S.F. _____ Section 1. Section 331.512, Code 2011, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 13A. Carry out duties relating to the 3 business property tax credit as provided in chapter 426C. 4 Sec. 2. Section 331.559, Code 2011, is amended by adding the 5 following new subsection: 6 NEW SUBSECTION . 14A. Carry out duties relating to the 7 business property tax credit as provided in chapter 426C. 8 Sec. 3. NEW SECTION . 426C.1 Definitions. 9 For the purposes of this chapter, unless the context 10 otherwise requires: 11 1. “Contiguous parcels” means any of the following: 12 a. Parcels that share a common boundary. 13 b. Parcels within the same building or structure regardless 14 of whether the parcels share a common boundary. 15 c. Improvements to the land that are situated on one or more 16 parcels of land that are assessed and taxed separately from the 17 improvements if the parcels of land upon which the improvements 18 are situated share a common boundary. 19 2. “Department” means the department of revenue. 20 3. “Fund” means the business property tax credit fund 21 created in section 426C.2. 22 4. “Parcel” means as defined in section 445.1. 23 5. “Property unit” means contiguous parcels all of which 24 are located within the same county, with the same property tax 25 classification, each of which contains permanent improvements, 26 are owned by the same person, and are operated by that person 27 for a common use and purpose. 28 Sec. 4. NEW SECTION . 426C.2 Business property tax credit 29 fund —— appropriation. 30 1. A business property tax credit fund is created in the 31 state treasury under the authority of the department. For the 32 fiscal year beginning July 1, 2012, there is appropriated from 33 the general fund of the state to the department to be credited 34 to the fund, the sum of fifty million dollars to be used for 35 -1- LSB 1908XC (29) 84 md/sc 1/ 12

S.F. _____ business property tax credits authorized in this chapter. For 1 the fiscal year beginning July 1, 2013, and each fiscal year 2 thereafter, there is appropriated from the general fund of the 3 state to the department to be credited to the fund an amount 4 equal to the total amount appropriated by the general assembly 5 to the fund in the previous fiscal year. In addition, the sum 6 of fifty million dollars shall be added to the appropriation 7 in each fiscal year beginning on or after July 1, 2013, if 8 the revenue estimating conference certifies during its final 9 meeting of the calendar year ending prior to the beginning of 10 the fiscal year that the total amount of general fund revenues 11 collected during the fiscal year ending during such calendar 12 year was at least one hundred four percent of the total amount 13 of general fund revenues collected during the previous fiscal 14 year. However, the total appropriation to the fund shall not 15 exceed two hundred million dollars for any one fiscal year. 16 2. Notwithstanding section 12C.7, subsection 2, interest or 17 earnings on moneys deposited in the fund shall be credited to 18 the fund. Moneys in the fund are not subject to the provisions 19 of section 8.33 and shall not be transferred, used, obligated, 20 appropriated, or otherwise encumbered except as provided in 21 this chapter. 22 Sec. 5. NEW SECTION . 426C.3 Claims for credit. 23 1. Each person who wishes to claim the credit allowed 24 under this chapter shall obtain the appropriate forms from the 25 assessor and file the claim with the assessor. The director 26 of revenue shall prescribe suitable forms and instructions for 27 such claims, and make such forms and instructions available to 28 the assessors. 29 2. a. Claims for the business property tax credit shall be 30 filed not later than March 15 preceding the fiscal year during 31 which the taxes for which the credit is claimed are due and 32 payable. 33 b. A claim filed after the deadline for filing claims shall 34 be considered as a claim for the following year. 35 -2- LSB 1908XC (29) 84 md/sc 2/ 12

