ARC 0130D

ARC 0130D

ECONOMIC DEVELOPMENT AUTHORITY[261]

Adopted and Filed

Rulemaking related to workforce housing tax incentives program

    The Economic Development Authority hereby rescinds Chapter 48, “Workforce Housing Tax Incentives Program,” Iowa Administrative Code, and adopts a new Chapter 48 with the same title.

Legal Authority for Rulemaking

    This rulemaking is adopted under the authority provided in Iowa Code chapter 15.

State or Federal Law Implemented

    This rulemaking implements, in whole or in part, Iowa Code chapter 15.

Purpose and Summary

    Pursuant to Executive Order 10, the Authority is rescinding Chapter 48 and adopting a new chapter in lieu thereof. The chapter describes the policies and procedures applicable to the Workforce Housing Tax Incentive Program available pursuant to Iowa Code chapter 15, subchapter II, part 17, as amended by 2025 Iowa Acts, Senate File 657. The program supports the development of housing projects that are targeted at middle-income households.

    The new chapter is clearer and more concise throughout and omits language that duplicates statute. Additionally, the new chapter omits inconsistencies due to changes to the program and its available allocation of tax credits in 2025 Iowa Acts, Senate File 657.

Public Comment and Changes to Rulemaking

    Notice of Intended Action for this rulemaking was published in the Iowa Administrative Bulletin on December 24, 2025, as ARC 9830C. A public hearing was held on the following date(s):

     ?   January 13, 2026

     ?   January 15, 2026

    No one attended the public hearings. No public comments were received. A change from the Notice has been made to remove references to 2025 Iowa Acts, Senate File 657, since that legislation has been codified in the 2026 Iowa Code.

Adoption of Rulemaking

    This rulemaking was adopted by the Authority Board on February 20, 2026.

Fiscal Impact

     This rulemaking has no fiscal impact to the State of Iowa.

Jobs Impact

    After analysis and review of this rulemaking, no impact on jobs has been found.

Waivers

    Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Authority for a waiver of the discretionary provisions, if any, pursuant to 261—Chapter 199.

Review by Administrative Rules Review Committee

    The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).

Effective Date

    This rulemaking will become effective on April 22, 2026.

    The following rulemaking action is adopted:

    ITEM 1.  Rescind 261—Chapter 48 and adopt the following new chapter in lieu thereof:

CHAPTER 48

WORKFORCE HOUSING TAX INCENTIVES PROGRAM

261—48.1(15) Definitions. As used in this chapter unless the context otherwise requires:

    “Authority” means the economic development authority created in Iowa Code section 15.105.

    “Authority’s website” means the information and related content found at www.opportunityiowa.gov.

    “Average dwelling unit cost” means the costs directly related to the housing project divided by the total number of dwelling units in the housing project.

    “Board” means the same as defined in Iowa Code section 15.102.

    “Costs directly related” means expenditures that are incurred for construction of a housing project to the extent that they are attributable directly to the improvement of the property or its structures. “Costs directly related” includes expenditures for site preparation work, surveying, construction materials, construction labor, architectural services, and engineering services. “Costs directly related” does not include expenditures for property acquisition, building permits, building inspection fees, furnishings, appliances, accounting services, legal services, loan origination and other financing costs including interest on construction loans, syndication fees and related costs, developer fees, or the costs associated with selling or renting the dwelling units whether incurred before or after completion of the housing project.

    “Disaster recovery housing project” means the same as defined in Iowa Code section 15.354(6).

    “Grayfield site” means the same as defined in Iowa Code section 15.352.

    “Greenfield site” means the same as defined in Iowa Code section 15.352.

    “Housing business” means the same as defined in Iowa Code section 15.352.

    “Housing project” means the same as defined in Iowa Code section 15.352.

