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PAG LIN 1 1 Section 1. Section 422E.1, subsection 2, Code 1999, is 1 2 amended to read as follows: 1 3 2. The maximum rate of tax shall be one percent. The rate 1 4 and duration shall be uniform throughout the county. The tax 1 5 shall be imposed without regard to any other local sales and 1 6 services tax authorized in chapter 422B, and is repealed at 1 7 the expiration of a period of ten years of imposition or a 1 8 shorter period as provided in the ballot proposition. 1 9 Sec. 2. Section 422E.1, subsection 3, Code 1999, is 1 10 amended to read as follows: 1 11 3. Local sales and services tax moneys received by a 1 12 county for school infrastructure purposes pursuant to this 1 13 chapter shall be utilized solely for school infrastructure 1 14 needs. For purposes of this chapter, "school infrastructure" 1 15 means those
activitiespurposes for which a school district is 1 16 authorized to contract indebtedness and issue general 1 17 obligation bonds under section 296.1, except those activities1 18 related toexcluding a teacher's or superintendent's home or 1 19 homes . These activities include the construction,1 20 reconstruction, repair, purchasing, or remodeling of1 21 schoolhouses, stadiums, gyms, fieldhouses, and bus garages and1 22 the procurement of schoolhouse construction sites and the1 23 making of site improvements. Additionally, "school1 24 infrastructure" includes the payment or retirement of1 25 outstanding bonds previously issued for school infrastructure1 26 purposes as defined in this subsection, and the payment or1 27 retirement of, to pay principal and interest on general 1 28 obligation bonds issued under chapter 296 or section 298.20, 1 29 or loan agreements under section 297.36, to make payments 1 30 pursuant to a lease or lease purchase agreement relating to 1 31 school infrastructure, or to pay principal and interest on 1 32 bonds issued under section 422E.4. 1 33 Sec. 3. Section 422E.2, subsection 2, paragraph b, Code 1 34 1999, is amended to read as follows: 1 35 b. Alternatively, the question of imposition of a local 2 1 sales and services tax for school infrastructure purposes may 2 2 be proposed by motion or motions, requesting such submission, 2 3 adopted by the governing body of a school district or school 2 4 districts located within the county containing a total, or a 2 5 combined total in the case of more than one school district, 2 6 of at least one-half of the population of the county, or by 2 7 the county board of supervisors. Only a school district's 2 8 population residing in the county shall be counted when 2 9 determining if the fifty percent population threshold has been 2 10 reached. A motion shall specify the rate of tax, the date 2 11 that the tax shall be imposed and repealed, and shall contain 2 12 a statement as to the specific purpose or purposes for which 2 13 the revenue shall be expended. Upon adoption of such motion, 2 14 the governing body of a school district shall notify the board 2 15 of supervisors of the adoption of the motion. The county 2 16 board of supervisors shall submit the motion to the county 2 17 commissioner of elections, who shall publish notice of the 2 18 ballot proposition concerning the imposition of the local 2 19 sales and services tax. A motion ceases to be valid at the 2 20 time of the holding of the regular election for the election 2 21 of members of the governing body which adopted the motion. 2 22 Sec. 4. Section 422E.2, subsection 2, Code 1999, is 2 23 amended by adding the following new paragraphs: 2 24 NEW PARAGRAPH. c. A motion requesting submission pursuant 2 25 to paragraph "b" shall cease to be valid upon the 2 26 reorganization or dissolution of a school district prior to 2 27 the election, whose adoption of the motion was necessary to 2 28 reach the fifty percent population threshold, unless no later 2 29 than seventy-four days prior to the election date, the 2 30 governing body of the newly formed school district informs the 2 31 county commissioner of elections of the adoption of a motion 2 32 ratifying the earlier motion to submit. 2 33 NEW PARAGRAPH. d. The rate and duration of tax, and text 2 34 of the ballot proposition, shall be determined as follows: 2 35 (1) For a tax requested by the governing body or bodies of 3 1 a school district or districts pursuant to paragraph "b", the 3 2 rate and duration of tax shall be established by the governing 3 3 body of each school district which adopted a motion requesting 3 4 imposition of the tax within the county. If the rate or 3 5 duration established by the governing bodies differs, the 3 6 county board of supervisors shall establish the rate, the 3 7 duration, or both if applicable, in consultation with the 3 8 governing bodies of the school districts which adopted a 3 9 motion requesting imposition of the tax. For a tax requested 3 10 by petition pursuant to paragraph "a", or by the county board 3 11 of supervisors pursuant to paragraph "b", the rate and 3 12 duration of tax shall be established by the county board of 3 13 supervisors in consultation with the governing bodies of all 3 14 the school districts located in the county. 