H.F. 2281 Section 1. Section 423.2, subsection 11, paragraph b, Code 1 2014, is amended by adding the following new subparagraph: 2 NEW SUBPARAGRAPH . (7) Beginning the first day of the 3 quarter following the effective date of this Act, transfer 4 to the raceway facility tax rebate fund created in section 5 423.4, subsection 11, paragraph “e” , that portion of the sales 6 tax receipts collected and remitted upon sales of tangible 7 personal property or services furnished by retailers at a 8 raceway facility meeting the qualifications of section 423.4, 9 subsection 11, that remains after the transfers required in 10 subparagraphs (1) through (6) of this paragraph “b” . This 11 subparagraph is repealed June 30, 2025, or thirty days 12 following the date on which two million dollars in total 13 rebates have been provided under section 423.4, subsection 11, 14 or thirty days following the date rebates cease as provided in 15 section 423.4, subsection 11, paragraph “c” , subparagraph (5), 16 whichever is earliest. 17 Sec. 2. Section 423.4, Code 2014, is amended by adding the 18 following new subsection: 19 NEW SUBSECTION . 11. a. For purposes of this subsection: 20 (1) “Change of control” means a change in ownership such 21 that the fair that was the owner or operator on the effective 22 date of this Act ceases to own a majority of the equity 23 interests in the raceway facility. 24 (2) “Fair” means the same as defined in section 174.1. 25 (3) “Owner or operator” means a fair that is the owner or 26 operator of a raceway facility and is a promoter of races. 27 (4) “Population” means the population based upon the 2010 28 certified federal census. 29 (5) “Raceway facility” means a raceway facility located 30 as part of a racetrack and entertainment complex and located 31 on fairgrounds, as defined in section 174.1, in a city with a 32 population of at least seven thousand but not more than seven 33 thousand five hundred residents, which city is located in a 34 county with a population of at least thirty-three thousand 35 -1- LSB 5744YH (3) 85 mm/sc 1/ 6

H.F. 2281 but not more than thirty-three thousand four hundred fifty 1 residents, and which facility was placed in service before the 2 effective date of this Act. 3 b. The owner or operator of a raceway facility may apply to 4 the department for a rebate of the following: 5 (1) Sales tax imposed and collected by retailers upon 6 sales of tangible personal property or services furnished to 7 purchasers at the raceway facility. Notwithstanding the state 8 sales tax imposed in section 423.2, a sales tax rebate issued 9 pursuant to this subparagraph shall not exceed the amounts 10 transferred to the raceway facility tax rebate fund pursuant to 11 section 423.2, subsection 11, paragraph “b” , subparagraph (7). 12 (2) (a) Sales or use tax upon the sales price of all 13 tangible personal property, or from services furnished to a 14 contractor, used in the fulfillment of a written contract with 15 the owner or operator if the property becomes an integral part 16 of the project under contract and at the completion of the 17 project becomes part of the raceway facility. 18 (b) Notwithstanding the state sales tax imposed in section 19 423.2, a sales tax rebate issued pursuant to this subparagraph 20 shall not exceed the amounts remaining after the transfers 21 required under section 423.2, subsection 11, paragraph “b” , 22 subparagraphs (1) through (6), have been made from the total 23 amount of sales tax for which the rebate is requested. 24 (c) Notwithstanding the state use tax imposed in section 25 423.5, a use tax rebate issued pursuant to this subparagraph 26 shall not exceed the amounts remaining after the transfers 27 required under section 423.43, subsection 1, have been made 28 from the total amount of use tax for which the rebate is 29 requested. 30 c. The rebate may be obtained only in the following amounts 31 and manner and only under the following conditions: 32 (1) For rebates pursuant to paragraph “b” , subparagraph (1), 33 on forms furnished by the department within the time period 34 provided by the department by rule, which time period shall not 35 -2- LSB 5744YH (3) 85 mm/sc 2/ 6

H.F. 2281 be longer than quarterly. 1 (2) For rebates pursuant to paragraph “b” , subparagraph (2), 2 on forms furnished by the department within the time period 3 provided by the department by rule, but not more than one year 4 after the final settlement has been made. 5 (3) The owner or operator shall provide information as 6 deemed necessary by the department. 7 (4) The transactions for which sales or use tax was 8 collected and the rebate is sought occurred on or after January 9 1, 2015, but before January 1, 2025. However, not more than 10 two million dollars in total rebates shall be provided pursuant 11 to this subsection. 12 (5) Notwithstanding subparagraph (4), the rebate of sales 13 or use tax shall cease for transactions occurring on or after 14 the date of the change of control of the raceway facility. 15 (6) The raceway facility has not received or shall not 16 receive any grants under the community attraction and tourism 17 program pursuant to chapter 15F, subchapter II, or the vision 18 Iowa program pursuant to chapter 15F, subchapter III. 19 d. To assist the department in determining the amount of the 20 rebate, the following shall occur: 21 (1) For rebates pursuant to paragraph “b” , subparagraph 22 (1), the owner or operator shall identify to the department 23 retailers located at the raceway facility who will be 24 collecting sales tax. The department shall verify such 25 identity and ensure that all proper permits have been issued. 26 For purposes of this subsection, advance ticket and admissions 27 sales shall be considered occurring at the raceway facility 28 regardless of where the transactions actually occur. 29 (2) For rebates pursuant to paragraph “b” , subparagraph (2), 30 the contractor shall state under oath, on forms provided by 31 the department, the amount of such sales of tangible personal 32 property, or services furnished and used in the performance 33 of a contract, and upon which sales or use tax has been paid, 34 and shall file such forms with the owner or operator which has 35 -3- LSB 5744YH (3) 85 mm/sc 3/ 6

