House Study Bill 668 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON SANDS) A BILL FOR An Act relating to the approval and imposition of the 1 facilities property tax levy and the equipment replacement 2 and program sharing property tax levy for a merged area and 3 including effective date and applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5429YC (2) 85 md/sc

H.F. _____ Section 1. Section 260C.15, subsection 1, Code 2014, is 1 amended to read as follows: 2 1. Regular elections held by the merged area for the 3 election of members of the board of directors as required by 4 section 260C.11 or for any other matter authorized by law and 5 designated for election by the board of directors of the merged 6 area, shall be held on the date of the school election as fixed 7 by section 277.1 . However, elections held for the renewal 8 imposition, rate change, or discontinuance of the twenty and 9 one-fourth cents per thousand dollars of assessed valuation 10 levy authorized in section 260C.22 shall be held either on the 11 date of the school election as fixed by section 277.1 or at a 12 special election held on the second Tuesday in September of 13 the even-numbered year. The election notice shall be made a 14 part of the local school election notice published as provided 15 in section 49.53 in each local school district where voting is 16 to occur in the merged area election and the election shall be 17 conducted by the county commissioner of elections pursuant to 18 chapters 39 through 53 and section 277.20 . 19 Sec. 2. Section 260C.22, subsection 1, paragraphs a and b, 20 Code 2014, are amended to read as follows: 21 a. In addition to the tax authorized under section 260C.17 22 and upon resolution of the board of directors , the voters 23 in a merged area may at the regular school election or at a 24 special election held on the second Tuesday in September of 25 the even-numbered year vote a tax not exceeding twenty and 26 one-fourth cents per thousand dollars of assessed value in any 27 one year for a period not to exceed ten years , unless otherwise 28 provided under subsection 2, for the purchase of grounds, 29 construction of buildings, payment of debts contracted for the 30 construction of buildings, purchase of buildings and equipment 31 for buildings, and the acquisition of libraries, for the 32 purpose of paying costs of utilities, and for the purpose of 33 maintaining, remodeling, improving, or expanding the community 34 college of the merged area. If the tax levy is approved under 35 -1- LSB 5429YC (2) 85 md/sc 1/ 8

H.F. _____ this section , the costs of utilities shall be paid from the 1 proceeds of the levy. The tax shall be collected by the county 2 treasurers and remitted to the treasurer of the merged area as 3 provided in section 331.552, subsection 29 . The proceeds of 4 the tax shall be deposited in a separate and distinct fund to 5 be known as the voted tax fund, to be paid out upon warrants 6 drawn by the president and secretary of the board of directors 7 of the merged area district for the payment of costs incurred 8 in providing the school facilities for which the tax was voted. 9 b. In order to make immediately available to the merged 10 area the proceeds of the voted tax hereinbefore authorized 11 to be levied, the board of directors of any such merged area 12 is hereby authorized, without the necessity for any further 13 election, to borrow money and enter into loan agreements in 14 anticipation of the collection of such tax, and such board 15 shall, by resolution, provide for the levy of an annual 16 tax, within the limits of the special voted tax hereinbefore 17 authorized, sufficient to pay the amount of any such loan and 18 the interest thereon to maturity as the same becomes due. A 19 certified copy of this resolution shall be filed with the 20 county auditors of the counties in which such merged area is 21 located, and the filing thereof shall make it a duty of such 22 auditors to enter annually this levy for collection until 23 funds are realized to repay the loan and interest thereon in 24 full. Said loan must mature within the number of years for 25 which the tax has been voted and shall bear interest at a 26 rate or rates not exceeding that permitted by chapter 74A . 27 Any loan agreement entered into pursuant to authority herein 28 contained shall be in such form as the board of directors shall 29 by resolution provide and the loan shall be payable as to both 30 principal and interest from the proceeds of the annual levy of 31 the voted tax hereinbefore authorized, or so much thereof as 32 will be sufficient to pay the loan and interest thereon. In 33 furtherance of the foregoing the board of directors of such 34 merged area may, with or without notice, negotiate and enter 35 -2- LSB 5429YC (2) 85 md/sc 2/ 8

