HSB 120 (LSB 1566XL (3) 90)

SENATE/HOUSE FILE _____

BY  (PROPOSED GOVERNOR BILL)

A BILL FOR

An Act relating to the calculation of assessment limitations for residential property and including effective date and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 441.21, subsection 4, Code 2023, is amended to read as follows:
   4.  For valuations established as of January 1, 1979, the percentage of actual value at which agricultural and residential property shall be assessed shall be the quotient of the dividend and divisor as defined in this section.
   a.  (1)  The dividend for each class of property shall be the dividend as determined for each class of property for valuations established as of January 1, 1978, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978, plus six percent of the amount so determined.
   (2)  However, if the difference between the dividend so determined for either class of property and the dividend for that class of property for valuations established as of January 1, 1978, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978, is less than six percent, the 1979 dividend for the other class of property shall be the dividend as determined for that class of property for valuations established as of January 1, 1978, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978, plus a percentage of the amount so determined which is equal to the percentage by which the dividend as determined for the other class of property for valuations established as of January 1, 1978, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978, is increased in arriving at the 1979 dividend for the other class of property.
   (3)  For valuations established for assessment years beginning on or after January 1, 2022, the calculation of the dividend for residential property under this subsection shall exclude the value of all property described in subsection 14, paragraph “a”, subparagraphs (2), (3), (4), (5), and (6), and the property described in subsection 14, paragraph “a”, subparagraph (7), that contains three or more separate dwelling units.
   b.  (1)  The divisor for each class of property shall be the total actual value of all such property in the state in the preceding year, as reported by the assessors on the abstracts of assessment submitted for 1978, plus the amount of value added to said total actual value by the revaluation of existing properties in 1979 as equalized by the director of revenue pursuant to section 441.49. The director shall utilize information reported on abstracts of assessment submitted pursuant to section 441.45 in determining such percentage.
   (2)  For valuations established for assessment years beginning on or after January 1, 2022, the calculation of the divisor for residential property under this subsection shall exclude the value of all property described in subsection 14, paragraph “a”, subparagraphs (2), (3), (4), (5), and (6), and the property described in subsection 14, paragraph “a”, subparagraph (7), that contains three or more separate dwelling units. 
   c.  (1)  For valuations established as of January 1, 1980, and each assessment year thereafter beginning before January 1, 2013, the percentage of actual value as equalized by the director of revenue as provided in section 441.49 at which agricultural and residential property shall be assessed shall be calculated in accordance with the methods provided in this subsection, including the limitation of increases in agricultural and residential assessed values to the percentage increase of the other class of property if the other class increases less than the allowable limit adjusted to include the applicable and current values as equalized by the director of revenue, except that any references to six percent in this subsection shall be four percent.
   (2)  For valuations established as of January 1, 2013, and each assessment year thereafter, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which agricultural and residential property shall be assessed shall be calculated in accordance with the methods provided in this subsection, including the limitation of increases in agricultural and residential assessed values to the percentage increase of the other class of property if the other class increases less than the allowable limit adjusted to include the applicable and current values as equalized by the department of revenue, except that any references to six percent in this subsection shall be three percent.
    Sec. 2.  IMPLEMENTATION.
   1.  Notwithstanding the requirements of section 441.21, subsection 9, and any other provision of law to the contrary, the director of the department of revenue shall, within two business days following the effective date of this Act, issue an amended order certifying to the county auditor of each county the percentages of actual value at which residential property, commercial property, industrial property, and property valued by the department of revenue pursuant to chapter 434 shall be assessed for taxation under section 441.21, subsection 9, for the assessment year beginning January 1, 2022. The amended order shall supersede all previous orders certifying percentages for assessment limitations for residential property, commercial property, industrial property, and property valued by the department of revenue pursuant to chapter 434 for the assessment year beginning January 1, 2022.
   2.  Notwithstanding the requirements of section 441.21, subsection 9, and any other provision of law to the contrary, upon receipt of the amended order under subsection 1, each county auditor shall proceed to determine the assessed values of residential property, commercial property, industrial property, and property valued by the department of revenue pursuant to chapter 434 for the assessment year beginning January 1, 2022, by applying the percentages from the amended order to the actual value of such property reported to the county auditor by the assessor. The assessed values so determined shall be the taxable values of such properties upon which the applicable levy shall be made.
   3.  Notwithstanding any provision of law to the contrary, each county auditor, within ten days after issuance of the order under subsection 1, shall report the valuation by class of property for each taxing district in the county for the assessment year beginning January 1, 2022, to the department of management on forms provided by the department of management. The valuations reported shall be the valuations used for determining the levy rates necessary to fund the budgets of the taxing districts for the fiscal year beginning July 1, 2023.
    Sec. 3.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 4.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to assessment years beginning on or after January 1, 2022.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Code section 441.21(4) establishes the calculation used to determine the assessment limitation for residential property and agricultural property. As the result of 2021 legislation, certain property that was previously classified as multiresidential property is classified as residential property for assessment years beginning on or after January 1, 2022, and the valuations of such property are included within the aggregate valuations used to calculate the assessment limitation under Code section 441.21(4). This bill excludes the values of the following from the calculation of the assessment limitation for assessment years beginning on or after January 1, 2022: mobile home parks; manufactured home communities; land-leased communities; assisted living facilities; parcels primarily used or intended for human habitation containing three or more separate dwelling units; and that portion of a parcel primarily used or intended for use as commercial property or industrial property that is used or intended for human habitation containing three or more separate dwelling units.
   The bill includes implementation provisions requiring the director of the department of revenue, within two business days following the effective date of the bill, to issue an amended order certifying to the county auditor of each county the percentages of actual value at which residential property, commercial property, industrial property, and property valued by the department of revenue pursuant to Code chapter 434 shall be assessed for taxation. The bill also requires each county auditor to determine revised assessed values based on the amended order and report the revised values to the department of management within 10 days after issuance of the order. 
   The bill takes effect upon enactment and applies retroactively to assessment years beginning on or after January 1, 2022.