3 15 (2) For a tax requested by the governing body or bodies of 3 16 a school district or districts pursuant to paragraph "b", the 3 17 purpose or purposes for which the revenues shall be expended 3 18 shall be determined by the governing body of each school 3 19 district located within the county. The school district shall 3 20 notify the county board of supervisors of the purposes 3 21 identified. The county commissioner of elections shall 3 22 determine the text of the ballot proposition, which shall be 3 23 uniform throughout the county, and which shall separately list 3 24 the specific purposes for which revenues shall be expended for 3 25 each school district. Revenue shall not be expended for a 3 26 purpose authorized in this chapter unless that purpose was 3 27 identified by a school district prior to the election and 3 28 listed by the county commissioner of elections on the ballot 3 29 proposition. For a tax requested by petition pursuant to 3 30 paragraph "a", or by the county board of supervisors pursuant 3 31 to paragraph "b", the purpose or purposes for which the 3 32 revenues shall be expended shall be established by the county 3 33 board of supervisors in consultation with the governing bodies 3 34 of all the school districts located in the county. 3 35 (3) The county board of supervisors shall file the rate 4 1 and duration of tax, and statements of purposes for revenue 4 2 expenditure, with the commissioner of elections no later than 4 3 fourteen days prior to the publication of notice of the ballot 4 4 proposition. 4 5 Sec. 5. Section 422E.2, subsection 3, Code 1999, is 4 6 amended to read as follows: 4 7 3. The county commissioner of elections shall submit the 4 8 question of imposition of a local sales and services tax for 4 9 school infrastructure purposes at a state general election or 4 10 at a special election held at any time other than the time of4 11 a city regular election. The special election shall not be 4 12 held in conjunction with any city or school election. The 4 13 election shall not be held sooner than sixty days after 4 14 publication of notice of the ballot proposition by the county 4 15 commissioner of elections. The ballot proposition shall 4 16 specify the rate of tax, the date the tax will be imposed and 4 17 repealed, and shall contain a statement as to the specific 4 18 purpose or purposes for which the revenues shall be expended. 4 19 The rate of tax shall not be more than one percent as set by4 20 the county board of supervisors.The state commissioner of 4 21 elections shall establish by rule the form for the ballot 4 22 proposition which form shall be uniform throughout the state. 4 23 Sec. 6. Section 422E.2, subsection 4, paragraph a, Code 4 24 1999, is amended to read as follows: 4 25 a. The tax may be repealed or the rate increased, but not 4 26 above one percent, or decreased after an election at which a 4 27 majority of those voting on the question of repeal or rate 4 28 change favored the repeal or rate change. The election at 4 29 which the question of repeal or rate change is offered shall 4 30 be called and held in the same manner and under the same 4 31 conditions as provided in this section for the election on the 4 32 imposition of the tax. The election may be held at any time4 33 but not sooner than sixty days following publication of the4 34 ballot proposition. However, theThe tax shall not be 4 35 repealed before it has been in effect for one year. 5 1 Sec. 7. Section 422E.2, subsection 4, paragraph b, 5 2 unnumbered paragraph 1, Code 1999, is amended to read as 5 3 follows: 5 4 Within ten days of the election at which a majority of 5 5 those voting on the question favors the imposition, repeal, or 5 6 change in the rate of the tax, the county board of supervisors 5 7 shall give written notice to the director of revenue and 5 8 finance of the result of the election. Election costs shall 5 9 be apportioned among school districts within the county on a 5 10 pro rata basis in proportion to the number of registered 5 11 voters in each school district who reside in the county and 5 12 the total number of registered voters in all of the school 5 13 districts within the county who reside in the county. 