2012 TIF Amendments – HF 2460

1. All cities and counties must file annual report with State by December 1 listing the following:

  • Physical and legal aspects of each area (size, boundaries, expiration date, etc.)
  • List of all projects – old and new
  • List of expenditures paid from TIF in past fiscal year
  • Amount of outstanding TIF debt and new TIF debt incurred in past fiscal year
  • Details of each TIF rebate agreement, including legal description of each property and names of recipients of TIF rebate
  • Total valuation of taxable property and amount of that valuation claimed for TIF

2. New procedures related to use of TIF revenues to finance public buildings, including reporting alternative funding options and reasons they are “less feasible” than using TIF. No veto power to schools or counties; analysis must be part of consultation session. For example, general obligation bonds could be issued, but a referendum would be required, and it is not likely that the required 60% of voters would be in favor. Local option revenues are limited by ballot language to use for streets.

3. Urban renewal plans must be amended whenever new projects are proposed that are not already listed in the plans. This will likely require amendments to existing urban renewal plans virtually every year, in order to give specifics of projects that are planned for that year, showing details of, for example, streets to be improved, buildings to be constructed, economic development grants or TIF rebate agreements to be approved.

4. “Anti-piracy” provisions related to restrictions on use of TIF as an incentive for a business to move from one city to another city. Such use would require one of the following:

  • An agreement between the two cities with respect to the use of TIF for this type of relocation or agreement with respect to the use of TIF to attract new developments, or
  • Company must show it is “actively considering moving all or part of its operations to a locations outside the State of Iowa” and that this would result in a significant reduction in total employees in Iowa or a reduction of total wages paid to employees in Iowa.

5. TIF debt or bonds incurred or issued after April 24, 2012, may not receive TIF revenues generated by school district instructional support tax levies. These levies are now “protected” in the same manner as all debt service levies and school physical plant and equipment levies. The impact of this change could be significant, because most school districts have instructional support tax levies. Going forward, TIF revenues calculations must exclude from consolidated levy all debt service levies, school physical plant and equipment levies and school instructional support levies. For TIF debt incurred prior to April 24, 2012, cities and counties must notify schools that they want to receive revenues from instructional support levies in order to help pay that debt.

6. Community Colleges are no longer part of the “consultation session” process.

Robert E. Josten and John P. Danos
Dorsey & Whitney, LLP
801 Grand, Suite 4100
Des Moines, Iowa 50309
(515) 283-1000
josten.robert@dorsey.com/danos.john@dorsey.com

Testimonial: Neumann Brothers

“Neumann Brothers believes in the private/public sector partnership approach to local economic development and know in order to grow jobs in any community businesses must get involved and contribute. We find our involvement in the Greater Dallas County Economic Development Alliance is a great way to be engaged in the process and support developing growth opportunities within our community.”

– Ted Brackett, VP / Business Development | Neumann Brothers
GDCDA Board of Directors Member and Membership Committee Co-Chair

www.neumannbros.com

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