Senate Study Bill 3121 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON LOCAL GOVERNMENT BILL BY CHAIRPERSON WILHELM) A BILL FOR An Act providing for petition and election to approve the use 1 of increased local sales and services tax revenues to fund 2 urban renewal projects. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 6015SC (3) 84 md/sc

S.F. _____ Section 1. Section 423B.1, subsection 6, paragraph c, Code 1 2011, is amended to read as follows: 2 c. Notwithstanding any other provision in this section , 3 a change in use of the local sales and services tax revenues 4 for purposes of funding an urban renewal project pursuant 5 to section 423B.10 does not require an election , except as 6 provided in section 423B.10, subsection 2 . 7 Sec. 2. Section 423B.10, subsection 2, Code 2011, is amended 8 to read as follows: 9 2. a. An eligible city may by ordinance of the city council 10 provide for the use of a designated amount of the increased 11 local sales and services tax revenues collected under this 12 chapter which are attributable to retail establishments in an 13 urban renewal area to fund urban renewal projects located in 14 the area. The designated amount may be all or a portion of such 15 the increased revenues allocable to the eligible city under 16 section 423B.7 . 17 b. Prior to consideration of an ordinance under this 18 section, a city council shall adopt a resolution stating its 19 intent to propose the ordinance. If within thirty days of the 20 adoption of the resolution, a petition is filed with the clerk 21 of the city in the manner provided by section 362.4 asking that 22 the question of the use of a designated amount of the increased 23 revenues allocable to the city be submitted to the registered 24 voters of the city, the council shall either by resolution 25 declare the proposal to have been abandoned or shall direct the 26 county commissioner of elections to call a special election 27 to be held on a date specified in section 39.2, subsection 28 4, paragraph “b” . If the vote in favor of the proposition is 29 equal to at least a majority of the total votes cast for and 30 against the proposition, the city council may proceed with 31 consideration of an ordinance authorizing funding of urban 32 renewal projects as provided in paragraph “a” . 33 c. If no petition is filed, the council may proceed with 34 consideration of an ordinance authorizing funding of urban 35 -1- LSB 6015SC (3) 84 md/sc 1/ 3

S.F. _____ renewal projects as provided in paragraph “a” . 1 Sec. 3. Section 423B.10, subsection 3, unnumbered paragraph 2 1, Code 2011, is amended to read as follows: 3 To determine the revenue increase allocable to the city for 4 purposes of subsection 2 , revenue amounts shall be calculated 5 by the department of revenue as follows: 6 Sec. 4. TAXES RECEIVED PRIOR TO EFFECTIVE DATE. The amount 7 of the increased local sales and services taxes received by a 8 city under chapter 423B prior to the effective date of this 9 Act that have been designated by a city by ordinance to fund 10 urban renewal projects pursuant to section 423B.10 shall be 11 deposited in the city’s special fund created in section 403.19, 12 subsection 2, and shall be used to fund urban renewal projects 13 located in an urban renewal area. 14 Sec. 5. OBLIGATIONS OF CITIES. This Act shall not relieve, 15 impair, or otherwise alter the obligations of a city relating 16 to bonds issued pursuant to chapter 403 prior to the effective 17 date of this Act or contracts made prior to the effective date 18 of this Act in connection with an urban renewal project. 19 EXPLANATION 20 This bill relates to the use of sales and services tax 21 revenues to fund urban renewal projects. 22 Current law allows an eligible city to provide by ordinance 23 for the use of a designated amount of the increased local sales 24 and services tax revenues attributable to retail establishments 25 in an urban renewal area to fund urban renewal projects located 26 in the area. 27 The bill requires an eligible city to adopt a resolution of 28 intent before considering an ordinance authorizing the use of 29 local sales and services tax revenues for urban renewal. If 30 within 30 days of the adoption of the resolution, a petition 31 requesting an election on the question is filed with the city 32 clerk, the city council must either declare the proposal 33 abandoned or direct the county commissioner of elections to 34 call a special election on the question. If the majority of 35 -2- LSB 6015SC (3) 84 md/sc 2/ 3

S.F. _____ votes cast is in favor of the proposition, it is approved by 1 voters, and the city may proceed with consideration of the 2 ordinance. If no petition is filed, the council may proceed 3 with consideration of the ordinance. 4 The bill specifies that the amount of increased revenues 5 designated for urban renewal projects may be all or a portion 6 of the increased revenues allocable to the eligible city. 7 The bill provides that any local sales and services taxes 8 received prior to the effective date of the bill and designated 9 for urban renewal projects must be deposited in the city’s 10 special fund and used to fund urban renewal projects. 11 The bill provides that the funding of urban renewal projects 12 with increased sales and services tax revenues shall not 13 relieve, impair, or alter the obligations of a city in regard 14 to certain bonds or contracts. 15 -3- LSB 6015SC (3) 84 md/sc 3/ 3