S.F. _____ Section 1. Section 384.4, subsection 1, Code 2013, is 1 amended by adding the following new paragraph: 2 NEW PARAGRAPH . f. Payments of principal and interest on 3 loans entered into pursuant to section 384.24B and authorized 4 for repayment by the council from the fund. 5 Sec. 2. NEW SECTION . 384.24B General obligation loans 6 funded by the city. 7 1. A city may authorize a loan, as defined in this section, 8 to borrow money for any public project in accordance with and 9 subject to the provisions of this section. 10 2. For purposes of this section, “loan” means the sum of 11 the transfers from one or more reserve accounts or funds of the 12 city which transfers are authorized for the purpose specified 13 in the loan authorization document. A transfer from a reserve 14 account or fund for the purposes of this section shall not 15 cause the balance of reserves in such account or fund at the 16 close of the fiscal year following the fiscal year in which the 17 transfer is made to fall below any minimum balance prescribed 18 by law for such account or fund. 19 3. A loan entered into by a city pursuant to this section 20 may contain provisions similar to those found in loan 21 agreements between private parties, including but not limited 22 to the issuance of notes to evidence its obligations. 23 4. A loan made pursuant to this section is payable from the 24 debt service fund of the city. The governing body shall follow 25 the same authorization procedures required for the issuance 26 of general obligation bonds issued for the same purpose to 27 authorize a loan made payable from the debt service fund. 28 5. A loan made pursuant to this section shall provide that a 29 portion of the payments be applied as interest at a rate set by 30 the council in the authorization for the loan. The council may 31 determine a rate of interest that shall not be below that set 32 for a certificate of deposit at a financial institution defined 33 in chapter 12C and that shall not exceed the lowest rate of 34 interest payable on a bond issuance, such rate being determined 35 -1- LSB 1761SC (2) 85 aw/sc 1/ 6

S.F. _____ at the time the loan is authorized. Other laws relating to 1 interest rates do not apply. 2 6. Repayments of principal and interest shall be applied 3 to the reserve fund or account from which all or a portion of 4 the funds were advanced for the loan in the proportion that the 5 amount of the advance from the fund or account bears to the 6 entire amount of the loan. 7 7. The limitation in section 346.24 does not apply to a 8 transfer made pursuant to this section or to a loan authorized 9 pursuant to this section. 10 Sec. 3. Section 384.25, Code 2013, is amended to read as 11 follows: 12 384.25 General obligation bonds or loans for essential 13 purposes. 14 1. A city which proposes to carry out any essential 15 corporate purpose within or without its corporate limits, and 16 to contract indebtedness and issue general obligation bonds or 17 authorize a loan described in section 384.24B, to provide funds 18 to pay all or any part of the cost of a project must do so in 19 accordance with the provisions of this division . 20 2. Before the council may institute proceedings for the 21 issuance of bonds or authorization of a loan for an essential 22 corporate purpose, a notice of the proposed action, including 23 a statement of the amount and purposes of the bonds or loan , 24 and the time and place of the meeting at which the council 25 proposes to take action for the issuance of the bonds or 26 authorization of the loan , must be published as provided in 27 section 362.3 . At the meeting, the council shall receive oral 28 or written objections from any resident or property owner 29 of the city. After all objections have been received and 30 considered, the council may, at that meeting or any adjournment 31 thereof, take additional action for the issuance of the bonds 32 or authorization of the loan or abandon the proposal to issue 33 the bonds or authorize the loan . Any resident or property 34 owner of the city may appeal the decision of the council to 35 -2- LSB 1761SC (2) 85 aw/sc 2/ 6

S.F. _____ take additional action to the district court of the county in 1 which any part of the city is located, within fifteen days 2 after the additional action is taken, but the additional action 3 of the council is final and conclusive unless the court finds 4 that the council exceeded its authority. The provisions of 5 this subsection with respect to notice, hearing, and appeal, 6 are in lieu of the provisions contained in chapter 73A , or any 7 other law. 8 3. a. Notwithstanding subsection 2 , a council may institute 9 proceedings for the issuance of bonds or the authorization of a 10 loan for an essential corporate purpose specified in section 11 384.24, subsection 3 , paragraph “w” or “x” , in an amount equal 12 to or greater than three million dollars by causing a notice 13 of the proposal to issue the bonds or authorize the loan , 14 including a statement of the amount and purpose of the bonds 15 or loan , together with the maximum rate of interest which the 16 bonds are to bear or which will be charged to the principal 17 balance of the loan , and the right to petition for an election, 18 to be published at least once in a newspaper of general 19 circulation within the city at least ten days prior to the 20 meeting at which it is proposed to take action for the issuance 21 of the bonds or the authorization of the loan . 22 b. If at any time before the date fixed for taking action 23 for the issuance of the bonds or the authorization of the 24 loan , a petition is filed with the clerk of the city signed 25 by eligible electors of the city equal in number to twenty 26 percent of the persons in the city who voted for the office of 27 president of the United States at the last preceding general 28 election that had such office on the ballot, asking that the 29 question of issuing the bonds or authorizing the loan be 30 submitted to the registered voters of the city, the council 31 shall either by resolution declare the proposal to issue the 32 bonds or authorize the loan to have been abandoned or shall 33 direct the county commissioner of elections to call a special 34 election upon the question of issuing the bonds or authorizing 35 -3- LSB 1761SC (2) 85 aw/sc 3/ 6

