Bill Text: IA HF655 | 2017-2018 | 87th General Assembly | Introduced

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Bill Title: A bill for an act relating to the approval and imposition of local option sales and services taxes. (Formerly HSB 43.)

Sponsorship: Committee Bill

Status: (Introduced - Dead) 2018-01-08 - Rereferred to Ways and Means. H.J. 20. [HF655 Detail]

Download: Iowa-2017-HF655-Introduced.html

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House File 655 - Introduced




                                 HOUSE FILE       
                                 BY  COMMITTEE ON WAYS AND
                                     MEANS

                                 (SUCCESSOR TO HSB 43)

                                      A BILL FOR

  1 An Act relating to the approval and imposition of local option
  2    sales and services taxes.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
    TLSB 1760HV (1) 87
    md/sc

PAG LIN



  1  1    Section 1.  Section 423B.1, subsection 1, Code 2017, is
  1  2 amended by striking the subsection and inserting in lieu
  1  3 thereof the following:
  1  4    1.  a.  A county may impose by ordinance of the board of
  1  5 supervisors the local vehicle tax authorized by this chapter,
  1  6 subject to this section.
  1  7    b.  A city or county may impose by ordinance the local sales
  1  8 and services tax authorized by this chapter, subject to this
  1  9 section.
  1 10    Sec. 2.  Section 423B.1, subsection 2, paragraph b,
  1 11 subparagraph (3), Code 2017, is amended to read as follows:
  1 12    (3)  The tax once imposed shall continue to be imposed until
  1 13 the county=imposed tax is reduced or increased in rate or
  1 14  repealed, and then the city=imposed tax shall also be reduced
  1 15 or increased in rate or repealed in the same amount and be
  1 16  effective on the same date.
  1 17    Sec. 3.  Section 423B.1, subsection 3, Code 2017, is amended
  1 18 to read as follows:
  1 19    3.  a.  A local option tax shall be imposed only after an
  1 20 election at which If a majority of those voting on the question
  1 21 of imposition of a local option tax favors imposition and, the
  1 22 local option tax shall then be imposed at the rate specified on
  1 23 the ballot for an unlimited period until repealed as provided
  1 24 in subsection 6, paragraph "a" this chapter.
  1 25    b.  If the tax is a local vehicle tax imposed by a county,
  1 26 it shall apply to all incorporated and unincorporated areas of
  1 27 the county.
  1 28    c.  (1)  (a)  If the tax is a local sales and services tax
  1 29 imposed by a county that is a qualified county, it shall only
  1 30 apply to those incorporated areas and the unincorporated area
  1 31 of that county in which if a majority of those voting in the
  1 32 area on the tax favors its imposition.
  1 33    (b)  If the tax is a local sales and services tax imposed by
  1 34 a city located in a county that is a qualified county, other
  1 35 than a city under subsection 2, it shall only apply to the city
  2  1 if a majority of those voting in the city on the tax favors its
  2  2 imposition.
  2  3    (2)  If the tax is a local sales and services tax imposed by
  2  4 a county that is not a qualified county, it shall only apply to
  2  5 those incorporated areas and the unincorporated area of that
  2  6 county in which a majority of those voting in the area on the
  2  7 tax favors its imposition.  For purposes of the local sales
  2  8 and services tax imposed by a county that is not a qualified
  2  9 county, all cities contiguous to each other shall be treated
  2 10 as part of one incorporated area and the tax would shall be
  2 11 imposed in each of those contiguous cities only if the majority
  2 12 of those voting in the total area covered by the contiguous
  2 13 cities favors its imposition. In the case of a local sales and
  2 14 services tax submitted to the registered voters of two or more
  2 15 contiguous counties as provided in subsection 4, paragraph "c",
  2 16 all cities contiguous to each other shall be treated as part of
  2 17 one incorporated area, even if the corporate boundaries of one
  2 18 or more of the cities include areas of more than one county,
  2 19 and the tax shall be imposed in each of those contiguous cities
  2 20 only if a majority of those voting on the tax in the total area
  2 21 covered by the contiguous cities favored its imposition. For
  2 22 purposes of the local sales and services tax, a city is not
  2 23 contiguous to another city if the only road access between the
  2 24 two cities is through another state.
