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PAG LIN
1 1 Section 1. Section 427B.17, Code 1995, is amended by
1 2 striking the section and inserting in lieu thereof the
1 3 following:
1 4 427B.17 PROPERTY SUBJECT TO SPECIAL VALUATION.
1 5 1. Property defined in section 427A.1, subsection 1,
1 6 paragraphs "e" and "j", shall be valued by the local assessor
1 7 as follows:
1 8 a. For the assessment year beginning January 1, 1995, at
1 9 twenty-six percent of the net acquisition cost.
1 10 b. For the assessment year beginning January 1, 1996, at
1 11 twenty-two percent of the net acquisition cost.
1 12 c. For the assessment year beginning January 1, 1997, at
1 13 eighteen percent of the net acquisition cost.
1 14 d. For the assessment year beginning January 1, 1998, at
1 15 fourteen percent of the net acquisition cost.
1 16 e. For the assessment year beginning January 1, 1999, at
1 17 ten percent of the net acquisition cost.
1 18 f. For the assessment year beginning January 1, 2000, at
1 19 six percent of the net acquisition cost.
1 20 g. For the assessment year beginning January 1, 2001, and
1 21 all subsequent assessment years, at zero percent of the net
1 22 acquisition cost.
1 23 2. For purposes of this section:
1 24 a. Property assessed by the department of revenue and
1 25 finance pursuant to sections 428.24 to 428.29, or chapters
1 26 433, 434, and 436 to 438 shall not receive the benefits of
1 27 this section.
1 28 b. The net acquisition cost of property acquired before
1 29 January 1, 1995, which was owned or used by a related person
1 30 shall be the net acquisition cost of the transferor of the
1 31 property.
1 32 c. "Related person" means a person who owns or controls
1 33 the taxpayer's business and another business entity from which
1 34 property is acquired or leased or to which property is sold or
1 35 leased. Business entities are owned or controlled by the same
2 1 person if the same person directly or indirectly owns or
2 2 controls fifty percent or more of the assets or any class of
2 3 stock or who directly or indirectly has an interest of fifty
2 4 percent or more in the ownership or profits.
2 5 d. "Net acquisition cost" means the acquired cost of the
2 6 property, including all foundations and installation cost less
2 7 any excess cost adjustment.
2 8 3. Property assessed pursuant to this section shall not be
2 9 eligible to receive a partial exemption under sections 427B.1
2 10 to 427B.6.
2 11 4. The taxpayer's valuation of property defined in section
2 12 427A.1, subsection 1, paragraphs "e" and "j", and located in
2 13 an urban renewal area for which an urban renewal plan provides
2 14 for the division of taxes as provided in section 403.19 to pay
2 15 the principal and interest on loans, advances, bonds issued
2 16 under the authority of section 403.9, subsection 1, or
2 17 indebtedness incurred by a city or county to finance an urban
2 18 renewal project within the urban renewal area, if such loans,
2 19 advances, or bonds were issued or indebtedness incurred, on or
2 20 after January 1, 1982, and on or before June 30, 1995, shall
2 21 be limited to thirty percent of the net acquisition cost of
2 22 the property. Such property located in an urban renewal area
2 23 shall not be valued pursuant to subsection 1 until the
2 24 assessment year following the calendar year in which the
2 25 obligations created by any loans, advances, bonds, or
2 26 indebtedness payable from the division of taxes as provided in
2 27 section 403.19 have been retired. The taxpayer's valuation
2 28 for such property shall then be the valuation specified in
2 29 subsection 1 for the applicable assessment year. If the
2 30 loans, advances, or bonds issued, or indebtedness incurred
2 31 between January 1, 1982, and June 30, 1995, are refinanced or
2 32 refunded after June 30, 1995, the valuation of such property
2 33 shall then be the valuation specified in subsection 1 for the
2 34 applicable assessment year beginning with the assessment year
2 35 after the calendar year in which any of those loans, advances,
3 1 bonds, or other indebtedness are refinanced or refunded after
3 2 June 30, 1995.
3 3 5. For the purpose of dividing taxes under section 260E.4
3 4 or 260F.4, the employer's or business's valuation of property
3 5 defined in section 427A.1, subsection 1, paragraphs "e" and
3 6 "j", and used to fund a new jobs training project which
3 7 project's first written agreement providing for a division of
3 8 taxes as provided in section 403.19, is approved on or before
3 9 June 30, 1995, shall be limited to thirty percent of the net
3 10 acquisition cost of the property. An employer's or business's
3 11 taxable property used to fund a new jobs training project
3 12 shall not be valued pursuant to subsection 1 until the
3 13 assessment year following the calendar year in which the
3 14 certificates or other funding obligations have been retired or
3 15 escrowed. The taxpayer's valuation for such property shall
3 16 then be the valuation specified in subsection 1 for the
3 17 applicable assessment year. This subsection shall not apply
3 18 to the refunding of certificates or refinancing of other
3 19 obligations issued between January 1, 1982, and June 30, 1995.