H.F. 2281 made any written contract for performance by the contractor. 1 The forms shall be filed by the contractor with the owner or 2 operator before final settlement is made. Any contractor who 3 willfully makes a false report of tax paid under the provisions 4 of this subsection is guilty of a simple misdemeanor and in 5 addition shall be liable for the payment of the tax and any 6 applicable penalty and interest. 7 e. There is established within the state treasury under 8 the control of the department a raceway facility tax rebate 9 fund consisting of the amount of state sales tax revenues 10 transferred pursuant to section 423.2, subsection 11, paragraph 11 “b” , subparagraph (7). An account is created within the 12 fund for each raceway facility meeting the qualifications of 13 this subsection. Moneys in the fund shall only be used to 14 provide rebates of state sales tax pursuant to paragraph “b” , 15 subparagraph (1). Not more than two million dollars in total 16 rebates shall be paid from the fund. Any moneys in the fund 17 which represent state sales tax revenue for which the time 18 period in paragraph “c” for receiving a rebate has expired, 19 or which otherwise represent state sales tax revenue that has 20 become ineligible for rebate pursuant to this subsection shall 21 immediately revert to the general fund of the state. 22 f. Upon determining that the conditions and requirements 23 of this subsection and the department are met, the department 24 shall issue a warrant to the owner or operator in the amount 25 equal to the amount claimed and verified by the department. 26 g. This subsection is repealed June 30, 2025, or thirty 27 days following the date on which two million dollars in total 28 rebates have been provided, or thirty days following the 29 date on which rebates cease as provided in paragraph “c” , 30 subparagraph (5), whichever is the earliest. 31 EXPLANATION 32 The inclusion of this explanation does not constitute agreement with 33 the explanation’s substance by the members of the general assembly. 34 This bill authorizes the department of revenue to rebate 35 -4- LSB 5744YH (3) 85 mm/sc 4/ 6

H.F. 2281 sales and use tax for certain transactions related to a 1 raceway facility. To be eligible for the rebate the raceway 2 facility must be located on fairgrounds, and must be located 3 in a city with a population between 7,000 and 7,500, which 4 city is located in a county with a population between 33,000 5 and 33,450. In addition, the raceway facility must have been 6 placed in service before the effective date of the bill. 7 The person eligible to receive the rebate is the owner or 8 operator of the raceway facility. “Owner or operator” means 9 a fair that is the owner or operator of a raceway facility and 10 is the promoter of races. “Fair” means the same as defined 11 in Code section 174.1 and generally means an organization 12 incorporated under the laws of Iowa that holds fair events and 13 meets certain property ownership requirements. 14 The rebate applies to two types of transactions. One, the 15 state sales tax collected upon tangible personal property or 16 services furnished to purchasers at the raceway facility. Two, 17 the state sales or use tax paid in fulfillment of a written 18 contract with the owner or operator if the property becomes an 19 integral part of the project under contract and upon completion 20 of the project becomes part of the raceway facility. The 21 rebates only apply to transactions occurring on or after 22 January 1, 2015, but before January 1, 2025, and are limited to 23 a maximum of $2 million. 24 With regard to the rebate of sales tax revenues collected 25 upon tangible personal property or services furnished to 26 purchasers at the raceway facility, the bill creates a raceway 27 facility tax rebate fund consisting of the remaining amount 28 of state sales tax revenue from these transactions after 29 subtracting the local option sales tax under Code chapter 423B, 30 the natural resources and outdoor recreation trust transfer 31 pursuant to Article VII, section 10, of the Constitution of 32 the State of Iowa if applicable, the secure an advanced vision 33 for education fund transfer pursuant to Code section 423F.2, 34 and any transfers required, if applicable, to a baseball and 35 -5- LSB 5744YH (3) 85 mm/sc 5/ 6

H.F. 2281 softball tournament facility and movie site sales tax rebate 1 fund, flood mitigation sales tax increment fund, or Iowa 2 reinvestment Act sales tax increment fund. Rebates from these 3 transactions are paid only from this rebate fund, are limited 4 to the amounts in the fund, and are made on forms furnished by 5 the department of revenue. 6 With regard to the rebate of sales or use tax paid in 7 fulfillment of a written contract with the owner or operator, 8 the bill specifies that the rebate of sales tax shall not 9 exceed the amount remaining after the transfers listed above 10 have been subtracted from the total amount of the sales tax 11 rebate requested, as applicable. The bill also specifies that 12 the rebate of use tax shall not exceed the amount remaining 13 after subtracting the local option taxes under Code chapter 14 423B and the secure an advanced vision for education fund 15 transfer pursuant to Code section 423F.2. A contractor 16 that has a written contract with the owner or operator is 17 required to provide information under oath to the owner or 18 operator regarding the amount of property or services used in 19 performance of the contract upon which sales or use tax has 20 been paid. A contractor who willfully makes a false report is 21 guilty of a simple misdemeanor and is liable for the payment 22 of the tax and any applicable penalty and interest. A simple 23 misdemeanor is punishable by confinement for no more than 24 30 days or a fine of at least $65 but not more than $625 or 25 by both. Rebates from these transactions are made on forms 26 furnished by the department of revenue. 27 The rebate ceases if control of the facility changes. A 28 change in control will occur when the fair that is the owner 29 or operator on the effective date of the bill ceases to own a 30 majority of the equity interests in the raceway facility. The 31 rebate provision is repealed June 30, 2025, or 30 days after 32 a total of $2 million has been rebated, or 30 days following 33 the change of control causing the rebates to cease, whichever 34 occurs earlier. 35 -6- LSB 5744YH (3) 85 mm/sc 6/ 6