HF 172 (LSB 1238YH (2) 91)

HOUSE FILE 172

BY  CROKEN

A BILL FOR

An Act allowing cities to certify taxes for general fund levy for various purposes upon approval of the voters at an election.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 37.8, Code 2025, is amended to read as follows:
   37.8  Cost of development, operation, and maintenance.
   For the development, operation, and maintenance of a building or monument constructed, purchased, or donated under this chapter, a city may utilize taxes levied under section 384.1 or section 384.12, subsection 7.
    Sec. 2.  Section 384.12, Code 2025, is amended by adding the following new subsections:
   NEW SUBSECTION.  6.  A tax not to exceed thirteen and one-half cents per thousand dollars of assessed value for the support of instrumental or vocal musical groups, one or more organizations which have tax-exempt status under section 501(c)(3) of the Internal Revenue Code and are organized and operated exclusively for artistic and cultural purposes, or any of these purposes. Certification of this tax is subject to subsection 16.
   NEW SUBSECTION.  7.  A tax not to exceed eighty-one cents per thousand dollars of assessed value for development, operation, and maintenance of a memorial building or monument. Certification of this tax is subject to subsection 16.
   NEW SUBSECTION.  8.  A tax not to exceed thirteen and one-half cents per thousand dollars of assessed value for support of a symphony orchestra. Certification of this tax is subject to subsection 16.
   NEW SUBSECTION.  9.  A tax not to exceed twenty-seven cents per thousand dollars of assessed value for the operation of cultural and scientific facilities. Certification of this tax is subject to subsection 16, except that the question may be submitted on the council’s own motion.
   NEW SUBSECTION.  10.  A tax to aid in the construction of a county bridge. Certification of this tax is subject to subsection 17, except that, in addition to other requirements, the notice of special election must include the location of the proposed bridge.
   NEW SUBSECTION.  11.  a.  A tax to aid a company incorporated under the laws of this state in the construction of a highway or combination bridge across any navigable boundary river of this state, commencing or terminating in the city and suitable for use as highway, or for both highway and railway purposes.
   b.  Tax moneys received for this purpose may not be paid over by the county treasurer until the city has filed a statement that the corporation has complied with all conditions.
   c.  The levy is limited to one dollar and thirty-five cents per thousand dollars of the assessed value of taxable property in the city.
   d.  The estimated cost of the bridge must be at least ten thousand dollars, and the city aid may not exceed one-half of the estimated cost.
   e.  Certification of this tax is subject to subsection 17, except that the notice of the special election shall include the name of the corporation to be aided, and all conditions required of the corporation.
   NEW SUBSECTION.  12.  If a tax has been voted for aid of a bridge under subsection 11, a further tax may be voted for the purpose of purchasing the bridge. Certification of this further tax is subject to subsection 16. The levy under this subsection is limited to three dollars and thirty-seven and one-half cents per thousand dollars of the assessed value of the taxable property in the city, payable in not less than ten annual installments.
   NEW SUBSECTION.  13.  A tax for aid to a public transportation company. Certification of this tax is subject to subsection 17. The levy is limited to three and three-eighths cents per thousand dollars of assessed value. In addition to any other conditions, the following requirements must be met before moneys received for this purpose may be paid over by the county treasurer:
   a.  The public transportation company shall provide the city with copies of state and federal income tax returns for the five years preceding the year for which payment is contemplated or for such lesser period of time as the company has been in operation.
   b.  The city shall, in any given year, be authorized to pay over only such sums as will yield not to exceed two percent of the public transportation company’s investment as the same is valued in its tax depreciation schedule, provided that corporate profits and losses for the five preceding years or for such lesser period of time as the company has been in operation shall not average in excess of a two percent net return. Taxes levied under this subsection may not be used to subsidize losses incurred prior to the election required by this subsection.
   NEW SUBSECTION.  14.  A tax not to exceed twenty and one-half cents per thousand dollars of assessed value each year to maintain an institution received by gift or devise. Certification of this tax is subject to subsection 16.
   NEW SUBSECTION.  15.  A tax not to exceed twenty-seven cents per thousand dollars of assessed value for support of a public library. Certification of this tax is subject to subsection 16, except that if a majority of voters approve the levy pursuant to subsection 16, paragraph “b”, it shall be imposed.
   NEW SUBSECTION.  16.  A tax to be certified under subsection 6, 7, 8, 9, 12, or 14 shall be subject to all of the following:
   a.  Upon receipt of a valid petition pursuant to section 362.4, the council shall submit to the voters at the next regular city election the question of whether a tax shall be levied.
   b.  If a majority of voters approve the levy, it may be imposed.
   c.  The levy can be eliminated by the same procedure of petition and election.
   d.  A tax authorized by an election held prior to the effective date of the city code may be continued until eliminated by the council, or by petition and election.
   NEW SUBSECTION.  17.  A tax to be certified under subsection 10, 11, or 13 shall be subject to the requirements of subsection 16 and all of the following:
   a.  The question of whether to adopt the tax shall be submitted at a special election.
   b.  The expense of a special election shall be paid by the county.
   c.  The notice of the special election shall include full details of the proposal, including the rate of tax to be levied and all other conditions.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   2023 Iowa Acts, chapter 71 (HF 718), amended Code section 384.12 (additional taxes) to eliminate several taxes a city may levy subject to voter approval at an election. In lieu thereof, HF 718 enacted Code section 384.1(3)(b)(2), which allows cities to levy the same amounts the eliminated taxes could have levied as a part of the cities’ general fund levy. This bill recodifies the tax levies eliminated by HF 718 and allows such taxes to be levied, subject to the same voter approval and notice requirements that existed prior to the enactment of HF 718 and at the same rates as prior to the enactment of HF 718, in addition to the increased amounts allowed by Code section 384.1(3)(b)(2).
   The permissible levies the bill recodifies relate to taxes for the support of instrumental or vocal musical groups or one or more organizations which have tax-exempt status under section 501(c)(3) of the Internal Revenue Code and are organized and operated exclusively for artistic and cultural purposes; the development, operation, and maintenance of a memorial building or monument; the support of a symphony orchestra; the operation of cultural and scientific facilities; the aid in the construction of a county bridge; the aid for a company incorporated under the laws of Iowa in the construction of certain highways or combination bridge across any navigable boundary river of Iowa; the purchase of certain bridges across navigable boundary rivers of Iowa; the aid to a public transportation company; the maintenance of an institution received by gift or devise; and the support of a public library. The bill establishes the maximum rate a city may levy for each tax.