S.F. 193 Section 1. Section 386.1, Code 2015, is amended by adding 1 the following new subsections: 2 NEW SUBSECTION . 4A. “ Promotion area” means an area which 3 may be created and the lessors therein subject to the lodging 4 fee in accordance with section 386.3A. 5 NEW SUBSECTION . 4B. “Promotion services” means any of the 6 following: 7 a. Promotion of public events that benefit businesses or 8 property in a promotion area. 9 b. Coordinating live music performances in a promotion area. 10 c. Coordinating promotion, marketing, and sales programs to 11 benefit property or businesses located in a promotion area. 12 d. Marketing and economic development services, including 13 retail retention and recruitment for the promotion area. 14 e. Providing security, sanitation, graffiti removal, street 15 and sidewalk cleaning, and other services for the promotion 16 area that are in addition to those already provided by the 17 city. 18 f. Any other services that benefit businesses and property 19 located in the promotion area. 20 Sec. 2. Section 386.2, Code 2015, is amended to read as 21 follows: 22 386.2 Authorization. 23 1. A city which that proposes to create a district, to 24 provide for its existence and operation, to provide for 25 improvements or self-liquidating improvements for the district, 26 to authorize and issue bonds for the purposes of the district, 27 and to levy the taxes authorized by this chapter must do so in 28 accordance with the provisions of this chapter . 29 2. A city that proposes to create a promotion area, to 30 provide for its existence and operation, and to undertake 31 promotion services in the promotion area must do so in 32 accordance with the provisions of this chapter. Except for the 33 local lodging fee authorized in section 386.5B, a city is not 34 authorized to levy any other taxes authorized in this chapter 35 -1- LSB 1343XS (3) 86 md/sc 1/ 13

S.F. 193 unless the city has also established a district in accordance 1 with the provisions of this chapter that includes the property 2 comprising the promotion area. 3 Sec. 3. NEW SECTION . 386.3A Establishment of a promotion 4 area. 5 1. A promotion area may be created by action of the council 6 following approval by the county board of supervisors, if 7 applicable, in accordance with the provisions of this section. 8 An area shall: 9 a. Be comprised of contiguous property wholly within 10 the boundaries of the city. However, a promotion area may 11 include property in the unincorporated areas of the county that 12 is contiguous to the property of the proposed area located 13 within the boundaries of a city, if approved by resolution of 14 the county board of supervisors. A promotion area shall be 15 comprised only of property that is zoned for commercial or 16 industrial uses or properties within a duly designated historic 17 district. 18 b. Be given a descriptive name containing the words 19 “promotion area”. 20 c. Be comprised of property related in some manner, 21 including but not limited to present or potential use, physical 22 location, condition, relationship to an area, or relationship 23 to present or potential commercial or other activity in an 24 area, so as to be benefited in any manner from the performance 25 of promotion services in the area. 26 2. The council shall initiate proceedings for establishing 27 a promotion area upon the filing with the city clerk of a 28 petition containing: 29 a. The signatures of at least twenty-five percent of all 30 owners of property within the proposed promotion area. These 31 signatures must together represent ownership of property 32 with an assessed value of twenty-five percent or more of the 33 assessed value of all of the property in the proposed promotion 34 area. 35 -2- LSB 1343XS (3) 86 md/sc 2/ 13

S.F. 193 b. A description of the boundaries of the proposed promotion 1 area or a consolidated description of the property within the 2 proposed promotion area. 3 c. The name of the proposed promotion area. 4 d. A statement of the rate of the local lodging fee proposed 5 for imposition within the promotion area. 6 e. The purpose of the establishment of the promotion area, 7 which may be stated generally, or in terms of the relationship 8 of the property within the promotion area or the interests of 9 the owners of property within the promotion area. 10 f. A statement that local lodging fees shall be used for 11 promotion services in the promotion area. 12 3. a. The council shall notify the city planning commission 13 upon the receipt of a petition. It shall be the duty of the 14 city planning commission to make recommendations to the council 15 in regard to the proposed promotion area. The city planning 16 commission shall, with due diligence, prepare an evaluative 17 report for the council on the merit and feasibility of the 18 promotion services for the proposed promotion area. The 19 council shall not hold its public hearings or take further 20 action on the establishment of the promotion area until it 21 has received the report of the city planning commission. In 22 addition to its report, the commission may, from time to time, 23 recommend to the council amendments and changes relating to the 24 promotion area. 25 b. If no city planning commission exists, the council shall 26 notify the metropolitan or regional planning commission upon 27 receipt of a petition, and such commission shall have the 28 same duties set forth in this subsection as a city planning 29 commission. If no planning commission exists, the council 30 shall notify the zoning commission upon receipt of a petition, 31 and such commission shall have the same duties set forth in 32 this subsection as a city planning commission. If no planning 33 or zoning commission exists, the council shall, upon receipt of 34 a petition, conduct a public hearing on the establishment of 35 -3- LSB 1343XS (3) 86 md/sc 3/ 13

