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PAG LIN 1 1 DIVISION I 1 2 FREEDOM COMMUNITIES 1 3 Section 1. NEW SECTION. 332.1 PURPOSE. 1 4 The purpose of this chapter is to encourage the merger of 1 5 local governmental units and the sharing of the provision of 1 6 service by local governments and to provide local governments 1 7 with flexibility to operate once merger or sharing has 1 8 occurred. It is further the purpose of this chapter to 1 9 increase accountability for provision of services to the 1 10 residents of the community. 1 11 Sec. 2. NEW SECTION. 332.2 DEFINITIONS. 1 12 1. "Municipality" means a city or county. 1 13 2. "Political subdivision" means a city, county, school 1 14 district, or township. 1 15 Sec. 3. NEW SECTION. 332.3 ELIGIBILITY FOR FREEDOM 1 16 COMMUNITY STATUS. 1 17 1. A municipality may achieve freedom community status if 1 18 it meets the qualifications of this section and section 332.4. 1 19 2. To be eligible for freedom community status, a city or 1 20 county shall have accomplished one of the following: 1 21 a. Adopted by referendum a charter for city-county 1 22 consolidation pursuant to sections 331.247 through 331.252. 1 23 b. Adopted by referendum a charter for a community 1 24 commonwealth pursuant to sections 331.260 through 331.263. 1 25 c. Adopted by referendum a charter for multicounty 1 26 consolidation pursuant to sections 331.253 through 331.256. 1 27 d. Adopted by referendum a charter for a consolidated 1 28 metropolitan corporation pursuant to chapter 373. 1 29 e. Approved by referendum establishment of a regional 1 30 metropolitan service area pursuant to section 28E.40. 1 31 f. Entered into at least one chapter 28E agreement with 1 32 one or more political subdivisions if the duration of the 1 33 agreement is at least five years and the agreement results in 1 34 the shared provision of services by two or more political 1 35 subdivisions the budgeted expenditures for which equal at 2 1 least fifty percent of budgeted expenditures for all services 2 2 provided by at least one of the parties to the 28E agreement. 2 3 A chapter 28E agreement includes a unified law enforcement 2 4 district established pursuant to sections 28E.21 through 2 5 28E.30 and a community cluster established pursuant to 2 6 sections 28E.35 through 28E.40. Chapter 28E agreements 2 7 entered into before the effective date of this Act qualify as 2 8 agreements under this paragraph if such agreements are to be 2 9 in effect for five years following the effective date of this 2 10 Act. 2 11 g. Assumed the exercise of powers and duties relating to 2 12 emergency services pursuant to section 331.385 powers and 2 13 duties relating to cemeteries pursuant to section 331.325. 2 14 Sec. 4. NEW SECTION. 332.4 APPLICATION FOR FREEDOM 2 15 COMMUNITY STATUS – GRANTS – PUBLIC HEARING. 2 16 1. A municipality must apply to the department of 2 17 management to receive certification as a freedom community. 2 18 The application must show that the municipality has done all 2 19 of the following: 2 20 a. Qualifies as a freedom community pursuant to section 2 21 332.3. The municipality shall submit with the application for 2 22 freedom community status an abstract of the votes on the 2 23 referendum cited in section 332.3, subsection 2, or a summary 2 24 and signature page of the chapter 28E agreement along with 2 25 documentation showing that the agreement results in shared 2 26 services meeting the requirements of section 332.3, subsection 2 27 2, paragraph "f", or a copy of the ordinance required by 2 28 section 331.325 and a copy of the resolution required by 2 29 section 331.385. 2 30 b. Prepared plans for establishment and operation of a 2 31 citizen commission pursuant to section 332.7. 2 32 c. Prepared plans for development of a format for 2 33 tailoring the accountability report required by section 332.6 2 34 to include information specific to the proposed freedom 2 35 community area. 3 1 2. The application of a municipality for freedom community 3 2 status may include an application for a grant from the local 3 3 government innovations fund for technical assistance or 3 4 facilitation of efforts to achieve freedom community status, 3 5 including financial assistance to pay for a commission process 3 6 required by statute and necessary to become eligible in 3 7 section 332.3, subsection 2, paragraphs "a" through "e". A 3 8 municipality applying for freedom community status and 3 9 submitting the documents required by subsection 1, paragraph 3 10 "a", may receive a grant from the local government innovations 3 11 fund even if freedom community status is denied. 3 12 3. Prior to submitting an application for freedom 3 13 community status to the department of management, the 3 14 governing body of the municipality shall hold a public hearing 3 15 on the application. Notice of the date and time of the public 3 16 hearing and a summary of the application shall be published in 3 17 a newspaper of general circulation in the municipality not 3 18 less than four nor more than twenty days before the hearing. 3 19 The governing body shall receive comments on the application 3 20 from those attending the public hearing. 3 21 4. The department of management shall notify a 3 22 municipality when it has received the municipality's 3 23 application for certification as a freedom community. The 3 24 department shall grant or deny freedom community certification 3 25 to a municipality within forty-five days of receiving the 3 26 application. The department shall immediately notify the 3 27 municipality of the action taken on the application. 3 28 5. After certification as a freedom community has been 3 29 granted by the department of management, the certification 3 30 must be approved by the electors of the municipality before 3 31 taking effect. The governing body of the municipality shall 3 32 direct the county commissioner of elections to submit the 3 33 proposition at a special election. The special election may 3 34 be the same day as the general election if the municipality is 3 35 a county and may be the same day as the regular city election 4 1 if the municipality is a city. The proposition is adopted if 4 2 it receives a favorable majority of the votes cast on the 4 3 proposition at the election. 