House File 697 H-1735 Amend House File 697 as follows: 1 1. Page 475, by striking lines 19 through 23 and 2 inserting: 3 < DIVISION ___ 4 EDUCATION FINANCE 5 REGULAR PROGRAM FOUNDATION BASE 6 Sec. ___. Section 257.1, subsection 2, paragraph 7 b, Code 2011, is amended by striking the paragraph and 8 inserting in lieu thereof the following: 9 b. (1) The regular program foundation base per 10 pupil is the following: 11 (a) For the budget year commencing July 1, 2011, 12 the regular program foundation base per pupil is 13 eighty-seven and five-tenths percent of the regular 14 program state cost per pupil. 15 (b) For the budget year commencing July 1, 2012, 16 the regular program foundation base per pupil is 17 eighty-seven and five-tenths percent of the regular 18 program state cost per pupil. 19 (c) For the budget year commencing July 1, 2013, 20 the regular program foundation base per pupil is 21 eighty-eight percent of the regular program state cost 22 per pupil. 23 (d) For the budget year commencing July 1, 2014, 24 the regular program foundation base per pupil is 25 eighty-eight and five-tenths percent of the regular 26 program state cost per pupil. 27 (e) For the budget year commencing July 1, 2015, 28 the regular program foundation base per pupil is 29 eighty-nine percent of the regular program state cost 30 per pupil. 31 (f) For the budget year commencing July 1, 2016, 32 the regular program foundation base per pupil is 33 eighty-nine and five-tenths percent of the regular 34 program state cost per pupil. 35 (g) For the budget year commencing July 1, 2017, 36 and succeeding budget years, the regular program 37 foundation base per pupil is ninety percent of the 38 regular program state cost per pupil. 39 (2) For each budget year, the special education 40 support services foundation base is seventy-nine 41 percent of the special education support services state 42 cost per pupil. The combined foundation base is the 43 sum of the regular program foundation base, the special 44 education support services foundation base, the total 45 teacher salary supplement district cost, the total 46 professional development supplement district cost, the 47 total early intervention supplement district cost, the 48 total area education agency teacher salary supplement 49 district cost, and the total area education agency 50 -1- HF697.3313 (1) 84 md/nh 1/ 30 #1.
professional development supplement district cost. 1 DIVISION ___ 2 PROPERTY TAX 3 PROPERTY ASSESSMENT LIMITATIONS 4 Sec. ___. Section 441.21, subsection 4, Code 2011, 5 is amended to read as follows: 6 4. For valuations established as of January 7 1, 1979, the percentage of actual value at which 8 agricultural and residential property shall be assessed 9 shall be the quotient of the dividend and divisor as 10 defined in this section . The dividend for each class 11 of property shall be the dividend as determined for 12 each class of property for valuations established as 13 of January 1, 1978, adjusted by the product obtained 14 by multiplying the percentage determined for that year 15 by the amount of any additions or deletions to actual 16 value, excluding those resulting from the revaluation 17 of existing properties, as reported by the assessors 18 on the abstracts of assessment for 1978, plus six 19 percent of the amount so determined. However, if the 20 difference between the dividend so determined for 21 either class of property and the dividend for that 22 class of property for valuations established as of 23 January 1, 1978, adjusted by the product obtained by 24 multiplying the percentage determined for that year 25 by the amount of any additions or deletions to actual 26 value, excluding those resulting from the revaluation 27 of existing properties, as reported by the assessors 28 on the abstracts of assessment for 1978, is less than 29 six percent, the 1979 dividend for the other class of 30 property shall be the dividend as determined for that 31 class of property for valuations established as of 32 January 1, 1978, adjusted by the product obtained by 33 multiplying the percentage determined for that year 34 by the amount of any additions or deletions to actual 35 value, excluding those resulting from the revaluation 36 of existing properties, as reported by the assessors on 37 the abstracts of assessment for 1978, plus a percentage 38 of the amount so determined which is equal to the 39 percentage by which the dividend as determined for the 40 other class of property for valuations established as 41 of January 1, 1978, adjusted by the product obtained 42 by multiplying the percentage determined for that year 43 by the amount of any additions or deletions to actual 44 value, excluding those resulting from the revaluation 45 of existing properties, as reported by the assessors 46 on the abstracts of assessment for 1978, is increased 47 in arriving at the 1979 dividend for the other class 48 of property. The divisor for each class of property 49 shall be the total actual value of all such property 50 -2- HF697.3313 (1) 84 md/nh 2/ 30
in the state in the preceding year, as reported by the 1 assessors on the abstracts of assessment submitted 2 for 1978, plus the amount of value added to said 3 total actual value by the revaluation of existing 4 properties in 1979 as equalized by the director of 5 revenue pursuant to section 441.49 . The director shall 6 utilize information reported on abstracts of assessment 7 submitted pursuant to section 441.45 in determining 8 such percentage. For valuations established as of 9 January 1, 1980, and each assessment year thereafter 10 beginning before January 1, 2012 , the percentage of 11 actual value as equalized by the director of revenue 12 as provided in section 441.49 at which agricultural 13 and residential property shall be assessed shall be 14 calculated in accordance with the methods provided 15 herein including the limitation of increases in 16 agricultural and residential assessed values to the 17 percentage increase of the other class of property if 18 the other class increases less than the allowable limit 19 adjusted to include the applicable and current values 20 as equalized by the director of revenue, except that 21 any references to six percent in this subsection shall 22 be four percent. For valuations established as of 23 January 1, 2012, and each assessment year thereafter, 24 the percentage of actual value as equalized by the 25 director of revenue as provided in section 441.49 at 26 which agricultural and residential property shall be 27 assessed shall be calculated in accordance with the 28 methods provided herein including the limitation of 29 increases in agricultural and residential assessed 30 values to the percentage increase of the other class 31 of property if the other class increases less than the 32 allowable limit adjusted to include the applicable and 33 current values as equalized by the director of revenue, 34 except that any references to six percent in this 35 subsection shall be two percent. 36 Sec. ___. Section 441.21, subsection 5, Code 2011, 37 is amended to read as follows: 38 5. a. For valuations established as of January 39 1, 1979, commercial property and industrial property, 40 excluding properties referred to in section 427A.1, 41 subsection 8 , shall be assessed as a percentage of 42 the actual value of each class of property. The 43 percentage shall be determined for each class of 44 property by the director of revenue for the state in 45 accordance with the provisions of this section . For 46 valuations established as of January 1, 1979, the 47 percentage shall be the quotient of the dividend and 48 divisor as defined in this section . The dividend 49 for each class of property shall be the total actual 50 -3- HF697.3313 (1) 84 md/nh 3/ 30
valuation for each class of property established for 1 1978, plus six percent of the amount so determined. 2 The divisor for each class of property shall be the 3 valuation for each class of property established for 4 1978, as reported by the assessors on the abstracts 5 of assessment for 1978, plus the amount of value 6 added to the total actual value by the revaluation 7 of existing properties in 1979 as equalized by the 8 director of revenue pursuant to section 441.49 . For 9 valuations established as of January 1, 1979, property 10 valued by the department of revenue pursuant to 11 chapters 428 , 433 , 437 , and 438 shall be considered 12 as one class of property and shall be assessed as a 13 percentage of its actual value. The percentage shall 14 be determined by the director of revenue in accordance 15 with the provisions of this section . For valuations 16 established as of January 1, 1979, the percentage 17 shall be the quotient of the dividend and divisor as 18 defined in this section . The dividend shall be the 19 total actual valuation established for 1978 by the 20 department of revenue, plus ten percent of the amount 21 so determined. The divisor for property valued by 22 the department of revenue pursuant to chapters 428 , 23 433 , 437 , and 438 shall be the valuation established 24 for 1978, plus the amount of value added to the total 25 actual value by the revaluation of the property by 26 the department of revenue as of January 1, 1979. 27 For valuations established as of January 1, 1980, 28 commercial property and industrial property, excluding 29 properties referred to in section 427A.1, subsection 30 8 , shall be assessed at a percentage of the actual 31 value of each class of property. The percentage 32 shall be determined for each class of property by 33 the director of revenue for the state in accordance 34 with the provisions of this section . For valuations 35 established as of January 1, 1980, the percentage 36 shall be the quotient of the dividend and divisor as 37 defined in this section . The dividend for each class 38 of property shall be the dividend as determined for 39 each class of property for valuations established as 40 of January 1, 1979, adjusted by the product obtained 41 by multiplying the percentage determined for that year 42 by the amount of any additions or deletions to actual 43 value, excluding those resulting from the revaluation 44 of existing properties, as reported by the assessors 45 on the abstracts of assessment for 1979, plus four 46 percent of the amount so determined. The divisor 47 for each class of property shall be the total actual 48 value of all such property in 1979, as equalized by 49 the director of revenue pursuant to section 441.49 , 50 -4- HF697.3313 (1) 84 md/nh 4/ 30