S.F. 193 a promotion area. 1 4. Upon receipt of the commission’s final report or after 2 the hearing has been conducted, as applicable, the council 3 shall set a time and place for a meeting at which the council 4 proposes to take action on the petition filed pursuant to 5 subsection 2 for establishment of the promotion area and shall 6 publish notice of the meeting as provided in section 362.3, and 7 the clerk shall send a copy of the notice by certified mail 8 not less than fifteen days before the meeting to each owner 9 of property within the proposed promotion area at the owner’s 10 address as shown by the records of the county auditor. If a 11 property is shown to be in the name of more than one owner 12 at the same mailing address, a single notice may be mailed 13 addressed to all owners at that address. Failure to receive 14 a mailed notice is not grounds for objection to the council’s 15 taking any action authorized in this section, section 386.4A, 16 section 386.5A, or section 386.5B. 17 5. In addition to the time and place of the meeting for 18 hearing on the petition, the notice must state: 19 a. That a petition has been filed with the council asking 20 that a promotion area be established. 21 b. The name of the promotion area. 22 c. The purpose of the promotion area. 23 d. The property proposed to be included in the promotion 24 area. 25 e. The rate of the local lodging fee proposed for imposition 26 in the promotion area. 27 6. At the time and place set in the notice, the council 28 shall hear all owners of property in the proposed promotion 29 area or residents of the city, or county, if applicable, 30 desiring to express their views. The council must wait at 31 least thirty days after the public hearing has been held before 32 it may adopt an ordinance establishing a promotion area which 33 must be comprised of all the property which the council finds 34 has the relationship described in subsection 1, paragraph 35 -4- LSB 1343XS (3) 86 md/sc 4/ 13

S.F. 193 “c” . Property included in the promotion area proposed in the 1 petition need not be included in the established promotion 2 area. However, the council may not include property in the 3 promotion area that was not included in the petition proposing 4 the area until the council has held another public hearing 5 after it has published and mailed notice in the same manner 6 as required in subsection 4 and containing the information 7 required in subsection 5, or has caused a notice of the 8 inclusion of the property to be personally served upon each 9 owner of the additional property, or has received a written 10 waiver of notice from each owner of the additional property. 11 7. Adoption of the ordinance establishing a promotion area 12 requires the affirmative vote of three-fourths of all of the 13 members of the council, or in cities having but three members 14 of the council, the affirmative vote of two members. However, 15 if a remonstrance has been filed with the clerk signed by at 16 least twenty-five percent of all owners of property within the 17 proposed promotion area representing ownership of property 18 with an assessed value of twenty-five percent or more of the 19 assessed value of all of the property in the proposed promotion 20 area, the adoption of the ordinance requires a unanimous vote 21 of the council. 22 8. The clerk shall cause a copy of the ordinance to be filed 23 in the office of the county recorder of each county in which 24 any property within the promotion area is located. 25 9. At any time prior to adoption of an ordinance 26 establishing a promotion area, the entire matter of 27 establishing such promotion area shall be withdrawn from 28 council consideration if a petition objecting to establishing 29 such area is filed with the city clerk containing the 30 signatures of at least forty percent of all owners of property 31 within the proposed promotion area or signatures which together 32 represent ownership of property with an assessed value of forty 33 percent or more of the assessed value of all property within 34 the proposed promotion area. 35 -5- LSB 1343XS (3) 86 md/sc 5/ 13

