H.F. 655 Section 1. Section 423B.1, subsection 1, Code 2017, is 1 amended by striking the subsection and inserting in lieu 2 thereof the following: 3 1. a. A county may impose by ordinance of the board of 4 supervisors the local vehicle tax authorized by this chapter, 5 subject to this section. 6 b. A city or county may impose by ordinance the local sales 7 and services tax authorized by this chapter, subject to this 8 section. 9 Sec. 2. Section 423B.1, subsection 2, paragraph b, 10 subparagraph (3), Code 2017, is amended to read as follows: 11 (3) The tax once imposed shall continue to be imposed until 12 the county-imposed tax is reduced or increased in rate or 13 repealed, and then the city-imposed tax shall also be reduced 14 or increased in rate or repealed in the same amount and be 15 effective on the same date. 16 Sec. 3. Section 423B.1, subsection 3, Code 2017, is amended 17 to read as follows: 18 3. a. A local option tax shall be imposed only after an 19 election at which If a majority of those voting on the question 20 of imposition of a local option tax favors imposition and , the 21 local option tax shall then be imposed at the rate specified on 22 the ballot for an unlimited period until repealed as provided 23 in subsection 6 , paragraph “a” this chapter . 24 b. If the tax is a local vehicle tax imposed by a county, 25 it shall apply to all incorporated and unincorporated areas of 26 the county. 27 c. (1) (a) If the tax is a local sales and services tax 28 imposed by a county that is a qualified county , it shall only 29 apply to those incorporated areas and the unincorporated area 30 of that county in which if a majority of those voting in the 31 area on the tax favors its imposition. 32 (b) If the tax is a local sales and services tax imposed by 33 a city located in a county that is a qualified county, other 34 than a city under subsection 2, it shall only apply to the city 35 -1- LSB 1760HV (1) 87 md/sc 1/ 16

H.F. 655 if a majority of those voting in the city on the tax favors its 1 imposition. 2 (2) If the tax is a local sales and services tax imposed by 3 a county that is not a qualified county, it shall only apply to 4 those incorporated areas and the unincorporated area of that 5 county in which a majority of those voting in the area on the 6 tax favors its imposition. For purposes of the local sales 7 and services tax imposed by a county that is not a qualified 8 county , all cities contiguous to each other shall be treated 9 as part of one incorporated area and the tax would shall be 10 imposed in each of those contiguous cities only if the majority 11 of those voting in the total area covered by the contiguous 12 cities favors its imposition. In the case of a local sales and 13 services tax submitted to the registered voters of two or more 14 contiguous counties as provided in subsection 4 , paragraph “c” , 15 all cities contiguous to each other shall be treated as part of 16 one incorporated area, even if the corporate boundaries of one 17 or more of the cities include areas of more than one county, 18 and the tax shall be imposed in each of those contiguous cities 19 only if a majority of those voting on the tax in the total area 20 covered by the contiguous cities favored its imposition. For 21 purposes of the local sales and services tax, a city is not 22 contiguous to another city if the only road access between the 23 two cities is through another state. 24 Sec. 4. Section 423B.1, Code 2017, is amended by adding the 25 following new subsection: 26 NEW SUBSECTION . 3A. For purposes of this chapter, 27 “qualified county” means a county with a population in excess 28 of four hundred thousand, a county with a population of at 29 least one hundred thirty thousand but not more than one hundred 30 thirty-one thousand, or a county with a population of at least 31 sixty thousand but not more than seventy thousand, according 32 to the 2010 federal decennial census. Except for purposes 33 of allocating local sales and services tax receipts based 34 on the county in which the tax was collected under section 35 -2- LSB 1760HV (1) 87 md/sc 2/ 16

