Text: HSB00710                          Text: HSB00712
Text: HSB00700 - HSB00799               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index



House Study Bill 711

Bill Text

PAG LIN
  1  1    Section 1.  NEW SECTION.  293.1  SCHOOL DISTRICT SALES TAX
  1  2 FUND.
  1  3    1.  A school district sales tax fund is created as a
  1  4 separate and distinct fund in the state treasury under the
  1  5 control of the department of revenue and finance.  Moneys in
  1  6 the fund include revenues credited to the fund pursuant to
  1  7 section 422.69, subsection 2, appropriations made to the fund,
  1  8 and other moneys deposited into the fund.  The moneys credited
  1  9 in a fiscal year to the fund shall be distributed as follows:
  1 10    a.  (1)  A school district located in whole or in part in a
  1 11 county that voted on and approved prior to March 31, 2002, the
  1 12 local sales and services tax for school infrastructure
  1 13 purposes under chapter 422E shall receive an amount equal to
  1 14 its guaranteed school infrastructure amount as calculated
  1 15 under subsection 2 if the board of directors notifies the
  1 16 director of revenue and finance that the school district wants
  1 17 to receive its guaranteed school infrastructure amount.  The
  1 18 notification shall be provided by July 1, 2002.  If
  1 19 notification is not received by July 1, 2002, the school
  1 20 district shall receive moneys pursuant to paragraph "b".
  1 21 Nothing in this chapter shall prevent a school district from
  1 22 using its guaranteed school infrastructure amount to pay
  1 23 principal and interest on obligations issued pursuant to
  1 24 section 422E.4.
  1 25    (2)  A school district receiving moneys pursuant to
  1 26 subparagraph (1) shall cease to receive its guaranteed school
  1 27 infrastructure amount and shall receive moneys pursuant to
  1 28 paragraph "b" starting with the fiscal year immediately
  1 29 following the fiscal year in which occurs the end of the
  1 30 original ten-year period or the date listed on the original
  1 31 ballot proposition, whichever is the earlier, as provided in
  1 32 chapter 422E.  However, a school district receiving moneys
  1 33 pursuant to subparagraph (1) may elect at anytime to receive
  1 34 moneys pursuant to paragraph "b" by providing notification to
  1 35 receive moneys pursuant to paragraph "b" to the director of
  2  1 revenue and finance and the director of the department of
  2  2 management by February 15 preceding the fiscal year for which
  2  3 the election will apply.  Once a school district makes this
  2  4 election it is irrevocable.
  2  5    b.  (1)  Moneys remaining after computations made pursuant
  2  6 to paragraph "a" shall be distributed to school districts not
  2  7 receiving moneys under paragraph "a" on a per student basis
  2  8 calculated by the director of revenue and finance by dividing
  2  9 the moneys available during the fiscal year by the combined
  2 10 actual enrollment for all school districts receiving
  2 11 distributions under this paragraph.
  2 12    (2)  The combined actual enrollment for school districts,
  2 13 for purposes of subparagraph (1), shall be calculated by
  2 14 adding together the actual enrollment for each school district
  2 15 receiving distributions under subparagraph (1) as determined
  2 16 by the department of management based on the actual enrollment
  2 17 figures reported by October 1 to the department of management
  2 18 by the department of education pursuant to section 257.6,
  2 19 subsection 1.  The combined actual enrollment count shall be
  2 20 forwarded to the director of revenue and finance by March 1,
  2 21 annually, for purposes of supplying estimated tax payment
  2 22 figures and making estimated tax payments pursuant to
  2 23 subsection 3 for the following fiscal year.
  2 24    2.  a.  For purposes of distributions under subsection 1,
  2 25 paragraph "a", the school district's guaranteed school
  2 26 infrastructure amount shall be calculated according to the
  2 27 following formula:
  2 28    The district's guaranteed school infrastructure amount
  2 29 equals the product of the county guaranteed school
  2 30 infrastructure amount times the district's county actual
  2 31 enrollment divided by the county combined actual enrollment.
  2 32    b.  For purposes of the formula in paragraph "a":
  2 33    (1)  "Base year" means the fiscal year beginning July 1,
  2 34 2001.