4 4 Sec. 5. NEW SECTION. 332.5 DEPARTMENT OF MANAGEMENT – 4 5 DUTY TO MONITOR – ANNUAL REPORT. 4 6 Once a municipality has been certified as a freedom 4 7 community, the department of management shall monitor and 4 8 annually report on tax collections, other revenue, and 4 9 expenditures of the freedom community and compare such 4 10 information with similar information of local governments that 4 11 have not applied for or been granted freedom community status. 4 12 If provided in a timely manner, a summary of these comparisons 4 13 may be included in the accountability report in section 332.6. 4 14 The department shall submit a summary of the report for the 4 15 most recently ended fiscal year to the general assembly by 4 16 January 15 of each year. 4 17 Sec. 6. NEW SECTION. 332.6 ACCOUNTABILITY REPORT. 4 18 1. A municipality certified as a freedom community shall 4 19 report every six months on progress made on the indicators and 4 20 targets identified by the citizen commission pursuant to 4 21 section 332.7. The report may include updates on progress 4 22 made in planning and goal setting for additional mergers of 4 23 services, joint operations of facilities, or reorganization of 4 24 government. 4 25 2. The report shall be mailed to residents of the freedom 4 26 community area and to the department of management. 4 27 3. The department of management, in consultation with the 4 28 city finance committee and the county finance committee, shall 4 29 formulate standards for uniform information to be included in 4 30 the report. The standards for reporting must emphasize 4 31 simplified and clear reporting. The standards for reporting 4 32 must allow for flexibility for communities to report 4 33 information specific to their community. 4 34 Sec. 7. NEW SECTION. 332.7 CITIZEN COMMISSION. 4 35 1. The governing body of a municipality that is certified 5 1 as a freedom community shall establish a citizen commission 5 2 charged with planning and setting goals for the freedom 5 3 community. The citizen commission shall establish an agenda 5 4 for the future relating to provision of services and operation 5 5 of facilities in the freedom community. The commission shall 5 6 establish key performance indicators and targets in at least 5 7 eight areas of service delivery that have been determined to 5 8 be services that are critical to the functioning of the 5 9 municipality. 5 10 2. Municipalities whose eligibility for freedom community 5 11 status was a result of a chapter 28E agreement between 5 12 political subdivisions may establish one citizen commission 5 13 for all municipalities subject to the agreement. 5 14 3. The citizen commission shall be comprised of residents 5 15 of the freedom community appointed by the governing body of 5 16 the municipality or governing bodies of the municipalities, if 5 17 applicable, comprising the freedom community. The membership 5 18 of the citizen commission shall also include representatives 5 19 of the governing body, or governing bodies, if applicable, of 5 20 the freedom community. 5 21 4. The citizen commission shall hold an organizational 5 22 meeting within thirty days of appointment of members. At the 5 23 organizational meeting, the citizen commission shall elect a 5 24 chairperson to serve for one year. The citizen commission 5 25 shall meet at the call of the chairperson, which shall not be 5 26 less than twice annually. 5 27 5. The terms of citizen commission members and other 5 28 matters relating to the operation of the citizen commission 5 29 shall be determined by the governing body of the freedom 5 30 community and such structure and operational determinations 5 31 made by the citizen commission shall be included with the 5 32 application submitted pursuant to section 332.4. 5 33 6. The citizen commission shall report annually to the 5 34 governing body of each municipality comprising the freedom 5 35 community. The governing body shall, immediately upon receipt 6 1 of the report, certify to the department of management that it 6 2 has received the report of the citizen committee. 6 3 Sec. 8. NEW SECTION. 332.8 COMPLIANCE. 6 4 1. The governing body of a municipality certified as a 6 5 freedom community that fails to comply with the planning and 6 6 reporting requirements in sections 332.6 and 332.7 shall be 6 7 notified by the department of that fact. The department's 6 8 notification shall inform the governing body that it must 6 9 rectify the areas of noncompliance within twelve months or 6 10 freedom community certification will be withdrawn. The 6 11 department shall withdraw certification for noncompliance 6 12 after twelve months. 6 13 2. After certification as a freedom community has been 6 14 approved at election, the governing body shall submit to the 6 15 department of management a report showing the per capita tax 6 16 and fee collections of the municipality for the fiscal year 6 17 immediately preceding the first fiscal year under which the 6 18 municipality operates as a freedom community. For each 6 19 subsequent fiscal year, the municipality shall provide a 6 20 report showing the per capita tax and fee collections of the 6 21 municipality. If, after applying inflation and population 6 22 increases or decreases to such per capita figures, the 6 23 department determines that the municipality has increased tax 6 24 and fee collections per capita as a freedom community, the 6 25 department shall notify the municipality that freedom 6 26 community certification shall be withdrawn beginning with the 6 27 fiscal year following the calendar year in which the 6 28 determination is made. The municipality may apply to the 6 29 department to have withdrawal of certification delayed for 6 30 another fiscal year. 6 31 Sec. 9. NEW SECTION. 332.9 FREEDOM COMMUNITY FINANCIAL 6 32 FLEXIBILITIES. 6 33 1. The governing body of a municipality certified as a 6 34 freedom community may, by resolution, and pursuant to section 6 35 332.10, impose an income surtax. 