plus the amount of value added to the total actual 1 value by the revaluation of existing properties in 2 1980. The director shall utilize information reported 3 on the abstracts of assessment submitted pursuant 4 to section 441.45 in determining such percentage. 5 For valuations established as of January 1, 1980, 6 property valued by the department of revenue pursuant 7 to chapters 428 , 433 , 437 , and 438 shall be assessed 8 at a percentage of its actual value. The percentage 9 shall be determined by the director of revenue in 10 accordance with the provisions of this section . For 11 valuations established as of January 1, 1980, the 12 percentage shall be the quotient of the dividend and 13 divisor as defined in this section . The dividend shall 14 be the total actual valuation established for 1979 by 15 the department of revenue, plus eight percent of the 16 amount so determined. The divisor for property valued 17 by the department of revenue pursuant to chapters 428 , 18 433 , 437 , and 438 shall be the valuation established 19 for 1979, plus the amount of value added to the total 20 actual value by the revaluation of the property by 21 the department of revenue as of January 1, 1980. For 22 valuations established as of January 1, 1981, and 23 each year thereafter, the percentage of actual value 24 as equalized by the director of revenue as provided 25 in section 441.49 at which commercial property and 26 industrial property, excluding properties referred to 27 in section 427A.1, subsection 8 , shall be assessed 28 shall be calculated in accordance with the methods 29 provided herein, except that any references to six 30 percent in this subsection shall be four percent. For 31 valuations established as of January 1, 1981, and 32 each year thereafter, the percentage of actual value 33 at which property valued by the department of revenue 34 pursuant to chapters 428 , 433 , 437 , and 438 shall be 35 assessed shall be calculated in accordance with the 36 methods provided herein, except that any references 37 to ten percent in this subsection shall be eight 38 percent. Beginning with valuations established as of 39 January 1, 1979, and each assessment year thereafter 40 beginning before January 1, 2012 , property valued 41 by the department of revenue pursuant to chapter 434 42 shall also be assessed at a percentage of its actual 43 value which percentage shall be equal to the percentage 44 determined by the director of revenue for commercial 45 property, industrial property, or property valued by 46 the department of revenue pursuant to chapters 428 , 47 433 , 437 , and 438 , whichever is lowest. For valuations 48 established on or after January 1, 2012, property 49 valued by the department of revenue pursuant to chapter 50 -5- HF697.3313 (1) 84 md/nh 5/ 30
434 shall be assessed at a percentage of its actual 1 value equal to the percentage of actual value at which 2 commercial property is assessed for the same assessment 3 year. 4 b. For valuations established on or after January 5 1, 2012, commercial property, excluding properties 6 referred to in section 427A.1, subsection 8 , shall 7 be assessed as a percentage of the actual value, as 8 determined in this paragraph “b” . 9 (1) For valuations established for the assessment 10 year beginning January 1, 2012, the percentage of 11 actual value as equalized by the director of revenue as 12 provided in section 441.49 at which commercial property 13 shall be assessed shall be ninety-five percent. 14 (2) For valuations established for the assessment 15 year beginning January 1, 2013, the percentage of 16 actual value as equalized by the director of revenue as 17 provided in section 441.49 at which commercial property 18 shall be assessed shall be ninety percent. 19 (3) For valuations established for the assessment 20 year beginning January 1, 2014, the percentage of 21 actual value as equalized by the director of revenue as 22 provided in section 441.49 at which commercial property 23 shall be assessed shall be eighty-five percent. 24 (4) For valuations established for the assessment 25 year beginning January 1, 2015, the percentage of 26 actual value as equalized by the director of revenue as 27 provided in section 441.49 at which commercial property 28 shall be assessed shall be eighty percent. 29 (5) For valuations established for the assessment 30 year beginning January 1, 2016, and each assessment 31 year thereafter, the percentage of actual value as 32 equalized by the director of revenue as provided in 33 section 441.49 at which commercial property shall be 34 assessed shall be seventy-five percent. 35 c. For valuations established on or after January 36 1, 2012, industrial property, excluding properties 37 referred to in section 427A.1, subsection 8, shall 38 be assessed as a percentage of the actual value, as 39 determined in this paragraph “c” . 40 (1) For valuations established for the assessment 41 year beginning January 1, 2012, the percentage of 42 actual value as equalized by the director of revenue as 43 provided in section 441.49 at which industrial property 44 shall be assessed shall be ninety-five percent. 45 (2) For valuations established for the assessment 46 year beginning January 1, 2013, the percentage of 47 actual value as equalized by the director of revenue as 48 provided in section 441.49 at which industrial property 49 shall be assessed shall be ninety percent. 50 -6- HF697.3313 (1) 84 md/nh 6/ 30
(3) For valuations established for the assessment 1 year beginning January 1, 2014, the percentage of 2 actual value as equalized by the director of revenue as 3 provided in section 441.49 at which industrial property 4 shall be assessed shall be eighty-five percent. 5 (4) For valuations established for the assessment 6 year beginning January 1, 2015, the percentage of 7 actual value as equalized by the director of revenue as 8 provided in section 441.49 at which industrial property 9 shall be assessed shall be eighty percent. 10 (5) For valuations established for the assessment 11 year beginning January 1, 2016, and each assessment 12 year thereafter, the percentage of actual value as 13 equalized by the director of revenue as provided in 14 section 441.49 at which industrial property shall be 15 assessed shall be seventy-five percent. 16 Sec. ___. Section 441.21, Code 2011, is amended by 17 adding the following new subsection: 18 NEW SUBSECTION . 13. Notwithstanding any provision 19 of law to the contrary, beginning with valuations 20 established on or after January 1, 2012, as used in 21 this section, “residential property” includes that 22 portion of a building or structure and a proportionate 23 share of the land upon which the building or structure 24 is situated that is used as a primary residence by 25 the person who owns the building even if the use as 26 a primary residence is not the primary use of the 27 building or structure. Accordingly, the assessor 28 may assign more than one classification to a parcel 29 of property satisfying the requirements of this 30 subsection. 31 Sec. ___. NEW SECTION . 441.21A Commercial and 32 industrial property tax replacement fund —— annual 33 legislative review. 34 1. a. There is created as a permanent fund 35 in the office of the treasurer of state under the 36 control of the department of management a fund to be 37 known as the commercial and industrial property tax 38 replacement fund, and for the purpose of establishing 39 and maintaining this fund for each fiscal year there is 40 appropriated thereto from funds in the general fund not 41 otherwise appropriated the following amounts: 42 (1) For the fiscal year beginning July 1, 2013, 43 thirty million dollars. 44 (2) For the fiscal year beginning July 1, 2014, 45 sixty million dollars. 46 (3) For the fiscal year beginning July 1, 2015, 47 ninety million dollars. 48 (4) For the fiscal year beginning July 1, 2016, one 49 hundred twenty million dollars. 50 -7- HF697.3313 (1) 84 md/nh 7/ 30