  2 25    Sec. 4.  Section 423B.1, Code 2017, is amended by adding the
  2 26 following new subsection:
  2 27    NEW SUBSECTION.  3A.  For purposes of this chapter,
  2 28 "qualified county" means a county with a population in excess
  2 29 of four hundred thousand, a county with a population of at
  2 30 least one hundred thirty thousand but not more than one hundred
  2 31 thirty=one thousand, or a county with a population of at least
  2 32 sixty thousand but not more than seventy thousand, according
  2 33 to the 2010 federal decennial census. Except for purposes
  2 34 of allocating local sales and services tax receipts based
  2 35 on the county in which the tax was collected under section
  3  1 423B.7, subsection 1, a city shall be deemed to be located in a
  3  2 qualified county if a majority of the population of the city,
  3  3 according to the 2010 federal decennial census, resides in the
  3  4 qualified county.
  3  5    Sec. 5.  Section 423B.1, subsections 4 and 5, Code 2017, are
  3  6 amended to read as follows:
  3  7    4.  a.  (1)  A The county board of supervisors shall direct
  3  8 within thirty days the county commissioner of elections to
  3  9 submit the question of imposition of a local vehicle tax or
  3 10 a local sales and services tax to the registered voters of
  3 11 the incorporated and unincorporated areas of the county upon
  3 12 receipt of a petition, requesting imposition of a local vehicle
  3 13 tax or a local sales and services tax, signed by eligible
  3 14 electors of the whole county equal in number to five percent of
  3 15 the persons in the whole county who voted at the last preceding
  3 16 general election. In the case of a local vehicle tax, the The
  3 17  petition requesting imposition shall specify the rate of tax
  3 18 and the classes, if any, that are to be exempt. If more than
  3 19 one valid petition is received, the earliest received petition
  3 20 shall be used.
  3 21    (2)  The county board of supervisors for a qualified county
  3 22 shall direct within thirty days the county commissioner of
  3 23 elections to submit the question of imposition of a local
  3 24 sales and services tax to the registered voters of a city or
  3 25 to the registered voters of the unincorporated area of the
  3 26 county upon receipt by the board of supervisors of a petition
  3 27 requesting imposition of a local sales and services tax, signed
  3 28 by eligible electors of the city or eligible electors of the
  3 29 unincorporated area of the county, as applicable, equal in
  3 30 number to five percent of the persons in the applicable city
  3 31 or unincorporated area of the county who voted at the last
  3 32 preceding general election. If more than one valid petition
  3 33 is received for a city or for the unincorporated area of the
  3 34 county, the earliest received petition shall be used.
  3 35    (3)  A county board of supervisors for a county that is not
  4  1 a qualified county shall direct within thirty days the county
  4  2 commissioner of elections to submit the question of imposition
  4  3 of a local sales and services tax to the registered voters of
  4  4 the incorporated and unincorporated areas of the county upon
  4  5 receipt of a petition requesting imposition of a local sales
  4  6 and services tax, signed by eligible electors of the whole
  4  7 county equal in number to five percent of the persons in the
  4  8 whole county who voted at the last preceding general election.
  4  9 If more than one valid petition is received, the earliest
  4 10 received petition shall be used.
  4 11    b.  (1)  The question of the imposition of a local sales
  4 12 and services tax in a qualified county shall be submitted to
  4 13 the registered voters of the city or to the registered voters
  4 14 of the unincorporated area of the county upon receipt by the
  4 15 county commissioner of elections of a motion requesting such
  4 16 submission, adopted by the governing body of a city located
  4 17 within the county or of the county for the unincorporated area
  4 18 of the county.  Upon adoption of such motion, the governing
  4 19 body of the city or county for the unincorporated area shall
  4 20 submit the motion to the county commissioner of elections.  The
  4 21 county commissioner of elections shall publish notice of the
  4 22 ballot proposition concerning the imposition of the local sales
  4 23 and services tax.  The manner provided under this subparagraph
  4 24 for the submission of the question of imposition of a local
  4 25 sales and services tax is an alternative to the manner provided
  4 26 in paragraph "a", subparagraph (2).