7 1 2. If a county that is a freedom community wishes to 7 2 impose a countywide local option sales tax, the county may do 7 3 so by resolution of the board of supervisors and by approval 7 4 of the proposition to impose the sales tax by a majority of 7 5 persons in the county voting on the proposition voting in 7 6 favor of such proposition, notwithstanding the election 7 7 requirements of section 422B.8. A freedom community shall not 7 8 impose a local option sales tax if imposition of such a tax 7 9 has already been approved under chapter 422B. 7 10 3. A municipality certified as a freedom community is 7 11 authorized to adopt ordinances charging fees for services if 7 12 the fee charged is directly related to the service provided. 7 13 Unpaid fees shall be treated as unpaid property taxes pursuant 7 14 to chapters 446 through 448. 7 15 4. A municipality certified as a freedom community may 7 16 adopt an ordinance providing for a schedule of impact fees to 7 17 be paid by developers of real property in the freedom 7 18 community area. The impact fee shall be used by the freedom 7 19 community to alleviate the negative impact on the environment 7 20 caused by the development for which the impact fee is charged 7 21 and for development of parks and recreation areas in the area 7 22 being developed. 7 23 5. In lieu of the contracts provided for in section 7 24 364.19, a municipality certified as a freedom community may 7 25 adopt an ordinance requiring payments in lieu of taxes by a 7 26 person or entity whose property is totally or partially exempt 7 27 from taxation under chapter 404, section 427.1, or section 7 28 427B.1, in order for the municipality to provide specified 7 29 services to that person or entity including but not limited to 7 30 police protection, fire protection, street maintenance, and 7 31 waste collection. The ordinance shall contain a schedule of 7 32 payments intended to treat types of property equally. The 7 33 payment requirement shall terminate as of the date previously 7 34 exempt property becomes subject to taxation. Delinquent 7 35 payments shall draw interest in the same amount and in the 8 1 same manner as delinquent property taxes draw interest 8 2 pursuant to section 445.39. 8 3 Sec. 10. NEW SECTION. 332.10 INCOME SURTAX FOR FREEDOM 8 4 COMMUNITIES. 8 5 1. a. The governing body of a municipality certified as a 8 6 freedom community may impose an income surtax on state 8 7 individual income tax in the municipality as provided in this 8 8 section. An income surtax shall not be imposed in the 8 9 municipality if the governing body has in effect a resolution 8 10 to exceed property tax levy rate limits pursuant to section 8 11 332.11, subsection 1. 8 12 b. The governing body of the municipality certified as a 8 13 freedom community shall hold a public hearing on the 8 14 proposition. The governing body shall set forth its proposal 8 15 in a resolution and shall publish the notice of the time and 8 16 place of a public hearing on the resolution. Notice of the 8 17 time and place of the public hearing shall be published not 8 18 less than four nor more than twenty days before the public 8 19 hearing in a newspaper of general circulation in the 8 20 municipality. Notice of the time and date of the public 8 21 hearing shall also be placed on the internet website of the 8 22 municipality. 8 23 c. At the hearing, or no later than thirty days after the 8 24 date of the hearing, the governing body shall take action to 8 25 adopt a resolution to impose an income surtax for a period not 8 26 exceeding five years. If the resolution is adopted, the 8 27 governing body shall certify its action to the department of 8 28 management. 8 29 2. For each budget year, the governing body shall 8 30 determine the percent of income surtax that will be imposed 8 31 for the budget, expressed as full percentage points, not to 8 32 exceed ten percent. The governing body shall certify to the 8 33 department of management, on or before February 1, the percent 8 34 of income surtax to be imposed for the budget year. The 8 35 department shall determine the amount of income surtax to be 9 1 collected based upon the most recent figures available for the 9 2 municipality's state individual income tax paid and shall 9 3 certify to the financial officer of the municipality the 9 4 estimate of income surtax to be collected for the budget year 9 5 and shall certify to the director of revenue the amount of 9 6 income surtax to be imposed for the budget year, expressed as 9 7 a percentage. 9 8 3. The income surtax shall be imposed on the state 9 9 individual income tax for the calendar year during which the 9 10 municipality's budget year begins, or for a taxpayer's fiscal 9 11 year ending during the second half of that calendar year or 9 12 the first half of the succeeding calendar year, and shall be 9 13 imposed on all individuals residing in the municipality on the 9 14 last day of the applicable tax year. As used in this section, 9 15 "state individual income tax" means the taxes computed under 9 16 section 422.5, less the credits allowed in sections 422.11A, 9 17 422.11B, 422.12, and 422.12B. 9 18 4. a. The director of revenue shall administer the income 9 19 surtax imposed under this section, and sections 422.20, 422.22 9 20 to 422.31, 422.68, and 422.72 to 422.75 shall apply with 9 21 respect to administration of the income surtax. 9 22 b. The income surtax shall be made a part of the Iowa 9 23 individual income tax return subject to the conditions and 9 24 restrictions set forth in section 422.21. If the municipality 9 25 imposing the income surtax is a city, the director of revenue 9 26 shall provide on income tax returns a requirement that each 9 27 person required to file a return numerically identify the city 9 28 of residence of the taxpayer. 9 29 5. a. A freedom community income surtax fund is created 9 30 in the office of the treasurer of state. Income surtaxes 9 31 collected by the department of revenue under this section 9 32 shall be deposited in the freedom community income surtax fund 9 33 to the credit of each municipality imposing the income surtax. 9 34 A separate accounting of each surtax, by municipality, shall 9 35 be maintained. 10 1 b. On or before November 1 of each year in which the 10 2 income surtax is collected, the director of the department of 10 3 administrative services shall draw warrants in payment of the 10 4 surtaxes collected in each municipality imposing the income 10 5 surtax. 