Bill Text: IA SF2325 | 2021-2022 | 89th General Assembly | Introduced

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Bill Title: A bill for an act related to matters under the purview of the economic development authority including the high quality jobs program, the Iowa energy center, and the workforce housing tax incentive program, and including effective date and retroactive applicability provisions. (Formerly SSB 3032.) Effective date: 03/23/2022. Applicability date: 07/01/2021.

Spectrum: Committee Bill

Status: (Passed) 2022-06-22 - Fiscal note. [SF2325 Detail]

Download: Iowa-2021-SF2325-Introduced.html
Senate File 2325 - Introduced SENATE FILE 2325 BY COMMITTEE ON COMMERCE (SUCCESSOR TO SSB 3032) A BILL FOR An Act related to matters under the purview of the economic 1 development authority including the high quality jobs 2 program, the Iowa energy center, and the workforce housing 3 tax incentive program, and including effective date and 4 retroactive applicability provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5319SV (2) 89 ko/jh
S.F. 2325 Section 1. Section 15.108, subsection 9, paragraph g, Code 1 2022, is amended to read as follows: 2 g. Administer the Iowa energy center established in section 3 15.120 . This paragraph “g” is repealed July 1, 2022 2027 . 4 Sec. 2. Section 15.120, subsection 1, Code 2022, is amended 5 by adding the following new paragraph: 6 NEW PARAGRAPH . h. To support research and development of 7 strategies for carbon management. 8 Sec. 3. Section 15.120, subsection 5, Code 2022, is amended 9 to read as follows: 10 5. This section is repealed July 1, 2022 2027 . 11 Sec. 4. Section 15.335C, subsection 2, Code 2022, is amended 12 to read as follows: 13 2. For purposes of this section , “economically distressed 14 area” means a county that ranks among the bottom thirty-three of 15 all Iowa counties, as measured by one meets at least three of 16 the following criteria : 17 a. Average The county ranks among the thirty-three Iowa 18 counties with the highest average monthly unemployment level 19 rates for the most recent twelve-month period based on the 20 applicable local area unemployment statistics produced by the 21 United States department of labor, bureau of labor statistics . 22 b. Average The county ranks among the thirty-three Iowa 23 counties with the highest average annualized unemployment 24 level rates for the most recent five-year period based on the 25 applicable local area unemployment statistics produced by the 26 United States department of labor, bureau of labor statistics . 27 c. The county ranks among the thirty-three Iowa counties 28 with the lowest annual average weekly wages based on the most 29 recent quarterly census of employment and wages published 30 by the United States department of labor, bureau of labor 31 statistics. 32 d. The county ranks among the thirty-three Iowa counties 33 with the highest family poverty rates based on the most recent 34 American community survey five-year estimate released by the 35 -1- LSB 5319SV (2) 89 ko/jh 1/ 9
S.F. 2325 United States census bureau. 1 e. The county ranks among the thirty-three Iowa counties 2 with the highest percentage population loss. Percentage 3 population loss shall be calculated by comparing the most 4 recent population estimate produced by the United States 5 census bureau to the most recent decennial census released 6 by the United States census bureau, except for a calendar 7 year in which the decennial census data is released, then the 8 percentage population loss shall be calculated by comparing the 9 population in the decennial census released that calendar year 10 to the population in decennial census released ten years prior. 11 f. The county ranks among the thirty-three Iowa counties 12 with the highest percentage of persons sixty-five years of age 13 or older based on the most recent American community survey 14 five-year estimate released by the United States census bureau. 15 Sec. 5. Section 15.335C, Code 2022, is amended by adding the 16 following new subsection: 17 NEW SUBSECTION . 3. The authority may designate a county 18 that does not meet at least three of the criteria in subsection 19 2 as an economically distressed area under this section if 20 a business located in the county experiences a layoff or a 21 closure that has a significant impact on a community within the 22 county. The authority shall adopt rules to establish a process 23 for designating a county an economically distressed area under 24 this subsection. 