S.F. 505 Section 1. Section 441.21, subsection 1, paragraph a, Code 1 2011, is amended to read as follows: 2 a. Except as provided in section 405.1, property subject to 3 taxation shall be classified on January 1 of each assessment 4 year according to its primary use on January 1 and not its 5 highest and best use. There shall be only one classification 6 per parcel of property. The land and the buildings on the land 7 shall be considered separate properties if owned by different 8 persons. An assessor shall not classify the land differently 9 than a building located on the land unless the building and the 10 land are owned by different persons or the property consists 11 of an agricultural dwelling located on agricultural land. 12 Land shall be classified as agricultural property if used in 13 good faith primarily for agricultural purposes. All property 14 subject to taxation shall be valued based on its classification 15 and present primary use at its actual value which shall be 16 entered opposite each item, and, except as otherwise provided 17 in this section , shall be assessed at one hundred percent of 18 its actual value, and the value so assessed shall be taken 19 and considered as the assessed value and taxable value of the 20 property upon which the levy shall be made. 21 Sec. 2. Section 441.21, subsection 1, paragraph b, 22 unnumbered paragraph 1, Code 2011, is amended to read as 23 follows: 24 The actual value of all property subject to assessment and 25 taxation shall be the fair and reasonable market value of 26 such property except as otherwise provided in this section . 27 “Market value” is defined as the fair and reasonable exchange 28 in the year in which the property is listed and valued between 29 a willing buyer and a willing seller, neither being under any 30 compulsion to buy or sell and each being familiar with all the 31 facts relating to the particular property. Sale prices of the 32 property or comparable property having the same classification 33 in normal transactions reflecting market value, and the 34 probable availability or unavailability of persons interested 35 -1- LSB 1893XS (6) 84 md/sc 1/ 6

S.F. 505 in purchasing the property, shall be taken into consideration 1 in arriving at its market value. In arriving at market value, 2 sale prices of property in abnormal transactions not reflecting 3 market value shall not be taken into account, or shall be 4 adjusted to eliminate the effect of factors which distort 5 market value, including but not limited to sales to immediate 6 family of the seller, foreclosure or other forced sales, 7 contract sales, discounted purchase transactions or purchase of 8 adjoining land or other land to be operated as a unit. 9 Sec. 3. Section 441.26, unnumbered paragraph 1, Code 2011, 10 is amended to read as follows: 11 The director of revenue shall each year prescribe the form 12 of assessment roll to be used by all assessors in assessing 13 property, in this state, also the form of pages of the 14 assessor’s assessment book. The assessment rolls shall be 15 in a form that will permit entering, separately, the names 16 of all persons assessed, and shall also contain a notice in 17 substantially the following form: 18 If you are not satisfied that the foregoing assessment is 19 correct, you may file a protest against such assessment with 20 the board of review on or after April 16, to and including May 5 21 20 , of the year of the assessment, such protest to be confined 22 to the grounds specified in section 441.37 . 23 Dated: ... day of ... (month), ... (year) 24 .............. 25 County/City Assessor. 26 Sec. 4. Section 441.37, subsection 1, Code 2011, is amended 27 to read as follows: 28 1. Any property owner or aggrieved taxpayer who is 29 dissatisfied with the owner’s or taxpayer’s assessment may file 30 a protest against such assessment with the board of review 31 on or after April 16, to and including May 5 20 , of the year 32 of the assessment. In any county which has been declared to 33 be a disaster area by proper federal authorities after March 34 1 and prior to May 20 June 5 of said year of assessment, the 35 -2- LSB 1893XS (6) 84 md/sc 2/ 6

S.F. 505 board of review shall be authorized to remain in session until 1 June 15 30 and the time for filing a protest shall be extended 2 to and include the period from May 25 June 10 to June 5 20 of 3 such year. Said The protest shall be in writing and signed 4 by the one protesting or by the protester’s duly authorized 5 agent. The taxpayer may have an oral hearing thereon on the 6 protest if request therefor request for the oral hearing is 7 made in writing is made at the time of filing the protest. Said 8 The protest must be confined to one or more of the following 9 grounds: 10 a. That said assessment is not equitable as compared with 11 assessments of other like property in the taxing district. 12 When this ground is relied upon as the basis of a protest the 13 legal description and assessments of a representative number of 14 comparable properties, as described by the aggrieved taxpayer 15 shall be listed on the protest, otherwise said protest shall 16 not be considered on this ground. For odd-numbered assessment 17 years and even-numbered assessment years for properties having 18 a change in actual value from the previous assessment year: 19 b. (1) That the property is assessed for more than the 20 value authorized by law , stating . When this ground is relied 21 upon, the specific amount which the protesting party believes 22 the property to be overassessed, and the amount which the party 23 considers to be its actual value and the amount the party 24 considers a fair assessment shall be stated . 25 c. (2) That the property is not assessable, is exempt from 26 taxes, or is misclassified and stating the reasons for the 27 protest. 28 d. (3) That there is an error in the assessment and state 29 the specific alleged error. When this ground is relied upon, 30 it may include but is not limited to listing errors, including 31 clerical or mathematical errors, listing claims of inequity in 32 the assessment, or listing any ground under this paragraph “a” 33 that results in an error in the assessment. 34 e. (4) That there is fraud in the assessment which shall 35 -3- LSB 1893XS (6) 84 md/sc 3/ 6

