Bill Text: IA SF387 | 2013-2014 | 85th General Assembly | Amended
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-Amended.html
Senate
File
387
-
Reprinted
SENATE
FILE
387
BY
COMMITTEE
ON
STATE
GOVERNMENT
(SUCCESSOR
TO
SSB
1092)
(As
Amended
and
Passed
by
the
Senate
March
20,
2013
)
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
SF
387
(3)
85
aw/sc/jh
S.F.
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
general
corporate
purpose
or
essential
9
corporate
purpose
in
accordance
with
and
subject
to
the
10
provisions
of
this
section.
11
2.
a.
For
purposes
of
this
section,
“loan”
means
the
12
sum
of
the
transfers
from
the
surplus
of
one
or
more
reserve
13
accounts
or
funds
of
the
city
which
transfers
are
authorized
14
for
the
purpose
specified
in
the
loan
authorization
document.
15
A
transfer
from
a
reserve
account
or
fund
for
the
purposes
of
16
this
section
shall
not
cause
the
balance
of
reserves
in
such
17
account
or
fund
at
the
close
of
the
fiscal
year
following
the
18
fiscal
year
in
which
the
transfer
is
made
to
fall
below
any
19
minimum
balance
prescribed
by
law
for
such
account
or
fund.
20
For
the
purposes
of
this
section,
“reserve
account
or
fund”
21
means
moneys
held
by
a
city
that
are
not
operating
funds,
as
22
defined
in
section
12B.10A,
and
which
is
authorized
by
law
to
23
receive
interest
pursuant
to
section
12C.7.
24
b.
A
loan
to
finance
a
general
obligation
bond
project
25
under
this
section
shall
not
result
in
a
user
fee,
rate,
or
26
property
tax
increase
to
support
the
annual
operations
of
the
27
account
or
fund
from
which
the
loan
is
made,
as
a
result
of
28
the
unavailability
of
the
surplus
funds.
For
the
purposes
of
29
this
section,
“surplus”
means
the
cash
balance
available
in
30
any
account
or
fund
from
which
a
loan
will
be
made
under
this
31
section
which
exceeds
the
amount
of
expenses
or
disbursements
32
made
from
the
account
or
fund
in
the
previous
three
months,
33
plus
the
amount
of
transfers,
payments,
or
disbursements
34
required
in
the
following
three
months.
35
-1-
SF
387
(3)
85
aw/sc/jh
1/
7
S.F.
387
3.
a.
A
loan
entered
into
by
a
city
pursuant
to
this
1
section
may
contain
provisions
similar
to
those
found
in
loan
2
agreements
between
private
parties,
including
but
not
limited
3
to
the
issuance
of
notes
to
evidence
its
obligations.
The
4
terms
of
each
loan
shall
require
repayment
of
the
loan
within
5
ninety
days
to
the
extent
necessary
to
prevent
a
user
fee,
6
rate,
or
property
tax
increase
which
raises
the
user
fees,
7
rates,
or
property
taxes
payable
into
the
account
or
fund
from
8
which
the
loan
is
made
above
the
level
in
effect
at
the
time
a
9
loan
under
this
section
is
authorized.
10
b.
A
loan
authorized
pursuant
to
this
section
shall
11
constitute
an
indebtedness
within
the
meaning
of
any
12
constitutional
debt
limitation
and
shall
be
reported
by
the
13
city
to
the
state
treasurer
in
the
same
manner
as
required
14
for
bonding
activities
pursuant
to
section
12.1.
The
full
15
or
partial
refunding
of
any
loan
under
this
section
shall
16
be
authorized
as
an
essential
corporate
purpose
pursuant
to
17
section
384.24,
subsection
3,
paragraph
“f”
.
18
4.
A
loan
made
pursuant
to
this
section
is
payable
from
the
19
debt
service
fund
of
the
city.
The
governing
body
shall
follow
20
the
same
authorization
procedures
required
for
the
issuance
21
of
general
obligation
bonds
issued
for
the
same
purpose
to
22
authorize
a
loan
made
payable
from
the
debt
service
fund.