    “New dwelling units” means dwelling units that are made available for occupancy in a community as a result of a housing project and that were not available for occupancy as residential housing in the community for a period of at least six months prior to the date on which application is made to the authority for tax incentives. If a dwelling unit has served as residential housing and been occupied during the six months preceding the date on which application is made to the authority for tax incentives, then the dwelling unit shall be presumed not to be a new dwelling unit.

    “Program” means the workforce housing tax incentives program administered pursuant to Iowa Code chapter 15, subchapter II, part 17, and this chapter.

    “Tax credit certificate” means a certificate issued by the authority stating the amount of workforce housing investment tax credits pursuant to Iowa Code section 15.355(3) that an eligible housing business may claim.

261—48.2(15) Housing project requirements.

    48.2(1) Eligible project types. To receive workforce housing tax incentives pursuant to the program, a proposed housing project shall meet all of the requirements in Iowa Code section 15.353.

    a.  For the purposes of identifying eligible project types pursuant to Iowa Code section 15.353, “rehabilitation, repair, or redevelopment” means construction or development activities associated with a housing project that are undertaken for the purpose of reusing or repurposing existing buildings or structures as new dwelling units. “Rehabilitation, repair, or redevelopment” does not include new construction of dwelling units at a greenfield site. “Rehabilitation, repair, or redevelopment” includes new structures at a qualified grayfield site.

    b.  For the purposes of identifying eligible project types pursuant to Iowa Code section 15.353, factors the authority may consider to determine whether a dwelling unit should be classified as a single family dwelling unit include but are not limited to the following:

    (1)  Whether the unit is separated from other units by a ground-to-roof wall;

    (2)  Whether the unit has a separate heating system;

    (3)  Whether the unit has an individual meter for public utilities; and

    (4)  Whether the unit has other units above or below.

    c.  A housing project is not eligible for the program if it is located in a 100-year floodplain.

    48.2(2) Maximum cost. The average dwelling unit cost for a housing project shall not exceed the maximum amount established by the board pursuant to Iowa Code section 15.353(3)“a” or, if applicable, the maximum amount established pursuant to Iowa Code section 15.353(3)“b.”

    48.2(3) Violations of law. A housing project may be ineligible for the program due to a record of violations of the law pursuant to Iowa Code section 15.354(1)“b”(2).

261—48.3(15) Housing project application and agreement.

    48.3(1) Application. Information about applying for tax incentives will be available on the authority’s website. A housing business shall apply for tax incentives in the form and content specified by the authority. The application will include all the information described in described in Iowa Code section 15.354(1).

    48.3(2) Application review and approval.

    a.  All completed applications shall be reviewed and scored pursuant to Iowa Code section 15.354(2). Review criteria include but are not limited to project need, project readiness, financial capacity, and project impact.

    b.  The director will approve tax incentive awards after considering the recommendations of staff. The director may approve, defer or deny an application.

    48.3(3) Agreement and fees.

    a.  A housing business that has been approved for tax incentives shall execute and return the agreement required by Iowa Code section 15.354(3) within 90 days of transmittal. Failure to do so may be cause for the director to terminate the award.

    b.  The compliance cost fees imposed in Iowa Code section 15.354(3)“b” shall apply to all agreements entered into for this program.

    c.  The agreement entered pursuant to Iowa Code section 15.354(3) may only be amended if done so in writing and signed by the housing business and the authority. Examples of situations requiring an amendment include but are not limited to time extensions, budget revisions, and significant alterations of the housing project.

    d.  Upon completion of a housing project, a housing business shall submit all of the information and documentation required by Iowa Code section 15.354(3)“d” to the authority along with a statement of all funding sources utilized for the project including government financing. The attestation applicable to the examination required by Iowa Code section 15.354(3)“d” is SSAE No. 10 (as amended by SSAE Nos. 11, 12, 14), AT section 101, and AT section 601 or other comparable attestations as identified by the authority. The procedures used by the certified public accountant (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.

261—48.4(15) Workforce housing tax incentives.