S.F. _____ 3. Upon the filing of a claim and allowance of the credit, 1 the credit shall be allowed on the parcel or property unit for 2 successive years without further filing as long as the parcel 3 or property unit satisfies the requirements for the credit. If 4 the parcel or property unit owner ceases to qualify for the 5 credit under this chapter, the owner shall provide written 6 notice to the assessor by the date for filing claims specified 7 in subsection 2 following the date on which the parcel or 8 property unit ceases to qualify for the credit. 9 4. When all or a portion of a parcel or property unit that 10 is allowed a credit under this chapter is sold, transferred, 11 or ownership otherwise changes, the buyer, transferee, or new 12 owner who wishes to receive the credit shall refile the claim 13 for credit. When a portion of a parcel or property unit that 14 is allowed a credit under this chapter is sold, transferred, 15 or ownership otherwise changes, the owner of the portion of 16 the parcel or property unit for which ownership did not change 17 shall refile the claim for credit. 18 5. The assessor shall remit the claims for credit to the 19 county auditor with the assessor’s recommendation for allowance 20 or disallowance. If the assessor recommends disallowance 21 of a claim, the assessor shall submit the reasons for the 22 recommendation, in writing, to the county auditor. The county 23 auditor shall forward the claims to the board of supervisors. 24 The board shall allow or disallow the claims. 25 6. For each claim and allowance of a credit for a property 26 unit, the county auditor shall calculate the average of all 27 consolidated levy rates applicable to the several parcels 28 within the property unit. All claims for credit which have 29 been allowed by the board of supervisors, the actual value of 30 the improvements to such parcels and property units applicable 31 to the fiscal year for which the credit is claimed that are 32 subject to assessment and taxation prior to imposition of any 33 applicable assessment limitation, the consolidated levy rates 34 for such parcels and the average consolidated levy rates for 35 -3- LSB 1908XC (29) 84 md/sc 3/ 12

S.F. _____ such property units applicable to the fiscal year for which the 1 credit is claimed, and the taxing districts in which the parcel 2 or property unit is located, shall be certified on or before 3 June 30, in each year, by the county auditor to the department. 4 7. The assessor shall maintain a permanent file of current 5 business property tax credits. The assessor shall file a 6 notice of transfer of property for which a credit has been 7 allowed when notice is received from the office of the county 8 recorder, from the person who sold or transferred the property, 9 or from the personal representative of a deceased property 10 owner. The county recorder shall give notice to the assessor 11 of each transfer of title filed in the recorder’s office. The 12 notice from the county recorder shall describe the property 13 transferred, the name of the person transferring title to the 14 property, and the name of the person to whom title to the 15 property has been transferred. 16 Sec. 6. NEW SECTION . 426C.4 Eligibility and amount of 17 credit. 18 1. Each parcel classified and taxed as commercial property, 19 industrial property, or railway property under chapter 434, 20 and improved with permanent construction, is eligible for a 21 credit under this chapter. A person may claim and receive one 22 credit under this chapter for each eligible parcel unless the 23 parcel is part of a property unit. A person may only claim and 24 receive one credit under this chapter for each property unit. 25 A credit approved for a property unit shall be allocated to the 26 several parcels within the property unit in the proportion that 27 each parcel’s total amount of property taxes due and payable 28 attributable to the improvements bears to the total amount of 29 property taxes due and payable attributable to the improvements 30 for the property unit. Only property units comprised of 31 commercial property, comprised of industrial property, or 32 comprised of railway property under chapter 434 are eligible 33 for a credit under this chapter. 34 2. Using the actual value of the improvements and the 35 -4- LSB 1908XC (29) 84 md/sc 4/ 12

S.F. _____ consolidated levy rate for each parcel or the average 1 consolidated levy rate for each property unit, as certified 2 by the county auditor to the department under section 426C.3, 3 subsection 6, the department shall calculate, for each fiscal 4 year, an initial amount of actual value of improvements for 5 use in determining the amount of the credit for each such 6 parcel or property unit so as to provide the maximum possible 7 credit according to the credit formula and limitations under 8 subsection 3, and to provide a total dollar amount of credits 9 against the taxes due and payable in the fiscal year equal to 10 ninety-eight percent of the moneys in the fund following the 11 deposit of the total appropriation for the fiscal year. 12 3. a. The amount of the credit for each parcel or property 13 unit for which a claim for credit under this chapter has 14 been approved shall be calculated under paragraph “b” using 15 the lesser of the initial amount of actual value of the 16 improvements determined by the department under subsection 17 2, and the actual value of the improvements to the parcel or 18 property unit as certified by the county auditor under section 19 426C.3, subsection 6. 20 b. The amount of the credit for each parcel or property 21 unit for which a claim for credit under this chapter has 22 been approved shall be equal to the amount of actual value 23 determined under paragraph “a” multiplied by the difference, 24 stated as a percentage, between the assessment limitation 25 applicable to the parcel or property unit under section 441.21, 26 subsection 5, and the assessment limitation applicable to 27 residential property under section 441.21, subsection 4, 28 divided by one thousand dollars, and then multiplied by the 29 consolidated levy rate or average consolidated levy rate for 30 one thousand dollars of taxable value applicable to the parcel 31 or property unit for the fiscal year for which the credit 32 is claimed as certified by the county auditor under section 33 426C.3, subsection 6. 34 Sec. 7. NEW SECTION . 426C.5 Payment to counties. 35 -5- LSB 1908XC (29) 84 md/sc 5/ 12