25 Sec. 6. Section 15.352, subsection 10, Code 2022, is amended 26 to read as follows: 27 10. “Small city” means any of the following: 28 a. Any city or township located in this state, except those 29 located wholly within one or more of the eleven most populous 30 counties in the state, as determined by either the most recent 31 population estimates issued estimate produced by the United 32 States bureau of census or the most recent decennial census 33 released by the United States bureau of census . 34 b. Any city or township located wholly within one or more of 35 -2- LSB 5319SV (2) 89 ko/jh 2/ 9
S.F. 2325 the eleven most populous counties in the state, as determined 1 pursuant to paragraph “a” , and that meets all of the following 2 requirements: 3 (1) The city or township has a population less than or equal 4 to two thousand five hundred as determined by either the most 5 recent population estimate produced by the United States bureau 6 of census or the most recent decennial census released by the 7 United States bureau of census. 8 (2) The city or township had population growth of less 9 than thirty percent as calculated by comparing the population 10 in the most recent decennial census released by the United 11 States census bureau to the population in the decennial census 12 released ten years prior. 13 Sec. 7. Section 15.352, Code 2022, is amended by adding the 14 following new subsection: 15 NEW SUBSECTION . 11. “Urban area” means any city or 16 township, except for a small city, that is wholly located 17 within one or more of the eleven most populous counties in 18 the state, as determined by either the most recent population 19 estimate produced by the United States bureau of census or the 20 most recent decennial census released by the United States 21 bureau of census. 22 Sec. 8. Section 15.353, subsection 2, paragraph e, Code 23 2022, is amended by striking the paragraph. 24 Sec. 9. Section 15.353, subsection 3, Code 2022, is amended 25 to read as follows: 26 3. a. Except as provided in paragraph “b” , the average 27 dwelling unit cost does not exceed two hundred thousand 28 dollars per dwelling unit the maximum amount established by 29 the board for each fiscal year for the applicable project 30 type and project location. The board shall establish the 31 maximum average dwelling unit cost for a project that includes 32 single-family dwelling units that is located in a small city 33 and for a project that includes single-family dwelling units 34 that is located in an urban area. The board shall establish 35 -3- LSB 5319SV (2) 89 ko/jh 3/ 9
S.F. 2325 the maximum average dwelling unit cost for a project that 1 includes multiple dwelling unit buildings and is located 2 in a small city and for a project that includes multiple 3 dwelling unit buildings and is located in an urban area. In 4 establishing each maximum average dwelling unit cost, the board 5 shall primarily consider the most recent annual United States 6 census bureau building permits survey and historical program 7 data . 8 b. (1) The average dwelling unit cost does not exceed two 9 hundred fifty thousand dollars per dwelling unit if If the 10 project involves the rehabilitation, repair, redevelopment, 11 or preservation of property described in section 404A.1, 12 subsection 8 , paragraph “a” , the average dwelling unit cost 13 shall not exceed one hundred twenty-five percent of the maximum 14 average dwelling unit cost established by the board for the 15 applicable project type and project location as provided in 16 paragraph “a” . 17 (2) The average dwelling unit cost for the project does not 18 exceed two hundred fifteen thousand dollars per dwelling unit 19 if the project is located in a small city. 20 Sec. 10. Section 15.354, subsection 3, paragraph c, 21 subparagraph (2), Code 2022, is amended to read as follows: 22 (2) The authority may for good cause within the discretion 23 of the authority extend a housing project’s completion 24 deadline once by up to twelve months upon application by 25 the housing business, which application shall be made prior 26 to the expiration of the three-year completion deadline in 27 subparagraph (1) in the manner and form prescribed by the 28 authority . The authority may approve a second extension of 29 up to twelve months if prior to the expiration of the first 30 twelve-month extension the housing business applies and 31 substantiates to the satisfaction of the authority that the 32 second extension is warranted due to extenuating circumstances 33 outside the control of the housing business. An application 34 by a housing business shall be made in the manner and form 35 -4- LSB 5319SV (2) 89 ko/jh 4/ 9