  2 35    (2)  "Base year county taxable sales percentage" means the
  3  1 percentage that the taxable sales in the county during the
  3  2 base year is of the total state taxable sales during the base
  3  3 year.
  3  4    (3)  "County combined actual enrollment" means the actual
  3  5 enrollment figures determined by the department of management
  3  6 for the county based on the actual enrollment figures reported
  3  7 by October 1 to the department of management by the department
  3  8 of education pursuant to section 257.6, subsection 1.
  3  9    (4)  "County guaranteed school infrastructure amount" means
  3 10 an amount equal to the product of the county's chapter 422E
  3 11 proportionate share times the amount deposited in the school
  3 12 district sales tax fund for the current year times the current
  3 13 year county taxable sales percentage divided by the base year
  3 14 county taxable sales percentage.
  3 15    (5)  "County's chapter 422E proportionate share" means the
  3 16 percentage that the annualized revenues received or which
  3 17 would have been received in the county under chapter 422E for
  3 18 the base year is of one-fifth of the total state sales tax
  3 19 revenues collected for deposit into the general fund of the
  3 20 state for the base year.
  3 21    (6)  "Current year" means the fiscal year for which
  3 22 distributions under this section are being made.
  3 23    (7)  "Current year county taxable sales percentage" means
  3 24 the percentage that the taxable sales in the county during the
  3 25 current fiscal year is of the total state taxable sales during
  3 26 the current fiscal year.
  3 27    (8)  "District's county actual enrollment" means the actual
  3 28 enrollment of the school district that attends school in the
  3 29 county for which the county combined actual enrollment is
  3 30 determined.
  3 31    (9)  "Taxable sales" means sales subject to the state sales
  3 32 and services tax under chapter 422, division IV.
  3 33    3.  a.  The director of revenue and finance by August 15 of
  3 34 each fiscal year shall send to each school district an
  3 35 estimate of the amount of tax moneys each school district will
  4  1 receive for the year and for each quarter of the year.  At the
  4  2 end of each quarter, the director may revise the estimates for
  4  3 the year and remaining quarters.
  4  4    b.  The director shall remit ninety-five percent of the
  4  5 estimated tax receipts for the school district to the school
  4  6 district on or before September 30 of the fiscal year and on
  4  7 or before the last day of each following quarter.
  4  8    c.  The director shall remit a final payment of the
  4  9 remainder of tax moneys due for the fiscal year before
  4 10 November 10 of the next fiscal year.  If an overpayment has
  4 11 resulted during the previous fiscal year, the November payment
  4 12 shall be adjusted to reflect any overpayment.
  4 13    d.  If the distributions are to school districts described
  4 14 in subsection 1, paragraph "a", the payments to these school
  4 15 districts shall be made on a monthly basis beginning with the
  4 16 month of August.
  4 17    Sec. 2.  NEW SECTION.  293.2  USE OF SCHOOL DISTRICT SALES
  4 18 TAX FUND MONEYS.
  4 19    1.  A school district receiving moneys from the school
  4 20 district sales tax fund under section 293.1, subsection 1,
  4 21 paragraph "a", shall use the moneys as provided on the
  4 22 original ballot proposition pursuant to chapter 422E, for the
  4 23 payment of principal and interest on general obligation bonds
  4 24 issued pursuant to chapter 296, or section 298.20 or loan
  4 25 agreements under section 297.36, for payments made pursuant to
  4 26 real property lease or lease-purchase agreements, or for
  4 27 payment of principal and interest on bonds issued under
  4 28 section 293.3 or 422E.4.
  4 29    2.  a.  Moneys received by a school district from the
  4 30 school district sales tax fund under section 293.1, subsection
  4 31 1, paragraph "b", shall be spent for property tax relief or
  4 32 infrastructure purposes according to an infrastructure plan
  4 33 developed by the board of directors.  The infrastructure plan
  4 34 may apply to more than one fiscal year.  Prior to adoption of
  4 35 the plan, the board of directors shall hold a public hearing
  5  1 on the question of approval of the proposed plan.  The board
  5  2 shall set forth its proposal and shall publish the notice of
  5  3 the time and place of a public hearing on the proposed plan.
