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Senate File 309 - IntroducedA Bill ForAn Act 1authorizing cities to establish self-supported
2entertainment areas.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 386A.1 Definitions.
2As used in this chapter, unless the context requires
3otherwise:
41. “Alcoholic beverage” means the same as defined in section
5123.3.
62. “Council” means the governing body of a city.
73. “Cultural or entertainment establishment” means a sporting
8or concert event venue, performing arts theater, movie theater,
9museum, convention hall, or enclosed shopping mall.
104. “Department” means the department of revenue.
115. “Director” means the director of the department of
12revenue.
136. “Entertainment area” or “area” means an area designated
14by ordinance under this chapter and the cultural or
15entertainment establishments, food establishments, liquor
16establishments, and lodging providers therein that are subject
17to the entertainment surcharge in accordance with section
18386A.3.
197. “Entertainment tickets” means all tickets or admissions
20subject to taxation pursuant to section 423.2, subsection 3.
218. “Food” means the same as defined in section 137F.1.
229. “Food establishment” means a food establishment licensed
23pursuant to chapter 137F, at which food is served or sold at
24retail. “Food establishment” also includes a temporary food
25establishment defined in section 137F.1.
2610. “Licensed premises” means the same as defined in section
27123.3.
2811. “Liquor establishment” means a licensed premises in or
29at which alcoholic beverages are sold at retail.
3012. “Lodging” means the same as defined in section 423A.2.
31“Lodging” does not include lodging exempted from tax pursuant
32to section 423A.5.
3313. “Lodging provider” means the same as defined in section
34423A.2.
3514. “Property owner” or “owner” means the owner of property,
-1-1as shown by the transfer books in the office of the county
2auditor of the county in which the property is located.
315. “Retail sale” means the same as defined in section
4423.1.
516. “Surcharge” means an entertainment surcharge imposed
6pursuant to this chapter.
7 Sec. 2. NEW SECTION. 386A.2 Authorization.
8A city that proposes to create an entertainment area and
9impose an entertainment surcharge must do so in accordance with
10the provisions of this chapter.
11 Sec. 3. NEW SECTION. 386A.3 Establishment of an
12entertainment area — entertainment surcharge — use of revenues.
131. An entertainment area may be created by ordinance of the
14council in accordance with the provisions of this section. A
15proposed entertainment area shall meet all of the following
16requirements:
17a. The combined attendance at cultural or entertainment
18establishments, food establishments, liquor establishments,
19and lodging providers within the proposed entertainment
20area exceeded two hundred fifty thousand persons during the
21previous calendar year, or the attendance forecast at such
22establishments is reasonably expected to exceed two hundred
23fifty thousand persons per calendar year within two years of
24the establishment of the entertainment area.
25b. The proposed entertainment area consists of contiguous
26parcels wholly within the boundaries of the city and does not
27exceed seventy-five acres in total.
28c. The proposed entertainment area does not include the
29entire incorporated area of the city.
30d. The proposed entertainment area consists only of
31properties zoned for commercial uses or properties within a
32duly designated historic district, and at least seventy-five
33percent of the properties must be cultural or entertainment
34establishments, food establishments, liquor establishments, or
35lodging providers.
-2- 1e. The proposed entertainment area must be comprised of
2property related in some manner, including but not limited
3to present or potential use, physical location, condition,
4relationship to the area, or relationship to present or
5potential commercial or other activity in the area, so as
6to be benefited in any manner, including but not limited to
7a benefit from present or potential use or enjoyment of the
8property, by the condition, development, or maintenance of
9the area or of any improvement or services provided to the
10area or be comprised of property the owners of which have a
11present or potential benefit from the condition, development,
12or maintenance of the area or of any improvement or services
13provided to the area.
14f. The entertainment area shall be given a descriptive name
15containing the words “entertainment area”.
162. The council shall initiate proceedings for the adoption
17of an ordinance under subsection 6 upon the filing of a
18petition containing all of the following:
19a. The signatures of at least twenty-five percent of
20all owners of property within the proposed entertainment
21area. These signatures must together represent ownership of
22at least twenty-five percent or more of the total number of
23cultural or entertainment establishments, food establishments,
24liquor establishments, and lodging providers in the proposed
25entertainment area.
26b. A description of the boundaries of the proposed
27entertainment area, or a consolidated description of the
28property within the proposed area, along with a map depicting
29the existing parcels of real estate located in the proposed
30entertainment area.
31c. The name of the proposed entertainment area.
32d. Subject to the limitations of subsection 4, paragraph
33“e”, a statement of the maximum surcharge rate that may be
34imposed upon retail sales within the entertainment area.
35e. The purpose of the establishment of the entertainment
-3-1area, which may be stated generally, or in terms of the
2relationship of the property within the entertainment
3area or the interests of the owners of property within the
4entertainment area, or in terms of the specific or general
5categories of improvements proposed to be developed for the
6purposes of the entertainment area, or in terms of the services
7to be provided within the entertainment area and supported
8from the revenues of the surcharge, or a combination of such
9purposes.
10f. A statement of the specified length of time the surcharge
11shall be imposed for the purposes of the entertainment area,
12along with any option to renew the surcharge.
