House Study Bill 546 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON LOCAL GOVERNMENT BILL BY CHAIRPERSON GASKILL) A BILL FOR An Act relating to the approval and use of increased local 1 sales and services tax revenues to fund urban renewal 2 projects. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5499HC (2) 83 md/sc

H.F. _____ Section 1. Section 423B.1, subsection 6, paragraph c, Code 1 2009, is amended to read as follows: 2 c. Notwithstanding any other provision in this section, 3 a change in use of the local sales and services tax revenues 4 for purposes of funding an urban renewal project pursuant 5 to section 423B.10 does not require an election , except as 6 provided in section 423B.10, subsection 2 . 7 Sec. 2. Section 423B.10, subsection 2, Code 2009, is amended 8 to read as follows: 9 2. a. An eligible city may by ordinance of the city council 10 provide for the use of a designated amount of the increased 11 local sales and services tax revenues collected under this 12 chapter which are attributable to retail establishments in an 13 urban renewal area to fund urban renewal projects located in 14 the area. The designated amount may be all or a portion of 15 such the increased revenues allocable to the eligible city 16 under section 423B.7 . 17 b. Prior to consideration of an ordinance under this 18 section, a city council shall adopt a resolution stating its 19 intent to propose the ordinance. If within thirty days of the 20 adoption of the resolution, a petition is filed with the clerk 21 of the city in the manner provided by section 362.4 asking that 22 the question of the use of a designated amount of the increased 23 revenues allocable to the city be submitted to the registered 24 voters of the city, the council shall either by resolution 25 declare the proposal to have been abandoned or shall direct the 26 county commissioner of elections to call a special election 27 to be held on a date specified in section 39.2, subsection 28 4, paragraph “b” . If the vote in favor of the proposition is 29 equal to at least a majority of the total votes cast for and 30 against the proposition, the city council may proceed with 31 consideration of an ordinance authorizing funding of urban 32 renewal projects as provided in paragraph “a” . 33 c. If no petition is filed pursuant to paragraph “b” , 34 the council may proceed with consideration of an ordinance 35 -1- LSB 5499HC (2) 83 md/sc 1/ 3

H.F. _____ authorizing funding of urban renewal projects as provided in 1 paragraph “a” . 2 Sec. 3. Section 423B.10, subsection 3, unnumbered paragraph 3 1, Code 2009, is amended to read as follows: 4 To determine the revenue increase allocable to the city for 5 purposes of subsection 2, revenue amounts shall be calculated 6 by the department of revenue as follows: 7 Sec. 4. ORDINANCES ADOPTED PRIOR TO EFFECTIVE DATE. The 8 amount of the increased local sales and services taxes received 9 by a city as the result of an ordinance adopted under chapter 10 423B prior to the effective date of this Act that have been 11 designated by a city by ordinance to fund urban renewal 12 projects pursuant to section 423B.10 shall be deposited in the 13 city’s special fund created in section 403.19, subsection 2, 14 and shall be used to fund urban renewal projects located in an 15 urban renewal area. 16 Sec. 5. OBLIGATIONS OF CITIES. This Act shall not relieve, 17 impair, or otherwise alter the obligations of a city relating 18 to bonds issued pursuant to chapter 403 prior to the effective 19 date of this Act or contracts made prior to the effective date 20 of this Act in connection with an urban renewal project. 21 EXPLANATION 22 This bill relates to the use of sales and services tax 23 revenues to fund urban renewal projects. 24 Current law allows an eligible city to provide by ordinance 25 for the use of a designated amount of the increased local sales 26 and services tax revenues attributable to retail establishments 27 in an urban renewal area to fund urban renewal projects located 28 in the area. Current law does not require an election prior to 29 the designation of these revenues. 30 The bill requires an eligible city to adopt a resolution of 31 intent before proposing an ordinance authorizing the use of 32 local sales and services tax revenues for urban renewal. If 33 within 30 days of the adoption of the resolution, a petition 34 requesting an election on the question is filed with the city 35 -2- LSB 5499HC (2) 83 md/sc 2/ 3

H.F. _____ clerk, the city council must either declare the proposal 1 abandoned or direct the county commissioner of elections 2 to call a special election on the question. If the vote 3 is in favor of the proposition, the city may proceed with 4 consideration of the ordinance. If no petition is filed, the 5 council may proceed with consideration of the ordinance. 6 The bill specifies that the amount of increased revenues 7 designated for urban renewal projects may be all or a portion 8 of the increased revenues allocable to the eligible city. 9 The bill provides that any local sales and services taxes 10 received as the result of an ordinance adopted prior to the 11 effective date of the bill and designated for urban renewal 12 projects must be deposited in the city’s special fund and used 13 to fund urban renewal projects. 14 The bill provides that the funding of urban renewal projects 15 with increased sales and services tax revenues shall not 16 relieve, impair, or alter the obligations of a city in regard 17 to certain bonds or contracts. 18 -3- LSB 5499HC (2) 83 md/sc 3/ 3