Bill Text: IA SF387 | 2013-2014 | 85th General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: A bill for an act relating to a city's authority to issue debt, including authorization to use city reserve funds as a loan payable from the debt service fund for certain general obligation bond projects. (Formerly SSB 1092.)
Spectrum: Committee Bill
Status: (Engrossed - Dead) 2014-01-28 - Subcommittee reassigned, Pettengill, Hanusa, and Running-Marquardt. H.J. 120. [SF387 Detail]
Download: Iowa-2013-SF387-Introduced.html
Bill Title: A bill for an act relating to a city's authority to issue debt, including authorization to use city reserve funds as a loan payable from the debt service fund for certain general obligation bond projects. (Formerly SSB 1092.)
Spectrum: Committee Bill
Status: (Engrossed - Dead) 2014-01-28 - Subcommittee reassigned, Pettengill, Hanusa, and Running-Marquardt. H.J. 120. [SF387 Detail]
Download: Iowa-2013-SF387-Introduced.html
Senate
File
387
-
Introduced
SENATE
FILE
387
BY
COMMITTEE
ON
STATE
GOVERNMENT
(SUCCESSOR
TO
SSB
1092)
A
BILL
FOR
An
Act
relating
to
a
city’s
authority
to
issue
debt,
including
1
authorization
to
use
city
reserve
funds
as
a
loan
payable
2
from
the
debt
service
fund
for
certain
general
obligation
3
bond
projects.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
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387
Section
1.
Section
384.4,
subsection
1,
Code
2013,
is
1
amended
by
adding
the
following
new
paragraph:
2
NEW
PARAGRAPH
.
f.
Payments
of
principal
and
interest
on
3
loans
entered
into
pursuant
to
section
384.24B
and
authorized
4
for
repayment
by
the
council
from
the
debt
service
fund.
5
Sec.
2.
NEW
SECTION
.
384.24B
General
obligation
loans
6
funded
by
the
city.
7
1.
A
city
may
authorize
a
loan,
as
defined
in
this
section,
8
to
borrow
money
for
any
public
purpose
in
accordance
with
and
9
subject
to
the
provisions
of
this
section.
10
2.
a.
For
purposes
of
this
section,
“loan”
means
the
11
sum
of
the
transfers
from
the
surplus
of
one
or
more
reserve
12
accounts
or
funds
of
the
city
which
transfers
are
authorized
13
for
the
purpose
specified
in
the
loan
authorization
document.
14
A
transfer
from
a
reserve
account
or
fund
for
the
purposes
of
15
this
section
shall
not
cause
the
balance
of
reserves
in
such
16
account
or
fund
at
the
close
of
the
fiscal
year
following
the
17
fiscal
year
in
which
the
transfer
is
made
to
fall
below
any
18
minimum
balance
prescribed
by
law
for
such
account
or
fund.
19
b.
A
loan
to
finance
a
general
obligation
bond
project
20
under
this
section
shall
not
result
in
a
user
fee,
rate,
or
21
property
tax
increase
to
support
the
annual
operations
of
the
22
account
or
fund
from
which
the
loan
is
made,
as
a
result
of
23
the
unavailability
of
the
surplus
funds.
For
the
purposes
24
of
this
section,
“surplus”
means
the
cash
balance
available
25
in
any
account
or
fund
from
which
a
loan
will
be
made
under
26
this
section,
calculated
in
accordance
with
generally
accepted
27
accounting
principles,
which
exceeds
the
amount
of
expenses
or
28
disbursements
made
from
the
account
or
fund
in
the
previous
29
three
months,
plus
the
amount
of
transfers,
payments,
or
30
disbursements
required
in
the
following
three
months.
31
3.
a.
A
loan
entered
into
by
a
city
pursuant
to
this
32
section
may
contain
provisions
similar
to
those
found
in
loan
33
agreements
between
private
parties,
including
but
not
limited
34
to
the
issuance
of
notes
to
evidence
its
obligations.