133. Upon receiving a valid petition for establishment of
14an entertainment area, the council shall set a time and place
15for a public hearing on the establishment of the entertainment
16area, and shall publish notice of the public hearing as
17provided in section 362.3, and the clerk shall send a copy of
18the notice by certified mail not less than fifteen days before
19the hearing to each owner of property within the proposed
20entertainment area at the owner’s address as shown by the
21records of the county auditor.
224. In addition to the time and place of the public hearing
23on the petition, the notice must state all of the following:
24a. That a petition has been filed with the council asking
25that an entertainment area be established.
26b. The name of the entertainment area.
27c. The purpose of the entertainment area.
28d. The property proposed to be included in the entertainment
29area.
30e. The maximum surcharge, not to exceed three percent, which
31may be imposed upon any of the following retail sales within
32the entertainment area:
33(1) The retail sales price of food or alcoholic beverages
34sold at a cultural or entertainment establishment, food
35establishment, or liquor establishment.
-4- 1(2) The retail sales price of entertainment tickets sold at
2a cultural or entertainment establishment.
3(3) The retail sales price for the renting of any lodging.
45. At the time and place set in the notice the council
5shall hear all owners of property in the proposed entertainment
6area or residents of the city desiring to express their
7views. The council must wait at least thirty days after the
8public hearing has been held before the council may adopt an
9ordinance establishing the entertainment area. The established
10entertainment area must be comprised of all the property in
11the proposed entertainment area that the council finds has the
12relationship or whose owners have the interest described in
13subsection 1, paragraph “e”. Property included in the proposed
14entertainment area need not be included in the established
15entertainment area. However, no property may be included in
16the entertainment area that was not included in the proposed
17entertainment area until the council has held another hearing
18after the council has published and mailed the same notice as
19required in subsections 3 and 4 on the original petition to
20the owners of the additional property, or has caused a notice
21of the inclusion of the property to be personally serviced
22upon each owner of the additional property, or has received
23a written waiver of notice from each owner of the additional
24property.
256. Adoption of the ordinance establishing the entertainment
26area requires the affirmative vote of three-fourths of all the
27members of the council, or in cities having three members of
28the council, the affirmative vote of two members. However,
29if a remonstrance has been filed with the clerk signed by at
30least twenty-five percent of all owners of property within
31the proposed entertainment area representing ownership of
32at least twenty-five percent or more of the total number of
33cultural or entertainment establishments, food establishments,
34liquor establishments, and lodging providers in the proposed
35entertainment area, the adoption of the ordinance requires a
-5-1unanimous vote of the council.
27. The clerk shall cause a copy of the ordinance to be filed
3in the office of the county recorder of each county in which
4any property within the entertainment area is located.
58. At any time prior to the final adoption of an ordinance
6establishing an entertainment area, the entire matter of
7establishing such entertainment area shall be withdrawn from
8council consideration if a petition objecting to establishing
9such entertainment area is filed with the clerk containing
10signatures of at least forty percent or more of all owners of
11property in the proposed entertainment area or signatures which
12together represent ownership of forty percent or more of the
13total number of cultural or entertainment establishments, food
14establishments, liquor establishments, and lodging providers
15within the proposed entertainment area.
169. The adoption of an ordinance establishing an
17entertainment area is a legislative determination that the
18property within the entertainment area has the relationship
19or its owners have the interest required under subsection 1,
20paragraph “e”, and includes all of the property within the
21entertainment area which has that relationship or the ownership
22of which has that interest in the entertainment area.
2310. Any resident or property owner of the city may appeal
24the action and the decisions of the council, including
25the creation of the entertainment area and imposition of a
26surcharge for the entertainment area, to the district court
27of the county in which any part of the entertainment area
28is located, within thirty days after the date upon which the
29ordinance creating the entertainment area becomes effective,
30but the action and decision of the council are final and
31conclusive unless the court finds that the council exceeded
32its authority. An action shall not be brought questioning the
33regularity of the proceedings pertaining to the establishment
34of the entertainment area or the validity of the entertainment
35area, or the propriety of the inclusion or exclusion of
-6-1any property within or from the entertainment area, or the
2ability of the city to impose the surcharge in accordance
3with the ordinance establishing the entertainment area, after
4thirty days from the date on which the ordinance creating the
5entertainment area becomes effective.
611. The surcharge imposed by the ordinance establishing
7the entertainment area shall be in addition to the state
8sales tax imposed pursuant to chapter 423, subchapter II, the
9state-imposed and locally imposed hotel and motel tax pursuant
10to chapter 423A, and the local sales and services tax imposed
11pursuant to chapter 423B.
1212. a. Within ten days of the effective date of the
13ordinance establishing the area and imposing the surcharge, the
14county auditor of the county with the largest parcel in the
15entertainment area shall give written notice to the director by
16sending a copy of the ordinance to the director.
17b. A surcharge shall be imposed either January 1 or July
181 following the notification of the director but not sooner
19than ninety days following the effective date of the ordinance
20imposing the surcharge and not sooner than sixty days following
21notice to sellers with a place of business, as defined in
22section 423.1, in the entertainment area and to lodging
23providers operating lodging in the entertainment area.
24c. A surcharge shall be repealed only on June 30 or December
2531 but not sooner than ninety days following repeal of the
26ordinance. At least forty days before the repeal of the
27surcharge, the council shall provide notice of the action by
28certified mail to the director.
