Senate File 2104 - Introduced SENATE FILE 2104 BY ZAUN A BILL FOR An Act relating to property taxation by providing a property 1 assessment adjustment and property tax reduction for 2 certain property of persons who meet certain income 3 qualifications, providing a penalty, modifying city and 4 county budget provisions, and including retroactive and 5 other applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 5948XS (3) 88 md/jh

S.F. 2104 DIVISION I 1 CITY AND COUNTY BUDGET INCREASE APPROVAL 2 Section 1. Section 331.433A, subsection 5, paragraph b, 3 Code 2020, is amended to read as follows: 4 b. If the sum of the maximum property tax dollars for the 5 budget year specified in the resolution for either general 6 county services or for rural county services under the 7 levies specified in subsection 2 , paragraphs “a” and “b” , as 8 applicable, exceeds one hundred two one percent of the sum of 9 the current fiscal year’s actual property taxes certified for 10 levy for general county services or rural county services under 11 the levies specified in subsection 2 , paragraphs “a” and “b” , as 12 applicable, the board shall be required to adopt the resolution 13 by a two-thirds majority of the membership of the board and for 14 fiscal years beginning on or after July 1, 2021, be approved at 15 election under section 331.434A . 16 Sec. 2. Section 331.434, unnumbered paragraph 1, Code 2020, 17 is amended to read as follows: 18 Annually, the board of each county, subject to section 19 331.403, subsection 4 , sections 331.423 through 331.426 , 20 section 331.433A , section 331.434A, and other applicable state 21 law, shall prepare and adopt a budget, certify taxes, and 22 provide appropriations as follows: 23 Sec. 3. NEW SECTION . 331.434A Budget increase election. 24 1. For fiscal years beginning on or after July 1, 2021, if 25 the sum of the maximum property tax dollars for the budget year 26 for either general county services or for rural county services 27 under the levies specified in section 331.433A, subsection 2, 28 paragraphs “a” and “b” , as applicable, exceeds one hundred one 29 percent of the sum of the current fiscal year’s actual property 30 taxes certified for levy for general county services or rural 31 county services under the levies specified in section 331.433A, 32 subsection 2, paragraphs “a” and “b” , as applicable, and the 33 board has adopted the resolution by a two-thirds majority of 34 the membership of the board as required under section 331.433A, 35 -1- LSB 5948XS (3) 88 md/jh 1/ 10

S.F. 2104 subsection 5, paragraph “b” , the board shall call a county 1 special election to vote upon the question of the increase. 2 2. Notice of the election shall be given by publication as 3 specified in section 331.305. At the election, the ballot used 4 for the submission of the proposition shall be in substantially 5 the form for submitting special questions at general elections. 6 3. The proposition for the increase is not carried or 7 adopted unless the vote in favor of the proposition is equal 8 to at least sixty percent of the total votes cast for and 9 against the proposition at the election. If the proposition is 10 approved by the voters, the board shall, as necessary, amend 11 the county budget under section 331.435, and the department of 12 management shall make all necessary changes to the county’s 13 certified amount of taxes. 14 Sec. 4. Section 331.435, subsection 2, Code 2020, is amended 15 to read as follows: 16 2. The board shall prepare and adopt a budget amendment in 17 the same manner as the original budget as provided in section 18 331.434 , but excluding the requirements for adoption of the 19 resolution under section 331.433A and the election under 20 section 331.434A , and the amendment is subject to protest as 21 provided in section 331.436 , except that the director of the 22 department of management may by rule provide that amendments 23 of certain types or up to certain amounts may be made without 24 public hearing and without being subject to protest. A county 25 budget for the ensuing fiscal year shall be amended by May 31 26 to allow time for a protest hearing to be held and a decision 27 rendered before June 30. An amendment of a budget after May 28 31 which is properly appealed but without adequate time for 29 hearing and decision before June 30 is void. 30 Sec. 5. Section 384.15A, subsection 5, paragraph b, Code 31 2020, is amended to read as follows: 32 b. If the sum of the maximum property tax dollars for 33 the budget year specified in the resolution under the levies 34 specified in subsection 2 exceeds one hundred two one percent 35 -2- LSB 5948XS (3) 88 md/jh 2/ 10

