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House File 213 - IntroducedA Bill ForAn Act 1relating to local government revenues by authorizing
2cities or counties to impose a local entertainment
3surcharge, and making an appropriation.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 423H.1 Definitions.
2As used in this chapter, unless the context otherwise
3requires:
41. “Alcoholic beverage” means the same as defined in section
5123.3.
62. “Cultural or entertainment establishment” means a sporting
7or concert event venue, performing arts theater, movie theater,
8museum, convention hall, or enclosed shopping mall.
93. “Department” means the department of revenue.
104. “Director” means the director of the department of
11revenue.
125. “District” means either of the following:
13a. An area within a municipality that is established as a
14local entertainment district pursuant to section 423H.2.
15b. An area within two or more municipalities pursuant to
16an agreement under chapter 28E that is established as a local
17entertainment district pursuant to section 423H.2.
186. “Entertainment tickets” means all tickets or admissions
19subject to taxation pursuant to section 423.2, subsection 3.
207. “Food” means the same as defined in section 137F.1.
218. “Food establishment” means a “food establishment” licensed
22pursuant to chapter 137F, at which food is served or sold at
23retail. “Food establishment” also includes a “temporary food
24establishment” defined in chapter 137F.1.
259. “Governing body” means the county board of supervisors,
26city council, or other body in which the legislative powers of
27the municipality are vested.
2810. “Licensed premises” means the same as defined in section
29123.3.
3011. “Liquor establishment” means a licensed premises in or
31at which alcoholic beverages are sold at retail.
3212. “Lodging” means the same as defined in section 423A.2.
33“Lodging” does not include lodging exempted from tax pursuant
34to section 423A.5.
3513. “Municipality” means any of the following:
-1- 1a. A county.
2b. An incorporated city.
3c. A joint board or other legal entity established or
4designated in an agreement between two or more contiguous
5municipalities identified in paragraph “a” or “b” pursuant to
6chapter 28E.
714. “Retail sale” means the same as defined in section
8423.1.
915. “Surcharge” means a local entertainment surcharge
10imposed pursuant to this chapter.
11 Sec. 2. NEW SECTION. 423H.2 Local entertainment district
12establishment — approval.
13A municipality may establish a district for purposes of
14imposing a surcharge. To be established as a district, a
15proposed district shall meet the following requirements:
161. The combined attendance at cultural or entertainment
17establishments, food establishments, and liquor establishments
18within the proposed district exceeded five hundred thousand
19persons during the previous calendar year, or the attendance
20forecast at such establishments is reasonably expected to
21exceed five hundred thousand persons per calendar year within
22two years of the establishment of the district.
232. The proposed district consists of contiguous parcels and
24does not exceed seventy-five acres in total.
253. For a municipality that is a city, the proposed district
26does not include the entire incorporated area of the city.
274. The proposed district is not located in whole or in part
28within another district established under this chapter.
29 Sec. 3. NEW SECTION. 423H.3 Local entertainment surcharge
30— approval.
311. Prior to adopting the ordinance or resolution under
32subsection 2, a proposed district plan shall be developed by
33the governing body of the municipality. The proposed district
34plan shall state the governing body’s intent to establish a
35district and a legal description of the real estate forming the
-2-1boundaries of the area to be included in the proposed district
2along with a map depicting the existing parcels of real estate
3located in the proposed district.
42. After developing a proposed district plan and stating
5the governing body’s intent to establish such a district under
6subsection 1, the governing body of a municipality may impose a
7surcharge pursuant to this chapter by adopting an ordinance, or
8in the case of a municipality under section 423H.1, subsection
913, paragraph “c”, a resolution. The surcharge shall be imposed
10at a rate not to exceed three percent upon the following within
11the district:
12a. The retail sales price of food or alcoholic beverages
13sold at a cultural or entertainment establishment, food
14establishment, or liquor establishment.
15b. The sales price of all sales of entertainment tickets
16sold at a cultural or entertainment establishment.
17c. The sales price for the renting of any lodging.
