Bill Text: IA HSB165 | 2019-2020 | 88th General Assembly | Introduced


Bill Title: A bill for an act establishing budget limitations for counties and cities and including applicability provisions.

Spectrum: Partisan Bill (? 1-0)

Status: (N/A) 2019-04-10 - Committee report, recommending amendment and passage. H.J. 811. [HSB165 Detail]

Download: Iowa-2019-HSB165-Introduced.html
House Study Bill 165 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON HEIN) A BILL FOR An Act establishing budget limitations for counties and cities 1 and including applicability provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1563YC (9) 88 md/jh
H.F. _____ Section 1. Section 23A.2, subsection 10, paragraph h, Code 1 2019, is amended to read as follows: 2 h. The performance of an activity listed in section 331.424 , 3 Code 2019, as a service for which a supplemental levy county 4 may be certified include in its budget . 5 Sec. 2. Section 28M.5, subsection 2, Code 2019, is amended 6 to read as follows: 7 2. If a regional transit district budget allocates 8 revenue responsibilities to the board of supervisors of a 9 participating county, the amount of the regional transit 10 district levy that is the responsibility of the participating 11 county shall be deducted from the maximum rates amount of taxes 12 authorized to be levied by the county pursuant to section 13 331.423, subsections 1 and 2 subsection 3, paragraphs “b” 14 and “c” , as applicable, unless the county meets its revenue 15 responsibilities as allocated in the budget from other 16 available revenue sources. However, for a regional transit 17 district that includes a county with a population of less than 18 three hundred thousand, the amount of the regional transit 19 district levy that is the responsibility of such participating 20 county shall be deducted from the maximum rate amount of taxes 21 authorized to be levied by the county pursuant to section 22 331.423, subsection 1 3, paragraph “b” . 23 Sec. 3. Section 29C.17, subsection 2, paragraph a, Code 24 2019, is amended to read as follows: 25 a. A countywide special supplemental levy pursuant to 26 section 331.424, subsection 1 . 27 Sec. 4. Section 123.38, subsection 2, paragraph b, Code 28 2019, is amended to read as follows: 29 b. For purposes of this subsection , any portion of license 30 or permit fees used for the purposes authorized in section 31 331.424, subsection 1 , paragraph “a” , subparagraphs (1) and 32 (2), Code 2019, and in section 331.424A , shall not be deemed 33 received either by the division or by a local authority. 34 Sec. 5. Section 218.99, Code 2019, is amended to read as 35 -1- LSB 1563YC (9) 88 md/jh 1/ 21
H.F. _____ follows: 1 218.99 Counties to be notified of patients’ personal 2 accounts. 3 The administrator in control of a state institution shall 4 direct the business manager of each institution under the 5 administrator’s jurisdiction which is mentioned in section 6 331.424, subsection 1 , paragraph “a” , subparagraphs (1) and 7 (2), and for which services are paid under section 331.424A , 8 to quarterly inform the county of residence of any patient or 9 resident who has an amount in excess of two hundred dollars on 10 account in the patients’ personal deposit fund and the amount 11 on deposit. The administrators shall direct the business 12 manager to further notify the county of residence at least 13 fifteen days before the release of funds in excess of two 14 hundred dollars or upon the death of the patient or resident. 15 If the patient or resident has no residency in this state or 16 the person’s residency is unknown, notice shall be made to the 17 director of human services and the administrator in control of 18 the institution involved. 19 Sec. 6. Section 331.263, subsection 2, Code 2019, is amended 20 to read as follows: 21 2. The governing body of the community commonwealth 22 shall have the authority to levy county taxes and shall 23 have the authority to levy city taxes to the extent the 24 city tax levy authority is transferred by the charter to 25 the community commonwealth. A city participating in the 26 community commonwealth shall transfer a portion of the 27 city’s tax levy authorized under section 384.1 or 384.12 , 28 whichever is applicable, to the governing body of the community 29 commonwealth. The maximum rates amount of taxes authorized to 30 be levied under sections section 384.1 and the maximum amount 31 of taxes authorized to be levied under section 384.12 by a city 32 participating in the community commonwealth shall be reduced 33 by an amount equal to the rates of the same or similar taxes 34 levied in the city by the governing body of the community 35 -2- LSB 1563YC (9) 88 md/jh 2/ 21
