S.F. 149 Section 1. Section 364.19, Code 2019, is amended to read as 1 follows: 2 364.19 Contracts to provide services to tax-exempt property. 3 A city council or county board of supervisors may enter into 4 a contract with a person whose property is totally or partially 5 exempt from taxation under chapter 404 , chapter 404B , section 6 427.1 , or section 427B.1 , or section 427B.10, for the city or 7 county to provide specified services to that person including 8 but not limited to police protection, fire protection, 9 street maintenance, and waste collection. The contract shall 10 terminate as of the date previously exempt property becomes 11 subject to taxation. 12 Sec. 2. NEW SECTION . 427B.10 Residential nuisance property 13 —— value added exemption from tax. 14 1. A city council or a county board of supervisors may 15 provide by ordinance for an exemption from property taxation 16 of the actual value added by improvements made to residential 17 property if the property is a public nuisance prior to the 18 improvements. A city council may provide for an exemption to 19 such property located within the boundaries of the city and the 20 county board of supervisors may provide for an exemption to 21 such property located outside the boundaries of a city. 22 2. All property described in subsection 1 for which an 23 exemption has been approved by ordinance is eligible to receive 24 a one hundred percent exemption from taxation on the actual 25 value added by the improvements. The exemption is for a 26 period of ten years beginning not later than the first year 27 in which all improvements described in the application are 28 first assessed for taxation. A property tax exemption under 29 this section shall not be granted if the property for which 30 the exemption is claimed has received any other property tax 31 exemption authorized by law for the actual value added to the 32 property. 33 3. a. The ordinance providing for the exemption may 34 designate a length of time of less than ten years that the 35 -1- LSB 2098XS (2) 88 md/jh 1/ 6

S.F. 149 exemption shall be available and may designate an exemption 1 percentage or schedule of percentages that is less than one 2 hundred percent. 3 b. The city council or the board of supervisors may, as part 4 of the resolution approving an exemption application, specify 5 an exemption duration or exemption percentage that is different 6 than that designated in the ordinance. However, the different 7 duration or percentage specified in the resolution shall not 8 exceed that which is provided for in the ordinance. 9 4. a. An application shall be filed for each new exemption 10 claimed. The first application for an exemption shall be filed 11 by the owner of the property with the governing body of the 12 city or county in which the property is located by February 13 1 of the assessment year for which the exemption is first 14 claimed, but not later than February 1 of the assessment year 15 in which all improvements included in the application are first 16 assessed for taxation. 17 b. The application shall, at a minimum, contain the nature 18 of the improvements, the cost of the improvements, a list of 19 all other federal, state, or local government tax credits, 20 exemptions, grants, forgivable loans, or other forms of 21 financial assistance received by or applied for by the owner 22 for completion of the improvements, and the estimated or actual 23 date of completion of the improvements. 24 c. An owner may submit an application for an exemption 25 under this section to the governing body of the city or 26 county to receive prior approval for eligibility for a tax 27 exemption. Such prior approval shall not entitle the owner 28 to exemption from taxation until the improvements have been 29 completed, a physical review of the property has been conducted 30 by the assessor pursuant to subsection 5, and the assessor has 31 determined that the actual value of the property has increased 32 as a result of the improvements. 33 d. Approval of an exemption application shall be by 34 resolution of the governing body of the city or county. 35 -2- LSB 2098XS (2) 88 md/jh 2/ 6

S.F. 149 e. If an application for an exemption is not approved, the 1 owner may submit an amended application for the governing body 2 to approve or reject. 3 5. The local assessor shall review each first-year 4 application by making a physical review of the property to 5 determine if the improvements made increased the actual value 6 of the approved property. If the assessor determines that 7 the actual value of that property has increased, the assessor 8 shall proceed to determine the actual value of the property 9 and certify the valuation to the county auditor at the time 10 of transmitting the assessment rolls. If an application for 11 exemption is denied as a result of failure to increase the 12 value of the property, the owner may, notwithstanding the 13 filing deadlines in subsection 4, file a first application in a 14 subsequent year when additional improvements are made. After 15 the tax exemption is granted, the local assessor shall continue 16 to grant the tax exemption, with periodic physical review by 17 the assessor, for the time period specified in subsection 2, 18 or specified in a different schedule if one has been adopted 19 under subsection 3, paragraph “a” , or in the resolution of the 20 governing body under which the exemption was granted pursuant 21 to subsection 3, paragraph “b” . 22 6. When in the opinion of the city council or the county 23 board of supervisors continuation of the exemption granted by 24 this section ceases to be of benefit to the city or county, the 25 city council or the county board of supervisors may repeal the 26 ordinance, but all existing exemptions shall continue until 27 their expiration. 28 7. For the purposes of this section, unless the context 29 otherwise requires: 30 a. “Actual value added” means the actual value added as of 31 the first year for which the exemption is received. 32 b. “Owner” includes a person who is purchasing property 33 by installment contract or under a duly executed purchase 34 contract. 35 -3- LSB 2098XS (2) 88 md/jh 3/ 6