183. The surcharge shall be in addition to the state sales
19tax imposed pursuant to chapter 423, subchapter II, the
20state-imposed and locally imposed hotel and motel tax pursuant
21to chapter 423A, and the local sales and services tax imposed
22pursuant to chapter 423B.
234. a. Within ten days of the passage of an ordinance
24or resolution imposing a surcharge, the county auditor of
25the county with the largest parcel in the district shall
26give written notice to the director by sending a copy of the
27district plan to the director.
28b. A surcharge shall be imposed either January 1 or July
291 following the notification of the director but not sooner
30than ninety days following the passage of the ordinance or
31resolution imposing the surcharge and not sooner than sixty
32days following notice to sellers, as defined in section 423.1.
33c. (1) A surcharge shall be repealed only on June 30 or
34December 31 but not sooner than ninety days following repeal of
35the ordinance or resolution. At least forty days before the
-3-1repeal of the surcharge, a municipality shall provide notice of
2the action by certified mail to the director of revenue.
3(2) The terms of any chapter 28E agreement shall govern the
4repeal of the surcharge in the case of a municipality under
5section 423H.1, subsection 13, paragraph “c”.
65. a. (1) If within thirty days after adoption of the
7ordinance that imposes a surcharge, or if after the ordinance
8has been in effect for one year, the board of supervisors of a
9municipality receives a valid petition as provided in section
10331.306 requesting that the question of whether to repeal
11the ordinance be submitted to the registered voters of the
12unincorporated area of the county, the board shall direct the
13county commissioner of elections to submit to the voters at an
14election held on a date specified in section 39.2, subsection
154, paragraph “a”, the question of whether the ordinance that
16imposes the surcharge shall be repealed.
17(2) If within thirty days after adoption of the ordinance
18that imposes a surcharge, or if after the ordinance has been
19in effect for one year, the city council of a municipality
20receives a valid petition as provided in section 362.4
21requesting that the question of whether to repeal the ordinance
22be submitted to the registered voters of the city, the city
23council shall direct the county commissioner of elections to
24submit to the voters at an election held on a date specified
25in section 39.2, subsection 4, paragraph “b”, the question
26of whether the ordinance that imposes the surcharge shall be
27repealed.
28(3) For a municipality under section 423H.1, subsection 13,
29paragraph “c”, the terms of any chapter 28E agreement shall
30govern the repeal of the surcharge, but shall, at a minimum,
31allow for a petition under section 331.306 or 362.4 requesting
32that a question to repeal the resolution be submitted to the
33voters after the resolution has been in effect for one year.
34b. If a majority of the total votes cast for and against the
35proposition favors repeal of the surcharge, or in the case of
-4-1a municipality under section 423H.1, subsection 13, paragraph
2“c”, a majority of at least one of the municipalities favors
3repeal, the ordinance or resolution shall be repealed, and
4collection of the surcharge shall terminate on either June 30
5or December 31 following the election, whichever is sooner.
6 Sec. 4. NEW SECTION. 423H.4 Administration.
71. The director shall administer the surcharge imposed
8pursuant to this chapter as nearly as possible in conjunction
9with the administration of state sales tax laws. The director
10shall provide appropriate forms, or provide space on the
11regular state tax forms, for reporting surcharge liability.
122. a. Section 422.25, subsection 4, sections 422.30,
13422.67, and 422.68, section 422.69, subsection 1, sections
14422.70, 422.71, 422.72, 422.74, and 422.75, section 423.14,
15subsection 1, and sections 423.23, 423.24, 423.25, 423.31,
16423.33, 423.35, 423.37 through 423.42, and 423.47, consistent
17with the provisions of this chapter, apply with respect to the
18surcharge authorized under this chapter, in the same manner and
19with the same effect as retail sales taxes within the meaning
20of those statutes. The director may require all persons
21who are engaged in the business of deriving any sales price
22subject to a surcharge under this chapter to register with
23the department. All surcharges collected under this chapter
24are deemed to be held in trust for the state of Iowa and the
25local jurisdictions imposing the surcharges. Local officials
26shall confer with the director of revenue for assistance in
27drafting the ordinance or resolution imposing the surcharge. A
28certified copy of the ordinance or resolution shall be filed
29with the director as soon as possible after passage.