23
Upon
approval
of
a
loan,
the
loan
shall
be
accounted
for
in
24
accordance
with
section
384.20.
25
5.
A
loan
made
pursuant
to
this
section
shall
include
26
provisions
establishing
an
interest
rate
on
the
loan
that
shall
27
be
set
at
a
rate
that
is
between
the
interest
rate
established
28
pursuant
to
section
12C.6,
subsection
2,
paragraph
“a”
,
and
the
29
interest
rate
established
pursuant
to
section
74A.6,
subsection
30
2.
31
6.
Repayments
of
principal
and
interest
shall
be
paid
to
32
the
reserve
fund
or
account
from
which
all
or
a
portion
of
the
33
funds
were
advanced
for
the
loan
in
the
proportion
that
the
34
amount
of
the
advance
from
the
fund
or
account
bears
to
the
35
-2-
SF
387
(3)
85
aw/sc/jh
2/
7
S.F.
387
entire
amount
of
the
loan.
1
7.
The
limitation
in
section
346.24
does
not
apply
to
a
2
transfer
made
pursuant
to
this
section
or
to
a
loan
authorized
3
pursuant
to
this
section.
4
8.
A
loan
made
pursuant
to
this
section
shall
not
include
5
any
transfers
or
obligations
from
the
reserve
fund
or
account
6
of
a
city
utility
or
of
a
combined
city
utility.
7
9.
The
powers
granted
under
this
section
shall
not
be
8
construed
as
a
limitation
of
the
existing
powers
of
a
city.
9
Sec.
3.
Section
384.25,
Code
2013,
is
amended
to
read
as
10
follows:
11
384.25
General
obligation
bonds
or
loans
for
essential
12
purposes.
13
1.
A
city
which
proposes
to
carry
out
any
essential
14
corporate
purpose
within
or
without
its
corporate
limits,
and
15
to
contract
indebtedness
and
issue
general
obligation
bonds
or
16
authorize
a
loan
described
in
section
384.24B,
to
provide
funds
17
to
pay
all
or
any
part
of
the
cost
of
a
project
must
do
so
in
18
accordance
with
the
provisions
of
this
division
.
19
2.
Before
the
council
may
institute
proceedings
for
the
20
issuance
of
bonds
or
authorization
of
a
loan
for
an
essential
21
corporate
purpose,
a
notice
of
the
proposed
action,
including
22
a
statement
of
the
amount
and
purposes
of
the
bonds
or
loan
,
23
and
the
time
and
place
of
the
meeting
at
which
the
council
24
proposes
to
take
action
for
the
issuance
of
the
bonds
or
25
authorization
of
the
loan
,
must
be
published
as
provided
in
26
section
362.3
.
At
the
meeting,
the
council
shall
receive
oral
27
or
written
objections
from
any
resident
or
property
owner
28
of
the
city.
After
all
objections
have
been
received
and
29
considered,
the
council
may,
at
that
meeting
or
any
adjournment
30
thereof,
take
additional
action
for
the
issuance
of
the
bonds
31
or
authorization
of
the
loan
or
abandon
the
proposal
to
issue
32
the
bonds
or
authorize
the
loan
.
Any
resident
or
property
33
owner
of
the
city
may
appeal
the
decision
of
the
council
to
34
take
additional
action
to
the
district
court
of
the
county
in
35
-3-
SF
387
(3)
85
aw/sc/jh
3/
7
S.F.
387
which
any
part
of
the
city
is
located,
within
fifteen
days
1
after
the
additional
action
is
taken,
but
the
additional
action
2
of
the
council
is
final
and
conclusive
unless
the
court
finds
3
that
the
council
exceeded
its
authority.
The
provisions
of
4
this
subsection
with
respect
to
notice,
hearing,
and
appeal,
5
are
in
lieu
of
the
provisions
contained
in
chapter
73A
,
or
any
6
other
law.
7
3.
a.