3 20 Sec. 2. NEW SECTION. 427B.18 ASSESSOR AND COUNTY AUDITOR
3 21 DUTIES.
3 22 1. On or before July 1 of each year, the assessor shall
3 23 determine the taxpayer's valuation of the property specified
3 24 in section 427B.17 for that year and the valuation of the
3 25 property if the property were valued, for assessment purposes,
3 26 at thirty percent of net acquisition cost and shall report the
3 27 valuations to the county auditor.
3 28 2. On or before July 1, 1996, and on or before July 1 of
3 29 each subsequent year, the county auditor shall prepare a
3 30 statement listing for each taxing district in the county:
3 31 a. Beginning with the assessment year beginning January 1,
3 32 1995, the difference between the assessed valuation of
3 33 property defined in section 427A.1, subsection 1, paragraphs
3 34 "e" and "j", and assessed pursuant to section 427B.17 and the
3 35 valuation of the property if the property were valued, for
4 1 assessment purposes, at thirty percent of net acquisition
4 2 cost.
4 3 b. The tax levy rate for each taxing district levied
4 4 against assessments made as of January 1 of the previous year.
4 5 c. The industrial machinery, equipment and computers tax
4 6 replacement claim for each taxing district, which is equal to
4 7 the amount determined pursuant to paragraph "a", multiplied by
4 8 the tax rate specified in paragraph "b".
4 9 3. The county auditor shall certify and forward one copy
4 10 of the statement to the department of revenue and finance not
4 11 later than July 1 of each year.
4 12 Sec. 3. NEW SECTION. 427B.19 REPLACEMENT.
4 13 Each county treasurer shall be paid an amount equal to the
4 14 following percentages of the industrial machinery, equipment
4 15 and computers tax replacement claim for that county determined
4 16 pursuant to section 427B.18, subsection 2:
4 17 1. For the fiscal year beginning July 1, 1996, ninety
4 18 percent.
4 19 2. For the fiscal year beginning July 1, 1997, seventy-
4 20 five percent.
4 21 3. For the fiscal year beginning July 1, 1998, sixty
4 22 percent.
4 23 4. For the fiscal year beginning July 1, 1999, forty-five
4 24 percent.
4 25 5. For the fiscal year beginning July 1, 2000, thirty
4 26 percent.
4 27 6. For the fiscal year beginning July 1, 2001, twenty
4 28 percent.
4 29 7. For the fiscal year beginning July 1, 2002, twenty
4 30 percent.
4 31 8. For the fiscal year beginning July 1, 2003, twenty
4 32 percent.
4 33 9. For the fiscal year beginning July 1, 2004, fifteen
4 34 percent.
4 35 10. For the fiscal year beginning July 1, 2005, ten
5 1 percent.
5 2 Sec. 4. NEW SECTION. 427B.19A FUND CREATED.
5 3 1. The industrial machinery, equipment and computers
5 4 property tax replacement fund is created. There is
5 5 appropriated annually from the general fund of the state to
5 6 the department of revenue and finance to be credited to the
5 7 industrial machinery, equipment and computers property tax
5 8 replacement fund, the amounts specified in section 427B.19B.
5 9 2. Each county treasurer shall be paid from the fund
5 10 created in this section the amount calculated pursuant to
5 11 section 427B.19. The payment shall be made in two equal
5 12 installments on or before September 30 and March 30 of each
5 13 year. The county treasurer shall apportion the payment in the
5 14 manner provided in section 445.57.
5 15 3. If an amount appropriated in section 427B.19B for a
5 16 fiscal year is insufficient to pay all claims according to the
5 17 replacement schedule in section 427B.19, the director shall
5 18 prorate the disbursements from the fund to the county
5 19 treasurers and shall notify the county auditors of the pro
5 20 rata percentage on or before August 1. If an amount
5 21 appropriated in section 427B.19B for a fiscal year is in
5 22 excess of the amount necessary to pay all claims according to
5 23 the replacement schedule in section 427B.19, the director
5 24 shall prorate the disbursements from the fund to the county
5 25 treasurers, notwithstanding the amount calculated pursuant to
5 26 section 427B.19, and shall notify the county auditors of the
5 27 pro rata percentage on or before August 1.
5 28 4. The replacement amount paid to each school district
5 29 shall be regarded as property tax for the purposes of the
5 30 school foundation property tax levy in section 257.3 and the
5 31 additional property tax levy in section 257.4. The department
5 32 of management shall annually make the adjustments necessary to
5 33 implement this subsection.
5 34 Sec. 5. NEW SECTION. 427B.19B APPROPRIATION.