S.F. 2104 of the sum of the current fiscal year’s actual property taxes 1 certified for levy under the levies specified in subsection 2 2 , the council shall be required to adopt the resolution by 3 a two-thirds majority of the membership of the council , and 4 for fiscal years beginning on or after July 1, 2021, shall be 5 approved at election under section 384.15B . 6 Sec. 6. NEW SECTION . 384.15B Budget increase election. 7 1. For fiscal years beginning on or after July 1, 2021, if 8 the sum of the maximum property tax dollars for the budget year 9 specified in the resolution under section 384.15A exceeds one 10 hundred one percent of the sum of the current fiscal year’s 11 actual property taxes certified for levy under the levies 12 specified in section 384.15A, subsection 2, and the council 13 has adopted the resolution by a two-thirds majority of the 14 membership of the council as required under section 384.15A, 15 subsection 5, paragraph “b” , the council shall call a city 16 special election to vote upon the question of the increase. 17 2. Notice of the election shall be given by publication as 18 specified in section 49.53. At the election, the ballot used 19 for the submission of the proposition shall be in substantially 20 the form for submitting special questions at general elections. 21 3. The proposition for the increase is not carried or 22 adopted unless the vote in favor of the proposition is equal 23 to at least sixty percent of the total votes cast for and 24 against the proposition at the election. If the proposition 25 is approved by the voters, the board shall, as necessary, 26 amend the city budget under section 384.18, and the department 27 of management shall make all necessary changes to the city’s 28 certified amount of taxes. 29 Sec. 7. Section 384.16, unnumbered paragraph 1, Code 2020, 30 is amended to read as follows: 31 Annually, a city that has satisfied the requirements of 32 section 384.15A and section 384.22, subsection 3 , and section 33 384.15B, if applicable, shall prepare and adopt a budget, and 34 shall certify taxes as follows: 35 -3- LSB 5948XS (3) 88 md/jh 3/ 10

S.F. 2104 Sec. 8. Section 384.18, subsection 1, Code 2020, is amended 1 by adding the following new paragraph: 2 NEW PARAGRAPH . e. To amend the city budget following an 3 election under section 384.15B. 4 Sec. 9. Section 384.18, subsection 2, Code 2020, is amended 5 to read as follows: 6 2. A budget amendment must be prepared and adopted in the 7 same manner as the original budget, as provided in section 8 384.16 , but excluding the requirement for adoption of a 9 resolution under section 384.15A or an election under section 10 384.15B, and is subject to protest as provided in section 11 384.19 , except that the committee may by rule provide that 12 amendments of certain types or up to certain amounts may be 13 made without public hearing and without being subject to 14 protest. A city budget shall be amended by May 31 of the 15 current fiscal year to allow time for a protest hearing to be 16 held and a decision rendered before June 30. The amendment of 17 a budget after May 31, which is properly appealed but without 18 adequate time for hearing and decision before June 30 is void. 19 Sec. 10. APPLICABILITY. This division of this Act applies 20 to city and county budgets for fiscal years beginning on or 21 after July 1, 2021. 22 DIVISION II 23 ELDERLY HOMESTEAD ADJUSTMENT 24 Sec. 11. NEW SECTION . 425B.1 Homestead assessed value 25 adjustment —— purpose. 26 Persons who own their homesteads and who meet the 27 qualifications provided in this chapter are eligible for an 28 adjustment in the assessed value of their homesteads and the 29 amount of property taxes due and payable, or both. 30 Sec. 12. NEW SECTION . 425B.2 Definitions. 31 As used in this chapter, unless the context otherwise 32 requires: 33 1. “Assessed value” means the actual value prior to any 34 adjustment pursuant to section 441.21, subsection 4. 35 -4- LSB 5948XS (3) 88 md/jh 4/ 10