5 14 Sec. 8. Section 422E.3, subsection 2, Code 1999, is 5 15 amended to read as follows: 5 16 2. The tax shall be imposed on the same basis as the state 5 17 sales and services tax and shall not be imposed on the sale of 5 18 any property or on any service not taxed by the state, except 5 19 the tax shall not be imposed on the gross receipts from the 5 20 sale of natural gas or electric energy in a city or county 5 21 where the gross receipts are subject to a franchise fee or 5 22 user fee during the period the franchise or user fee is 5 23 imposed, on the gross receipts from the sale of motor fuel or 5 24 special fuel as defined in chapter 452A, on the gross receipts 5 25 from the rental of rooms, apartments, or sleeping quarters 5 26 which are taxed under chapter 422A during the period the hotel 5 27 and motel tax is imposed, on the gross receipts from the sale 5 28 of equipment by the state department of transportation, and on 5 29 the gross receipts from the sale of a lottery ticket or share 5 30 in a lottery game conducted pursuant to chapter 99E. 5 31 Sec. 9. Section 422E.3, subsection 5, paragraph c, Code 5 32 1999, is amended to read as follows: 5 33 c. The director shall remit a final payment of the 5 34 remainder of tax moneys due for the fiscal year before 5 35 November 10 of the next fiscal year. If an overpayment has 6 1 resulted during the previous fiscal year, the firstNovember 6 2 payment of the new fiscal yearshall be adjusted to reflect 6 3 any overpayment. 6 4 Sec. 10. Section 422E.3, subsection 5, unnumbered 6 5 paragraph 1, Code 1999, is amended to read as follows: 6 6 If more than one school district, or a portion of a school 6 7 district, is located within the county, tax receipts shall be 6 8 remitted to each school district or portion of a school 6 9 district in which the county tax is imposed in a pro rata 6 10 share based upon the ratio which the percentage of actual6 11 enrollment for the school district that attends school in the6 12 county bears to the percentage of the total combined actual6 13 enrollments for all school districts that attend school in the6 14 countythe actual enrollment of the school district residing 6 15 in a portion of the county bears to the total combined actual 6 16 enrollments for all the school districts residing in a portion 6 17 of the county. The combined actual enrollment for a county, 6 18 for purposes of this section, shall be determined for each 6 19 county imposing a sales and services tax for school 6 20 infrastructure purposes by the department of management based 6 21 on the actual enrollment figures reported by October 1 to the 6 22 department of management by the department of education 6 23 pursuant to section 257.6, subsection 1. The combined actual 6 24 enrollment count shall be forwarded to the director of the 6 25 department of management by March 1, annually, for purposes of 6 26 supplying estimated tax payment figures and making estimated 6 27 tax payments pursuant to this section for the following fiscal 6 28 year. 6 29 Sec. 11. Section 422E.3, Code 1999, is amended by adding 6 30 the following new subsection: 6 31 NEW SUBSECTION. 7. Construction contractors may make 6 32 application to the department for a refund of the additional 6 33 local sales and services tax paid under this chapter by reason 6 34 of taxes paid on goods, wares, or merchandise under the 6 35 conditions specified in section 422B.11. The refund shall be 7 1 paid by the department from the appropriate school district's 7 2 account in the local sales and services tax fund. The penalty 7 3 provisions contained in section 422B.11, subsection 3, shall 7 4 apply regarding an erroneous application for refund of local 7 5 sales and services tax paid under this chapter. 7 6 Sec. 12. Section 422E.3, Code 1999, is amended by adding 7 7 the following new subsection: 7 8 NEW SUBSECTION. 8. Notwithstanding section 422E.1, 7 9 subsection 3, if a school district receives local option sales 7 10 and services tax for school infrastructure revenue in an 7 11 amount exceeding that amount required to facilitate the school 7 12 infrastructure purpose or purposes stated on the ballot 7 13 proposition, the excess revenue may be expended by the 7 14 district to reduce property taxes previously imposed pursuant 7 15 to section 257.41, 257.46, 298.2, 298.4, or 298.10, or in lieu 7 16 of the imposition of additional tax pursuant to those 7 17 sections. A school district shall be authorized to expend the 7 18 excess revenues pursuant to this subsection only if the ballot 7 19 proposition concerning imposition of the tax included property 7 20 tax reduction utilizing excess revenues as a potential use of 7 21 the revenue. 