10 6 c. Income surtax moneys received or refunded after 10 7 November 1 shall be deposited in or withdrawn from the general 10 8 fund of the state and shall be considered part of the cost of 10 9 administering the income surtax. 10 10 6. On or before October 20 of each year, the director of 10 11 revenue shall make an accounting of the income surtax 10 12 collected under this section applicable to tax returns for the 10 13 last preceding calendar year, or for a taxpayer's fiscal year 10 14 ending during the second half of that calendar year, or the 10 15 first half of the succeeding calendar year, from taxpayers in 10 16 each municipality in the state that has imposed the income 10 17 surtax, and shall certify to the department of management the 10 18 amount of total income surtax credited from the taxpayers of 10 19 each municipality. 10 20 7. a. If the governing body of a municipality that has 10 21 imposed the income surtax wishes to continue imposition of the 10 22 income surtax for an additional five years, the governing body 10 23 must, on or before February 15 of the last calendar year in 10 24 which the income surtax is to be imposed, adopt a resolution 10 25 calling for imposition for an additional five years. 10 26 Immediately after adoption of the resolution, the governing 10 27 body shall direct the county commissioner of elections to 10 28 provide for submitting the proposition of whether the income 10 29 surtax shall be extended for five more years. The proposition 10 30 must be voted on during the fifth calendar year of imposition 10 31 of the current income surtax. The proposition may be voted on 10 32 at a special election or at the regular city election if the 10 33 municipality is a city, or at the general election, if the 10 34 municipality is a county, if those elections fall in the fifth 10 35 calendar year. 11 1 b. If necessary, the election shall be conducted pursuant 11 2 to section 47.2, subsections 2 through 4. Notice of the 11 3 proposition shall be published at least twice in a newspaper 11 4 as specified in section 331.305 or 362.3, as applicable, prior 11 5 to the date of the election. The first notice shall appear as 11 6 early as practicable after the governing body has decided to 11 7 seek continuance of the income surtax. 11 8 c. The proposition is adopted if a majority of those 11 9 voting on the proposition at the election approves it. After 11 10 the initial five years of imposition of an income surtax, the 11 11 governing body may request a vote on the imposition of an 11 12 income surtax every five years. 11 13 Sec. 11. NEW SECTION. 332.11 ADDITIONAL FREEDOM 11 14 COMMUNITY FINANCIAL FLEXIBILITIES – PROPERTY TAX. 11 15 1. In lieu of imposing an income surtax under section 11 16 332.9, subsection 1, a municipality certified as a freedom 11 17 community may, by resolution, declare itself exempt from the 11 18 levy rate limitations in section 331.423, if the freedom 11 19 community is a county, and in section 384.1, if the freedom 11 20 community is a city. 11 21 2. A municipality certified as a freedom community may 11 22 adopt ordinances creating special taxing districts for 11 23 delivering services and may impose property tax levies on 11 24 property located within the districts, including the delivery 11 25 of a service jointly with another political subdivision. 11 26 3. Notwithstanding section 384.12, a city certified as a 11 27 freedom community may, for each fiscal year, certify a tax 11 28 pursuant to section 384.12 without the necessity of having the 11 29 tax approved by referendum. 11 30 4. A municipality certified as a freedom community may, 11 31 for each fiscal year, certify to the county auditor the 11 32 percentage of the budget for which a tax will be levied 11 33 against the assessed valuation of land subject to tax and the 11 34 percentage of the budget that will be levied against the 11 35 assessed valuation of the taxable real property other than 12 1 land subject to tax. If the municipality has a limit on the 12 2 rate of the levy, that limit shall only mean that the total 12 3 amount of property tax revenues that the municipality may 12 4 collect from all taxable real property equals the product of 12 5 that levy rate limit times the total assessed value of all 12 6 taxable real property. 12 7 5. The county board of supervisors of a county certified 12 8 as a freedom community may direct the county auditor to 12 9 establish a rural debt service tax district for the purpose of 12 10 issuing general obligation bonds for rural county services. 12 11 The rural debt service tax district shall include only 12 12 unincorporated portions of the county. The county's debt 12 13 service tax levy for the general obligation bonds for rural 12 14 county services shall be levied only against taxable property 12 15 within the county which is included within the boundaries of 12 16 the rural debt service tax district. The board may issue 12 17 general obligation bonds for general county purposes and 12 18 essential county purposes in the rural debt service tax 12 19 district if such stated purpose is intended to exclusively 12 20 benefit those persons residing in the county outside of 12 21 incorporated city areas. General obligation bonds for rural 12 22 county services are subject to approval at an election held in 12 23 the manner provided in section 331.442, subsections 1 through 12 24 4, except that only those registered voters residing within 12 25 the rural service area tax district may vote on the 12 26 proposition. 12 27 Sec. 12. NEW SECTION. 332.12 WAIVER OF STATUTORY 12 28 REQUIREMENTS AND STATE RULES. 12 29 1. A municipality certified as a freedom community may 12 30 apply to the department of management for a waiver of a 12 31 statutory requirement relating to budgets or delivery of a 12 32 service. The application shall state the alternative method 12 33 proposed by the municipality relating to budgeting or service 12 34 delivery. 