H.F. 2480 Section 1. Section 15F.103, Code 2009, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 5. Review, evaluate, and approve proposed 3 and amended plans for sales tax bonding districts pursuant to 4 sections 418.4 and 418.5. 5 Sec. 2. NEW SECTION . 418.1 Short title. 6 This chapter shall be known and cited as “The Sales Tax 7 Bonding Act” . 8 Sec. 3. NEW SECTION . 418.2 Definitions. 9 For purposes of this chapter, unless the context otherwise 10 requires: 11 1. “Base year” means the fiscal year ending during the 12 calendar year in which an ordinance establishing a sales tax 13 bonding district is adopted pursuant to the provisions of this 14 chapter. 15 2. “Board” means the vision Iowa board created pursuant to 16 section 15F.102. 17 3. “Sales tax” means the sales and services tax imposed 18 pursuant to section 423.2 or a tax imposed by a municipality 19 upon the sales price of the rental of lodging pursuant to 20 chapter 423A or upon the sales price of the sale or rental of 21 personal property and the furnishing of services pursuant to 22 chapter 423B. 23 4. “Designated portion” means the amount of an increment 24 that a municipality has authorized by resolution to be expended 25 for one or more of the purposes described in this chapter. 26 5. “District” means an area within an eligible municipality 27 designated as a sales tax bonding district pursuant to section 28 418.4. 29 6. “Eligible municipality” means a municipality meeting the 30 requirements of section 418.3. 31 7. “Fund” means the sales tax increment fund created 32 pursuant to section 418.7. 33 8. “Governing body” means the board of supervisors, city 34 council, or other body in which the legislative powers of the 35 -1- LSB 5008HV (3) 83 tw/sc 1/ 18

H.F. 2480 municipality are vested. 1 9. “Increment” means the amount of a district’s sales tax 2 receipts that is in excess of the amount of that district’s 3 sales tax receipts for the same quarter in the base year, as 4 calculated by the department of revenue pursuant to section 5 418.6. 6 10. “Lessor” has the same meaning as defined in section 7 423A.2. 8 11. “Lodging” has the same meaning as defined in section 9 423A.2. 10 12. “Municipality” means a county or an incorporated city. 11 13. “Project” means a vertical improvement to be constructed 12 or improved within a district financed pursuant to this 13 chapter. 14 14. “Retail establishment” means a business operated by a 15 retailer as defined in section 423.1. 16 15. “Transportation infrastructure” means structures and 17 other improvements used to convey people or goods from point to 18 point for purposes of commerce or recreation and includes but 19 is not limited to highways, roads, streets, alleys, railways, 20 and bike paths. 21 16. “Vacant land” means land in a proposed district that is 22 not occupied by a vertical improvement. 23 17. “Vertical improvement” means a structure that is wholly 24 or partially above ground. Vertical improvement includes 25 buildings and other appurtenant structures. 26 18. “Waterway” means a navigable body of water and includes 27 but is not limited to streams, rivers, lakes, ponds, and 28 canals. 29 Sec. 4. NEW SECTION . 418.3 Eligible municipalities. 30 1. A municipality meeting the requirements of this section 31 shall be eligible to establish a district pursuant to section 32 418.4 and to issue bonds pursuant to section 418.9. 33 2. To be eligible, a municipality shall demonstrate the 34 existence of all of the following conditions: 35 -2- LSB 5008HV (3) 83 tw/sc 2/ 18

H.F. 2480 a. An area suitable for development exists within 1 the boundaries of the municipality. To be suitable for 2 development, the area shall meet all of the following 3 requirements: 4 (1) The area shall consist of four hundred or more 5 contiguous acres of land that are entirely within the 6 boundaries of the municipality. An area may be bisected 7 by transportation infrastructure or waterways and still be 8 considered contiguous. 9 (2) At least ninety percent of the land in the area shall 10 be vacant land. 11 (3) The area shall consist only of parcels of real property 12 that the governing body determines will be directly and 13 substantially benefited by the proposed district. 14 (4) The area shall not include any part of a quality 15 jobs enterprise zone designated pursuant to section 15A.9 or 16 any part of an economic development enterprise zone created 17 pursuant to section 15E.192. 18 b. A proposed plan for the district has been developed. The 19 proposed plan shall meet the requirements of section 418.4. 20 Sec. 5. NEW SECTION . 418.4 District establishment. 21 1. The governing body of an eligible municipality may 22 by ordinance establish a district for purposes of financing 23 projects pursuant to this chapter. 24 2. a. A municipality seeking to establish a district 25 shall adopt a resolution finding that an area suitable for 26 development exists within the municipality and stating the 27 governing body’s intent to create a sales tax bonding district 28 and adopt a plan for the district. The resolution shall 29 include a proposed district plan. The proposed district plan 30 shall include all of the following: 31 (1) A legal description of the real estate forming the 32 boundaries of the area to be encompassed by the district along 33 with a map depicting the existing parcels of real estate within 34 the proposed district. 35 -3- LSB 5008HV (3) 83 tw/sc 3/ 18