H.F. _____ commonwealth. 1 Sec. 7. Section 331.301, subsection 12, Code 2019, is 2 amended to read as follows: 3 12. The board of supervisors may credit funds to a reserve 4 for the purposes authorized by subsection 11 of this section ; 5 section 331.424, subsection 1 , paragraph “a” , subparagraph 6 (5); and section 331.441, subsection 2 , paragraph “b” . Moneys 7 credited to the reserve, and interest earned on such moneys, 8 shall remain in the reserve until expended for purposes 9 authorized by subsection 11 of this section ; section 331.424, 10 subsection 1 , paragraph “a” , subparagraph (5); or section 11 331.441, subsection 2 , paragraph “b” . 12 Sec. 8. Section 331.421, subsections 1 and 10, Code 2019, 13 are amended by striking the subsections. 14 Sec. 9. Section 331.421, Code 2019, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 7A. “Item” means, in accordance 17 with protests under chapter 24, a budgeted expenditure, 18 appropriation, or cash reserve from a fund for a service area, 19 program, program element, or purpose. 20 Sec. 10. Section 331.422, unnumbered paragraph 1, Code 21 2019, is amended to read as follows: 22 Subject to this section and sections 331.423 through 331.426 23 331.424C or as otherwise provided by state law, the board of 24 each county shall certify property taxes annually at its March 25 session to be levied for county purposes as follows: 26 Sec. 11. Section 331.423, Code 2019, is amended by striking 27 the section and inserting in lieu thereof the following: 28 331.423 Property tax dollars —— maximums. 29 1. Annually, the board shall determine separate property 30 tax levy limits to pay for general county services and rural 31 county services in accordance with this section. The property 32 tax levies separately certified for general county services and 33 rural county services under section 331.434 shall not raise 34 property tax dollars that exceed the amount determined under 35 -3- LSB 1563YC (9) 88 md/jh 3/ 21
H.F. _____ this section. 1 2. For purposes of this section, unless the context 2 otherwise requires: 3 a. “Annual growth factor” means an index, expressed as 4 a percentage, determined by the department of management by 5 January 1 of the calendar year in which the budget year begins. 6 In determining the annual growth factor, the department shall 7 calculate the percentage change in the median family income 8 in midwest census region between the two most recent calendar 9 years for which information is available. The department shall 10 then add that percentage change to one hundred percent. In no 11 case, however, shall the annual growth factor be less than one 12 hundred percent. 13 b. “Boundary adjustment” means annexation, severance, 14 incorporation, or discontinuance as those terms are defined in 15 section 368.1. 16 c. “Budget year” is the fiscal year beginning during the 17 calendar year in which a budget is certified. 18 d. “Current fiscal year” is the fiscal year ending during 19 the calendar year in which a budget is certified. 20 e. “Net new valuation taxes” means the amount of property 21 tax dollars equal to the current fiscal year’s levy rate in 22 the county for general county services or for rural county 23 services, as applicable, multiplied by the increase from the 24 current fiscal year to the budget year in taxable valuation due 25 to the following: 26 (1) Net new construction, excluding all incremental 27 valuation that is released in any one year from either a 28 division of revenue under section 260E.4 or an urban renewal 29 area for which taxes were being divided under section 403.19 if 30 the property for the valuation being released remains subject 31 to the division of revenue under section 260E.4 or remains part 32 of the urban renewal area that is subject to a division of 33 revenue under section 403.19. 34 (2) Additions or improvements to existing structures. 35 -4- LSB 1563YC (9) 88 md/jh 4/ 21
H.F. _____ (3) Remodeling of existing structures for which a building 1 permit is required. 2 (4) Net boundary adjustment. 3 (5) A municipality no longer dividing tax revenues in an 4 urban renewal area as provided in section 403.19 or a community 5 college no longer dividing revenues as provided in section 6 260E.4. 7 (6) That portion of taxable property located in an urban 8 revitalization area on which an exemption was allowed and such 9 exemption has expired. 10 3. a. For the fiscal year beginning July 1, 2020, and 11 subsequent fiscal years, the maximum amount of property tax 12 dollars which may be certified for levy by a county for general 13 county services and rural county services shall be the maximum 14 property tax dollars calculated under paragraphs “b” and “c” , 15 respectively. 16 b. The maximum property tax dollars that may be levied for 17 general county services is an amount equal to the sum of the 18 following: 19 (1) The annual growth factor times the current fiscal year’s 20 maximum property tax dollars for general county services. 21 (2) The amount of net new valuation taxes in the county. 22 c. The maximum property tax dollars that may be levied for 23 rural county services is an amount equal to the sum of the 24 following: 25 (1) The annual growth factor times the current fiscal year’s 26 maximum property tax dollars for rural county services. 27 (2) The amount of net new valuation taxes in the 28 unincorporated area of the county. 29 4. a. For purposes of calculating maximum property tax 30 dollars for general county services for the fiscal year 31 beginning July 1, 2020, only, the term “current fiscal year’s 32 maximum property tax dollars” shall mean the total amount of 33 property tax dollars certified by the county for general county 34 services for the fiscal year beginning July 1, 2019. 35 -5- LSB 1563YC (9) 88 md/jh 5/ 21