  5  4 Notice of the time and place of the public hearing shall be
  5  5 published not less than ten nor more than twenty days before
  5  6 the public hearing in a newspaper which is a newspaper of
  5  7 general circulation in the school district.  At the hearing,
  5  8 or no later than thirty days after the date of the hearing,
  5  9 the board shall take action to adopt the proposed plan.
  5 10    b.  If the board adopts the plan, the board shall direct
  5 11 the county commissioner of elections to submit the question of
  5 12 the approval or disapproval of the infrastructure plan to the
  5 13 registered voters of the school district at the next following
  5 14 regular school election or a special election.  If at least
  5 15 sixty percent of those voting on the question favor the plan
  5 16 of the board, the moneys received shall be used according to
  5 17 the plan beginning with the first fiscal year following that
  5 18 election until a change in the plan is approved at a
  5 19 subsequent election by at least sixty percent of those voting
  5 20 on the question.  If at least sixty percent of those voting on
  5 21 the question at the election does not favor the plan of the
  5 22 board, the district shall use the moneys received as provided
  5 23 in paragraph "c" for the fiscal year.
  5 24    A plan approved at an election shall only be valid for up
  5 25 to ten years at which time the board must approve another plan
  5 26 or the same one and submit this plan at an election in the
  5 27 same manner and under the same conditions as provided for the
  5 28 original plan.
  5 29    c.  If the infrastructure plan is not approved at an
  5 30 election as provided in paragraph "b", or if a plan is not
  5 31 approved by the board, moneys received by a school district or
  5 32 moneys in excess of those needed for infrastructure purposes
  5 33 according to an approved plan shall be used for the fiscal
  5 34 year to reduce the following levies in the following order:
  5 35    (1)  Bond levies under sections 298.18 and 298.18A and all
  6  1 other debt levies until the moneys received or the levies are
  6  2 reduced to zero.
  6  3    (2)  The nonvoter-approved instructional support levy under
  6  4 section 257.18, until the moneys received or the levy is
  6  5 reduced to zero.
  6  6    (3)  The voter-approved physical plant and equipment levy
  6  7 under section 298.2, until the moneys received or the levy is
  6  8 reduced to zero.
  6  9    (4)  The voter-approved instructional support levy under
  6 10 section 257.18, until the moneys received or the levy is
  6 11 reduced to zero.
  6 12    (5)  The additional property tax levy under section 257.4,
  6 13 until the moneys received or the levy is reduced to zero.
  6 14    Any money remaining after the reduction of the levies
  6 15 specified in this paragraph "c" may be used for any property
  6 16 tax levy reduction purpose of the school district.
  6 17    d.  For purposes of this subsection, "infrastructure
  6 18 purposes" means those purposes for which a school district is
  6 19 authorized to contract indebtedness and issue general
  6 20 obligation bonds under chapter 296 or to expend tax revenues
  6 21 under section 298.3, the payment of principal and interest on
  6 22 general obligation bonds issued under chapter 296 or section
  6 23 298.20 or loan agreements under section 297.36, payments made
  6 24 pursuant to a real property lease or lease-purchase agreement,
  6 25 or the payment of principal and interest on bonds issued under
  6 26 section 293.3 or 422E.4.
  6 27    e.  Notwithstanding any other provision in this subsection,
  6 28 moneys received by a school district from the school district
  6 29 sales tax fund under section 293.1, subsection 1, paragraph
  6 30 "b", during the fiscal year beginning July 1, 2002, shall be
  6 31 dedicated for property tax relief by reducing the levies
  6 32 specified in paragraph "c" for taxes payable in the fiscal
  6 33 year beginning July 1, 2003.  However, if an infrastructure
  6 34 plan is approved at an election by the required sixty percent
  6 35 of those voting prior to March 1, 2003, any amount of such
  7  1 dedicated moneys may be used for the purposes specified under
  7  2 the plan.
  7  3    Sec. 3.  NEW SECTION.  293.3  BONDING.