S.F. 193 10. The adoption of an ordinance establishing a promotion 1 area is a legislative determination that the property within 2 the promotion area has the relationship required under 3 subsection 1, paragraph “c” , and includes all of the property 4 within the promotion area which has that relationship in the 5 promotion area. 6 11. Any resident or property owner of the city, or of the 7 unincorporated area of the county, if applicable, may appeal 8 the action and the decisions of the council, including the 9 creation of the promotion area and the imposition of the local 10 lodging fee, to the district court of the county in which any 11 part of the promotion area is located, within thirty days after 12 the date upon which the ordinance creating the promotion area 13 becomes effective, but the action and decision of the council 14 are final and conclusive unless the court finds that the 15 council exceeded its authority. An action may not be brought 16 questioning the regularity of the proceedings pertaining to 17 the establishment of a promotion area or the validity of the 18 promotion, or the propriety of the inclusion or exclusion of 19 any property within or from the promotion area, or the ability 20 to impose a local lodging fee in accordance with the ordinance 21 establishing the promotion area, after thirty days from the 22 date on which the ordinance creating the promotion area becomes 23 effective. 24 Sec. 4. NEW SECTION . 386.4A Amendments to promotion areas. 25 1. The ordinance creating a promotion area may be amended 26 and property may be added to a promotion area and the local 27 lodging fee rate referred to in the ordinance may be changed at 28 any time in the same manner and by the same procedure as for the 29 establishment of a promotion area. 30 2. Action by the council amending the ordinance creating 31 the promotion area, including adding property to or severing 32 property from the promotion area, or changing the rate of 33 the local lodging fee, shall be by ordinance adopted by an 34 affirmative vote of three-fourths of all of the members of 35 -6- LSB 1343XS (3) 86 md/sc 6/ 13

S.F. 193 the council, or in cities having but three members of the 1 council, the affirmative vote of two members. However, if 2 a remonstrance has been filed with the clerk signed by at 3 least twenty-five percent of all owners of property within 4 the promotion area and all property proposed to be included 5 representing ownership of property with an assessed value of 6 twenty-five percent or more of the assessed value of all the 7 property in the promotion area and all property proposed to be 8 included, the amending ordinance must be adopted by unanimous 9 vote of the council. 10 3. The clerk shall cause a copy of the amending ordinance 11 to be filed in the office of the county recorder of each county 12 in which any property within the promotion area, as amended, 13 is located. 14 4. At any time prior to council amendment of the ordinance 15 creating the promotion area, the entire matter of amending such 16 ordinance shall be withdrawn from council consideration if a 17 petition objecting to amending such ordinance is filed with 18 the city clerk containing either the signatures of at least 19 forty percent of all owners of property within the promotion 20 area and all property proposed to be included or signatures 21 which together represent ownership of property with an assessed 22 value of forty percent or more of the assessed value of all 23 property within the promotion area and all property proposed 24 to be included. 25 5. Any resident or property owner of the city may appeal 26 the action or decisions of the council amending the ordinance 27 creating the promotion area to the district court of the county 28 in which any part of the promotion area, as amended, is located 29 within fifteen days after the date upon which the amending 30 ordinance becomes effective, but the action and decision of 31 the council are final and conclusive unless the court finds 32 that the council exceeded its authority. An action may not 33 be brought questioning the regularity of the proceedings 34 pertaining to the amended ordinance or the validity of the 35 -7- LSB 1343XS (3) 86 md/sc 7/ 13

