HF 5335 Summary

• Creates a new local authorization process (section 297A.9901) allowing counties and cities to impose local sales taxes up to 1% combined rate for specified capital projects (convention centers, libraries, parks, sports complexes, trails) with state auditor approval and voter approval.

• Establishes state auditor oversight requiring political subdivisions to file documentation by November 30, with auditor approval decision by January 10, and development of uniform accounting and financial reporting system for local sales taxes.

• Creates a local sales tax equalization distribution account funded by 15% of collected local sales tax revenues, with distributions made based on fiscal capacity formulas to equalize tax revenues across political subdivisions, effective July 1, 2024.

• Requires public hearings, community support letters from neighboring governments, separate voter approval for each project, and restrictions on campaign spending for tax referendums.

• Repeals temporary moratorium on local sales tax modifications that was set to expire May 31, 2025, and appropriates unspecified funding to state auditor through June 30, 2027 to implement oversight requirements.