S.F. 2104 2. “Base assessment year” means the assessment year 1 beginning in the base year. 2 3. “Base year” means the calendar year last ending before 3 the claim is filed. 4 4. “Claimant” means a person filing a claim for adjustment 5 under this chapter who receives fifty percent or more of the 6 person’s household income from social security benefits or 7 pension income, and is domiciled in this state at the time the 8 claim is filed or at the time of the person’s death in the 9 case of a claim filed by the executor or administrator of the 10 claimant’s estate. 11 5. “Homestead” means the same as defined in section 425.17. 12 6. “Household” , “household income” , and “income” mean the 13 same as defined in section 425.17. 14 7. “Owned” means owned by an owner as defined in section 15 425.11. 16 Sec. 13. NEW SECTION . 425B.3 Right to file a claim. 17 The right to file a claim for an assessed value adjustment 18 under this chapter may be exercised by the claimant or on 19 behalf of a claimant by the claimant’s legal guardian, spouse, 20 or attorney, or by the executor or administrator of the 21 claimant’s estate. If a claimant dies after having filed a 22 claim for adjustment, the amount of any adjustment shall be 23 made as if the claimant had not died. 24 Sec. 14. NEW SECTION . 425B.4 Claim for adjustment. 25 1. Subject to the limitations provided in this chapter, 26 a claimant may annually claim an adjustment of the assessed 27 value of the claimant’s homestead for the base assessment year. 28 The adjustment claim shall be filed with the county assessor 29 between January 1 and February 15 immediately following 30 the close of the base assessment year. However, in case of 31 sickness, absence, or other disability of the claimant, or 32 if in the judgment of the county assessor good cause exists, 33 the county assessor may extend the time for filing a claim for 34 adjustment through June 30 of the same calendar year. 35 -5- LSB 5948XS (3) 88 md/jh 5/ 10

S.F. 2104 2. The county assessor shall notify the department of 1 revenue by March 1 of the number of claimants receiving 2 adjustments under this chapter and the total amount of the 3 reduced assessed values for the base assessment year. 4 Sec. 15. NEW SECTION . 425B.5 Adjustment —— maximum tax 5 dollars levied. 6 The assessed value of the claimant’s homestead in the 7 base assessment year shall be adjusted, but not increased, 8 to equal the assessed value, as such assessed value may have 9 been adjusted pursuant to this chapter, in the assessment year 10 preceding the base assessment year. If the amount of property 11 taxes levied against the adjusted assessment exceeds the amount 12 of property taxes levied against the property in the fiscal 13 year for which taxes were first levied against an adjusted 14 assessment under this chapter, the amount of the difference 15 shall be abated and the treasurer shall subtract the difference 16 from the amount due. 17 Sec. 16. NEW SECTION . 425B.6 Administration. 18 The director of revenue shall make available suitable forms 19 for claiming an assessed value adjustment with instructions 20 for claimants. Each assessor and county treasurer shall make 21 available the forms and instructions. The claim shall be in a 22 form as the director may prescribe. 23 Sec. 17. NEW SECTION . 425B.7 Proof of claim. 24 1. Every claimant shall give the department of revenue, in 25 support of the claim, reasonable proof of: 26 a. Changes of homestead. 27 b. Size and nature of the property claimed as the homestead. 28 c. Household income. 29 2. The director of revenue may require any additional proof 30 necessary to support a claim. 31 Sec. 18. NEW SECTION . 425B.8 Audit —— denial. 32 If on the audit of a claim for adjustment under this chapter, 33 the director of revenue determines the claim is not allowable, 34 the director shall notify the claimant of the denial and the 35 -6- LSB 5948XS (3) 88 md/jh 6/ 10

S.F. 2104 reasons for it. The director shall not deny a claim after 1 three years from October 31 of the year in which the claim was 2 filed. The director shall give notification to the county 3 assessor of the denial of the claim and the county assessor 4 shall instruct the county treasurer to proceed to collect the 5 tax that would have been levied on the applicable adjusted 6 assessed value in the same manner as other property taxes 7 due and payable are collected, if the property on which the 8 adjustment was granted is still owned by the claimant. 9 Sec. 19. NEW SECTION . 425B.9 Waiver of confidentiality. 10 1. A claimant shall expressly waive any right to 11 confidentiality relating to all information available to the 12 county assessor who shall hold the information confidential 13 except that it may be used as evidence to disallow the assessed 14 value adjustment. 15 2. The department of revenue may release information 16 pertaining to a person’s eligibility or claim for or receipt of 17 the assessed value adjustment to an employee of the department 18 of inspections and appeals in the employee’s official conduct 19 of an audit or investigation. 20 Sec. 20. NEW SECTION . 425B.10 False claim —— penalty. 21 A person who makes a false affidavit for the purpose of 22 obtaining an adjustment in assessed value provided for in 23 this chapter or who knowingly receives the adjustment without 24 being legally entitled to it or makes claim for the adjustment 25 in more than one county in the state without being legally 26 entitled to it is guilty of a fraudulent practice. The claim 27 for adjustment shall be disallowed in full and property tax 28 shall be levied on the disallowed adjustment at the rate that 29 would have been levied but for the adjustment. The director of 30 revenue shall send a notice of disallowance of the claim. 31 Sec. 21. NEW SECTION . 425B.11 Notices, appeals, and 32 rules. 33 To the extent not otherwise contrary to the provisions of 34 this chapter: 35 -7- LSB 5948XS (3) 88 md/jh 7/ 10