30b. Frequency of deposits and quarterly reports of the
31surcharge with the department of revenue are governed by the
32provisions in section 423.31. Local surcharge collections
33shall not be included in computation of the total tax to
34determine frequency of filing under section 423.31.
35c. The director shall apply a boundary change of a city
-5-1imposing or collecting the surcharge to the imposition or
2collection of that surcharge only on the first day of a
3calendar quarter which occurs sixty days or more after the
4director has given notice of the boundary change to sellers.
53. a. The director, in consultation with local officials,
6shall collect and account for the surcharge. The director
7shall certify each quarter the amount of the surcharge
8receipts and any interest and penalties to be credited to
9the municipality account in the state surcharge revenue fund
10established in section 423H.5. Local authorities shall not
11require any permit not required by the director of revenue.
12b. All surcharge revenues and interest and penalties
13received or refunded one hundred eighty days or more after the
14date on which the municipality repeals the surcharge, shall be
15deposited in or withdrawn from the general fund of the state.
164. Each municipality that has established a district
17under this chapter shall assist the department in identifying
18new establishments required to impose the surcharge in the
19district. This process shall be ongoing until the surcharge
20is repealed.
21 Sec. 5. NEW SECTION. 423H.5 State surcharge revenue fund.
221. A state surcharge revenue fund is established in the
23state treasury under the control of the department consisting
24of the surcharge revenues collected within each district and
25deposited in the fund pursuant to section 423H.4. Revenues
26deposited in the fund are appropriated to the department for
27the purposes of this section.
282. A district account is created within the fund for each
29municipality creating a district under this chapter.
303. The department shall deposit the revenues described in
31subsection 1 that were collected in a quarter beginning on or
32after the district’s commencement date into the appropriate
33district account in the fund.
344. All revenues in each district account within the
35fund shall be remitted quarterly by the department to the
-6-1municipality that established the district for deposit in
2the general fund of the municipality. In the case of a
3municipality described in section 423H.1, subsection 13,
4paragraph “c”, revenues shall be remitted to the municipalities
5that are parties to the chapter 28E agreement in such
6proportions as described in the chapter 28E agreement.
7 Sec. 6. NEW SECTION. 423H.6 Payment to municipality — use
8of revenues.
91. Upon the remittance of the revenues from the state
10revenue surcharge fund to the municipality under section
11423H.5, subsection 4, the revenues shall be deposited into the
12general fund of the municipality.
132. Surcharge revenues deposited into the general fund of the
14municipality shall be used as follows, as applicable:
15a. For deposit into the debt service fund in section 331.430
16or 384.4.
17b. For deposit into the emergency services fund in section
18331.424C or emergency fund in section 384.8.
19c. For deposit into the capital improvements fund in section
20384.7.
21d. For the purposes described in section 384.3A, subsection
223, paragraph “b”, “c”, “e”, “f”, or “g”.
23 Sec. 7. NEW SECTION. 423H.7 Rules.
24The department shall adopt rules pursuant to chapter 17A to
25administer this chapter.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
29This bill relates to local government revenues by
30authorizing cities or counties to impose a local entertainment
31surcharge, and makes an appropriation.
32The bill authorizes a city, county, or an area within two or
33more municipalities pursuant to a Code chapter 28E agreement
34(municipality) to establish a local entertainment district
35(district) by ordinance or, in the case of a Code chapter 28E
-7-1agreement by resolution, for the purpose of imposing a local
2entertainment surcharge (surcharge). Under the bill, to be
3established as a district, the proposed area shall meet all
4of the following requirements: the combined attendance at
5cultural or entertainment establishments, food establishments,
6and liquor establishments within the proposed district exceeded
7500,000 persons during the previous calendar year, or the
8expected attendance forecast at such establishments is expected
9to exceed 500,000 persons per calendar year within two years;
10the proposed area consists of contiguous parcels and does not
11exceed 75 acres; the proposed area does not include the entire
12incorporated area of the city; and the proposed area is not
13located in whole or in part within another district.
