Bill Text: IA HF2460 | 2011-2012 | 84th General Assembly | Enrolled

---

Bill Title: A bill for an act relating to Iowa's urban renewal law and incremental taxes by modifying provisions relating to divisions of revenue, modifying provisions relating to the approval of urban renewal plans and projects and approval of the use of certain local sales and services tax revenue, requiring certain reporting and auditing, and including applicability provisions. Effective 7-1-12.

Sponsorship: Committee Bill

Status: (Passed) 2012-05-25 - Signed by Governor. H.J. 963. [HF2460 Detail]

Download: Iowa-2011-HF2460-Enrolled.html

---

House File 2460
AN ACT
RELATING TO IOWA’S URBAN RENEWAL LAW AND INCREMENTAL TAXES
BY MODIFYING PROVISIONS RELATING TO DIVISIONS OF REVENUE,
MODIFYING PROVISIONS RELATING TO THE APPROVAL OF URBAN
RENEWAL PLANS AND PROJECTS AND APPROVAL OF THE USE OF
CERTAIN LOCAL SALES AND SERVICES TAX REVENUE, REQUIRING
CERTAIN REPORTING AND AUDITING, AND INCLUDING APPLICABILITY
PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. Section 2.48, subsection 3, paragraph b,
subparagraph (2), Code 2011, is amended by striking the
subparagraph.
Sec. 2. Section 2.48, subsection 3, paragraph c, Code 2011,
is amended by adding the following new subparagraph:
NEW SUBPARAGRAPH . (6) Property tax revenue divisions for
urban renewal areas under section 403.19.
Sec. 3. Section 11.11, Code Supplement 2011, is amended to
read as follows:
11.11 Scope of audits.
The written report of the audit of a governmental
subdivision shall include the auditor’s opinion as to whether a
governmental subdivision’s financial statements are presented
fairly in all material respects in conformity with generally
accepted accounting principles or with an other comprehensive
basis of accounting. As a part of conducting an audit of a
governmental subdivision, an evaluation of internal control
and tests for compliance with laws and regulations shall be
performed. As part of conducting an audit of a governmental
subdivision, an examination of the governmental subdivision’s
compliance with the reporting requirements of section 331.403,

House File 2460, p. 2
subsection 3, or 384.22, subsection 2, if applicable, shall be
performed.
Sec. 4. Section 24.21, Code 2011, is amended to read as
follows:
24.21 Transfer of inactive funds.
Subject to the provisions of any law relating to
municipalities, when the necessity for maintaining any fund of
the municipality has ceased to exist, and a balance remains
in said fund, the certifying board or levying board, as the
case may be, shall so declare by resolution, and upon such
declaration, such balance shall forthwith be transferred to the
fund or funds of the municipality designated by such board,
unless other provisions have been made in creating such fund
in which such balance remains. In the case of a special fund
created by a city or a county under section 403.19, such
balance remaining in the fund shall be allocated to and paid
into the funds for the respective taxing districts as taxes by
or for the taxing district into which all other property taxes
are paid.
Sec. 5. Section 331.403, subsection 3, Code 2011, is amended
by striking the subsection and inserting in lieu thereof the
following:
3. a. Each county that had an urban renewal plan and
area in effect at any time during the most recently ended
fiscal year shall complete for each such urban renewal plan
and area and file with the department of management an urban
renewal report by December 1 following the end of such fiscal
year. Each report shall be approved by the affirmative vote
of a majority of the board and be prepared in the format
and submitted electronically pursuant to the instructions
prescribed by the department of management in consultation with
the legislative services agency.
b. The report required under this subsection shall include
all of the following as of June 30 of the most recently ended
fiscal year or the information for such fiscal year, as
applicable:
(1) Whether the urban renewal area is determined by the
county to be a slum area, blighted area, economic development
area or a combination of those areas, and the date such
determination was made.
(2) A map clearly identifying the boundaries of the urban
renewal area.
(3) A copy of the ordinance providing for a division of

