House Study Bill 62 - IntroducedA Bill ForAn Act 1relating to city finances by amending the definition of
2essential corporate purpose and provisions relating to the
3issuance of general obligation bonds.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1   Section 1.  Section 384.24, subsection 3, paragraph c, Code
22023, is amended to read as follows:
   3c.  The construction, reconstruction, and repair of
4sidewalks, trails, and pedestrian underpasses and overpasses,
5and the acquisition of real estate needed for such purposes.
6   Sec. 2.  Section 384.24, subsection 3, Code 2023, is amended
7by adding the following new paragraphs:
8   NEW PARAGRAPH.  y.  The acquisition, construction,
9reconstruction, improvement, repair, and equipping of a public
10safety or emergency services facility.
11   NEW PARAGRAPH.  z.  The rehabilitation, reconstruction,
12improvement, enlargement, repair, and equipping of any building
13or facility for which the issuance of bonds for the original
14construction of the building or facility, or a portion thereof,
15was previously approved at election under section 384.26 or
16which were issued following a notice under section 384.26,
17subsection 5, for which no timely petition was filed.
18   Sec. 3.  Section 384.24, subsection 4, paragraph c, Code
192023, is amended to read as follows:
   20c.  The acquisition, construction, reconstruction,
21enlargement, improvement, and equipping of city halls, jails,
22police stations, fire stations, garages, libraries, and
23hospitals, including buildings to be used for any combination
24of the foregoing purposes, and the acquisition of real estate
25therefor, other than those which are essential corporate
26purposes
.
27   Sec. 4.  Section 384.26, subsection 5, paragraph a, Code
282023, is amended to read as follows:
   29a.  Notwithstanding the provisions of subsection 2, a council
30may, in lieu of calling an election, institute proceedings
31for the issuance of bonds for a general corporate purpose by
32causing a notice of the proposal to issue the bonds, including
33a statement of the amount and purpose of the bonds, together
34with the maximum rate of interest which the bonds are to bear,
35and the right to petition for an election, to be published at
-1-1least once in a newspaper of general circulation within the
2city at least ten days prior to the meeting at which it is
3proposed to take action for the issuance of the bonds subject
4to the following population-based limitations, adjusted and
5published annually in January by the department of management
6by applying the percentage change in the consumer price
7index for all urban consumers for the most recent available
8twelve-month period published in the federal register by the
9United States department of labor, bureau of labor statistics
:
   10(1)  In cities having a population of five thousand or less,
11in an amount of not more than four eight hundred thousand
12dollars.
   13(2)  In cities having a population of more than five thousand
14and not more than seventy-five thousand, in an amount of not
15more than seven one million four hundred thousand dollars.
   16(3)  In cities having a population in excess of seventy-five
17thousand, in an amount of not more than one two million
18dollars.
19   Sec. 5.  Section 384.26, subsection 5, Code 2023, is amended
20by adding the following new paragraph:
21   NEW PARAGRAPH.  0b.  Each city’s population used to determine
22the limitations of paragraph “a” shall be determined using the
23most recent population estimate produced by the United States
24census bureau.
25EXPLANATION
26The inclusion of this explanation does not constitute agreement with
27the explanation’s substance by the members of the general assembly.
   28This bill relates to city finances by amending the
29definition of “essential corporate purpose” and provisions
30relating to the issuance of general obligation bonds.
   31Under Code chapter 384, a city may generally contract
32indebtedness and approve the issuance of general obligation
33bonds to carry out an essential corporate purpose without voter
34approval, while the issuance of general obligation bonds to
35carry out a general corporate purpose generally requires voter
-2-1approval.
   2The definition of “essential corporate purpose” includes,
3in part, the construction, reconstruction, and repair of
4sidewalks and pedestrian underpasses and overpasses, and the
5acquisition of real estate needed for such purposes. The
6bill adds the construction, reconstruction, and repair of
7trails and the acquisition of real estate needed for such
8purposes to that portion of the definition. The bill also
9adds the following to the definition of “essential corporate
10purpose”: (1) the acquisition, construction, reconstruction,
11improvement, repair, and equipping of a public safety or
12emergency services facility; and (2) the rehabilitation,
13reconstruction, improvement, enlargement, repair, and equipping
14of any building or facility for which the issuance of bonds
15for the original construction of the building or facility, or
16a portion thereof, was previously approved at election or if
17a petition for an election was not filed after notice of the
18proposed bond issuance was published.
   19If a city proposes to carry out a general corporate purpose
20using funds from the issuance of general obligation bonds,
21generally the issuance of such bonds must first be approved at
22election. Current law establishes an exception by providing
23that a city, in lieu of calling an election, may institute
24proceedings for the issuance of bonds for a general municipal
25purpose by notice and publication of the proposal to issue
26the bonds that includes a notice of the right to petition for
27an election, subject to the following bond amount and city
28population limitations: (1) in cities having a population
29of 5,000 or less, in an amount of not more than $400,000;
30(2) in cities having a population of over 5,000 and not over
3175,000, in an amount of not more than $700,000; and (3) in
32cities having a population of over 75,000, in an amount of
33not more than $1 million. However, if at any time before the
34date fixed for taking action for the issuance of the bonds, a
35valid petition is filed asking that the question of issuing the
-3-1bonds be submitted to the registered voters of the city, the
2city council shall either by resolution declare the proposal
3to issue the bonds to have been abandoned or shall direct the
4county commissioner of elections to call a special election
5upon the question of issuing the bonds.
   6The bill increases the bond amount limitations for each of
7the city population categories to the following amounts: (1)
8in counties having a population of 5,000 or less, in an amount
9of not more than $800,000; (2) in cities having a population
10of over 5,000 and not over 75,000, in an amount of not more
11than $1,400,000; and (3) in cities having a population of over
1275,000, in an amount of not more than $2 million. In addition,
13the bill provides for such bond amount limitations to be
14adjusted and published annually by the department of management
15based on a specified consumer price index and requires each
16city’s population to be determined based on the most recent
17population estimate produced by the United States census
18bureau.
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