14The bill defines “cultural or entertainment establishment”
15to mean a sporting or concert event venue, performing arts
16theater, movie theater, museum, convention hall, or enclosed
17shopping mall. The bill defines “food establishment” to mean a
18“food establishment” licensed pursuant to Code chapter 137F, at
19which food is served or sold at retail. “Food establishment”
20also includes a “temporary food establishment” defined in Code
21section 137F.1. The bill defines “liquor establishment” to
22mean a licensed premises in or at which alcoholic beverages are
23sold at retail.
24If the governing body of a municipality imposes a surcharge
25pursuant to the bill, the surcharge shall be at a rate not to
26exceed 3 percent, which shall be imposed upon the following
27within the district: the retail sales price of food or
28alcoholic beverages sold at a cultural or entertainment
29establishment, food establishment, or liquor establishment; the
30sales price of all sales of entertainment tickets sold at a
31cultural or entertainment establishment; or the sales price for
32the renting of any lodging.
33The bill defines “entertainment tickets” to mean all tickets
34or admissions subject to taxation pursuant to Code section
35423.2(3). The bill defines “lodging” to mean the same as
-8-1defined in Code section 432A.2. However, “lodging” does not
2include lodging exempted from tax pursuant to Code section
3423A.5.
4The bill specifies that the surcharge shall be in addition
5to the state sales tax imposed pursuant to Code chapter 423,
6subchapter II, the state-imposed and locally imposed hotel and
7motel tax pursuant to Code chapter 423A, or the local sales and
8services tax imposed pursuant to Code chapter 423B.
9The bill establishes a process to adopt or repeal the
10surcharge. A surcharge shall be imposed either on January 1
11or July 1 following notification of the director of revenue
12but not sooner than 90 days following the passage of the
13ordinance or resolution imposing the rate of the surcharge and
14not sooner than 60 days following notice to the sellers in the
15local entertainment district. For a surcharge adopted by a
16resolution, the Code chapter 28E agreement shall govern the
17repeal of the surcharge. A surcharge adopted by resolution
18and governed by a Code chapter 28E agreement may be repealed
19upon the majority vote of persons in one of the municipalities
20after the resolution has been in effect for one year. For a
21surcharge adopted by ordinance, a surcharge shall be repealed
22only on June 30 or December 31 but no sooner than 90 days
23following the repeal of the ordinance. A surcharge adopted by
24ordinance may also be repealed by petition upon the majority
25vote of persons in the municipality beginning 30 days after
26adoption of the ordinance.
27The bill specifies the director of the department of
28revenue shall administer the surcharge as nearly as possible
29in conjunction with the administration of the state sales tax.
30The bill specifies that numerous administrative and enforcement
31laws relating to the sales tax apply to surcharges imposed
32under the bill. The bill requires each municipality to assist
33the department in identifying new establishments required to
34impose the surcharge in the district.
35The bill creates a state surcharge revenue fund in the
-9-1state treasury under the control of the department of revenue
2consisting of surcharge revenues collected within each
3local entertainment district. The bill creates a local
4entertainment district account for each municipality creating a
5district. The bill requires the revenues be deposited into the
6appropriate district account.
7All revenues in each district account within the state
8surcharge revenue fund shall be remitted quarterly by
9the department to the municipality or municipalities that
10established the district for deposit in the general fund of
11the municipality. Surcharge revenues deposited into the
12general fund of the municipality shall be deposited in the
13following funds, as applicable: the debt service fund in
14Code section 331.430 or 384.4, the emergency services fund in
15Code section 331.424C or the emergency fund in Code section
16384.8, or the capital improvements fund in Code section 384.7.
17If the surcharge revenues are not deposited in any of the
18above-mentioned funds, the surcharge revenues shall be used for
19any of the purposes described under Code section 384.3A(3)(b),
20(c), (e), (f), or (g).