S.F. 193 promotion area as amended, or the propriety of the inclusion 1 or exclusion of any property within or from the amended 2 promotion area, or the ability to impose the local lodging fee 3 in accordance with the ordinance establishing the promotion 4 area, as amended, after thirty days from the date upon which 5 the amending ordinance becomes effective. 6 6. All other provisions in section 386.3A shall apply to 7 an amended promotion area and to any ordinance amending the 8 ordinance creating the promotion area with the same effect as 9 they apply to the original promotion area and the ordinance 10 creating the original promotion area. 11 Sec. 5. NEW SECTION . 386.5A Dissolution. 12 1. A promotion area may be dissolved and terminated by 13 action of the council repealing the ordinance creating the 14 promotion area, and any subsequent ordinances amending the 15 ordinance creating the promotion area, by an affirmative vote 16 of three-fourths of all members of the council, or in cities 17 having but three members of the council, the affirmative vote 18 of two members. However, if a remonstrance has been filed with 19 the clerk signed by at least twenty-five percent of all owners 20 of property within the promotion area representing ownership 21 of property with an assessed value of twenty-five percent or 22 more of the assessed value of all the property in the promotion 23 area, the repeal of the ordinance creating the promotion area, 24 and any subsequent ordinances amending the ordinance creating 25 the promotion area, requires a unanimous vote of the council. 26 2. At any time prior to action of the council repealing 27 the ordinance creating the promotion area, and any subsequent 28 ordinances amending the ordinance creating the promotion area, 29 the entire matter of dissolving a promotion area shall be 30 withdrawn from council consideration if a petition is filed 31 with the city clerk containing the signatures of at least forty 32 percent of all owners of property within the promotion area 33 or signatures which together represent ownership of property 34 with an assessed value of forty percent or more of the assessed 35 -8- LSB 1343XS (3) 86 md/sc 8/ 13

S.F. 193 value of all property within the promotion area. 1 Sec. 6. NEW SECTION . 386.5B Local lodging fee. 2 1. Following establishment of a promotion area in 3 accordance with this chapter, a city may impose, as part of 4 the ordinance establishing the promotion area, a local lodging 5 fee to be imposed on each night of lodging rental at a lessor 6 located in the promotion area. 7 2. The local lodging fee shall be collected by the lessor 8 of lodging from the user of that lodging. The lessor shall add 9 the fee to the sales price of the lodging, and the fee shall 10 be stated as a distinct item separate and apart from the sales 11 price of the lodging and taxes imposed, if any, under section 12 423A.3 or 423A.4. 13 3. Local lodging fees collected by a lessor shall be due and 14 payable to the city according to a schedule specified in the 15 ordinance creating the promotion area. A lessor is liable for 16 the payment of fees to the city in the same manner as liability 17 is imposed on retailers for the payment of taxes under sections 18 421.26 and 421.28. 19 4. Fees received by a city under this section shall be 20 deposited in a promotion area account within the city’s general 21 fund. A separate account shall be created for each promotion 22 area established by the city. All fees collected under this 23 section are deemed to be held in trust for the city. 24 5. Moneys in a promotion area account shall be used for 25 promotion services within the applicable promotion area. 26 6. The ordinance imposing a local lodging fee under this 27 section shall designate a city officer to receive payments 28 from lessors and to prescribe any forms necessary for the 29 collection, reporting, and payment of such fees. 30 7. For the purposes of this section, unless the context 31 otherwise requires, “lessor” , “lodging” , “rent” , and “user” mean 32 the same as defined in section 423A.2. 33 Sec. 7. Section 423A.3, Code 2015, is amended to read as 34 follows: 35 -9- LSB 1343XS (3) 86 md/sc 9/ 13

S.F. 193 423A.3 State-imposed hotel and motel tax. 1 A tax of five percent is imposed upon the sales price for 2 the renting of any lodging if the renting occurs in this state. 3 The tax shall be collected by any lessor of lodging from the 4 user of that lodging. The lessor shall add the tax to the 5 sales price of the lodging, and the state-imposed tax, when 6 collected, shall be stated as a distinct item, separate and 7 apart from the sales price of the lodging , and the local tax 8 imposed, if any, under section 423A.4 , and the local lodging 9 fee imposed, if any, under section 386.5B . 10 Sec. 8. Section 423A.5, Code 2015, is amended by adding the 11 following new subsection: 12 NEW SUBSECTION . 3. All of the following are exempt from any 13 fee imposed under section 386.5B: 14 a. The renting of lodging which is rented by the same person 15 for a period of more than thirty-one consecutive days. 16 b. The renting of sleeping rooms in dormitories and in the 17 memorial unions at all universities and colleges located in the 18 state of Iowa. 19 c. The lodging furnished to the guests of a religious 20 institution if the property is exempt under section 427.1, 21 subsection 8, and the purpose of renting is to provide a 22 place for a religious retreat or function and not a place for 23 transient guests generally. 24 EXPLANATION 25 The inclusion of this explanation does not constitute agreement with 26 the explanation’s substance by the members of the general assembly. 27 This bill authorizes the establishment of promotion areas by 28 cities and authorizes the imposition of a local lodging fee in 29 those promotion areas. 30 Under the bill, a promotion area may be created by action 31 of the city council under Code chapter 386 (self-supported 32 municipal improvement districts). A promotion area must be 33 comprised of contiguous property wholly within the boundaries 34 of the city but may include property in the unincorporated 35 -10- LSB 1343XS (3) 86 md/sc 10/ 13