(5) For the fiscal year beginning July 1, 2017, and 1 each fiscal year thereafter, one hundred fifty million 2 dollars. 3 b. If an amount appropriated for a fiscal year 4 is insufficient to pay all claims, the department of 5 management shall prorate the disbursements from the 6 fund to the county treasurers in the proportion that 7 the total assessed value of commercial and industrial 8 property located within the taxing district for taxes 9 payable in that fiscal year bears to the total assessed 10 value of all commercial and industrial property within 11 the state and located in an eligible taxing district. 12 The department of management shall notify the county 13 auditors of the pro rata percentage on or before July 14 15. 15 c. The replacement claims shall be paid to each 16 county treasurer in equal installments in September 17 and March of each year. The county treasurer shall 18 apportion the replacement claim payments among the 19 eligible taxing districts in the county. 20 d. Any balance in the commercial and industrial 21 property tax replacement fund on June 30 shall be 22 transferred to the taxpayers trust fund created in 23 section 8.57E and used for the purposes specified in 24 that section. 25 2. Beginning with the fiscal year beginning July 26 1, 2013, each county treasurer shall be paid from the 27 commercial and industrial property tax replacement fund 28 an amount, subject to the limitations of this section, 29 equal to the amount of the commercial and industrial 30 property tax replacement claim, as calculated in 31 subsection 4. 32 3. On or before March 1 of each year, the assessor 33 shall determine the total assessed value of all 34 commercial and industrial property assessed for taxes 35 payable in the next fiscal year and the total assessed 36 value of all commercial and industrial property 37 assessed as of January 1, 2011, and shall report the 38 valuations to the county auditor. 39 4. On or before May 15 of each year, the county 40 auditor shall prepare a statement, based upon the 41 report received pursuant to subsection 3, listing for 42 each taxing district in the county: 43 a. Beginning with the assessment year beginning 44 January 1, 2012, the difference between the assessed 45 valuation of all commercial and industrial property 46 for that year and the total assessed value of all 47 commercial and industrial property assessed as of 48 January 1, 2011. If the total assessed value of the 49 property assessed as of January 1, 2011, is less, 50 -8- HF697.3313 (1) 84 md/nh 8/ 30
there is no commercial and industrial property tax 1 replacement for the fiscal year. 2 b. The tax levy rate for each taxing district for 3 the current fiscal year. However, the applicable tax 4 levy rate for a school district shall be the total of 5 all levy rates for the school district for the current 6 fiscal year excluding the foundation property tax levy 7 under section 257.3, subsection 1. 8 c. The commercial and industrial property tax 9 replacement claim for each taxing district. For 10 fiscal years beginning on or after July 1, 2013, the 11 replacement claim is equal to seventy-five percent 12 of the amount determined pursuant to paragraph “a” , 13 multiplied by the tax rate specified in paragraph “b” . 14 5. The county auditor shall certify and forward one 15 copy of the statement to the department of management 16 not later than July 1 of each year. 17 6. For purposes of determining replacement amounts 18 under this section, that portion of an urban renewal 19 area defined as the sum of the assessed valuations 20 defined in section 403.19, subsections 1 and 2, shall 21 be considered a taxing district. The amount of the 22 replacement claim shall first be credited to the 23 portion of assessed value defined in section 403.19, 24 subsection 2. The amount not allocated to that portion 25 of assessed value defined in section 403.19, subsection 26 2, shall be credited to the portion of assessed value 27 defined in section 403.19, subsection 1. 28 7. The committee on ways and means of the senate 29 and the committee on ways and means of the house of 30 representatives shall each conduct an annual review of 31 the implementation and fiscal impact of the commercial, 32 industrial, and railway property assessment limitations 33 established under section 441.21, subsection 5, on 34 local taxing authorities in this state. 35 Sec. ___. SAVINGS PROVISION. This division of this 36 Act, pursuant to section 4.13, does not affect the 37 operation of, or prohibit the application of, prior 38 provisions of section 441.21, or rules adopted under 39 chapter 17A to administer prior provisions of section 40 441.21, for assessment years beginning before January 41 1, 2012, and for duties, powers, protests, appeals, 42 proceedings, actions, or remedies attributable to an 43 assessment year beginning before January 1, 2012. 44 Sec. ___. APPLICABILITY. This division of this Act 45 applies to property tax assessment years beginning on 46 or after January 1, 2012. 47 DIVISION ___ 48 COUNTY AND CITY BUDGET LIMITATION 49 Sec. ___. Section 23A.2, subsection 10, paragraph 50 -9- HF697.3313 (1) 84 md/nh 9/ 30
h, Code 2011, is amended to read as follows: 1 h. The performance of an activity listed in 2 section 331.424 , Code 2011, as a service for which a 3 supplemental levy county may be certified include in 4 its budget . 5 Sec. ___. Section 28M.5, subsection 2, Code 2011, 6 is amended to read as follows: 7 2. If a regional transit district budget allocates 8 revenue responsibilities to the board of supervisors 9 of a participating county, the amount of the regional 10 transit district levy that is the responsibility of the 11 participating county shall be deducted from the maximum 12 rates amount of taxes authorized to be levied by the 13 county pursuant to section 331.423 , subsections 1 and 14 2 subsection 3, paragraphs “b” and “c” , as applicable, 15 unless the county meets its revenue responsibilities as 16 allocated in the budget from other available revenue 17 sources. However, for a regional transit district 18 that includes a county with a population of less than 19 three hundred thousand, the amount of the regional 20 transit district levy that is the responsibility of 21 such participating county shall be deducted from the 22 maximum rate amount of taxes authorized to be levied 23 by the county pursuant to section 331.423, subsection 24 1 3, paragraph “b” . 25 Sec. ___. Section 123.38, subsection 2, Code 2011, 26 is amended to read as follows: 27 2. Any licensee or permittee, or the licensee’s 28 or permittee’s executor or administrator, or any 29 person duly appointed by the court to take charge of 30 and administer the property or assets of the licensee 31 or permittee for the benefit of the licensee’s or 32 permittee’s creditors, may voluntarily surrender a 33 license or permit to the division. When a license 34 or permit is surrendered the division shall notify 35 the local authority, and the division or the local 36 authority shall refund to the person surrendering the 37 license or permit, a proportionate amount of the fee 38 received by the division or the local authority for 39 the license or permit as follows: if a license or 40 permit is surrendered during the first three months 41 of the period for which it was issued, the refund 42 shall be three-fourths of the amount of the fee; 43 if surrendered more than three months but not more 44 than six months after issuance, the refund shall be 45 one-half of the amount of the fee; if surrendered more 46 than six months but not more than nine months after 47 issuance, the refund shall be one-fourth of the amount 48 of the fee. No refund shall be made, however, for 49 any special liquor permit, nor for a liquor control 50 -10- HF697.3313 (1) 84 md/nh 10/ 30
license, wine permit, or beer permit surrendered more 1 than nine months after issuance. For purposes of this 2 subsection, any portion of license or permit fees 3 used for the purposes authorized in section 331.424, 4 subsection 1 , paragraph “a” , subparagraphs (1) and 5 (2), Code 2011, and in section 331.424A , shall not be 6 deemed received either by the division or by a local 7 authority. No refund shall be made to any licensee or 8 permittee, upon the surrender of the license or permit, 9 if there is at the time of surrender, a complaint filed 10 with the division or local authority, charging the 11 licensee or permittee with a violation of this chapter . 12 If upon a hearing on a complaint the license or permit 13 is not revoked or suspended, then the licensee or 14 permittee is eligible, upon surrender of the license 15 or permit, to receive a refund as provided in this 16 section ; but if the license or permit is revoked or 17 suspended upon hearing the licensee or permittee is not 18 eligible for the refund of any portion of the license 19 or permit fee. 20 Sec. ___. Section 218.99, Code 2011, is amended to 21 read as follows: 22 218.99 Counties to be notified of patients’ personal 23 accounts. 24 The administrator in control of a state institution 25 shall direct the business manager of each institution 26 under the administrator’s jurisdiction which is 27 mentioned in section 331.424, subsection 1 , paragraph 28 “a” , subparagraphs (1) and (2), and for which services 29 are paid under section 331.424A , to quarterly inform 30 the county of legal settlement’s entity designated to 31 perform the county’s central point of coordination 32 process of any patient or resident who has an amount 33 in excess of two hundred dollars on account in the 34 patients’ personal deposit fund and the amount on 35 deposit. The administrators shall direct the business 36 manager to further notify the entity designated to 37 perform the county’s central point of coordination 38 process at least fifteen days before the release of 39 funds in excess of two hundred dollars or upon the 40 death of the patient or resident. If the patient or 41 resident has no county of legal settlement, notice 42 shall be made to the director of human services and the 43 administrator in control of the institution involved. 44 Sec. ___. Section 331.263, subsection 2, Code 2011, 45 is amended to read as follows: 46 2. The governing body of the community commonwealth 47 shall have the authority to levy county taxes and shall 48 have the authority to levy city taxes to the extent the 49 city tax levy authority is transferred by the charter 50 -11- HF697.3313 (1) 84 md/nh 11/ 30