H.F. 655 423B.7, subsection 1, a city shall be deemed to be located in a 1 qualified county if a majority of the population of the city, 2 according to the 2010 federal decennial census, resides in the 3 qualified county. 4 Sec. 5. Section 423B.1, subsections 4 and 5, Code 2017, are 5 amended to read as follows: 6 4. a. (1) A The county board of supervisors shall direct 7 within thirty days the county commissioner of elections to 8 submit the question of imposition of a local vehicle tax or 9 a local sales and services tax to the registered voters of 10 the incorporated and unincorporated areas of the county upon 11 receipt of a petition , requesting imposition of a local vehicle 12 tax or a local sales and services tax , signed by eligible 13 electors of the whole county equal in number to five percent of 14 the persons in the whole county who voted at the last preceding 15 general election. In the case of a local vehicle tax, the The 16 petition requesting imposition shall specify the rate of tax 17 and the classes, if any, that are to be exempt. If more than 18 one valid petition is received, the earliest received petition 19 shall be used. 20 (2) The county board of supervisors for a qualified county 21 shall direct within thirty days the county commissioner of 22 elections to submit the question of imposition of a local 23 sales and services tax to the registered voters of a city or 24 to the registered voters of the unincorporated area of the 25 county upon receipt by the board of supervisors of a petition 26 requesting imposition of a local sales and services tax, signed 27 by eligible electors of the city or eligible electors of the 28 unincorporated area of the county, as applicable, equal in 29 number to five percent of the persons in the applicable city 30 or unincorporated area of the county who voted at the last 31 preceding general election. If more than one valid petition 32 is received for a city or for the unincorporated area of the 33 county, the earliest received petition shall be used. 34 (3) A county board of supervisors for a county that is not 35 -3- LSB 1760HV (1) 87 md/sc 3/ 16

H.F. 655 a qualified county shall direct within thirty days the county 1 commissioner of elections to submit the question of imposition 2 of a local sales and services tax to the registered voters of 3 the incorporated and unincorporated areas of the county upon 4 receipt of a petition requesting imposition of a local sales 5 and services tax, signed by eligible electors of the whole 6 county equal in number to five percent of the persons in the 7 whole county who voted at the last preceding general election. 8 If more than one valid petition is received, the earliest 9 received petition shall be used. 10 b. (1) The question of the imposition of a local sales 11 and services tax in a qualified county shall be submitted to 12 the registered voters of the city or to the registered voters 13 of the unincorporated area of the county upon receipt by the 14 county commissioner of elections of a motion requesting such 15 submission, adopted by the governing body of a city located 16 within the county or of the county for the unincorporated area 17 of the county. Upon adoption of such motion, the governing 18 body of the city or county for the unincorporated area shall 19 submit the motion to the county commissioner of elections. The 20 county commissioner of elections shall publish notice of the 21 ballot proposition concerning the imposition of the local sales 22 and services tax. The manner provided under this subparagraph 23 for the submission of the question of imposition of a local 24 sales and services tax is an alternative to the manner provided 25 in paragraph “a” , subparagraph (2). 26 (2) The question of the imposition of a local sales and 27 services tax in a county that is not a qualified county shall 28 be submitted to the registered voters of the incorporated and 29 unincorporated areas of the county upon receipt by the county 30 commissioner of elections of the motion or motions, requesting 31 such submission, adopted by the governing body or bodies of the 32 city or cities located within the county or of the county, for 33 the unincorporated areas of the county, representing at least 34 one half of the population of the county. Upon adoption of 35 -4- LSB 1760HV (1) 87 md/sc 4/ 16