-10-jm/jh
2cities or counties to impose a local entertainment
3surcharge, and making an appropriation.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 423H.1 Definitions.
2As used in this chapter, unless the context otherwise
3requires:
41. “Alcoholic beverage” means the same as defined in section
5123.3.
62. “Cultural or entertainment establishment” means a sporting
7or concert event venue, performing arts theater, movie theater,
8museum, convention hall, or enclosed shopping mall.
93. “Department” means the department of revenue.
104. “Director” means the director of the department of
11revenue.
125. “District” means either of the following:
13a. An area within a municipality that is established as a
14local entertainment district pursuant to section 423H.2.
15b. An area within two or more municipalities pursuant to
16an agreement under chapter 28E that is established as a local
17entertainment district pursuant to section 423H.2.
186. “Entertainment tickets” means all tickets or admissions
19subject to taxation pursuant to section 423.2, subsection 3.
207. “Food” means the same as defined in section 137F.1.
218. “Food establishment” means a “food establishment” licensed
22pursuant to chapter 137F, at which food is served or sold at
23retail. “Food establishment” also includes a “temporary food
24establishment” defined in chapter 137F.1.
259. “Governing body” means the county board of supervisors,
26city council, or other body in which the legislative powers of
27the municipality are vested.
2810. “Licensed premises” means the same as defined in section
29123.3.
3011. “Liquor establishment” means a licensed premises in or
31at which alcoholic beverages are sold at retail.
3212. “Lodging” means the same as defined in section 423A.2.
33“Lodging” does not include lodging exempted from tax pursuant
34to section 423A.5.
3513. “Municipality” means any of the following:
-1- 1a. A county.
2b. An incorporated city.
3c. A joint board or other legal entity established or
4designated in an agreement between two or more contiguous
5municipalities identified in paragraph “a” or “b” pursuant to
6chapter 28E.
714. “Retail sale” means the same as defined in section
8423.1.
915. “Surcharge” means a local entertainment surcharge
10imposed pursuant to this chapter.
11 Sec. 2. NEW SECTION. 423H.2 Local entertainment district
12establishment — approval.
13A municipality may establish a district for purposes of
14imposing a surcharge. To be established as a district, a
15proposed district shall meet the following requirements:
161. The combined attendance at cultural or entertainment
17establishments, food establishments, and liquor establishments
18within the proposed district exceeded five hundred thousand
19persons during the previous calendar year, or the attendance
20forecast at such establishments is reasonably expected to
21exceed five hundred thousand persons per calendar year within
22two years of the establishment of the district.
232. The proposed district consists of contiguous parcels and
24does not exceed seventy-five acres in total.
253. For a municipality that is a city, the proposed district
26does not include the entire incorporated area of the city.
274. The proposed district is not located in whole or in part
28within another district established under this chapter.
29 Sec. 3. NEW SECTION. 423H.3 Local entertainment surcharge
30— approval.
311. Prior to adopting the ordinance or resolution under
32subsection 2, a proposed district plan shall be developed by
33the governing body of the municipality. The proposed district
34plan shall state the governing body’s intent to establish a
35district and a legal description of the real estate forming the
-2-1boundaries of the area to be included in the proposed district
2along with a map depicting the existing parcels of real estate
3located in the proposed district.
42. After developing a proposed district plan and stating
5the governing body’s intent to establish such a district under
6subsection 1, the governing body of a municipality may impose a
7surcharge pursuant to this chapter by adopting an ordinance, or
8in the case of a municipality under section 423H.1, subsection
913, paragraph “c”, a resolution. The surcharge shall be imposed
10at a rate not to exceed three percent upon the following within
11the district:
12a. The retail sales price of food or alcoholic beverages
13sold at a cultural or entertainment establishment, food
14establishment, or liquor establishment.
15b. The sales price of all sales of entertainment tickets
16sold at a cultural or entertainment establishment.
17c. The sales price for the renting of any lodging.
