House Study Bill 184 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON LOCAL GOVERNMENT BILL BY CHAIRPERSON SCHULTZ) A BILL FOR An Act relating to the establishment and dissolution of rural 1 improvement zones and including effective date provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2478YC (2) 85 md/sc

H.F. _____ Section 1. Section 357H.1, subsection 1, Code 2013, is 1 amended to read as follows: 2 1. The board of supervisors of a county with less than 3 twenty thousand residents, not counting persons admitted or 4 committed to an institution enumerated in section 218.1 or 5 904.102 , based upon the 2000 certified federal census, and with 6 a private lake development shall designate an area surrounding 7 the lake, if it is an unincorporated area of the county, a 8 rural improvement zone upon receipt of a petition pursuant to 9 section 357H.2 , and upon the board’s determination that the 10 area is in need of improvements. In no case, however, shall a 11 rural improvement zone be established under this chapter on or 12 after the effective date of this Act. 13 Sec. 2. Section 357H.10, Code 2013, is amended to read as 14 follows: 15 357H.10 Dissolution of zone. 16 1. The Unless otherwise required to be dissolved under 17 subsection 2, the rural improvement zone shall be dissolved 18 upon the adoption of a resolution of the board of trustees 19 which specifies that all improvements have been made in the 20 zone and all indebtedness has been paid. 21 2. Each rural improvement zone is dissolved on the date 22 seven years after the date that the resolution of the board 23 establishing the zone was adopted or June 30, 2014, whichever 24 is later. 25 3. Upon dissolution of the zone, all assets shall be deeded 26 to a nonprofit corporation whose members are property owners of 27 the improvement zone. If a zone is dissolved under subsection 28 2 and indebtedness of the zone remains unpaid on the date of 29 dissolution, such indebtedness shall be assumed by and become 30 an indebtedness of the nonprofit corporation to which the 31 zone’s assets are deeded. 32 4. Upon dissolution of the zone, the collection of the 33 property tax authorized under section 357H.8, subsection 4, and 34 the division of taxes authorized under section 357H.9 shall 35 -1- LSB 2478YC (2) 85 md/sc 1/ 3

H.F. _____ cease immediately. 1 Sec. 3. NEW SECTION . 357H.11 Future repeal. 2 This chapter is repealed July 1, 2021. 3 Sec. 4. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 4 immediate importance, takes effect upon enactment. 5 EXPLANATION 6 Current Code chapter 357H authorizes the board of 7 supervisors of a county with less than 20,000 residents 8 based upon the 2000 certified federal census to establish 9 a rural improvement zone in an area surrounding a private 10 lake development located in an unincorporated area of the 11 county if the board determines that the area is in need of 12 improvements. A rural improvement zone is governed by a board 13 of trustees and is authorized to enter into contracts and incur 14 indebtedness to provide funds for the costs of improvements, 15 levy a standby property tax upon taxable property within the 16 zone, and divide property tax revenue from the zone in the 17 same manner as an urban renewal area under Code chapter 403. 18 Current Code section 357H.10 provides that a rural improvement 19 zone is dissolved upon the adoption of a resolution of the 20 board of trustees which specifies that all improvements have 21 been made in the zone and all indebtedness has been paid. 22 In addition, current law provides that upon dissolution all 23 assets of the rural improvement zone shall be deeded to a 24 nonprofit corporation whose members are property owners of the 25 improvement zone. 26 This bill provides that each rural improvement zone is 27 dissolved on the date seven years after the date that the 28 resolution of the board of supervisors establishing the zone 29 was adopted or June 30, 2014, whichever is later. The bill 30 provides that if a rural improvement zone is dissolved by 31 operation of the bill and indebtedness of the zone remains 32 unpaid on the date of dissolution, such indebtedness shall 33 be assumed by and become an indebtedness of the nonprofit 34 corporation to which the zone’s assets are deeded. The 35 -2- LSB 2478YC (2) 85 md/sc 2/ 3

H.F. _____ bill also provides that the collection of the property tax 1 authorized under Code section 357H.8(4) and the division 2 of taxes authorized under Code section 357H.9 shall cease 3 immediately upon dissolution of the rural improvement zone. 4 The bill establishes a future repeal date for Code chapter 5 357H of July 1, 2021. 6 The bill takes effect upon enactment. 7 -3- LSB 2478YC (2) 85 md/sc 3/ 3