to the community commonwealth. A city participating 1 in the community commonwealth shall transfer a portion 2 of the city’s tax levy authorized under section 384.1 3 or 384.12 , whichever is applicable, to the governing 4 body of the community commonwealth. The maximum 5 rates amount of taxes authorized to be levied under 6 sections section 384.1 and the maximum amount of taxes 7 authorized to be levied under section 384.12 by a city 8 participating in the community commonwealth shall be 9 reduced by an amount equal to the rates of the same or 10 similar taxes levied in the city by the governing body 11 of the community commonwealth. 12 Sec. ___. Section 331.301, subsection 12, Code 13 2011, is amended to read as follows: 14 12. The board of supervisors may credit funds to 15 a reserve for the purposes authorized by subsection 16 11 of this section ; section 331.424, subsection 1 , 17 paragraph “a” , subparagraph (6); and section 331.441, 18 subsection 2 , paragraph “b” . Moneys credited to the 19 reserve, and interest earned on such moneys, shall 20 remain in the reserve until expended for purposes 21 authorized by subsection 11 of this section ; section 22 331.424, subsection 1 , paragraph “a” , subparagraph (6); 23 or section 331.441, subsection 2 , paragraph “b” . 24 Sec. ___. Section 331.421, subsections 1 and 10, 25 Code 2011, are amended by striking the subsections. 26 Sec. ___. Section 331.421, Code 2011, is amended by 27 adding the following new subsection: 28 NEW SUBSECTION . 7A. “Item” means a budgeted 29 expenditure, appropriation, or cash reserve from a 30 fund for a service area, program, program element, or 31 purpose. 32 Sec. ___. Section 331.423, Code 2011, is amended by 33 striking the section and inserting in lieu thereof the 34 following: 35 331.423 Property tax dollars —— maximums. 36 1. Annually, the board shall determine separate 37 property tax levy limits to pay for general county 38 services and rural county services in accordance with 39 this section. The property tax levies separately 40 certified for general county services and rural county 41 services under section 331.434 shall not raise property 42 tax dollars that exceed the amount determined under 43 this section. 44 2. For purposes of this section and section 45 331.423B, unless the context otherwise requires: 46 a. “Annual growth factor” means an index, expressed 47 as a percentage, determined by the department of 48 management by January 1 of the calendar year in which 49 the budget year begins. In determining the annual 50 -12- HF697.3313 (1) 84 md/nh 12/ 30
growth factor, the department shall calculate the 1 average of the preceding twelve-month percentage 2 change, which shall be computed on a monthly basis, 3 in the midwest consumer price index, ending with the 4 percentage change for the month of November. The 5 department shall then add that average percentage 6 change to one hundred percent. In no case, however, 7 shall the annual growth factor exceed one hundred four 8 percent. 9 b. “Boundary adjustment” means annexation, 10 severance, incorporation, or discontinuance as those 11 terms are defined in section 368.1. 12 c. “Budget year” is the fiscal year beginning 13 during the calendar year in which a budget is 14 certified. 15 d. “Current fiscal year” is the fiscal year 16 ending during the calendar year in which a budget is 17 certified. 18 e. “Net new valuation taxes” means the amount of 19 property tax dollars equal to the current fiscal year’s 20 levy rate in the county for general county services or 21 for rural county services, as applicable, multiplied by 22 the increase from the current fiscal year to the budget 23 year in taxable valuation due to the following: 24 (1) Net new construction, excluding all incremental 25 valuation that is released in any one year from a 26 division of revenue under section 260E.4 or an urban 27 renewal area for which taxes were being divided under 28 section 403.19 if the property for the valuation being 29 released remains subject to the division of revenue 30 under section 260E.4 or remains part of the urban 31 renewal area that is subject to a division of revenue 32 under section 403.19. 33 (2) Additions or improvements to existing 34 structures. 35 (3) Remodeling of existing structures for which a 36 building permit is required. 37 (4) Net boundary adjustment. 38 (5) A municipality no longer dividing tax revenues 39 in an urban renewal area as provided in section 403.19 40 or a community college no longer dividing revenues as 41 provided in section 260E.4. 42 (6) That portion of taxable property located in an 43 urban revitalization area on which an exemption was 44 allowed and such exemption has expired. 45 3. a. For the fiscal year beginning July 1, 2012, 46 and subsequent fiscal years, the maximum amount of 47 property tax dollars which may be certified for levy by 48 a county for general county services and rural county 49 services shall be the maximum property tax dollars 50 -13- HF697.3313 (1) 84 md/nh 13/ 30
calculated under paragraphs “b” and “c” , respectively. 1 b. The maximum property tax dollars that may be 2 levied for general county services is an amount, 3 following the subtraction of replacement claim amounts 4 to be received under section 441.21A during the budget 5 year that are the result of the levy rate for general 6 county services, equal to the sum of the following: 7 (1) The annual growth factor times the sum of the 8 current fiscal year’s maximum property tax dollars 9 for general county services and the amount of all 10 replacement claim amounts received under section 11 441.21A during the current fiscal year that are the 12 result of the levy rate for general county services. 13 (2) The amount of net new valuation taxes in the 14 county. 15 c. The maximum property tax dollars that may 16 be levied for rural county services is an amount, 17 following the subtraction of replacement claim amounts 18 to be received under section 441.21A during the budget 19 year that are the result of the levy rate for rural 20 county services, equal to the sum of the following: 21 (1) The annual growth factor times the sum of the 22 current fiscal year’s maximum property tax dollars for 23 rural county services and the amount of all replacement 24 claim amounts received under section 441.21A during the 25 current fiscal year that are the result of the levy 26 rate for rural county services. 27 (2) The amount of net new valuation taxes in the 28 unincorporated area of the county. 29 4. a. For purposes of calculating maximum property 30 tax dollars for general county services for the fiscal 31 year beginning July 1, 2012, only, the term “current 32 fiscal year’s maximum property tax dollars” shall mean 33 the total amount of property tax dollars certified by 34 the county for general county services for the fiscal 35 year beginning July 1, 2011. 36 b. For purposes of calculating maximum property tax 37 dollars for rural county services for the fiscal year 38 beginning July 1, 2012, only, the term “current fiscal 39 year’s maximum property tax dollars” shall mean the 40 total amount of property tax dollars certified by the 41 county for rural county services for the fiscal year 42 beginning July 1, 2011. 43 5. Property taxes certified for deposit in the 44 mental health, mental retardation, and developmental 45 disabilities services fund in section 331.424A, the 46 emergency services fund in section 331.424C, the debt 47 service fund in section 331.430, any capital projects 48 fund established by the county for deposit of bond, 49 loan, or note proceeds, and any temporary increase 50 -14- HF697.3313 (1) 84 md/nh 14/ 30