  7  4    A school district receiving moneys pursuant to section
  7  5 293.1, subsection 1, paragraph "a", or a school district
  7  6 receiving moneys pursuant to section 293.1, subsection 1,
  7  7 paragraph "b", which has approved by election the use of the
  7  8 moneys for infrastructure purposes, may anticipate the amount
  7  9 of moneys to be received pursuant to section 293.1 as provided
  7 10 in this section.
  7 11    The board of directors of a school district may issue
  7 12 negotiable, interest-bearing school bonds, without election,
  7 13 and utilize tax receipts derived from the school district
  7 14 sales tax fund for principal and interest repayment.  Proceeds
  7 15 of the bonds issued pursuant to this section shall be utilized
  7 16 solely for infrastructure purposes as defined in section
  7 17 293.2, subsection 2.
  7 18    Bonds issued under this section may be sold at public sale
  7 19 as provided in chapter 75.  Notice shall be given and a
  7 20 hearing shall be held as provided in section 73A.12.  Bonds
  7 21 may bear dates, bear interest at rates not exceeding that
  7 22 permitted by chapter 74A, mature in one or more installments,
  7 23 be in either coupon or registered form, carry registration and
  7 24 conversion privileges, be payable as to principal and interest
  7 25 at times and places, be subject to terms of redemption prior
  7 26 to maturity with or without premium, and be in one or more
  7 27 denominations, all as provided by the resolution of the board
  7 28 of directors authorizing their issuance.  However, the maximum
  7 29 period during which principal on the bonds is payable shall
  7 30 not exceed a ten-year period or the length of time the
  7 31 infrastructure plan is valid.  The resolution may also
  7 32 prescribe additional provisions, terms, conditions, and
  7 33 covenants which the board of directors deems advisable,
  7 34 including provisions for creating and maintaining reserve
  7 35 funds, the issuance of additional bonds ranking on a parity
  8  1 with such bonds and additional bonds junior and subordinate to
  8  2 such bonds, and that such bonds shall rank on a parity with or
  8  3 be junior and subordinate to any bonds which may be then
  8  4 outstanding.  Bonds may be issued to refund outstanding and
  8  5 previously issued bonds under this section.  Bonds are a
  8  6 contract between the school district and holders, and the
  8  7 resolution issuing the bonds and pledging tax revenues to be
  8  8 received from the school district sales tax fund to the
  8  9 payment of principal and interest on the bonds is a part of
  8 10 the contract.  Bonds issued pursuant to this section shall not
  8 11 constitute indebtedness within the meaning of any
  8 12 constitutional or statutory debt limitation or restriction,
  8 13 and shall not be subject to any other law relating to the
  8 14 authorization, issuance, or sale of bonds.
  8 15    A school district may enter into a chapter 28E agreement
  8 16 with another school district which is located partially or
  8 17 entirely in or is contiguous to the county.  The school
  8 18 district shall only expend its designated portion of tax
  8 19 revenues to be received from the school district sales tax
  8 20 fund.
  8 21    Sec. 4.  NEW SECTION.  293.4  REPEAL.
  8 22    This chapter is repealed July 1, 2022, for fiscal years
  8 23 beginning on or after that date.
  8 24    Sec. 5.  Section 298.2, Code 2001, is amended by adding the
  8 25 following new subsection:
  8 26    NEW SUBSECTION.  7.  The regular physical plant and
  8 27 equipment levy shall not be certified for levy after the
  8 28 effective date of this subsection.  A voter-approved physical
  8 29 plant and equipment levy may continue to be approved and
  8 30 certified for levy after the effective date of this
  8 31 subsection.
  8 32    Sec. 6.  Section 298.18, unnumbered paragraph 4, Code
  8 33 Supplement 2001, is amended to read as follows:
  8 34    The amount estimated and certified to apply on principal
  8 35 and interest for any one year may exceed two dollars and
  9  1 seventy cents per thousand dollars of assessed value by the
  9  2 amount approved by the voters of the school corporation, but
  9  3 not exceeding four dollars and five cents per thousand of the
  9  4 assessed value of the taxable property within any school
  9  5 corporation, provided that the registered voters of such
  9  6 school corporation have first approved such increased amount
  9  7 at a special election, which may be was held at the same time
  9  8 as the regular school election prior to July 1, 2002, or
  9  9 subsequent to January 1, 2022.  The proposition submitted to
  9 10 the voters at such special election shall be in substantially
  9 11 the following form:
  9 12    Sec. 7.  Section 298.18, unnumbered paragraph 8, Code
  9 13 Supplement 2001, is amended to read as follows:
  9 14    The ability of a school corporation to exceed two dollars
  9 15 and seventy cents per thousand dollars of assessed value to
  9 16 service principal and interest payments on bonded indebtedness
  9 17 is limited and conferred only to those school corporations
  9 18 engaged in the administration of elementary and secondary
  9 19 education and whose registered voters have voted to exceed
  9 20 that levy limitation prior to July 1, 2002, or subsequent to
  9 21 January 1, 2022.