S.F. 2325 prescribed by the authority by rule. 1 Sec. 11. Section 15.354, subsection 3, paragraph e, 2 subparagraph (2), subparagraph divisions (b) and (c), Code 3 2022, are amended to read as follows: 4 (b) If the project costs cause the housing project’s average 5 dwelling unit cost to exceed the applicable maximum amount 6 authorized in section 15.353, subsection 3 , but do not cause 7 the average dwelling unit cost to exceed one hundred ten fifty 8 percent of such applicable maximum amount, the authority may 9 consider the agreement fulfilled and may issue a tax credit 10 certificate. In such case, the authority shall reduce the tax 11 incentive award and the corresponding amount of tax incentives 12 the eligible housing project may claim under section 15.355, 13 subsections 2 and 3 , by the same percentage that the housing 14 project’s average dwelling unit cost exceeds the applicable 15 maximum amount under section 15.353, subsection 3 , and such 16 tax incentive reduction shall be reflected on the tax credit 17 certificate. If the authority issues a certificate pursuant 18 to this subparagraph division, the department of revenue 19 shall accept the certificate notwithstanding that the housing 20 project’s average dwelling unit costs exceed the maximum amount 21 specified in section 15.353, subsection 3 . 22 (c) If the project costs cause the housing project’s average 23 dwelling unit cost to exceed one hundred ten fifty percent of 24 the applicable maximum amount authorized in section 15.353, 25 subsection 3 , the authority shall determine the eligible 26 housing business to be in default under the agreement, shall 27 revoke the tax incentive award, and shall not issue a tax 28 credit certificate. The housing business shall not be allowed 29 a refund of sales and use tax under section 15.355, subsection 30 2 . 31 Sec. 12. EFFECTIVE DATE. This Act, being deemed of 32 immediate importance, takes effect upon enactment. 33 Sec. 13. RETROACTIVE APPLICABILITY. The following 34 apply retroactively to July 1, 2021, to all eligible housing 35 -5- LSB 5319SV (2) 89 ko/jh 5/ 9
S.F. 2325 businesses that the economic development authority has not 1 notified of the amount that the housing business may claim 2 as a refund of the sales and use tax under section 15.355, 3 subsection 2, and all eligible housing businesses that the 4 economic development authority has not issued a tax credit 5 certificate stating the amount of workforce housing investment 6 tax credits under section 15.355, subsection 3, the eligible 7 housing business may claim: 8 1. The section of this Act amending section 15.352, 9 subsection 10. 10 2. The section of this Act enacting section 15.352, 11 subsection 11. 12 3. The section of this Act amending section 15.353, 13 subsection 2, paragraph “e”. 14 4. The section of this Act amending section 15.353, 15 subsection 3. 16 5. The section of this Act amending section 15.354, 17 subsection 3, paragraph “e”, subparagraph (2), subparagraph 18 divisions (b) and (c). 19 EXPLANATION 20 The inclusion of this explanation does not constitute agreement with 21 the explanation’s substance by the members of the general assembly. 22 This bill relates to matters under the purview of the 23 economic development authority (authority) including the high 24 quality jobs program, the Iowa energy center, and the workforce 25 housing tax incentive program. 26 Under current law, Code section 15.120, which establishes 27 the Iowa energy center, is repealed on July 1, 2022. The bill 28 extends the date to 2027. The bill requires the Iowa energy 29 center to support research and development of strategies for 30 carbon management. 31 Under current law, for purposes of the high quality jobs 32 program, a county is qualified as an economically distressed 33 area if the county ranks among the bottom 33 of all Iowa 34 counties, as measured by either the monthly unemployment level 35 -6- LSB 5319SV (2) 89 ko/jh 6/ 9