House File 2460, p. 3
revenue in the urban renewal area under section 403.19.
(4) A copy of the urban renewal plan adopted for the urban
renewal area, the date of each amendment to the plan, and a
copy of such amendment.
(5) A list and description of all urban renewal projects
within the urban renewal area that are in process and all urban
renewal projects that were completed during the fiscal year.
(6) A description of each expenditure during the fiscal year
from the county’s special fund created in section 403.19. Each
such expenditure shall be classified by the county according
to categories established by the department of management and
shall be designated as corresponding to the specific loan,
advance, indebtedness, or bond which qualifies for payment from
the special fund under section 403.19. Each such expenditure
shall also be designated as corresponding to one or more
specific urban renewal projects. This description shall not
be required for the report required to be filed on or before
December 1, 2012.
(7) The amount of loans, advances, indebtedness, or
bonds, including interest negotiated on such loans, advances,
indebtedness, or bonds, which qualify for payment from the
special fund created in section 403.19, and which were incurred
or issued during the fiscal year. Each such loan, advance,
debt, or bond shall be classified by the county according to
categories established by the department of management and
shall be designated as corresponding to one or more specific
urban renewal projects.
(8) The amount of loans, advances, indebtedness, or bonds
that remain unpaid at the close of the fiscal year, and which
qualify for payment from the special fund created in section
403.19, including interest negotiated on such loans, advances,
indebtedness, or bonds.
(9) The total amount of property taxes that were exempted,
rebated, refunded, or reimbursed by the county, used to fund a
grant provided by the county, or directly paid by the county
during the fiscal year for property in the urban renewal area
using moneys in the county’s special fund created in section
403.19 and such amounts agreed to by the county for future
fiscal years.
(10) A list of all properties, including the owner of such
properties, and the amount of property taxes due and payable
for the fiscal year that were exempted, rebated, refunded, or
reimbursed by the county, used to fund a grant provided by the

House File 2460, p. 4
county, or directly paid by the county during the fiscal year
using moneys in the county’s special fund created in section
403.19 and information for such amounts agreed to by the county
for future fiscal years.
(11) The balance of the county’s special fund created in
section 403.19.
(12) The aggregate assessed value of the taxable property in
the urban renewal area, as shown on the assessment roll used to
calculate the amount of taxes under section 403.19, subsection
1, for the fiscal year.
(13) The aggregate assessed value of each classification of
taxable property located in the urban renewal area.
(14) That portion of the assessed value of all taxable
property located in the urban renewal area that was used to
calculate the amount of excess taxes under section 403.19,
subsection 2.
(15) The amount of taxes determined under section 403.19,
subsection 2, in excess of the amount required to pay the
applicable loans, advances, indebtedness, and bonds, if any,
and interest thereon, for the fiscal year that was paid into
the funds for the respective taxing districts in the same
manner as taxes on all other property.
(16) Interest or earnings received by each urban renewal
area during the fiscal year on amounts deposited into the
special fund created in section 403.19 and the net proceeds
during the fiscal year from the sale of assets purchased using
amounts deposited into the special fund created in section
403.19.
(17) For each taxing district for which the county divided
taxes, the amount of taxes determined under section 403.19,
subsection 2, that, in lieu of allocation to the taxing
district, were deposited into the county’s special fund during
the fiscal year.
(18) The amount of expenditures by the county during
the fiscal year for the purpose of providing or aiding in
the provision of public improvements related to housing and
residential development.
(19) The amount of assistance to low and moderate income
housing provided by the county under section 403.22 during the
fiscal year if applicable.
(20) When required as part of an urban renewal development
or redevelopment agreement that includes the use of incremental
taxes collected pursuant to section 403.19, subsection 2, the

House File 2460, p. 5
total number of jobs to be created, the wages associated with
those jobs, the total private capital investment, and the total
cost of the public infrastructure constructed.
(21) All other additional information or documentation
relating to a county’s urban renewal activities or use of
divisions of revenue under chapter 403 deemed relevant by the
department of management, in consultation with the county
finance committee.
c. By December 1, 2012, the department of management, in
collaboration with the legislative services agency, shall make
publicly available on an internet site a searchable database
of all such information contained in the reports required
under this subsection. Reports from previous years shall be
retained by the department and shall continue to be available
and searchable on the internet site.
d. The legislative services agency, in consultation with
the department of management, shall annually prepare a report
for submission to the governor and the general assembly that
summarizes and analyzes the information contained in the
reports submitted under this subsection, section 357H.9,
subsection 2, and section 384.22, subsection 2. The report
prepared by the legislative services agency shall be submitted
not later than February 15 following the most recently ended
fiscal year for which the reports were filed.
e. For purposes of this subsection, “indebtedness” includes
but is not limited to written agreements whereby the county
agrees to exempt, rebate, refund, or reimburse property taxes,
provide a grant for property taxes paid, or make a direct
payment of taxes, with moneys in the special fund created in
section 403.19, and bonds, notes, or other obligations that are
secured by or subject to repayment from moneys appropriated by
the county from moneys in the special fund created in section
403.19.
Sec. 6. Section 331.403, Code 2011, is amended by adding the
following new subsection:
NEW SUBSECTION . 4. The annual financial report shall
be prepared on forms and pursuant to instructions prescribed
by the department of management and shall be filed with the
department of management. The urban renewal report shall be
filed with the department of management. Each report must
be filed prior to the publication and adoption of the county
budget under section 331.434 for the fiscal year beginning July
1 following the date such reports are due. If such reports are