H.F. 2480 (2) A list of the names and addresses of the owners of 1 record of the parcels to be included within the district. 2 (3) A list of all projects proposed to be undertaken within 3 the district, a detailed description of those projects, and a 4 project plan for each project. Each project included in the 5 list of projects shall independently meet the requirements of 6 section 418.5. 7 (4) An economic impact study conducted by an independent 8 economist retained by the municipality. 9 (5) The date and time of a public hearing to be conducted by 10 the municipality on the proposed plan and establishment of the 11 proposed district. 12 b. The projects listed in the proposed plan pursuant to 13 paragraph “a” , subparagraph (3), shall, in combination, do all 14 of the following: 15 (1) Total a capital investment of fifty million dollars. 16 (2) Create at least two hundred permanent new jobs. 17 (3) Generate at least twenty-five million dollars in annual 18 gross revenue. 19 c. The economic impact study required in paragraph “a” , 20 subparagraph (4), shall, at a minimum, do all of the following: 21 (1) Contain a detailed analysis of the financial benefit 22 of the proposed district to the economy of the state and the 23 municipality. 24 (2) Identify a projected market area within which the 25 district can reasonably be expected to have an economic impact. 26 (3) Assess the fiscal and financial impact of the proposed 27 district on other economic development projects or businesses 28 within the projected market area. 29 3. Notice of the public hearing, along with a copy of 30 the resolution and a summary of the proposed plan, shall be 31 published pursuant to section 331.305 or 362.3, as applicable. 32 Upon the conclusion of the public hearing, the governing body 33 of the municipality may adopt the initial proposed plan or an 34 amended proposed plan for the district. 35 -4- LSB 5008HV (3) 83 tw/sc 4/ 18

H.F. 2480 4. a. The municipality shall submit a copy of the 1 resolution, proposed plan, and accompanying materials adopted 2 pursuant to this section to the board for review and approval. 3 b. The board shall evaluate the municipality’s proposed 4 plan for the district and shall approve the establishment of 5 the district if the board determines that both of the following 6 conditions are met: 7 (1) The municipality is an eligible municipality pursuant 8 to section 418.3. 9 (2) Projects completed within the district will have a 10 substantial beneficial impact on the economy of the state and 11 the municipality. 12 5. Upon receiving the approval of the board, a municipality 13 seeking to establish a district may adopt an ordinance 14 establishing the district and shall notify the director of 15 revenue of the establishment of the district. 16 Sec. 6. NEW SECTION . 418.5 Project approval. 17 1. A municipality may use the moneys in the special fund 18 created by a municipality pursuant to section 418.8 to fund the 19 development of projects within a district established pursuant 20 to section 418.4 if such projects meet the requirements of this 21 section. 22 2. A municipality may amend the district plan to add 23 additional projects. All such additional projects are subject 24 to approval by the board. 25 3. a. For each project to be developed within the district, 26 the municipality shall submit a project plan to the board. 27 b. Each project plan shall include a project feasibility 28 study conducted by an independent professional with expertise 29 in economic development and public finance. The feasibility 30 study shall project and analyze the following: 31 (1) The amount of gross revenues expected to be collected 32 in the district as a result of the project for each year of the 33 bond maturation period. 34 (2) A detailed explanation of the manner and extent to which 35 -5- LSB 5008HV (3) 83 tw/sc 5/ 18