The
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terms
of
each
loan
shall
require
repayment
of
the
loan
within
1
ninety
days
to
the
extent
necessary
to
prevent
a
user
fee,
2
rate,
or
property
tax
increase
which
raises
the
user
fees,
3
rates,
or
property
taxes
payable
into
the
account
or
fund
from
4
which
the
loan
is
made
above
the
level
in
effect
at
the
time
a
5
loan
under
this
section
is
authorized.
6
b.
A
loan
authorized
pursuant
to
this
section
shall
7
constitute
an
indebtedness
within
the
meaning
of
any
statutory
8
debt
limitation.
The
full
or
partial
refunding
of
any
9
loan
under
this
section
shall
be
authorized
as
an
essential
10
corporate
purpose
pursuant
to
section
384.24,
subsection
3,
11
paragraph
“f”
.
12
4.
A
loan
made
pursuant
to
this
section
is
payable
from
the
13
debt
service
fund
of
the
city.
The
governing
body
shall
follow
14
the
same
authorization
procedures
required
for
the
issuance
15
of
general
obligation
bonds
issued
for
the
same
purpose
to
16
authorize
a
loan
made
payable
from
the
debt
service
fund.
17
Upon
approval
of
a
loan,
the
loan
shall
be
accounted
for
and
18
disclosed
annually
on
the
city’s
annual
financial
report
filed
19
with
the
auditor
of
state
pursuant
to
section
384.22.
20
5.
A
loan
made
pursuant
to
this
section
shall
include
21
provisions
establishing
an
interest
rate
on
the
loan
that
22
shall
be
set
between
fifty
percent
and
one
hundred
percent
of
23
the
average
interest
rate
reported
by
a
municipal
bond
sale
24
reporting
service
on
the
day
that
the
loan
is
authorized.
25
6.
Repayments
of
principal
and
interest
shall
be
paid
to
26
the
reserve
fund
or
account
from
which
all
or
a
portion
of
the
27
funds
were
advanced
for
the
loan
in
the
proportion
that
the
28
amount
of
the
advance
from
the
fund
or
account
bears
to
the
29
entire
amount
of
the
loan.
30
7.
The
limitation
in
section
346.24
does
not
apply
to
a
31
transfer
made
pursuant
to
this
section
or
to
a
loan
authorized
32
pursuant
to
this
section.
33
8.
A
loan
made
pursuant
to
this
section
shall
not
include
34
any
transfers
or
obligations
from
the
reserve
fund
or
account
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of
a
city
utility
or
of
a
combined
city
utility.
1
9.
The
powers
granted
under
this
section
shall
not
be
2
construed
as
a
limitation
of
the
existing
powers
of
a
city.
3
Sec.
3.
Section
384.25,
Code
2013,
is
amended
to
read
as
4
follows:
5
384.25
General
obligation
bonds
or
loans
for
essential
6
purposes.
7
1.
A
city
which
proposes
to
carry
out
any
essential
8
corporate
purpose
within
or
without
its
corporate
limits,
and
9
to
contract
indebtedness
and
issue
general
obligation
bonds
or
10
authorize
a
loan
described
in
section
384.24B,
to
provide
funds
11
to
pay
all
or
any
part
of
the
cost
of
a
project
must
do
so
in
12
accordance
with
the
provisions
of
this
division
.
13
2.
Before
the
council
may
institute
proceedings
for
the
14
issuance
of
bonds
or
authorization
of
a
loan
for
an
essential
15
corporate
purpose,
a
notice
of
the
proposed
action,
including
16
a
statement
of
the
amount
and
purposes
of
the
bonds
or
loan
,
17
and
the
time
and
place
of
the
meeting
at
which
the
council
18
proposes
to
take
action
for
the
issuance
of
the
bonds
or
19
authorization
of
the
loan
,
must
be
published
as
provided
in
20
section
362.3
.
