Current through Register Vol. 47, No. 6, September 18, 2024
(1)
Application.
a. A housing
business seeking workforce housing tax incentives provided in rule
261-48.6 (15) shall make
application to the authority in the manner prescribed in this rule.
b. The application required in paragraph
48.5(1)
"a" shall include all of the following:
(1) The following information establishing
local participation for the housing project:
1. A resolution in support of the housing
project by the community where the housing project will be located.
2. Documentation of local matching funds
pledged for the housing project in an amount equal to at least $1,000 per
dwelling unit, including but not limited to a funding agreement between the
housing business and the community where the housing project will be located.
For purposes of this paragraph, local matching funds shall be in the form of
cash or cash equivalents or in the form of a local property tax exemption,
rebate, refund, or reimbursement.
(2) A report that meets the requirements and
conditions of Iowa Code section
15.330(9)
if required.
(3) Information showing the total costs and
funding sources of the housing project sufficient to allow the authority to
adequately determine the financing that will be utilized for the housing
project, the actual cost of the dwelling units, and the amount of qualifying
new investment.
(4) Any other
information deemed necessary by the authority to evaluate the eligibility and
financial need of the housing project under the program.
(2)
Application review-tax
incentive award.
a. All completed
applications shall be reviewed and scored on a competitive basis by the
authority pursuant to these rules. Review criteria include but are not limited
to project need, project readiness, financial capacity, and project
impact.
b. Upon review and scoring
of all applications received during an application period, the authority may
make a tax incentive award to a housing project. The tax incentive award shall
represent the maximum amount of tax incentives the housing project may qualify
for under the program. In determining a tax incentive award, the authority
shall not use an amount of project costs that exceeds the amount included in
the application from the housing business. Tax incentive awards shall be
approved by the director of the authority.
c. After making a tax incentive award, the
authority shall notify the housing business of its tax incentive award. The
notification shall include the amount of tax incentives under rule
261-48.6 (15) for which the
housing business has received an award and a statement that the housing
business has no right to receive a tax incentive certificate or claim a tax
incentive until all requirements of the program, including all requirements
imposed by the agreement entered into pursuant to paragraph
48.5(3)"a," are satisfied. The amount of tax credits included
on a tax credit certificate issued pursuant to this chapter, or a claim for
refund of sales and use taxes, shall be contingent upon completion of the
requirements in subrule 48.5(3).
d.
An applicant that does not receive a tax incentive award during an application
period may make additional applications during subsequent application periods.
Such applicant shall be required to submit a new application, which shall be
competitively reviewed and scored in the same manner as other applications in
that application period.
(3)
Agreement and fees.
a. Upon receiving atax incentive award for a
housing project, the housing business shall enter into an agreement with the
authority for the successful completion of all requirements of the program. The
agreement shall identify the tax incentive amount, the tax incentive award
date, the project completion deadline and the total costs of the housing
project.
b. The compliance cost
fees imposed in Iowa Code section
15.330(12)
shall apply to all agreements entered into
under this program and shall be collected by the authority in the same manner
and to the same extent as described in that provision.
c. Housing project completion deadline.
(1) Except as provided in subparagraph
48.5(3)"c" (2), a housing business shall complete its housing
project within three years from the date the housing project is registered by
the authority.
(2) The authority
may for good cause within the discretion of the authority extend a housing
project's completion deadline by up to 12 months upon application by the
housing business, which application shall be made prior to the expiration of
the three-year completion deadline in subparagraph
48.5(3)"c"(1) in the manner and form prescribed by the
authority. The authority may approve a second extension of up to 12 months if
prior to the expiration of the first 12-month extension the housing business
applies and substantiates to the satisfaction of the authority that the second
extension is warranted due to extenuating circumstances outside the control of
the housing business. An application by a housing business shall be made in the
manner and form prescribed by the authority.
d. Upon completion of a housing project, a
housing business shall submit all of the following to the authority:
(1) An examination of the project in
accordance with the American Institute of Certified Public Accountants'
statements on standards for attestation engagements, completed by a certified
public accountant (CPA) authorized to practice in this state. The attestation
applicable to this examination is SSAE No. 10 (as amended by SSAE Nos. 11, 12,
14), AT section 101 and AT section 601. The procedures used by the CPA to
conduct the examination should allow the CPA to conclude that, in the CPA's
professional judgment, the expenditures claimed are eligible pursuant to the
agreement; Iowa Code chapter 15, subchapter II, part 17; and all rules adopted
pursuant to Iowa Code chapter 15, subchapter II, part 17, in all material
respects. Within ten business days of a request by the authority, the housing
business shall make available to the authority the documents reviewed by the
CPA unless good cause is shown.