7 22 Sec. 13. Section 422E.4, unnumbered paragraph 1, Code 7 23 1999, is amended to read as follows: 7 24 The board of directors of a school district shall be 7 25 authorized to issue negotiable, interest-bearing school bonds, 7 26 without election, and utilize tax receipts derived from the 7 27 sales and services tax for school infrastructure purposes for 7 28 principal and interest repayment. Proceeds of the bonds 7 29 issued pursuant to this section shall be utilized solely for 7 30 school infrastructure needs as school infrastructure is 7 31 defined in section 422E.1, subsection 3. Issuance of bonds 7 32 pursuant to this section shall be permitted only in a district 7 33 which has imposed a local sales and services tax for school 7 34 infrastructure purposes pursuant to section 422E.2. The 7 35 provisions of sections 298.22 through 298.24 shall apply 8 1 regarding the form, rate of interest, registration, 8 2 redemption, and recording of bond issues pursuant to this 8 3 section, with the exception that the maximum period during 8 4 which principal on the bonds is payable shall not exceed a 8 5 ten-year period, or the date of repeal stated on the ballot 8 6 proposition. The provisions of section 75.1, relating to the 8 7 passage of a six-month interval between bond elections, shall 8 8 not apply to a bond issuance following the failure of a 8 9 proposition to impose a local option sales and services tax 8 10 for school infrastructure, or a proposition to impose a local 8 11 option sales and services tax following the failure of a 8 12 proposition to authorize issuance of bonds at an election. 8 13 Bonds issued under this section may be sold at public or 8 14 private sale as determined by the board of directors of the 8 15 school district. Bonds may bear dates, bear interest at rates 8 16 not exceeding that permitted by chapter 74A, mature in one or 8 17 more installments, be in either coupon or registered form, 8 18 carry registration and conversion privileges, be payable as to 8 19 principal and interest at times and places, be subject to 8 20 terms of redemption prior to maturity with or without premium, 8 21 and be in one or more denominations, all as provided by the 8 22 resolution of the board of directors authorizing their 8 23 issuance. The resolution may also prescribe additional 8 24 provisions, terms, conditions, and covenants which the board 8 25 of directors deems advisable, including provisions for 8 26 creating and maintaining reserve funds, the issuance of 8 27 additional bonds ranking on a parity with such bonds and 8 28 additional bonds junior and subordinate to such bonds, and 8 29 that such bonds shall rank on a parity with or be junior and 8 30 subordinate to any bonds which may then be outstanding. Local 8 31 sales and services tax for school infrastructure revenue bonds 8 32 are a contract between the school district and holders and the 8 33 resolution of the school district is a part of the contract. 8 34 Sec. 14. Section 422E.4, unnumbered paragraph 2, Code 8 35 1999, is amended to read as follows: 9 1 A school district in which a local option sales tax for 9 2 school infrastructure purposes has been imposed shall be 9 3 authorized to enter into a chapter 28E agreement with one or 9 4 more cities or a county whose boundaries encompass all or a 9 5 part of the area of the school district. A city or cities 9 6 entering into a chapter 28E agreement shall be authorized to 9 7 expend its designated portion of the local option sales and 9 8 services tax revenues for any valid purpose permitted in this 9 9 chapter or authorized by the governing body of the city. A 9 10 county entering into a chapter 28E agreement with a school 9 11 district in which a local option sales tax for school 9 12 infrastructure purposes has been imposed shall be authorized 9 13 to expend its designated portion of the local option sales and 9 14 services tax revenues to provide property tax relief within 9 15 the boundaries of the school district located in the county. 9 16 A school district shall be authorized to enter into a chapter 9 17 28E agreement pursuant to this section only if the ballot 9 18 proposition concerning imposition of the tax included entering 9 19 into a chapter 28E agreement as a potential use of the 9 20 revenue. 9 21 Sec. 15. PREVIOUS ELECTIONS. A school district in which a 9 22 local option sales and services tax for school infrastructure 9 23 has been imposed as a result of an election held between July 9 24 1, 1998, and October 1, 1999, shall not be precluded from 9 25 utilizing tax receipts for any purpose authorized in this 9 26 chapter as of the effective date of this Act, even if the 9 27 purpose was not specifically stated on the ballot proposition. 