House File 456 - Introduced
HOUSE FILE
BY REICHERT
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to art, culture, and entertainment by providing
2 income tax deductions for certain related income and
3 contributions and by allowing cultural and entertainment
4 districts to be included in self=supported municipal
5 improvement districts, and including a retroactive
6 applicability date provision.
7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
8 TLSB 2055HH 82
9 tm/je/5
PAG LIN
1 1 Section 1. Section 386.3, subsection 1, paragraphs a and
1 2 c, Code 2007, are amended to read as follows:
1 3 a. Be comprised of contiguous property wholly located
1 4 within the boundaries of the city. A self=supported municipal
1 5 improvement district shall be comprised only of property in
1 6 districts which are and be one of the following:
1 7 (1) An area zoned for commercial or industrial uses and
1 8 properties within a use.
1 9 (2) A duly designated historic district.
1 10 (3) A cultural and entertainment district certified by the
1 11 department of cultural affairs pursuant to section 303.3B.
1 12 c. Be comprised of property one of the following:
1 13 (1) Property related in some manner, including but not
1 14 limited to present or potential use, physical location,
1 15 condition, relationship to an area, or relationship to present
1 16 or potential commercial or other activity in an area, so as to
1 17 be benefited in any manner, including but not limited to a
1 18 benefit from present or potential use or enjoyment of the
1 19 property, by the condition, development or maintenance of the
1 20 district or of any improvement or self=liquidating improvement
1 21 of the district, or be comprised of property.
1 22 (2) Property the owners of which have a present or
1 23 potential benefit from the condition, development, or
1 24 maintenance of the district or of any improvement or
1 25 self=liquidating improvement of the district.
1 26 (3) Property in a certified cultural and entertainment
1 27 district the owners of which have a present or potential
1 28 benefit from the expenditure of moneys for purposes of the
1 29 operational costs associated with the operation of the
1 30 certified cultural and entertainment district.
1 31 Sec. 2. Section 386.8, Code 2007, is amended to read as
1 32 follows:
1 33 386.8 OPERATION TAX.
1 34 A city may establish a self=supported improvement district
1 35 operation fund, and may certify taxes not to exceed the rate
2 1 limitation as established in the ordinance creating the
2 2 district, or any amendment thereto, each year to be levied for
2 3 the fund against all of the property in the district, for the
2 4 purpose of paying the administrative expenses of the district,
2 5 which may include but are not limited to administrative
2 6 personnel salaries, a separate administrative office, planning
2 7 costs including consultation fees, engineering fees,
2 8 architectural fees, and legal fees and all other expenses
2 9 reasonably associated with the administration of the district
2 10 and the fulfilling of the purposes of the district. The taxes
2 11 levied for this fund may also be used for the purpose of
2 12 paying maintenance expenses of improvements or
2 13 self=liquidating improvements for a specified length of time
2 14 with one or more options to renew if such is clearly stated in
2 15 the petition which requests the council to authorize
2 16 construction of the improvement or self=liquidating
2 17 improvement, whether or not such petition is combined with the
2 18 petition requesting creation of a district. Parcels of
2 19 property which are assessed as residential property for
2 20 property tax purposes are exempt from the tax levied under
2 21 this section except residential properties within a duly
2 22 designated historic district and residential properties within
2 23 a certified cultural and entertainment district. A tax levied
2 24 under this section is not subject to the levy limitation in
2 25 section 384.1.
2 26 Sec. 3. Section 386.9, Code 2007, is amended to read as
2 27 follows:
2 28 386.9 CAPITAL IMPROVEMENT TAX.
2 29 A city may establish a capital improvement fund for a
2 30 district and may certify taxes, not to exceed the rate
2 31 established by the ordinance creating the district, or any
2 32 subsequent amendment thereto, each year to be levied for the
2 33 fund against all of the property in the district, for the
2 34 purpose of accumulating moneys for the financing or payment of
2 35 a part or all of the costs of any improvement or self=
3 1 liquidating improvement or for the financing or payment of
3 2 operational costs associated with the operation of a certified
3 3 cultural and entertainment district. However, parcels of
3 4 property which are assessed as residential property for
3 5 property tax purposes are exempt from the tax levied under
3 6 this section except residential properties within a duly
3 7 designated historic district and residential properties within
3 8 a certified cultural and entertainment district. A tax levied
3 9 under this section is not subject to the levy limitations in
3 10 section 384.1 or 384.7.