H.F. 2480 the project will contribute to the economic development of the 1 state and the municipality. 2 (3) An estimate of the number of visitors or customers the 3 project will generate during each year of the bond maturation 4 period. 5 (4) A description of the unique characteristics of the 6 project. 7 (5) An analysis of the project’s economic impact. The 8 analysis shall include the same components and be conducted in 9 the same manner as the economic impact study required under 10 section 418.4. 11 c. Each project plan shall clearly state the cost of the 12 project and the amount of public debt to be incurred for 13 purposes of funding the project. 14 4. The board shall review the municipality’s project 15 plan and evaluate the feasibility of the project. The board 16 shall approve a project plan if the plan demonstrates that the 17 project will contribute significantly to the economy of the 18 state and the municipality and that the project’s proposed 19 funding is feasible. 20 Sec. 7. NEW SECTION . 418.6 Increased revenue calculation. 21 1. The department of revenue shall calculate quarterly the 22 amount of increased tax revenues to be deposited in the sales 23 tax increment fund pursuant to the following provisions: 24 a. Section 423.2, subsection 11, paragraph “a” , subparagraph 25 (2). 26 b. Section 423A.6, subsection 4, paragraph “b” . 27 c. Section 423B.7, subsection 1, paragraph “c” . 28 2. The department of revenue shall calculate the amount of 29 the increase for purposes of subsection 1 as follows: 30 a. Determine the amount of sales tax revenue collected 31 in the area comprising the district during the corresponding 32 quarter in the base year by adding together the following: 33 (1) The amount of state sales and use tax revenue collected 34 by the department from retail establishments located in the 35 -6- LSB 5008HV (3) 83 tw/sc 6/ 18

H.F. 2480 district. 1 (2) The amount of local sales and services tax revenue 2 collected by the department from retail establishments located 3 in the district which are distributed to the municipality 4 pursuant to section 423B.7. 5 (3) The amount of local hotel and motel tax revenue 6 collected by the department from lessors of lodging located in 7 the district. 8 b. Determine the amount of sales tax revenue collected 9 in the area comprising the district during the corresponding 10 quarter in each subsequent calendar year by adding together the 11 revenues from the same sources specified in paragraph “a” . 12 c. Subtract the base year quarterly amount determined in 13 paragraph “a” from the subsequent calendar year quarterly 14 amount determined in paragraph “b” . 15 d. The result of the calculation in paragraph “c” , to the 16 extent that the total amount of revenue in all quarters of each 17 subsequent year exceeds the total amount of revenue in all 18 quarters of the base year, shall constitute the total yearly 19 amount of increased revenues for purposes of subsection 1. 20 Sec. 8. NEW SECTION . 418.7 Sales tax increment fund. 21 1. A sales tax increment fund is established in the state 22 treasury under the control of the department of revenue 23 consisting of the following moneys: 24 a. The amount of the increased state sales and services 25 tax revenues collected by the department of revenue within the 26 district and deposited in the fund pursuant to section 423.2, 27 subsection 11, paragraph “a” , subparagraph (2). 28 b. The amount of the increased local hotel and motel tax 29 revenues collected by the department of revenue within the 30 district and deposited in the fund pursuant to section 423A.6, 31 subsection 4, paragraph “b” . 32 c. The amount of the increased local option sales and 33 services tax revenues collected by the department of revenue 34 within the district and deposited in the fund pursuant to 35 -7- LSB 5008HV (3) 83 tw/sc 7/ 18

H.F. 2480 section 423B.7, subsection 1, paragraph “c” . 1 2. The department of revenue shall credit to the fund the 2 moneys described in subsection 1 beginning the first day of the 3 quarter following adoption of an ordinance pursuant to section 4 418.4. 5 3. An account is created within the fund for each 6 municipality that has established a district pursuant to 7 section 418.4. 8 4. a. All moneys in the accounts of the fund shall be 9 remitted quarterly by the department of revenue to each 10 municipality in the amount collected within the district. 11 b. The department of revenue shall adopt rules for the 12 remittance of moneys to municipalities. 13 Sec. 9. NEW SECTION . 418.8 Special fund of municipality. 14 1. Sales tax revenue received by a municipality pursuant 15 to this chapter shall be deposited in a special fund of the 16 municipality created for purposes of this chapter and shall be 17 used to fund projects within the district and to pay principal 18 and interest on bonds issued pursuant to section 418.9. If the 19 municipality determines that the revenue accruing to the fund 20 exceeds the amount necessary for these purposes, then moneys 21 derived from a locally imposed tax not necessary for reserves 22 or pledged to fund additional projects in the district shall be 23 applied by the municipality in reduction of property taxes, and 24 moneys derived from a state imposed tax shall be remitted by 25 the municipality to the department of revenue for deposit in 26 the general fund of the state. 27 2. In addition to the moneys received pursuant to section 28 418.7, subsection 1, a municipality may deposit in the special 29 fund any other sales tax revenues received by it pursuant to 30 the distribution formula in section 423B.7, subsections 3, 4, 31 and 5, and any other moneys lawfully at the municipality’s 32 disposal. 33 Sec. 10. NEW SECTION . 418.9 Bond issuance. 34 1. a. A municipality receiving sales tax revenues pursuant 35 -8- LSB 5008HV (3) 83 tw/sc 8/ 18

