House File 21 - Introduced
HOUSE FILE 21
BY HITE
A BILL FOR
1 An Act relating to revitalization areas by authorizing cities
2 and counties to provide property tax exemptions for certain
3 property located in areas previously subjected to lending
4 discrimination and including applicability provisions.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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1 Section 1. Section 404.1, Code 2021, is amended by adding
2 the following new subsection:
3 NEW SUBSECTION. 6. An area that is a federal targeted area,
4 as defined in section 404.3C.
5 Sec. 2. Section 404.2, subsection 2, paragraphs h and i,
6 Code 2021, are amended to read as follows:
7 h. Any tax exemption schedule authorized in section 404.3,
8 subsection 5, or section 404.3A, 404.3B, or 404.3C, that shall
9 be used in lieu of the schedule set out in section 404.3,
10 subsection 1, 2, 3, or 4. In the case of a county, the tax
11 schedules used shall only be applicable to property of the type
12 for which the revitalization area is zoned at the time the
13 county designates the area a revitalization area.
14 i. The Unless inapplicable for an area under section 404.3C,
15 the percent increase in actual value requirements that shall
16 be used in lieu of the fifteen and ten percent requirements
17 specified in section 404.3, subsection 8 and in section 404.5.
18 This percent increase in actual value requirements shall not be
19 greater than that provided in this chapter and shall, except as
20 provided in section 404.3C, be the same requirements applicable
21 to all existing revitalization areas.
22 Sec. 3. Section 404.3, subsections 5, 8, and 9, Code 2021,
23 are amended to read as follows:
24 5. A city or county may adopt a different tax exemption
25 schedule than those allowed in subsection 1, 2, 3, or 4. The
26 different schedule adopted shall not allow a greater exemption,
27 but may allow a smaller exemption, in a particular year,
28 than allowed in the schedule specified in the corresponding
29 subsection of this section. A different schedule adopted by a
30 city or county shall apply to every revitalization area within
31 the city or county, unless the qualified property is eligible
32 for an exemption pursuant to section 404.3A, or 404.3B, or
33 404.3C, and except in areas of the city or county which have
34 been designated as both urban renewal and urban revitalization
35 areas. In an area designated for both urban renewal and urban
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1 revitalization, a city or county may adopt a different schedule
2 than has been adopted for revitalization areas which have not
3 been designated as urban renewal areas.
4 8. “Qualified real estate” as used in this chapter and
5 section 419.17 means real property, other than land, which
6 is located in a designated revitalization area and to which
7 improvements have been added, during the time the area was
8 so designated, which have increased the actual value by at
9 least the percent specified in the plan adopted by the city
10 or county pursuant to section 404.2 or if no percent is
11 specified then by at least fifteen percent, or at least ten
12 percent in the case of real property assessed as residential
13 property or which have, in the case of land upon which is
14 located more than one building and not assessed as residential
15 property, increased the actual value of the buildings to
16 which the improvements have been made by at least fifteen
17 percent. For revitalization areas governed by section
18 404.3C, the percent increase in actual value required to be
19 eligible to receive an exemption shall not apply and instead
20 the improvement cost requirement under section 404.3C shall
21 apply. “Qualified real estate” also means land upon which
22 no structure existed at the start of the new construction,
23 which is located in a designated revitalization area and upon
24 which new construction has been added during the time the area
25 was so designated. “Improvements” as used in this chapter
26 and section 419.17 includes rehabilitation and additions to
27 existing structures as well as new construction on vacant land
28 or on land with existing structures. However, new construction
29 on land assessed as agricultural property shall not qualify as
30 “improvements” for purposes of this chapter and section 419.17
31 unless the governing body of the city or county has presented
32 justification at a public hearing held pursuant to section
33 404.2 for the revitalization of land assessed as agricultural
34 property by means of new construction. Such justification
35 shall demonstrate, in addition to the other requirements of
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1 this chapter and section 419.17, that the improvements on
2 land assessed as agricultural land will utilize the minimum
3 amount of agricultural land necessary to accomplish the
4 revitalization of the other classes of property within the
5 urban revitalization area. However, if such construction,
6 rehabilitation or additions were begun prior to January 29,
7 1979, or one year prior to the adoption by the city or county
8 of a plan of urban revitalization pursuant to section 404.2,
9 whichever occurs later, the value added by such construction,
10 rehabilitation or additions shall not constitute an increase in
11 value for purposes of qualifying for the exemptions listed in
12 this section. “Actual value added by the improvements” as used
13 in this chapter and section 419.17 means the actual value added
14 as of the first year for which the exemption was received.