approved pursuant to section 331.424, are not included 1 in the maximum amount of property tax dollars that may 2 be certified for a budget year under subsection 3. 3 6. The department of management, in consultation 4 with the county finance committee, shall adopt rules 5 to administer this section. The department shall 6 prescribe forms to be used by counties when making 7 calculations required by this section. 8 Sec. ___. NEW SECTION . 331.423B Ending fund 9 balance. 10 1. a. Budgeted ending fund balances for a budget 11 year in excess of twenty-five percent of budgeted 12 expenditures in either the general fund or rural 13 services fund for that budget year shall be explicitly 14 reserved or designated for a specific purpose. 15 b. A county is encouraged, but not required, to 16 reduce budgeted, unreserved, or undesignated ending 17 fund balances for the budget year to an amount equal 18 to approximately twenty-five percent of budgeted 19 expenditures and transfers from the general fund 20 and rural services fund for that budget year unless 21 a decision is certified by the state appeal board 22 ordering a reduction in the ending fund balance of any 23 of those funds. 24 c. In a protest to the county budget under section 25 331.436, the county shall have the burden of proving 26 that the budgeted balances in excess of twenty-five 27 percent are reasonably likely to be appropriated for 28 the explicitly reserved or designated specific purpose. 29 The excess budgeted balance for the specific purpose 30 shall be considered an increase in an item in the 31 budget for purposes of section 24.28. 32 2. a. For a county that has, as of June 30, 2011, 33 reduced its actual ending fund balance to less than 34 twenty-five percent of actual expenditures, additional 35 property taxes may be computed and levied as provided 36 in this subsection. The additional property tax levy 37 amount is an amount not to exceed twenty-five percent 38 of actual expenditures from the general fund and rural 39 services fund for the fiscal year beginning July 1, 40 2010, minus the combined ending fund balances for those 41 funds for that year. 42 b. The amount of the additional property taxes 43 shall be apportioned between the general fund and the 44 rural services fund. However, the amount apportioned 45 for general county services and for rural county 46 services shall not exceed for each fund twenty-five 47 percent of actual expenditures for the fiscal year 48 beginning July 1, 2010. 49 c. All or a portion of additional property tax 50 -15- HF697.3313 (1) 84 md/nh 15/ 30
dollars may be levied for the purpose of increasing 1 cash reserves for general county services and rural 2 county services in the budget year. The additional 3 property tax dollars authorized under this subsection 4 but not levied may be carried forward as unused ending 5 fund balance taxing authority until and for the fiscal 6 year beginning July 1, 2017. The amount carried 7 forward shall not exceed twenty-five percent of the 8 maximum amount of property tax dollars available in 9 the current fiscal year. Additionally, property taxes 10 that are levied as unused ending fund balance taxing 11 authority under this subsection may be the subject of 12 a protest under section 331.436, and the amount will 13 be considered an increase in an item in the budget for 14 purposes of section 24.28. The amount of additional 15 property taxes levied under this subsection shall not 16 be included in the computation of the maximum amount of 17 property tax dollars which may be certified and levied 18 under section 331.423. 19 Sec. ___. Section 331.424, Code 2011, is amended by 20 striking the section and inserting in lieu thereof the 21 following: 22 331.424 Authority to levy beyond maximum property 23 tax dollars. 24 1. The board may certify additions to the maximum 25 amount of property tax dollars to be levied for 26 a period of time not to exceed two years if the 27 proposition has been submitted at a special election 28 and received a favorable majority of the votes cast on 29 the proposition. 30 2. The special election is subject to the 31 following: 32 a. The board must give at least thirty-two days’ 33 notice to the county commissioner of elections that the 34 special election is to be held. In no case, however, 35 shall a notice be given to the county commissioner 36 of elections after December 31 for an election on a 37 proposition to exceed the statutory limits during the 38 fiscal year beginning in the next calendar year. 39 b. The special election shall be conducted by the 40 county commissioner of elections in accordance with 41 law. 42 c. The proposition to be submitted shall be 43 substantially in the following form: 44 Vote “yes” or “no” on the following: Shall the 45 county of _______ levy for an additional $_______ each 46 year for ___ years beginning July 1, _____, in excess 47 of the statutory limits otherwise applicable for the 48 (general county services or rural services) fund? 49 d. The canvass shall be held beginning at 1:00 p.m. 50 -16- HF697.3313 (1) 84 md/nh 16/ 30
on the second day which is not a holiday following the 1 special election. 2 e. Notice of the special election shall be 3 published at least once in a newspaper as specified 4 in section 331.305 prior to the date of the special 5 election. The notice shall appear as early as 6 practicable after the board has voted to submit a 7 proposition to the voters to levy additional property 8 tax dollars. 9 3. Registered voters in the county may vote on the 10 proposition to increase property taxes for the general 11 fund in excess of the statutory limit. Registered 12 voters residing outside the corporate limits of a 13 city within the county may vote on the proposition to 14 increase property taxes for the rural services fund in 15 excess of the statutory limit. 16 4. The amount of additional property tax dollars 17 certified under this section shall not be included in 18 the computation of the maximum amount of property tax 19 dollars which may be certified and levied under section 20 331.423. 21 Sec. ___. Section 331.424A, subsection 4, Code 22 2011, is amended to read as follows: 23 4. For the fiscal year beginning July 1, 1996, 24 and for each subsequent fiscal year, the county shall 25 certify a levy for payment of services. For each 26 fiscal year, county revenues from taxes imposed by the 27 county credited to the services fund shall not exceed 28 an amount equal to the amount of base year expenditures 29 for services as defined in section 331.438 , less the 30 amount of property tax relief to be received pursuant 31 to section 426B.2 , in the fiscal year for which the 32 budget is certified. The county auditor and the 33 board of supervisors shall reduce the amount of the 34 levy certified for the services fund by the amount of 35 property tax relief to be received. A levy certified 36 under this section is not subject to the appeal 37 provisions of section 331.426 or to any other provision 38 in law authorizing a county to exceed, increase, or 39 appeal a property tax levy limit. 40 Sec. ___. Section 331.427, subsection 3, paragraph 41 l, Code 2011, is amended to read as follows: 42 l. Services listed in section 331.424, subsection 43 1 , Code 2011, and section 331.554 . 44 Sec. ___. Section 331.428, subsection 2, paragraph 45 d, Code 2011, is amended to read as follows: 46 d. Services listed under section 331.424, 47 subsection 2 , Code 2011 . 48 Sec. ___. Section 331.434, subsection 1, Code 2011, 49 is amended to read as follows: 50 -17- HF697.3313 (1) 84 md/nh 17/ 30
1. The budget shall show the amount required for 1 each class of proposed expenditures, a comparison of 2 the amounts proposed to be expended with the amounts 3 expended for like purposes for the two preceding years, 4 the revenues from sources other than property taxation, 5 and the amount to be raised by property taxation, in 6 the detail and form prescribed by the director of the 7 department of management. For each county that has 8 established an urban renewal area, the budget shall 9 include estimated and actual tax increment financing 10 revenues and all estimated and actual expenditures of 11 the revenues, proceeds from debt and all estimated 12 and actual expenditures of the debt proceeds, and 13 identification of any entity receiving a direct payment 14 of taxes funded by tax increment financing revenues 15 and shall include the total amount of loans, advances, 16 indebtedness, or bonds outstanding at the close of 17 the most recently ended fiscal year, which qualify 18 for payment from the special fund created in section 19 403.19 , including interest negotiated on such loans, 20 advances, indebtedness, or bonds. For purposes of this 21 subsection , “indebtedness” includes written agreements 22 whereby the county agrees to suspend, abate, exempt, 23 rebate, refund, or reimburse property taxes, provide a 24 grant for property taxes paid, or make a direct payment 25 of taxes, with moneys in the special fund. The amount 26 of loans, advances, indebtedness, or bonds shall be 27 listed in the aggregate for each county reporting. The 28 county finance committee, in consultation with the 29 department of management and the legislative services 30 agency, shall determine reporting criteria and shall 31 prepare a form for reports filed with the department 32 pursuant to this section . The department shall make 33 the information available by electronic means. 34 Sec. ___. Section 373.10, Code 2011, is amended to 35 read as follows: 36 373.10 Taxing authority. 37 The metropolitan council shall have the authority 38 to levy city taxes to the extent the city tax levy 39 authority is transferred by the charter to the 40 metropolitan council. A member city shall transfer 41 a portion of the city’s tax levy authorized under 42 section 384.1 or 384.12 , whichever is applicable, to 43 the metropolitan council. The maximum rates amount of 44 taxes authorized to be levied under sections section 45 384.1 and the taxes authorized to be levied under 46 section 384.12 by a member city shall be reduced by an 47 amount equal to the rates of the same or similar taxes 48 levied in the city by the metropolitan council. 49 Sec. ___. Section 384.1, Code 2011, is amended by 50 -18- HF697.3313 (1) 84 md/nh 18/ 30