House File 2460, p. 6
not filed pursuant to the requirements of this section, the
department of management shall not certify the county’s taxes
back to the county auditor under section 24.17.
Sec. 7. Section 331.434, unnumbered paragraph 1, Code 2011,
is amended to read as follows:
Annually, the board of each county, subject to section
331.403, subsection 4, sections 331.423 through 331.426 , and
other applicable state law, shall prepare and adopt a budget,
certify taxes, and provide appropriations as follows:
Sec. 8. Section 331.434, subsection 1, Code 2011, is amended
to read as follows:
1. The budget shall show the amount required for each class
of proposed expenditures, a comparison of the amounts proposed
to be expended with the amounts expended for like purposes for
the two preceding years, the revenues from sources other than
property taxation, and the amount to be raised by property
taxation, in the detail and form prescribed by the director
of the department of management. For each county that has
established an urban renewal area, the budget shall include
estimated and actual tax increment financing revenues and all
estimated and actual expenditures of the revenues, proceeds
from debt and all estimated and actual expenditures of the
debt proceeds , and identification of any entity receiving a
direct payment of taxes funded by tax increment financing
revenues and shall include the total amount of loans, advances,
indebtedness, or bonds outstanding at the close of the most
recently ended fiscal year, which qualify for payment from the
special fund created in section 403.19 , including interest
negotiated on such loans, advances, indebtedness, or bonds .
For purposes of this subsection , “indebtedness” includes
written agreements whereby the county agrees to suspend, abate,
exempt, rebate, refund, or reimburse property taxes, provide
a grant for property taxes paid, or make a direct payment
of taxes, with moneys in the special fund. The amount of
loans, advances, indebtedness, or bonds shall be listed in
the aggregate for each county reporting. The county finance
committee, in consultation with the department of management
and the legislative services agency, shall determine reporting
criteria and shall prepare a form for reports filed with the
department pursuant to this section . The department shall make
the information available by electronic means.
Sec. 9. Section 357H.9, Code 2011, is amended to read as
follows:

House File 2460, p. 7
357H.9 Incremental property taxes.
1. The board of trustees shall provide by resolution that
taxes levied on the taxable property in a rural improvement
zone each year by or for the benefit of the state, city,
county, school district, or other taxing district after the
effective date of the resolution shall be divided as provided
in section 403.19 , subsections 1 and 2 , in the same manner
as if the taxable property in the rural improvement zone was
taxable property in an urban renewal area and the resolution
was an ordinance within the meaning of those subsections. The
taxes received by the board of trustees shall be allocated to,
and when collected be paid into, a special fund and may be
irrevocably pledged by the trustees to pay the principal of and
interest on the certificates, contracts, or other obligations
approved by the board of trustees to finance or refinance, in
whole or in part, an improvement project. As used in this
section , “taxes” includes, but is not limited to, all levies on
an ad valorem basis upon land or real property located in the
rural improvement zone.
2. a. Each board of trustees that has by resolution
provided for a division of revenue in the rural improvement
zone during the most recently ended fiscal year shall complete
and file with the department of management a tax increment
financing report by December 1 following the end of such
fiscal year. The report shall be approved by the affirmative
vote of a majority of the board of trustees and be prepared
in the format and submitted electronically pursuant to the
instructions prescribed by the department of management in
consultation with the legislative services agency.
b. The report required under this subsection shall include
substantially the same information required for counties under
section 331.403, subsection 3, as of June 30 of the most
recently ended fiscal year or the information for such fiscal
year, as applicable.
c. By December 1, 2012, the department of management,
shall make publicly available on an internet site a searchable
database of all such information contained in the reports
required under this subsection. Reports from previous years
shall be retained by the department and shall continue to be
available and searchable on the internet site.
d. A board of trustees that fails to satisfy the
requirements of this subsection shall have all future
incremental taxes withheld from payment into the rural