183. The surcharge shall be in addition to the state sales
19tax imposed pursuant to chapter 423, subchapter II, the
20state-imposed and locally imposed hotel and motel tax pursuant
21to chapter 423A, and the local sales and services tax imposed
22pursuant to chapter 423B.
234. a. Within ten days of the passage of an ordinance
24or resolution imposing a surcharge, the county auditor of
25the county with the largest parcel in the district shall
26give written notice to the director by sending a copy of the
27district plan to the director.
28b. A surcharge shall be imposed either January 1 or July
291 following the notification of the director but not sooner
30than ninety days following the passage of the ordinance or
31resolution imposing the surcharge and not sooner than sixty
32days following notice to sellers, as defined in section 423.1.
33c. (1) A surcharge shall be repealed only on June 30 or
34December 31 but not sooner than ninety days following repeal of
35the ordinance or resolution. At least forty days before the
-3-1repeal of the surcharge, a municipality shall provide notice of
2the action by certified mail to the director of revenue.
3(2) The terms of any chapter 28E agreement shall govern the
4repeal of the surcharge in the case of a municipality under
5section 423H.1, subsection 13, paragraph “c”.
65. a. (1) If within thirty days after adoption of the
7ordinance that imposes a surcharge, or if after the ordinance
8has been in effect for one year, the board of supervisors of a
9municipality receives a valid petition as provided in section
10331.306 requesting that the question of whether to repeal
11the ordinance be submitted to the registered voters of the
12unincorporated area of the county, the board shall direct the
13county commissioner of elections to submit to the voters at an
14election held on a date specified in section 39.2, subsection
154, paragraph “a”, the question of whether the ordinance that
16imposes the surcharge shall be repealed.
17(2) If within thirty days after adoption of the ordinance
18that imposes a surcharge, or if after the ordinance has been
19in effect for one year, the city council of a municipality
20receives a valid petition as provided in section 362.4
21requesting that the question of whether to repeal the ordinance
22be submitted to the registered voters of the city, the city
23council shall direct the county commissioner of elections to
24submit to the voters at an election held on a date specified
25in section 39.2, subsection 4, paragraph “b”, the question
26of whether the ordinance that imposes the surcharge shall be
27repealed.
28(3) For a municipality under section 423H.1, subsection 13,
29paragraph “c”, the terms of any chapter 28E agreement shall
30govern the repeal of the surcharge, but shall, at a minimum,
31allow for a petition under section 331.306 or 362.4 requesting
32that a question to repeal the resolution be submitted to the
33voters after the resolution has been in effect for one year.
34b. If a majority of the total votes cast for and against the
35proposition favors repeal of the surcharge, or in the case of
-4-1a municipality under section 423H.1, subsection 13, paragraph
2“c”, a majority of at least one of the municipalities favors
3repeal, the ordinance or resolution shall be repealed, and
4collection of the surcharge shall terminate on either June 30
5or December 31 following the election, whichever is sooner.
6 Sec. 4. NEW SECTION. 423H.4 Administration.
71. The director shall administer the surcharge imposed
8pursuant to this chapter as nearly as possible in conjunction
9with the administration of state sales tax laws. The director
10shall provide appropriate forms, or provide space on the
11regular state tax forms, for reporting surcharge liability.
122. a. Section 422.25, subsection 4, sections 422.30,
13422.67, and 422.68, section 422.69, subsection 1, sections
14422.70, 422.71, 422.72, 422.74, and 422.75, section 423.14,
15subsection 1, and sections 423.23, 423.24, 423.25, 423.31,
16423.33, 423.35, 423.37 through 423.42, and 423.47, consistent
17with the provisions of this chapter, apply with respect to the
18surcharge authorized under this chapter, in the same manner and
19with the same effect as retail sales taxes within the meaning
20of those statutes. The director may require all persons
21who are engaged in the business of deriving any sales price
22subject to a surcharge under this chapter to register with
23the department. All surcharges collected under this chapter
24are deemed to be held in trust for the state of Iowa and the
25local jurisdictions imposing the surcharges. Local officials
26shall confer with the director of revenue for assistance in
27drafting the ordinance or resolution imposing the surcharge. A
28certified copy of the ordinance or resolution shall be filed
29with the director as soon as possible after passage.