At
the
meeting,
the
council
shall
receive
oral
21
or
written
objections
from
any
resident
or
property
owner
22
of
the
city.
After
all
objections
have
been
received
and
23
considered,
the
council
may,
at
that
meeting
or
any
adjournment
24
thereof,
take
additional
action
for
the
issuance
of
the
bonds
25
or
authorization
of
the
loan
or
abandon
the
proposal
to
issue
26
the
bonds
or
authorize
the
loan
.
Any
resident
or
property
27
owner
of
the
city
may
appeal
the
decision
of
the
council
to
28
take
additional
action
to
the
district
court
of
the
county
in
29
which
any
part
of
the
city
is
located,
within
fifteen
days
30
after
the
additional
action
is
taken,
but
the
additional
action
31
of
the
council
is
final
and
conclusive
unless
the
court
finds
32
that
the
council
exceeded
its
authority.
The
provisions
of
33
this
subsection
with
respect
to
notice,
hearing,
and
appeal,
34
are
in
lieu
of
the
provisions
contained
in
chapter
73A
,
or
any
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other
law.
1
3.
a.
Notwithstanding
subsection
2
,
a
council
may
institute
2
proceedings
for
the
issuance
of
bonds
or
the
authorization
of
a
3
loan
for
an
essential
corporate
purpose
specified
in
section
4
384.24,
subsection
3
,
paragraph
“w”
or
“x”
,
in
an
amount
equal
5
to
or
greater
than
three
million
dollars
by
causing
a
notice
6
of
the
proposal
to
issue
the
bonds
or
authorize
the
loan
,
7
including
a
statement
of
the
amount
and
purpose
of
the
bonds
8
or
loan
,
together
with
the
maximum
rate
of
interest
which
the
9
bonds
are
to
bear
or
which
will
be
charged
to
the
principal
10
balance
of
the
loan
,
and
the
right
to
petition
for
an
election,
11
to
be
published
at
least
once
in
a
newspaper
of
general
12
circulation
within
the
city
at
least
ten
days
prior
to
the
13
meeting
at
which
it
is
proposed
to
take
action
for
the
issuance
14
of
the
bonds
or
the
authorization
of
the
loan
.
15
b.
If
at
any
time
before
the
date
fixed
for
taking
action
16
for
the
issuance
of
the
bonds
or
the
authorization
of
the
17
loan
,
a
petition
is
filed
with
the
clerk
of
the
city
signed
18
by
eligible
electors
of
the
city
equal
in
number
to
twenty
19
percent
of
the
persons
in
the
city
who
voted
for
the
office
of
20
president
of
the
United
States
at
the
last
preceding
general
21
election
that
had
such
office
on
the
ballot,
asking
that
the
22
question
of
issuing
the
bonds
or
authorizing
the
loan
be
23
submitted
to
the
registered
voters
of
the
city,
the
council
24
shall
either
by
resolution
declare
the
proposal
to
issue
the
25
bonds
or
authorize
the
loan
to
have
been
abandoned
or
shall
26
direct
the
county
commissioner
of
elections
to
call
a
special
27
election
upon
the
question
of
issuing
the
bonds
or
authorizing
28
the
loan
.
Notice
of
the
election
and
its
conduct
shall
be
in
29
the
manner
provided
in
section
384.26
.
30
c.
If
a
petition
is
not
filed,
or
if
a
petition
is
filed
and
31
the
proposition
of
issuing
the
bonds
or
authorizing
the
loan
32
is
approved
at
an
election,
the
council
may
proceed
with
the
33
authorization
and
issuance
of
the
bonds
or
authorization
of
the
34
loan
.
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Sec.
4.
Section
384.26,
subsections
1,
2,
4,
and
5,
Code
1
2013,
are
amended
to
read
as
follows:
2
1.