S.F. 505 be specifically stated. 1 In addition to the above, the property owner may protest 2 annually to the board of review under the provisions of section 3 441.35 , but such protest shall be in the same manner and upon 4 the same terms as heretofore prescribed in this section . 5 The property owner or aggrieved taxpayer may combine on one 6 form protests of assessment on parcels separately assessed if 7 the same grounds are relied upon as the basis for protesting 8 each separate assessment. If an oral hearing is requested 9 on more than one of such protests, the person making the 10 combined protests may request that the oral hearings be held 11 consecutively. 12 b. For even-numbered assessment years for properties 13 having no change in assessment from the previous assessment 14 year, that there has been a decrease in actual value from the 15 previous assessment year. When this ground is relied upon, 16 the protesting party shall provide specific evidence that the 17 market value of the property is less than the assessed value. 18 Such protest shall be made under the provisions of section 19 441.35, but in the same manner and upon the same terms as 20 described in this section. 21 Sec. 5. Section 441.37, Code 2011, is amended by adding the 22 following new subsection: 23 NEW SUBSECTION . 1A. The property owner or aggrieved 24 taxpayer may combine on one form protests of assessment on 25 parcels separately assessed if the same grounds are relied upon 26 as the basis for protesting each separate assessment. If an 27 oral hearing is requested on more than one of such protests, 28 the person making the combined protests may request that the 29 oral hearings be held consecutively. 30 Sec. 6. Section 441.37, Code 2011, is amended by adding the 31 following new subsection: 32 NEW SUBSECTION . 4. The property assessment appeal board 33 shall adopt rules pursuant to chapter 17A to implement the 34 provisions of this section relating to protests of assessment. 35 -4- LSB 1893XS (6) 84 md/sc 4/ 6

S.F. 505 Sec. 7. Section 441.73, Code 2011, is amended by adding the 1 following new subsection: 2 NEW SUBSECTION . 5. For purposes of this section, 3 “litigation expenses” includes the operational costs of the 4 property assessment appeal board created in section 421.1A. 5 Sec. 8. APPLICABILITY. The sections of this Act amending 6 sections 441.21 and 441.37 apply to property tax assessment 7 years beginning on or after January 1, 2012. 8 EXPLANATION 9 This bill specifies that except for certain housing 10 development property, all property subject to taxation shall 11 be classified on January 1 of each assessment year according 12 to its primary use on January 1 and not its highest and best 13 use. The bill also specifies that there shall be only one 14 classification per property. The bill provides that land 15 and the buildings on the land shall be considered separate 16 properties if owned by different persons. Under the bill, 17 an assessor shall not classify the land differently than a 18 building located on the land unless the building and the land 19 are owned by different persons or the property consists of an 20 agricultural dwelling located on agricultural land. The bill 21 specifies that land is classified as agricultural property if 22 used in good faith primarily for agricultural purposes. The 23 bill specifies that when determining market value of a property 24 using sales of comparable properties, only properties with the 25 same property tax classification may be used. 26 The bill amends several of the dates relating to the protest 27 period for the local board of review under Code section 28 441.37, including the dates for filing a protest. The bill 29 also amends provisions relating to the grounds upon which a 30 property assessment protest may be brought. The bill strikes 31 a provision that allows a protest on the ground that the 32 assessment is not equitable as compared with assessments of 33 other like property in the taxing district. The bill specifies 34 that for odd-numbered assessment years and even-numbered 35 -5- LSB 1893XS (6) 84 md/sc 5/ 6

S.F. 505 assessment years for properties having a different assessment 1 from the previous assessment year protests may only be brought 2 by asserting that the assessment is more than the value 3 authorized by law, that the property is not assessable, is 4 exempt from taxes, or is misclassified, that there is an error 5 in the assessment, or that there is fraud in the assessment. A 6 protest on the ground that there is an error in the assessment 7 may include but is not limited to listing errors, including 8 clerical or mathematical errors, claims of inequity in the 9 assessment, or any other specified ground that results in an 10 error in the assessment. 11 For even-numbered assessment years for properties having 12 no change in assessment from the previous assessment year, 13 a protest under the bill is only allowed on the ground that 14 there has been a decrease in actual value from the previous 15 assessment year. The bill requires such a protest in the 16 even-numbered year to be made under the provisions of Code 17 section 441.35, but in the same manner and upon the same terms 18 as described in Code section 441.37. 19 The bill requires the property assessment appeal board 20 to adopt rules pursuant to Code chapter 17A to implement the 21 provisions of Code section 441.37 relating to protests of 22 assessment. 23 The bill specifies that the operational costs of the 24 property assessment appeal board are litigation expenses for 25 purposes of Code section 441.73, and that such costs shall be 26 paid from the litigation expense fund under the control of the 27 department of revenue. 28 The bill, except the section of the bill amending Code 29 section 441.73, applies to property tax assessment years 30 beginning on or after January 1, 2012. 31 -6- LSB 1893XS (6) 84 md/sc 6/ 6