H.F. 655 such motion, the governing body of the city or county, for the 1 unincorporated areas, shall submit the motion to the county 2 commissioner of elections and in the case of the governing 3 body of the city shall notify the board of supervisors of the 4 adoption of the motion. The county commissioner of elections 5 shall keep a file on all the motions received and, upon 6 reaching the population requirements, shall publish notice of 7 the ballot proposition concerning the imposition of the local 8 sales and services tax. A motion ceases to be valid at the 9 time of the holding of the regular election for the election of 10 members of the governing body which that adopted the motion. 11 The county commissioner of elections shall eliminate from the 12 file any motion that ceases to be valid. The manner provided 13 under this paragraph subparagraph for the submission of the 14 question of imposition of a local sales and services tax 15 is an alternative to the manner provided in paragraph “a” , 16 subparagraph (3) . 17 c. Upon receipt of petitions or motions calling for the 18 submission of the question of the imposition of a local sales 19 and services tax as described in paragraph “a” or “b” , the 20 boards of supervisors of two or more contiguous counties in 21 which the question is to be submitted may enter into a joint 22 agreement providing that for purposes of this chapter , a 23 city whose corporate boundaries include areas of more than 24 one county shall be treated as part of the county in which a 25 majority of the residents of the city reside. In such event, 26 the county commissioners of elections from each such county 27 shall cooperate in the selection of a single date upon which 28 the election shall be held, and for all purposes of this 29 chapter relating to the imposition, repeal, change of use, 30 or collection of the tax, such a city shall be deemed to be 31 part of the county in which a majority of the residents of the 32 city reside. A copy of the joint agreement shall be provided 33 promptly to the director of revenue. 34 5. a. The county commissioner of elections shall submit 35 -5- LSB 1760HV (1) 87 md/sc 5/ 16

H.F. 655 the question of imposition of a local option tax at an election 1 held on a date specified in section 39.2, subsection 4 , 2 paragraph “a” or “b” , as applicable . The election shall not be 3 held sooner than sixty days after publication of notice of the 4 ballot proposition. 5 b. The ballot proposition shall specify the type and rate of 6 tax and , in the case of a vehicle tax , the classes that will be 7 exempt and , in the case of a local sales and services tax , the 8 date it will be imposed which date shall not be earlier than 9 ninety days following the election. The ballot proposition 10 shall also specify the approximate amount of local option tax 11 revenues that will be used for property tax relief , subject to 12 the requirement of section 423B.7, subsection 7, paragraph “b” , 13 and shall contain a statement as to the specific purpose or 14 purposes for which the revenues shall otherwise be expended. 15 If the county board of supervisors in a county that is not 16 a qualified county or if the board of supervisors or city 17 council, as applicable, in a qualified county decides under 18 subsection 6 to specify a date on which the local option sales 19 and services tax shall automatically be repealed, the date of 20 the repeal shall also be specified on the ballot. 21 c. The rate of the vehicle tax shall be in increments of one 22 dollar per vehicle as set by the petition seeking to impose the 23 tax. 24 d. The rate of a local sales and services tax shall not be 25 more than one percent as set by the governing body . 26 e. The state commissioner of elections shall establish by 27 rule the form for the ballot proposition which form shall be 28 uniform throughout the state. 29 Sec. 6. Section 423B.1, subsection 6, paragraph a, 30 subparagraph (1), Code 2017, is amended by striking the 31 subparagraph. 32 Sec. 7. Section 423B.1, subsection 6, paragraph a, 33 subparagraphs (2) and (3), Code 2017, are amended to read as 34 follows: 35 -6- LSB 1760HV (1) 87 md/sc 6/ 16

H.F. 655 (2) (a) The A local option tax may be repealed or the 1 rate of the local vehicle tax increased or decreased or the 2 use thereof of a local option tax changed after an election at 3 which a majority of those voting on the question of repeal or 4 rate or use change favored favors the repeal or rate or use 5 change. 6 (b) The date on which the repeal, rate, or use change is 7 to take effect shall not be earlier than ninety days following 8 the election. The election at which the question of repeal 9 or rate or use change is offered shall be called and held in 10 the same manner and under the same conditions as provided in 11 subsections 4 and 5 for the election on the imposition of the 12 local option tax. However, in the case of a local sales and 13 services tax where the tax has not been imposed countywide, the 14 question of repeal or imposition or rate or use change shall 15 be voted on only by the registered voters of the areas of the 16 county where the tax has been imposed or has not been imposed, 17 as appropriate. 18 (c) However, the The governing body of the incorporated 19 area city or unincorporated area where the local sales and 20 services tax is imposed may, upon its own motion, request the 21 county commissioner of elections to hold an election in the 22 incorporated city or unincorporated area, as appropriate, on 23 the question of the change in use of local sales and services 24 tax revenues. The election may be held at any time but not 25 sooner than sixty days following publication of the ballot 26 proposition. If a majority of those voting in the incorporated 27 city or unincorporated area on the change in use favors the 28 change, the governing body of that city or area shall change 29 the use to which the revenues shall be used. The ballot 30 proposition shall list the present use of the revenues, the 31 proposed use, and the date after which revenues received will 32 be used for the new use. 33 (3) When submitting the question of the imposition of a 34 local sales and services tax, the county board of supervisors 35 -7- LSB 1760HV (1) 87 md/sc 7/ 16