S.F. 193 area of the county that is contiguous to the property of the 1 proposed area if the county board of supervisors approves its 2 inclusion by resolution. The bill requires that the promotion 3 area be comprised of property related in some manner, including 4 but not limited to present or potential use, physical location, 5 condition, relationship to an area, or relationship to present 6 or potential commercial or other activity in an area, so as to 7 be benefited in any manner from the performance of promotion 8 services in the area. 9 The bill requires the council to initiate proceedings 10 for establishing a promotion area upon the filing of a 11 petition containing a specified number of signatures and other 12 information specified in the bill. 13 The bill requires the council to notify the city planning 14 commission upon the receipt of a petition, and the planning 15 commission is required to make recommendations to the council 16 in regard to the proposed promotion area. The city planning 17 commission is also required to prepare an evaluative report 18 for the council on the merit and feasibility of the promotion 19 services for the proposed promotion area. The bill provides 20 alternative procedures in the event the city does not have a 21 planning commission. 22 Upon the receipt of the commission’s final report, the 23 council shall set a time and place for a meeting at which the 24 council proposes to take action for the establishment of the 25 promotion area and receive comments from residents. 26 The bill establishes council voting requirements for 27 the approval of an ordinance establishing a promotion area, 28 provisions which remove the entire matter from the council’s 29 consideration, appeal provisions relating to the establishment 30 of a promotion area, provisions governing amendments to the 31 ordinance creating the promotion area, and provisions governing 32 the dissolution of the promotion area. Such requirements and 33 provisions are similar to those in current Code chapter 386 34 for establishment of a self-supported municipal improvement 35 -11- LSB 1343XS (3) 86 md/sc 11/ 13

S.F. 193 district. 1 The bill provides that except for the local lodging fee 2 authorized in the bill, a city is not authorized to levy any 3 taxes authorized in Code chapter 386 within a promotion area 4 unless the city has also established a district in accordance 5 with the provisions of Code chapter 386 that includes the 6 property comprising the promotion area. 7 Following establishment of a promotion area, as part of the 8 ordinance establishing the promotion area, a city may impose a 9 local lodging fee to be imposed on each night of lodging rental 10 at a lessor located in the promotion area. The local lodging 11 fee shall be collected by the lessor of lodging from the user 12 of that lodging. The lessor shall add the fee to the sales 13 price of the lodging, and the fee shall be stated as a distinct 14 item separate and apart from the sales price of the lodging 15 and taxes imposed. Local lodging fees collected by a lessor 16 shall be due and payable to the city according to a schedule 17 specified in the ordinance. A lessor is liable for the payment 18 of fees to the city in the same manner as liability is imposed 19 on retailers for the payment of certain state taxes. 20 The bill requires that local lodging fees received by a city 21 be deposited in a promotion area account within the city’s 22 general fund. Moneys in a promotion area account shall be 23 used for promotion services within the applicable promotion 24 area. The bill defines “promotion services” to mean any 25 of the following: promotion of public events that benefit 26 businesses or property in a promotion area; coordinating live 27 music performances in a promotion area; coordinating promotion, 28 marketing, and sales programs to benefit property or businesses 29 located in a promotion area; marketing and economic development 30 services, including retail retention and recruitment for the 31 promotion area; providing security, sanitation, graffiti 32 removal, street and sidewalk cleaning, and other services 33 for the promotion area that are in addition to those already 34 provided by the city; and any other services that benefit 35 -12- LSB 1343XS (3) 86 md/sc 12/ 13