§ 423A.7 — Local transient guest tax fund

Iowa § 423A.7

• Jurisdiction: Iowa
• Title X: FINANCIAL RESOURCES
• Ch. 423A: HOTEL AND MOTEL TAX

Text

1. A local transient guest tax fund is created in the department which shall consist of all
moneys credited to such fund under section 423A.6.
2. Allmoneysinthelocaltransientguesttaxfundshallberemittedatleastquarterlybythe
department, pursuant to rules of the director of revenue, to each city in the amount collected
from businesses in that city, to each county in the amount collected from businesses in the
unincorporated areas of the county, and to each land use district in the amount collected from
businesses in that land use district.
3. Moneys received by the city from this fund shall be credited to the general fund of the
city, subject to the provisions of subsection 4.
4. The revenue derived by a city or county from any local hotel and motel tax authorized
by section 423A.4 shall be used by a city or county as follows:
a. Each county or city which levies the tax shall spend at least fifty percent of the
revenues derived therefrom for the acquisition of sites for, or constructing, improving,
enlarging, equipping, repairing, operating, or maintaining of recreation, convention,
cultural, or entertainment facilities including but not limited to memorial buildings, halls and
monuments, civic center convention buildings, auditoriums, coliseums, and parking areas or
facilities located at those recreation, convention, cultural, or entertainment facilities or the
payment of principal and interest, when due, on bonds or other evidence of indebtedness
issued by the county or city for those recreation, convention, cultural, or entertainment
facilities; or for the promotion and encouragement of tourist and convention business in the
city or county and surrounding areas.
b. The remaining revenues may be spent by the city or county which levies the tax for any
city or county operations authorized by law as a proper purpose for the expenditure within
statutory limitations of city or county revenues derived from ad valorem taxes.
c. Any city or county which levies and collects the local hotel and motel tax authorized by
section 423A.4 may pledge irrevocably an amount of the revenues derived therefrom for each
of the years the bonds remain outstanding to the payment of bonds which the city or county
may issue for one or more of the purposes set forth in paragraph “a”. Any revenue pledged
to the payment of such bonds may be credited to the spending requirement of paragraph “a”.
d. (1) The provisions of chapter 384, subchapter III, relating to the issuance of corporate
purpose bonds, apply to the issuance by a city of bonds payable as provided in this section
and the provisions of chapter 331, subchapter IV, part 3, relating to the issuance of county
purposebonds, applytotheissuancebyacountyofbondspayableasprovidedinthissection.
The provisions of chapter 76 apply to the bonds payable as provided in this section except
that the mandatory levy to be assessed pursuant to section 76.2 shall be at a rate to generate
an amount which together with the receipts from the pledged portion of the local hotel and
motel tax is sufficient to pay the interest and principal on the bonds. All amounts collected
as a result of the levy assessed pursuant to section 76.2 and paid out in the first instance for
bond principal and interest shall be repaid to the city or county which levied the tax from the
first available local hotel and motel tax collections received in excess of the requirement for
§423A.7, HOTEL AND MOTEL TAX 6
the payment of the principal and interest of the bonds and when repaid shall be applied in
reduction of property taxes.
(2) The amount of bonds which may be issued under section 76.3 shall be the amount
which could be retired from the actual collections of the local hotel and motel tax for the last
four calendar quarters, as certified by the director of revenue. The amount of tax revenues
pledged jointly by other cities or counties may be considered for the purpose of determining
the amount of bonds which may be issued. If the local hotel and motel tax has been in
effect for less than four calendar quarters, the tax collected within the shorter period may be
adjusted to project the collections for the full year for the purpose of determining the amount
of the bonds which may be issued.
e. A city or county, jointly with one or more other cities or counties as provided in chapter
28E, may pledge irrevocably any amount derived from the revenues of the local hotel and
motel tax to the support or payment of bonds issued for a project within the purposes set
forth in paragraph “a” and located within one or more of the participatory cities or counties
ormayapplytheproceedsofitsbondstothesupportofanysuchproject. Revenuesopledged
or applied shall be credited to the spending requirement of paragraph “a”.
f. (1) A city or county acting on behalf of an unincorporated area may, in lieu of calling
an election, institute proceedings for the issuance of bonds under this section by causing a
notice of the proposal to issue the bonds, including a statement of the amount and purpose
of the bonds, together with the maximum rate of interest which the bonds are to bear, and
the right to petition for an election, to be published at least once in a newspaper of general
circulation within the city or unincorporated area at least ten days prior to the meeting at
which it is proposed to take action for the issuance of the bonds.
(2) If at any time before the date fixed for taking action for the issuance of the bonds a
petition signed by eligible electors residing in the city or the unincorporated area equal in
number to at least three percent of the registered voters of the city or unincorporated area
is filed, asking that the question of issuing the bonds be submitted to the registered voters
of the city or unincorporated area, the council or board of supervisors acting on behalf of an
unincorporated area shall either by resolution declare the proposal to issue the bonds to have
been abandoned or shall direct the county commissioner of elections to call a special election
upon the question of issuing the bonds.
(3) The proposition of issuing bonds under this section is not approved unless the vote in
favor of the proposition is equal to a majority of the vote cast.
(4) If no petition is filed, or if a petition is filed and the proposition of issuing the
bonds is approved at an election, the council or board of supervisors acting on behalf of an
unincorporated area may proceed with the authorization and issuance of the bonds.
(5) Bonds may be issued for the purpose of refunding outstanding and previously issued
bonds under this section without otherwise complying with this paragraph.
5. Therevenuederivedbyalandusedistrictfromanylocalhotelandmoteltaxauthorized
by section 423A.4 shall be expended exclusively for the purposes set forth in section 303.52,
subsection 4, paragraph “b”.