A
city
which
proposes
to
carry
out
any
general
corporate
3
purpose
within
or
without
its
corporate
limits,
and
to
contract
4
indebtedness
and
issue
general
obligation
bonds
or
authorize
a
5
loan
described
in
section
384.24B,
to
provide
funds
to
pay
all
6
or
any
part
of
the
costs
of
a
project,
must
do
so
in
accordance
7
with
the
provisions
of
this
division
.
8
2.
Before
the
council
may
institute
proceedings
for
the
9
issuance
of
bonds
or
authorization
of
a
loan
for
a
general
10
corporate
purpose,
it
shall
call
a
special
city
election
to
11
vote
upon
the
question
of
issuing
the
bonds
or
authorizing
the
12
loan
.
At
the
election
the
proposition
must
be
submitted
in
one
13
of
the
following
form
forms,
as
applicable
:
14
Shall
the
............
(insert
the
name
of
the
city)
issue
15
its
bonds
in
an
amount
not
exceeding
the
amount
of
$
....
for
16
the
purpose
of
..........
?
17
Shall
the
..........
(insert
the
name
of
the
city)
authorize
18
a
loan
from
its
surplus
funds
in
an
amount
not
exceeding
the
19
amount
of
$
....
for
the
purpose
of
..........?
20
4.
The
proposition
of
issuing
general
corporate
purpose
21
bonds
or
authorizing
a
loan
for
a
general
corporate
purpose
22
is
not
carried
or
adopted
unless
the
vote
in
favor
of
the
23
proposition
is
equal
to
at
least
sixty
percent
of
the
total
24
vote
cast
for
and
against
the
proposition
at
the
election.
25
If
the
proposition
of
issuing
the
general
corporate
purpose
26
bonds
or
authorizing
a
loan
for
a
general
corporate
purpose
is
27
approved
by
the
voters,
the
city
may
proceed
with
the
issuance
28
of
the
bonds
or
authorization
of
the
loan
.
29
5.
a.
Notwithstanding
the
provisions
of
subsection
2
,
30
a
council
may,
in
lieu
of
calling
an
election,
institute
31
proceedings
for
the
issuance
of
bonds
or
authorization
of
a
32
loan
for
a
general
corporate
purpose
by
causing
a
notice
of
the
33
proposal
to
issue
the
bonds
or
authorize
the
loan
,
including
34
a
statement
of
the
amount
and
purpose
of
the
bonds
or
loan
,
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387
together
with
the
maximum
rate
of
interest
which
the
bonds
are
1
to
bear
or
which
the
loan
is
to
bear
,
and
the
right
to
petition
2
for
an
election,
to
be
published
at
least
once
in
a
newspaper
3
of
general
circulation
within
the
city
at
least
ten
days
prior
4
to
the
meeting
at
which
it
is
proposed
to
take
action
for
the
5
issuance
of
the
bonds
or
authorization
of
the
loan
subject
to
6
the
following
limitations:
7
(1)
In
cities
having
a
population
of
five
thousand
or
less,
8
in
an
amount
of
not
more
than
four
hundred
thousand
dollars.
9
(2)
In
cities
having
a
population
of
more
than
five
thousand
10
and
not
more
than
seventy-five
thousand,
in
an
amount
of
not
11
more
than
seven
hundred
thousand
dollars.
12
(3)
In
cities
having
a
population
in
excess
of
seventy-five
13
thousand,
in
an
amount
of
not
more
than
one
million
dollars.
14
b.
If
at
any
time
before
the
date
fixed
for
taking
action
15
for
the
issuance
of
the
bonds
or
the
authorization
of
the
16
loan
,
a
petition
is
filed
with
the
clerk
of
the
city
in
the
17
manner
provided
by
section
362.4
,
asking
that
the
question
18
of
issuing
the
bonds
or
authorizing
the
loan
be
submitted
to
19
the
registered
voters
of
the
city,
the
council
shall
either
by
20
resolution
declare
the
proposal
to
issue
the
bonds
or
authorize
21
the
loan
to
have
been
abandoned
or
shall
direct
the
county
22
commissioner
of
elections
to
call
a
special
election
upon
the
23
question
of
issuing
the
bonds
or
authorizing
the
loan
.