2913. a. An entertainment area may be dissolved and
30terminated by action of the council rescinding the ordinance
31creating the area and any subsequent ordinances amending the
32area by an affirmative vote of three-fourths of all members
33of the council, or in cities having three members of the
34council, the affirmative vote of two members. However, if
35a remonstrance has been filed with the clerk signed by at
-7-1least twenty-five percent of all owners of property within the
2area representing ownership of at least twenty-five percent
3or more of the total number of cultural or entertainment
4establishments, food establishments, liquor establishments, and
5lodging providers in the area, the rescission of the ordinance
6creating the area, and any subsequent ordinances amending the
7area, requires a unanimous vote of the council.
8b. At any time prior to action of the council rescinding the
9ordinance creating the entertainment area, and any subsequent
10ordinances amending the area, the entire matter of dissolving
11an area shall be withdrawn from council consideration if a
12petition is filed with its clerk containing the signatures of
13at least forty percent of all owners of property within the
14area or signatures which together represent ownership of at
15least forty percent or more of the total number of cultural
16or entertainment establishments, food establishments, liquor
17establishments, and lodging providers within the area.
1814. The ordinance creating an entertainment area may be
19amended, including to add property to the area, remove property
20from the area, extend the duration of the area, or alter the
21amount of the entertainment surcharge, by the same procedure as
22for the establishment of the entertainment area and imposition
23of the surcharge.
2415. a. Upon the adoption of an ordinance establishing an
25entertainment area, the city shall establish an entertainment
26area fund, and upon remittance of the revenues from the state
27surcharge revenue fund to the city under section 386A.5, the
28revenues shall be deposited into the city’s entertainment area
29fund.
30b. Surcharge revenues deposited into an entertainment area
31fund of the city shall only be used for the following, as
32applicable:
33(1) For deposit into the debt service fund in section 384.4.
34(2) For deposit into the emergency fund in section 384.8.
35(3) For deposit into the capital improvements fund in
-8-1section 384.7.
2(4) For the purposes described in section 384.3A,
3subsection 3, paragraph “b”, “c”, “e”, “f”, or “g”, including
4city operational expenses for public safety services within the
5entertainment area.
6 Sec. 4. NEW SECTION. 386A.4 Administration of surcharge.
71. The director shall administer the surcharge imposed
8pursuant to this chapter as nearly as possible in conjunction
9with the administration of state sales tax laws. The director
10shall provide appropriate forms, or provide space on the
11regular state tax forms, for reporting surcharge liability.
122. a. Section 422.25, subsection 4, sections 422.30,
13422.67, and 422.68, section 422.69, subsection 1, sections
14422.70, 422.71, 422.72, 422.74, and 422.75, section 423.14,
15subsection 1, and sections 423.23, 423.24, 423.25, 423.31,
16423.33, 423.35, 423.37 through 423.42, and 423.47, consistent
17with the provisions of this chapter, apply with respect to the
18surcharge authorized under this chapter, in the same manner and
19with the same effect as retail sales taxes within the meaning
20of those statutes. The director may require all persons
21who are engaged in the business of deriving any sales price
22subject to a surcharge under this chapter to register with the
23department. All surcharges collected under this chapter are
24deemed to be held in trust for the state of Iowa and the cities
25imposing the surcharges. Local officials shall confer with the
26director for assistance in drafting the ordinance imposing the
27surcharge. A certified copy of the ordinance shall be filed
28with the director as soon as possible after passage.
29b. Frequency of deposits and quarterly reports of the
30surcharge with the department of revenue are governed by the
31provisions in section 423.31. Local surcharge collections
32shall not be included in computation of the total tax to
33determine frequency of filing under section 423.31.
34c. The director shall apply a boundary change of an
35entertainment area to the imposition or collection of that
-9-1surcharge only on the first day of a calendar quarter which
2occurs sixty days or more after the director has given notice
3of the boundary change to sellers with a place of business,
4as defined in section 423.1, in the entertainment area and to
5lodging providers operating lodging in the entertainment area.
63. a. The director, in consultation with local officials,
7shall collect and account for the surcharge. The director
8shall certify each quarter the amount of the surcharge receipts
9and any interest and penalties to be credited to the city
10account in the state surcharge revenue fund established in
11section 386A.5. Local authorities shall not require any permit
12not required by the director.
13b. All surcharge revenues and interest and penalties
14received or refunded one hundred eighty days or more after the
15date on which the city repeals the surcharge shall be deposited
16in or withdrawn from the general fund of the state.
174. Each city that has established an entertainment area
18under this chapter shall assist the department in identifying
19new establishments required to impose the surcharge in the
20entertainment area. This process shall be ongoing until the
21surcharge is repealed.
22 Sec. 5. NEW SECTION. 386A.5 State surcharge revenue fund
23— accounts.
241. A state surcharge revenue fund is established in the
25state treasury under the control of the department consisting
26of the surcharge revenues collected within each entertainment
27area and deposited in the fund pursuant to section 386A.4.
28Revenues deposited in the fund are appropriated to the
29department for the purposes of this section.
302. An entertainment area account is created within the
31fund for each city creating an entertainment area under this
32chapter.
333. The department shall deposit the revenues described in
34subsection 1 that were collected in a quarter beginning on
35or after the entertainment area’s commencement date into the
-10-1appropriate entertainment area account in the fund.