H.F. 2480 to this chapter shall have the authority to issue bonds that 1 are payable from revenues deposited in the municipality’s 2 special fund created pursuant to section 418.8. 3 b. A municipality shall have the authority to pledge 4 irrevocably to the payment of the bonds an amount of revenue 5 derived from the designated portions for each of the years the 6 bonds remain outstanding. 7 c. A municipality shall have the authority to issue bonds 8 only for purposes of funding projects in the district. 9 2. a. If a municipality elects to authorize the issuance of 10 bonds payable as provided in this section, the governing body 11 of the municipality shall follow the authorization procedures 12 set forth in section 384.83. 13 b. A municipality shall have the authority to issue bonds 14 for the purpose of refunding outstanding and previously issued 15 bonds under this subsection without otherwise complying with 16 the notice and hearing provisions of this subsection. 17 3. If sales taxes have been in effect for less than four 18 calendar quarters, the tax collected within the shorter period 19 may be adjusted to project the collections of the designated 20 portion for the full year for the purpose of determining the 21 amount of the bonds which may be issued. 22 4. a. The provisions of this section constitute separate 23 authorization for the issuance of bonds and shall prevail in 24 the event of conflict with any other provision of the Code 25 limiting the amount of bonds which may be issued or the source 26 of payment of the bonds. 27 b. Bonds issued under this section shall not limit or 28 restrict the authority of the municipality to issue bonds under 29 other provisions of the Code. 30 5. a. Bonds issued pursuant to this section shall 31 not constitute an indebtedness within the meaning of any 32 constitutional or statutory debt limitation or restriction, 33 and, except as otherwise provided in this section, shall not be 34 subject to the provisions of any other law or charter relating 35 -9- LSB 5008HV (3) 83 tw/sc 9/ 18

H.F. 2480 to the authorization, issuance, or sale of bonds. 1 b. Bonds issued pursuant to this section are declared to be 2 issued for an essential public and governmental purpose. 3 c. The bonds may be issued in one or more series and shall 4 comply with all of the following: 5 (1) The bonds shall bear the date of issuance. 6 (2) The bonds shall specify one of the following: 7 (a) Whether they are payable on demand. 8 (b) The time of maturity. 9 (3) The bonds shall bear interest at a rate not exceeding 10 that permitted by chapter 74A. 11 (4) The bonds shall be in a denomination or denominations, 12 be in the form, have the rank or priority, be executed in 13 the manner, be payable in the medium of payment, at the 14 place or places, be subject to the terms of redemption, with 15 or without premium, be secured in the manner, and have the 16 other characteristics, as may be provided by the resolution 17 authorizing their issuance. 18 d. The bonds may be sold at public or private sale at a 19 price as may be determined by the governing body. 20 Sec. 11. NEW SECTION . 418.10 District dissolution. 21 1. a. A municipality may by ordinance provide for the 22 dissolution of a district. However, a municipality shall 23 not dissolve a district until the debt incurred through the 24 issuance of bonds pursuant to this chapter has been retired. 25 b. A district established pursuant to this chapter is 26 dissolved twenty years from the date of its establishment under 27 section 418.4. 28 2. Upon the adoption of an ordinance pursuant to this 29 section, the municipality shall notify the director of revenue 30 of the dissolution of the district. 31 3. Upon the receipt of notification pursuant to subsection 32 2, the department of revenue shall cease to credit municipal 33 sales tax revenues to the fund. 34 4. Upon the dissolution of a district, the sales taxes 35 -10- LSB 5008HV (3) 83 tw/sc 10/ 18