    48.4(1) Eligibility. A housing business that has entered into an agreement pursuant to rule 261—48.3(15) is eligible to receive the sales tax refund and income tax credit described in Iowa Code section 15.355. Tax incentives may be claimed pursuant to Iowa Code section 15.355 and any applicable rules adopted by the department of revenue.

    48.4(2) Transfer. Tax credit certificates may be transferred to any person pursuant to Iowa Code section 15.355 and the applicable rules adopted by the department of revenue. However, tax credit certificate amounts of less than $1,000 shall not be transferable.

    48.4(3) Tax credit limitations. The tax credit limitations specified in Iowa Code section 15.354(4) shall apply.

DISASTER RECOVERY HOUSING PROGRAM

261—48.5(15) Disaster recovery housing project requirements. To receive disaster recovery housing tax incentives pursuant to the program, a proposed disaster recovery housing project shall meet all requirements for other housing projects in rule 261—48.2(15).

261—48.6(15) Disaster recovery housing project application and agreement.

    48.6(1) Application. Information about applying for disaster recovery tax incentives will be available on the authority’s website. A housing business shall apply for tax incentives in the form and with the content specified by the authority. The application will include all the information described in Iowa Code section 15.354(1). If tax credits for disaster recovery housing projects are available, the authority may establish a disaster recovery application period following the declaration of a major disaster by the President of the United States for a county in Iowa.

    48.6(2) Application review and approval.

    a.  All completed applications shall be reviewed and scored pursuant to Iowa Code section 15.354(2). Review criteria include but are not limited to project need, project readiness, financial capacity, and project impact.

    b.  The director will approve tax incentive awards after considering the recommendations of staff. The director may approve, defer, or deny an application.

    48.6(3) Agreement and fees.

    a.  A housing business that has been approved for disaster recovery tax incentives shall execute and return the agreement required by Iowa Code section 15.354(3) within 90 days of transmittal. Failure to do so may be cause for the director to terminate the award.

    b.  The compliance cost fees imposed in Iowa Code section 15.354(3)“b” shall apply to all agreements entered into for this program.

    c.  The agreement entered pursuant to Iowa Code section 15.354(3) may only be amended if done so in writing and signed by the housing business and the authority. Examples of situations requiring an amendment include but are not limited to time extensions, budget revisions, and significant alterations of the housing project.

    d.  Upon completion of a disaster recovery housing project, a housing business shall submit all information and documentation required by Iowa Code section 15.354(3)“d” to the authority along with a statement of all funding sources utilized for the project including government financing. The attestation applicable to the examination required by Iowa Code section 15.354(3)“d” is as described in paragraph 48.3(3)“c.”

261—48.7(15) Disaster recovery housing tax incentives.

    48.7(1) Eligibility. A housing business that has entered into an agreement pursuant to rule 261—48.6(15) is eligible to receive the sales tax refund and income tax credit described in Iowa Code section 15.355. Tax incentives may be claimed pursuant to Iowa Code section 15.355 and any applicable rules adopted by the department of revenue.

    48.7(2) Transfer. Tax credit certificates may be transferred to any person pursuant to Iowa Code section 15.355 and the applicable rules adopted by the department of revenue. However, tax credit certificate amounts of less than $1,000 shall not be transferable.

    48.7(3) Tax credit limitations. The tax credit limitations specified in Iowa Code section 15.354(4) or that may otherwise be specified for disaster recovery housing projects shall apply.

261—48.8(15) Projects located in small cities. A housing project located in a city or township that meets the criteria in Iowa Code section 15.352(10)“b” must be located at least five miles from the city limits of a city with a population greater than 2,500 to be considered located in a small city. Population for the purposes of this rule will be as determined by either the most recent population estimate produced by the United States Bureau of Census or the most recent decennial census released by the United States Bureau of Census.

These rules are intended to implement Iowa Code chapter 15, subchapter II, part 17.

[Filed 2/26/26, effective 4/22/26]

[Published 3/18/26]

EDITOR’S NOTE: For replacement pages for IAC, see IAC Supplement 3/18/26.