24. All revenues in each entertainment area account within
3the fund shall be remitted quarterly by the department to the
4city that established the entertainment area for deposit in the
5entertainment area fund of the city.
65. The department shall adopt rules pursuant to chapter 17A
7necessary to administer the department’s responsibilities under
8this chapter.
9 Sec. 6. Section 423A.5A, subsection 3, Code 2023, is amended
10to read as follows:
113. Unless otherwise provided in this section, the
12state-imposed tax under section 423A.3 and any locally
13imposed tax under section 423A.4 shall be collected by the
14lodging provider from the user of that lodging and shall be
15remitted to the department. The lodging provider shall add
16the state-imposed tax to the sales price of the lodging and
17the tax, when collected, shall be stated as a distinct item,
18separate and apart from the sales price of the lodging and from
19the locally imposed tax under section 423A.4 or entertainment
20surcharge under chapter 386A, if any. The lodging provider
21shall add the locally imposed tax, if any, to the sales price
22of the lodging and the tax, when collected, shall be stated as
23a distinct item, separate and apart from the sales price of
24the lodging and from the state-imposed tax or entertainment
25surcharge under chapter 386A, if any.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
29This bill authorizes cities to establish entertainment areas
30and to impose an entertainment surcharge within the area.
31Under the bill, following the filing of a petition for the
32establishment of an entertainment area (area) and holding a
33public hearing, a city may establish an area by ordinance for
34the purpose of imposing an entertainment surcharge (surcharge).
35The proposed area must meet all of the following requirements:
-11-1(1) the combined attendance at cultural or entertainment
2establishments, food establishments, liquor establishments, and
3lodging providers within the proposed area exceeded 250,000
4persons during the previous calendar year, or the expected
5attendance forecast at such establishments is expected to
6exceed 250,000 persons per calendar year within two years;
7(2) the area consists of contiguous parcels wholly within the
8boundaries of the city and does not exceed 75 acres; (3) the
9area does not include the entire incorporated area of the city;
10(4) the area consists only of properties zoned for commercial
11uses or properties within a designated historic district,
12and at least 75 percent of the properties must be cultural
13or entertainment establishments, food establishments, liquor
14establishments, or lodging providers; (5) the area must be
15comprised of property related in some manner; and (6) the area
16must be given a descriptive name.
17Adoption of the ordinance establishing the area requires the
18affirmative vote of three-fourths of all the members of the
19council, or in cities having three members of the council, the
20affirmative vote of two members. However, if a remonstrance
21has been filed with the clerk signed by at least 25 percent of
22all owners of property within the proposed area representing
23ownership of at least 25 percent or more of the total number of
24cultural or entertainment establishments, food establishments,
25liquor establishments, and lodging providers in the proposed
26area, the adoption of the ordinance requires a unanimous vote
27of the council. At any time prior to the final adoption
28of an ordinance establishing an area, the entire matter
29of establishing such area shall be withdrawn from council
30consideration if a petition objecting to establishing such area
31is filed with the clerk containing signatures of at least 40
32percent or more of all owners of property in the proposed area
33or signatures which together represent ownership of 40 percent
34or more of the total number of cultural or entertainment
35establishments, food establishments, liquor establishments, and
-12-1lodging providers within the proposed entertainment area.
2The surcharge authorized under the bill shall be a rate not
3to exceed 3 percent, which shall be imposed upon any of the
4following within the area: (1) the retail sales price of food
5or alcoholic beverages sold at a cultural or entertainment
6establishment, food establishment, or liquor establishment; (2)
7the sales price of all sales of entertainment tickets sold at a
8cultural or entertainment establishment; or (3) the sales price
9for the renting of any lodging.
10The bill specifies that the surcharge shall be in addition
11to the state sales tax imposed pursuant to Code chapter 423,
12subchapter II, the state-imposed and locally imposed hotel and
13motel tax pursuant to Code chapter 423A, and the local sales
14and services tax imposed pursuant to Code chapter 423B. The
15bill establishes a process and timing for imposition or repeal
16of the surcharge and for dissolution of the area.
17The bill specifies the director of the department of
18revenue shall administer the surcharge as nearly as possible
19in conjunction with the administration of the state sales tax.
20The bill specifies that administrative and enforcement laws
21relating to the sales tax apply to surcharges imposed under the
22bill. The bill requires each city to assist the department in
23identifying new establishments required to impose the surcharge
24in the area.
25The bill creates a state surcharge revenue fund in the
26state treasury under the control of the department of revenue
27consisting of surcharge revenues collected within each area.
28The bill creates an area account for each city creating an
29area. The bill requires the revenues be deposited into the
30appropriate area account. All revenues in each area account
31shall be remitted quarterly by the department to the city
32that established the area for deposit in the entertainment
33area fund of the city. Surcharge revenues deposited into the
34city’s entertainment area fund may be deposited in any of
35the following funds: the debt service fund in Code section
-13-1384.4, the emergency fund in Code section 384.8, or the capital
2improvements fund in Code section 384.7. If the surcharge
3revenues are not deposited in any of the above-mentioned funds,
4the surcharge revenues may also be used for any of the purposes
5described under Code section 384.3A(3)(b), (c), (e), (f), or
6(g).
