H.F. _____ 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 6 sales tax receipts collected and remitted upon sales of 7 tangible personal property or services furnished by retailers 8 at a raceway facility meeting the qualifications of section 9 423.4, subsection 11, that remains after the transfers 10 required in subparagraphs (1) through (6) of this paragraph 11 “b” . This subparagraph is repealed June 30, 2025, or thirty 12 days following the date on which an amount of total rebates 13 specified in section 423.4, subsection 11, paragraph “c” , 14 subparagraph (4), subparagraph division (a) or (b), whichever 15 is applicable, has been provided or thirty days following the 16 date on which rebates cease as provided in section 423.4, 17 subsection 11, paragraph “c” , subparagraph (5), whichever is 18 earliest. 19 Sec. 2. Section 423.4, Code 2014, is amended by adding the 20 following new subsection: 21 NEW SUBSECTION . 11. a. For purposes of this subsection: 22 (1) “Change of control” means a change in ownership such 23 that the fair that was the owner or operator on the effective 24 date of this Act ceases to own a majority of the equity 25 interests in the raceway facility. 26 (2) “Fair” means the same as defined in section 174.1. 27 (3) “Owner or operator” means a fair that is the owner or 28 operator of a raceway facility and is a promoter of races. 29 (4) “Population” means the population based upon the 2010 30 certified federal census. 31 (5) “Raceway facility” means a raceway facility located 32 as part of a racetrack and entertainment complex and located 33 on fairgrounds, as defined in section 174.1, in a city with a 34 population of at least seven thousand but not more than seven 35 -1- LSB 6184YC (1) 85 mm/sc 1/ 8

H.F. _____ thousand five hundred residents, which city is located in a 1 county with a population of at least thirty-three thousand 2 but not more than thirty-three thousand four hundred fifty 3 residents, and which facility was placed in service before the 4 effective date of this Act. 5 b. The owner or operator of a raceway facility may apply to 6 the department for a rebate of the following: 7 (1) Sales tax imposed and collected by retailers upon 8 sales of tangible personal property or services furnished to 9 purchasers at the raceway facility. Notwithstanding the state 10 sales tax imposed in section 423.2, a sales tax rebate issued 11 pursuant to this subparagraph shall not exceed the amounts 12 transferred to the raceway facility tax rebate fund pursuant to 13 section 423.2, subsection 11, paragraph “b” , subparagraph (7). 14 (2) (a) Sales or use tax upon the sales price of all 15 tangible personal property, or from services furnished to a 16 contractor, used in the fulfillment of a written contract with 17 the owner or operator if the property becomes an integral part 18 of the project under contract and at the completion of the 19 project becomes part of the raceway facility. 20 (b) The rebate available under this subparagraph shall be 21 limited to one project per raceway facility. If such a project 22 is undertaken, the owner or operator of the raceway facility 23 shall notify the department upon completion of the project. 24 (c) Notwithstanding the state sales tax imposed in section 25 423.2, a sales tax rebate issued pursuant to this subparagraph 26 shall not exceed the amounts remaining after the transfers 27 required under section 423.2, subsection 11, paragraph “b” , 28 subparagraphs (1) through (6), have been made from the total 29 amount of sales tax for which the rebate is requested. 30 (d) Notwithstanding the state use tax imposed in section 31 423.5, a use tax rebate issued pursuant to this subparagraph 32 shall not exceed the amounts remaining after the transfers 33 required under section 423.43, subsection 1, have been made 34 from the total amount of use tax for which the rebate is 35 -2- LSB 6184YC (1) 85 mm/sc 2/ 8

H.F. _____ requested. 1 c. The rebate may be obtained only in the following amounts 2 and manner and only under the following conditions: 3 (1) For rebates pursuant to paragraph “b” , subparagraph (1), 4 on forms furnished by the department within the time period 5 provided by the department by rule, which time period shall not 6 be longer than quarterly. 7 (2) For rebates pursuant to paragraph “b” , subparagraph (2), 8 on forms furnished by the department within the time period 9 provided by the department by rule, but not more than one year 10 after the final settlement has been made. 11 (3) The owner or operator shall provide information as 12 deemed necessary by the department. 13 (4) The transactions for which sales or use tax was 14 collected and the rebate is sought occurred on or after January 15 1, 2015, but before January 1, 2025. However, the total amount 16 of rebates provided pursuant to this subsection shall not 17 exceed the lesser of the following amounts: 18 (a) Twenty-five percent of the project costs, as determined 19 by the department, if such a project is undertaken by the owner 20 or operator. For purposes of this subparagraph division, 21 “project costs” means costs incurred by the owner or operator 22 in connection with the planning, design, construction, and 23 installation of property that becomes an integral part of the 24 project under contract which project upon completion becomes 25 part of the raceway facility, and other costs incurred by 26 the owner or operator in connection with the project that 27 are customarily associated with the renovation, remodeling, 28 reconstruction, expansion, equipping, or improvement of 29 real property. Project costs shall be determined after the 30 department receives notification of completion of the project 31 pursuant to paragraph “b” , subparagraph (2), subparagraph 32 division (b). However, if rebates cease because of a change of 33 control of the raceway facility as provided in paragraph “c” , 34 subparagraph (5), project costs shall be determined as of the 35 -3- LSB 6184YC (1) 85 mm/sc 3/ 8