S.F. _____ the loan . Notice of the election and its conduct shall be in 1 the manner provided in section 384.26 . 2 c. If a petition is not filed, or if a petition is filed and 3 the proposition of issuing the bonds or authorizing the loan 4 is approved at an election, the council may proceed with the 5 authorization and issuance of the bonds or authorization of the 6 loan . 7 Sec. 4. Section 384.26, subsections 1, 2, 4, and 5, Code 8 2013, are amended to read as follows: 9 1. A city which proposes to carry out any general corporate 10 purpose within or without its corporate limits, and to contract 11 indebtedness and issue general obligation bonds or authorize a 12 loan described in section 384.24B, to provide funds to pay all 13 or any part of the costs of a project, must do so in accordance 14 with the provisions of this division . 15 2. Before the council may institute proceedings for the 16 issuance of bonds or authorization of a loan for a general 17 corporate purpose, it shall call a special city election to 18 vote upon the question of issuing the bonds or authorizing the 19 loan . At the election the proposition must be submitted in one 20 of the following form forms, as applicable : 21 Shall the ............ (insert the name of the city) issue 22 its bonds in an amount not exceeding the amount of $ .... for 23 the purpose of .......... ? 24 Shall the .......... (insert the name of the city) authorize 25 a loan from its reserve funds in an amount not exceeding the 26 amount of $ .... for the purpose of ..........? 27 4. The proposition of issuing general corporate purpose 28 bonds or authorizing a loan for a general corporate purpose 29 is not carried or adopted unless the vote in favor of the 30 proposition is equal to at least sixty percent of the total 31 vote cast for and against the proposition at the election. 32 If the proposition of issuing the general corporate purpose 33 bonds or authorizing a loan for a general corporate purpose is 34 approved by the voters, the city may proceed with the issuance 35 -4- LSB 1761SC (2) 85 aw/sc 4/ 6

S.F. _____ of the bonds or authorization of the loan . 1 5. a. Notwithstanding the provisions of subsection 2 , 2 a council may, in lieu of calling an election, institute 3 proceedings for the issuance of bonds or authorization of a 4 loan for a general corporate purpose by causing a notice of the 5 proposal to issue the bonds or authorize the loan , including 6 a statement of the amount and purpose of the bonds or loan , 7 together with the maximum rate of interest which the bonds are 8 to bear or which the loan is to bear , and the right to petition 9 for an election, to be published at least once in a newspaper 10 of general circulation within the city at least ten days prior 11 to the meeting at which it is proposed to take action for the 12 issuance of the bonds or authorization of the loan subject to 13 the following limitations: 14 (1) In cities having a population of five thousand or less, 15 in an amount of not more than four hundred thousand dollars. 16 (2) In cities having a population of more than five thousand 17 and not more than seventy-five thousand, in an amount of not 18 more than seven hundred thousand dollars. 19 (3) In cities having a population in excess of seventy-five 20 thousand, in an amount of not more than one million dollars. 21 b. If at any time before the date fixed for taking action 22 for the issuance of the bonds or the authorization of the 23 loan , a petition is filed with the clerk of the city in the 24 manner provided by section 362.4 , asking that the question 25 of issuing the bonds or authorizing the loan be submitted to 26 the registered voters of the city, the council shall either by 27 resolution declare the proposal to issue the bonds or authorize 28 the loan to have been abandoned or shall direct the county 29 commissioner of elections to call a special election upon the 30 question of issuing the bonds or authorizing the loan . Notice 31 of the election and its conduct shall be in the manner provided 32 in the preceding subsections of this section . 33 c. If no petition is filed, or if a petition is filed and 34 the proposition of issuing the bonds or authorizing the loan 35 -5- LSB 1761SC (2) 85 aw/sc 5/ 6

S.F. _____ is approved at an election, the council may proceed with the 1 authorization and issuance of the bonds or the authorization 2 of the loan . 3 EXPLANATION 4 This bill allows a city to borrow money from its reserve 5 accounts or funds to pay for certain public projects. The bill 6 requires that a city certify taxes to be levied for deposit in 7 the debt service fund in the amount necessary to pay principal 8 and interest on loans authorized under the bill. 9 The bill requires that such loans not cause the balances 10 of such reserve accounts or funds to fall below any minimum 11 balance prescribed by law. Such a loan shall be payable from 12 the city debt service fund, and shall provide for interest 13 payments at a rate set by the city council, as limited in the 14 bill. 15 The bill requires that such authorization by a city council 16 follow substantially the same procedures for the issuance of 17 general obligation bonds for essential corporate purposes, 18 pursuant to Code section 384.25, or for general corporate 19 purposes, pursuant to Code section 384.26. 20 -6- LSB 1761SC (2) 85 aw/sc 6/ 6