House File 2460, p. 8
improvement zone’s special fund until such requirements are
met.
Sec. 10. Section 384.16, unnumbered paragraph 1, Code 2011,
is amended to read as follows:
Annually, a city that has satisfied the requirements of
section 384.22, subsection 3, shall prepare and adopt a budget,
and shall certify taxes as follows:
Sec. 11. Section 384.16, subsection 1, paragraphs b and c,
Code 2011, are amended to read as follows:
b. A budget must show comparisons between the estimated
expenditures in each program in the following year, the latest
estimated expenditures in each program in the current year, and
the actual expenditures in each program from the annual report
reports as provided in section 384.22 , or as corrected by a
subsequent audit report. Wherever practicable, as provided in
rules of the committee, a budget must show comparisons between
the levels of service provided by each program as estimated for
the following year, and actual levels of service provided by
each program during the two preceding years. For each city
that has established an urban renewal area, the budget shall
include estimated and actual tax increment financing revenues
and all estimated and actual expenditures of the revenues,
proceeds from debt and all estimated and actual expenditures of
the debt proceeds , and identification of any entity receiving
a direct payment of taxes funded by tax increment financing
revenues and shall include the total amount of loans, advances,
indebtedness, or bonds outstanding at the close of the most
recently ended fiscal year, which qualify for payment from the
special fund created in section 403.19 , including interest
negotiated on such loans, advances, indebtedness, or bonds .
The amount of loans, advances, indebtedness, or bonds shall
be listed in the aggregate for each city reporting. The city
finance committee, in consultation with the department of
management and the legislative services agency, shall determine
reporting criteria and shall prepare a form for reports filed
with the department pursuant to this section . The department
shall make the information available by electronic means.
c. For purposes of this subsection , “indebtedness” includes
written agreements whereby the city agrees to suspend, abate,
exempt, rebate, refund, or reimburse property taxes, provide
a grant for property taxes paid, or make a direct payment of
taxes, with moneys in the special fund.
Sec. 12. Section 384.22, Code 2011, is amended to read as

House File 2460, p. 9
follows:
384.22 Annual report reports —— financial report —— urban
renewal report .
1. Not later than December 1 of each year, a city shall
publish an annual financial report as provided in section
362.3 containing a summary for the preceding fiscal year of
all collections and receipts, all accounts due the city, and
all expenditures, the current public debt of the city, and the
legal debt limit of the city for the current fiscal year. The
annual financial report shall be prepared on forms and pursuant
to instructions prescribed by the auditor of state. A copy of
this report must be filed with the auditor of state not later
than December 1 of each year.
A city that fails to meet the filing deadline imposed by
this section shall have withheld from payments to be made to
the county which are allocated to the city pursuant to section
425.1 an amount equal to five cents per capita until the annual
report is filed with the auditor of state.
2. a. Each city that had an urban renewal plan and area in
effect at any time during the most recently ended fiscal year
shall complete for each such urban renewal plan and area and
file with the department of management an urban renewal report
by December 1 following the end of such fiscal year. Each
report shall be approved by the affirmative vote of a majority
of the city council and be prepared in the format and submitted
electronically pursuant to the instructions prescribed by the
department of management in consultation with the legislative
services agency.
b. The report required under this subsection shall include
all of the following as of June 30 of the most recently ended
fiscal year:
(1) Whether the urban renewal area is determined by the city
to be a slum area, blighted area, economic development area or
a combination of those areas, and the date such determination
was made.
(2) A map clearly identifying the boundaries of the urban
renewal area.
(3) A copy of the ordinance providing for a division of
revenue in the urban renewal area under section 403.19.
(4) A copy of the urban renewal plan adopted for the urban
renewal area, the date of each amendment to the plan, and a
copy of such amendment.
(5) A list and description of all urban renewal projects

House File 2460, p. 10
within the urban renewal area that are in process and all urban
renewal projects that were completed during the fiscal year.
(6) A description of each expenditure during the fiscal
year from the city’s special fund created in section 403.19.
Each such expenditure shall be classified by the city according
to categories established by the department of management and
shall be designated as corresponding to the specific loan,
advance, indebtedness, or bond which qualifies for payment from
the special fund under section 403.19. Each such expenditure
shall also be designated as corresponding to one or more
specific urban renewal projects. This description shall not
be required for the report required to be filed on or before
December 1, 2012.
(7) The amount of loans, advances, indebtedness, or
bonds, including interest negotiated on such loans, advances,
indebtedness, or bonds, which qualify for payment from the
special fund created in section 403.19, and which were incurred
or issued during the fiscal year. Each such loan, advance,
debt, or bond shall be classified by the city according to
categories established by the department of management and
shall be designated as corresponding to one or more specific
urban renewal projects.
(8) The amount of loans, advances, indebtedness, or bonds
that remain unpaid at the close of the fiscal year, and which
qualify for payment from the special fund created in section
403.19, including interest negotiated on such loans, advances,
indebtedness, or bonds.
(9) The total amount of property taxes that were exempted,
rebated, refunded, or reimbursed by the city, used to fund a
grant provided by the city, or directly paid by the city during
the fiscal year for property in the urban renewal area using
moneys in the city’s special fund created in section 403.19 and
such amounts agreed to by the city for future fiscal years.
(10) A list of all properties, including the owner of such
properties, and the amount of property taxes due and payable
for the fiscal year that were exempted, rebated, refunded, or
reimbursed by the city, used to fund a grant provided by the
city, or directly paid by the city during the fiscal year using
moneys in the city’s special fund created in section 403.19 and
information for such amounts agreed to by the city for future
fiscal years.
(11) The balance of the city’s special fund created in
section 403.19.

