House Study Bill 62 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON KAUFMANN) A BILL FOR An Act relating to city finances by amending the definition of 1 essential corporate purpose and provisions relating to the 2 issuance of general obligation bonds. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1060YC (2) 90 md/jh

H.F. _____ Section 1. Section 384.24, subsection 3, paragraph c, Code 1 2023, is amended to read as follows: 2 c. The construction, reconstruction, and repair of 3 sidewalks , trails, and pedestrian underpasses and overpasses, 4 and the acquisition of real estate needed for such purposes. 5 Sec. 2. Section 384.24, subsection 3, Code 2023, is amended 6 by adding the following new paragraphs: 7 NEW PARAGRAPH . y. The acquisition, construction, 8 reconstruction, improvement, repair, and equipping of a public 9 safety or emergency services facility. 10 NEW PARAGRAPH . z. The rehabilitation, reconstruction, 11 improvement, enlargement, repair, and equipping of any building 12 or facility for which the issuance of bonds for the original 13 construction of the building or facility, or a portion thereof, 14 was previously approved at election under section 384.26 or 15 which were issued following a notice under section 384.26, 16 subsection 5, for which no timely petition was filed. 17 Sec. 3. Section 384.24, subsection 4, paragraph c, Code 18 2023, is amended to read as follows: 19 c. The acquisition, construction, reconstruction, 20 enlargement, improvement, and equipping of city halls, jails, 21 police stations, fire stations, garages, libraries, and 22 hospitals, including buildings to be used for any combination 23 of the foregoing purposes, and the acquisition of real estate 24 therefor , other than those which are essential corporate 25 purposes . 26 Sec. 4. Section 384.26, subsection 5, paragraph a, Code 27 2023, is amended to read as follows: 28 a. Notwithstanding the provisions of subsection 2 , a council 29 may, in lieu of calling an election, institute proceedings 30 for the issuance of bonds for a general corporate purpose by 31 causing a notice of the proposal to issue the bonds, including 32 a statement of the amount and purpose of the bonds, together 33 with the maximum rate of interest which the bonds are to bear, 34 and the right to petition for an election, to be published at 35 -1- LSB 1060YC (2) 90 md/jh 1/ 4

H.F. _____ least once in a newspaper of general circulation within the 1 city at least ten days prior to the meeting at which it is 2 proposed to take action for the issuance of the bonds subject 3 to the following population-based limitations , adjusted and 4 published annually in January by the department of management 5 by applying the percentage change in the consumer price 6 index for all urban consumers for the most recent available 7 twelve-month period published in the federal register by the 8 United States department of labor, bureau of labor statistics : 9 (1) In cities having a population of five thousand or less, 10 in an amount of not more than four eight hundred thousand 11 dollars. 12 (2) In cities having a population of more than five thousand 13 and not more than seventy-five thousand, in an amount of not 14 more than seven one million four hundred thousand dollars. 15 (3) In cities having a population in excess of seventy-five 16 thousand, in an amount of not more than one two million 17 dollars. 18 Sec. 5. Section 384.26, subsection 5, Code 2023, is amended 19 by adding the following new paragraph: 20 NEW PARAGRAPH . 0b. Each city’s population used to determine 21 the limitations of paragraph “a” shall be determined using the 22 most recent population estimate produced by the United States 23 census bureau. 24 EXPLANATION 25 The inclusion of this explanation does not constitute agreement with 26 the explanation’s substance by the members of the general assembly. 27 This bill relates to city finances by amending the 28 definition of “essential corporate purpose” and provisions 29 relating to the issuance of general obligation bonds. 30 Under Code chapter 384, a city may generally contract 31 indebtedness and approve the issuance of general obligation 32 bonds to carry out an essential corporate purpose without voter 33 approval, while the issuance of general obligation bonds to 34 carry out a general corporate purpose generally requires voter 35 -2- LSB 1060YC (2) 90 md/jh 2/ 4

H.F. _____ approval. 1 The definition of “essential corporate purpose” includes, 2 in part, the construction, reconstruction, and repair of 3 sidewalks and pedestrian underpasses and overpasses, and the 4 acquisition of real estate needed for such purposes. The 5 bill adds the construction, reconstruction, and repair of 6 trails and the acquisition of real estate needed for such 7 purposes to that portion of the definition. The bill also 8 adds the following to the definition of “essential corporate 9 purpose”: (1) the acquisition, construction, reconstruction, 10 improvement, repair, and equipping of a public safety or 11 emergency services facility; and (2) the rehabilitation, 12 reconstruction, improvement, enlargement, repair, and equipping 13 of any building or facility for which the issuance of bonds 14 for the original construction of the building or facility, or 15 a portion thereof, was previously approved at election or if 16 a petition for an election was not filed after notice of the 17 proposed bond issuance was published. 18 If a city proposes to carry out a general corporate purpose 19 using funds from the issuance of general obligation bonds, 20 generally the issuance of such bonds must first be approved at 21 election. Current law establishes an exception by providing 22 that a city, in lieu of calling an election, may institute 23 proceedings for the issuance of bonds for a general municipal 24 purpose by notice and publication of the proposal to issue 25 the bonds that includes a notice of the right to petition for 26 an election, subject to the following bond amount and city 27 population limitations: (1) in cities having a population 28 of 5,000 or less, in an amount of not more than $400,000; 29 (2) in cities having a population of over 5,000 and not over 30 75,000, in an amount of not more than $700,000; and (3) in 31 cities having a population of over 75,000, in an amount of 32 not more than $1 million. However, if at any time before the 33 date fixed for taking action for the issuance of the bonds, a 34 valid petition is filed asking that the question of issuing the 35 -3- LSB 1060YC (2) 90 md/jh 3/ 4

H.F. _____ bonds be submitted to the registered voters of the city, the 1 city council shall either by resolution declare the proposal 2 to issue the bonds to have been abandoned or shall direct the 3 county commissioner of elections to call a special election 4 upon the question of issuing the bonds. 5 The bill increases the bond amount limitations for each of 6 the city population categories to the following amounts: (1) 7 in counties having a population of 5,000 or less, in an amount 8 of not more than $800,000; (2) in cities having a population 9 of over 5,000 and not over 75,000, in an amount of not more 10 than $1,400,000; and (3) in cities having a population of over 11 75,000, in an amount of not more than $2 million. In addition, 12 the bill provides for such bond amount limitations to be 13 adjusted and published annually by the department of management 14 based on a specified consumer price index and requires each 15 city’s population to be determined based on the most recent 16 population estimate produced by the United States census 17 bureau. 18 -4- LSB 1060YC (2) 90 md/jh 4/ 4