  9 22    Sec. 8.  Section 422.43, subsections 1, 2, 4, 5, 6, 7, 10,
  9 23 and 12, Code Supplement 2001, are amended to read as follows:
  9 24    1.  There is imposed a tax of five six percent upon the
  9 25 gross receipts from all sales of tangible personal property,
  9 26 consisting of goods, wares, or merchandise, except as
  9 27 otherwise provided in this division, sold at retail in the
  9 28 state to consumers or users; a like rate of tax upon the gross
  9 29 receipts from the sales, furnishing, or service of gas,
  9 30 electricity, water, heat, pay television service, and
  9 31 communication service, including the gross receipts from such
  9 32 sales by any municipal corporation or joint water utility
  9 33 furnishing gas, electricity, water, heat, pay television
  9 34 service, and communication service to the public in its
  9 35 proprietary capacity, except as otherwise provided in this
 10  1 division, when sold at retail in the state to consumers or
 10  2 users; a like rate of tax upon the gross receipts from all
 10  3 sales of tickets or admissions to places of amusement, fairs,
 10  4 and athletic events except those of elementary and secondary
 10  5 educational institutions; a like rate of tax on the gross
 10  6 receipts from an entry fee or like charge imposed solely for
 10  7 the privilege of participating in an activity at a place of
 10  8 amusement, fair, or athletic event unless the gross receipts
 10  9 from the sales of tickets or admissions charges for observing
 10 10 the same activity are taxable under this division; and a like
 10 11 rate of tax upon that part of private club membership fees or
 10 12 charges paid for the privilege of participating in any
 10 13 athletic sports provided club members.
 10 14    2.  There is imposed a tax of five six percent upon the
 10 15 gross receipts derived from the operation of all forms of
 10 16 amusement devices and games of skill, games of chance,
 10 17 raffles, and bingo games as defined in chapter 99B, operated
 10 18 or conducted within the state, the tax to be collected from
 10 19 the operator in the same manner as for the collection of taxes
 10 20 upon the gross receipts of tickets or admission as provided in
 10 21 this section.  The tax shall also be imposed upon the gross
 10 22 receipts derived from the sale of lottery tickets or shares
 10 23 pursuant to chapter 99E.  The tax on the lottery tickets or
 10 24 shares shall be included in the sales price and distributed to
 10 25 the general fund as provided in section 99E.10.
 10 26    4.  There is imposed a tax of five six percent upon the
 10 27 gross receipts from the sales of engraving, photography,
 10 28 retouching, printing, and binding services.  For the purpose
 10 29 of this division, the sales of engraving, photography,
 10 30 retouching, printing, and binding services are sales of
 10 31 tangible property.
 10 32    5.  There is imposed a tax of five six percent upon the
 10 33 gross receipts from the sales of vulcanizing, recapping, and
 10 34 retreading services.  For the purpose of this division, the
 10 35 sales of vulcanizing, recapping, and retreading services are
 11  1 sales of tangible property.
 11  2    6.  There is imposed a tax of five six percent upon the
 11  3 gross receipts from the sales of optional service or warranty
 11  4 contracts, except residential service contracts regulated
 11  5 under chapter 523C, which provide for the furnishing of labor
 11  6 and materials and require the furnishing of any taxable
 11  7 service enumerated under this section.  The gross receipts are
 11  8 subject to tax even if some of the services furnished are not
 11  9 enumerated under this section.  For the purpose of this
 11 10 division, the sale of an optional service or warranty
 11 11 contract, other than a residential service contract regulated
 11 12 under chapter 523C, is a sale of tangible personal property.