H.F. _____ b. For purposes of calculating maximum property tax dollars 1 for rural county services for the fiscal year beginning July 2 1, 2020, only, the term “current fiscal year’s maximum property 3 tax dollars” shall mean the total amount of property tax dollars 4 certified by the county for rural county services for the 5 fiscal year beginning July 1, 2019. 6 5. Property taxes certified for mental health and 7 disabilities services in section 331.424A, the emergency 8 services fund in section 331.424C, the debt service fund in 9 section 331.430, any capital projects fund established by the 10 county for deposit of bond, loan, or note proceeds, and any 11 temporary increase approved pursuant to section 331.424, are 12 not included in the maximum amount of property tax dollars that 13 may be certified for a budget year under subsection 3. 14 6. The department of management, in consultation with the 15 county finance committee, shall adopt rules to administer this 16 section. The department shall prescribe forms to be used by 17 counties when making calculations required by this section. 18 Sec. 12. NEW SECTION . 331.423A Ending fund balance. 19 1. a. Budgeted ending fund balances for a budget year 20 in excess of twenty-five percent of budgeted expenditures in 21 either the general fund or rural services fund for that budget 22 year shall be explicitly reserved or designated for a specific 23 purpose. 24 b. A county is encouraged, but not required, to reduce 25 budgeted, unreserved, or undesignated ending fund balances for 26 the budget year to an amount equal to approximately twenty-five 27 percent of budgeted expenditures and transfers from the general 28 fund and rural services fund for that budget year unless a 29 decision is certified by the state appeal board ordering a 30 reduction in the ending fund balance of any of those funds. 31 c. In a protest to the county budget under section 331.436, 32 the county shall have the burden of proving that the budgeted 33 balances in excess of twenty-five percent are reasonably likely 34 to be appropriated for the explicitly reserved or designated 35 -6- LSB 1563YC (9) 88 md/jh 6/ 21
H.F. _____ specific purpose. The excess budgeted balance for the specific 1 purpose shall be considered an increase in an item in the 2 budget for purposes of section 24.28. 3 2. a. For a county that has, as of June 30, 2019, reduced 4 its actual ending fund balance to less than twenty-five 5 percent of actual expenditures, additional property taxes may 6 be computed and levied as provided in this subsection. The 7 additional property tax levy amount is an amount not to exceed 8 twenty-five percent of actual expenditures from the general 9 fund and rural services fund for the fiscal year beginning July 10 1, 2018, minus the combined ending fund balances for those 11 funds for that year. 12 b. The amount of the additional property taxes shall be 13 apportioned between the general fund and the rural services 14 fund. However, the amount apportioned for general county 15 services and for rural county services shall not exceed for 16 each fund twenty-five percent of actual expenditures for the 17 fiscal year beginning July 1, 2018. 18 c. All or a portion of additional property tax dollars 19 may be levied for the purpose of increasing cash reserves 20 for general county services and rural county services in the 21 budget year. The additional property tax dollars authorized 22 under this subsection but not levied may be carried forward as 23 unused ending fund balance taxing authority until and for the 24 fiscal year beginning July 1, 2025. The amount carried forward 25 shall not exceed twenty-five percent of the maximum amount of 26 property tax dollars available in the current fiscal year. 27 Additionally, property taxes that are levied as unused ending 28 fund balance taxing authority under this subsection may be the 29 subject of a protest under section 331.436, and the amount 30 will be considered an increase in an item in the budget for 31 purposes of section 24.28. The amount of additional property 32 taxes levied under this subsection shall not be included in the 33 computation of the maximum amount of property tax dollars which 34 may be certified and levied under section 331.423. 35 -7- LSB 1563YC (9) 88 md/jh 7/ 21
