1. Any municipality or political subdivision of this state, as herein defined, may contract and cooperate with any other municipality or political subdivision, or with an elective or appointive official thereof, or with a duly authorized agency of the United States, or of this state, or with other states or their municipalities or political subdivisions, or with any private person, firm, association or corporation, for the planning, development, construction, acquisition or operation of any public improvement or facility, or for a common service; provided, that the subject and purposes of any such contract or cooperative action made and entered into by such municipality or political subdivision shall be within the scope of the powers of such municipality or political subdivision.

2. Any municipality or political subdivision of this state may contract with one or more adjacent municipalities or political subdivisions to share the tax revenues of such cooperating entities that are generated from real property and the improvements constructed thereon, if such real property is located within the boundaries of either or both municipalities or subdivisions and within three thousand feet of a common border of the contracting municipalities or political subdivisions. The purpose of such contract shall be within the scope of powers of each municipality or political subdivision. Municipalities or political subdivisions separated only by a public street, easement, or right-of-way shall be considered to share a common border for purposes of this subsection.

3. Any home rule city with more than seventy-three thousand but fewer than seventy-five thousand inhabitants may contract with any county of the first classification with more than eighty-five thousand nine hundred but fewer than eighty-six thousand inhabitants to share tax revenues for the purpose of promoting tourism and the construction, maintenance, and improvement of convention center and recreational facilities. In the event an agreement for the distribution of tax revenues is entered into between a county of the first classification with more than eighty-five thousand nine hundred but fewer than eighty-six thousand inhabitants and a home rule city with more than seventy-three thousand but fewer than seventy-five thousand inhabitants, then all revenue received from such taxes shall be distributed in accordance with the terms of said agreement. For purposes of this subsection, the term “tax revenues” shall include tax revenues generated from the imposition of a transient guest tax imposed under the provisions of section 67.1361.

4. If any contract or cooperative action entered into under this section is between a municipality or political subdivision and an elective or appointive official of another municipality or political subdivision, such contract or cooperative action shall be approved by the governing body of the unit of government in which such elective or appointive official resides.

5. In the event an agreement for the distribution of tax revenues is entered into between a county of the first classification without a charter form of government and a constitutional charter city with a population of more than one hundred forty thousand that is located in said county prior to a vote to authorize the imposition of such tax, then all revenue received from such tax shall be distributed in accordance with said agreement for so long as the tax remains in effect or until the agreement is modified by mutual agreement of the parties.