HF 186 (LSB 1717YH (5) 87)

HOUSE FILE 186

BY  PETTENGILL and MAXWELL

A BILL FOR

An Act providing for the imposition of the local hotel and motel tax by a land use district.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 303.52, Code 2017, is amended by adding the following new subsection:
   NEW SUBSECTION.  3A.  The board of trustees may by ordinance impose a hotel and motel tax in accordance with chapter 423A. 
    Sec. 2.  Section 423A.4, Code 2017, is amended to read as follows:
   423A.4  Locally imposed hotel and motel tax.
   1.  A city or, a county, or a land use district created under chapter 303, subchapter IV, may impose, by ordinance of the city council or by resolution of the board of supervisors or by ordinance of the board of trustees, a hotel and motel tax, at a rate not to exceed seven percent, which shall be imposed in increments of one or more full percentage points upon the sales price from the renting of lodging. The tax when imposed by a city shall apply only within the corporate boundaries of that city, and when imposed by a county shall apply only outside incorporated areas within that county, and when imposed by a land use district shall apply only within the corporate boundaries of that district.  A hotel and motel tax imposed by a city or county shall not be imposed within the corporate boundaries of a land use district during any period of time that the land use district is imposing a hotel and motel tax.
   2.  Within ten days of the election at which a majority of those voting on the question favors the imposition, repeal, or change in the rate of the hotel and motel tax, the county auditor shall give written notice by sending a copy of the abstract of votes from the favorable election to the director of revenue.
   3.  A local hotel and motel tax shall be imposed on January 1 or July 1, following the notification of the director of revenue. Once imposed, the tax shall remain in effect at the rate imposed for a minimum of one year. A local hotel and motel tax shall terminate only on June 30 or December 31. At least forty-five days prior to the tax being effective or prior to a revision in the tax rate or prior to the repeal of the tax, a city, or county, or land use district shall provide notice by mail of such action to the director of revenue. The director shall have the authority to waive the notice requirement.
   4.  a.  A city, or county, or land use district shall impose or repeal a hotel and motel tax or increase or reduce the tax rate only after an election at which a majority of those voting on the question favors imposition, repeal, or change in rate. However, a hotel and motel tax of a city or county shall not be repealed or reduced in rate if obligations are outstanding which are payable as provided in section 423A.7, unless funds sufficient to pay the principal, interest, and premium, if any, on the outstanding obligations at and prior to maturity have been properly set aside and pledged for that purpose.
   b.  If the tax applies only within the corporate boundaries of a city, only the registered voters of the city shall be permitted to vote. The election shall be held at the time of the regular city election or at a special election called for that purpose. If the tax applies only in the unincorporated areas of a county or only within the corporate boundaries of a land use district, only the registered voters of the unincorporated areas of the county or the registered voters of the land use district, as applicable, shall be permitted to vote. The election shall be held at the time of the general election or at a special election called for that purpose.
    Sec. 3.  Section 423A.6, subsection 1, Code 2017, is amended to read as follows:
   1.  The director of revenue shall administer the state and local hotel and motel tax as nearly as possible in conjunction with the administration of the state sales tax law, except that portion of the law which implements the streamlined sales and use tax agreement. The director shall provide appropriate forms, or provide on the regular state tax forms, for reporting state and local hotel and motel tax liability. All moneys received or refunded one hundred eighty days after the date on which a city, or county, or land use district terminates its local hotel and motel tax and all moneys received from the state hotel and motel tax shall be deposited in or withdrawn from the general fund of the state. 
    Sec. 4.  Section 423A.7, subsection 2, Code 2017, is amended to read as follows:
   2.  All moneys in the local transient guest tax fund shall be remitted at least quarterly by the department, pursuant to rules of the director of revenue, to each city in the amount collected from businesses in that city, and to each county in the amount collected from businesses in the unincorporated areas of the county, and to each land use district in the amount collected from businesses in that land use district.
    Sec. 5.  Section 423A.7, subsection 4, unnumbered paragraph 1, Code 2017, is amended to read as follows:
   The revenue derived by a city or county from any local hotel and motel tax authorized by section 423A.4 shall be used by a city or county as follows:
    Sec. 6.  Section 423A.7, Code 2017, is amended by adding the following new subsection:
   NEW SUBSECTION.  5.  The revenue derived by a land use district from any local hotel and motel tax authorized by section 423A.4 may be expended for any lawful purpose of the land use district. 
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill permits a land use district created under Code sections 303.41 through 303.68 to impose the local hotel and motel tax under Code chapter 423A upon the renting of any lodging within the land use district. The bill amends the powers and duties of the board of trustees of a land use district to permit the board to impose the tax.
   The tax may only be imposed by ordinance of the board of trustees of the district after an election at which a majority of those voting favors imposition. Only registered voters of the land use district are permitted to vote, and the tax only applies within the corporate boundaries of the land use district. A majority vote of the registered voters of the district is also required for a repeal or rate change. The tax rate may not exceed 7 percent and must be in increments of one or more full percentage points. 
   The bill provides that revenues derived by a land use district from the local hotel and motel tax may be expended for any lawful purposes of the land use district. The bill also provides that a hotel and motel tax imposed by a city or county shall not be imposed within the corporate boundaries of a land use district during any period of time that the land use district is imposing a hotel and motel tax. The bill amends provisions of Code sections 423A.4 and 423A.7 relating to the power to pledge future hotel and motel tax revenues toward the payment of certain bonds to specify that such bonding provisions only apply to cities and counties that levy the tax.