(2)
A statement of the final amount of qualifying new investment for the housing
project.
(3) Any information the
authority deems necessary to ensure compliance with the agreement signed by the
housing business pursuant to paragraph 48.5(3)"a" ; the
requirements of Iowa Code chapter 15, subchapter II, part 17; and these rules
and rules adopted by the department of revenue pursuant to Iowa Code section
15.356.
e. Upon review
of the examination, verification of the amount of the qualifying new
investment, and review of any other information submitted pursuant to
subparagraph 48.5(3)"d" (3), the authority may notify the
housing business of the amount that the housing business may claim as a refund
of the sales and use taxes under subrule 48.6(2) and may issue a tax credit
certificate to the housing business stating the amount of workforce housing
investment tax credits under rule
261-48.6 (15) that the eligible
housing business may claim. The sum of the amount that the housing business may
claim as a refund of the sales and use tax and the amount of the tax credit
certificate shall not exceed the amount of the tax incentive award.
f. If, upon review of the examination in
paragraph 48.5(3)
"d," the authority determines that a housing
project has incurred project costs in excess of the amount submitted in the
application and identified in the agreement, the authority shall do one of the
following for projects that received a refund notice or tax credit certificate
on or after July 1, 2021:
(1) If the project
costs do not cause the housing project's average dwelling unit cost to exceed
the applicable maximum amount authorized in rule
261-48.4 (15), the authority may
consider the agreement fulfilled and may issue a tax credit
certificate.
(2) If the project
costs cause the housing project's average dwelling cost to exceed the
applicable maximum amount authorized in rule
261-48.4 (15) but do not cause
the average dwelling unit cost to exceed 150 percent of such applicable amount,
the authority shall reduce the tax incentive award and the corresponding amount
of tax incentives the eligible project may claim under rule
261-48.6 (15) by the same
percentage that the housing project's average dwelling cost exceeds the
applicable maximum amount under rule
261-48.4 (15), and such tax
incentive reduction shall be reflected on the tax credit certificate. If the
authority issues a certificate pursuant to this subrule, the department of
revenue shall accept the certificate notwithstanding that the housing project's
average dwelling unit cost exceeds the maximum amount specified in rule
261-48.4 (15).
(3) If the project costs cause the housing
project's average dwelling unit cost to exceed 150 percent of the applicable
maximum amount authorized in rule 261-48.4(15), the authority shall determine
the eligible housing business to be in default under the agreement, shall
revoke the tax incentive award and shall not issue a tax credit certificate.
The housing business shall not be allowed a refund of sales and use tax under
rule 261-48.6 (15).
(4)
Maximum
incentives amount.
a. The maximum
aggregate amount of tax incentives that may be awarded under rule
261-48.6 (15) to a housing
business for a housing project shall not exceed $1 million.
b. If a housing business qualifies for a
higher amount of tax incentives under rule
261-48.6 (15) than is allowed by
the limitation imposed in paragraph 48.5(4)"a," the authority
and the housing business may negotiate an apportionment of the reduction in tax
incentives between the sales tax refund provided in subrule 48.6(2) and the
workforce housing investment tax credits provided in subrule 48.6(3) provided
the total aggregate amount of tax incentives after the apportioned reduction
does not exceed the amount in paragraph 48.5(4)"a."
c. The authority shall issue tax incentives
under the program on a first-come, first-served basis until the maximum amount
of tax incentives allocated pursuant to Iowa Code section
15.119(2)
is reached. The authority shall maintain a
list of registered housing projects under the program so that if the maximum
aggregate amount of tax incentives is reached in a given fiscal year,
registered housing projects that were completed but for which tax incentives
were not issued shall be placed on a wait list in the order the registered
housing projects were registered and shall be given priority for receiving tax
incentives in succeeding fiscal years.
(5)
Termination and
repayment. The failure by a housing business in completing a housing
project to comply with any requirement of this program or any of the terms and
obligations of an agreement entered into pursuant to this rule may result in
the reduction, termination, or rescission of the approved tax incentives and
may subject the housing business to the repayment or recapture of tax
incentives claimed under rule
261-48.6 (15). The repayment or
recapture of tax incentives pursuant to this rule shall be accomplished in the
same manner as provided in Iowa Code section
15.330(2).