H.F. 2480 collected under chapter 423A or chapter 423B within the 1 area formerly comprising the district shall be thereafter 2 administered, and the tax revenues distributed to 3 municipalities, in the same manner as if the district had not 4 been established. 5 Sec. 12. Section 423.2, subsection 11, Code 2009, is amended 6 to read as follows: 7 11. a. (1) All revenues arising under the operation of the 8 provisions of this section shall be deposited into the general 9 fund of the state. 10 (2) Subsequent to the deposit into the general fund of the 11 state, the director shall credit an amount equal to four cents 12 of every dollar of the amount of the increase in sales subject 13 to the tax imposed under this section and made in a sales 14 tax bonding district established pursuant to section 418.4, 15 into an account created for that city or county in the sales 16 tax increment fund created in section 418.7. The director 17 shall credit the moneys beginning the first day of the quarter 18 following adoption of an ordinance pursuant to section 418.4. 19 b. Subsequent to the deposit into the general fund of the 20 state and after the transfer of such pursuant to paragraph “a” , 21 the department shall do the following in the order prescribed: 22 (1) Transfer the revenues collected under chapter 423B , the 23 department shall transfer . 24 (2) Transfer one-sixth of such the remaining revenues to the 25 secure an advanced vision for education fund created in section 26 423F.2. This paragraph subparagraph is repealed December 31, 27 2029. 28 (3) Credit that portion of the sales tax receipts described 29 in paragraph “a” , subparagraph (2). 30 Sec. 13. Section 423A.6, Code 2009, is amended to read as 31 follows: 32 423A.6 Administration by director. 33 1. The director of revenue shall administer the state and 34 local hotel and motel tax as nearly as possible in conjunction 35 -11- LSB 5008HV (3) 83 tw/sc 11/ 18

H.F. 2480 with the administration of the state sales tax law, except that 1 portion of the law which implements the streamlined sales and 2 use tax agreement. 3 2. The director shall provide appropriate forms, or provide 4 on the regular state tax forms, for reporting state and local 5 hotel and motel tax liability. 6 3. All moneys received or refunded one hundred eighty days 7 after the date on which a city or county terminates its local 8 hotel and motel tax and all moneys received from the state 9 hotel and motel tax shall be deposited in or withdrawn from the 10 general fund of the state. 11 4. a. The director, in consultation with local officials, 12 shall collect and account for a local hotel and motel tax and . 13 Except as provided in paragraph “b” , the director shall credit 14 all revenues collected under this paragraph “a” to the local 15 transient guest tax fund created in section 423A.7. 16 b. Notwithstanding paragraph “a” , the director shall 17 credit the amount of the increase in local hotel and motel tax 18 receipts, as computed in section 418.6, collected in a sales 19 tax bonding district established pursuant to section 418.4, 20 into an account created for that city or county in the sales 21 tax increment fund created in section 418.7. The director 22 shall deposit the tax receipts beginning the first day of the 23 quarter following adoption of an ordinance pursuant to section 24 418.4. 25 5. Local authorities shall not require any tax permit not 26 required by the director of revenue. 27 6. a. Section 422.25, subsection 4, sections 422.30, 28 422.67, and 422.68, section 422.69, subsection 1, sections 29 422.70, 422.71, 422.72, 422.74, and 422.75, section 423.14, 30 subsection 1, and sections 423.23, 423.24, 423.25, 423.31, 31 423.33, 423.35, 423.37 through 423.42, and 423.47, consistent 32 with the provisions of this chapter, apply with respect to 33 the taxes authorized under this chapter, in the same manner 34 and with the same effect as if the state and local hotel and 35 -12- LSB 5008HV (3) 83 tw/sc 12/ 18