S.F. _____ 1. Annually the department shall certify to the county 1 auditor of each county the amounts of the business property 2 tax credits allowed in the county. Each county auditor shall 3 then enter the credits against the tax levied on each eligible 4 parcel or property unit in the county, designating on the tax 5 lists the credit as being from the fund. Each taxing district 6 shall receive its share of the business property tax credit 7 allowed on each eligible parcel or property unit in such taxing 8 district, in the proportion that the levy made by such taxing 9 district upon the parcel or property unit bears to the total 10 levy upon the parcel or property unit by all taxing districts 11 imposing a property tax in such taxing district. However, the 12 several taxing districts shall not draw the moneys so credited 13 until after the semiannual allocations have been received by 14 the county treasurer, as provided in this section. Each county 15 treasurer shall show on each tax receipt the amount of credit 16 received from the fund. 17 2. The director of the department of administrative 18 services shall issue warrants on the fund payable to the county 19 treasurers of the several counties of the state under this 20 chapter. 21 3. The amount due each county shall be paid in two payments 22 on November 15 and March 15 of each fiscal year, drawn upon 23 warrants payable to the respective county treasurers. The two 24 payments shall be as nearly equal as possible. 25 Sec. 8. NEW SECTION . 426C.6 Appeals. 26 1. If the board of supervisors disallows a claim for credit 27 under section 426C.3, subsection 5, the board of supervisors 28 shall send written notice, by mail, to the claimant at the 29 claimant’s last known address. The notice shall state the 30 reasons for disallowing the claim for the credit. The board 31 of supervisors is not required to send notice that a claim for 32 credit is disallowed if the claimant voluntarily withdraws the 33 claim. Any person whose claim is denied under the provisions 34 of this chapter may appeal from the action of the board of 35 -6- LSB 1908XC (29) 84 md/sc 6/ 12

S.F. _____ supervisors to the district court of the county in which the 1 parcel or property unit is located by giving written notice 2 of such appeal to the county auditor within twenty days from 3 the date of mailing of notice of such action by the board of 4 supervisors. 5 2. If any claim for credit has been denied by the board 6 of supervisors, and such action is subsequently reversed on 7 appeal, the credit shall be allowed on the applicable parcel 8 or property unit, and the director of revenue, the county 9 auditor, and the county treasurer shall provide the credit and 10 change their books and records accordingly. In the event the 11 appealing taxpayer has paid one or both of the installments of 12 the tax payable in the year or years in question, remittance 13 shall be made to such taxpayer of the amount of such credit. 14 The amount of such credit awarded on appeal shall be allocated 15 and paid from the balance remaining in the fund. 16 Sec. 9. NEW SECTION . 426C.7 Audit —— denial. 17 1. If on the audit of a credit provided under this chapter, 18 the director of revenue determines the amount of the credit 19 to have been incorrectly calculated or that the credit is 20 not allowable, the director shall recalculate the credit and 21 notify the taxpayer and the county auditor of the recalculation 22 or denial and the reasons for it. The director shall not 23 adjust a credit after three years from October 31 of the year 24 in which the claim for the credit was filed. If the credit 25 has been paid, the director shall give notification to the 26 taxpayer, the county treasurer, and the applicable assessor 27 of the recalculation or denial of the credit and the county 28 treasurer shall proceed to collect the tax owed in the same 29 manner as other property taxes due and payable are collected, 30 if the parcel or property unit for which the credit was allowed 31 is still owned by the taxpayer. If the parcel or property unit 32 for which the credit was allowed is not owned by the taxpayer, 33 the amount may be recovered from the taxpayer by assessment in 34 the same manner that income taxes are assessed under sections 35 -7- LSB 1908XC (29) 84 md/sc 7/ 12