12 35 2. A municipality certified as a freedom community may 13 1 apply to a department of state government for a waiver of 13 2 rules adopted by the department relating to delivery of a 13 3 service or implementation of a statutory requirement. The 13 4 application shall state an alternative method proposed by the 13 5 municipality. A department may adopt rules that specifically 13 6 address requirements of municipalities certified as freedom 13 7 communities relating to delivery of a service or 13 8 implementation of a statutory requirement that result in 13 9 greater authority and flexibility for the freedom community. 13 10 Sec. 13. EFFECTIVE DATE. This division of this Act, being 13 11 deemed of immediate importance, takes effect upon enactment. 13 12 DIVISION II 13 13 COMMUNITY CLUSTERS 13 14 Sec. 14. Section 28E.35, Code 2003, is amended to read as 13 15 follows: 13 16 28E.35 DEFINITIONS. 13 17 As used in this division unless the context otherwise 13 18 requires: 13 19 1. "Community cluster" means a cooperative community unit 13 20 established pursuant to this chapter for the joint exercise of 13 21 powers by two or more governmental units and for sharing one 13 22 or more governmental functions between two or more 13 23 governmental units participating in a community cluster. 13 24 2. "Governing board" means the governing board of a 13 25 community cluster appointed pursuant to section 28E.37. 13 262.3. "Governmental unit" means a city, county, township, 13 27 school district, merged area, or special taxing district. 13 28 4. "Shared governmental function" includes, but is not 13 29 limited to, joint delivery of services, joint operation of 13 30 facilities, joint development of infrastructure, or joint 13 31 fostering of economic development. 13 32 Sec. 15. Section 28E.36, Code 2003, is amended to read as 13 33 follows: 13 34 28E.36 ESTABLISHMENT OF COMMUNITY CLUSTER. 13 35 Two or more governmental units located in the state may, by 14 1 resolution of each governmental unit, establish a community 14 2 clusterby entering into an agreement for the joint exercise 14 3 of powers pursuant to this chapter to make more efficient use 14 4 of their resources by providing forjoint functions, services,14 5facilities, development of infrastructure and for revenue14 6sharing, and to foster economic developmentshared 14 7 governmental functions between two or more of the governmental 14 8 units participating in the community cluster. 14 9 A community cluster and its governing board shall have all 14 10 the rights, powers, duties, privileges, and immunities of a 14 11 governmental unit and governmental unit governing body to the 14 12 extent that such rights, powers, duties, privileges, and 14 13 immunities relate to shared governmental functions of the 14 14 governmental units participating in the community cluster. 14 15 Sec. 16. Section 28E.37, Code 2003, is amended by striking 14 16 the section and inserting in lieu thereof the following: 14 17 28E.37 COMMUNITY CLUSTER GOVERNING BOARD. 14 18 The governing body of each governmental unit participating 14 19 in a community cluster shall appoint two of its members to a 14 20 community cluster governing board. However, an alternative 14 21 board composition may be agreed upon by the participating 14 22 governmental units. A member of the governing board shall 14 23 serve for two years or until the member's term on the 14 24 governing body of the governmental unit expires, whichever is 14 25 earlier. A vacancy on the governing board shall be filled in 14 26 the same manner as the original appointment. A member of the 14 27 governing board shall not receive compensation for service on 14 28 the governing board. 14 29 Sec. 17. Section 28E.38, Code 2003, is amended by striking 14 30 the section and inserting in lieu thereof the following: 14 31 28E.38 POWERS AND DUTIES OF GOVERNING BOARD – EXISTING 14 32 BONDED INDEBTEDNESS – TAXING AUTHORITY. 14 33 1. The governing board shall identify governmental 14 34 functions, services, facilities, development of 14 35 infrastructure, or economic development efforts that will be 15 1 shared or jointly provided or operated within the community 15 2 cluster. 15 3 2. The governing board shall establish an official name 15 4 for the community cluster. 15 5 3. The governing board may provide for the adjustment of 15 6 existing bonded indebtedness and other obligations to the 15 7 extent the bonded indebtedness relates to a shared 15 8 governmental function within the community cluster. 15 9 4. The governing board may provide for the transfer or 15 10 other disposition of property and other rights, claims, 15 11 assets, and franchises as they relate to a shared governmental 15 12 function within the community cluster. A governmental unit 15 13 participating in a community cluster may make donations of 15 14 property, real or personal, including gratuitous leases, to 15 15 the community cluster and the governing board as deemed proper 15 16 and appropriate in aiding the community cluster and the 15 17 governing board effectuate their purposes. 15 18 5. The governing board may provide for the transfer, 15 19 reorganization, abolition, adjustment, and absorption or 15 20 merger of existing boards, existing subordinate service 15 21 districts, local improvement districts, and agencies of the 15 22 participating governmental units to the extent they relate to 15 23 a shared governmental function within the community cluster. 15 24 6. The governing board may determine the boundaries of the 15 25 service areas within the community cluster and shall provide 15 26 for administration of the provision of services in each of the 15 27 designated service areas. 15 28 7. The governing board may employ and fix the compensation 15 29 of administrative, technical, professional, and clerical 15 30 assistance as necessary to administer a shared governmental 15 31 function. 15 32 8. a. The governing board may adopt budgets for shared 15 33 governmental functions within the community cluster and may 15 34 levy property taxes to the extent the taxing authority of a 15 35 participating governmental unit is transferred to the 16 1 community cluster to fund a shared governmental function. The 16 2 governing board in its budget shall allocate the revenue 16 3 responsibilities of each governmental unit participating in 16 4 the community cluster. The governing board shall follow the 16 5 same procedures for adoption of a budget as if the community 16 6 cluster were a city and the governing board a city council. 