-14-md/jh
2entertainment areas.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 386A.1 Definitions.
2As used in this chapter, unless the context requires
3otherwise:
41. “Alcoholic beverage” means the same as defined in section
5123.3.
62. “Council” means the governing body of a city.
73. “Cultural or entertainment establishment” means a sporting
8or concert event venue, performing arts theater, movie theater,
9museum, convention hall, or enclosed shopping mall.
104. “Department” means the department of revenue.
115. “Director” means the director of the department of
12revenue.
136. “Entertainment area” or “area” means an area designated
14by ordinance under this chapter and the cultural or
15entertainment establishments, food establishments, liquor
16establishments, and lodging providers therein that are subject
17to the entertainment surcharge in accordance with section
18386A.3.
197. “Entertainment tickets” means all tickets or admissions
20subject to taxation pursuant to section 423.2, subsection 3.
218. “Food” means the same as defined in section 137F.1.
229. “Food establishment” means a food establishment licensed
23pursuant to chapter 137F, at which food is served or sold at
24retail. “Food establishment” also includes a temporary food
25establishment defined in section 137F.1.
2610. “Licensed premises” means the same as defined in section
27123.3.
2811. “Liquor establishment” means a licensed premises in or
29at which alcoholic beverages are sold at retail.
3012. “Lodging” means the same as defined in section 423A.2.
31“Lodging” does not include lodging exempted from tax pursuant
32to section 423A.5.
3313. “Lodging provider” means the same as defined in section
34423A.2.
3514. “Property owner” or “owner” means the owner of property,
-1-1as shown by the transfer books in the office of the county
2auditor of the county in which the property is located.
315. “Retail sale” means the same as defined in section
4423.1.
516. “Surcharge” means an entertainment surcharge imposed
6pursuant to this chapter.
7 Sec. 2. NEW SECTION. 386A.2 Authorization.
8A city that proposes to create an entertainment area and
9impose an entertainment surcharge must do so in accordance with
10the provisions of this chapter.
11 Sec. 3. NEW SECTION. 386A.3 Establishment of an
12entertainment area — entertainment surcharge — use of revenues.
131. An entertainment area may be created by ordinance of the
14council in accordance with the provisions of this section. A
15proposed entertainment area shall meet all of the following
16requirements:
17a. The combined attendance at cultural or entertainment
18establishments, food establishments, liquor establishments,
19and lodging providers within the proposed entertainment
20area exceeded two hundred fifty thousand persons during the
21previous calendar year, or the attendance forecast at such
22establishments is reasonably expected to exceed two hundred
23fifty thousand persons per calendar year within two years of
24the establishment of the entertainment area.
25b. The proposed entertainment area consists of contiguous
26parcels wholly within the boundaries of the city and does not
27exceed seventy-five acres in total.
28c. The proposed entertainment area does not include the
29entire incorporated area of the city.
30d. The proposed entertainment area consists only of
31properties zoned for commercial uses or properties within a
32duly designated historic district, and at least seventy-five
33percent of the properties must be cultural or entertainment
34establishments, food establishments, liquor establishments, or
35lodging providers.
-2- 1e. The proposed entertainment area must be comprised of
2property related in some manner, including but not limited
3to present or potential use, physical location, condition,
4relationship to the area, or relationship to present or
5potential commercial or other activity in the area, so as
6to be benefited in any manner, including but not limited to
7a benefit from present or potential use or enjoyment of the
8property, by the condition, development, or maintenance of
9the area or of any improvement or services provided to the
10area or be comprised of property the owners of which have a
11present or potential benefit from the condition, development,
12or maintenance of the area or of any improvement or services
13provided to the area.
14f. The entertainment area shall be given a descriptive name
15containing the words “entertainment area”.
162. The council shall initiate proceedings for the adoption
17of an ordinance under subsection 6 upon the filing of a
18petition containing all of the following:
19a. The signatures of at least twenty-five percent of
20all owners of property within the proposed entertainment
21area. These signatures must together represent ownership of
22at least twenty-five percent or more of the total number of
23cultural or entertainment establishments, food establishments,
24liquor establishments, and lodging providers in the proposed
25entertainment area.
26b. A description of the boundaries of the proposed
27entertainment area, or a consolidated description of the
28property within the proposed area, along with a map depicting
29the existing parcels of real estate located in the proposed
30entertainment area.
31c. The name of the proposed entertainment area.
32d. Subject to the limitations of subsection 4, paragraph
33“e”, a statement of the maximum surcharge rate that may be
34imposed upon retail sales within the entertainment area.
35e. The purpose of the establishment of the entertainment
-3-1area, which may be stated generally, or in terms of the
2relationship of the property within the entertainment
3area or the interests of the owners of property within the
4entertainment area, or in terms of the specific or general
5categories of improvements proposed to be developed for the
6purposes of the entertainment area, or in terms of the services
7to be provided within the entertainment area and supported
8from the revenues of the surcharge, or a combination of such
9purposes.
10f. A statement of the specified length of time the surcharge
11shall be imposed for the purposes of the entertainment area,
12along with any option to renew the surcharge.