S.F. 2325 for the most recent 12-month period, or the average annualized 1 unemployment level for the most recent five-year period. Under 2 the bill, a county qualifies as an economically distressed 3 area if it meets at least three of the criteria detailed in 4 the bill. The authority may designate a county that does 5 not meet at least three of the criteria as an economically 6 distressed area if a business located in the county experiences 7 a layoff or a closure that has a significant impact on a 8 community within the county. The authority shall adopt rules 9 to establish a process for designating a county an economically 10 distressed area under those circumstances. 11 Under current law, for purposes of the workforce housing 12 tax incentive program (program), a “small city” is defined 13 as any city or township, except those located wholly within 14 one or more of the 11 most populous counties in the state, as 15 determined by the most recent population estimates issued by 16 the United States bureau of census (census bureau). The bill 17 defines “small city” as any city or township, except those 18 located wholly within one or more of the 11 most populous 19 counties, as determined by either the most recent population 20 estimate or the most recent decennial census released by the 21 census bureau; or any city or township located wholly within 22 one or more of the 11 most populous counties in the state, 23 that has a population less than or equal to 2,500, and that 24 had population growth of less than 30 percent as calculated by 25 comparing the population in the most recent decennial census to 26 the population in the decennial census released 10 years prior. 27 The bill defines “urban area” as any city or township, except 28 for a small city, that is wholly located within one or more of 29 the 11 most populous counties. “Urban area” is not defined for 30 purposes of the program under current law. 31 The bill removes new construction, rehabilitation, repair, 32 or redevelopment of dwelling units in a distressed workforce 33 housing community as an option for a proposed housing project 34 (project) under the program. To receive workforce housing tax 35 -7- LSB 5319SV (2) 89 ko/jh 7/ 9
S.F. 2325 incentives (tax incentives) under the program, a project cannot 1 exceed a specific average dwelling unit cost (unit cost), which 2 varies depending on the type of project and whether the project 3 is located in a small city or an urban area, as determined by 4 the authority board as detailed in the bill. 5 Under current law, the authority may extend a project’s 6 completion deadline under the program up to 12 months upon 7 application by the housing business, which must be made prior 8 to the expiration of the project’s three-year completion 9 deadline. Under the bill, the authority may approve a second 10 extension of up to 12 months if prior to the expiration of the 11 first 12-month extension the housing business makes application 12 and substantiates to the satisfaction of the authority that the 13 extension is warranted due to extenuating circumstances outside 14 the control of the housing business. 15 Under current law, if the cost of a project causes a housing 16 project’s average unit cost to exceed the authorized maximum 17 amount, but does not cause the average unit cost to exceed 18 110 percent of the maximum amount, the authority may issue 19 a tax credit certificate (certificate). If the cost of the 20 project causes the average unit cost to exceed 110 percent, the 21 authority shall determine the housing business is in default, 22 revoke the housing business’s tax incentive award, and not 23 issue it a certificate. Under the bill, the average unit cost 24 cannot exceed 150 percent of the authorized maximum amount. 25 The sections of the bill amending Code sections 15.352(10), 26 15.352(11), 15.353(2)(e), 15.353(3), and 15.354(3)(e)(2)(b)-(c) 27 apply retroactively to July 1, 2021, to all eligible housing 28 businesses that the authority has not notified of the amount 29 that the housing business may claim as a refund of the sales 30 and use tax under Code section 15.355(2) and all eligible 31 housing businesses that the authority has not issued a 32 certificate stating the amount of workforce housing investment 33 tax credits under Code section 15.355(3) the eligible housing 34 business may claim. 35 -8- LSB 5319SV (2) 89 ko/jh 8/ 9
S.F. 2325 The bill takes effect upon enactment. 1 -9- LSB 5319SV (2) 89 ko/jh 9/ 9
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