16 7 b. The governing board shall devise formulas for the 16 8 transfer of taxing authority from governmental units that are 16 9 participating in the community cluster to the governing board 16 10 of the community cluster to fund a shared governmental 16 11 function. The maximum rates of taxes authorized to be levied 16 12 by a governmental unit participating in a community cluster 16 13 shall be reduced by an amount equal to that portion of the 16 14 levy rates transferred to the authority of the governing 16 15 board. 16 16 c. In lieu of transferring property taxing authority to a 16 17 governing board, a governmental unit participating in a 16 18 community cluster may meet its shared revenue obligations by 16 19 transferring other sources of revenue authorized to be 16 20 collected by the governmental unit. 16 21 9. The governing board may accept donations, 16 22 contributions, grants, or gifts from individuals, 16 23 associations, municipal and private corporations, and the 16 24 United States, or any agency or instrumentality of the United 16 25 States, and may enter into agreements in connection therewith. 16 26 10. The governing board may issue bonded indebtedness to 16 27 the extent authorized in section 28E.39. 16 28 11. By December 1 of each year, the governing board shall 16 29 provide a report relating to shared governmental functions and 16 30 administration of the community cluster to the governing body 16 31 of each governmental unit participating in the community 16 32 cluster. 16 33 Sec. 18. Section 28E.39, Code 2003, is amended by striking 16 34 the section and inserting in lieu thereof the following: 16 35 28E.39 ISSUANCE OF BONDS – APPROVAL BY ELECTORATE. 17 1 1. The governing board may propose the expenditure of 17 2 funds, the issuance of revenue bonds, entering into a lease- 17 3 purchase agreement, or the issuance of general obligation 17 4 bonds for the following: 17 5 a. Acquisition of a construction site and construction of 17 6 a building or facility for common public use by two or more 17 7 governmental units participating in the community cluster. 17 8 b. Purchase of an existing building or facility for public 17 9 use, or conversion of a building or facility previously owned 17 10 and maintained by a governmental unit for public use by two or 17 11 more governmental units participating in the community 17 12 cluster. 17 13 c. Equipping or furnishing a new or existing building or 17 14 facility for public use by two or more governmental units 17 15 participating in the community cluster. 17 16 d. Operation, maintenance, or improvement of a building or 17 17 facility for public use by two or more governmental units 17 18 participating in the community cluster. 17 19 e. Any other aspect of construction, acquisition, 17 20 furnishing, operation, or maintenance of a building or 17 21 facility for public use by two or more governmental units 17 22 participating in the community cluster, such other aspect 17 23 having been proposed by the governing board and not otherwise 17 24 prohibited by law. 17 25 2. The proposal shall be forwarded to the governing body 17 26 of each governmental unit participating in the community 17 27 cluster that is listed in the proposal as being allocated a 17 28 portion of the cost for any of the purposes in subsection 1, 17 29 paragraphs "a" through "e". The proposal shall specify the 17 30 purposes for which the building or facility shall be used, the 17 31 estimated cost of the building or facility, the estimated 17 32 amount of the cost to be allocated to each of the 17 33 participating governmental units, the proportion and method of 17 34 allocating the expenses of the operation and maintenance of 17 35 the building or facility or improvement, and the disposition 18 1 to be made of any revenues to be derived from operation of the 18 2 building or facility. 18 3 3. If a proposal for expenditure of funds, for issuance of 18 4 revenue bonds, or for issuance of general obligation bonds 18 5 described in the proposal as essential county purpose bonds or 18 6 essential corporate purpose bonds is approved by the governing 18 7 body of each governmental unit named in the proposal, the 18 8 governing board may include such expenditures in its budget 18 9 for the following fiscal year. If a proposal for issuance of 18 10 general obligation bonds described in the proposal as general 18 11 county purpose bonds or general corporate purpose bonds or for 18 12 entering into a lease-purchase agreement is approved by the 18 13 governing body of each governmental unit named in the 18 14 proposal, the governing board shall direct the county 18 15 commissioner of elections to submit the proposition at a 18 16 special election. The special election may be held on the 18 17 same day as the general election if the county commissioner 18 18 determines that the elections will not conflict. Only those 18 19 registered voters living within the governmental units named 18 20 in the proposal may vote on the proposition. The proposition 18 21 shall be adopted if the vote in favor of the proposition is 18 22 equal to at least sixty percent of the vote cast for and 18 23 against the proposition in each governmental unit named in the 18 24 proposal. 18 25 4. The governing board when issuing indebtedness pursuant 18 26 to this section shall follow the procedures for issuance of 18 27 debt as if the governing board were a city council or a county 18 28 board of supervisors and the applicable bonding provisions of 18 29 chapters 74, 75, 331, and 384 shall apply. 18 30 5. Indebtedness issued pursuant to this section shall 18 31 constitute a debt of the governmental units named in the 18 32 proposal in the same proportion that the cost of the project 18 33 is allocated to the governmental units and such indebtedness 18 34 is subject to any statutory or constitutional limitation on 18 35 issuance of debt if the debt would be subject to such 19 1 limitation if it were issued by a governmental unit acting 19 2 alone. 19 3 Sec. 19. Section 28E.40, Code 2003, is amended by striking 19 4 the section and inserting in lieu thereof the following: 19 5 28E.40 JOINING COMMUNITY CLUSTER OR TERMINATING 19 6 PARTICIPATION. 