Senate Study Bill 3218 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON BOLKCOM) A BILL FOR An Act relating to benefited recreational lake districts, 1 water quality districts, and combined recreational lake and 2 water quality districts and including effective date and 3 retroactive applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5801XC (2) 85 md/sc

S.F. _____ Section 1. NEW SECTION . 357E.15 Exemption from taxation 1 —— refunds. 2 1. The property and facilities of a district shall not be 3 taxable in any manner by the state or any of its political 4 subdivisions. 5 2. A district is a tax-certifying body for purposes of 6 section 423.4, subsection 1. 7 Sec. 2. Section 427.1, subsection 2, Code 2014, is amended 8 to read as follows: 9 2. Municipal and military property. The property of a 10 county, township, city, school corporation, levee district, 11 drainage district, district organized under chapter 357E, or 12 the Iowa national guard, when devoted to public use and not 13 held for pecuniary profit, except property of a municipally 14 owned electric utility held under joint ownership and property 15 of an electric power facility financed under chapter 28F or 16 476A that shall be subject to taxation under chapter 437A 17 and facilities of a municipal utility that are used for the 18 provision of local exchange services pursuant to chapter 476 , 19 but only to the extent such facilities are used to provide such 20 services, which shall be subject to taxation under chapter 433 , 21 except that section 433.11 shall not apply. The exemption for 22 property owned by a city or county also applies to property 23 which is operated by a city or county as a library, art 24 gallery or museum, conservatory, botanical garden or display, 25 observatory or science museum, or as a location for holding 26 athletic contests, sports or entertainment events, expositions, 27 meetings or conventions, or leased from the city or county for 28 any such purposes, or leased from the city or county by the 29 Iowa national guard or by a federal agency for the benefit of 30 the Iowa national guard when devoted for public use and not 31 for pecuniary profit. Food and beverages may be served at the 32 events or locations without affecting the exemptions, provided 33 the city has approved the serving of food and beverages on the 34 property if the property is owned by the city or the county 35 -1- LSB 5801XC (2) 85 md/sc 1/ 3

S.F. _____ has approved the serving of food and beverages on the property 1 if the property is owned by the county. The exemption for 2 property owned by a city or county also applies to property 3 which is located at an airport and leased to a fixed base 4 operator providing aeronautical services to the public. 5 Sec. 3. IMPLEMENTATION OF ACT. Section 25B.7 does not apply 6 to the property tax exemption established in this Act. 7 Sec. 4. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 8 immediate importance, takes effect upon enactment. 9 Sec. 5. RETROACTIVE APPLICABILITY. This Act applies 10 retroactively to January 1, 2014, for property tax assessment 11 years beginning on or after that date. 12 Sec. 6. RETROACTIVE APPLICABILITY. This Act applies 13 retroactively to January 1, 2014, for sales and use tax paid 14 on or after that date. 15 EXPLANATION 16 The inclusion of this explanation does not constitute agreement with 17 the explanation’s substance by the members of the general assembly. 18 This bill relates to benefited recreational lake districts, 19 water quality districts, and combined recreational lake and 20 water quality districts organized under Code chapter 357E. 21 The bill provides that the property and facilities of 22 a district organized under Code chapter 357E shall not be 23 taxable in any manner by the state or any of its political 24 subdivisions. 25 The bill specifies that a district organized under Code 26 chapter 357E is a tax-certifying body for purposes of sales 27 or use tax construction contractor refunds under Code section 28 423.4(1), for construction contracts with tax-certifying 29 bodies. By operation of law, the designation of a district as 30 a tax-certifying body for purposes of Code section 423.4(1), 31 means that the district is a “designated exempt entity” within 32 the meaning of Code section 423.3(80), relating to an exemption 33 for construction contractors performing work for such an 34 entity. 35 -2- LSB 5801XC (2) 85 md/sc 2/ 3

S.F. _____ The bill also exempts from property taxation the property of 1 a district organized under Code chapter 357E, when devoted to 2 public use and not held for pecuniary profit. 3 Code section 25B.7 provides that for a property tax credit 4 or exemption enacted on or after January 1, 1997, if a state 5 appropriation made to fund the credit or exemption is not 6 sufficient to fully fund the credit or exemption, the political 7 subdivision shall be required to extend to the taxpayer only 8 that portion of the credit or exemption estimated by the 9 department of revenue to be funded by the state appropriation. 10 Code section 25B.7 does not apply to the property tax exemption 11 established in the bill. 12 The bill takes effect upon enactment. 13 The bill applies retroactively to January 1, 2014, for 14 property tax assessment years beginning on or after that date. 15 The bill applies retroactively to January 1, 2014, for sales 16 and use tax paid on or after that date. 17 -3- LSB 5801XC (2) 85 md/sc 3/ 3