H.F. _____ date the change of control occurs. 1 (b) Two million dollars. 2 (5) Notwithstanding subparagraph (4), the rebate of sales 3 or use tax shall cease for transactions occurring on or after 4 the date of the change of control of the raceway facility. 5 (6) The raceway facility has not received or shall not 6 receive any grants under the community attraction and tourism 7 program pursuant to chapter 15F, subchapter II, or the vision 8 Iowa program pursuant to chapter 15F, subchapter III. 9 d. To assist the department in determining the amount of the 10 rebate, the following shall occur: 11 (1) For rebates pursuant to paragraph “b” , subparagraph 12 (1), the owner or operator shall identify to the department 13 retailers located at the raceway facility who will be 14 collecting sales tax. The department shall verify such 15 identity and ensure that all proper permits have been issued. 16 For purposes of this subsection, advance ticket and admissions 17 sales shall be considered occurring at the raceway facility 18 regardless of where the transactions actually occur. 19 (2) For rebates pursuant to paragraph “b” , subparagraph (2), 20 the contractor shall state under oath, on forms provided by 21 the department, the amount of such sales of tangible personal 22 property, or services furnished and used in the performance 23 of a contract, and upon which sales or use tax has been paid, 24 and shall file such forms with the owner or operator which has 25 made any written contract for performance by the contractor. 26 The forms shall be filed by the contractor with the owner or 27 operator before final settlement is made. Any contractor who 28 willfully makes a false report of tax paid under the provisions 29 of this subsection is guilty of a simple misdemeanor and in 30 addition shall be liable for the payment of the tax and any 31 applicable penalty and interest. 32 e. There is established within the state treasury under 33 the control of the department a raceway facility tax rebate 34 fund consisting of the amount of state sales tax revenues 35 -4- LSB 6184YC (1) 85 mm/sc 4/ 8

H.F. _____ transferred pursuant to section 423.2, subsection 11, paragraph 1 “b” , subparagraph (7). An account is created within the 2 fund for each raceway facility meeting the qualifications of 3 this subsection. Moneys in the fund shall only be used to 4 provide rebates of state sales tax pursuant to paragraph “b” , 5 subparagraph (1). The total amount of rebates paid from the 6 fund shall not exceed the amount specified in paragraph “c” , 7 subparagraph (4), subparagraph division (a) or (b), whichever 8 is applicable. Any moneys in the fund which represent state 9 sales tax revenue for which the time period in paragraph “c” for 10 receiving a rebate has expired, or which otherwise represent 11 state sales tax revenue that has become ineligible for rebate 12 pursuant to this subsection shall immediately revert to the 13 general fund of the state. 14 f. Upon determining that the conditions and requirements 15 of this subsection and the department are met, the department 16 shall issue a warrant to the owner or operator in the amount 17 equal to the amount claimed and verified by the department. 18 g. This subsection is repealed June 30, 2025, or thirty 19 days following the date on which an amount of total rebates 20 specified in paragraph “c” , subparagraph (4), subparagraph 21 division (a) or (b), whichever is applicable, has been provided 22 and no overpayment of rebates exists, or thirty days following 23 the date on which rebates cease as provided in paragraph 24 “c” , subparagraph (5), and no overpayment of rebates exists, 25 whichever is earliest. 26 h. If the amount of rebates issued to an owner or operator 27 under this subsection exceeds the amount allowed under this 28 subsection, the department shall seek repayment of such excess 29 amount. The repayment of rebates pursuant to this paragraph 30 shall be considered a tax payment due and payable to the 31 department by any person who has received such rebates, and 32 the failure to make such a repayment may be treated by the 33 department in the same manner as a failure to pay the tax shown 34 due or required to be shown due with the filing of a return 35 -5- LSB 6184YC (1) 85 mm/sc 5/ 8