19 7 1. A governmental unit, by resolution, may request to join 19 8 an existing community cluster. The governing body of the 19 9 governmental unit shall forward the resolution to the 19 10 governing bodies of each governmental unit participating in 19 11 the community cluster. If each of the governing bodies 19 12 approves the resolution, the governmental unit is included in 19 13 the community cluster and shall appoint two of the members of 19 14 its governing body to the governing board of the community 19 15 cluster. 19 16 2. A governmental unit, by resolution, may terminate its 19 17 participation in a community cluster. Immediately upon its 19 18 adoption by the governing body of the governmental unit 19 19 seeking termination of its participation in the community 19 20 cluster, the resolution shall be forwarded to the governing 19 21 board. The governing board is not empowered to deny 19 22 termination but it may set a timetable, not to exceed eighteen 19 23 months after adoption of the resolution, for termination to be 19 24 fully effective. 19 25 Sec. 20. EFFECTIVE DATE. This division of this Act, being 19 26 deemed of immediate importance, takes effect upon enactment. 19 27 EXPLANATION 19 28 This bill relates to shared governmental functions among 19 29 local governments. 19 30 Division I of the bill allows a municipality (a city or a 19 31 county) to apply to the department of management for 19 32 certification as a freedom community. Once a city or a county 19 33 is certified as a freedom community, the division provides for 19 34 additional duties relating to reporting to citizens and to 19 35 citizen involvement in future planning relating to provision 20 1 of services, operation of facilities, and government 20 2 reorganization. The division also provides certain financial 20 3 flexibilities to freedom communities. 20 4 The division provides that a municipality is eligible for 20 5 freedom community status if it has adopted a charter for city- 20 6 county consolidation, community commonwealth, multicounty 20 7 consolidation, or consolidated metropolitan corporation; if it 20 8 has established a regional metropolitan service area; or if 20 9 the municipality has entered into a Code chapter 28E agreement 20 10 of at least five years in duration if the agreement results in 20 11 services shared between political subdivisions equal to at 20 12 least 50 percent of budgeted expenditures for services of at 20 13 least one of the parties to the Code chapter 28E agreement. 20 14 The division provides that an eligible municipality shall 20 15 apply to the department of management for certification as a 20 16 freedom community. The division requires the municipality to 20 17 hold a public hearing on the freedom community application 20 18 before submitting the application to the department of 20 19 management. The department of management has 45 days in which 20 20 to act on an application for freedom community status. The 20 21 division provides that if the department grants certification, 20 22 the certification must be approved at an election. 20 23 The division requires the department of management to 20 24 monitor tax collections, other revenue, and expenditures of 20 25 freedom communities and to compare these items to 20 26 municipalities that have not been certified as freedom 20 27 communities. The division further requires that the 20 28 department prepare an annual report containing this 20 29 information. 20 30 The division provides that each municipality certified as a 20 31 freedom community shall send to its citizens every six months 20 32 an accountability report. The division further provides that 20 33 each municipality certified as a freedom community shall 20 34 establish a citizen commission comprised of citizens and local 20 35 government officials of the freedom community. The commission 21 1 is charged with planning and setting goals for the freedom 21 2 community. The division provides that if a municipality 21 3 certified as a freedom community fails to comply with these 21 4 requirements, the department of management shall notify the 21 5 governing body of the municipality that it must rectify the 21 6 areas of noncompliance within 12 months or freedom community 21 7 certification will be withdrawn. The division also provides 21 8 that the freedom community must submit data showing that per 21 9 capita tax and fee collections have not increased subsequent 21 10 to certification as a freedom community or freedom community 21 11 certification will be withdrawn. 21 12 The division provides financial flexibility to 21 13 municipalities certified as freedom communities including 21 14 allowing imposition of an income surtax that can be renewed 21 15 every five years if approved at an election, allowing a county 21 16 to impose a local option sales and services tax if the tax is 21 17 approved at a countywide election, allowing ordinances to be 21 18 adopted that charge fees for services, a developers impact 21 19 fee, and payments in lieu of taxes. 21 20 The division allows a municipality certified as a freedom 21 21 community to, in lieu of imposition of an income surtax, 21 22 declare itself exempt from the current levy rate limitations 21 23 for the general fund if the municipality is a city and for the 21 24 general fund and the rural services fund if the freedom 21 25 community is a county. The division also allows a 21 26 municipality certified as a freedom community to create 21 27 special taxing districts for services and to impose property 21 28 tax levies within those districts. The division allows a city 21 29 certified as a freedom community to impose the additional 21 30 levies currently allowed by statute in Code section 384.12 21 31 without the necessity of receiving approval at an election. A 21 32 municipality certified as a freedom community is allowed to 21 33 set the percentage of its budget, for which a real property 21 34 tax levy is authorized, that is to be collected from the tax 21 35 on the land and the percentage of its budget that is to be 22 1 collected from the tax on all other taxable real property 22 2 other than land. The division allows a freedom community that 22 3 is a county to issue rural general obligation bonds payable 22 4 from property taxes levied in the unincorporated areas of the 22 5 county. The bonds are subject to the election requirements 22 6 for countywide general obligation bonds. 