 11 13 Additional sales, services, or use taxes shall not be levied
 11 14 on services, parts, or labor provided under optional service
 11 15 or warranty contracts which are subject to tax under this
 11 16 section.
 11 17    If the optional service or warranty contract is a computer
 11 18 software maintenance or support service contract and there is
 11 19 no separately stated fee for the taxable personal property or
 11 20 for the nontaxable service, the tax of five six percent
 11 21 imposed by this subsection shall be imposed on fifty percent
 11 22 of the gross receipts from the sale of such contract.  If the
 11 23 contract provides for technical support services only, no tax
 11 24 shall be imposed under this subsection.  The provisions of
 11 25 this subsection also apply to the tax imposed by chapter 423.
 11 26    7.  There is imposed a tax of five six percent upon the
 11 27 gross receipts from the renting of rooms, apartments, or
 11 28 sleeping quarters in a hotel, motel, inn, public lodging
 11 29 house, rooming house, manufactured or mobile home which is
 11 30 tangible personal property, or tourist court, or in any place
 11 31 where sleeping accommodations are furnished to transient
 11 32 guests for rent, whether with or without meals.  "Renting" and
 11 33 "rent" include any kind of direct or indirect charge for such
 11 34 rooms, apartments, or sleeping quarters, or their use.  For
 11 35 the purposes of this division, such renting is regarded as a
 12  1 sale of tangible personal property at retail.  However, this
 12  2 tax does not apply to the gross receipts from the renting of a
 12  3 room, apartment, or sleeping quarters while rented by the same
 12  4 person for a period of more than thirty-one consecutive days.
 12  5    10.  There is imposed a tax of five six percent upon the
 12  6 gross receipts from the rendering, furnishing, or performing
 12  7 of services as defined in section 422.42.
 12  8    12.  A tax of five six percent is imposed upon the gross
 12  9 receipts from the sales of prepaid telephone calling cards and
 12 10 prepaid authorization numbers.  For the purpose of this
 12 11 division, the sales of prepaid telephone calling cards and
 12 12 prepaid authorization numbers are sales of tangible personal
 12 13 property.
 12 14    Sec. 9.  Section 422.43, subsection 13, paragraph a,
 12 15 unnumbered paragraph 1, Code Supplement 2001, is amended to
 12 16 read as follows:
 12 17    A tax of five six percent is imposed upon the gross
 12 18 receipts from the sales, furnishing, or service of solid waste
 12 19 collection and disposal service.
 12 20    Sec. 10.  Section 422.43, subsections 16 and 17, Code
 12 21 Supplement 2001, are amended to read as follows:
 12 22    16.  a.  A tax of five six percent is imposed upon the
 12 23 gross receipts from sales of bundled services contracts.  For
 12 24 purposes of this subsection, a "bundled services contract"
 12 25 means an agreement providing for a retailer's performance of
 12 26 services, one or more of which is a taxable service enumerated
 12 27 in this section and one or more of which is not, in return for
 12 28 a consumer's or user's single payment for the performance of
 12 29 the services, with no separate statement to the consumer or
 12 30 user of what portion of that payment is attributable to any
 12 31 one service which is a part of the contract.
 12 32    b.  For purposes of the administration of the tax on
 12 33 bundled services contracts, the director may enter into
 12 34 agreements of limited duration with individual retailers,
 12 35 groups of retailers, or organizations representing retailers
 13  1 of bundled services contracts.  Such an agreement shall impose
 13  2 the tax rate only upon that portion of the gross receipts from
 13  3 a bundled services contract which is attributable to taxable
 13  4 services provided under the contract.