H.F. _____ Sec. 13. Section 331.424, Code 2019, is amended by striking 1 the section and inserting in lieu thereof the following: 2 331.424 Authority to levy beyond maximum property tax 3 dollars. 4 1. a. The board may annually certify additions to the 5 maximum amount of property tax dollars to be levied if the 6 board publishes the notice of the proposed action, including a 7 statement of the amount and purpose of the proposed additions, 8 and the time and place of a public meeting at which the board 9 proposes to take action on the proposal. At the meeting, 10 the board shall receive oral or written objections from any 11 resident or property owner of the county. After all objections 12 have been received and considered, the board may, following 13 twenty days after the meeting and subject to paragraph “b” , take 14 action on the proposal or abandon the proposal. 15 b. If at any time within twenty days after the meeting under 16 paragraph “a” , a petition is filed with the county auditor 17 signed by eligible electors of the county equal in number to 18 the lesser of two thousand or twenty percent of the persons 19 in the county who voted for the office of president of the 20 United States at the last preceding general election that 21 had such office on the ballot, asking that the question of 22 levying an additional amount be submitted to the registered 23 voters of the county, the board shall either by resolution 24 declare the proposal to be abandoned or shall direct the county 25 commissioner of elections to call a special election upon the 26 question. 27 2. The special election, if called, is subject to the 28 following: 29 a. The board must give at least thirty-two days’ notice to 30 the county commissioner of elections that the special election 31 is to be held. In no case, however, shall a notice be given to 32 the county commissioner of elections after December 31 for an 33 election on a proposition to exceed the statutory limits during 34 the fiscal year beginning in the next calendar year. 35 -8- LSB 1563YC (9) 88 md/jh 8/ 21
H.F. _____ b. The proposition submitted to voters may propose authority 1 for the board to certify additions to the maximum amount 2 of property tax dollars for up to two fiscal years. The 3 proposition is approved if it receives a favorable majority of 4 the votes cast on the proposition. 5 c. The proposition to be submitted shall be substantially 6 in the following form: 7 Vote “yes” or “no” on the following: 8 Shall the county of ........ levy for an additional $ ... each 9 year for ... years beginning July 1, .... , in excess of the 10 statutory limits otherwise applicable for the (general county 11 services or rural services) fund? 12 d. The canvass shall be held beginning at 1:00 p.m. on 13 the second day which is not a holiday following the special 14 election. 15 e. Notice of the special election shall be published at 16 least once in a newspaper as specified in section 331.305 prior 17 to the date of the special election. The notice shall appear 18 as early as practicable after the board has voted to submit 19 a proposition to the voters to levy additional property tax 20 dollars. 21 3. Registered voters in the county may vote on the 22 proposition to increase property taxes for the general fund 23 in excess of the statutory limit. Registered voters residing 24 outside the corporate limits of a city within the county may 25 vote on the proposition to increase property taxes for the 26 rural services fund in excess of the statutory limit. 27 4. The amount of additional property tax dollars certified 28 under this section shall not be included in the computation 29 of the maximum amount of property tax dollars which may be 30 certified and levied under section 331.423. 31 Sec. 14. Section 331.424A, subsection 6, Code 2019, is 32 amended to read as follows: 33 6. For each fiscal year, the county shall certify a levy 34 for payment of services. For each fiscal year, county revenues 35 -9- LSB 1563YC (9) 88 md/jh 9/ 21
H.F. _____ from taxes imposed by the county credited to the county 1 services fund shall not exceed an amount equal to the county 2 budgeted amount for the fiscal year. A levy certified under 3 this section is not subject to the appeal provisions of section 4 331.426 or to any other provision in law authorizing a county 5 to exceed, increase, or appeal a property tax levy limit. 6 Sec. 15. Section 331.427, subsection 3, paragraph l, Code 7 2019, is amended to read as follows: 8 l. Services listed in section 331.424, subsection 1 , Code 9 2019, and section 331.554 . 10 Sec. 16. Section 331.428, subsection 2, paragraph d, Code 11 2019, is amended to read as follows: 12 d. Services listed under section 331.424, subsection 2 , Code 13 2019 . 14 Sec. 17. Section 331.429, subsection 1, paragraphs a and b, 15 Code 2019, are amended to read as follows: 16 a. Transfers from the general fund not to exceed in any year 17 the dollar equivalent of a tax of sixteen and seven-eighths 18 cents per thousand dollars of assessed value on all taxable 19 property in the county multiplied by the ratio of current 20 taxes actually collected and apportioned for the general basic 21 county services levy to the total general basic county services 22 levy for the current year, and an amount equivalent to the 23 moneys derived by the general fund from military service tax 24 credits under chapter 426A , manufactured or mobile home taxes 25 under section 435.22 , and delinquent taxes for prior years 26 collected and apportioned to the general basic county services 27 fund in the current year, multiplied by the ratio of sixteen 28 and seven-eighths cents to three dollars and fifty cents. 29 The limit on transfers in this paragraph applies only to 30 property tax revenue and is not a limit on transfers of revenue 31 generated from sources other than property taxes. 32 b. Transfers from the rural services fund not to exceed in 33 any year the dollar equivalent of a tax of three dollars and 34 three-eighths cents per thousand dollars of assessed value on 35 -10- LSB 1563YC (9) 88 md/jh 10/ 21
