HSB 737 (LSB 6257HC (4) 83)

HOUSE FILE _____

BY  (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON SHOMSHOR)

A BILL FOR

An Act increasing the maximum allowable local hotel and motel tax rate and requiring public participation relating to the use of certain local hotel and motel tax revenues.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 423A.4, subsections 1 and 3, Code 2009, are amended to read as follows:
   1.  A city or county may impose by ordinance of the city council or by resolution of the board of supervisors a hotel and motel tax, at a rate not to exceed seven nine percent, which shall be imposed in increments of one or more full percentage points upon the sales price from the renting of lodging.  A county may impose by resolution of the board of supervisors a hotel and motel tax, at a rate not to exceed eight percent, which shall be imposed in increments of one or more full percentage points upon the sales price from the renting of lodging. The tax when imposed by a city shall apply only within the corporate boundaries of that city and when imposed by a county shall apply only outside incorporated areas within that county.
   3.  A Subject to the requirements of subsection 5, a local hotel and motel tax shall be imposed on January 1 or July 1, following the notification of the director of revenue. Once imposed, the tax shall remain in effect at the rate imposed for a minimum of one year. A local hotel and motel tax shall terminate only on June 30 or December 31. At least forty-five days prior to the tax being effective or prior to a revision in the tax rate or prior to the repeal of the tax, a city or county shall provide notice by mail of such action to the director of revenue. The director shall have the authority to waive the notice requirement.
    Sec. 2.  Section 423A.4, Code 2009, is amended by adding the following new subsection:
   NEW SUBSECTION.  5.  a.  For any imposition of a local hotel and motel tax, or any increase in the rate of a local hotel and motel tax, approved at election on or after the effective date of this Act, the city council or county board of supervisors where the tax or the tax rate increase was approved shall, within ten days following approval at election, appoint a citizen advisory committee consisting of not less than five individuals. Each individual appointed to the citizen advisory committee shall be a resident of the city or the unincorporated area of the county where the tax or the tax rate increase was approved. A vacancy on the citizen advisory committee shall be filled in the same manner as the original appointment. Committee members shall not receive compensation by reason of their membership on the committee.
   b.  The citizen advisory committee shall develop and submit recommendations to the city council or county board of supervisors, as applicable, relating to the use of the increased revenues resulting from the imposition of the tax or the increased tax rate. Recommendations for the use of such increased revenues shall be consistent with the requirements of section 423A.7, subsection 4. The recommendations of the citizen advisory committee shall not relieve the city or county from compliance with the requirements of section 423A.7, subsection 4.
   c.  If a city or county fails to appoint a citizen advisory committee as required under this subsection, the director of revenue shall not impose the tax, or the increase in the tax rate, notwithstanding subsection 3. The director of revenue shall only impose the tax, or an increase in the tax rate, approved on or after the effective date of this Act on January 1 or July 1, following the appointment of a citizen advisory committee.
   d.  The citizen advisory committee shall be dissolved on the date the tax or the increased tax rate is imposed by the director of revenue.
EXPLANATION
   Current Code section 423A.4 authorizes a city or county to impose by ordinance of the city council or by resolution of the county board of supervisors a local hotel and motel tax at a rate not to exceed 7 percent. The imposition, repeal, or change in the rate of a local hotel and motel tax is also subject to approval at election. This bill increases the maximum allowable local hotel and motel tax rate for cities from 7 percent to 9 percent. The bill increases the maximum allowable local hotel and motel tax rate for counties from 7 percent to 8 percent.
   The bill provides that for any imposition of a local hotel and motel tax, or any increase in the rate of a local hotel and motel tax, approved at election on or after the effective date of the bill, the city council or county board of supervisors where the tax or the tax rate increase was approved must, within 10 days following approval at election, appoint a citizen advisory committee consisting of not less than five individuals. The bill requires each individual appointed to a citizen advisory committee to be a resident of the city or the unincorporated area of the county where the tax or the tax rate increase was approved. Vacancies on a citizen advisory committee must be filled in the same manner as the original appointment. Committee members do not receive compensation for serving on the committee.
   The bill requires each citizen advisory committee to develop and submit recommendations to the city council or county board of supervisors, as applicable, relating to the use of the increased revenues resulting from the imposition of the tax or the increased tax rate. Such recommendations for the use of the increased revenues must be consistent with statutory requirements for the use of local hotel and motel tax revenues under Code section 423A.7. Recommendations of the citizen advisory committee do not relieve the city or county from complying with the statutory use requirements under Code section 423A.7.
   Under the bill, if a city or county fails to appoint a citizen advisory committee, the director of revenue shall not impose the tax or the increase in the tax rate. The bill only allows the director of revenue to impose the tax or an increase in the tax rate following the appointment of a citizen advisory committee. The bill provides that each citizen advisory committee is dissolved on the date the tax or the increased tax rate is imposed by the director of revenue.