 13  5    17.  A tax of five six percent is imposed upon the gross
 13  6 receipts from any mobile telecommunication service which this
 13  7 state is allowed to tax by the provisions of the federal
 13  8 Mobile Telecommunications Sourcing Act, Pub. L. No. 106-252, 4
 13  9 U.S.C. } 116 et seq.  For purposes of this subsection, taxes
 13 10 on mobile telecommunications service, as defined under the
 13 11 federal Mobile Telecommunications Sourcing Act, that are
 13 12 deemed to be provided by the customer's home service provider
 13 13 shall be paid to the taxing jurisdiction whose territorial
 13 14 limits encompass the customer's place of primary use,
 13 15 regardless of where the mobile telecommunication service
 13 16 originates, terminates, or passes through and shall in all
 13 17 other respects be taxed in conformity with the federal Mobile
 13 18 Telecommunications Sourcing Act.  All other provisions of the
 13 19 federal Mobile Telecommunications Sourcing Act are adopted by
 13 20 the state of Iowa and incorporated into this subsection by
 13 21 reference.  With respect to mobile telecommunications service
 13 22 under the federal Mobile Telecommunications Sourcing Act the
 13 23 director shall, if requested, enter into agreements consistent
 13 24 with the provisions of the federal Act.
 13 25    Sec. 11.  Section 422.43, Code Supplement 2001, is amended
 13 26 by adding the following new subsection:
 13 27    NEW SUBSECTION.  18.  The sales tax rate of six percent is
 13 28 reduced to five percent on July 1, 2022.
 13 29    Sec. 12.  Section 422.47, Code Supplement 2001, is amended
 13 30 by adding the following new subsection:
 13 31    NEW SUBSECTION.  2.  Construction contractors may make
 13 32 application to the department for a refund of the additional
 13 33 one percent tax paid under this division by reason of the
 13 34 increase in the tax from five to six percent for taxes paid on
 13 35 goods, wares, or merchandise under the following conditions:
 14  1    a.  The goods, wares, or merchandise are incorporated into
 14  2 an improvement to real estate in fulfillment of a written
 14  3 contract fully executed prior to July 1, 2002.  The refund
 14  4 shall not apply to equipment transferred in fulfillment of a
 14  5 mixed construction contract.
 14  6    b.  The contractor has paid to the department or to a
 14  7 retailer the full six percent tax.
 14  8    c.  The claim is filed on forms provided by the department
 14  9 and is filed within one year of the date the tax is paid.
 14 10    A contractor who makes an erroneous application for refund
 14 11 shall be liable for payment of the excess refund paid plus
 14 12 interest at the rate in effect under section 421.7.  In
 14 13 addition, a contractor who willfully makes a false application
 14 14 for refund is guilty of a simple misdemeanor and is liable for
 14 15 a penalty equal to fifty percent of the excess refund claimed.
 14 16 Excess refunds, penalties, and interest due under this
 14 17 subsection may be enforced and collected in the same manner as
 14 18 the tax imposed by this division.
 14 19    Sec. 13.  Section 422.69, subsection 2, Code 2001, is
 14 20 amended to read as follows:
 14 21    2.  a.  Unless Except as provided in paragraph "b", or as
 14 22 otherwise provided, the fees, taxes, interest, and penalties
 14 23 collected under this chapter shall be credited to the general
 14 24 fund.
 14 25    b.  One-sixth of the fees, taxes, interest, and penalties
 14 26 collected pursuant to division IV shall be credited to the
 14 27 school district sales tax fund created in section 293.1.  This
 14 28 paragraph is repealed July 1, 2022.
 14 29    Sec. 14.  Section 422E.1, Code 2001, is amended by adding
 14 30 the following new subsection:
 14 31    NEW SUBSECTION.  4.  a.  This chapter does not apply to any
 14 32 county after the effective date of this Act.
 14 33    b.  In the case of a county that has voted on and approved
 14 34 prior to March 31, 2002, a local sales and services tax for
 14 35 school infrastructure purposes, the increase in the state
 15  1 sales and services tax under chapter 422, division IV, from
 15  2 five percent to six percent shall replace the county's local
 15  3 sales and services tax for school infrastructure purposes and
 15  4 to this extent the local sales and services tax for school
 15  5 infrastructure purposes is repealed.
 15  6    Sec. 15.  APPLICABILITY.  This section applies in regard to
 15  7 the increase in the state sales tax from five to six percent.