H.F. _____ into a loan agreement or agreements with any bank, investment 1 banker, trust company, insurance company or group thereof, 2 whereunder the borrowing of the necessary funds may be assured 3 and consummated. The proceeds of such loan shall be deposited 4 in a special fund, to be kept separate and apart from all other 5 funds of the merged area, and shall be paid out upon warrants 6 drawn by the president and secretary of the board of directors 7 to pay the cost of acquiring the school facilities for which 8 the tax was voted. 9 Sec. 3. Section 260C.22, subsections 2 and 3, Code 2014, 10 are amended by striking the subsections and inserting in lieu 11 thereof the following: 12 2. Following both approval of the tax at two consecutive 13 elections under subsection 1 where the question of imposition 14 of the tax appeared on the ballot and imposition of the tax 15 for a period of at least twenty consecutive years, the board 16 of directors of the merged area may, by annual resolution, 17 continue to impose the voted tax each year at a rate not to 18 exceed the maximum rate approved at election until the tax is 19 discontinued or the maximum rate is increased following an 20 election pursuant to subsection 3. An increase in the maximum 21 rate of the voted tax, not to exceed the maximum rate specified 22 in subsection 1, shall be approved at election pursuant to the 23 requirements of subsection 3. 24 3. A voted tax imposed under this section may be 25 discontinued, or its maximum rate changed, by petition and 26 election. Upon receipt of a petition containing the required 27 number of signatures, the board of directors of a merged area 28 shall direct the county commissioner of elections responsible 29 under section 47.2 for conducting elections in the merged area 30 to submit to the voters of the merged area the question of 31 whether to discontinue the authority of the board of directors 32 to impose the voted tax under this section or to change the 33 maximum rate of the voted tax, whichever is applicable. The 34 petition must be signed by eligible electors equal in number 35 -3- LSB 5429YC (2) 85 md/sc 3/ 8

H.F. _____ to not less than twenty-five percent of the votes cast at the 1 last preceding election in the merged area where the question 2 of the imposition of the tax appeared on the ballot. The 3 question shall be submitted at an election held on a date 4 authorized for an election under subsection 1, paragraph “a” . 5 If a majority of those voting on the question of discontinuance 6 of the board of director’s authority to impose the tax favors 7 discontinuance, the board shall not impose the tax for any 8 fiscal year beginning after the date of the election unless 9 the voted tax is again authorized at election under subsection 10 1. If a majority of those voting on the question to change the 11 maximum rate of the voted tax favors the proposed change, the 12 new maximum rate shall apply to fiscal years beginning after 13 the date of the election. 14 Sec. 4. Section 260C.22, subsection 4, Code 2014, is amended 15 by striking the subsection. 16 Sec. 5. Section 260C.28, subsection 3, Code 2014, is amended 17 to read as follows: 18 3. a. If the board of directors wishes to certify for a 19 levy under subsection 2 , the board shall direct the county 20 commissioner of elections to submit the question of such 21 authorization for the board at an election held on a date 22 specified in section 39.2, subsection 4 , paragraph “c” . If a 23 majority of those voting on the question at the election favors 24 authorization of the board to make such a levy, the board 25 may certify for a levy as provided under subsection 2 during 26 each of the ten years following the election , unless otherwise 27 authorized under paragraph “b” . If a majority of those voting 28 on the question at the election does not favor authorization 29 of the board to make a levy under subsection 2 , the board may 30 submit the question to the voters again at an election held on 31 a date specified in section 39.2, subsection 4 , paragraph “c” . 32 b. Following both approval of the additional tax authorized 33 under subsection 2 at two consecutive elections under paragraph 34 “a” where the question of imposition of the tax appeared on 35 -4- LSB 5429YC (2) 85 md/sc 4/ 8

H.F. _____ the ballot and imposition of the tax for a period of at least 1 twenty consecutive years, the board of directors of the merged 2 area may, by annual resolution, continue to impose the tax 3 each year at a rate not to exceed the maximum rate authorized 4 under subsection 2, until the tax is discontinued following an 5 election pursuant to paragraph “c” . 6 c. The additional tax authorized under subsection 2 may 7 be discontinued by petition and election. Upon receipt of a 8 petition containing the required number of signatures, the 9 board of directors of a merged area shall direct the county 10 commissioner of elections responsible under section 47.2 for 11 conducting elections in the merged area to submit to the voters 12 of the merged area the question of whether to discontinue the 13 authority of the board of directors to impose the additional 14 tax under subsection 2. The petition must be signed by 15 eligible electors equal in number to not less than twenty-five 16 percent of the votes cast at the last preceding election in 17 the merged area where the question of the imposition of the 18 additional tax appeared on the ballot. The question shall be 19 submitted at an election held on a date specified in section 20 39.2, subsection 4, paragraph “c” . 21 Sec. 6. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 22 immediate importance, takes effect upon enactment. 23 Sec. 7. APPLICABILITY. 24 1. This Act applies to merged area voted taxes under section 25 260C.22 in effect on the effective date of this Act and merged 26 area voted taxes approved at election under section 260C.22 on 27 or after the effective date of this Act. 28 2. This Act applies to merged area taxes under section 29 260C.28, subsections 2 and 3, in effect on the effective date 30 of this Act and merged area taxes approved at election under 31 section 260C.28, subsection 3, on or after the effective date 32 of this Act. 33 Sec. 8. LIMITATION ON PERIOD OF TIME FOR VOTED TAX VOIDED 34 —— APPLICABILITY. 35 -5- LSB 5429YC (2) 85 md/sc 5/ 8

