Bill Text: IA HF412 | 2021-2022 | 89th General Assembly | Introduced
Bill Title: A bill for an act relating to certain bonds issued for urban renewal purposes.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2021-12-31 - END OF [] ACTIONS [HF412 Detail]
Download: Iowa-2021-HF412-Introduced.html
House
File
412
-
Introduced
HOUSE
FILE
412
BY
BUSH
A
BILL
FOR
An
Act
relating
to
certain
bonds
issued
for
urban
renewal
1
purposes.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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412
Section
1.
Section
403.9,
subsection
2,
Code
2021,
is
1
amended
to
read
as
follows:
2
2.
Bonds
issued
under
this
section
shall
not
constitute
3
an
indebtedness
within
the
meaning
of
any
constitutional
or
4
statutory
debt
limitation
or
restriction,
and
shall
not
be
5
subject
to
the
provisions
of
any
other
law
or
charter
relating
6
to
the
authorization,
issuance
,
or
sale
of
bonds.
Bonds
issued
7
under
the
provisions
of
this
chapter
are
declared
to
be
issued
8
for
an
essential
public
and
governmental
purpose
and,
together
9
with
interest
thereon
and
income
therefrom,
shall
be
exempted
10
from
all
taxes.
11
EXPLANATION
12
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
13
the
explanation’s
substance
by
the
members
of
the
general
assembly.
14
Code
section
403.9
states
that
bonds
issued
under
the
15
authority
of
that
section
for
purposes
of
urban
renewal
16
shall
not
constitute
indebtedness
within
the
meaning
of
any
17
constitutional
or
statutory
debt
limitation
or
restriction,
18
presumably
including
Iowa
Constitution,
Article
XI,
section
19
3,
which
prohibits
counties
or
other
political
or
municipal
20
corporations
from
becoming
indebted
in
any
manner
to
an
21
aggregate
amount
exceeding
5
percent
of
the
value
of
taxable
22
property
within
the
corporation.
The
Iowa
supreme
court
in
23
Richards
v.
City
of
Muscatine,
237
N.W.2d
48
(Iowa
1975),
24
ruled
that
urban
renewal
bonds
issued
pursuant
to
Code
25
section
403.9,
although
payable
with
incremental
property
26
tax
revenues
deposited
in
the
special
fund,
are
indebtedness
27
subject
to
the
constitutional
limitation
because
the
bonds
28
are
payable
from
the
general
revenues
of
the
city
and
not
29
from
a
special
assessment
or
from
the
operating
revenues
of
a
30
municipal
enterprise
that
generates
income.
In
Fults
v.
City
31
of
Coralville,
666
N.W.2d
548
(Iowa
2003),
the
Iowa
supreme
32
court
ruled
that
urban
renewal
indebtedness
subject
to
an
33
annual
appropriation
provision
is
a
contingent
obligation
that
34
does
not
constitute
debt
for
purposes
of
the
constitutional
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412
limitation
on
indebtedness
of
a
municipality.
An
annual
1
appropriation
provision
(also
known
as
a
“nonappropriation
2
clause”)
means
that
the
indebtedness
incurred
by
a
municipality
3
is
subject
to
repayment
only
if
the
governing
body
of
the
4
municipality
annually
appropriates
the
funds
necessary
5
for
repayment
in
the
coming
fiscal
year
and
there
is
no
6
legally
enforceable
obligation
to
continue
repayments
in
the
7
future.
The
Iowa
supreme
court
stated
that
debt
subject
to
8
the
constitutional
limitation
is
that
which
a
municipality
9
obligates
itself
to
pay
without
further
action
on
the
part
of
10
the
city.
The
Iowa
supreme
court
stated
that
the
repayment
of
11
debt
that
is
not
certain
to
take
place
is
not
subject
to
the
12
constitutional
debt
limitation
because
the
city
cannot
be
held
13
legally
responsible
for
the
debt
for
a
year
other
than
one
in
14
which
funds
for
repayment
have
been
appropriated.
Therefore,
15
the
city’s
obligation
is
restricted
to
the
fiscal
year
within
16
which
the
city
council
appropriates
money
for
repayment.
It
is
17
that
annual
amount
appropriated,
therefore,
that
is
included
18
in
the
aggregate
amount
of
debt
when
computing
whether
a
19
municipality
exceeds
the
constitutional
limitation.
20
This
bill
strikes
that
portion
of
the
bonding
authority
21
language
under
Code
section
403.9
stating
that
bonds
issued
22
under
the
authority
of
that
section
for
purposes
of
urban
23
renewal
shall
not
constitute
indebtedness
within
the
meaning
of
24
any
constitutional
or
statutory
debt
limitation
or
restriction.
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