  4 27    (2)  The question of the imposition of a local sales and
  4 28 services tax in a county that is not a qualified county shall
  4 29 be submitted to the registered voters of the incorporated and
  4 30 unincorporated areas of the county upon receipt by the county
  4 31 commissioner of elections of the motion or motions, requesting
  4 32 such submission, adopted by the governing body or bodies of the
  4 33 city or cities located within the county or of the county, for
  4 34 the unincorporated areas of the county, representing at least
  4 35 one half of the population of the county. Upon adoption of
  5  1 such motion, the governing body of the city or county, for the
  5  2 unincorporated areas, shall submit the motion to the county
  5  3 commissioner of elections and in the case of the governing
  5  4 body of the city shall notify the board of supervisors of the
  5  5 adoption of the motion. The county commissioner of elections
  5  6 shall keep a file on all the motions received and, upon
  5  7 reaching the population requirements, shall publish notice of
  5  8 the ballot proposition concerning the imposition of the local
  5  9 sales and services tax. A motion ceases to be valid at the
  5 10 time of the holding of the regular election for the election of
  5 11 members of the governing body which that adopted the motion.
  5 12 The county commissioner of elections shall eliminate from the
  5 13 file any motion that ceases to be valid. The manner provided
  5 14 under this paragraph subparagraph for the submission of the
  5 15 question of imposition of a local sales and services tax
  5 16 is an alternative to the manner provided in paragraph "a",
  5 17 subparagraph (3).
  5 18    c.  Upon receipt of petitions or motions calling for the
  5 19 submission of the question of the imposition of a local sales
  5 20 and services tax as described in paragraph "a" or "b", the
  5 21 boards of supervisors of two or more contiguous counties in
  5 22 which the question is to be submitted may enter into a joint
  5 23 agreement providing that for purposes of this chapter, a
  5 24 city whose corporate boundaries include areas of more than
  5 25 one county shall be treated as part of the county in which a
  5 26 majority of the residents of the city reside. In such event,
  5 27 the county commissioners of elections from each such county
  5 28 shall cooperate in the selection of a single date upon which
  5 29 the election shall be held, and for all purposes of this
  5 30 chapter relating to the imposition, repeal, change of use,
  5 31 or collection of the tax, such a city shall be deemed to be
  5 32 part of the county in which a majority of the residents of the
  5 33 city reside. A copy of the joint agreement shall be provided
  5 34 promptly to the director of revenue.
  5 35    5.  a.  The county commissioner of elections shall submit
  6  1 the question of imposition of a local option tax at an election
  6  2 held on a date specified in section 39.2, subsection 4,
  6  3 paragraph "a" or "b", as applicable. The election shall not be
  6  4 held sooner than sixty days after publication of notice of the
  6  5 ballot proposition.
  6  6    b.  The ballot proposition shall specify the type and rate of
  6  7 tax and, in the case of a vehicle tax, the classes that will be
  6  8 exempt and, in the case of a local sales and services tax, the
  6  9 date it will be imposed which date shall not be earlier than
  6 10 ninety days following the election. The ballot proposition
  6 11 shall also specify the approximate amount of local option tax
  6 12 revenues that will be used for property tax relief, subject to
  6 13 the requirement of section 423B.7, subsection 7, paragraph "b",
  6 14  and shall contain a statement as to the specific purpose or
  6 15 purposes for which the revenues shall otherwise be expended.
  6 16 If the county board of supervisors in a county that is not
  6 17 a qualified county or if the board of supervisors or city
  6 18 council, as applicable, in a qualified county decides under
  6 19 subsection 6 to specify a date on which the local option sales
  6 20 and services tax shall automatically be repealed, the date of
  6 21 the repeal shall also be specified on the ballot.