H.F. 655 of a county that is not a qualified county or the board of 1 supervisors or the governing body of the city, as applicable, 2 in a qualified county may direct that the question contain a 3 provision for the repeal, without election, of the local sales 4 and services tax on a specific date, which date shall be as 5 provided in section 423B.6, subsection 1 . 6 Sec. 8. Section 423B.1, subsection 7, paragraph b, Code 7 2017, is amended to read as follows: 8 b. Costs of local option tax elections shall be apportioned 9 among jurisdictions within the county voting on the question 10 at the same election on a pro rata basis in proportion to the 11 number of registered voters in each taxing jurisdiction voting 12 on the question and the total number of registered voters in 13 all of the taxing jurisdictions voting on the question . 14 Sec. 9. Section 423B.1, subsection 8, Code 2017, is amended 15 by striking the subsection. 16 Sec. 10. Section 423B.1, subsections 9 and 10, Code 2017, 17 are amended to read as follows: 18 9. a. In a county that has imposed a local option sales 19 and services tax that is not a qualified county , the board 20 of supervisors shall, notwithstanding any contrary provision 21 of this chapter , repeal the local option sales and services 22 tax in the unincorporated areas or in an incorporated city 23 area in which the tax has been imposed upon adoption of its 24 the board’s own motion for repeal in the unincorporated areas 25 or upon receipt of a motion adopted by the governing body of 26 that incorporated city area requesting repeal. The board of 27 supervisors shall repeal the local option sales and services 28 tax effective on the later of the date of the adoption of 29 the repeal motion or the earliest date specified in section 30 423B.6, subsection 1 , following adoption of the motion . For 31 purposes of this subsection paragraph , incorporated city area 32 includes an incorporated city which is contiguous to another 33 incorporated city. 34 b. For a qualified county: 35 -8- LSB 1760HV (1) 87 md/sc 8/ 16

H.F. 655 (1) In a city that has imposed a local sales and services 1 tax, the governing body of the city shall, notwithstanding any 2 contrary provision of this chapter, repeal the local sales and 3 services tax in the city upon adoption of its own motion for 4 repeal. The governing body of the city shall repeal the local 5 sales and services tax effective on the earliest date specified 6 in section 423B.6, subsection 1, following adoption of the 7 motion. 8 (2) In the unincorporated area of the county where the 9 local sales and services tax has been imposed, the board of 10 supervisors shall, notwithstanding any contrary provision of 11 this chapter, repeal the local sales and services tax in the 12 unincorporated area of the county upon adoption of its own 13 motion for repeal. The board of supervisors shall repeal the 14 local sales and services tax effective on the earliest date 15 specified in section 423B.6, subsection 1, following adoption 16 of the motion. 17 10. Notwithstanding subsection 9 or any other contrary 18 provision of this chapter , a local option sales and services 19 tax shall not be repealed or reduced in rate if obligations are 20 outstanding which are payable as provided in section 423B.9 , 21 unless funds sufficient to pay the principal, interest, and 22 premium, if any, on the outstanding obligations at and prior 23 to maturity have been properly set aside and pledged for that 24 purpose. 25 Sec. 11. Section 423B.5, subsections 1 and 4, Code 2017, are 26 amended to read as follows: 27 1. A local sales and services tax at the rate of not more 28 than one percent may be imposed by a city or county pursuant 29 to this chapter shall be imposed on the sales price taxed by 30 the state under chapter 423, subchapter II . A local sales 31 and services tax shall be imposed on the same basis as the 32 state sales and services tax or in the case of the use of 33 natural gas, natural gas service, electricity, or electric 34 service on the same basis as the state use tax and shall not 35 -9- LSB 1760HV (1) 87 md/sc 9/ 16