133. Upon receiving a valid petition for establishment of
14an entertainment area, the council shall set a time and place
15for a public hearing on the establishment of the entertainment
16area, and shall publish notice of the public hearing as
17provided in section 362.3, and the clerk shall send a copy of
18the notice by certified mail not less than fifteen days before
19the hearing to each owner of property within the proposed
20entertainment area at the owner’s address as shown by the
21records of the county auditor.
224. In addition to the time and place of the public hearing
23on the petition, the notice must state all of the following:
24a. That a petition has been filed with the council asking
25that an entertainment area be established.
26b. The name of the entertainment area.
27c. The purpose of the entertainment area.
28d. The property proposed to be included in the entertainment
29area.
30e. The maximum surcharge, not to exceed three percent, which
31may be imposed upon any of the following retail sales within
32the entertainment area:
33(1) The retail sales price of food or alcoholic beverages
34sold at a cultural or entertainment establishment, food
35establishment, or liquor establishment.
-4- 1(2) The retail sales price of entertainment tickets sold at
2a cultural or entertainment establishment.
3(3) The retail sales price for the renting of any lodging.
45. At the time and place set in the notice the council
5shall hear all owners of property in the proposed entertainment
6area or residents of the city desiring to express their
7views. The council must wait at least thirty days after the
8public hearing has been held before the council may adopt an
9ordinance establishing the entertainment area. The established
10entertainment area must be comprised of all the property in
11the proposed entertainment area that the council finds has the
12relationship or whose owners have the interest described in
13subsection 1, paragraph “e”. Property included in the proposed
14entertainment area need not be included in the established
15entertainment area. However, no property may be included in
16the entertainment area that was not included in the proposed
17entertainment area until the council has held another hearing
18after the council has published and mailed the same notice as
19required in subsections 3 and 4 on the original petition to
20the owners of the additional property, or has caused a notice
21of the inclusion of the property to be personally serviced
22upon each owner of the additional property, or has received
23a written waiver of notice from each owner of the additional
24property.
256. Adoption of the ordinance establishing the entertainment
26area requires the affirmative vote of three-fourths of all the
27members of the council, or in cities having three members of
28the council, the affirmative vote of two members. However,
29if a remonstrance has been filed with the clerk signed by at
30least twenty-five percent of all owners of property within
31the proposed entertainment area representing ownership of
32at least twenty-five percent or more of the total number of
33cultural or entertainment establishments, food establishments,
34liquor establishments, and lodging providers in the proposed
35entertainment area, the adoption of the ordinance requires a
-5-1unanimous vote of the council.
27. The clerk shall cause a copy of the ordinance to be filed
3in the office of the county recorder of each county in which
4any property within the entertainment area is located.
58. At any time prior to the final adoption of an ordinance
6establishing an entertainment area, the entire matter of
7establishing such entertainment area shall be withdrawn from
8council consideration if a petition objecting to establishing
9such entertainment area is filed with the clerk containing
10signatures of at least forty percent or more of all owners of
11property in the proposed entertainment area or signatures which
12together represent ownership of forty percent or more of the
13total number of cultural or entertainment establishments, food
14establishments, liquor establishments, and lodging providers
15within the proposed entertainment area.
169. The adoption of an ordinance establishing an
17entertainment area is a legislative determination that the
18property within the entertainment area has the relationship
19or its owners have the interest required under subsection 1,
20paragraph “e”, and includes all of the property within the
21entertainment area which has that relationship or the ownership
22of which has that interest in the entertainment area.
2310. Any resident or property owner of the city may appeal
24the action and the decisions of the council, including
25the creation of the entertainment area and imposition of a
26surcharge for the entertainment area, to the district court
27of the county in which any part of the entertainment area
28is located, within thirty days after the date upon which the
29ordinance creating the entertainment area becomes effective,
30but the action and decision of the council are final and
31conclusive unless the court finds that the council exceeded
32its authority. An action shall not be brought questioning the
33regularity of the proceedings pertaining to the establishment
34of the entertainment area or the validity of the entertainment
35area, or the propriety of the inclusion or exclusion of
-6-1any property within or from the entertainment area, or the
2ability of the city to impose the surcharge in accordance
3with the ordinance establishing the entertainment area, after
4thirty days from the date on which the ordinance creating the
5entertainment area becomes effective.
611. The surcharge imposed by the ordinance establishing
7the entertainment area shall be in addition to the state
8sales tax imposed pursuant to chapter 423, subchapter II, the
9state-imposed and locally imposed hotel and motel tax pursuant
10to chapter 423A, and the local sales and services tax imposed
11pursuant to chapter 423B.
1212. a. Within ten days of the effective date of the
13ordinance establishing the area and imposing the surcharge, the
14county auditor of the county with the largest parcel in the
15entertainment area shall give written notice to the director by
16sending a copy of the ordinance to the director.
17b. A surcharge shall be imposed either January 1 or July
181 following the notification of the director but not sooner
19than ninety days following the effective date of the ordinance
20imposing the surcharge and not sooner than sixty days following
21notice to sellers with a place of business, as defined in
22section 423.1, in the entertainment area and to lodging
23providers operating lodging in the entertainment area.
24c. A surcharge shall be repealed only on June 30 or December
2531 but not sooner than ninety days following repeal of the
26ordinance. At least forty days before the repeal of the
27surcharge, the council shall provide notice of the action by
28certified mail to the director.
