25B.7  Funding property tax credits and exemptions.

1.  Beginning with property taxes due and payable in the fiscal year beginning July 1, 1998, the cost of providing a property tax credit or property tax exemption which is enacted by the general assembly on or after January 1, 1997, shall be fully funded by the state. If a state appropriation made to fund a credit or exemption which is enacted on or after January 1, 1997, is not sufficient to fully fund the credit or exemption, the political subdivision shall be required to extend to the taxpayer only that portion of the credit or exemption estimated by the department of revenue and finance to be funded by the state appropriation. The department of revenue and finance shall determine by June 15 the estimated portion of the credit or exemption which will be funded by the state appropriation.

2.  The requirement for fully funding and the consequences of not fully funding credits and exemptions under subsection 1 also apply to all of the following:

a.  Homestead tax credit pursuant to sections 425.1 through 425.15.

b.  Low-income property tax credit and elderly and disabled property tax credit pursuant to sections 425.16 through 425.40.

c.  Military service property tax credit and exemption pursuant to chapter 426A and sections 427.3 through 427.7, to the extent of six dollars and seventy-five cents per thousand dollars of assessed value of the exempt property.

3. a.  For purposes of this subsection, "base reimbursement amount" means the amount in dollars received for the fiscal year beginning July 1, 1996, by a city, county, or school district from the state as a reimbursement for the homestead tax credit, military service property tax credit, low-income property tax credit, or the elderly and disabled property tax credit, as appropriate. The county treasurer shall determine the base reimbursement amount for the cities, county, and school districts for each credit. The treasurer shall notify the department of management of the base reimbursement amounts for each credit of each school district.

b.  The amount of state reimbursement received for a fiscal year beginning on or after July 1, 1997, and ending on or before June 30, 2002, by a city, county, or school district for the homestead tax credit, military service property tax credit, low-income property tax credit, or elderly and disabled property tax credit in excess of the base reimbursement amount for that credit shall be used as follows:

(1)  In the case of a city, at least fifty percent shall be used for property tax relief with the remaining amount used for infrastructure. The county treasurer shall provide to each city located in the county the total amount of excess tax credit reimbursement received by the city.

(2)  In the case of a county, at least fifty percent shall be used for property tax relief with the remaining amount used for infrastructure or for paying the expenses incurred in providing the statement and receipt required under section 445.5. The county treasurer shall provide the county auditor with the total amount of excess tax credit reimbursement received by the county.

(3)  In the case of a school district, one hundred percent shall be used for property tax relief through the reduction in the additional levy under section 257.4. Each county treasurer shall provide the department of management with the total amount of excess tax credit reimbursement received by each school district in the county.

c.  The requirements of paragraph "b" do not constitute a state mandate under this chapter.

d.  This subsection is repealed June 30, 2002, for fiscal years beginning after that date.

Section History: Recent form

  97 Acts, ch 206, §4


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