S.F. _____ 422.26 and 422.30. The amount of such erroneous credit, when 1 collected, shall be deposited in the fund. 2 2. The taxpayer or board of supervisors may appeal any 3 decision of the director of revenue to the state board of tax 4 review pursuant to section 421.1, subsection 5. The taxpayer, 5 the board of supervisors, or the director of revenue may seek 6 judicial review of the action of the state board of tax review 7 in accordance with chapter 17A. 8 Sec. 10. NEW SECTION . 426C.8 False claim —— penalty. 9 A person who makes a false claim for the purpose of obtaining 10 a credit provided for in this chapter or who knowingly receives 11 the credit without being legally entitled to it is guilty of a 12 fraudulent practice. The claim for a credit of such a person 13 shall be disallowed and if the credit has been paid the amount 14 shall be recovered in the manner provided in section 426C.7. 15 In such cases, the director of revenue shall send a notice of 16 disallowance of the credit. 17 Sec. 11. NEW SECTION . 426C.9 Rules. 18 The director of revenue shall prescribe forms, instructions, 19 and rules pursuant to chapter 17A, as necessary, to carry out 20 the purposes of this chapter. 21 Sec. 12. IMPLEMENTATION. Notwithstanding the deadline 22 for filing claims established in section 426C.3, for a credit 23 against property taxes due and payable during the fiscal year 24 beginning July 1, 2012, the claim for the credit shall be filed 25 not later than January 15, 2012. 26 Sec. 13. APPLICABILITY. This Act applies to property taxes 27 due and payable in fiscal years beginning on or after July 1, 28 2012. 29 EXPLANATION 30 This bill creates a business property tax credit under new 31 Code chapter 426C for property taxes due and payable in fiscal 32 years beginning on or after July 1, 2012. 33 The bill establishes a business property tax credit 34 fund. For the fiscal year beginning July 1, 2012, the 35 -8- LSB 1908XC (29) 84 md/sc 8/ 12

S.F. _____ bill appropriates from the general fund of the state to the 1 department of revenue for deposit in the fund, $50 million. 2 For the fiscal year beginning July 1, 2013, and each fiscal 3 year thereafter, the bill appropriates from the general fund of 4 the state to the department of revenue for deposit in the fund 5 an amount equal to the total amount appropriated by the general 6 assembly to the fund in the previous fiscal year. In addition, 7 for fiscal years beginning on or after July 1, 2013, the bill 8 appropriates an additional sum of $50 million to the fund if 9 the revenue estimating conference certifies that the total 10 amount of general fund revenues has grown by at least 4 percent 11 as compared to the previous fiscal year. The bill provides, 12 however, that the total appropriation to the fund shall not 13 exceed $200 million in any one fiscal year. Under the bill, 14 interest or earnings on moneys deposited in the fund are 15 credited to the fund, moneys in the fund are not subject to the 16 provisions of Code section 8.33, and moneys in the fund shall 17 not be transferred, used, obligated, appropriated, or otherwise 18 encumbered except as provided in new Code chapter 426C. 19 The bill provides that each person who wishes to claim a 20 business property tax credit shall obtain the appropriate 21 forms from the assessor and file the claim with the assessor. 22 The director of revenue is required to prescribe suitable 23 forms and instructions for such claims, and make such forms 24 and instructions available to the assessors. The assessor 25 is required to remit the claims for credit to the county 26 auditor with the assessor’s recommendation for allowance 27 or disallowance. If the assessor recommends disallowance 28 of a claim, the assessor shall submit the reasons for the 29 recommendation, in writing, to the county auditor. The county 30 auditor then forwards the claims to the board of supervisors. 31 The board is required to allow or disallow the claims. If 32 the board of supervisors disallows a claim for a credit, the 33 board of supervisors is required to send written notice, by 34 mail, to the claimant and the notice must state the reasons for 35 -9- LSB 1908XC (29) 84 md/sc 9/ 12