H.F. 655 be imposed on the sale of any property or on any service not 1 taxed by the state, except the tax shall not be imposed on 2 the sales price from the sale of motor fuel or special fuel 3 as defined in chapter 452A which is consumed for highway use 4 or in watercraft or aircraft if the fuel tax is paid on the 5 transaction and a refund has not or will not be allowed, on the 6 sales price from the sale of equipment by the state department 7 of transportation, or on the sales price from the sale or use 8 of natural gas, natural gas service, electricity, or electric 9 service in a city or county where the sales price from the sale 10 of natural gas or electric energy is subject to a franchise 11 fee or user fee during the period the franchise or user fee 12 is imposed. A local sales and services tax is applicable 13 to transactions within those incorporated and the city or 14 unincorporated areas area of the county where it is imposed and 15 shall be collected by all persons required to collect state 16 sales taxes. All cities contiguous to each other shall be 17 treated as part of one incorporated area and the tax would be 18 imposed in each of those contiguous cities only if the majority 19 of those voting in the total area covered by the contiguous 20 cities favors its imposition. In the case of a local sales and 21 services tax submitted to the registered voters of two or more 22 contiguous counties as provided in section 423B.1, subsection 23 4 , paragraph “c” , all cities contiguous to each other shall be 24 treated as part of one incorporated area, even if the corporate 25 boundaries of one or more of the cities include areas of more 26 than one county, and the tax shall be imposed in each of those 27 contiguous cities only if a majority of those voting on the tax 28 in the total area covered by the contiguous cities favored its 29 imposition. However, a local sales and services tax is not 30 applicable to transactions of a retailer holding a retail sales 31 tax permit at a place of business, as defined in section 423.1, 32 if the retailer’s place of business is located in part within a 33 city or unincorporated area of the county where the tax is not 34 imposed. 35 -10- LSB 1760HV (1) 87 md/sc 10/ 16

H.F. 655 4. If a local sales and services tax is imposed by a city or 1 county pursuant to this chapter , a local excise tax at the same 2 rate shall be imposed by the city or county on the purchase 3 price of natural gas, natural gas service, electricity, or 4 electric service subject to tax under chapter 423, subchapter 5 III , and not exempted from tax by any provision of chapter 6 423, subchapter III . The local excise tax is applicable only 7 to the use of natural gas, natural gas service, electricity, 8 or electric service within those incorporated cities and 9 unincorporated areas of the county where it is imposed 10 and, except as otherwise provided in this chapter , shall be 11 collected and administered in the same manner as the local 12 sales and services tax. For purposes of this chapter , “local 13 sales and services tax” shall also include the local excise tax. 14 Sec. 12. Section 423B.6, subsection 1, paragraphs b and c, 15 Code 2017, are amended to read as follows: 16 b. A local sales and services tax shall be repealed only 17 on June 30 or December 31 but not sooner than ninety days 18 following the favorable election if one is held. However, a 19 local sales and services tax shall not be repealed before the 20 tax has been in effect for one year. At least forty days before 21 the imposition or repeal of the tax, a the city or county , as 22 applicable, shall provide notice of the action by certified 23 mail to the director of revenue. 24 c. The imposition of or a rate change for a local sales and 25 services tax shall not be applied to purchases from a printed 26 catalog wherein a purchaser computes the local tax based on 27 rates published in the catalog unless a minimum of one hundred 28 twenty days’ notice of the imposition or rate change has been 29 given to the seller from the catalog and the first day of a 30 calendar quarter has occurred on or after the one hundred 31 twentieth day. 32 Sec. 13. Section 423B.6, subsection 2, paragraph b, Code 33 2017, is amended to read as follows: 34 b. The ordinance of a governing body of a city or county 35 -11- LSB 1760HV (1) 87 md/sc 11/ 16