30b. Frequency of deposits and quarterly reports of the
31surcharge with the department of revenue are governed by the
32provisions in section 423.31. Local surcharge collections
33shall not be included in computation of the total tax to
34determine frequency of filing under section 423.31.
35c. The director shall apply a boundary change of a city
-5-1imposing or collecting the surcharge to the imposition or
2collection of that surcharge only on the first day of a
3calendar quarter which occurs sixty days or more after the
4director has given notice of the boundary change to sellers.
53. a. The director, in consultation with local officials,
6shall collect and account for the surcharge. The director
7shall certify each quarter the amount of the surcharge
8receipts and any interest and penalties to be credited to
9the municipality account in the state surcharge revenue fund
10established in section 423H.5. Local authorities shall not
11require any permit not required by the director of revenue.
12b. All surcharge revenues and interest and penalties
13received or refunded one hundred eighty days or more after the
14date on which the municipality repeals the surcharge, shall be
15deposited in or withdrawn from the general fund of the state.
164. Each municipality that has established a district
17under this chapter shall assist the department in identifying
18new establishments required to impose the surcharge in the
19district. This process shall be ongoing until the surcharge
20is repealed.
21 Sec. 5. NEW SECTION. 423H.5 State surcharge revenue fund.
221. A state surcharge revenue fund is established in the
23state treasury under the control of the department consisting
24of the surcharge revenues collected within each district and
25deposited in the fund pursuant to section 423H.4. Revenues
26deposited in the fund are appropriated to the department for
27the purposes of this section.
282. A district account is created within the fund for each
29municipality creating a district under this chapter.
303. The department shall deposit the revenues described in
31subsection 1 that were collected in a quarter beginning on or
32after the district’s commencement date into the appropriate
33district account in the fund.
344. All revenues in each district account within the
35fund shall be remitted quarterly by the department to the
-6-1municipality that established the district for deposit in
2the general fund of the municipality. In the case of a
3municipality described in section 423H.1, subsection 13,
4paragraph “c”, revenues shall be remitted to the municipalities
5that are parties to the chapter 28E agreement in such
6proportions as described in the chapter 28E agreement.
7 Sec. 6. NEW SECTION. 423H.6 Payment to municipality — use
8of revenues.
91. Upon the remittance of the revenues from the state
10revenue surcharge fund to the municipality under section
11423H.5, subsection 4, the revenues shall be deposited into the
12general fund of the municipality.
132. Surcharge revenues deposited into the general fund of the
14municipality shall be used as follows, as applicable:
15a. For deposit into the debt service fund in section 331.430
16or 384.4.
17b. For deposit into the emergency services fund in section
18331.424C or emergency fund in section 384.8.
19c. For deposit into the capital improvements fund in section
20384.7.
21d. For the purposes described in section 384.3A, subsection
223, paragraph “b”, “c”, “e”, “f”, or “g”.
23 Sec. 7. NEW SECTION. 423H.7 Rules.
24The department shall adopt rules pursuant to chapter 17A to
25administer this chapter.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
29This bill relates to local government revenues by
30authorizing cities or counties to impose a local entertainment
31surcharge, and makes an appropriation.
32The bill authorizes a city, county, or an area within two or
33more municipalities pursuant to a Code chapter 28E agreement
34(municipality) to establish a local entertainment district
35(district) by ordinance or, in the case of a Code chapter 28E
-7-1agreement by resolution, for the purpose of imposing a local
2entertainment surcharge (surcharge). Under the bill, to be
3established as a district, the proposed area shall meet all
4of the following requirements: the combined attendance at
5cultural or entertainment establishments, food establishments,
6and liquor establishments within the proposed district exceeded
7500,000 persons during the previous calendar year, or the
8expected attendance forecast at such establishments is expected
9to exceed 500,000 persons per calendar year within two years;
10the proposed area consists of contiguous parcels and does not
11exceed 75 acres; the proposed area does not include the entire
12incorporated area of the city; and the proposed area is not
13located in whole or in part within another district.