Notwithstanding
subsection
2
,
a
council
may
institute
8
proceedings
for
the
issuance
of
bonds
or
the
authorization
of
a
9
loan
for
an
essential
corporate
purpose
specified
in
section
10
384.24,
subsection
3
,
paragraph
“w”
or
“x”
,
in
an
amount
equal
11
to
or
greater
than
three
million
dollars
by
causing
a
notice
12
of
the
proposal
to
issue
the
bonds
or
authorize
the
loan
,
13
including
a
statement
of
the
amount
and
purpose
of
the
bonds
14
or
loan
,
together
with
the
maximum
rate
of
interest
which
the
15
bonds
are
to
bear
or
which
will
be
charged
to
the
principal
16
balance
of
the
loan
,
and
the
right
to
petition
for
an
election,
17
to
be
published
at
least
once
in
a
newspaper
of
general
18
circulation
within
the
city
at
least
ten
days
prior
to
the
19
meeting
at
which
it
is
proposed
to
take
action
for
the
issuance
20
of
the
bonds
or
the
authorization
of
the
loan
.
21
b.
If
at
any
time
before
the
date
fixed
for
taking
action
22
for
the
issuance
of
the
bonds
or
the
authorization
of
the
23
loan
,
a
petition
is
filed
with
the
clerk
of
the
city
signed
24
by
eligible
electors
of
the
city
equal
in
number
to
twenty
25
percent
of
the
persons
in
the
city
who
voted
for
the
office
of
26
president
of
the
United
States
at
the
last
preceding
general
27
election
that
had
such
office
on
the
ballot,
asking
that
the
28
question
of
issuing
the
bonds
or
authorizing
the
loan
be
29
submitted
to
the
registered
voters
of
the
city,
the
council
30
shall
either
by
resolution
declare
the
proposal
to
issue
the
31
bonds
or
authorize
the
loan
to
have
been
abandoned
or
shall
32
direct
the
county
commissioner
of
elections
to
call
a
special
33
election
upon
the
question
of
issuing
the
bonds
or
authorizing
34
the
loan
.
Notice
of
the
election
and
its
conduct
shall
be
in
35
-4-
SF
387
(3)
85
aw/sc/jh
4/
7
S.F.
387
the
manner
provided
in
section
384.26
.
1
c.
If
a
petition
is
not
filed,
or
if
a
petition
is
filed
and
2
the
proposition
of
issuing
the
bonds
or
authorizing
the
loan
3
is
approved
at
an
election,
the
council
may
proceed
with
the
4
authorization
and
issuance
of
the
bonds
or
authorization
of
the
5
loan
.
6
Sec.
4.
Section
384.26,
subsections
1,
2,
4,
and
5,
Code
7
2013,
are
amended
to
read
as
follows:
8
1.
A
city
which
proposes
to
carry
out
any
general
corporate
9
purpose
within
or
without
its
corporate
limits,
and
to
contract
10
indebtedness
and
issue
general
obligation
bonds
or
authorize
a
11
loan
described
in
section
384.24B,
to
provide
funds
to
pay
all
12
or
any
part
of
the
costs
of
a
project,
must
do
so
in
accordance
13
with
the
provisions
of
this
division
.
14
2.
Before
the
council
may
institute
proceedings
for
the
15
issuance
of
bonds
or
authorization
of
a
loan
for
a
general
16
corporate
purpose,
it
shall
call
a
special
city
election
to
17
vote
upon
the
question
of
issuing
the
bonds
or
authorizing
the
18
loan
.
At
the
election
the
proposition
must
be
submitted
in
one
19
of
the
following
form
forms,
as
applicable
:
20
Shall
the
............
(insert
the
name
of
the
city)
issue
21
its
bonds
in
an
amount
not
exceeding
the
amount
of
$
....
for
22
the
purpose
of
..........
?
23
Shall
the
..........
(insert
the
name
of
the
city)
authorize
24
a
loan
from
its
surplus
funds
in
an
amount
not
exceeding
the
25
amount
of
$
....
for
the
purpose
of
..........?
26
4.
The
proposition
of
issuing
general
corporate
purpose
27
bonds
or
authorizing
a
loan
for
a
general
corporate
purpose
28
is
not
carried
or
adopted
unless
the
vote
in
favor
of
the
29
proposition
is
equal
to
at
least
sixty
percent
of
the
total
30
vote
cast
for
and
against
the
proposition
at
the
election.