2913. a. An entertainment area may be dissolved and
30terminated by action of the council rescinding the ordinance
31creating the area and any subsequent ordinances amending the
32area by an affirmative vote of three-fourths of all members
33of the council, or in cities having three members of the
34council, the affirmative vote of two members. However, if
35a remonstrance has been filed with the clerk signed by at
-7-1least twenty-five percent of all owners of property within the
2area representing ownership of at least twenty-five percent
3or more of the total number of cultural or entertainment
4establishments, food establishments, liquor establishments, and
5lodging providers in the area, the rescission of the ordinance
6creating the area, and any subsequent ordinances amending the
7area, requires a unanimous vote of the council.
8b. At any time prior to action of the council rescinding the
9ordinance creating the entertainment area, and any subsequent
10ordinances amending the area, the entire matter of dissolving
11an area shall be withdrawn from council consideration if a
12petition is filed with its clerk containing the signatures of
13at least forty percent of all owners of property within the
14area or signatures which together represent ownership of at
15least forty percent or more of the total number of cultural
16or entertainment establishments, food establishments, liquor
17establishments, and lodging providers within the area.
1814. The ordinance creating an entertainment area may be
19amended, including to add property to the area, remove property
20from the area, extend the duration of the area, or alter the
21amount of the entertainment surcharge, by the same procedure as
22for the establishment of the entertainment area and imposition
23of the surcharge.
2415. a. Upon the adoption of an ordinance establishing an
25entertainment area, the city shall establish an entertainment
26area fund, and upon remittance of the revenues from the state
27surcharge revenue fund to the city under section 386A.5, the
28revenues shall be deposited into the city’s entertainment area
29fund.
30b. Surcharge revenues deposited into an entertainment area
31fund of the city shall only be used for the following, as
32applicable:
33(1) For deposit into the debt service fund in section 384.4.
34(2) For deposit into the emergency fund in section 384.8.
35(3) For deposit into the capital improvements fund in
-8-1section 384.7.
2(4) For the purposes described in section 384.3A,
3subsection 3, paragraph “b”, “c”, “e”, “f”, or “g”, including
4city operational expenses for public safety services within the
5entertainment area.
6 Sec. 4. NEW SECTION. 386A.4 Administration of surcharge.
71. The director shall administer the surcharge imposed
8pursuant to this chapter as nearly as possible in conjunction
9with the administration of state sales tax laws. The director
10shall provide appropriate forms, or provide space on the
11regular state tax forms, for reporting surcharge liability.
122. a. Section 422.25, subsection 4, sections 422.30,
13422.67, and 422.68, section 422.69, subsection 1, sections
14422.70, 422.71, 422.72, 422.74, and 422.75, section 423.14,
15subsection 1, and sections 423.23, 423.24, 423.25, 423.31,
16423.33, 423.35, 423.37 through 423.42, and 423.47, consistent
17with the provisions of this chapter, apply with respect to the
18surcharge authorized under this chapter, in the same manner and
19with the same effect as retail sales taxes within the meaning
20of those statutes. The director may require all persons
21who are engaged in the business of deriving any sales price
22subject to a surcharge under this chapter to register with the
23department. All surcharges collected under this chapter are
24deemed to be held in trust for the state of Iowa and the cities
25imposing the surcharges. Local officials shall confer with the
26director for assistance in drafting the ordinance imposing the
27surcharge. A certified copy of the ordinance shall be filed
28with the director as soon as possible after passage.
29b. Frequency of deposits and quarterly reports of the
30surcharge with the department of revenue are governed by the
31provisions in section 423.31. Local surcharge collections
32shall not be included in computation of the total tax to
33determine frequency of filing under section 423.31.
34c. The director shall apply a boundary change of an
35entertainment area to the imposition or collection of that
-9-1surcharge only on the first day of a calendar quarter which
2occurs sixty days or more after the director has given notice
3of the boundary change to sellers with a place of business,
4as defined in section 423.1, in the entertainment area and to
5lodging providers operating lodging in the entertainment area.
63. a. The director, in consultation with local officials,
7shall collect and account for the surcharge. The director
8shall certify each quarter the amount of the surcharge receipts
9and any interest and penalties to be credited to the city
10account in the state surcharge revenue fund established in
11section 386A.5. Local authorities shall not require any permit
12not required by the director.
13b. All surcharge revenues and interest and penalties
14received or refunded one hundred eighty days or more after the
15date on which the city repeals the surcharge shall be deposited
16in or withdrawn from the general fund of the state.
174. Each city that has established an entertainment area
18under this chapter shall assist the department in identifying
19new establishments required to impose the surcharge in the
20entertainment area. This process shall be ongoing until the
21surcharge is repealed.
22 Sec. 5. NEW SECTION. 386A.5 State surcharge revenue fund
23— accounts.
241. A state surcharge revenue fund is established in the
25state treasury under the control of the department consisting
26of the surcharge revenues collected within each entertainment
27area and deposited in the fund pursuant to section 386A.4.
28Revenues deposited in the fund are appropriated to the
29department for the purposes of this section.
302. An entertainment area account is created within the
31fund for each city creating an entertainment area under this
32chapter.
333. The department shall deposit the revenues described in
34subsection 1 that were collected in a quarter beginning on
35or after the entertainment area’s commencement date into the
-10-1appropriate entertainment area account in the fund.