striking the section and inserting in lieu thereof the 1 following: 2 384.1 Property tax dollars —— maximums. 3 1. A city shall certify taxes to be levied by the 4 city on all taxable property within the city limits, 5 for all city government purposes. Annually, the 6 city council may certify levies for city government 7 purposes, subject to the limitation on property tax 8 dollars provided in this section. 9 2. For purposes of this section and section 384.1B, 10 unless the context otherwise requires: 11 a. “Annual growth factor” means an index, expressed 12 as a percentage, determined by the department of 13 management by January 1 of the calendar year in which 14 the budget year begins. In determining the annual 15 growth factor, the department shall calculate the 16 average of the preceding twelve-month percentage 17 change, which shall be computed on a monthly basis, 18 in the midwest consumer price index, ending with the 19 percentage change for the month of November. The 20 department shall then add that average percentage 21 change to one hundred percent. In no case, however, 22 shall the annual growth factor exceed one hundred four 23 percent. 24 b. “Boundary adjustment” means annexation, 25 severance, incorporation, or discontinuance as those 26 terms are defined in section 368.1. 27 c. “Budget year” is the fiscal year beginning 28 during the calendar year in which a budget is 29 certified. 30 d. “Current fiscal year” is the fiscal year 31 ending during the calendar year in which a budget is 32 certified. 33 e. “Net new valuation taxes” means the amount of 34 property tax dollars equal to the current fiscal year’s 35 levy rate in the city for the general fund and for the 36 trust and agency funds under section 384.6, subsection 37 1, multiplied by the increase from the current fiscal 38 year to the budget year in taxable valuation due to the 39 following: 40 (1) Net new construction, excluding all incremental 41 valuation that is released in any one year from a 42 division of revenue under section 260E.4 or an urban 43 renewal area for which taxes were being divided under 44 section 403.19 if the property for the valuation being 45 released remains subject to the division of revenue 46 under section 260E.4 or remains part of the urban 47 renewal area that is subject to a division of revenue 48 under section 403.19. 49 (2) Additions or improvements to existing 50 -19- HF697.3313 (1) 84 md/nh 19/ 30
structures. 1 (3) Remodeling of existing structures for which a 2 building permit is required. 3 (4) Net boundary adjustment. 4 (5) A municipality no longer dividing tax revenues 5 in an urban renewal area as provided in section 403.19 6 or a community college no longer dividing revenues as 7 provided in section 260E.4. 8 (6) That portion of taxable property located in an 9 urban revitalization area on which an exemption was 10 allowed and such exemption has expired. 11 3. a. For the fiscal year beginning July 1, 2012, 12 and subsequent fiscal years, the maximum amount of 13 property tax dollars which may be certified for levy by 14 a city for the general fund and for the city’s trust 15 and agency funds under section 384.6, subsection 1, 16 shall be the maximum property tax dollars calculated 17 under paragraph “b” . 18 b. The maximum property tax dollars that may be 19 levied for deposit in the general fund and the city’s 20 trust and agency funds under section 384.6, subsection 21 1, is an amount, following the subtraction of 22 replacement claim amounts to be received under section 23 441.21A during the budget year that are the result of 24 the levy rates for the general fund and for the trust 25 and agency funds under section 384.6, subsection 1, 26 equal to the sum of the following: 27 (1) The annual growth factor times the sum of the 28 current fiscal year’s maximum property tax dollars 29 for the general fund, the trust and agency funds 30 under section 384.6, subsection 1, and the amount of 31 all replacement claim amounts received under section 32 441.21A during the current fiscal year that are the 33 result of the levy rates for the general fund and 34 for the trust and agency funds under section 384.6, 35 subsection 1. 36 (2) The amount of net new valuation taxes in the 37 city. 38 4. For purposes of calculating maximum property tax 39 dollars for the city general fund for the fiscal year 40 beginning July 1, 2012, only, the term “current fiscal 41 year’s maximum property tax dollars” shall mean the sum 42 of the total amount of property tax dollars certified 43 by the city for the city’s general fund and the city’s 44 trust and agency funds under section 384.6, subsection 45 1, for the fiscal year beginning July 1, 2011. 46 5. Property taxes certified for deposit in the debt 47 service fund in section 384.4, capital improvements 48 reserve fund in section 384.7, the emergency fund in 49 section 384.8, any capital projects fund established by 50 -20- HF697.3313 (1) 84 md/nh 20/ 30
the city for deposit of bond, loan, or note proceeds, 1 any temporary increase approved pursuant to section 2 384.12A, property taxes collected from a voted levy 3 in section 384.12, and property taxes levied under 4 section 384.12, subsection 18, are not counted against 5 the maximum amount of property tax dollars that may be 6 certified for a fiscal year under subsection 3. 7 6. Notwithstanding the maximum amount of taxes 8 a city may certify for levy, the tax levied by a 9 city on tracts of land and improvements on the 10 tracts of land used and assessed for agricultural or 11 horticultural purposes shall not exceed three dollars 12 and three-eighths cents per thousand dollars of 13 assessed value in any year. Improvements located on 14 such tracts of land and not used for agricultural or 15 horticultural purposes and all residential dwellings 16 are subject to the same rate of tax levied by the city 17 on all other taxable property within the city. 18 7. The department of management, in consultation 19 with the city finance committee, shall adopt rules 20 to administer this section. The department shall 21 prescribe forms to be used by cities when making 22 calculations required by this section. 23 Sec. ___. NEW SECTION . 384.1B Ending fund balance. 24 1. a. Budgeted ending fund balances for a budget 25 year in excess of twenty-five percent of budgeted 26 expenditures from the general fund for that budget 27 year shall be explicitly reserved or designated for a 28 specific purpose. 29 b. A city is encouraged, but not required, to 30 reduce budgeted, unreserved, or undesignated ending 31 fund balances for the budget year to an amount equal 32 to approximately twenty-five percent of budgeted 33 expenditures and transfers from the general fund for 34 that budget year unless a decision is certified by the 35 state appeal board ordering a reduction in the ending 36 fund balance of the fund. 37 c. In a protest to the city budget under section 38 384.19, the city shall have the burden of proving 39 that the budgeted balances in excess of twenty-five 40 percent are reasonably likely to be appropriated for 41 the explicitly reserved or designated specific purpose. 42 The excess budgeted balance for the specific purpose 43 shall be considered an increase in an item in the 44 budget for purposes of section 24.28. 45 2. a. For a city that has, as of June 30, 46 2011, reduced its ending fund balance to less than 47 twenty-five percent of actual expenditures, additional 48 property taxes may be computed and levied as provided 49 in this subsection. The additional property tax levy 50 -21- HF697.3313 (1) 84 md/nh 21/ 30
amount is an amount not to exceed the difference 1 between twenty-five percent of actual expenditures for 2 city government purposes for the fiscal year beginning 3 July 1, 2010, minus the ending fund balance for that 4 year. 5 b. All or a portion of additional property tax 6 dollars may be levied for the purpose of increasing 7 cash reserves for city government purposes in the 8 budget year. The additional property tax dollars 9 authorized under this subsection but not levied may be 10 carried forward as unused ending fund balance taxing 11 authority until and for the fiscal year beginning 12 July 1, 2017. The amount carried forward shall not 13 exceed twenty-five percent of the maximum amount of 14 property tax dollars available in the current fiscal 15 year. Additionally, property taxes that are levied 16 as unused ending fund balance taxing authority under 17 this subsection may be the subject of a protest under 18 section 384.19, and the amount will be considered an 19 increase in an item in the budget for purposes of 20 section 24.28. The amount of additional property tax 21 dollars levied under this subsection shall not be 22 included in the computation of the maximum amount of 23 property tax dollars which may be certified and levied 24 under section 384.1. 25 Sec. ___. Section 384.6, subsection 1, unnumbered 26 paragraph 1, Code 2011, is amended to read as follows: 27 Accounting for pension and related employee benefit 28 funds as provided by the city finance committee. A 29 city may , subject to the limitations of section 384.1, 30 certify taxes to be levied for a trust and agency fund 31 in the amount necessary to meet its obligations. 32 Sec. ___. Section 384.12, subsection 20, Code 2011, 33 is amended by striking the subsection. 34 Sec. ___. NEW SECTION . 384.12A Authority to levy 35 beyond maximum property tax dollars. 36 1. The city council may certify additions to the 37 maximum amount of property tax dollars to be levied 38 for a period of time not to exceed two years if the 39 proposition has been submitted at a special election 40 and received a favorable majority of the votes cast on 41 the proposition. 42 2. The special election is subject to the 43 following: 44 a. The city council must give at least thirty-two 45 days’ notice to the county commissioner of elections 46 that the special election is to be held. In no 47 case, however, shall a notice be given to the county 48 commissioner of elections after December 31 for an 49 election on a proposition to exceed the statutory 50 -22- HF697.3313 (1) 84 md/nh 22/ 30