House File 2460, p. 11
(12) The aggregate assessed value of the taxable property in
the urban renewal area, as shown on the assessment roll used to
calculate the amount of taxes under section 403.19, subsection
1, for the fiscal year.
(13) The aggregate assessed value of each classification of
taxable property located in the urban renewal area.
(14) That portion of the assessed value of all taxable
property located in the urban renewal area that was used to
calculate the amount of excess taxes under section 403.19,
subsection 2.
(15) The amount of taxes determined under section 403.19,
subsection 2, in excess of the amount required to pay the
applicable loans, advances, indebtedness, and bonds, if any,
and interest thereon, for the fiscal year that was paid into
the funds for the respective taxing districts in the same
manner as taxes on all other property.
(16) Interest or earnings received by each urban renewal
area during the fiscal year on amounts deposited into the
special fund created in section 403.19 and the net proceeds
during the fiscal year from the sale of assets purchased using
amounts deposited into the special fund created in section
403.19.
(17) For each taxing district for which the city divided
taxes, the amount of taxes determined under section 403.19,
subsection 2, that, in lieu of allocation to the taxing
district, were deposited into the city’s special fund during
the fiscal year.
(18) The amount of expenditures by the city during the
fiscal year for the purpose of providing or aiding in the
provision of public improvements related to housing and
residential development.
(19) The amount and types of assistance to low and moderate
income housing provided by the city under section 403.22 during
the fiscal year if applicable.
(20) When required as part of an urban renewal development
or redevelopment agreement that includes the use of incremental
taxes collected pursuant to section 403.19, subsection 2, the
total number of jobs to be created, the wages associated with
those jobs, the total private capital investment, and the total
cost of the public infrastructure constructed.
(21) All other additional information or documentation
relating to a city’s urban renewal activities or use of
divisions of revenue under chapter 403 deemed relevant by the

House File 2460, p. 12
department of management, in consultation with the city finance
committee.
c. By December 1, 2012, the department of management, in
collaboration with the legislative services agency, shall make
publicly available on an internet site a searchable database
of all such information contained in the reports required
under this subsection. Reports from previous years shall be
retained by the department and shall continue to be available
and searchable on the internet site.
d. For purposes of this subsection, “indebtedness” includes
but is not limited to written agreements whereby the city
agrees to exempt, rebate, refund, or reimburse property taxes,
provide a grant for property taxes paid, or make a direct
payment of taxes, with moneys in the special fund created in
section 403.19, and bonds, notes, or other obligations that are
secured by or subject to repayment from moneys appropriated by
the city from moneys in the special fund created in section
403.19.
3. The annual financial report shall be prepared on forms
and pursuant to instructions prescribed by the auditor of
state and shall be filed with the auditor of state. The
urban renewal report shall be filed with the department of
management. Each report must be filed prior to the publication
and adoption of the city budget under section 384.16 for the
fiscal year beginning July 1 following the date such reports
are due. If such reports are not filed pursuant to the
requirements of this section, the department of management
shall not certify the city’s taxes back to the county auditor
under section 24.17.
Sec. 13. Section 403.5, subsection 2, paragraph b, Code
2011, is amended to read as follows:
b. (1) Prior to its approval of an urban renewal plan which
provides for a division of revenue pursuant to section 403.19 ,
the municipality shall mail the proposed plan by regular mail
to the affected taxing entities. The municipality shall
include with the proposed plan notification of a consultation
to be held between the municipality and affected taxing
entities prior to the public hearing on the urban renewal plan.
If the proposed urban renewal plan or proposed urban renewal
project within the urban renewal area includes the use of taxes
resulting from a division of revenue under section 403.19 for a
public building, including but not limited to a police station,
fire station, administration building, swimming pool, hospital,