24. All revenues in each entertainment area account within
3the fund shall be remitted quarterly by the department to the
4city that established the entertainment area for deposit in the
5entertainment area fund of the city.
65. The department shall adopt rules pursuant to chapter 17A
7necessary to administer the department’s responsibilities under
8this chapter.
9 Sec. 6. Section 423A.5A, subsection 3, Code 2023, is amended
10to read as follows:
113. Unless otherwise provided in this section, the
12state-imposed tax under section 423A.3 and any locally
13imposed tax under section 423A.4 shall be collected by the
14lodging provider from the user of that lodging and shall be
15remitted to the department. The lodging provider shall add
16the state-imposed tax to the sales price of the lodging and
17the tax, when collected, shall be stated as a distinct item,
18separate and apart from the sales price of the lodging and from
19the locally imposed tax under section 423A.4 or entertainment
20surcharge under chapter 386A, if any. The lodging provider
21shall add the locally imposed tax, if any, to the sales price
22of the lodging and the tax, when collected, shall be stated as
23a distinct item, separate and apart from the sales price of
24the lodging and from the state-imposed tax or entertainment
25surcharge under chapter 386A, if any.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
29This bill authorizes cities to establish entertainment areas
30and to impose an entertainment surcharge within the area.
31Under the bill, following the filing of a petition for the
32establishment of an entertainment area (area) and holding a
33public hearing, a city may establish an area by ordinance for
34the purpose of imposing an entertainment surcharge (surcharge).
35The proposed area must meet all of the following requirements:
-11-1(1) the combined attendance at cultural or entertainment
2establishments, food establishments, liquor establishments, and
3lodging providers within the proposed area exceeded 250,000
4persons during the previous calendar year, or the expected
5attendance forecast at such establishments is expected to
6exceed 250,000 persons per calendar year within two years;
7(2) the area consists of contiguous parcels wholly within the
8boundaries of the city and does not exceed 75 acres; (3) the
9area does not include the entire incorporated area of the city;
10(4) the area consists only of properties zoned for commercial
11uses or properties within a designated historic district,
12and at least 75 percent of the properties must be cultural
13or entertainment establishments, food establishments, liquor
14establishments, or lodging providers; (5) the area must be
15comprised of property related in some manner; and (6) the area
16must be given a descriptive name.
17Adoption of the ordinance establishing the area requires the
18affirmative vote of three-fourths of all the members of the
19council, or in cities having three members of the council, the
20affirmative vote of two members. However, if a remonstrance
21has been filed with the clerk signed by at least 25 percent of
22all owners of property within the proposed area representing
23ownership of at least 25 percent or more of the total number of
24cultural or entertainment establishments, food establishments,
25liquor establishments, and lodging providers in the proposed
26area, the adoption of the ordinance requires a unanimous vote
27of the council. At any time prior to the final adoption
28of an ordinance establishing an area, the entire matter
29of establishing such area shall be withdrawn from council
30consideration if a petition objecting to establishing such area
31is filed with the clerk containing signatures of at least 40
32percent or more of all owners of property in the proposed area
33or signatures which together represent ownership of 40 percent
34or more of the total number of cultural or entertainment
35establishments, food establishments, liquor establishments, and
-12-1lodging providers within the proposed entertainment area.
2The surcharge authorized under the bill shall be a rate not
3to exceed 3 percent, which shall be imposed upon any of the
4following within the area: (1) the retail sales price of food
5or alcoholic beverages sold at a cultural or entertainment
6establishment, food establishment, or liquor establishment; (2)
7the sales price of all sales of entertainment tickets sold at a
8cultural or entertainment establishment; or (3) the sales price
9for the renting of any lodging.
10The bill specifies that the surcharge shall be in addition
11to the state sales tax imposed pursuant to Code chapter 423,
12subchapter II, the state-imposed and locally imposed hotel and
13motel tax pursuant to Code chapter 423A, and the local sales
14and services tax imposed pursuant to Code chapter 423B. The
15bill establishes a process and timing for imposition or repeal
16of the surcharge and for dissolution of the area.
17The bill specifies the director of the department of
18revenue shall administer the surcharge as nearly as possible
19in conjunction with the administration of the state sales tax.
20The bill specifies that administrative and enforcement laws
21relating to the sales tax apply to surcharges imposed under the
22bill. The bill requires each city to assist the department in
23identifying new establishments required to impose the surcharge
24in the area.
25The bill creates a state surcharge revenue fund in the
26state treasury under the control of the department of revenue
27consisting of surcharge revenues collected within each area.
28The bill creates an area account for each city creating an
29area. The bill requires the revenues be deposited into the
30appropriate area account. All revenues in each area account
31shall be remitted quarterly by the department to the city
32that established the area for deposit in the entertainment
33area fund of the city. Surcharge revenues deposited into the
34city’s entertainment area fund may be deposited in any of
35the following funds: the debt service fund in Code section
-13-1384.4, the emergency fund in Code section 384.8, or the capital
2improvements fund in Code section 384.7. If the surcharge
3revenues are not deposited in any of the above-mentioned funds,
4the surcharge revenues may also be used for any of the purposes
5described under Code section 384.3A(3)(b), (c), (e), (f), or
6(g).
-14-md/jh