  6 22    c.  The rate of the vehicle tax shall be in increments of one
  6 23 dollar per vehicle as set by the petition seeking to impose the
  6 24 tax.
  6 25    d.  The rate of a local sales and services tax shall not be
  6 26 more than one percent as set by the governing body.
  6 27    e.  The state commissioner of elections shall establish by
  6 28 rule the form for the ballot proposition which form shall be
  6 29 uniform throughout the state.
  6 30    Sec. 6.  Section 423B.1, subsection 6, paragraph a,
  6 31 subparagraph (1), Code 2017, is amended by striking the
  6 32 subparagraph.
  6 33    Sec. 7.  Section 423B.1, subsection 6, paragraph a,
  6 34 subparagraphs (2) and (3), Code 2017, are amended to read as
  6 35 follows:
  7  1    (2)  (a)  The A local option tax may be repealed or the
  7  2 rate of the local vehicle tax increased or decreased or the
  7  3 use thereof of a local option tax changed after an election at
  7  4 which a majority of those voting on the question of repeal or
  7  5 rate or use change favored favors the repeal or rate or use
  7  6 change.
  7  7    (b)  The date on which the repeal, rate, or use change is
  7  8 to take effect shall not be earlier than ninety days following
  7  9 the election. The election at which the question of repeal
  7 10 or rate or use change is offered shall be called and held in
  7 11 the same manner and under the same conditions as provided in
  7 12 subsections 4 and 5 for the election on the imposition of the
  7 13 local option tax. However, in the case of a local sales and
  7 14 services tax where the tax has not been imposed countywide, the
  7 15 question of repeal or imposition or rate or use change shall
  7 16 be voted on only by the registered voters of the areas of the
  7 17 county where the tax has been imposed or has not been imposed,
  7 18 as appropriate.
  7 19    (c)  However, the The governing body of the incorporated
  7 20 area city or unincorporated area where the local sales and
  7 21 services tax is imposed may, upon its own motion, request the
  7 22 county commissioner of elections to hold an election in the
  7 23 incorporated city or unincorporated area, as appropriate, on
  7 24 the question of the change in use of local sales and services
  7 25 tax revenues. The election may be held at any time but not
  7 26 sooner than sixty days following publication of the ballot
  7 27 proposition. If a majority of those voting in the incorporated
  7 28  city or unincorporated area on the change in use favors the
  7 29 change, the governing body of that city or area shall change
  7 30 the use to which the revenues shall be used. The ballot
  7 31 proposition shall list the present use of the revenues, the
  7 32 proposed use, and the date after which revenues received will
  7 33 be used for the new use.
  7 34    (3)  When submitting the question of the imposition of a
  7 35 local sales and services tax, the county board of supervisors
  8  1 of a county that is not a qualified county or the board of
  8  2 supervisors or the governing body of the city, as applicable,
  8  3 in a qualified county may direct that the question contain a
  8  4 provision for the repeal, without election, of the local sales
  8  5 and services tax on a specific date, which date shall be as
  8  6 provided in section 423B.6, subsection 1.
  8  7    Sec. 8.  Section 423B.1, subsection 7, paragraph b, Code
  8  8 2017, is amended to read as follows:
  8  9    b.  Costs of local option tax elections shall be apportioned
  8 10 among jurisdictions within the county voting on the question
  8 11 at the same election on a pro rata basis in proportion to the
  8 12 number of registered voters in each taxing jurisdiction voting
  8 13 on the question and the total number of registered voters in
  8 14 all of the taxing jurisdictions voting on the question.
  8 15    Sec. 9.  Section 423B.1, subsection 8, Code 2017, is amended
  8 16 by striking the subsection.