S.F. _____ disallowing the claim for the credit. Any person whose claim 1 for credit is denied may appeal from the action of the board of 2 supervisors to the district court of the county in which the 3 parcel or property unit is located. 4 Claims for the business property tax credit must be filed 5 not later than March 15 preceding the fiscal year during which 6 the property taxes for which the credit is claimed are due 7 and payable. However, the deadline for filing claims against 8 property taxes due and payable in the fiscal year beginning 9 July 1, 2012, is January 15, 2012. 10 Upon the filing of a claim and allowance of a business 11 property tax credit, the credit is allowed on the parcel or 12 property unit for successive years without further filing as 13 long as the parcel or property unit satisfies the requirements 14 for the credit. The owner is required to provide written 15 notice to the assessor when the parcel or property unit ceases 16 to qualify for the credit. The bill requires the assessor to 17 maintain a permanent file of current credits and also specifies 18 certain requirements for parcel or property unit owners, 19 assessors, and county recorders when all or a portion of such 20 parcels or property units are sold, transferred, or ownership 21 otherwise changes. 22 Under the bill, each parcel classified and taxed as 23 commercial property, industrial property, or railway 24 property under Code chapter 434, and improved with permanent 25 construction, is eligible for a business property tax credit. 26 A person may claim and receive one credit for each eligible 27 parcel unless the parcel is part of a property unit. The 28 bill defines “property unit” to mean contiguous parcels 29 located within the same county, with the same property tax 30 classification, each containing permanent improvements, owned 31 by the same person, and operated by that person for a common 32 use and purpose. A person may only claim and receive one 33 tax credit for each property unit. A credit approved for a 34 property unit is allocated to the several parcels within the 35 -10- LSB 1908XC (29) 84 md/sc 10/ 12

S.F. _____ property unit in the proportion that each parcel’s property 1 tax liability on improvements bears to the total property tax 2 liability on improvements for the property unit. Only those 3 property units comprised of commercial property, comprised of 4 industrial property, or comprised of railway property under 5 Code chapter 434 are eligible for a credit. 6 The bill provides that all claims for credit which have been 7 allowed, the actual value of the improvements to the applicable 8 parcels and property units that are subject to assessment and 9 taxation, the consolidated levy rates or average consolidated 10 levy rates for such parcels and property units applicable to 11 the fiscal year for which the credit is claimed, and the taxing 12 districts in which each parcel or property unit is located, 13 shall be certified on or before June 30, in each year, by the 14 county auditor to the department of revenue. 15 The bill provides that using the actual value of the 16 improvements and the consolidated levy rate or average 17 consolidated levy rate for each parcel or property unit, as 18 certified by the county auditor, the department is required 19 to calculate, for each fiscal year, an initial amount of 20 actual value of improvements for use in determining the amount 21 of the credit for each approved parcel or property unit so 22 as to provide the maximum possible credit according to the 23 credit formula and limitations in the bill, and to provide a 24 total dollar amount of credits in the fiscal year equal to 98 25 percent of the moneys in the business property tax credit fund 26 following the deposit of the total appropriation for the fiscal 27 year. 28 The credit for each parcel or property unit for which a 29 claim for a business property tax credit has been approved is 30 calculated using the lesser of the initial amount of actual 31 value of the improvements determined by the department for 32 the fiscal year and the actual value of improvements to the 33 parcel or property unit as certified to the department of 34 revenue. The amount of the credit for each parcel or property 35 -11- LSB 1908XC (29) 84 md/sc 11/ 12

S.F. _____ unit is then calculated by multiplying the lesser amount of 1 actual value, so determined, by the difference, stated as 2 a percentage, between the assessment limitation applicable 3 to the parcel or property unit under Code section 441.21(5) 4 (commercial, industrial, and railway property tax rollback) 5 and the assessment limitation applicable to residential 6 property under Code section 441.21(4) (residential property 7 tax rollback), divided by $1,000, and then multiplied by the 8 consolidated levy rate or average consolidated levy rate for 9 $1,000 of taxable value applicable to the parcel or property 10 unit for the fiscal year for which the credit is claimed. 11 The bill specifies the procedures for the payment of the 12 amount of the business property tax credits to the county 13 treasurers and the resulting apportionment to the applicable 14 taxing districts. The bill also specifies the requirements 15 and procedures for an appeal of a denial of a claim for 16 credit, specifies the requirements and procedures for an audit 17 of a business property tax credit allowed, and specifies 18 requirements relating to the collection of property taxes 19 due as the result of an incorrectly calculated or improperly 20 approved credit. 21 The bill provides that a person who makes a false claim for 22 the purpose of obtaining a business property tax credit or who 23 knowingly receives the credit without being legally entitled 24 to it is guilty of a fraudulent practice and is subject to a 25 criminal penalty. 26 The bill requires the director of revenue to prescribe 27 forms, instructions, and rules pursuant to Code chapter 17A, as 28 necessary, to carry out the purposes of new Code chapter 426C. 29 The bill applies to property taxes due and payable in fiscal 30 years beginning on or after July 1, 2012. 31 -12- LSB 1908XC (29) 84 md/sc 12/ 12