H.F. 2480 motel taxes were retail sales taxes within the meaning of those 1 statutes. 2 b. Notwithstanding this paragraph, the director shall 3 provide for quarterly filing of returns and for other than 4 quarterly filing of returns both as prescribed in section 5 423.31. 6 7. The director may require all persons who are engaged in 7 the business of deriving any sales price subject to tax under 8 this chapter to register with the department. 9 8. All taxes collected under this chapter by a retailer or 10 any individual are deemed to be held in trust for the state of 11 Iowa and the local jurisdictions imposing the taxes. 12 Sec. 14. Section 423A.7, subsection 1, Code 2009, is amended 13 to read as follows: 14 1. A local transient guest tax fund is created in the 15 department which shall consist of all moneys credited to such 16 fund under section 423A.6 , subsection 4, paragraph “a” . 17 Sec. 15. Section 423B.6, subsection 3, Code 2009, is amended 18 to read as follows: 19 3. a. The director, in consultation with local officials, 20 shall collect and account for a local sales and services 21 tax. The director shall certify each quarter the amount of 22 local sales and services tax receipts and any interest and 23 penalties to be credited to the “local sales and services tax 24 fund” established in the office of the treasurer of state. The 25 revenues from the taxes collected pursuant to this section 26 shall be credited and paid to cities and counties pursuant to 27 section 423B.7. 28 b. All taxes collected under this chapter by a retailer or 29 any individual are deemed to be held in trust for the state of 30 Iowa and the local jurisdictions imposing the taxes. 31 b. c. All local tax moneys and interest and penalties 32 received or refunded one hundred eighty days or more after the 33 date on which the county repeals its local sales and services 34 tax shall be deposited in or withdrawn from the state general 35 -13- LSB 5008HV (3) 83 tw/sc 13/ 18

H.F. 2480 fund. 1 Sec. 16. Section 423B.7, subsection 1, Code 2009, is amended 2 to read as follows: 3 1. a. Except as provided in paragraph paragraphs “b” and 4 “c” , the director shall credit the local sales and services 5 tax receipts and interest and penalties from a county-imposed 6 tax to the county’s account in the local sales and services 7 tax fund and from a city-imposed tax under section 423B.1, 8 subsection 2, to the city’s account in the local sales and 9 services tax fund. If the director is unable to determine 10 from which county any of the receipts were collected, those 11 receipts shall be allocated among the possible counties based 12 on allocation rules adopted by the director. 13 b. Notwithstanding paragraph “a” , the director shall 14 credit the designated amount of the increase in local sales 15 and services tax receipts, as computed in section 423B.10, 16 collected in an urban renewal area of an eligible city that has 17 adopted an ordinance pursuant to section 423B.10, subsection 18 2, into a special city account in the local sales and services 19 tax fund. 20 c. Notwithstanding paragraph “a” , the director shall 21 credit the amount of the increase in local sales and services 22 tax receipts, as computed in section 418.6, collected in a 23 sales tax bonding district established pursuant to section 24 418.4, which are distributed to the city or county pursuant 25 to 423B.7, into an account created for that city or county in 26 the sales tax increment fund created in section 418.7. The 27 director shall deposit the tax receipts beginning the first day 28 of the quarter following adoption of an ordinance pursuant to 29 section 418.4. 30 EXPLANATION 31 This bill allows cities and counties to use increased 32 revenues from certain taxes for purposes of funding the 33 development of projects within specially created districts. 34 The bill provides for the creation of sales tax bonding 35 -14- LSB 5008HV (3) 83 tw/sc 14/ 18

H.F. 2480 districts within which municipalities may issue bonds to fund 1 economic development projects. The bonds may be secured by a 2 portion of the increased state sales and services tax revenues 3 collected in the district, the increased local option sales and 4 services tax revenues, and the increased local hotel and motel 5 tax revenues within the district. 6 To be eligible to create such a district and issue 7 such bonds, a municipality must have an area suitable for 8 development within its boundaries. An area suitable for 9 development must meet the following requirements: (1) the area 10 must be 400 or more contiguous acres in size and be entirely 11 within the boundaries of the municipality; (2) at least 90 12 percent of the land in the area must be vacant land; (3) 13 the area consists only of parcels that will be directly and 14 substantially benefited by the creation of the district; and 15 (4) no portion of the area suitable for development can also be 16 part of an enterprise zone. In addition, the proposed district 17 must include a projected capital investment of at least $50 18 million, the projects to be developed within the proposed 19 district must generate at least $25 million in annual revenue, 20 and the projects to be developed within the proposed district 21 must create at least 200 permanent new jobs. 22 The governing body of a municipality seeking to establish 23 a district and issue bonds must adopt a resolution stating 24 its intent to do so. The resolution must include a proposed 25 district plan. The proposed district plan must include the 26 area for the district, the names of the owners of the parcels 27 to be included within it, a list of the projects proposed for 28 the district and a plan for each project. The resolution 29 must also: (1) include a map of the area being proposed for 30 the district; (2) include an economic impact study conducted 31 by an independent economist; (3) make findings that an area 32 suitable for development exists in the municipality; and (4) 33 set the date and time of a public hearing on the establishment 34 of the proposed district. After holding a public hearing on 35 -15- LSB 5008HV (3) 83 tw/sc 15/ 18