  8 17    Sec. 10.  Section 423B.1, subsections 9 and 10, Code 2017,
  8 18 are amended to read as follows:
  8 19    9.  a.  In a county that has imposed a local option sales
  8 20 and services tax that is not a qualified county, the board
  8 21 of supervisors shall, notwithstanding any contrary provision
  8 22 of this chapter, repeal the local option sales and services
  8 23 tax in the unincorporated areas or in an incorporated city
  8 24 area in which the tax has been imposed upon adoption of its
  8 25  the board's own motion for repeal in the unincorporated areas
  8 26 or upon receipt of a motion adopted by the governing body of
  8 27 that incorporated city area requesting repeal. The board of
  8 28 supervisors shall repeal the local option sales and services
  8 29 tax effective on the later of the date of the adoption of
  8 30 the repeal motion or the earliest date specified in section
  8 31 423B.6, subsection 1, following adoption of the motion. For
  8 32 purposes of this subsection paragraph, incorporated city area
  8 33 includes an incorporated city which is contiguous to another
  8 34 incorporated city.
  8 35    b.  For a qualified county:
  9  1    (1)  In a city that has imposed a local sales and services
  9  2 tax, the governing body of the city shall, notwithstanding any
  9  3 contrary provision of this chapter, repeal the local sales and
  9  4 services tax in the city upon adoption of its own motion for
  9  5 repeal. The governing body of the city shall repeal the local
  9  6 sales and services tax effective on the earliest date specified
  9  7 in section 423B.6, subsection 1, following adoption of the
  9  8 motion.
  9  9    (2)  In the unincorporated area of the county where the
  9 10 local sales and services tax has been imposed, the board of
  9 11 supervisors shall, notwithstanding any contrary provision of
  9 12 this chapter, repeal the local sales and services tax in the
  9 13 unincorporated area of the county upon adoption of its own
  9 14 motion for repeal. The board of supervisors shall repeal the
  9 15 local sales and services tax effective on the earliest date
  9 16 specified in section 423B.6, subsection 1, following adoption
  9 17 of the motion.
  9 18    10.  Notwithstanding subsection 9 or any other contrary
  9 19 provision of this chapter, a local option sales and services
  9 20 tax shall not be repealed or reduced in rate if obligations are
  9 21 outstanding which are payable as provided in section 423B.9,
  9 22 unless funds sufficient to pay the principal, interest, and
  9 23 premium, if any, on the outstanding obligations at and prior
  9 24 to maturity have been properly set aside and pledged for that
  9 25 purpose.
  9 26    Sec. 11.  Section 423B.5, subsections 1 and 4, Code 2017, are
  9 27 amended to read as follows:
  9 28    1.  A local sales and services tax at the rate of not more
  9 29 than one percent may be imposed by a city or county pursuant
  9 30 to this chapter shall be imposed on the sales price taxed by
  9 31 the state under chapter 423, subchapter II.  A local sales
  9 32 and services tax shall be imposed on the same basis as the
  9 33 state sales and services tax or in the case of the use of
  9 34 natural gas, natural gas service, electricity, or electric
  9 35 service on the same basis as the state use tax and shall not
 10  1 be imposed on the sale of any property or on any service not
 10  2 taxed by the state, except the tax shall not be imposed on
 10  3 the sales price from the sale of motor fuel or special fuel
 10  4 as defined in chapter 452A which is consumed for highway use
 10  5 or in watercraft or aircraft if the fuel tax is paid on the
 10  6 transaction and a refund has not or will not be allowed, on the
 10  7 sales price from the sale of equipment by the state department
 10  8 of transportation, or on the sales price from the sale or use
 10  9 of natural gas, natural gas service, electricity, or electric
 10 10 service in a city or county where the sales price from the sale
 10 11 of natural gas or electric energy is subject to a franchise
 10 12 fee or user fee during the period the franchise or user fee
 10 13 is imposed. A local sales and services tax is applicable
 10 14 to transactions within those incorporated and the city or
 10 15  unincorporated areas area of the county where it is imposed and
 10 16 shall be collected by all persons required to collect state
 10 17 sales taxes. All cities contiguous to each other shall be
 10 18 treated as part of one incorporated area and the tax would be
 10 19 imposed in each of those contiguous cities only if the majority
 10 20 of those voting in the total area covered by the contiguous
 10 21 cities favors its imposition. In the case of a local sales and
 10 22 services tax submitted to the registered voters of two or more
 10 23 contiguous counties as provided in section 423B.1, subsection
 10 24 4, paragraph "c", all cities contiguous to each other shall be
 10 25 treated as part of one incorporated area, even if the corporate
 10 26 boundaries of one or more of the cities include areas of more
 10 27 than one county, and the tax shall be imposed in each of those
 10 28 contiguous cities only if a majority of those voting on the tax
 10 29 in the total area covered by the contiguous cities favored its
 10 30 imposition.  However, a local sales and services tax is not
 10 31 applicable to transactions of a retailer holding a retail sales
 10 32 tax permit at a place of business, as defined in section 423.1,
 10 33 if the retailer's place of business is located in part within a
 10 34 city or unincorporated area of the county where the tax is not
 10 35 imposed.
