SSB 1184 (LSB 2574XC (2) 88)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON FEENSTRA)

A BILL FOR

An Act relating to the procedure for disposal of city utilities by sale.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 388.2A, subsection 2, paragraph a, Code 2019, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (3)  The governing body of a city in which the city utility is located which has a population of less than six thousand shall not be required to obtain appraisals pursuant to this paragraph.
    Sec. 2.  Section 388.2A, subsection 2, paragraph b, Code 2019, is amended to read as follows:
   b.  After considering the appraisals obtained pursuant to paragraph “a”, or upon receiving the proposal to dispose of the city utility by sale if the appraisals were not required as provided in paragraph “a”, subparagraph (3), the governing body shall establish the city utility’s fair market value. The fair market value shall be the greater of any of the following:
   (1)  The average of the two appraisals obtained pursuant to paragraph “a”, if such appraisals were required.
   (2)  The depreciated value of the capital assets to be sold.
   (3)  The amount necessary to retire all of the city’s outstanding revenue and general obligations issued for purposes of the city utility.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Current law establishes a procedure for the governing body of a city to dispose of a city utility by sale. The procedure requires the governing body to obtain two separate appraisals of the city utility system to determine its fair market value. This bill provides that a governing body of a city in which the city utility is located with a population of less than 6,000 shall not be required to obtain the appraisals to dispose of the city utility by sale. As provided in current law, the fair market value of a city utility located in a city with a population of less than 6,000 shall be the greater of the depreciated value of the capital assets to be sold, or the amount necessary to retire all of the city’s outstanding revenue and general obligations issued for purposes of the city utility.