House File 582 - Introduced
HOUSE FILE 582
BY COMMITTEE ON ECONOMIC
GROWTH
(SUCCESSOR TO HSB 178)
A BILL FOR
1 An Act relating to affordable housing, disaster housing
2 assistance, and redevelopment tax credits by creating an
3 Iowa housing tax credit program, modifying distribution of
4 real estate transfer taxes, modifying workforce housing tax
5 incentives, including a downtown loan guarantee program,
6 creating a disaster housing recovery assistance program and
7 an eviction prevention program, providing for a fee, and
8 including effective date and applicability provisions.
9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
TLSB 1978HV (1) 89
jm/jh
 H.F. 582
1 DIVISION I
2 IOWA HOUSING TAX CREDIT PROGRAM
3 Section 1. NEW SECTION. 16.37A Definitions.
4 For purposes of this section and sections 16.37B through
5 16.37G, unless the context otherwise requires:
6 1. “Compliance period” means the period of fifteen years
7 beginning with the first taxable year of the credit period.
8 2. “Credit period” means the period of ten tax years
9 beginning with the tax year in which a qualified development
10 is placed in service and the Iowa housing tax credit may be
11 claimed. If a qualified development consists of more than
12 one building, the qualified development is placed in service
13 in the tax year in which the last building of the qualified
14 development is placed in service.
15 3. “Department” means the Iowa department of revenue.
16 4. “Qualified allocation plan” means the qualified
17 allocation plan adopted by the authority pursuant to section
18 42(m) of the Internal Revenue Code.
19 5. “Qualified basis” means the qualified basis determined
20 under section 42(c)(1) of the Internal Revenue Code.
21 6. “Qualified development” means a qualified low-income
22 housing project under section 42(g) of the Internal Revenue
23 Code that is financed with tax-exempt bonds, pursuant to
24 section 42(i)(2) of the Internal Revenue Code, and located in
25 this state.
26 7. “Taxpayer” means an individual, a person, firm,
27 corporation, or other entity that owns an interest, direct
28 or indirect, in a qualified development and who claims a tax
29 credit under section 16.37C.
30 Sec. 2. NEW SECTION. 16.37B Application —— review ——
31 authorization.
32 1. The authority shall develop a system for the application,
33 review, and authorization of Iowa housing tax credits awarded
34 pursuant to this part and shall control the issuance of all tax
35 credit certificates to taxpayers pursuant to this part.
LSB 1978HV (1) 89
-1- jm/jh 1/29
 H.F. 582
1 2. Applications for Iowa housing tax credits shall be
2 accepted during an application period established by the
3 authority.
4 3. The authority may authorize the tax credit if all of the
5 following conditions are satisfied:
6 a. The tax credit certificate is issued to a taxpayer who
7 has an ownership interest in the qualified development.
8 b. The tax credit amount is allocated pursuant to a
9 qualified allocation plan.
10 c. The tax credit is necessary for the financial feasibility
11 of the qualified development.
12 d. The amount of the tax credit allocated to an owner
13 does not exceed thirty percent of the qualified basis of the
14 qualified development.
15 e. The qualified development is the subject of a recorded
16 restrictive covenant requiring that, for the compliance period
17 or for a longer period agreed to by the authority and the
18 owner of the qualified development, the development shall be
19 maintained and operated as a qualified development and shall be
20 in compliance with Tit. VIII of the federal Civil Rights Act of
21 1968, as amended.
22 4. Upon review of an application, the authority may approve
23 the qualified development for the tax credit program provided
24 in section 16.37C, and issue a tax credit certificate stating
25 the amount of the tax credit the authority determines the
26 taxpayer is eligible to claim for each year of the credit
27 period.
28 5. Unless otherwise provided in this section or the context
29 clearly requires otherwise, the authority shall determine
30 eligibility for a credit and allocate credits in accordance
31 with the standards and requirements set forth in section 42 of
32 the Internal Revenue Code.
33 6. An applicant that is unsuccessful in receiving a tax
34 credit award during an application period may make additional
35 applications during subsequent application periods. Such
LSB 1978HV (1) 89
-2- jm/jh 2/29
 H.F. 582
1 applicants shall be required to submit a new application which
2 shall be reviewed in the same manner as other applications in
3 that application period.
4 Sec. 3. NEW SECTION. 16.37C Iowa housing tax credits ——
5 limits.
6 1. An Iowa housing tax credit shall be allowed against
7 the taxes imposed in chapter 422, subchapters II, III, and V,
8 and in chapter 432, and against the moneys and credits tax
9 imposed in section 533.329, in the amount determined by the
10 authority pursuant to this part. Any tax credit in excess of
11 the taxpayer’s liability for the tax year is not refundable but
12 may be credited to the tax liability for the following five
13 years or until depleted, whichever is earlier.