22 7 The division also allows a municipality certified as a 22 8 freedom community to apply to the department of management for 22 9 a waiver of statutory requirement relating to budgets or 22 10 delivery of services if the application proposes an 22 11 alternative method. The division further allows a 22 12 municipality certified as a freedom community to apply to a 22 13 department of state government for a waiver of rules adopted 22 14 by the department relating to delivery of a service or 22 15 implementation of a statutory requirement if the application 22 16 proposes an alternative method. The division also allows a 22 17 department to adopt rules that result in greater authority and 22 18 flexibility for municipalities certified as freedom 22 19 communities. 22 20 This division of the bill takes effect upon enactment. 22 21 Division II of the bill expands current statutory 22 22 provisions relating to establishment of community clusters. 22 23 Community clusters are cooperative community units established 22 24 for the joint exercise of powers by two or more governmental 22 25 units. 22 26 Currently, a governmental unit that may participate in a 22 27 community cluster is defined as a city, county, or special 22 28 taxing district. The division adds townships, school 22 29 districts, and merged areas to the definition of governmental 22 30 unit. The division defines "shared governmental functions" to 22 31 include joint delivery of services, joint operation of 22 32 facilities, joint development of infrastructure, and joint 22 33 fostering of economic development. 22 34 The division provides that a community cluster and its 22 35 governing board shall have all the rights, powers, duties, 23 1 privileges, and immunities, as they relate to shared 23 2 governmental functions, as those governmental units 23 3 participating in the community cluster. 23 4 The division provides that the governing body of each 23 5 governmental unit participating in a community cluster may 23 6 appoint two of its members to a community cluster governing 23 7 board unless a different board membership is agreed upon by 23 8 the participating governmental units. The term of a member of 23 9 the governing board is two years or until the member's term on 23 10 the governing body expires, whichever is earlier. 23 11 The division requires the governing board to identify 23 12 shared governmental functions of the community cluster. The 23 13 division authorizes the governing board to provide for 23 14 adjustment of existing bonded indebtedness; transfer or 23 15 disposition of property; reorganization of existing 23 16 administrative boards, agencies, and services districts; to 23 17 accept donations, contributions, grants, or gifts; and to 23 18 employ necessary personnel insofar as all of these things 23 19 relate to administration of shared governmental functions 23 20 within the community cluster. The division also provides that 23 21 the governing board has the authority to adopt budgets for 23 22 shared governmental functions. The division requires the 23 23 governing board to devise formulas for the transfer of taxing 23 24 authority from participating governmental units to fund shared 23 25 governmental functions. Any amount of taxing authority 23 26 transferred shall be subtracted from the statutory maximum, if 23 27 any, for that governmental unit. A participating governmental 23 28 unit may transfer other revenues, in lieu of transferring 23 29 property tax authority, in order to meet its shared revenue 23 30 obligations. The division requires the governing board to 23 31 report annually to the governing body of each governmental 23 32 unit participating in the community cluster. 23 33 The division authorizes the governing board to expend 23 34 funds, enter into lease-purchase agreements, and issue revenue 23 35 bonds or general obligation bonds for acquisition, 24 1 construction, improvement, equipping, maintenance, and 24 2 operation of a building or facility for common public use by 24 3 two or more governmental units participating in the community 24 4 cluster. The proposal to expend funds or issue debt for a 24 5 building or facility must be approved by the governing body of 24 6 each governmental unit named in the proposal as being 24 7 allocated a portion of the cost of the building or facility. 24 8 The division provides that the governing board is to proceed 24 9 as if it were a city or a county expending the funds or 24 10 issuing the indebtedness. This means, among other things, 24 11 that if the proposal identifies the bonds as general county 24 12 purpose or general corporate purpose bonds, issuance of such 24 13 bonds must be approved at an election. Indebtedness that 24 14 would be subject to any statutory or constitutional limitation 24 15 if a governmental unit had issued the debt acting alone shall 24 16 be considered debt of the governmental unit as part of the 24 17 community cluster in the same proportion that the costs of the 24 18 building or facility were allocated to the governmental unit. 24 19 The division allows a governmental unit, by resolution, to 24 20 request joining an existing community cluster. The resolution 24 21 must be approved by the governing bodies of each governmental 24 22 unit participating in the community cluster. The division 24 23 also allows a governmental unit, by resolution, to terminate 24 24 participation in a community cluster. The governing board may 24 25 not deny termination, but it may set a timetable, not to 24 26 exceed 18 months, for termination to be fully effective. 24 27 The division strikes a section of the Code that required an 24 28 election before a community cluster could share property tax 24 29 revenues. The division also strikes a section of the Code 24 30 relating to establishment of regional metropolitan service 24 31 areas. 24 32 This division of the bill takes effect upon enactment. 24 33 LSB 5515HH 80 24 34 sc/pj/5
Text: HF02249 Text: HF02251 Text: HF02200 - HF02299 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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