H.F. 2480 the proposed district plan, the municipality must submit a 1 copy of the resolution, the proposed plan, and accompanying 2 materials to the vision Iowa board for review and approval. 3 A municipality may develop subsequent projects within the 4 district, but each project requires a project plan and is 5 subject to approval by the board. Each project plan must 6 include a project feasibility study conducted by an independent 7 professional with expertise in economic development and public 8 finance. The feasibility study must project and analyze the 9 following: (1) the amount of gross revenues expected to be 10 collected in the district as a result of the project for each 11 year of the bond maturation period; (2) a detailed explanation 12 of the manner and extent to which the project will contribute 13 to the economic development of the state and the municipality; 14 (3) an estimate of the number of visitors or customers 15 the project will generate during each year of the bond 16 maturation period; (4) a description of the project’s unique 17 characteristics; and (5) an analysis of the project’s economic 18 impact. The analysis must include the same components and 19 be conducted in the same manner as the economic impact study 20 required upon initial establishment. Each project plan must 21 also clearly state the cost of the project and the amount of 22 public debt to be incurred for purposes of funding the project. 23 Once a municipality has established a district, it may bond 24 against the increased tax revenues within the district. To 25 determine the amount of the increase, the department of revenue 26 calculates the amount of tax revenues in the district during 27 the corresponding quarter of the fiscal year ending during the 28 calendar year the district was first established (the “base 29 year”) and the amount of tax revenues during the corresponding 30 quarter in subsequent years. The department then subtracts the 31 base year amount from the amounts in the subsequent years to 32 arrive at the amount of the increase. 33 The bill creates a sales tax increment fund within the 34 department of revenue and an account in the fund for each 35 -16- LSB 5008HV (3) 83 tw/sc 16/ 18

H.F. 2480 municipality that has created a district. The department 1 credits monthly the amount of the district’s increased 2 revenues to the municipality’s account. Revenue received by a 3 municipality from the fund must be deposited in a special fund 4 of the municipality and used for funding projects or for the 5 payment of principal and interest on bonds issued to fund the 6 projects. If there are funds in excess of the amount needed, 7 moneys from locally imposed taxes are to be applied toward 8 property tax relief and moneys deriving from a state imposed 9 tax are to be deposited in the general fund. 10 The bill provides for the issuance of bonds by an eligible 11 municipality. In issuing the bonds, the municipality 12 must comply with the revenue bond authorization procedures 13 applicable to cities pursuant to Code section 384.83. 14 Bonds issued pursuant to the provisions of the bill 15 constitute separate authorization for the issuance of bonds and 16 will prevail in the event of conflict with any other provision 17 of the Code limiting the amount of bonds which may be issued 18 or the source of payment of the bonds. Also, bonds issued 19 pursuant to the provisions of the bill do not limit or restrict 20 the authority of the municipality to issue bonds under other 21 provisions of the Code. 22 Bonds issued pursuant to the provisions of the bill do 23 not constitute an indebtedness within the meaning of any 24 constitutional or statutory debt limitation or restriction, 25 and are not subject to the provisions of any other law or 26 charter relating to the authorization, issuance, or sale of 27 bonds. Bonds issued pursuant to the provisions of the bill are 28 declared to be issued for an essential public and governmental 29 purpose. 30 The bill directs the director of revenue to calculate the 31 amount of increased state sales and services taxes, increased 32 local sales and services taxes, and increased local hotel 33 and motel taxes and to credit the increased amounts to the 34 municipality’s account in the sales tax increment fund. These 35 -17- LSB 5008HV (3) 83 tw/sc 17/ 18

H.F. 2480 amounts are to be credited beginning the quarter following the 1 creation of a district by a municipality. 2 A district is dissolved 20 years from the date of its 3 establishment. Upon the dissolution of a district, the 4 consumption taxes collected within the area formerly comprising 5 the district shall be thereafter administered, and the local 6 tax revenues distributed to municipalities, in the same manner 7 as if the district had not been established. 8 -18- LSB 5008HV (3) 83 tw/sc 18/ 18