H.F. 655 board of supervisors imposing a local sales and services 1 tax shall adopt by reference the applicable provisions of 2 the appropriate sections of chapter 423 . All powers and 3 requirements of the director to administer the state sales tax 4 law and use tax law are applicable to the administration of 5 a local sales and services tax law and the local excise tax, 6 including but not limited to the provisions of section 422.25, 7 subsection 4 , sections 422.30 , 422.67 , and 422.68 , section 8 422.69, subsection 1 , sections 422.70 through 422.75 , section 9 423.14, subsection 1 and subsection 2 , paragraphs “b” through 10 “e” , and sections 423.15 , 423.23 , 423.24 , 423.25 , 423.31 11 through 423.35 , 423.37 through 423.42 , 423.46 , and 423.47 . 12 Local officials shall confer with the director of revenue for 13 assistance in drafting the ordinance imposing a local sales and 14 services tax. A certified copy of the ordinance shall be filed 15 with the director as soon as possible after passage. 16 Sec. 14. Section 423B.6, subsection 3, paragraph b, Code 17 2017, is amended to read as follows: 18 b. All local tax moneys and interest and penalties received 19 or refunded one hundred eighty days or more after the date 20 on which the city or county repeals its the local sales and 21 services tax shall be deposited in or withdrawn from the state 22 general fund. 23 Sec. 15. Section 423B.7, subsection 1, Code 2017, is amended 24 to read as follows: 25 1. a. Except as provided in paragraph paragraphs “b” and 26 “c” , the director shall credit the local sales and services 27 tax receipts and interest and penalties from a county-imposed 28 tax to the county’s account in the local sales and services 29 tax fund and from a city-imposed tax under section 423B.1, 30 subsection 2 , to the city’s account in the local sales 31 and services tax fund for the county in which the tax was 32 collected . If the director is unable to determine from which 33 county any of the receipts were collected, those receipts shall 34 be allocated among the possible counties based on allocation 35 -12- LSB 1760HV (1) 87 md/sc 12/ 16

H.F. 655 rules adopted by the director. 1 b. Notwithstanding paragraph “a” , the The director shall 2 credit the designated amount of the increase in local sales 3 and services tax receipts, as computed in section 423B.10 , 4 collected in an urban renewal area of an eligible city that has 5 adopted an ordinance pursuant to section 423B.10, subsection 6 2 , into a special city account in the local sales and services 7 tax fund. 8 c. The director shall credit the local sales and services 9 tax receipts and interest and penalties from a city-imposed tax 10 under section 423B.1, subsection 2, to the city’s account in 11 the local sales and services tax fund. 12 Sec. 16. Section 423B.7, subsection 7, Code 2017, is amended 13 to read as follows: 14 7. a. Local Subject to the requirement of paragraph “b” , 15 local sales and services tax moneys received by a city or 16 county may be expended for any lawful purpose of the city or 17 county. 18 b. Each city located in a qualified county and each 19 qualified county for the unicorporated area for which 20 the imposition of the local sales and services tax in the 21 incorporated area or unincorporated area was approved at 22 election on or after the effective date of this Act shall use 23 not less than fifty percent of the moneys received for property 24 tax relief. 25 Sec. 17. Section 423B.8, subsection 1, paragraph a, Code 26 2017, is amended to read as follows: 27 a. The goods, wares, or merchandise are incorporated into 28 an improvement to real estate in fulfillment of a written 29 contract fully executed prior to the date of the imposition or 30 increase in rate of a local sales and services tax under this 31 chapter . The refund shall not apply to equipment transferred 32 in fulfillment of a mixed construction contract. 33 Sec. 18. Section 423B.10, subsection 1, paragraph b, Code 34 2017, is amended to read as follows: 35 -13- LSB 1760HV (1) 87 md/sc 13/ 16