limits during the fiscal year beginning in the next 1 calendar year. 2 b. The special election shall be conducted by the 3 county commissioner of elections in accordance with 4 law. 5 c. The proposition to be submitted shall be 6 substantially in the following form: 7 Vote “yes” or “no” on the following: Shall the city 8 of _______ levy for an additional $_______ each year 9 for ___ years beginning next July 1, ____, in excess of 10 the statutory limits otherwise applicable for the city 11 general fund and the city trust and agency funds? 12 d. The canvass shall be held beginning at 1:00 p.m. 13 on the second day which is not a holiday following the 14 special election. 15 e. Notice of the special election shall be 16 published at least once in a newspaper as specified 17 in section 362.3 prior to the date of the special 18 election. The notice shall appear as early as 19 practicable after the city council has voted to submit 20 a proposition to the voters to levy additional property 21 tax dollars. 22 3. The amount of additional property tax dollars 23 certified under this section shall not be included in 24 the computation of the maximum amount of property tax 25 dollars which may be certified and levied under section 26 384.1. 27 Sec. ___. Section 384.16, subsection 1, paragraph 28 b, Code 2011, is amended to read as follows: 29 b. A budget must show comparisons between the 30 estimated expenditures in each program in the following 31 year, the latest estimated expenditures in each program 32 in the current year, and the actual expenditures in 33 each program from the annual report as provided in 34 section 384.22 , or as corrected by a subsequent audit 35 report. Wherever practicable, as provided in rules 36 of the committee, a budget must show comparisons 37 between the levels of service provided by each program 38 as estimated for the following year, and actual 39 levels of service provided by each program during 40 the two preceding years. For each city that has 41 established an urban renewal area, the budget shall 42 include estimated and actual tax increment financing 43 revenues and all estimated and actual expenditures of 44 the revenues, proceeds from debt and all estimated 45 and actual expenditures of the debt proceeds, and 46 identification of any entity receiving a direct payment 47 of taxes funded by tax increment financing revenues 48 and shall include the total amount of loans, advances, 49 indebtedness, or bonds outstanding at the close of 50 -23- HF697.3313 (1) 84 md/nh 23/ 30
the most recently ended fiscal year, which qualify 1 for payment from the special fund created in section 2 403.19 , including interest negotiated on such loans, 3 advances, indebtedness, or bonds. The amount of loans, 4 advances, indebtedness, or bonds shall be listed in the 5 aggregate for each city reporting. The city finance 6 committee, in consultation with the department of 7 management and the legislative services agency, shall 8 determine reporting criteria and shall prepare a form 9 for reports filed with the department pursuant to this 10 section . The department shall make the information 11 available by electronic means. 12 Sec. ___. Section 384.19, Code 2011, is amended by 13 adding the following new unnumbered paragraph: 14 NEW UNNUMBERED PARAGRAPH . For purposes of a tax 15 protest filed under this section, “item” means a 16 budgeted expenditure, appropriation, or cash reserve 17 from a fund for a service area, program, program 18 element, or purpose. 19 Sec. ___. Section 386.8, Code 2011, is amended to 20 read as follows: 21 386.8 Operation tax. 22 A city may establish a self-supported improvement 23 district operation fund, and may certify taxes not 24 to exceed the rate limitation as established in the 25 ordinance creating the district, or any amendment 26 thereto, each year to be levied for the fund against 27 all of the property in the district, for the purpose 28 of paying the administrative expenses of the district, 29 which may include but are not limited to administrative 30 personnel salaries, a separate administrative office, 31 planning costs including consultation fees, engineering 32 fees, architectural fees, and legal fees and all other 33 expenses reasonably associated with the administration 34 of the district and the fulfilling of the purposes of 35 the district. The taxes levied for this fund may also 36 be used for the purpose of paying maintenance expenses 37 of improvements or self-liquidating improvements for a 38 specified length of time with one or more options to 39 renew if such is clearly stated in the petition which 40 requests the council to authorize construction of the 41 improvement or self-liquidating improvement, whether 42 or not such petition is combined with the petition 43 requesting creation of a district. Parcels of property 44 which are assessed as residential property for property 45 tax purposes are exempt from the tax levied under this 46 section except residential properties within a duly 47 designated historic district. A tax levied under 48 this section is not subject to the levy limitation in 49 section 384.1 . 50 -24- HF697.3313 (1) 84 md/nh 24/ 30
Sec. ___. Section 386.9, Code 2011, is amended to 1 read as follows: 2 386.9 Capital improvement tax. 3 A city may establish a capital improvement fund 4 for a district and may certify taxes, not to exceed 5 the rate established by the ordinance creating the 6 district, or any subsequent amendment thereto, 7 each year to be levied for the fund against all of 8 the property in the district, for the purpose of 9 accumulating moneys for the financing or payment 10 of a part or all of the costs of any improvement or 11 self-liquidating improvement. However, parcels of 12 property which are assessed as residential property 13 for property tax purposes are exempt from the tax 14 levied under this section except residential properties 15 within a duly designated historic district. A tax 16 levied under this section is not subject to the levy 17 limitations in section 384.1 or 384.7 . 18 Sec. ___. REPEAL. Sections 331.425 and 331.426, 19 Code 2011, are repealed. 20 Sec. ___. APPLICABILITY. This division of this 21 Act applies to fiscal years beginning on or after July 22 1, 2012. 23 DIVISION ___ 24 INCOME TAX 25 EARNED INCOME TAX CREDIT 26 Sec. ___. Section 422.12B, subsection 1, Code 2011, 27 is amended to read as follows: 28 1. The taxes imposed under this division less the 29 credits allowed under section 422.12 shall be reduced 30 by an earned income credit equal to seven ten percent 31 of the federal earned income credit provided in section 32 32 of the Internal Revenue Code. Any credit in excess 33 of the tax liability is refundable. 34 Sec. ___. RETROACTIVE APPLICABILITY. This division 35 of this Act applies retroactively to January 1, 2011, 36 for tax years beginning on or after that date. 37 DIVISION ___ 38 INCOME TAX 39 SCHOOL TUITION ORGANIZATION TAX CREDITS 40 Sec. ___. Section 422.11S, subsection 7, paragraph 41 a, subparagraph (2), Code 2011, is amended to read as 42 follows: 43 (2) “Total approved tax credits” means for the 44 tax year beginning in the 2006 calendar year, two 45 million five hundred thousand dollars, for the tax 46 year beginning in the 2007 calendar year, five million 47 dollars, and for tax years beginning on or after 48 January 1, 2008, seven million five hundred thousand 49 dollars. the following: 50 -25- HF697.3313 (1) 84 md/nh 25/ 30
(a) For tax years beginning on or after January 1, 1 2008, and before January 1, 2012, seven million five 2 hundred thousand dollars. 3 (b) For the tax year beginning on or after January 4 1, 2012, and before January 1, 2013, eight million 5 seven hundred fifty thousand dollars. 6 (c) For tax years beginning on or after January 1, 7 2013, ten million dollars. 8 DIVISION ___ 9 INCOME TAX 10 TEACHER EXPENSES 11 Sec. ___. Section 422.7, Code 2011, is amended by 12 adding the following new subsection: 13 NEW SUBSECTION . 54. A taxpayer is allowed to 14 take the deduction for certain expenses of elementary 15 and secondary school teachers allowed under section 16 62(a)(2)(D) of the Internal Revenue Code, as amended 17 by the federal Emergency Economic Stabilization Act of 18 2008, Pub. L. No. 110-343, in computing net income for 19 state tax purposes. 20 Sec. ___. REFUNDS. Notwithstanding any provision 21 to the contrary in section 422.25, subsection 3, 22 a taxpayer who files an amended return in the time 23 permitted by statute to claim a refund related to the 24 allowance of the deduction enacted in this division of 25 this Act is only entitled to a refund of the amount 26 paid that is in excess of tax liability. The taxpayer 27 shall not be entitled to interest on such excess. 28 Sec. ___. EFFECTIVE DATE AND RETROACTIVE 29 APPLICABILITY. This division of this Act, being deemed 30 of immediate importance, takes effect upon enactment 31 and applies retroactively to January 1, 2008, for 32 tax years beginning on or after that date and before 33 January 1, 2009. 34 DIVISION ___ 35 INCOME TAX 36 QUALIFIED HIGHER EDUCATION EXPENSES 37 Sec. ___. Section 422.7, Code 2011, is amended by 38 adding the following new subsection: 39 NEW SUBSECTION . 54. A taxpayer is allowed to 40 take the deduction for qualified tuition and related 41 expenses allowed under section 222 of the Internal 42 Revenue Code, as amended by the federal Emergency 43 Economic Stabilization Act of 2008, Pub. L. No. 44 110-343, in computing net income for state tax 45 purposes. 46 Sec. ___. REFUNDS. Notwithstanding any provision 47 to the contrary in section 422.25, subsection 3, 48 a taxpayer who files an amended return in the time 49 permitted by statute to claim a refund related to the 50 -26- HF697.3313 (1) 84 md/nh 26/ 30