House File 2460, p. 13
library, recreational building, city hall, or other public
building that is exempt from taxation, including the grounds
of, and the erection, equipment, remodeling, or reconstruction
of, and additions or extensions to, such a building, the
municipality shall include with the proposed plan notification
an analysis of alternative development options and funding for
the urban renewal area or urban renewal project and the reasons
such options would be less feasible than the proposed urban
renewal plan or proposed urban renewal project. A copy of
the analysis required in this subparagraph shall be included
with the urban renewal report required under section 331.403
or 384.22, as applicable, and filed by December 1 following
adoption of the urban renewal plan or project.
(2) Each affected taxing entity may appoint a
representative to attend the consultation. The consultation
may include a discussion of the estimated growth in valuation
of taxable property included in the proposed urban renewal
area, the fiscal impact of the division of revenue on the
affected taxing entities, the estimated impact on the provision
of services by each of the affected taxing entities in the
proposed urban renewal area, and the duration of any bond
issuance included in the plan. The designated representative
of the affected taxing entity may make written recommendations
for modification to the proposed division of revenue no later
than seven days following the date of the consultation. The
representative of the municipality shall, no later than
seven days prior to the public hearing on the urban renewal
plan, submit a written response to the affected taxing entity
addressing the recommendations for modification to the proposed
division of revenue.
Sec. 14. Section 403.5, subsection 5, Code 2011, is amended
to read as follows:
5. a. An Except as otherwise provided in this subsection,
an urban renewal plan may be modified at any time : Provided,
that if . However, if the urban renewal plan is modified
after the lease or sale by the municipality of real property
in the urban renewal project area, such modification may
be conditioned upon such approval of the owner, lessee , or
successor in interest as the municipality may deem advisable,
and in any event such modification shall be subject to such
rights at law or in equity as a lessee or purchaser, or a
lessee’s or purchaser’s successor or successors in interest,
may be entitled to assert.

House File 2460, p. 14
b. A municipality shall not approve an urban renewal project
for an urban renewal area unless the governing body has amended
or modified the adopted urban renewal plan to include the urban
renewal project.
c. The municipality shall comply with the notification , and
consultation , and hearing process provided in this section
prior to the approval of any amendment or modification to an
adopted urban renewal plan if such amendment or modification
provides for refunding bonds or refinancing resulting in an
increase in debt service or provides for the issuance of
bonds or other indebtedness, to be funded primarily in the
manner provided in section 403.19 , or if such amendment or
modification provides for the inclusion and approval of an
urban renewal project under paragraph “b” . However, the review
and recommendation process conducted by the municipality’s
planning commission under subsection 2, paragraph “a” , shall
not be required when amending or modifying an adopted urban
renewal plan.
d. Once determined to be a blighted area, a slum area, or an
economic development area by a municipality, an urban renewal
area shall not be redetermined by the municipality throughout
the duration of the urban renewal area.
Sec. 15. Section 403.17, subsection 1, Code 2011, is amended
to read as follows:
1. “Affected taxing entity” means a city, community college,
county, or school district which levied or certified for levy
a property tax on any portion of the taxable property located
within the urban renewal area in the fiscal year beginning
prior to the calendar year in which a proposed urban renewal
plan is submitted to the local governing body for approval.
Sec. 16. Section 403.19, subsection 2, Code Supplement
2011, as amended by 2012 Iowa Acts, Senate File 2137, section
6, is amended to read as follows:
2. a. That portion of the taxes each year in excess of such
amount shall be allocated to and when collected be paid into a
special fund of the municipality to pay the principal of and
interest on loans, moneys advanced to, or indebtedness, whether
funded, refunded, assumed, or otherwise, including bonds
issued under the authority of section 403.9, subsection 1 ,
incurred by the municipality to finance or refinance, in whole
or in part, an urban renewal project within the area, and to
provide assistance for low and moderate income family housing
as provided in section 403.22 . However, except as provided

House File 2460, p. 15
in paragraph “b” , taxes for the regular and voter-approved
physical plant and equipment levy of a school district imposed
pursuant to section 298.2 and taxes for the instructional
support program of a school district imposed pursuant to
section 257.19 , taxes for the payment of bonds and interest
of each taxing district, and taxes imposed under section
346.27, subsection 22 , related to joint county-city buildings
shall be collected against all taxable property within the
taxing district without limitation by the provisions of this
subsection .
b. (1) However, all All or a portion of the taxes for
the physical plant and equipment levy shall be paid by the
school district to the municipality if the auditor certifies
to the school district by July 1 the amount of such levy that
is necessary to pay the principal and interest on bonds issued
by the municipality to finance an urban renewal project, which
bonds were issued before July 1, 2001. Indebtedness incurred
to refund bonds issued prior to July 1, 2001, shall not be
included in the certification. Such school district shall pay
over the amount certified by November 1 and May 1 of the fiscal
year following certification to the school district.
(2) (a) All or a portion of the taxes for the instructional
support program levy of a school district shall be paid by the
school district to the municipality if the auditor, pursuant
to subsection 11 , certifies to the school district by July 1
the amount of such levy that is necessary to pay the principal
and interest on bonds issued or other indebtedness incurred by
the municipality to finance an urban renewal project if such
bonds or indebtedness were issued or incurred on or before
April 24, 2012. Such school district shall pay over the amount
certified by November 1 and May 1 of the fiscal year following
certification to the school district.
(b) In lieu of payment to a municipality under subparagraph
division (a) , a school district may by resolution of the board
of directors of the school district approve at a regular
meeting of the board of directors the payment of all or a
portion of the instructional support program property tax
revenue excluded under paragraph “a” , to the municipality for
the payment of principal and interest on such bonds issued or
such other indebtedness incurred by the municipality before,
on, or after April 24, 2012.
c. Unless and until the total assessed valuation of the
taxable property in an urban renewal area exceeds the total