 15  8 The six percent rate applies to all sales of taxable personal
 15  9 property, consisting of goods, wares, or merchandise if
 15 10 delivery occurs on or after July 1, 2002.  The six percent
 15 11 rate applies to the gross receipts from the sale, furnishing,
 15 12 or service of gas, electricity, water, heat, pay television
 15 13 service, and communication service if the date of billing the
 15 14 customer is on or after July 1, 2002.  In the case of a
 15 15 service contract entered into prior to July 1, 2002, which
 15 16 contract calls for periodic payments, the six percent rate
 15 17 applies to those payments made or due on or after July 1,
 15 18 2002.  This periodic payment applies, but is not limited to,
 15 19 tickets or admissions, private club membership fees, sources
 15 20 of amusement, equipment rental, dry cleaning, reducing salons,
 15 21 dance schools, and all other services subject to tax, except
 15 22 the aforementioned utility services which are subject to a
 15 23 special transitional rule.  Unlike periodic payments under
 15 24 service contracts, installment sales of goods, wares, and
 15 25 merchandise are subject to the full amount of sales or use tax
 15 26 when the sales contract is entered into.
 15 27    Sec. 16.  EFFECTIVE DATE.  Sections 1, 2, and 5 of this
 15 28 Act, enacting sections 293.1 and 293.2, and section 298.2,
 15 29 subsection 7, being deemed of immediate importance, take
 15 30 effect upon enactment.  
 15 31                           EXPLANATION
 15 32    This bill increases the state sales tax rate from 5 percent
 15 33 to 6 percent.  The increased revenues are deposited into a
 15 34 school district sales tax fund to be distributed to school
 15 35 districts throughout the state to be used for infrastructure
 16  1 or property tax relief purposes.  Because the increase in the
 16  2 state sales tax rate replaces the local option sales and
 16  3 services tax for school infrastructure purposes, those school
 16  4 districts that were or would be receiving revenues from the
 16  5 local option tax may continue to receive, according to a
 16  6 formula, revenues from the school district sales tax fund in
 16  7 an amount that approximates what those districts would have
 16  8 received under the local option tax.  These districts will
 16  9 receive their distributions first.  The remaining moneys will
 16 10 be distributed to the other school districts on a per pupil
 16 11 basis.  School districts that were receiving or voted to
 16 12 receive the local option tax may elect to receive the
 16 13 distributions on a per pupil basis rather than pursuant to the
 16 14 formula.
 16 15    Revenues received by the school districts according to the
 16 16 formula must be used for the purposes specified in the ballot
 16 17 when the local option tax was first passed or to pay principal
 16 18 and interest on general obligation bonds, real property lease-
 16 19 purchase agreements, or other loan agreements.  Other
 16 20 districts will be required to spend the revenues for property
 16 21 tax relief by lowering the debt service levies, the voter-
 16 22 approved physical plant and equipment levy, the instructional
 16 23 support levy or the additional property tax levy under the
 16 24 school aid formula unless the school board adopts an
 16 25 infrastructure plan which is approved at an election by 60
 16 26 percent of those voting.  Bonds may be issued by a school
 16 27 district, without an election, in anticipation of the
 16 28 distributions the district will receive from the school
 16 29 district sales tax fund.
 16 30    The regular physical plant and equipment levy is
 16 31 eliminated.  However, any voter-approved physical plant and
 16 32 equipment levy may continue to be voted on and imposed.
 16 33    The school district debt service levy is also reduced from
 16 34 a maximum $4.05 per $1,000 of taxable value to $2.70 per
 16 35 $1,000 of taxable value.  However, if the voters in the
 17  1 district have voted to exceed the $2.70 per $1,000 of taxable
 17  2 value levy amount prior to July 1, 2002, then the maximum levy
 17  3 may remain at $4.05 per $1,000 of taxable value until the
 17  4 bonds are retired.
 17  5    The bill has some effective date provisions.  However, the
 17  6 sales tax rate is increased as of July 1, 2002.  The sales tax
 17  7 rate is reduced from 6 percent to 5 percent on July 1, 2022.
 17  8 In addition the local sales and services tax for school
 17  9 infrastructure purposes is repealed.  
 17 10 LSB 7094HC 79
 17 11 mg/cf/24
     

Text: HSB00710                          Text: HSB00712
Text: HSB00700 - HSB00799               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

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