Bill > HF38

Introduced Session

This bill authorizes cities to establish entertainment areas and to impose an entertainment surcharge within the area. Under the bill, following the filing of a petition for the establishment of an entertainment area (area) and holding a public hearing, a city may establish an area by ordinance for the purpose of imposing an entertainment surcharge (surcharge). The city council shall initiate proceedings for adoption of the ordinance upon signatures of at least 25 percent of the owners of property within the proposed entertainment area. The proposed area must meet all of the following requirements: (1) the combined attendance at cultural or entertainment establishments, food establishments, liquor establishments, and lodging providers within the proposed area is reasonably expected to exceed 250,000 persons per calendar year within two years; (2) the area consists of contiguous parcels wholly within the boundaries of the city and does not exceed 75 acres; (3) the area does not include the entire incorporated area of the city; (4) the area consists only of properties zoned for commercial uses or properties within a designated historic district, and at least 75 percent of the properties must be cultural or entertainment establishments, food establishments, liquor establishments, or lodging providers; (5) the area must be comprised of property related in some manner; and (6) the area must be given a descriptive name. Adoption of the ordinance establishing the area requires the affirmative vote of three-fourths of all the members of the council, or in cities having three members of the council, the affirmative vote of two members. However, if a remonstrance has been filed with the clerk signed by at least 25 percent of all owners of property within the proposed area representing ownership of at least 25 percent or more of the total number of cultural or entertainment establishments, food establishments, liquor establishments, and lodging providers in the proposed area, the adoption of the ordinance requires a unanimous vote of the council. At any time prior to the final adoption of an ordinance establishing an area, the entire matter of establishing such area shall be withdrawn from council consideration if a petition objecting to establishing such area is filed with the clerk containing signatures of at least 40 percent or more of all owners of property in the proposed area or signatures which together represent ownership of 40 percent or more of the total number of cultural or entertainment establishments, food establishments, liquor establishments, and lodging providers within the proposed entertainment area. The surcharge authorized under the bill shall be a rate not to exceed 3 percent, which shall be imposed upon any of the following within the area: (1) the retail sales price of food or alcoholic beverages sold at a cultural or entertainment establishment, food establishment, or liquor establishment; (2) the sales price of all sales of entertainment tickets sold at a cultural or entertainment establishment; or (3) the sales price for the renting of any lodging. The bill specifies that the surcharge shall be in addition to the state sales tax imposed pursuant to Code chapter 423, subchapter II, the state-imposed and locally imposed hotel and motel tax pursuant to Code chapter 423A, and the local sales and services tax imposed pursuant to Code chapter 423B. The bill establishes a process and timing for imposition or repeal of the surcharge and for dissolution of the area. The bill specifies the director of the department of revenue shall administer the surcharge as nearly as possible in conjunction with the administration of the state sales tax. The bill specifies that administrative and enforcement laws relating to the sales tax apply to surcharges imposed under the bill. The bill requires each city to assist the department in identifying new establishments required to impose the surcharge in the area. The bill creates a state surcharge revenue fund in the state treasury under the control of the department of revenue consisting of surcharge revenues collected within each area. The bill creates an area account for each city creating an area. The bill requires the revenues be deposited into the appropriate area account. All revenues in each area account shall be remitted monthly by the department to the city that established the area for deposit in the entertainment area fund of the city. Surcharge revenues deposited into the city’s entertainment area fund may be deposited in any of the following funds: the debt service fund in Code section 384.4, or the capital improvements fund in Code section 384.7. If the surcharge revenues are not deposited in any of the above-mentioned funds, the surcharge revenues may also be used for any of the purposes described under Code section 384.3A(3)(b), (c), (e), (f), or (g).

AI Summary

Committee Categories

Brian Lohse (R)*, 

Committee report approving bill, renumbered as HF 760. (on 03/05/2025)

Official Document