 11  1    4.  If a local sales and services tax is imposed by a city or
 11  2  county pursuant to this chapter, a local excise tax at the same
 11  3 rate shall be imposed by the city or county on the purchase
 11  4 price of natural gas, natural gas service, electricity, or
 11  5 electric service subject to tax under chapter 423, subchapter
 11  6 III, and not exempted from tax by any provision of chapter
 11  7 423, subchapter III.  The local excise tax is applicable only
 11  8 to the use of natural gas, natural gas service, electricity,
 11  9 or electric service within those incorporated cities and
 11 10 unincorporated areas of the county where it is imposed
 11 11 and, except as otherwise provided in this chapter, shall be
 11 12 collected and administered in the same manner as the local
 11 13 sales and services tax. For purposes of this chapter, "local
 11 14 sales and services tax" shall also include the local excise tax.
 11 15    Sec. 12.  Section 423B.6, subsection 1, paragraphs b and c,
 11 16 Code 2017, are amended to read as follows:
 11 17    b.  A local sales and services tax shall be repealed only
 11 18 on June 30 or December 31 but not sooner than ninety days
 11 19 following the favorable election if one is held. However, a
 11 20 local sales and services tax shall not be repealed before the
 11 21 tax has been in effect for one year. At least forty days before
 11 22 the imposition or repeal of the tax, a the city or county, as
 11 23 applicable, shall provide notice of the action by certified
 11 24 mail to the director of revenue.
 11 25    c.  The imposition of or a rate change for a local sales and
 11 26 services tax shall not be applied to purchases from a printed
 11 27 catalog wherein a purchaser computes the local tax based on
 11 28 rates published in the catalog unless a minimum of one hundred
 11 29 twenty days' notice of the imposition or rate change has been
 11 30 given to the seller from the catalog and the first day of a
 11 31 calendar quarter has occurred on or after the one hundred
 11 32 twentieth day.
 11 33    Sec. 13.  Section 423B.6, subsection 2, paragraph b, Code
 11 34 2017, is amended to read as follows:
 11 35    b.  The ordinance of a governing body of a city or county
 12  1 board of supervisors imposing a local sales and services
 12  2 tax shall adopt by reference the applicable provisions of
 12  3 the appropriate sections of chapter 423. All powers and
 12  4 requirements of the director to administer the state sales tax
 12  5 law and use tax law are applicable to the administration of
 12  6 a local sales and services tax law and the local excise tax,
 12  7 including but not limited to the provisions of section 422.25,
 12  8 subsection 4, sections 422.30, 422.67, and 422.68, section
 12  9 422.69, subsection 1, sections 422.70 through 422.75, section
 12 10 423.14, subsection 1 and subsection 2, paragraphs "b" through
 12 11 "e", and sections 423.15, 423.23, 423.24, 423.25, 423.31
 12 12 through 423.35, 423.37 through 423.42, 423.46, and 423.47.
 12 13 Local officials shall confer with the director of revenue for
 12 14 assistance in drafting the ordinance imposing a local sales and
 12 15 services tax. A certified copy of the ordinance shall be filed
 12 16 with the director as soon as possible after passage.