H.F. _____ 1. Merged area voted taxes under section 260C.22 in effect 1 on the effective date of this Act shall remain in effect. 2 However, if imposition of the tax is authorized by the board of 3 directors of the merged area under section 260C.22, subsection 4 2, any limitation on the period of time during which the tax 5 was authorized to be imposed under section 260C.22, Code 2014, 6 shall be void and unenforceable. 7 2. Merged area taxes under section 260C.28, subsection 2, 8 in effect on the effective date of this Act shall remain in 9 effect. However, if imposition of the tax is authorized by the 10 board of directors of the merged area under section 260C.28, 11 subsection 3, paragraph “b”, any limitation on the period of 12 time during which the tax was authorized to be imposed under 13 section 260C.28, subsection 3, Code 2014, shall be void and 14 unenforceable. 15 EXPLANATION 16 The inclusion of this explanation does not constitute agreement with 17 the explanation’s substance by the members of the general assembly. 18 This bill relates to the approval and imposition of the 19 facilities property tax levy and the equipment replacement and 20 program sharing property tax levy for a merged area. 21 Current Code section 260C.22 provides that in addition to a 22 merged area’s property tax levy under Code section 260C.17, the 23 voters in a merged area may vote a tax levy not exceeding 20 and 24 one-fourth cents per $1,000 of assessed value for a period not 25 to exceed 10 years for the purchase of grounds, construction of 26 buildings, payment of debts contracted for the construction of 27 buildings, purchase of buildings and equipment for buildings, 28 and the acquisition of libraries, for the purpose of paying 29 costs of utilities, and for the purpose of maintaining, 30 remodeling, improving, or expanding the community college of 31 the merged area. 32 Under the bill, following both approval at two consecutive 33 elections where the question of imposition of the tax was on 34 the ballot and imposition of the tax for a period of at least 20 35 -6- LSB 5429YC (2) 85 md/sc 6/ 8

H.F. _____ consecutive years, the board of directors of the merged area 1 may, by resolution, continue to impose the voted tax each year 2 at a rate not to exceed the maximum rate approved at election 3 until the tax is discontinued or its rate changed following 4 an election initiated by petition. The bill also specifies 5 that the election to impose the levy under Code section 260C.22 6 shall be initiated by resolution of the board of directors of 7 the merged area. 8 The bill provides that upon the receipt of a petition 9 containing the required number of signatures, the board of 10 directors of a merged area shall direct the appropriate county 11 commissioners of elections to submit to the registered voters 12 of the merged area the question of whether to discontinue the 13 authority of the board of directors to impose the voted tax or 14 to change the rate of the tax. The petition must be signed by 15 eligible electors equal in number to not less than 25 percent 16 of the number of votes cast at the last preceding election in 17 the merged area where the question of imposition of the tax 18 appeared on the ballot. 19 The bill also strikes obsolete provisions of Code section 20 260C.22 relating to the imposition of the voted tax in specific 21 years. 22 Current Code section 260C.28 provides that in addition to 23 a property tax levy of $0.03 per $1,000 of assessed value for 24 equipment replacement, the board of directors of a merged area 25 may certify for levy at a rate in excess of the $0.03 per $1,000 26 of assessed value, if the excess tax levied does not cause the 27 total rate certified to exceed a rate of $0.09 per $1,000 of 28 assessed value, and the excess revenue generated is used for 29 purposes of program sharing between community colleges or for 30 the purchase of instructional equipment, and the additional 31 levy is approved at election. The approval at election may be 32 for a period not to exceed 10 years. 33 Under the bill, following both approval at two consecutive 34 elections where the question of imposition of the additional 35 -7- LSB 5429YC (2) 85 md/sc 7/ 8

H.F. _____ tax was on the ballot and imposition of the additional tax 1 for a period of at least 20 consecutive years, the board of 2 directors of the merged area may, by resolution, continue 3 to impose the additional tax each year until the tax is 4 discontinued following an election initiated by petition. 5 The bill provides that upon the receipt of a petition 6 containing the required number of signatures, the board of 7 directors of a merged area shall direct the appropriate county 8 commissioners of elections to submit to the registered voters 9 of the merged area the question of whether to discontinue the 10 authority of the board of directors to impose the additional 11 tax. The petition must be signed by eligible electors equal 12 in number to not less than 25 percent of the number of votes 13 cast at the last preceding election in the merged area where 14 the question of the imposition of the additional tax appeared 15 on the ballot. 16 The bill takes effect upon enactment and applies to merged 17 area taxes in effect on the effective date of the bill 18 and merged area taxes approved at election on or after the 19 effective date of the bill. 20 The bill also specifies that merged area taxes under Code 21 section 260C.22 or Code section 260C.28 in effect on the 22 effective date of the bill shall remain in effect. However, 23 if imposition of either tax is authorized by annual resolution 24 of the board of directors of the merged area, any limitation 25 on the period of time during which the tax was authorized to be 26 levied under Code section 260C.22, Code 2014, or Code section 27 260C.28, Code 2014, shall be void and unenforceable. 28 -8- LSB 5429YC (2) 85 md/sc 8/ 8