HSB 714 (LSB 6193YC (3) 89)

HOUSE FILE _____ 

BY  (PROPOSED COMMITTEE ON LOCAL GOVERNMENT BILL BY CHAIRPERSON BLOOMINGDALE)

A BILL FOR

An Act relating to county and city finances by amending provisions relating to the issuance of bonds and authorizing counties to establish and levy for a capital improvement reserve fund.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  331.430A  Capital improvements reserve fund.
   1.  A county may establish a capital improvements reserve fund, and may certify taxes not to exceed sixty-seven and one-half cents per thousand dollars of taxable value each year to be levied for the fund for the purpose of accumulating moneys for the financing of specified capital improvements, or carrying out a specific capital improvement plan.
   2.  The question of the establishment of a capital improvements reserve fund, the time period during which a levy will be made for the fund, and the tax rate to be levied for the fund is subject to approval by the voters, and may be submitted at any general election upon the board’s motion, or shall be submitted at the next general election upon receipt of a valid petition as provided in section 331.306.
   3.  If a continuing capital improvements levy is established by election, such levy may be terminated in the same manner, upon the board’s motion or upon petition. Balances in a capital improvements reserve fund are not unencumbered or unappropriated funds for the purpose of reducing tax levies. Transfers may be made between the capital improvements reserve fund, construction funds, and the general fund, as provided in rules promulgated by the committee.
    Sec. 2.  Section 331.442, subsection 2, paragraph a, Code 2022, is amended to read as follows:
   a.  The board shall publish notice of the proposal to issue the bonds, including a statement of the amount and purpose of the bonds and a statement of the estimated cost of the project for which the bonds are to be issued. The notice shall be published as provided in section 331.305 with the minutes of the meeting at which the board adopts a resolution to call a county special election to vote upon the question of issuing the bonds. The cost of the project, as published in the notice pursuant to this paragraph, is an estimate and is not intended to be binding on the board in later proceedings related to the project.
    Sec. 3.  Section 331.442, subsection 5, paragraph a, subparagraphs (1), (2), and (3), Code 2022, are amended to read as follows:
   (1)  In counties having a population of twenty thousand or less, in an amount of not more than one four hundred thousand dollars.
   (2)  In counties having a population of over twenty thousand and not over fifty thousand, in an amount of not more than two seven hundred thousand dollars.
   (3)  In counties having a population of over fifty thousand, in an amount of not more than three hundred thousand one million dollars.
    Sec. 4.  Section 331.443, subsection 3, paragraph a, Code 2022, is amended to read as follows:
   a.  Notwithstanding subsection 2, a board may institute proceedings for the issuance of bonds for an essential county purpose specified in section 331.441, subsection 2, paragraph “b”, subparagraph (18) or (19), in an amount equal to or greater than three five million dollars by causing a notice of the proposal to issue the bonds, including a statement of the amount and purpose of the bonds, together with the maximum rate of interest which the bonds are to bear, and the right to petition for an election, to be published at least once in a newspaper of general circulation within the county at least ten days prior to the meeting at which it is proposed to take action for the issuance of the bonds.
    Sec. 5.  Section 384.25, subsection 3, paragraph a, Code 2022, is amended to read as follows:
   a.  Notwithstanding subsection 2, a council may institute proceedings for the issuance of bonds for an essential corporate purpose specified in section 384.24, subsection 3, paragraph “w” or “x”, in an amount equal to or greater than three five million dollars by causing a notice of the proposal to issue the bonds, including a statement of the amount and purpose of the bonds, together with the maximum rate of interest which the bonds are to bear, and the right to petition for an election, to be published at least once in a newspaper of general circulation within the city at least ten days prior to the meeting at which it is proposed to take action for the issuance of the bonds.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to county and city finances by amending provisions relating to the issuance of bonds and authorizing counties to establish and levy for a capital improvement reserve fund.
   The bill authorizes a county to establish a capital improvements reserve fund, and may certify taxes not to exceed 67.5 cents per $1,000 of taxable value each year to be levied for the fund for the purpose of accumulating moneys for the financing of specified capital improvements, or carrying out a specific capital improvement plan. The authorization of the fund and levy are similar to those authorized for cities under Code section 384.7. The question of the establishment of a capital improvements reserve fund, the time period during which a levy will be made for the fund, and the tax rate to be levied for the fund is subject to approval by the voters, and may be submitted at any general election upon the board’s motion, or shall be submitted at the next general election upon receipt of a valid petition. Termination of the levy is done in the same manner as the authorization.
   When a county proposes to issue general county purpose bonds, Code section 331.442(2) requires the board of supervisors to publish a notice of the proposal to issue the bonds, including a statement of the amount and purpose of the bonds and a statement of the estimated cost of the project for which the bonds are to be issued. The bill strikes the requirement that the notice include a statement of the estimated cost of the project for which the bonds are to be issued. 
   If a county proposes to carry out a general county purpose using funds from the issuance of general obligation bonds, generally the issuance of such bonds must first be approved by the registered voters of the county. Current law establishes an exception by providing that a county, in lieu of calling an election, may institute proceedings for the issuance of bonds for a general county purpose by notice and publication of the proposal to issue the bonds that includes a notice of the right to petition for an election, subject to the following bond amount and county population limitations: (1) in counties having a population of 20,000 or less, in an amount of not more than $100,000; (2) in counties having a population of over 20,000 and not over 50,000, in an amount of not more than $200,000; and (3) in counties having a population of over 50,000, in an amount of not more than $300,000. However, if at any time before the date fixed for taking action for the issuance of the bonds, a valid petition is filed with the county auditor asking that the question of issuing the bonds be submitted to the registered voters of the county, the board of supervisors shall either by resolution declare the proposal to issue the bonds to have been abandoned or shall direct the county commissioner of elections to call a special election upon the question of issuing the bonds.
   The bill increases the bond amount limitations for each of the county population categories to the following amounts: (1) in counties having a population of 20,000 or less, in an amount of not more than $400,000; (2) in counties having a population of over 20,000 and not over 50,000, in an amount of not more than $700,000; and (3) in counties having a population of over 50,000, in an amount of not more than $1 million.
   The bill amends the provisions governing the issuance of essential county purpose bonds and essential corporate purpose bonds for purposes relating to the remediation, restoration, repair, cleanup, replacement, and improvement of property, buildings, equipment, and public facilities that have been damaged by a disaster and that are located in a specified disaster area. The bill increases the minimum threshold amount of bonds for such purposes from $3 million to $5 million.