The bill authorizes cities in Iowa to create self-supported entertainment areas, which are defined as designated zones that include cultural and entertainment establishments, food and liquor venues, and lodging providers. To establish these areas, a city council must pass an ordinance, which requires meeting specific criteria such as an expected annual attendance of over 250,000 people and the area being composed of commercial properties or properties within a historic district. Additionally, a petition from at least 25% of property owners in the proposed area is necessary to initiate the process, which includes public hearings and the potential for a surcharge on retail sales within the entertainment area.

The legislation also introduces an entertainment surcharge that can be applied to sales of food, alcoholic beverages, entertainment tickets, and lodging within the designated areas, with a maximum rate of 3%. The revenues generated from this surcharge will be deposited into a city-specific entertainment area fund, which can be utilized for public safety services and capital improvements. Furthermore, the bill establishes a state surcharge revenue fund to manage the collected revenues and mandates that the Department of Revenue administer the surcharge in accordance with state sales tax laws. Overall, the bill aims to enhance local revenue generation through the structured establishment of entertainment areas while ensuring compliance with existing tax regulations.

Statutes affected:
Introduced: 423.2, 423A.5A