SSB 1181 (LSB 2818XC (3) 91)

SENATE FILE _____ 

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

A BILL FOR

An Act prohibiting franchise fees imposed by cities and counties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 331.301, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  26.  Beginning on July 1, 2025, a county shall not assess or collect a franchise fee.
    Sec. 2.  Section 364.2, subsection 4, paragraph f, subparagraph (1), subparagraph division (a), Code 2025, is amended to read as follows:
   (a)  A franchise fee assessed by a city may be based upon a percentage of gross revenues generated from sales of the franchisee within the city not to exceed five percent except as provided in subparagraph division (b), without regard to the city’s cost of inspecting, supervising, and otherwise regulating the franchise.  Beginning on July 1, 2025, a city shall not assess a franchise fee related to any franchise granted by the city.
    Sec. 3.  Section 480A.6, Code 2025, is amended to read as follows:
   480A.6  Franchise ordinance not superseded.
   This chapter does not modify or supersede the rights and obligations of a local government and the public utility established by the terms of any existing or future franchise granted, approved, and accepted pursuant to section 364.2, subsection 4. A For fiscal years beginning before July 1, 2025, a city which collects a city franchise fee from an entity pursuant to section 364.2, subsection 4, under an existing or future franchise, shall not also collect a fee from that entity under section 480A.3.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Currently, a city may grant a franchise to erect and maintain essential city services described in Code section 364.2(4)(a), and may impose a franchise fee upon the gross sales amount of such services not to exceed 5 percent. In cities with a population exceeding 200,000, the franchise fee allowed to be imposed shall not exceed 7 percent of the gross sales amount. This bill eliminates a city’s ability to impose any franchise fees beginning July 1, 2025.
   The bill also prohibits a county from imposing or collecting a franchise fee beginning July 1, 2025.