H.F. _____ all taxable property not located within the corporate limits 1 of a city in the county multiplied by the ratio of current 2 taxes actually collected and apportioned for the rural county 3 services basic levy to the total rural county services basic 4 levy for the current year and an amount equivalent to the 5 moneys derived by the rural services fund from military service 6 tax credits under chapter 426A , manufactured or mobile home 7 taxes under section 435.22 , and delinquent taxes for prior 8 years collected and apportioned to the rural county services 9 basic fund in the current year, multiplied by the ratio of 10 three dollars and three-eighths cents to three dollars and 11 ninety-five cents. The limit on transfers in this paragraph 12 applies only to property tax revenue and is not a limit on 13 transfers of revenue generated from sources other than property 14 taxes. 15 Sec. 18. Section 331.434, unnumbered paragraph 1, Code 16 2019, is amended to read as follows: 17 Annually, the board of each county, subject to section 18 331.403, subsection 4 , sections 331.423 through 331.426 19 331.424C , and other applicable state law, shall prepare and 20 adopt a budget, certify taxes, and provide appropriations as 21 follows: 22 Sec. 19. Section 331.435, unnumbered paragraph 1, Code 23 2019, is amended to read as follows: 24 The board may amend the adopted county budget, subject to 25 sections 331.423 through 331.426 331.424C and other applicable 26 state law, to permit increases in any class of proposed 27 expenditures contained in the budget summary published under 28 section 331.434, subsection 3 . 29 Sec. 20. Section 373.10, Code 2019, is amended to read as 30 follows: 31 373.10 Taxing authority. 32 The metropolitan council shall have the authority to 33 levy city taxes to the extent the city tax levy authority 34 is transferred by the charter to the metropolitan council. 35 -11- LSB 1563YC (9) 88 md/jh 11/ 21
H.F. _____ A member city shall transfer a portion of the city’s tax 1 levy authorized under section 384.1 or 384.12 , whichever is 2 applicable, to the metropolitan council. The maximum rates 3 amount of taxes authorized to be levied under sections section 4 384.1 and the taxes authorized to be levied under section 5 384.12 by a member city shall be reduced by an amount equal to 6 the rates of the same or similar taxes levied in the city by the 7 metropolitan council. 8 Sec. 21. Section 384.1, Code 2019, is amended by striking 9 the section and inserting in lieu thereof the following: 10 384.1 Property tax dollars —— maximum. 11 1. A city shall certify taxes to be levied by the city 12 on all taxable property within the city limits, for all city 13 government purposes. Annually, the city council may certify 14 a basic levy for city government purposes, subject to the 15 limitation on property tax dollars provided in this section. 16 2. For purposes of this section, unless the context 17 otherwise requires: 18 a. “Annual growth factor” means an index, expressed as 19 a percentage, determined by the department of management by 20 January 1 of the calendar year in which the budget year begins. 21 In determining the annual growth factor, the department shall 22 calculate the percentage change in the median family income 23 in midwest census region between the two most recent calendar 24 years for which information is available. The department shall 25 then add that percentage change to one hundred percent. In no 26 case, however, shall the annual growth factor be less than one 27 hundred percent. 28 b. “Boundary adjustment” means annexation, severance, 29 incorporation, or discontinuance as those terms are defined in 30 section 368.1. 31 c. “Budget year” is the fiscal year beginning during the 32 calendar year in which a budget is certified. 33 d. “Current fiscal year” is the fiscal year ending during 34 the calendar year in which a budget is certified. 35 -12- LSB 1563YC (9) 88 md/jh 12/ 21
H.F. _____ e. “Net new valuation taxes” means the amount of property 1 tax dollars equal to the current fiscal year’s levy rate in the 2 city for the general fund multiplied by the increase from the 3 current fiscal year to the budget year in taxable valuation due 4 to the following: 5 (1) Net new construction, excluding all incremental 6 valuation that is released in any one year from either a 7 division of revenue under section 260E.4 or an urban renewal 8 area for which taxes were being divided under section 403.19 if 9 the property for the valuation being released remains subject 10 to the division of revenue under section 260E.4 or remains part 11 of the urban renewal area that is subject to a division of 12 revenue under section 403.19. 13 (2) Additions or improvements to existing structures. 14 (3) Remodeling of existing structures for which a building 15 permit is required. 16 (4) Net boundary adjustment. 