9 28 The school district shall, however, publish notice of the 9 29 intended use of the revenue prior to allocation of the revenue 9 30 as provided in section 331.305. 9 31 Sec. 16. EFFECTIVE DATE. This Act, being deemed of 9 32 immediate importance, takes effect upon enactment. Sections 9 33 7, 8, 10, and 11, of this Act are retroactively applicable to 9 34 July 1, 1998, for purposes of apportionment of election costs 9 35 for elections held on or after that date, for exemption of the 10 1 tax on gross receipts from the sale of natural gas or electric 10 2 energy subject to a franchise fee or user fee, for the 10 3 distribution of tax receipts in counties with more than one 10 4 school district, and for refunds of tax payable to 10 5 construction contractors, respectively. 10 6 EXPLANATION 10 7 This bill amends certain Code provisions relating to the 10 8 local option sales tax for school infrastructure. 10 9 The bill deletes a list of specified examples of school 10 10 infrastructure activities, but maintains the specified 10 11 designation of purposes for which a school district is 10 12 authorized to contract indebtedness and issue general 10 13 obligation bonds under Code section 296.1. The bill provides 10 14 that additional school infrastructure purposes shall include 10 15 the payment of principal and interest on general obligation 10 16 bonds issued under Code chapter 296 or Code section 298.20, 10 17 loan agreements under Code section 297.36, lease or lease 10 18 purchase agreements relating to school infrastructure, or the 10 19 payment of principal and interest on bonds issued under Code 10 20 section 422E.4. 10 21 The bill contains several provisions relating to local 10 22 option sales tax for school infrastructure election procedures 10 23 and ballot contents. The bill provides, with regard to 10 24 submission of the question of an election to impose the tax, 10 25 by adoption of a motion by the school board or school boards 10 26 of school districts located within the county representing a 10 27 combined population of at least one-half the population of the 10 28 county, that only a school district's population residing in 10 29 the county shall be counted when determining if the minimum 10 30 population threshold has been reached. The bill also provides 10 31 that such a motion will not remain valid if a school district 10 32 subsequently reorganizes or dissolves after adoption of the 10 33 motion, and the adoption of the motion in that school district 10 34 was necessary to reach the 50 percent population threshold. 10 35 However, if the board of directors of the newly organized 11 1 school district adopts a motion to ratify the earlier motion 11 2 within 74 days prior to the election date, the motion will 11 3 remain valid. 11 4 The bill additionally contains provisions relating to the 11 5 determination of, and contents of, ballot propositions for 11 6 imposition of the tax. The bill provides that the rate and 11 7 duration of tax will be established by the governing bodies of 11 8 the school districts located within the county. The bill 11 9 provides that the county board of supervisors shall establish 11 10 the rate, the duration, or both if applicable, in consultation 11 11 with the school districts, in the event the governing bodies 11 12 of the school districts involved cannot reach agreement. 11 13 The bill provides that the text of the ballot proposition, 11 14 determined by the county commissioner of elections, will be 11 15 uniform throughout the county, and will separately list the 11 16 specific purposes for which the revenues shall be expended for 11 17 each school district located within the county. While the 11 18 commissioner of elections is responsible for the specific 11 19 text, the respective purposes for which the revenues shall be 11 20 expended shall be determined by each school district, conveyed 11 21 to the county board of supervisors, and filed with the 11 22 commissioner for incorporation onto the ballot. The bill also 11 23 provides that the rate and duration of tax, and statements of 11 24 purposes for revenue expenditure, shall be filed with the 11 25 commissioner of elections by the county board of supervisors 11 26 no later than 14 days prior to the publication of notice of 11 27 the ballot proposition. 11 28 The bill provides that the county board of supervisors will 11 29 establish the rate, duration, and text of the ballot 11 30 proposition in the event of a request to impose the tax by 11 31 petition or by the county board of supervisors. 11 32 The bill provides that regarding the apportionment of 11 33 election costs among school districts within the county on a 11 34 pro rata basis, the pro rata allocation shall be determined 11 35 strictly with regard to registered voters residing in the 12 1 county. 