House File 2460, p. 16
assessed value of the taxable property in such area as shown by
the last equalized assessment roll referred to in subsection 1 ,
all of the taxes levied and collected upon the taxable property
in the urban renewal area shall be paid into the funds for
the respective taxing districts as taxes by or for the taxing
districts in the same manner as all other property taxes.
When such loans, advances, indebtedness, and bonds, if any,
and interest thereon, have been paid, all moneys thereafter
received from taxes upon the taxable property in such urban
renewal area shall be paid into the funds for the respective
taxing districts in the same manner as taxes on all other
property.
d. In those instances where a school district has entered
into an agreement pursuant to section 279.64 for sharing of
school district taxes levied and collected from valuation
described in this subsection and released to the school
district, the school district shall transfer the taxes as
provided in the agreement.
Sec. 17. Section 403.19, subsection 6, paragraph a,
subparagraph (1), Code Supplement 2011, is amended to read as
follows:
(1) A municipality shall certify to the county auditor on or
before December 1 the amount of loans, advances, indebtedness,
or bonds , including interest negotiated on such loans,
advances, indebtedness, or bonds, which qualify for payment
from the special fund referred to in subsection 2 , for each
urban renewal area in the municipality, and the filing of the
certificate shall make it a duty of the auditor to provide for
the division of taxes in each subsequent year without further
certification, except as provided in paragraphs “b” and “c” ,
until the amount of the loans, advances, indebtedness, or
bonds is paid to the special fund. Such certification shall
include all amounts which qualify for payment from the special
fund referred to in subsection 2 during the next fiscal year
and all amounts which qualify for payment from the special
fund in any subsequent fiscal year. If any loans, advances,
indebtedness, or bonds are issued which qualify for payment
from the special fund and which are in addition to amounts
already certified, the municipality shall certify the amount of
the additional obligations on or before December 1 of the year
such obligations were issued, and the filing of the certificate
shall make it a duty of the auditor to provide for the division
of taxes in each subsequent year without further certification,

House File 2460, p. 17
except as provided in paragraphs “b” and “c” , until the amount
of the loans, advances, indebtedness, or bonds is paid to
the special fund. Any subsequent certifications under this
subsection shall not include amounts previously certified.
Sec. 18. Section 403.19, subsection 6, Code Supplement
2011, is amended by adding the following new paragraph:
NEW PARAGRAPH . d. For purposes of this section,
“indebtedness” includes but is not limited to written agreements
whereby the municipality agrees to exempt, rebate, refund, or
reimburse property taxes, provide a grant for property taxes
paid, or make a direct payment of taxes, with moneys in the
special fund referred to in subsection 2, and bonds, notes, or
other obligations that are secured by or subject to payment
from moneys appropriated by the municipality from moneys in the
special fund referred to in subsection 2.
Sec. 19. Section 403.19, Code Supplement 2011, is amended by
adding the following new subsection:
NEW SUBSECTION . 9. a. Moneys from any source deposited
into the special fund created in this section shall not be
expended for or otherwise used in connection with an urban
renewal project approved on or after the effective date of this
Act that includes the relocation of a commercial or industrial
enterprise not presently located within the municipality,
unless one of the following occurs:
(1) The local governing body of the municipality where
the commercial or industrial enterprise is currently located
and the local governing body of the municipality where the
commercial or industrial enterprise is proposing to relocate
have either entered into a written agreement concerning the
relocation of the commercial or industrial enterprise or have
entered into a written agreement concerning the general use
of economic incentives to attract commercial or industrial
development within those municipalities.
(2) The local governing body of the municipality where the
commercial or industrial enterprise is proposing to relocate
finds that the use of deposits into the special fund for an
urban renewal project that includes such a relocation is in
the public interest. A local governing body’s finding that an
urban renewal project that includes a commercial or industrial
enterprise relocation is in the public interest shall include
written verification from the commercial or industrial
enterprise that the enterprise is actively considering moving
all or a part of its operations to a location outside the state