S.F. 2104 1. Section 423.39, subsection 1, shall apply to all notices 1 under this chapter. 2 2. Any person aggrieved by an act or decision of the 3 director of revenue or the department of revenue under this 4 chapter shall have the same rights of appeal and review as 5 provided in section 423.38 and the rules of the department of 6 revenue. 7 3. A claim for adjustment shall be disallowed if the 8 department finds that the claimant or a person of the 9 claimant’s household received title to the homestead primarily 10 for the purpose of receiving benefits under this chapter. 11 4. The department of revenue shall adopt rules pursuant to 12 chapter 17A to administer and interpret this chapter, including 13 rules to prevent and disallow duplication of benefits and to 14 prevent any unreasonable hardship or advantage to any person. 15 Sec. 22. APPLICABILITY. This division of this Act applies 16 retroactively to January 1, 2020, for assessment years 17 beginning on or after that date and to the filing of claims on 18 or after January 1, 2021, for adjustments of assessed values. 19 EXPLANATION 20 The inclusion of this explanation does not constitute agreement with 21 the explanation’s substance by the members of the general assembly. 22 This bill relates to property taxation by modifying certain 23 city and county budget provisions and providing a property 24 assessment adjustment and property tax reduction for certain 25 property of persons that meet income qualifications. 26 Current law provides that for budget years beginning on or 27 after July 1, 2020, each county and city is, prior to filing of 28 the entity’s proposed budget, required to adopt a resolution 29 establishing, in the case of a county, the total maximum 30 property tax dollars that may be certified for levy for general 31 county services and the total maximum property tax dollars that 32 may be certified for levy for rural county services; and in the 33 case of a city, the total maximum property tax dollars that may 34 be certified for the enumerated city government purposes and 35 -8- LSB 5948XS (3) 88 md/jh 8/ 10

S.F. 2104 funds. In addition to the public hearing on the budget, the 1 governing body must hold a public hearing on the resolution. 2 If the sum of the total maximum property tax dollars for the 3 budget year specified in the resolution exceeds 102 percent 4 of the sum of the current fiscal year’s actual property taxes 5 certified for levy, the governing body shall be required to 6 adopt the resolution by a two-thirds majority of the membership 7 of the governing body. Division I of the bill changes the 8 threshold percentage for the two-third majority approval from 9 102 percent to 101 percent and requires the increase in the 10 budget amount to be approved by the voters at election. The 11 proposition for the increase is not carried or adopted unless 12 the vote in favor of the proposition is equal to at least 60 13 percent of the total votes cast for and against the proposition 14 at the election. If the proposition is approved by the voters, 15 the county or city, as applicable, shall amend the county or 16 city budget and the department of management shall make all 17 necessary changes to the city’s certified amount of taxes. 18 Division I of the bill applies to city and county budgets for 19 fiscal years beginning on or after July 1, 2021. 20 Division II of the bill provides for an adjustment in 21 the assessed value of a homestead, as defined in the bill, 22 if the owner’s household income consists of 50 percent or 23 more of social security income or pension income. If those 24 qualifications are met, the assessed value of the homestead 25 upon which property taxes are levied in a fiscal year is the 26 same assessed value as for the previous fiscal year. The bill 27 specifies that assessed value is the actual value prior to any 28 rollback being applied. 29 The bill provides that a person who makes a false affidavit 30 for the purpose of obtaining an adjustment, knowingly receives 31 the adjustment without being legally entitled to it, or makes 32 claim for the adjustment in more than one county without being 33 legally entitled to it is guilty of a fraudulent practice and 34 is subject to a criminal penalty. 35 -9- LSB 5948XS (3) 88 md/jh 9/ 10