15 9. The fifteen and ten percent increase in actual value
16 requirements specified in subsection 8 shall apply to every
17 revitalization area within a city or county unless different
18 percent increases in actual value requirements are required by
19 or made inapplicable under this chapter or are adopted in the
20 city or county plan as provided in section 404.2. However, a
21 city or county shall not adopt different requirements unless
22 every revitalization area within the city or county, other
23 than those areas governed by section 404.3C, has the same
24 requirements and the requirements do not provide for a greater
25 percent increase than specified in subsection 8.
26 Sec. 4. NEW SECTION. 404.3C Federal targeted area
27 exemption.
28 1. a. Notwithstanding the schedules otherwise provided
29 for in this chapter, a city or county may provide that all
30 qualified real estate located in a revitalization area that is
31 a federal targeted area is eligible to receive an exemption
32 from taxation based on the schedule set forth in subsection 2.
33 b. In lieu of the percent increase in actual value
34 requirements otherwise applicable for qualified real estate
35 under this chapter, in order to be qualified real estate for
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1 the purposes of this section, the owner of the real property
2 must add improvements to the property the cost of which equals
3 or exceeds thirty percent of the actual value of the property
4 as of the date the area was designated.
5 2. All qualified real estate described in subsection 1 is
6 eligible to receive an exemption from taxation on the total
7 actual value of the qualified real estate. The exemption is
8 for a period of fifteen years. The amount of the exemption is
9 equal to a percent of the actual value of the qualified real
10 estate, determined as follows:
11 a. For the first year, one hundred percent.
12 b. For the second year, ninety-four percent.
13 c. For the third year, eighty-eight percent.
14 d. For the fourth year, eighty-two percent.
15 e. For the fifth year, seventy-six percent.
16 f. For the sixth year, seventy percent.
17 g. For the seventh year, sixty-four percent.
18 h. For the eighth year, fifty-eight percent.
19 i. For the ninth year, fifty-two percent.
20 j. For the tenth year, forty-six percent.
21 k. For the eleventh year, forty percent.
22 l. For the twelfth year, thirty-four percent.
23 m. For the thirteenth year, twenty-eight percent.
24 n. For the fourteenth year, twenty-two percent.
25 o. For the fifteenth year, sixteen percent.
26 3. For purposes of this section, “federal targeted area”
27 means an area that has previously been identified by the
28 home owners’ loan corporation or similar entity as less
29 desirable, declining, hazardous, or risky for mortgage lending
30 in accordance with or as the result of implementation of the
31 National Housing Act, Pub. L. No. 73–479, 48 Stat. 1246, the
32 United States Housing Act of 1937, Pub. L. No. 75–412, 50
33 Stat. 888, or a subsequent enactment of Congress or successor
34 provision of law prior to enactment of Title VIII of the Civil
35 Rights Act of 1968, commonly referred to as the Fair Housing
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1 Act of 1968.
2 Sec. 5. APPLICABILITY. This Act applies to revitalization
3 areas established on or after July 1, 2021.
4 EXPLANATION
5 The inclusion of this explanation does not constitute agreement with
6 the explanation’s substance by the members of the general assembly.
7 Code chapter 404 authorizes a city to designate an area
8 of the city, or a county to designate an area of the county
9 outside the boundaries of a city, as a revitalization area,
10 if that area meets certain conditions related to the state
11 of the property or is appropriate for public improvements or
12 development. As the result of such designations, qualified
13 real estate within the revitalization area is eligible to
14 receive a property tax exemption for a percentage of the actual
15 value added by improvements to the property. Under Code
16 chapter 404, qualified real estate must meet certain thresholds
17 for the amount of actual value added by the improvements to
18 receive an exemption under one of several exemption schedules
19 with varying durations and percentages of exemption.
20 This bill provides an additional option for a city or county
21 to provide an exemption to a revitalization area established
22 by ordinance that is a “federal targeted area”. The bill
23 defines “federal targeted area” to mean an area that has
24 previously been identified by the home owners’ loan corporation
25 or similar entity as less desirable, declining, hazardous, or
26 risky for mortgage lending in accordance with or as the result
27 of implementation of the National Housing Act (1934), the
28 United States Housing Act of 1937, or a subsequent enactment of
29 Congress or successor provision of law prior to enactment of
30 the Fair Housing Act of 1968.
31 All qualified real estate in a revitalization area that is
32 a federal targeted area is eligible to receive an exemption
33 from taxation on the total actual value of the qualified real
34 estate. The exemption is for a period of 15 years, beginning
35 at 100 percent and decreasing by 6 percent each year until
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1 expiration of the 15-year period.
2 In lieu of the percent increase in actual value requirements
3 otherwise applicable for qualified real estate under Code
4 chapter 404, in order to be qualified real estate for the
5 purposes of the bill, the owner of the real property must
6 add improvements to the property the cost of which equals or
7 exceeds 30 percent of the actual value of the property as of
8 the date the area was designated.
9 The bill applies to revitalization areas established on or
10 after July 1, 2021.
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Statutes affected:
Introduced: 404.1