House File 2460, p. 18
and a specific finding that such an out-of-state move would
result in a significant reduction in either the enterprise’s
total employment in the state or in the total amount of wages
earned by employees of the enterprise in the state.
b. For the purposes of this subsection, “relocation”
means the closure or substantial reduction of an enterprise’s
existing operations in one area of the state and the initiation
of substantially the same operation in the same county or a
contiguous county in the state. This subsection does not
prohibit an enterprise from expanding its operations in another
area of the state provided that existing operations of a
similar nature are not closed or substantially reduced.
Sec. 20. Section 403.19, Code Supplement 2011, is amended by
adding the following new subsection:
NEW SUBSECTION . 10. a. Interest or earnings received on
amounts deposited into the special fund created in this section
and the net proceeds from the sale of assets purchased using
amounts deposited into the special fund created in this section
shall be credited to the special fund and shall be used solely
for the purposes specified in this section.
b. Moneys in the special fund created in this section shall
not be transferred to another fund of the municipality except
for the payment of loans, advances, indebtedness, or bonds that
qualify for payment from the special fund.
Sec. 21. Section 403.19, Code Supplement 2011, is amended by
adding the following new subsection:
NEW SUBSECTION . 11. For any fiscal year, a municipality
may certify to the county auditor for instructional support
program property tax revenue necessary for payment of principal
and interest on bonds issued or other indebtedness incurred
for an urban renewal project on or before April 24, 2012. If
for any fiscal year a municipality fails to certify to the
county auditor by July 1 the amount of instructional support
program property tax revenue necessary for payment of principal
and interest on such bonds, as provided in subsection 2 , the
school district is not required to pay over the revenue to
the municipality. If a school district and a municipality
are unable to agree on the amount of instructional support
program property tax revenue certified by the municipality,
either party may request that the state appeal board review
and finally pass upon the amount that may be certified. Such
appeals must be presented in writing to the state appeal board
no later than July 31 following certification. The burden

House File 2460, p. 19
shall be on the municipality to prove that the instructional
support program property tax revenue is necessary to pay
principal and interest on the applicable bonds. A final
decision must be issued by the state appeal board no later than
the following October 1.
Sec. 22. NEW SECTION . 403.23 Audit —— certificate of
compliance.
1. Each municipality that has established an urban renewal
area that utilizes, or plans to utilize, revenues from the
special fund created in section 403.19, shall make an annual
certification of compliance with this section. For any year in
which the municipality is audited in accordance with section
11.6, such certification shall be audited as part of the
municipality’s audit.
2. The certification required under this section shall
include such information or documentation deemed appropriate
by the auditor of state including but not limited to the
information required to be reported under section 331.403,
subsection 3, or section 384.22, subsection 2, as applicable.
3. The auditor of state shall adopt rules necessary to
implement this section.
Sec. 23. Section 423B.10, subsection 2, Code 2011, is
amended to read as follows:
2. a. An Upon approval by the board of supervisors of each
applicable county pursuant to paragraph “b” , an eligible city
may by ordinance of the city council provide for the use of a
designated amount of the increased local sales and services tax
revenues collected under this chapter which are attributable to
retail establishments in an urban renewal area to fund urban
renewal projects located in the area. The designated amount
may be all or a portion of such increased revenues.
b. A city shall not adopt an ordinance under paragraph
“a” unless the board of supervisors of each county where the
urban renewal area from which such local sales and services
tax revenues are to be collected and used to fund urban
renewal projects is located first adopts a resolution approving
the collection and use of such local sales and services tax
revenues.
Sec. 24. IMPLEMENTATION OF ACT. Section 25B.2, subsection
3, shall not apply to this Act.
Sec. 25. APPLICABILITY. The provisions of this Act
prohibiting the department of management from certifying taxes
back to the county auditor under section 24.17 if a county,

House File 2460, p. 20
under section 331.403, subsection 4, or a city, under section
384.22, subsection 3, fails to meet the reporting requirements
of sections 331.403 and 384.22, as applicable, or the provision
of this Act requiring that incremental taxes be withheld from
payment to a rural improvement zone if the rural improvement
zone fails to meet the reporting requirement of section 357H.9,
subsection 2, shall not apply to the report required to be
filed on or before December 1, 2012.
Sec. 26. APPLICABILITY. The provisions of this Act relating
to the division of taxes for the instructional support program
of a school district under section 403.19, as amended in this
Act, apply to property taxes due and payable in fiscal years
beginning on or after July 1, 2013.
Sec. 27. APPLICABILITY. The section of this Act amending
section 423B.10 applies to city ordinances adopted under
section 423B.10 on or after the effective date of this Act.
______________________________
KRAIG PAULSEN
Speaker of the House
______________________________
JOHN P. KIBBIE
President of the Senate
I hereby certify that this bill originated in the House and
is known as House File 2460, Eighty-fourth General Assembly.
______________________________
W. CHARLES SMITHSON
Chief Clerk of the House
Approved _______________, 2012
______________________________
TERRY E. BRANSTAD
Governor