 12 17    Sec. 14.  Section 423B.6, subsection 3, paragraph b, Code
 12 18 2017, is amended to read as follows:
 12 19    b.  All local tax moneys and interest and penalties received
 12 20 or refunded one hundred eighty days or more after the date
 12 21 on which the city or county repeals its the local sales and
 12 22 services tax shall be deposited in or withdrawn from the state
 12 23 general fund.
 12 24    Sec. 15.  Section 423B.7, subsection 1, Code 2017, is amended
 12 25 to read as follows:
 12 26    1.  a.  Except as provided in paragraph paragraphs "b" and
 12 27 "c", the director shall credit the local sales and services
 12 28 tax receipts and interest and penalties from a county=imposed
 12 29 tax to the county's account in the local sales and services
 12 30 tax fund and from a city=imposed tax under section 423B.1,
 12 31 subsection 2, to the city's account in the local sales
 12 32 and services tax fund for the county in which the tax was
 12 33 collected. If the director is unable to determine from which
 12 34 county any of the receipts were collected, those receipts shall
 12 35 be allocated among the possible counties based on allocation
 13  1 rules adopted by the director.
 13  2    b.  Notwithstanding paragraph "a", the The director shall
 13  3 credit the designated amount of the increase in local sales
 13  4 and services tax receipts, as computed in section 423B.10,
 13  5 collected in an urban renewal area of an eligible city that has
 13  6 adopted an ordinance pursuant to section 423B.10, subsection
 13  7 2, into a special city account in the local sales and services
 13  8 tax fund.
 13  9    c.  The director shall credit the local sales and services
 13 10 tax receipts and interest and penalties from a city=imposed tax
 13 11 under section 423B.1, subsection 2, to the city's account in
 13 12 the local sales and services tax fund.
 13 13    Sec. 16.  Section 423B.7, subsection 7, Code 2017, is amended
 13 14 to read as follows:
 13 15    7.  a.  Local Subject to the requirement of paragraph "b",
 13 16 local sales and services tax moneys received by a city or
 13 17 county may be expended for any lawful purpose of the city or
 13 18 county.
 13 19    b.  Each city located in a qualified county and each
 13 20 qualified county for the unicorporated area for which
 13 21 the imposition of the local sales and services tax in the
 13 22 incorporated area or unincorporated area was approved at
 13 23 election on or after the effective date of this Act shall use
 13 24 not less than fifty percent of the moneys received for property
 13 25 tax relief.
 13 26    Sec. 17.  Section 423B.8, subsection 1, paragraph a, Code
 13 27 2017, is amended to read as follows:
 13 28    a.  The goods, wares, or merchandise are incorporated into
 13 29 an improvement to real estate in fulfillment of a written
 13 30 contract fully executed prior to the date of the imposition or
 13 31 increase in rate of a local sales and services tax under this
 13 32 chapter. The refund shall not apply to equipment transferred
 13 33 in fulfillment of a mixed construction contract.
 13 34    Sec. 18.  Section 423B.10, subsection 1, paragraph b, Code
 13 35 2017, is amended to read as follows:
 14  1    b.  "Eligible city" means a city in which a local sales and
 14  2 services tax imposed by the city or county applies or a city
 14  3 described in section 423B.1, subsection 2, paragraph "a", and in
 14  4 which an urban renewal area has been designated.
 14  5    Sec. 19.  IMPLEMENTATION.  This Act shall not affect the
 14  6 imposition of local option taxes in effect on the effective
 14  7 date of this Act and such taxes shall continue to be imposed
 14  8 until their repeal pursuant to chapter 423B.  The law regarding
 14  9 repeal in effect at the time of the repeal governs the repeal
 14 10 of the local option taxes.
 14 11                           EXPLANATION
 14 12 The inclusion of this explanation does not constitute agreement with
 14 13 the explanation's substance by the members of the general assembly.
