House approves bill to require RDAs to report and return unused affordable-housing tax increment funds

House Bill 12, introduced by Representative Dunnegan, responds to an auditor report that found some redevelopment agencies (RDAs) held tax-increment financing (TIF) balances intended for affordable housing that had not been spent.

Dunnegan described the bill as implementing the auditor's recommendations to increase transparency and ensure money designated for low-income housing is used. "If the redevelopment agency has money that's just parked there that's supposed to be going for low income housing...they have to send a report to the legislative auditor saying how much money we have. And if it sits there for five years, then it defaults to our low income housing fund," Dunnegan said on the House floor.

During questioning, Dunnegan explained RDAs currently report financials to the Government Office of Economic Opportunity (GOEO), but enforcement has been limited. The bill adds penalties — after two years of nonreporting an RDA could lose 20% of increment money and GOEO would refer nonreporters to the legislative auditor for further review and posting.

Representative Lyman and Representative Briscoe pressed the sponsor about small municipalities that may lack capacity to use RDA funds directly. Dunnegan said those RDAs could transfer earmarked dollars to the state holding fund to aggregate resources for larger projects.

The House voted on HB 12 and the transcript records the final tally as "72 yays, 2 nays;" the bill will be sent to the Senate for consideration.

The sponsor and supporters characterized the measure as a transparency and accountability step to direct already-committed affordable-housing dollars toward their intended use rather than to create new taxes or redirect unrelated increment revenues.