HSB 184 (LSB 2478YC (2) 85)

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 improvement zones and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 357H.1, subsection 1, Code 2013, is amended to read as follows:
   1.  The board of supervisors of a county with less than twenty thousand residents, not counting persons admitted or committed to an institution enumerated in section 218.1 or 904.102, based upon the 2000 certified federal census, and with a private lake development shall designate an area surrounding the lake, if it is an unincorporated area of the county, a rural improvement zone upon receipt of a petition pursuant to section 357H.2, and upon the board’s determination that the area is in need of improvements.

In no case, however, shall a rural improvement zone be established under this chapter on or after the effective date of this Act.
    Sec. 2.  Section 357H.10, Code 2013, is amended to read as follows:
   357H.10  Dissolution of zone.
   1.  The
 
Unless otherwise required to be dissolved under subsection 2, the rural improvement zone shall be dissolved upon the adoption of a resolution of the board of trustees which specifies that all improvements have been made in the zone and all indebtedness has been paid.
   2.  Each rural improvement zone is dissolved on the date seven years after the date that the resolution of the board establishing the zone was adopted or June 30, 2014, whichever is later.
   3.  Upon dissolution of the zone, all assets shall be deeded to a nonprofit corporation whose members are property owners of the improvement zone.

If a zone is dissolved under subsection 2 and indebtedness of the zone remains unpaid on the date of dissolution, such indebtedness shall be assumed by and become an indebtedness of the nonprofit corporation to which the zone’s assets are deeded.
   4.  Upon dissolution of the zone, the collection of the property tax authorized under section 357H.8, subsection 4, and the division of taxes authorized under section 357H.9 shall cease immediately.
    Sec. 3.  NEW SECTION.  357H.11  Future repeal.
   This chapter is repealed July 1, 2021.
    Sec. 4.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
   Current Code chapter 357H authorizes the board of supervisors of a county with less than 20,000 residents based upon the 2000 certified federal census to establish a rural improvement zone in an area surrounding a private lake development located in an unincorporated area of the county if the board determines that the area is in need of improvements. A rural improvement zone is governed by a board of trustees and is authorized to enter into contracts and incur indebtedness to provide funds for the costs of improvements, levy a standby property tax upon taxable property within the zone, and divide property tax revenue from the zone in the same manner as an urban renewal area under Code chapter 403. Current Code section 357H.10 provides that a rural improvement zone is dissolved upon the adoption of a resolution of the board of trustees which specifies that all improvements have been made in the zone and all indebtedness has been paid. In addition, current law provides that upon dissolution all assets of the rural improvement zone shall be deeded to a nonprofit corporation whose members are property owners of the improvement zone.
   This bill provides that each rural improvement zone is dissolved on the date seven years after the date that the resolution of the board of supervisors establishing the zone was adopted or June 30, 2014, whichever is later. The bill provides that if a rural improvement zone is dissolved by operation of the bill and indebtedness of the zone remains unpaid on the date of dissolution, such indebtedness shall be assumed by and become an indebtedness of the nonprofit corporation to which the zone’s assets are deeded. The bill also provides that the collection of the property tax authorized under Code section 357H.8(4) and the division of taxes authorized under Code section 357H.9 shall cease immediately upon dissolution of the rural improvement zone.
   The bill establishes a future repeal date for Code chapter 357H of July 1, 2021.
   The bill takes effect upon enactment.