5 35 There is appropriated in each of the following fiscal years
6 1 from the general fund of the state to the industrial
6 2 machinery, equipment and computers property tax replacement
6 3 fund the following amounts:
6 4 1. For the fiscal year beginning July 1, 1996, ten million
6 5 dollars.
6 6 2. For the fiscal year beginning July 1, 1997, seventeen
6 7 million dollars.
6 8 3. For the fiscal year beginning July 1, 1998, twenty-
6 9 three million dollars.
6 10 4. For the fiscal year beginning July 1, 1999, twenty-
6 11 three million, four hundred thousand dollars.
6 12 5. For the fiscal year beginning July 1, 2000, twenty-one
6 13 million, one hundred thousand dollars.
6 14 6. For the fiscal year beginning July 1, 2001, eighteen
6 15 million, one hundred thousand dollars.
6 16 7. For the fiscal year beginning July 1, 2002, twenty-four
6 17 million dollars.
6 18 8. For the fiscal year beginning July 1, 2003, twenty-five
6 19 million, six hundred thousand dollars.
6 20 9. For the fiscal year beginning July 1, 2004, twenty
6 21 million, four hundred thousand dollars.
6 22 10. For the fiscal year beginning July 1, 2005, fourteen
6 23 million, five hundred thousand dollars.
6 24 Sec. 6. NEW SECTION. 427B.19C PHASEOUT OF TAX.
6 25 Effective on July 1, 2002, all property taxes on property
6 26 defined in section 427A.1, subsection 1, paragraphs "e" and
6 27 "j", are repealed. For assessment years beginning on or after
6 28 January 1, 2005, such property shall not be listed or
6 29 assessed. This section shall prevail over all inconsistent
6 30 statutes.
6 31 Sec. 7. NEW SECTION. 427B.19D GUARANTEE OF STATE
6 32 REPLACEMENT FUNDS.
6 33 If for any reason an appropriation specified in section
6 34 427B.19 is not made or the appropriation made is less than
6 35 that specified in section 427B.19 for the applicable fiscal
7 1 year, the director of the department of management shall
7 2 compute the difference between the amount specified in section
7 3 427B.19B and the amount actually appropriated or zero if no
7 4 appropriation is made. The department shall divide that
7 5 difference by the consolidated tax levy rate to determine the
7 6 amount of taxable value necessary to raise the difference at
7 7 that tax rate. The department shall compute an adjustment
7 8 factor as a percentage of net acquisition cost which will
7 9 yield such taxable value. The director of revenue and finance
7 10 shall review and certify such adjustment factor to the county
7 11 auditor. The auditor shall apply such adjustment factor to
7 12 all taxable property described in section 427B.17 for the
7 13 assessment year beginning January 1 preceding the fiscal year
7 14 for which the specified appropriation was not made. Property
7 15 taxes generated by the adjustment factor in this section shall
7 16 not be considered property tax dollars certified for purposes
7 17 of the property tax limitation in chapter 444.
7 18 EXPLANATION
7 19 This bill changes the method of valuation, for purposes of
7 20 property tax assessment, of industrial machinery, equipment
7 21 and computers to provide for a phaseout of the property tax on
7 22 such property over a six-year period beginning with the
7 23 assessment year beginning January 1, 1995. The bill further
7 24 provides that a percentage of property tax revenues will be
7 25 replaced by the state over a 10-year period beginning in
7 26 fiscal year 1996-1997. The bill creates an industrial
7 27 machinery, equipment and computers property tax replacement
7 28 fund and provides appropriations for the next 10 fiscal years,
7 29 beginning with fiscal year 1996-1997, from which the local
7 30 government property tax revenues will be replaced. If moneys
7 31 in the fund are not sufficient to pay local government taxing
7 32 district claims, the replacement amounts will be prorated
7 33 among the taxing districts. Likewise, if the moneys in the
7 34 fund are in excess of the replacement claims, the excess
7 35 amount will be prorated among the local government taxing
8 1 districts. If the general assembly does not make the
8 2 specified appropriation, the local government taxing districts
8 3 will be allowed to make up the shortfall in the following
8 4 fiscal year by levying against a higher assessment computed by
8 5 the department of management, certified by the department of
8 6 revenue and finance, and applied statewide.
8 7 The bill provides that industrial machinery, equipment and
8 8 computers located in a tax increment financing area shall
8 9 continue to be valued at 30 percent of net acquisition cost if
8 10 outstanding bonds or other obligations used to fund the
8 11 development or redevelopment are payable from taxes levied
8 12 against the taxable valuation of that property. The bill
8 13 provides the same guarantee for industrial machinery,
8 14 equipment and computers owned by a business or an employer
8 15 participating in a new jobs training program.
8 16 LSB 1578YC 76
8 17 sc/cf/24
Text: HSB00055 Text: HSB00057 Text: HSB00000 - HSB00099 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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