H.F. 655 b. “Eligible city” means a city in which a local sales and 1 services tax imposed by the city or county applies or a city 2 described in section 423B.1, subsection 2 , paragraph “a” , and in 3 which an urban renewal area has been designated. 4 Sec. 19. IMPLEMENTATION. This Act shall not affect the 5 imposition of local option taxes in effect on the effective 6 date of this Act and such taxes shall continue to be imposed 7 until their repeal pursuant to chapter 423B. The law regarding 8 repeal in effect at the time of the repeal governs the repeal 9 of the local option taxes. 10 EXPLANATION 11 The inclusion of this explanation does not constitute agreement with 12 the explanation’s substance by the members of the general assembly. 13 This bill relates to the approval and imposition of the 14 local option sales and services tax. Current Code chapter 423B 15 authorizes the imposition of local option taxes, including 16 a local option sales and services tax. Currently, such a 17 proposed tax is only presented to the voters of a whole county 18 upon the filing of a petition signed by eligible electors of 19 the county equal in number to 5 percent of the persons in 20 the county who voted at the last preceding general election 21 or upon receipt by the county commissioner of elections of 22 motions requesting such submission, adopted by the governing 23 bodies of the cities located within the county or the governing 24 body of the county for the unincorporated area of the county, 25 representing at least one-half of the population of the county. 26 The bill amends the methods of seeking presentment of the 27 local option sales and services tax to the voters of certain 28 qualified counties by allowing the eligible electors of 29 individual cities and the unincorporated area of a county to 30 file a petition for an election to be held in the petitioning 31 jurisdiction if such petition is signed by eligible electors 32 of the city or the unincorporated area of the county, as 33 applicable, equal in number to 5 percent of the persons in 34 the applicable city or unincorporated area of the county who 35 -14- LSB 1760HV (1) 87 md/sc 14/ 16

H.F. 655 voted at the last preceding general election. The bill defines 1 “qualified county” to mean a county with a population in excess 2 of 400,000, a county with a population of at least 130,000 but 3 not more than 131,000, or a county with a population of at 4 least 60,000 but not more than 70,000, according to the 2010 5 federal decennial census. For those qualified counties, the 6 bill also removes the requirement that in order to have the 7 local sales and services tax presented to the voters, motions 8 must be approved by cities or the county for the unincorporated 9 area, representing at least one-half of the county’s 10 population. Instead, the bill allows individual cities or the 11 county for the unincorporated area within a qualified county 12 to approve a motion for an election on the local sales and 13 services tax to be held in only that jurisdiction. 14 The bill specifies that except for purposes of allocating 15 local sales and services tax receipts based on the county in 16 which the tax was collected, a city shall be deemed to be 17 located in a qualified county if a majority of the population 18 of the city, according to the 2010 federal decennial census, 19 resides in the qualified county. 20 The bill provides that in a qualified county a city or the 21 board of supervisors for the unincorporated area of a county 22 may repeal the local sales and services tax in the city upon 23 adoption of its own motion for repeal. 24 For those counties that are not qualified counties, the 25 methods of seeking presentment of the local option sales and 26 services tax to the voters and the methods for repealing such 27 a tax remain the same as required under current Code chapter 28 423B. 29 The bill provides that each city or county for which the 30 imposition of the local sales and services tax was approved at 31 election on or after the effective date of the bill shall use 32 not less than 50 percent of the moneys received for property 33 tax relief. 34 The bill strikes special provisions related to the approval 35 -15- LSB 1760HV (1) 87 md/sc 15/ 16

H.F. 655 and imposition of a local sales and services tax in a city that 1 is located in two or more contiguous counties. 2 The bill provides that a local sales and services tax is 3 not applicable to transactions of a retailer holding a retail 4 sales tax permit at a place of business if the retailer’s place 5 of business is located in part within a city or unincorporated 6 area of the county where the tax is not imposed. 7 Current Code chapter 423B authorizes the imposition of a 8 local sales and services tax at a rate of not more than 1 9 percent. The bill requires a local sales and services tax, if 10 imposed, to be 1 percent. 11 The bill provides that the imposition of local option 12 taxes in effect on the effective date of the bill shall not 13 be affected by the bill, and such taxes shall continue to 14 be imposed until their repeal pursuant to Code chapter 423B. 15 The law in effect regarding repeal at the time of the repeal 16 governs the repeal of the local option taxes. 17 -16- LSB 1760HV (1) 87 md/sc 16/ 16