S.F. 149 c. “Public nuisance” means a building that is a menace to 1 the public health, welfare, or safety, or that is structurally 2 unsafe, unsanitary, or not provided with adequate safe egress, 3 or that constitutes a fire hazard, or is otherwise dangerous to 4 human life, or that in relation to the existing use constitutes 5 a hazard to the public health, welfare, or safety by reason 6 of inadequate maintenance, dilapidation, obsolescence, or 7 abandonment. 8 Sec. 3. IMPLEMENTATION OF ACT. Section 25B.7 shall not 9 apply to the property tax exemption established in this Act. 10 EXPLANATION 11 The inclusion of this explanation does not constitute agreement with 12 the explanation’s substance by the members of the general assembly. 13 This bill authorizes a city council or a county board of 14 supervisors to provide by ordinance for an exemption from 15 property taxation of the actual value added to residential 16 property by improvements to the property if the property 17 is a public nuisance, as defined in the bill, prior to the 18 improvements. 19 If approved by the governing body of the city or the board of 20 supervisors of a county, the property is eligible to receive 21 a 100 percent exemption from taxation on the actual value 22 added by the improvements. The exemption is for a period of 23 10 years beginning not later than the first year in which all 24 improvements described in the application are first assessed 25 for taxation. The ordinance providing for the exemption from 26 tax may designate a length of time of less than 10 years and may 27 designate an exemption percentage or schedule of percentages 28 that is less than 100 percent. The resolution approving the 29 exemption application may also provide for a different period 30 of exemption and exemption percentage than what is provided in 31 the ordinance, but not exceeding the duration and percentages 32 in the ordinance. 33 The application for an exemption must be filed by the 34 owner of the property with the governing body of the city or 35 -4- LSB 2098XS (2) 88 md/jh 4/ 6

S.F. 149 county in which the property is located by February 1 of the 1 assessment year for which the exemption is first claimed, but 2 not later than February 1 of the assessment year in which all 3 improvements included in the application are first assessed 4 for taxation. The bill authorizes an owner to submit an 5 application for an exemption to receive prior approval for 6 eligibility for a tax exemption. Such prior approval does 7 not entitle the owner to exemption from taxation until the 8 improvements have been completed, a physical review of the 9 property has been conducted by the assessor, and the assessor 10 has determined that the actual value of the property has 11 increased as a result of the improvements. 12 The bill requires the application to list all other federal, 13 state, or local government tax credits, exemptions, grants, 14 forgivable loans, or other forms of financial assistance 15 received by or applied for by the owner for completion of the 16 improvements. 17 The bill requires the assessor to review each first-year 18 application by making a physical review of the property, to 19 determine if the improvements made increased the actual value 20 of the approved property. If an application for exemption 21 is denied as a result of failure to increase the value of 22 the property, the owner may file a first application in a 23 subsequent year when additional improvements are made. After 24 the tax exemption is granted, the local assessor shall continue 25 to grant the tax exemption, with periodic physical review by 26 the assessor, for the time period authorized. 27 Code section 25B.7 does not apply to the property tax 28 exemption to the bill. Code section 25B.7 provides that for a 29 property tax credit or exemption enacted on or after January 30 1, 1997, if a state appropriation made to fund the credit 31 or exemption is not sufficient to fully fund the credit or 32 exemption, the political subdivision is required to extend 33 to the taxpayer only that portion of the credit or exemption 34 estimated by the department of revenue to be funded by the 35 -5- LSB 2098XS (2) 88 md/jh 5/ 6