SENATE FILE 61

BY  HOGG

A BILL FOR

An Act relating to the division of school foundation property taxes for purposes of urban renewal and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 403.19, subsection 2, Code 2011, is amended to read as follows:
   2.  That portion of the taxes each year in excess of such amount shall be allocated to and when collected be paid into a special fund of the municipality to pay the principal of and interest on loans, moneys advanced to, or indebtedness, whether funded, refunded, assumed, or otherwise, including bonds issued under the authority of section 403.9, subsection 1, incurred by the municipality to finance or refinance, in whole or in part, an urban renewal project within the area, and to provide assistance for low and moderate income family housing as provided in section 403.22, except that. However, taxes for the regular and voter-approved physical plant and equipment levy of a school district imposed pursuant to section 298.2,and taxes for the payment of bonds and interest of each taxing district must, and the foundation property tax imposed pursuant to section 257.3, subsection 1, but only as provided in subsection 8, shall be collected against all taxable property within the taxing district without limitation by the provisions of this subsection. However In addition, all or a portion of the taxes for the physical plant and equipment levy shall be paid by the school district to the municipality if the auditor certifies to the school district by July 1 the amount of such levy that is necessary to pay the principal and interest on bonds issued by the municipality to finance an urban renewal project, which bonds were issued before July 1, 2001. Indebtedness incurred to refund bonds issued prior to July 1, 2001, shall not be included in the certification. Such school district shall pay over the amount certified by November 1 and May 1 of the fiscal year following certification to the school district. Unless and until the total assessed valuation of the taxable property in an urban renewal area exceeds the total assessed value of the taxable property in such area as shown by the last equalized assessment roll referred to in subsection 1, all of the taxes levied and collected upon the taxable property in the urban renewal area shall be paid into the funds for the respective taxing districts as taxes by or for the taxing districts in the same manner as all other property taxes. When such loans, advances, indebtedness, and bonds, if any, and interest thereon, have been paid, all moneys thereafter received from taxes upon the taxable property in such urban renewal area shall be paid into the funds for the respective taxing districts in the same manner as taxes on all other property. In those instances where a school district has entered into an agreement pursuant to section 279.64 for sharing of school district taxes levied and collected from valuation described in this subsection and released to the school district, the school district shall transfer the taxes as provided in the agreement.
   Sec. 2.  Section 403.19, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  8.  a.  For urban renewal plans adopted on or after the effective date of this Act, the foundation property tax imposed pursuant to section 257.3, subsection 1, shall not be divided under this section but shall be paid to the school district if the urban renewal plan includes residential development in an area that is not designated a slum or blighted area.
   b.  For urban renewal plans adopted before the effective date of this Act that include residential development in an area that is not designated a slum or blighted area, the foundation property tax imposed pursuant to section 257.3, subsection 1, shall not be divided under this section but shall be paid to the school district, for fiscal years beginning on or after July 1, 2021.
   Sec. 3.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
   This bill provides that the $5.40 school foundation levy shall not be divided for urban renewal purposes for urban renewal plans adopted on or after the effective date of the bill if the urban renewal plan includes residential development in an area that is not designated a slum or blighted area. Under the bill, such taxes shall instead be paid to the school district. The bill further provides that, beginning with the fiscal year beginning July 1, 2021, the $5.40 school foundation levy shall not be divided for urban renewal purposes for urban renewal plans adopted before the effective date of the bill if the urban renewal plan includes residential development in an area that is not designated a slum or blighted area, but will be paid to the school district.
   The bill takes effect upon enactment.