17 (5) A municipality no longer dividing tax revenues in an 18 urban renewal area as provided in section 403.19 or a community 19 college no longer dividing revenues as provided in section 20 260E.4. 21 (6) That portion of taxable property located in an urban 22 revitalization area on which an exemption was allowed and such 23 exemption has expired. 24 3. a. For the fiscal year beginning July 1, 2020, and 25 subsequent fiscal years, the maximum amount of property 26 tax dollars which may be certified for levy by a city for 27 the general fund shall be the maximum property tax dollars 28 calculated under paragraph “b” . 29 b. The maximum property tax dollars that may be levied for 30 deposit in the general fund is an amount equal to the sum of the 31 following: 32 (1) The annual growth factor times the current fiscal year’s 33 maximum property tax dollars for the general fund. 34 (2) The amount of net new valuation taxes in the city. 35 -13- LSB 1563YC (9) 88 md/jh 13/ 21
H.F. _____ 4. For purposes of calculating maximum property tax dollars 1 for the city general fund for the fiscal year beginning July 2 1, 2020, only, the term “current fiscal year’s maximum property 3 tax dollars” shall mean the total amount of property tax dollars 4 certified by the city for the city’s general fund for the 5 fiscal year beginning July 1, 2019. 6 5. Property taxes certified for deposit in the debt service 7 fund in section 384.4, trust and agency funds in section 8 384.6, capital improvements reserve fund in section 384.7, 9 the emergency fund in section 384.8, any capital projects 10 fund established by the city for deposit of bond, loan, or 11 note proceeds, any temporary increase approved pursuant to 12 section 384.12A, property taxes collected from a voted levy in 13 section 384.12, and property taxes levied under section 384.12, 14 subsection 17, are not counted against the maximum amount of 15 property tax dollars that may be certified for a fiscal year 16 under subsection 3. 17 6. Notwithstanding the maximum amount of taxes a city 18 may certify for levy, the tax levied by a city on tracts of 19 land and improvements on the tracts of land used and assessed 20 for agricultural or horticultural purposes shall not exceed 21 three dollars and three-eighths cents per thousand dollars 22 of assessed value in any year. Improvements located on such 23 tracts of land and not used for agricultural or horticultural 24 purposes and all residential dwellings are subject to the same 25 rate of tax levied by the city on all other taxable property 26 within the city. 27 7. The department of management, in consultation with the 28 city finance committee, shall adopt rules to administer this 29 section. The department shall prescribe forms to be used by 30 cities when making calculations required by this section. 31 Sec. 22. NEW SECTION . 384.1A Ending fund balance. 32 1. a. Budgeted ending fund balances for a budget year in 33 excess of twenty-five percent of budgeted expenditures from the 34 general fund for that budget year shall be explicitly reserved 35 -14- LSB 1563YC (9) 88 md/jh 14/ 21
H.F. _____ or designated for a specific purpose. 1 b. A city is encouraged, but not required, to reduce 2 budgeted, unreserved, or undesignated ending fund balances for 3 the budget year to an amount equal to approximately twenty-five 4 percent of budgeted expenditures and transfers from the general 5 fund for that budget year unless a decision is certified by 6 the state appeal board ordering a reduction in the ending fund 7 balance of the fund. 8 c. In a protest to the city budget under section 384.19, 9 the city shall have the burden of proving that the budgeted 10 balances in excess of twenty-five percent are reasonably likely 11 to be appropriated for the explicitly reserved or designated 12 specific purpose. The excess budgeted balance for the specific 13 purpose shall be considered an increase in an item in the 14 budget for purposes of section 24.28. 15 2. a. For a city that has, as of June 30, 2019, reduced its 16 ending fund balance to less than twenty-five percent of actual 17 expenditures, additional property taxes may be computed and 18 levied as provided in this subsection. The additional property 19 tax levy amount is an amount not to exceed the difference 20 between twenty-five percent of actual expenditures for city 21 government purposes for the fiscal year beginning July 1, 2018, 22 minus the ending fund balance for that year. 23 b. All or a portion of additional property tax dollars 24 may be levied for the purpose of increasing cash reserves for 25 city government purposes in the budget year. The additional 26 property tax dollars authorized under this subsection but not 27 levied may be carried forward as unused ending fund balance 28 taxing authority until and for the fiscal year beginning 29 July 1, 2025. The amount carried forward shall not exceed 30 twenty-five percent of the maximum amount of property tax 31 dollars available in the current fiscal year. Additionally, 32 property taxes that are levied as unused ending fund balance 33 taxing authority under this subsection may be the subject of a 34 protest under section 384.19, and the amount will be considered 35 -15- LSB 1563YC (9) 88 md/jh 15/ 21
