Senate Study Bill 3125 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON BOLKCOM) A BILL FOR An Act relating to the division of school foundation property 1 taxes for purposes of urban renewal and including an 2 effective date provision. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5204XC (6) 83 md/sc

S.F. _____ Section 1. Section 403.19, subsection 2, Code 2009, is 1 amended to read as follows: 2 2. That portion of the taxes each year in excess of such 3 amount shall be allocated to and when collected be paid into a 4 special fund of the municipality to pay the principal of and 5 interest on loans, moneys advanced to, or indebtedness, whether 6 funded, refunded, assumed, or otherwise, including bonds issued 7 under the authority of section 403.9, subsection 1, incurred 8 by the municipality to finance or refinance, in whole or in 9 part, an urban renewal project within the area, and to provide 10 assistance for low and moderate income family housing as 11 provided in section 403.22 , except that . However, taxes for 12 the regular and voter-approved physical plant and equipment 13 levy of a school district imposed pursuant to section 14 298.2 , and taxes for the payment of bonds and interest of 15 each taxing district must , and the foundation property tax 16 imposed pursuant to section 257.3, subsection 1, but only 17 as provided in subsection 8, shall be collected against all 18 taxable property within the taxing district without limitation 19 by the provisions of this subsection. However In addition , all 20 or a portion of the taxes for the physical plant and equipment 21 levy shall be paid by the school district to the municipality 22 if the auditor certifies to the school district by July 1 the 23 amount of such levy that is necessary to pay the principal and 24 interest on bonds issued by the municipality to finance an 25 urban renewal project, which bonds were issued before July 1, 26 2001. Indebtedness incurred to refund bonds issued prior to 27 July 1, 2001, shall not be included in the certification. Such 28 school district shall pay over the amount certified by November 29 1 and May 1 of the fiscal year following certification to the 30 school district. Unless and until the total assessed valuation 31 of the taxable property in an urban renewal area exceeds the 32 total assessed value of the taxable property in such area as 33 shown by the last equalized assessment roll referred to in 34 subsection 1, all of the taxes levied and collected upon the 35 -1- LSB 5204XC (6) 83 md/sc 1/ 3

S.F. _____ taxable property in the urban renewal area shall be paid into 1 the funds for the respective taxing districts as taxes by 2 or for the taxing districts in the same manner as all other 3 property taxes. When such loans, advances, indebtedness, and 4 bonds, if any, and interest thereon, have been paid, all moneys 5 thereafter received from taxes upon the taxable property in 6 such urban renewal area shall be paid into the funds for the 7 respective taxing districts in the same manner as taxes on all 8 other property. In those instances where a school district 9 has entered into an agreement pursuant to section 279.64 for 10 sharing of school district taxes levied and collected from 11 valuation described in this subsection and released to the 12 school district, the school district shall transfer the taxes 13 as provided in the agreement. 14 Sec. 2. Section 403.19, Code 2009, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 8. a. For urban renewal plans adopted 17 on or after the effective date of this Act, the foundation 18 property tax imposed pursuant to section 257.3, subsection 1, 19 shall not be divided under this section but shall be paid to 20 the school district. 21 b. For urban renewal plans adopted before the effective date 22 of this Act, the foundation property tax imposed pursuant to 23 section 257.3, subsection 1, shall not be divided under this 24 section but shall be paid to the school district, for fiscal 25 years beginning on or after July 1, 2020. 26 c. On or before October 31, 2010, a municipality shall 27 report to the department of management the status of any loans, 28 advances, indebtedness, or bonds issued or incurred before 29 the effective date of this Act for urban renewal purposes and 30 payable from the special fund in section 403.19, subsection 2. 31 The report shall include a schedule of payments for all such 32 loans, advances, indebtedness, or bonds. 33 Sec. 3. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 34 immediate importance, takes effect upon enactment. 35 -2- LSB 5204XC (6) 83 md/sc 2/ 3

S.F. _____ EXPLANATION 1 This bill provides that the $5.40 school foundation levy 2 shall not be divided for urban renewal purposes for urban 3 renewal plans adopted on or after the effective date of the 4 bill. Under the bill, such taxes shall instead be paid to the 5 school district. The bill further provides that, beginning 6 with the fiscal year beginning July 1, 2020, the $5.40 school 7 foundation levy shall not be divided for urban renewal purposes 8 for urban renewal plans adopted before the effective date of 9 the bill but will be paid to the school district. 10 The bill also requires municipalities to file a report with 11 the department of management detailing the loans, advances, 12 indebtedness, or bonds issued or incurred before the effective 13 date of the bill for urban renewal purposes and payable from 14 the special fund in Code section 403.19, subsection 2. 15 The bill takes effect upon enactment. 16 -3- LSB 5204XC (6) 83 md/sc 3/ 3