14The bill defines “cultural or entertainment establishment”
15to mean a sporting or concert event venue, performing arts
16theater, movie theater, museum, convention hall, or enclosed
17shopping mall. The bill defines “food establishment” to mean a
18“food establishment” licensed pursuant to Code chapter 137F, at
19which food is served or sold at retail. “Food establishment”
20also includes a “temporary food establishment” defined in Code
21section 137F.1. The bill defines “liquor establishment” to
22mean a licensed premises in or at which alcoholic beverages are
23sold at retail.
24If the governing body of a municipality imposes a surcharge
25pursuant to the bill, the surcharge shall be at a rate not to
26exceed 3 percent, which shall be imposed upon the following
27within the district: the retail sales price of food or
28alcoholic beverages sold at a cultural or entertainment
29establishment, food establishment, or liquor establishment; the
30sales price of all sales of entertainment tickets sold at a
31cultural or entertainment establishment; or the sales price for
32the renting of any lodging.
33The bill defines “entertainment tickets” to mean all tickets
34or admissions subject to taxation pursuant to Code section
35423.2(3). The bill defines “lodging” to mean the same as
-8-1defined in Code section 432A.2. However, “lodging” does not
2include lodging exempted from tax pursuant to Code section
3423A.5.
4The bill specifies that the surcharge shall be in addition
5to the state sales tax imposed pursuant to Code chapter 423,
6subchapter II, the state-imposed and locally imposed hotel and
7motel tax pursuant to Code chapter 423A, or the local sales and
8services tax imposed pursuant to Code chapter 423B.
9The bill establishes a process to adopt or repeal the
10surcharge. A surcharge shall be imposed either on January 1
11or July 1 following notification of the director of revenue
12but not sooner than 90 days following the passage of the
13ordinance or resolution imposing the rate of the surcharge and
14not sooner than 60 days following notice to the sellers in the
15local entertainment district. For a surcharge adopted by a
16resolution, the Code chapter 28E agreement shall govern the
17repeal of the surcharge. A surcharge adopted by resolution
18and governed by a Code chapter 28E agreement may be repealed
19upon the majority vote of persons in one of the municipalities
20after the resolution has been in effect for one year. For a
21surcharge adopted by ordinance, a surcharge shall be repealed
22only on June 30 or December 31 but no sooner than 90 days
23following the repeal of the ordinance. A surcharge adopted by
24ordinance may also be repealed by petition upon the majority
25vote of persons in the municipality beginning 30 days after
26adoption of the ordinance.
27The bill specifies the director of the department of
28revenue shall administer the surcharge as nearly as possible
29in conjunction with the administration of the state sales tax.
30The bill specifies that numerous administrative and enforcement
31laws relating to the sales tax apply to surcharges imposed
32under the bill. The bill requires each municipality to assist
33the department in identifying new establishments required to
34impose the surcharge in the district.
35The bill creates a state surcharge revenue fund in the
-9-1state treasury under the control of the department of revenue
2consisting of surcharge revenues collected within each
3local entertainment district. The bill creates a local
4entertainment district account for each municipality creating a
5district. The bill requires the revenues be deposited into the
6appropriate district account.
7All revenues in each district account within the state
8surcharge revenue fund shall be remitted quarterly by
9the department to the municipality or municipalities that
10established the district for deposit in the general fund of
11the municipality. Surcharge revenues deposited into the
12general fund of the municipality shall be deposited in the
13following funds, as applicable: the debt service fund in
14Code section 331.430 or 384.4, the emergency services fund in
15Code section 331.424C or the emergency fund in Code section
16384.8, or the capital improvements fund in Code section 384.7.
17If the surcharge revenues are not deposited in any of the
18above-mentioned funds, the surcharge revenues shall be used for
19any of the purposes described under Code section 384.3A(3)(b),
20(c), (e), (f), or (g).
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