H.F. _____ an increase in an item in the budget for purposes of section 1 24.28. The amount of additional property tax dollars levied 2 under this subsection shall not be included in the computation 3 of the maximum amount of property tax dollars which may be 4 certified and levied under section 384.1. 5 Sec. 23. Section 384.12, subsection 19, Code 2019, is 6 amended by striking the subsection. 7 Sec. 24. NEW SECTION . 384.12A Authority to levy beyond 8 maximum property tax dollars. 9 1. a. The city council may annually certify additions 10 to the maximum amount of property tax dollars to be levied 11 if the city council publishes notice of the proposed action, 12 including a statement of the amount and purpose of the proposed 13 additions, and the time and place of a public meeting at which 14 the city council proposes to take action on the proposal. 15 At the meeting, the council shall receive oral or written 16 objections from any resident or property owner of the city. 17 After all objections have been received and considered, the 18 council may, following twenty days after the meeting and 19 subject to paragraph “b” , take action on the proposal or abandon 20 the proposal. 21 b. If, at any time within twenty days after the meeting 22 under paragraph “a” , a petition is filed with the city clerk 23 signed by eligible electors of the city equal in number to the 24 lesser of two thousand or twenty percent of the persons in the 25 city who voted for the office of president of the United States 26 at the last preceding general election that had such office on 27 the ballot, asking that the question of levying an additional 28 amount be submitted to the registered voters of the city, the 29 city council shall either by resolution declare the proposal 30 to be abandoned or shall direct the county commissioner of 31 elections to call a special election upon the question. 32 2. The special election, if called, is subject to the 33 following: 34 a. The city council must give at least thirty-two days’ 35 -16- LSB 1563YC (9) 88 md/jh 16/ 21
H.F. _____ notice to the county commissioner of elections that the special 1 election is to be held. In no case, however, shall a notice be 2 given to the county commissioner of elections after December 31 3 for an election on a proposition to exceed the statutory limits 4 during the fiscal year beginning in the next calendar year. 5 b. The proposition submitted to voters may propose authority 6 for the city council to certify additions to the maximum amount 7 of property tax dollars for up to two fiscal years. The 8 proposition is approved if it receives a favorable majority of 9 the votes cast on the proposition. 10 c. The proposition to be submitted shall be substantially 11 in the following form: 12 Vote “yes” or “no” on the following: 13 Shall the city of ........ levy for an additional $ ... each 14 year for ... years beginning next July 1, .... , in excess of 15 the statutory limits otherwise applicable for the city general 16 fund? 17 d. The canvass shall be held beginning at 1:00 p.m. on 18 the second day which is not a holiday following the special 19 election. 20 e. Notice of the special election shall be published at 21 least once in a newspaper as specified in section 362.3 prior 22 to the date of the special election. The notice shall appear 23 as early as practicable after the city council has voted to 24 submit a proposition to the voters to levy additional property 25 tax dollars. 26 3. The amount of additional property tax dollars certified 27 under this section shall not be included in the computation 28 of the maximum amount of property tax dollars which may be 29 certified and levied under section 384.1. 30 Sec. 25. Section 384.19, Code 2019, is amended by adding the 31 following new subsection: 32 NEW SUBSECTION . 5. For purposes of a tax protest filed 33 under this section and in accordance with the provisions of 34 chapter 24, “item” means a budgeted expenditure, appropriation, 35 -17- LSB 1563YC (9) 88 md/jh 17/ 21
H.F. _____ or cash reserve from a fund for a service area, program, 1 program element, or purpose. 2 Sec. 26. Section 386.8, Code 2019, is amended to read as 3 follows: 4 386.8 Operation tax. 5 A city may establish a self-supported improvement district 6 operation fund, and may certify taxes not to exceed the 7 rate limitation as established in the ordinance creating the 8 district, or any amendment thereto, each year to be levied 9 for the fund against all of the property in the district, 10 for the purpose of paying the administrative expenses of 11 the district, which may include but are not limited to 12 administrative personnel salaries, a separate administrative 13 office, planning costs including consultation fees, engineering 14 fees, architectural fees, and legal fees and all other expenses 15 reasonably associated with the administration of the district 16 and the fulfilling of the purposes of the district. The taxes 17 levied for this fund may also be used for the purpose of paying 18 maintenance expenses of improvements or self-liquidating 19 improvements for a specified length of time with one or more 20 options to renew if such is clearly stated in the petition 21 which requests the council to authorize construction of the 22 improvement or self-liquidating improvement, whether or not 23 such petition is combined with the petition requesting creation 24 of a district. Parcels of property which are assessed as 25 residential property for property tax purposes are exempt from 26 the tax levied under this section except residential properties 27 within a duly designated historic district. A tax levied under 28 this section is not subject to the levy limitation in section 29 384.1 . 