Notice
24
of
the
election
and
its
conduct
shall
be
in
the
manner
provided
25
in
the
preceding
subsections
of
this
section
.
26
c.
If
no
petition
is
filed,
or
if
a
petition
is
filed
and
27
the
proposition
of
issuing
the
bonds
or
authorizing
the
loan
28
is
approved
at
an
election,
the
council
may
proceed
with
the
29
authorization
and
issuance
of
the
bonds
or
the
authorization
30
of
the
loan
.
31
Sec.
5.
Section
384.33,
Code
2013,
is
amended
to
read
as
32
follows:
33
384.33
Action.
34
No
action
may
be
brought
which
questions
the
legality
of
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general
obligation
bonds
,
notes,
or
loans
under
this
chapter
or
1
the
power
of
the
city
to
issue
the
bonds
,
notes
or
loans
or
the
2
effectiveness
of
any
proceedings
relating
to
the
authorization
3
and
issuance
of
the
bonds
,
notes,
or
loans
from
and
after
sixty
4
days
from
the
time
the
bonds
,
notes
or
loans
are
ordered
issued
5
by
the
city.
6
EXPLANATION
7
This
bill
enacts
new
Code
section
384.24B
to
allow
a
city
8
to
borrow
surplus
money
from
its
reserve
accounts
or
funds
9
for
certain
public
purposes.
The
bill
requires
that
a
city
10
certify
taxes
to
be
levied
for
deposit
in
the
debt
service
11
fund
in
the
amount
necessary
to
pay
principal
and
interest
on
12
loans
authorized
under
the
bill.
This
bill
defines
“loan”
and
13
“surplus”.
14
The
bill
requires
that
such
loans
not
cause
the
balances
15
of
such
reserve
accounts
or
funds
to
fall
below
any
minimum
16
balance
prescribed
by
law.
The
bill
requires
that
such
loans
17
not
result
in
a
user
fee,
rate,
or
property
tax
increase
as
18
a
result
of
unavailability
of
surplus
funds.
The
terms
of
19
each
loan
shall
require
repayment
of
the
loan
within
90
days
20
to
the
extent
necessary
to
prevent
a
user
fee
rate
or
property
21
tax
increase.
Such
a
loan
shall
be
payable
from
the
city
debt
22
service
fund
and
shall
constitute
an
indebtedness
within
the
23
meaning
of
any
statutory
debt
limitation.
24
The
full
or
partial
repayment
of
a
loan
entered
into
under
25
the
bill
shall
constitute
an
essential
corporate
purpose
26
pursuant
to
Code
section
384.24,
subsection
3,
paragraph
“f”.
27
The
bill
provides
that
upon
approval
of
such
a
loan
that
the
28
loan
shall
be
accounted
for
and
disclosed
annually
on
the
29
city’s
annual
financial
report.
The
bill
further
provides
30
that
interest
rates
on
such
a
loan
be
set
between
50
and
100
31
percent
of
the
average
interest
rate
reported
by
a
municipal
32
bond
sale
reporting
service
on
the
day
the
loan
is
authorized.
33
The
bill
provides
that
such
a
loan
not
include
any
transfers
or
34
obligations
from
a
reserve
fund
or
account
of
a
city
utility
or
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combined
city
utility.
1
The
bill
requires
that
such
authorization
by
a
city
council
2
follow
substantially
the
same
procedures
for
the
issuance
of
3
general
obligation
bonds
for
essential
corporate
purposes,
4
pursuant
to
Code
section
384.25,
or
for
general
corporate
5
purposes,
pursuant
to
Code
section
384.26.
The
bill
further
6
provides
that
no
action
may
be
brought
against
a
city
regarding
7
the
legality,
power
to
issue,
or
power
to
authorize
notes
or
8
loans
under
new
Code
section
384.24B
at
any
time
after
60
days
9
following
issuance.
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