14 2. An individual may claim a tax credit under this section
15 of a partnership, limited liability company, S corporation,
16 estate, or trust electing to have income taxed directly to
17 the individual. The amount claimed by the individual shall
18 be based upon the pro rata share of the individual’s earnings
19 from the partnership, limited liability company, S corporation,
20 estate, or trust.
21 3. In any calendar year, the aggregate amount of all tax
22 credits allocated by the authority shall not exceed fifteen
23 million dollars, plus the sum of the following amounts:
24 a. The total of all unallocated tax credits, if any, for the
25 preceding calendar years.
26 b. The total amount of all previously allocated tax credits
27 that have been recaptured, revoked, canceled, or otherwise
28 recovered by the authority.
29 4. a. To claim a tax credit under this section, a taxpayer
30 shall include one or more tax credit certificates issued by the
31 authority with the taxpayer’s tax return.
32 b. The tax credit certificate shall contain the taxpayer’s
33 name, address, tax identification number, the amount of the
34 credit including the amount the authority determines the
35 taxpayer is eligible to claim for each year of the credit
LSB 1978HV (1) 89
-3- jm/jh 3/29
 H.F. 582
1 period, the name of the qualified development, any other
2 information required by the department of revenue, and a place
3 for the name and tax identification number of a transferee and
4 the amount of the tax credit being transferred.
5 c. Tax credit certificates issued under this section may
6 be transferred to any person or entity. Within ninety days
7 of transfer, the transferee shall submit the transferred tax
8 credit certificate to the authority along with a statement
9 containing the transferee’s name, tax identification number,
10 and address, the denomination that each replacement tax credit
11 certificate is to carry, and any other information required by
12 the department of revenue.
13 d. Within thirty days of receiving the transferred tax
14 credit certificate and the transferee’s statement, the
15 authority shall issue one or more replacement tax credit
16 certificates to the transferee. Each replacement tax credit
17 certificate must contain the information required for the
18 original tax credit certificate and must have the same
19 expiration date that appeared in the transferred tax credit
20 certificate. Tax credit certificate amounts of less than the
21 minimum amount established by rule of the authority shall not
22 be transferable.
23 e. A tax credit shall not be claimed by a transferee
24 under this section until a replacement tax credit certificate
25 identifying the transferee as the proper holder has been
26 issued. The transferee may use the amount of the tax credit
27 transferred against the taxes imposed in chapter 422,
28 subchapters II, III, and V, and in chapter 432, and against the
29 moneys and credits tax imposed in section 533.329, for any tax
30 year the original transferor could have claimed the tax credit.
31 Any consideration received for the transfer of the tax credit
32 shall not be included as income under chapter 422, subchapters
33 II, III, and V. Any consideration paid for the transfer of the
34 tax credit shall not be deducted from income under chapter 422,
35 subchapters II, III, and V.
LSB 1978HV (1) 89
-4- jm/jh 4/29
 H.F. 582
1 Sec. 4. NEW SECTION. 16.37D Recapture.
2 1. As of the last day of any tax year during the compliance
3 period, if the amount of the qualified basis of a qualified
4 development owned by a taxpayer claiming the credit is less
5 than the amount of the qualified basis as of the last day of the
6 immediately preceding tax year, the amount of the taxpayer’s
7 liability under chapter 422, subchapter II, III, or V, chapter
8 432, or section 533.329, as applicable, shall be increased by
9 the recapture amount determined using the method under section
10 42(j) of the Internal Revenue Code.
11 2. If a recapture event occurs, the taxpayer shall include
12 the recaptured proportion of the credit on the return submitted
13 for the tax year in which the recapture event is identified.
14 Sec. 5. NEW SECTION. 16.37E Compliance monitoring.
15 The authority shall monitor and oversee compliance with
16 sections 16.37A through 16.37D and shall report specific
17 occurrences of noncompliance to the department.
18 Sec. 6. NEW SECTION. 16.37F Report to the general assembly.
19 On or before January 31 of each year, the authority shall
20 submit to the general assembly a report that includes all of
21 the following:
22 1. A statement of the number of qualified developments for
23 which the authority issued tax certificates the prior year.
24 2. A description of each qualified development for which the
25 authority issued a tax certificate the prior year, including
26 the geographic location of the development, the household type
27 and any specific demographic information available concerning
28 the residents intended to be served by the development,
29 the income levels of residents intended to be served by the
30 development, and the rents or set-asides authorized for each
31 development.
32 Sec. 7. NEW SECTION. 16.37G Rules.
33 The authority and the department shall adopt rules pursuant
34 to chapter 17A as necessary for the implementation and
35 administration of this part.
LSB 1978HV (1) 89
-5- jm/jh 5/29
 H.F. 582
1 Sec. 8. NEW SECTION. 422.10C Iowa housing tax credit.
2 The taxes imposed under this subchapter, less the credits
3 allowed under section 422.12, shall be reduced by an Iowa
4 housing tax credit allowed under section 16.37C.