30 Sec. 27. Section 386.9, Code 2019, is amended to read as 31 follows: 32 386.9 Capital improvement tax. 33 A city may establish a capital improvement fund for a 34 district and may certify taxes, not to exceed the rate 35 -18- LSB 1563YC (9) 88 md/jh 18/ 21
H.F. _____ established by the ordinance creating the district, or any 1 subsequent amendment thereto, each year to be levied for 2 the fund against all of the property in the district, for 3 the purpose of accumulating moneys for the financing or 4 payment of a part or all of the costs of any improvement or 5 self-liquidating improvement. However, parcels of property 6 which are assessed as residential property for property tax 7 purposes are exempt from the tax levied under this section 8 except residential properties within a duly designated historic 9 district. A tax levied under this section is not subject to 10 the levy limitations in section 384.1 or 384.7 . 11 Sec. 28. REPEAL. Sections 331.425 and 331.426, Code 2019, 12 are repealed. 13 Sec. 29. APPLICABILITY. This Act applies to fiscal years 14 beginning on or after July 1, 2020. 15 EXPLANATION 16 The inclusion of this explanation does not constitute agreement with 17 the explanation’s substance by the members of the general assembly. 18 This bill removes the property tax levy rate limitations on 19 the general and rural funds for counties and on the general 20 fund for cities and substitutes a limitation on the maximum 21 amount of property tax dollars that may be certified for 22 expenditure by a county or city for those funds for fiscal 23 years beginning on or after July 1, 2020. For the fiscal 24 year beginning July 1, 2020, and subsequent fiscal years, the 25 maximum amount of property tax dollars which may be certified 26 for levy shall be an amount equal to the sum of the current 27 fiscal year’s total property tax dollars certified by the 28 county or city multiplied by the annual growth factor, as 29 defined in the bill, and the amount of net new valuation taxes, 30 as defined in the bill. 31 The bill also allows counties and cities to annually certify 32 additions to the maximum amount of property tax dollars to 33 be levied following a public meeting, subject to a voter 34 referendum, if requested by petition. The bill specifies 35 -19- LSB 1563YC (9) 88 md/jh 19/ 21
H.F. _____ the notice and election requirements for such a referendum 1 election. The bill specifies that such additional amounts are 2 not to be included in the computation of the maximum amount of 3 property tax dollars for future budget years. 4 The bill specifies certain requirements for ending fund 5 balances for counties and cities. The bill provides that 6 budgeted ending fund balances in certain specified funds for a 7 budget year in excess of 25 percent of budgeted expenditures 8 shall be explicitly reserved or designated for a specific 9 purpose. 10 Under the bill, counties and cities are encouraged, but 11 not required, to reduce budgeted, unreserved, or undesignated 12 ending fund balances for the budget year to an amount equal to 13 approximately 25 percent of budgeted expenditures and certain 14 transfers for that budget year unless a decision is certified 15 by the state appeal board ordering a reduction in the ending 16 fund balance of any of those funds. The county or city, 17 as applicable, has the burden of proving that the budgeted 18 balances in excess of 25 percent are reasonably likely to be 19 appropriated for the explicitly reserved or designated specific 20 purpose. 21 The bill also allows for additional property taxes to be 22 levied in certain fiscal years for those counties or cities 23 that have, as of June 30, 2019, reduced their actual ending 24 fund balance to less than 25 percent of actual expenditures. 25 Such additional property tax dollars authorized but not levied 26 may be carried forward as unused ending fund balance taxing 27 authority until and for the fiscal year beginning July 1, 2025. 28 However, the amount carried forward shall not exceed 25 percent 29 of the maximum amount of property tax dollars available in the 30 current fiscal year. The amount of such additional property 31 taxes levied shall not, however, be included in the computation 32 of the maximum amount of property tax dollars which may be 33 certified and levied in future budget years. 34 The bill also makes conforming amendments to other 35 -20- LSB 1563YC (9) 88 md/jh 20/ 21
H.F. _____ provisions of the Code. 1 The bill applies to fiscal years beginning on or after July 2 1, 2020. 3 -21- LSB 1563YC (9) 88 md/jh 21/ 21
feedback