H.F. _____ or deposit form. In addition, the amount of rebates required 1 to be repaid shall constitute a lien upon the real property 2 that comprises the raceway facility that was the subject of 3 the rebate regardless of the identity of the owner or operator 4 of said raceway facility, and the liability shall be collected 5 in the same manner as provided in section 422.26. Amounts 6 required to be repaid pursuant to this paragraph shall accrue 7 interest at the rate in effect under section 421.7 from the 8 date of the warrant issued under paragraph “f” . 9 i. The director shall adopt rules for the administration of 10 this subsection. 11 EXPLANATION 12 The inclusion of this explanation does not constitute agreement with 13 the explanation’s substance by the members of the general assembly. 14 This bill authorizes the department of revenue to rebate 15 sales and use tax for certain transactions related to a 16 raceway facility. To be eligible for the rebate the raceway 17 facility must be located on fairgrounds, and must be located 18 in a city with a population between 7,000 and 7,500, which 19 city is located in a county with a population between 33,000 20 and 33,450. In addition, the raceway facility must have been 21 placed in service before the effective date of the bill. 22 The person eligible to receive the rebate is the owner or 23 operator of the raceway facility. “Owner or operator” means 24 a fair that is the owner or operator of a raceway facility and 25 is the promoter of races. “Fair” means the same as defined 26 in Code section 174.1 and generally means an organization 27 incorporated under the laws of Iowa that holds fair events and 28 meets certain property ownership requirements. 29 The rebate applies to two types of transactions. One, the 30 state sales tax collected upon tangible personal property or 31 services furnished to purchasers at the raceway facility. Two, 32 the state sales or use tax paid in fulfillment of a written 33 contract with the owner or operator if the property becomes an 34 integral part of the project under contract and upon completion 35 -6- LSB 6184YC (1) 85 mm/sc 6/ 8

H.F. _____ of the project becomes part of the raceway facility. This 1 rebate is limited to one project per raceway facility. The 2 rebates only apply to transactions occurring on or after 3 January 1, 2015, but before January 1, 2025, and are limited 4 to a maximum of $2 million or an amount equal to 25 percent of 5 the project costs if such a project is undertaken, whichever is 6 less. “Project costs” is defined in the bill. 7 With regard to the rebate of sales tax revenues collected 8 upon tangible personal property or services furnished to 9 purchasers at the raceway facility, the bill creates a raceway 10 facility tax rebate fund consisting of the remaining amount 11 of state sales tax revenue from these transactions after 12 subtracting the local option sales tax under Code chapter 423B, 13 the natural resources and outdoor recreation trust transfer 14 pursuant to Article VII, section 10, of the Constitution of 15 the State of Iowa if applicable, the secure an advanced vision 16 for education fund transfer pursuant to Code section 423F.2, 17 and any transfers required, if applicable, to a baseball and 18 softball tournament facility and movie site sales tax rebate 19 fund, flood mitigation sales tax increment fund, or Iowa 20 reinvestment Act sales tax increment fund. Rebates from these 21 transactions are paid only from this rebate fund, are limited 22 to the amounts in the fund, and are made on forms furnished by 23 the department of revenue. 24 With regard to the rebate of sales or use tax paid in 25 fulfillment of a written contract with the owner or operator, 26 the bill specifies that the rebate of sales tax shall not 27 exceed the amount remaining after the transfers listed above 28 have been subtracted from the total amount of the sales tax 29 rebate requested, as applicable. The bill also specifies that 30 the rebate of use tax shall not exceed the amount remaining 31 after subtracting the local option taxes under Code chapter 32 423B and the secure an advanced vision for education fund 33 transfer pursuant to Code section 423F.2. A contractor 34 that has a written contract with the owner or operator is 35 -7- LSB 6184YC (1) 85 mm/sc 7/ 8

H.F. _____ required to provide information under oath to the owner or 1 operator regarding the amount of property or services used in 2 performance of the contract upon which sales or use tax has 3 been paid. A contractor who willfully makes a false report is 4 guilty of a simple misdemeanor and is liable for the payment 5 of the tax and any applicable penalty and interest. A simple 6 misdemeanor is punishable by confinement for no more than 7 30 days or a fine of at least $65 but not more than $625 or 8 by both. Rebates from these transactions are made on forms 9 furnished by the department of revenue. 10 The rebate ceases if control of the facility changes. A 11 change in control will occur when the fair that is the owner 12 or operator on the effective date of the bill ceases to own a 13 majority of the equity interests in the raceway facility. The 14 rebate provision is repealed June 30, 2025, or 30 days after 15 a total of $2 million or an amount equal to 25 percent of the 16 project costs if such a project is undertaken, whichever is 17 less, have been rebated, or 30 days following the change of 18 control causing the rebates to cease, whichever occurs earlier. 19 If the amount of rebates issued exceed the amount of 20 rebates allowed under the bill, the department of revenue 21 shall seek repayment from the person who received the excess 22 rebates in the same manner as it does other tax payments. The 23 excess rebates shall also be a lien on the real property that 24 comprises the raceway facility, regardless of the identity of 25 the owner or operator. 26 -8- LSB 6184YC (1) 85 mm/sc 8/ 8