3 11 Sec. 4. Section 386.10, Code 2007, is amended to read as
3 12 follows:
3 13 386.10 DEBT SERVICE TAX.
3 14 A city shall establish a self=supported municipal
3 15 improvement district debt service fund whenever any
3 16 self=supported municipal improvement district bonds are issued
3 17 and outstanding, other than revenue bonds, and shall certify
3 18 taxes to be levied against all of the property in the district
3 19 for the debt service fund in the amount necessary to pay
3 20 interest as it becomes due and the amount necessary to pay, or
3 21 to create a sinking fund to pay, the principal at maturity of
3 22 all self=supported municipal improvement district bonds as
3 23 authorized in section 386.11, issued by the city. However,
3 24 parcels of property which are assessed as residential property
3 25 for property tax purposes at the time of the issuance of the
3 26 bonds are exempt from the tax levied under this section until
3 27 the parcels are no longer assessed as residential property or
3 28 until the residential properties are designated as a part of
3 29 an historic district or a certified cultural and entertainment
3 30 district.
3 31 Sec. 5. Section 422.7, Code 2007, is amended by adding the
3 32 following new subsections:
3 33 NEW SUBSECTION. 50. a. Subtract, to the extent not
3 34 otherwise excluded, the appraised value of a work of fine art
3 35 or written material that is a charitable contribution donated
4 1 by the artist or author.
4 2 b. For purposes of this subsection, unless the context
4 3 otherwise requires:
4 4 (1) "Artist" and "fine art" mean the same as those terms
4 5 are defined in section 556D.1.
4 6 (2) "Charitable contribution" means the same as that term
4 7 is defined in section 170(c) of the Internal Revenue Code,
4 8 excluding a contribution or gift to or for the use of a public
4 9 entity described in section 170(c) of the Internal Revenue
4 10 Code.
4 11 (3) "Written material" means an article, book, essay,
4 12 poetry, play, script, or story written by an individual on a
4 13 professional, freelance basis and not as an employee of
4 14 another person.
4 15 NEW SUBSECTION. 51. Subtract, to the extent not otherwise
4 16 excluded, the first twenty=five thousand dollars of the gain
4 17 from the sale of a unique work of art, provided the artist
4 18 lives and works in a cultural and entertainment district
4 19 certified pursuant to section 303.3B.
4 20 Sec. 6. RETROACTIVE APPLICABILITY. The section of this
4 21 Act amending section 422.7, relating to income tax deductions,
4 22 applies retroactively to January 1, 2007, for tax years
4 23 beginning on or after that date.
4 24 EXPLANATION
4 25 This bill relates to art, culture, and entertainment by
4 26 providing income tax deductions for certain related income
4 27 contributions and allowing cultural and entertainment
4 28 districts to be included in self=supported municipal
4 29 improvement districts.
4 30 Currently, a city is allowed to create a self=supported
4 31 municipal improvement district comprised of areas zoned for
4 32 commercial or industrial use and property within a duly
4 33 designated historic district. The bill expands the type of
4 34 property that may be included in a district to include
4 35 cultural and entertainment districts certified by the
5 1 department of cultural affairs. The bill provides that a
5 2 self=supported municipal improvement district may be comprised
5 3 of property in a certified cultural and entertainment district
5 4 the owners of which have a present or potential benefit from
5 5 the expenditure of moneys for purposes of the operational
5 6 costs associated with the operation of the certified cultural
5 7 and entertainment district. The bill provides that
5 8 residential property within a certified cultural and
5 9 entertainment district may be taxed for purposes of an
5 10 operation tax, a capital improvement tax, and a debt service
5 11 tax for a self=supported municipal improvement district.
5 12 The bill allows a taxpayer to exempt from income the amount
5 13 of the appraised value of a work of fine art or written
5 14 material that is a charitable contribution donated by the
5 15 artist or author. The deduction applies retroactively to
5 16 January 1, 2007, for tax years beginning on or after that
5 17 date.
5 18 The bill allows a taxpayer to exempt from income an amount
5 19 up to $25,000 of the gain from the sale of a unique work of
5 20 art, provided the artist lives and works in a cultural and
5 21 entertainment district. The deduction applies retroactively
5 22 to January 1, 2007, for tax years beginning on or after that
5 23 date.
5 24 LSB 2055HH 82
5 25 tm:sc/je/5