allowance of the deduction enacted in this division of 1 this Act is only entitled to a refund of the amount 2 paid that is in excess of tax liability. The taxpayer 3 shall not be entitled to interest on such excess. 4 Sec. ___. EFFECTIVE DATE AND RETROACTIVE 5 APPLICABILITY. This division of this Act, being deemed 6 of immediate importance, takes effect upon enactment 7 and applies retroactively to January 1, 2008, for 8 tax years beginning on or after that date and before 9 January 1, 2009. 10 DIVISION ___ 11 INCOME TAX 12 STATE SALES/USE TAX DEDUCTION 13 Sec. ___. Section 422.9, subsection 2, paragraph i, 14 Code 2011, is amended to read as follows: 15 i. The deduction for state sales and use taxes 16 is allowable only if the taxpayer elected to deduct 17 the state sales and use taxes in lieu of state income 18 taxes under section 164 of the Internal Revenue Code. 19 A deduction for state sales and use taxes is not 20 allowed if the taxpayer has taken the deduction for 21 state income taxes or claimed the standard deduction 22 under section 63 of the Internal Revenue Code. This 23 paragraph applies to taxable years beginning after 24 December 31, 2003, and before January 1, 2006 2009, and 25 to taxable years beginning after December 31, 2009, and 26 before January 1, 2012 . 27 Sec. ___. REFUNDS. Notwithstanding any provision 28 to the contrary in section 422.25, subsection 3, 29 a taxpayer who files an amended return in the time 30 permitted by statute to claim a refund related to the 31 allowance of the deduction enacted in this division of 32 this Act is only entitled to a refund of the amount 33 paid that is in excess of tax liability. The taxpayer 34 shall not be entitled to interest on such excess. 35 Sec. ___. EFFECTIVE DATE AND RETROACTIVE 36 APPLICABILITY. This division of this Act, being deemed 37 of immediate importance, takes effect upon enactment 38 and applies retroactively to tax years beginning on or 39 after January 1, 2006, and before January 1, 2009, and 40 to tax years beginning on or after January 1, 2010, and 41 before January 1, 2012. 42 DIVISION ___ 43 INCOME TAX 44 SPECIAL FILING PROVISIONS 45 Sec. ___. SPECIAL FILING PROVISIONS. 46 1. Adjustments by individuals to federal adjusted 47 gross income and by corporations to federal taxable 48 income for tax returns filed prior to the enactment of 49 2011 Iowa Acts, Senate File 512, may be required as a 50 -27- HF697.3313 (1) 84 md/nh 27/ 30
result of the provisions of divisions ___ through ___ 1 of this Act. These adjustments are as follows: 2 a. The increased expensing allowance authorized in 3 section 179(b) of the Internal Revenue Code for tax 4 years beginning on or after January 1, 2010, but before 5 January 1, 2011. 6 b. The deduction for qualified tuition and related 7 expenses allowed under section 222 of the Internal 8 Revenue Code. 9 c. The deduction for certain expenses of elementary 10 and secondary school teachers allowed under section 11 62(a)(2)(D) of the Internal Revenue Code. 12 2. In lieu of filing an amended tax return, 13 taxpayers may make the adjustments, pursuant to rules 14 adopted by the director of revenue, on the next return 15 filed subsequent to the enactment of 2011 Iowa Acts, 16 Senate File 512. If the taxpayer elects not to file 17 an amended return, these provisions are suspended with 18 regard to the following adjustments otherwise available 19 as a result of this Act. 20 a. The limitation based on income provisions 21 and regulations of section 179(b)(3) of the Internal 22 Revenue Code with regard to the section 179(b) 23 adjustment. 24 b. The applicable dollar limit provisions of 25 section 222(b)(2)(B) of the Internal Revenue Code with 26 regard to the section 222 adjustment. 27 DIVISION ___ 28 INCOME TAX 29 WITHHOLDING AGREEMENTS 30 Sec. ___. Section 403.19A, subsection 1, paragraphs 31 c and f, Code 2011, are amended to read as follows: 32 c. “Employer” means a business creating or 33 retaining targeted jobs in an urban renewal area of a 34 pilot project city pursuant to a withholding agreement. 35 f. “Targeted job” means a job in a business which 36 is or will be located in an urban renewal area of a 37 pilot project city that pays a wage at least equal to 38 the countywide average wage. “Targeted job” includes 39 new or retained jobs from Iowa business expansions 40 or retentions within the city limits of the pilot 41 project city and those jobs resulting from established 42 out-of-state businesses, as defined by the department 43 of economic development, moving to or expanding in 44 Iowa. 45 Sec. ___. Section 403.19A, subsection 3, paragraph 46 c, subparagraph (1), Code 2011, is amended to read as 47 follows: 48 (1) The pilot project city shall enter into a 49 withholding agreement with each employer concerning 50 -28- HF697.3313 (1) 84 md/nh 28/ 30
the targeted jobs withholding credit. The withholding 1 agreement shall provide for the total amount of 2 withholding tax credits awarded. An agreement shall 3 not provide for an amount of withholding credits that 4 exceeds the amount of the qualifying investment made in 5 the project. An agreement shall not be entered into by 6 a pilot project city with a business currently located 7 in this state unless the business either creates or 8 retains ten new jobs or makes a qualifying investment 9 of at least five hundred thousand dollars within 10 the urban renewal area. The withholding agreement 11 may have a term of up to ten years. An employer 12 shall not be obligated to enter into a withholding 13 agreement. An agreement shall not be entered into with 14 an employer not already located in a pilot project 15 city when another Iowa community is competing for the 16 same project and both the pilot project city and the 17 other Iowa community are seeking assistance from the 18 department. 19 Sec. ___. Section 403.19A, subsection 3, paragraph 20 f, Code 2011, is amended to read as follows: 21 f. If the employer ceases to meet the requirements 22 of the withholding agreement, the agreement shall be 23 terminated and any withholding tax credits for the 24 benefit of the employer shall cease. However, in 25 regard to the number of new jobs that are to be created 26 or retained , if the employer has met the number of 27 new jobs to be created or retained pursuant to the 28 withholding agreement and subsequently the number of 29 new jobs falls below the required level, the employer 30 shall not be considered as not meeting the new job 31 requirement until eighteen months after the date of the 32 decrease in the number of new jobs created or retained . 33 Sec. ___. EFFECTIVE UPON ENACTMENT AND RETROACTIVE 34 APPLICABILITY. This division of this Act, being 35 deemed of immediate importance, takes effect upon 36 enactment and applies retroactively to July 1, 2006, 37 for agreements entered into on or after that date. 38 DIVISION ___ 39 INCOME TAX 40 DISASTER-RELATED PERSONAL CASUALTY LOSS DEDUCTIONS 41 Sec. ___. Section 422.9, Code 2011, is amended by 42 adding the following new subsection: 43 NEW SUBSECTION . 9. A taxpayer is allowed to take 44 the deduction for disaster-related casualty losses 45 under section 165(h) of the Internal Revenue Code, as 46 modified by the Heartland Disaster Relief Act of 2008, 47 Pub. L. No. 110-343, in computing net income for state 48 tax purposes. 49 Sec. ___. Notwithstanding any provision to the 50 -29- HF697.3313 (1) 84 md/nh 29/ 30
contrary in section 422.25, subsection 3, a taxpayer 1 who files an amended return in the time permitted by 2 statute to claim a refund related to the allowance of 3 the deduction enacted in this division of this Act is 4 only entitled to a refund of the amount paid that is 5 in excess of tax liability. The taxpayer shall not be 6 entitled to interest on such excess. 7 Sec. ___. EFFECTIVE DATE AND RETROACTIVE 8 APPLICABILITY. This division of this Act, being deemed 9 of immediate importance, takes effect upon enactment 10 and applies retroactively to January 1, 2008, for 11 tax years beginning on or after that date and before 12 January 1, 2009. > 13 2. By renumbering, redesignating, and correcting 14 internal references as necessary. 15 ______________________________ COMMITTEE ON WAYS AND MEANS SANDS of Louisa, Chairperson -30- HF697.3313 (1) 84 md/nh 30/ 30 #2.