 14 14    This bill relates to the approval and imposition of the
 14 15 local option sales and services tax.  Current Code chapter 423B
 14 16 authorizes the imposition of local option taxes, including
 14 17 a local option sales and services tax. Currently, such a
 14 18 proposed tax is only presented to the voters of a whole county
 14 19 upon the filing of a petition signed by eligible electors of
 14 20 the county equal in number to 5 percent of the persons in
 14 21 the county who voted at the last preceding general election
 14 22 or upon receipt by the county commissioner of elections of
 14 23 motions requesting such submission, adopted by the governing
 14 24 bodies of the cities located within the county or the governing
 14 25 body of the county for the unincorporated area of the county,
 14 26 representing at least one=half of the population of the county.
 14 27    The bill amends the methods of seeking presentment of the
 14 28 local option sales and services tax to the voters of certain
 14 29 qualified counties by allowing the eligible electors of
 14 30 individual cities and the unincorporated area of a county to
 14 31 file a petition for an election to be held in the petitioning
 14 32 jurisdiction if such petition is signed by eligible electors
 14 33 of the city or the unincorporated area of the county, as
 14 34 applicable, equal in number to 5 percent of the persons in
 14 35 the applicable city or unincorporated area of the county who
 15  1 voted at the last preceding general election.  The bill defines
 15  2 "qualified county" to mean a county with a population in excess
 15  3 of 400,000, a county with a population of at least 130,000 but
 15  4 not more than 131,000, or a county with a population of at
 15  5 least 60,000 but not more than 70,000, according to the 2010
 15  6 federal decennial census. For those qualified counties, the
 15  7 bill also removes the requirement that in order to have the
 15  8 local sales and services tax presented to the voters, motions
 15  9 must be approved by cities or the county for the unincorporated
 15 10 area, representing at least one=half of the county's
 15 11 population. Instead, the bill allows individual cities or the
 15 12 county for the unincorporated area within a qualified county
 15 13 to approve a motion for an election on the local sales and
 15 14 services tax to be held in only that jurisdiction.
 15 15    The bill specifies that except for purposes of allocating
 15 16 local sales and services tax receipts based on the county in
 15 17 which the tax was collected, a city shall be deemed to be
 15 18 located in a qualified county if a majority of the population
 15 19 of the city, according to the 2010 federal decennial census,
 15 20 resides in the qualified county.
 15 21    The bill provides that in a qualified county a city or the
 15 22 board of supervisors for the unincorporated area of a county
 15 23 may repeal the local sales and services tax in the city upon
 15 24 adoption of its own motion for repeal.
 15 25    For those counties that are not qualified counties, the
 15 26 methods of seeking presentment of the local option sales and
 15 27 services tax to the voters and the methods for repealing such
 15 28 a tax remain the same as required under current Code chapter
 15 29 423B.
 15 30    The bill provides that each city or county for which the
 15 31 imposition of the local sales and services tax was approved at
 15 32 election on or after the effective date of the bill shall use
 15 33 not less than 50 percent of the moneys received for property
 15 34 tax relief.
 15 35    The bill strikes special provisions related to the approval
 16  1 and imposition of a local sales and services tax in a city that
 16  2 is located in two or more contiguous counties.
 16  3    The bill provides that a local sales and services tax is
 16  4 not applicable to transactions of a retailer holding a retail
 16  5 sales tax permit at a place of business if the retailer's place
 16  6 of business is located in part within a city or unincorporated
 16  7 area of the county where the tax is not imposed.
 16  8    Current Code chapter 423B authorizes the imposition of a
 16  9 local sales and services tax at a rate of not more than 1
 16 10 percent. The bill requires a local sales and services tax, if
 16 11 imposed, to be 1 percent.
 16 12    The bill provides that the imposition of local option
 16 13 taxes in effect on the effective date of the bill shall not
 16 14 be affected by the bill, and such taxes shall continue to
 16 15 be imposed until their repeal pursuant to Code chapter 423B.
 16 16  The law in effect regarding repeal at the time of the repeal
 16 17 governs the repeal of the local option taxes.
       LSB 1760HV (1) 87
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