31
If
the
proposition
of
issuing
the
general
corporate
purpose
32
bonds
or
authorizing
a
loan
for
a
general
corporate
purpose
is
33
approved
by
the
voters,
the
city
may
proceed
with
the
issuance
34
of
the
bonds
or
authorization
of
the
loan
.
35
-5-
SF
387
(3)
85
aw/sc/jh
5/
7
S.F.
387
5.
a.
Notwithstanding
the
provisions
of
subsection
2
,
1
a
council
may,
in
lieu
of
calling
an
election,
institute
2
proceedings
for
the
issuance
of
bonds
or
authorization
of
a
3
loan
for
a
general
corporate
purpose
by
causing
a
notice
of
the
4
proposal
to
issue
the
bonds
or
authorize
the
loan
,
including
5
a
statement
of
the
amount
and
purpose
of
the
bonds
or
loan
,
6
together
with
the
maximum
rate
of
interest
which
the
bonds
are
7
to
bear
or
which
the
loan
is
to
bear
,
and
the
right
to
petition
8
for
an
election,
to
be
published
at
least
once
in
a
newspaper
9
of
general
circulation
within
the
city
at
least
ten
days
prior
10
to
the
meeting
at
which
it
is
proposed
to
take
action
for
the
11
issuance
of
the
bonds
or
authorization
of
the
loan
subject
to
12
the
following
limitations:
13
(1)
In
cities
having
a
population
of
five
thousand
or
less,
14
in
an
amount
of
not
more
than
four
hundred
thousand
dollars.
15
(2)
In
cities
having
a
population
of
more
than
five
thousand
16
and
not
more
than
seventy-five
thousand,
in
an
amount
of
not
17
more
than
seven
hundred
thousand
dollars.
18
(3)
In
cities
having
a
population
in
excess
of
seventy-five
19
thousand,
in
an
amount
of
not
more
than
one
million
dollars.
20
b.
If
at
any
time
before
the
date
fixed
for
taking
action
21
for
the
issuance
of
the
bonds
or
the
authorization
of
the
22
loan
,
a
petition
is
filed
with
the
clerk
of
the
city
in
the
23
manner
provided
by
section
362.4
,
asking
that
the
question
24
of
issuing
the
bonds
or
authorizing
the
loan
be
submitted
to
25
the
registered
voters
of
the
city,
the
council
shall
either
by
26
resolution
declare
the
proposal
to
issue
the
bonds
or
authorize
27
the
loan
to
have
been
abandoned
or
shall
direct
the
county
28
commissioner
of
elections
to
call
a
special
election
upon
the
29
question
of
issuing
the
bonds
or
authorizing
the
loan
.
Notice
30
of
the
election
and
its
conduct
shall
be
in
the
manner
provided
31
in
the
preceding
subsections
of
this
section
.
32
c.
If
no
petition
is
filed,
or
if
a
petition
is
filed
and
33
the
proposition
of
issuing
the
bonds
or
authorizing
the
loan
34
is
approved
at
an
election,
the
council
may
proceed
with
the
35
-6-
SF
387
(3)
85
aw/sc/jh
6/
7
S.F.
387
authorization
and
issuance
of
the
bonds
or
the
authorization
1
of
the
loan
.
2
Sec.
5.
Section
384.33,
Code
2013,
is
amended
to
read
as
3
follows:
4
384.33
Action.
5
No
action
may
be
brought
which
questions
the
legality
of
6
general
obligation
bonds
,
notes,
or
loans
under
this
chapter
or
7
the
power
of
the
city
to
issue
the
bonds
,
notes
or
loans
or
the
8
effectiveness
of
any
proceedings
relating
to
the
authorization
9
and
issuance
of
the
bonds
,
notes,
or
loans
from
and
after
sixty
10
days
from
the
time
the
bonds
,
notes
or
loans
are
ordered
issued
11
by
the
city.
12
-7-
SF
387
(3)
85
aw/sc/jh
7/
7