5 Sec. 9. Section 422.33, Code 2021, is amended by adding the
6 following new subsection:
7 NEW SUBSECTION. 17. The taxes imposed under this subchapter
8 shall be reduced by an Iowa housing tax credit as allowed under
9 section 16.37C.
10 Sec. 10. Section 422.60, Code 2021, is amended by adding the
11 following new subsection:
12 NEW SUBSECTION. 14. The taxes imposed under this subchapter
13 shall be reduced by an Iowa housing tax credit as allowed under
14 section 16.37C.
15 Sec. 11. NEW SECTION. 432.12N Iowa housing tax credit.
16 The taxes imposed under this chapter shall be reduced by an
17 Iowa housing tax credit allowed under section 16.37C.
18 Sec. 12. Section 533.329, subsection 2, Code 2021, is
19 amended by adding the following new paragraph:
20 NEW PARAGRAPH. l. The moneys and credits tax imposed under
21 this section shall be reduced by an Iowa housing tax credit
22 allowed under section 16.37C.
23 Sec. 13. CODE EDITOR DIRECTIVE. The Code editor shall
24 designate sections 16.37A through 16.37G, as enacted by
25 this division of this Act, as a new part within chapter 16,
26 subchapter VII, and may redesignate the new and preexisting
27 parts, replace references to sections 16.37A through 16.37G
28 with references to the new part, and correct internal
29 references as necessary, including references in subchapter or
30 part headnotes.
31 Sec. 14. EFFECTIVE DATE. This division of this Act takes
32 effect January 1, 2022.
33 Sec. 15. APPLICABILITY. This division of this Act applies
34 to tax years beginning on or after January 1, 2022.
35 DIVISION II
LSB 1978HV (1) 89
-6- jm/jh 6/29
 H.F. 582
1 HOUSING TRUST FUND
2 Sec. 16. Section 428A.8, subsection 3, Code 2021, is amended
3 by striking the subsection.
4 DIVISION III
5 WORKFORCE HOUSING TAX INCENTIVES
6 Sec. 17. Section 15.119, subsection 2, paragraph g, Code
7 2021, is amended to read as follows:
8 g. (1) The workforce housing tax incentives program
9 administered pursuant to sections 15.351 through 15.356.
10 In allocating tax credits pursuant to this subsection, the
11 authority shall not allocate more than twenty-five million
12 dollars for purposes of this paragraph. Of the moneys
13 allocated under this paragraph, ten million dollars shall be
14 reserved for allocation to qualified housing projects in small
15 cities, as defined in section 15.352, that are registered on
16 or after July 1, 2017.
17 (2) (a) Notwithstanding subparagraph (1), in allocating
18 tax credits pursuant to this subsection for each fiscal
19 year of the period beginning July 1, 2021, and ending June
20 30, 2024, the authority shall not allocate more than fifty
21 million dollars for purposes of this paragraph. Of the moneys
22 allocated under this paragraph for each fiscal year of the
23 period beginning July 1, 2021, and ending June 30, 2024, twenty
24 million dollars shall be reserved for allocation to qualified
25 housing projects in small cities, as defined in section 15.352,
26 that are registered on or after July 1, 2017.
27 (b) This subparagraph is repealed July 1, 2024.
28 Sec. 18. Section 15.353, subsection 3, Code 2021, is amended
29 to read as follows:
30 3. a. Except as provided in paragraph “b”, the The average
31 dwelling unit cost does not exceed two hundred thousand dollars
32 per dwelling unit an amount determined by the authority by
33 rule. In determining the average dwelling unit cost the
34 authority shall consider, at a minimum, building materials,
35 labor, site development, and land or property acquisition
LSB 1978HV (1) 89
-7- jm/jh 7/29
 H.F. 582
1 costs.
2 b. (1) The average dwelling unit cost does not exceed
3 two hundred fifty thousand dollars per dwelling unit if the
4 project involves the rehabilitation, repair, redevelopment,
5 or preservation of property described in section 404A.1,
6 subsection 8, paragraph “a”.
7 (2) The average dwelling unit cost for the project does not
8 exceed two hundred fifteen thousand dollars per dwelling unit
9 if the project is located in a small city.
10 Sec. 19. Section 15.354, subsection 3, paragraph d, Code
11 2021, is amended to read as follows:
12 d. Upon completion of a housing project, an a housing
13 business shall submit all of the following to the authority:
14 (1) An examination of the project in accordance with the
15 American institute of certified public accountants’ statements
16 on standards for attestation engagements, completed by a
17 certified public accountant authorized to practice in this
18 state, shall be submitted to the authority.
19 (2) A statement of the final amount of qualifying new
20 investment for the housing project.
21 (3) Any information the authority deems necessary to ensure
22 compliance with the agreement signed by the housing business
23 pursuant to paragraph “a”, the requirements of this part,
24 and rules the authority and the department of revenue adopt
25 pursuant to section 15.356.
26 Sec. 20. Section 15.354, subsection 3, paragraph e,
27 subparagraph (1), Code