12 2 The bill specifies that the rate of tax imposed will be 12 3 uniform throughout a county, and that a special election held 12 4 on the question of imposition of the tax, or with regard to 12 5 repeal, rate, or duration change, shall not be held in 12 6 conjunction with any city or school election. The bill also 12 7 provides that the six-month requirement between bond elections 12 8 contained in Code section 75.1 does not apply to a bond 12 9 election, following a failed election, to impose the local 12 10 option sales tax school infrastructure, or vice versa. The 12 11 bill additionally makes changes relating to authority to issue 12 12 bonds consistent with other provisions of the Code. 12 13 The bill provides that revenues will be allocated in a 12 14 county within which more than one school district, or portion 12 15 of a school district, is located, between the districts based 12 16 on the ratio of the actual enrollment residing in a portion of 12 17 the county to the combined actual enrollment of all school 12 18 districts residing in a portion of the county. 12 19 The bill provides that the gross receipts from the sale of 12 20 natural gas or electric energy, in a city or county where the 12 21 gross receipts are subject to a franchise fee or user fee 12 22 during the period the franchise or user fee is imposed, will 12 23 be exempt from the local option sales tax for school 12 24 infrastructure. 12 25 In addition, the bill provides that construction 12 26 contractors can apply for a refund of additional local sales 12 27 and services tax paid pursuant to the provisions of Code 12 28 section 422B.11, with the refund paid out of the appropriate 12 29 school district's account in the local sales and services tax 12 30 fund. The bill provides that the director of revenue and 12 31 finance will adjust the payment due in November with regard to 12 32 any overpayment for the previous fiscal year. 12 33 The bill also provides that a school district will be 12 34 authorized to utilize a portion of local option sales tax for 12 35 school infrastructure revenue for property tax reduction. The 13 1 bill provides that revenue received by a school district from 13 2 the local option sales and services tax for school 13 3 infrastructure exceeding the amount required to facilitate the 13 4 school infrastructure purpose or purposes stated on the ballot 13 5 proposition can be used to reduce property taxes previously 13 6 imposed pursuant to Code section 257.41, 257.46, 298.2, 298.4, 13 7 or 298.10, or in lieu of the imposition of additional tax 13 8 pursuant to those sections. A school district will be 13 9 authorized to expend the excess revenues only if the ballot 13 10 proposition concerning imposition of the tax included property 13 11 tax reduction utilizing excess revenues as a potential use of 13 12 the revenue. 13 13 The bill additionally provides that a school district in 13 14 which a local option sales tax for school infrastructure 13 15 purposes has been imposed would be authorized to enter into a 13 16 chapter 28E agreement with a county within which the school 13 17 district is partially or completely located, in addition to 13 18 the previous authorization in connection with a city or 13 19 cities. The county would be authorized to expend its 13 20 designated portion of the local option sales and services tax 13 21 revenues to provide property tax relief within the boundaries 13 22 of the school district located in the county, provided that 13 23 entering into a chapter 28E agreement was listed on the ballot 13 24 proposition as a potential use of the revenue. 13 25 The bill provides that a school district in which the tax 13 26 is imposed as a result of an election held between July 1, 13 27 1998, and October 1, 1999, can utilize tax receipts for any of 13 28 the purposes authorized in Code chapter 422E as of the 13 29 effective date of the bill, even if not specified on the 13 30 ballot proposition, provided that notice of the intended use 13 31 is published pursuant to Code section 331.305. 13 32 The bill takes effect upon enactment, and applies 13 33 retroactively to July 1, 1998, with regard to the 13 34 apportionment of election costs for elections held on or after 13 35 that date, exemption of the tax on gross receipts from the 14 1 sale of natural gas or electric energy subject to a franchise 14 2 fee or user fee, apportionment of tax revenues in counties 14 3 with more than one school district, and refunds of tax payable 14 4 to construction contractors. 14 5 LSB 1733SS 78 14 6 rn/cf/24.1
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