House File 25
HOUSE FILE
BY J.K. VAN FOSSEN, RAYHONS,
LUKAN, ELGIN, GREINER, DENNIS,
UPMEYER, J.R. VAN FOSSEN, AND
S. OLSON
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to a limitation on property taxes for cities and
2 counties.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 1152YH 80
5 sc/sh/8
PAG LIN
1 1 Section 1. NEW SECTION. 444.25 PROPERTY TAX LIMITATIONS
1 2 FOR 2004=2005 AND 2005=2006 FISCAL YEARS.
1 3 1. COUNTY LIMITATION. The maximum amount of property tax
1 4 dollars that may be certified by a county for taxes payable in
1 5 the fiscal year beginning July 1, 2004, shall not exceed the
1 6 amount of property tax dollars certified by the county for
1 7 taxes payable in the fiscal year beginning July 1, 2003, and
1 8 the maximum amount of property tax dollars that may be
1 9 certified by a county for taxes payable in the fiscal year
1 10 beginning July 1, 2005, shall not exceed the amount of
1 11 property tax dollars certified by the county for taxes payable
1 12 in the fiscal year beginning July 1, 2004, for each of the
1 13 levies for the following:
1 14 a. General county services under section 331.422,
1 15 subsection 1.
1 16 b. Rural county services under section 331.422, subsection
1 17 2.
1 18 c. Other taxes under section 331.422, subsection 4.
1 19 The limitation provided in this subsection does not apply
1 20 to the levies on the increase in taxable valuation due to new
1 21 construction, additions or improvements to existing
1 22 structures, remodeling of existing structures for which a
1 23 building permit is required, annexation, and phasing out of
1 24 tax exemptions, and on the increase in valuation of taxable
1 25 property as a result of a comprehensive revaluation by a
1 26 private appraiser under a contract entered into prior to
1 27 January 1, 2003, or as a result of a comprehensive revaluation
1 28 directed or authorized by the conference board prior to
1 29 January 1, 2003, with documentation of the contract,
1 30 authorization, or directive on the revaluation provided to the
1 31 director of revenue and finance, if the levies are equal to or
1 32 less than the levies for the previous year; levies on that
1 33 portion of the taxable property located in an urban renewal
1 34 project the tax revenues from which are no longer divided as
1 35 provided in section 403.19, subsection 2; or as otherwise
2 1 provided in this section.
2 2 2. CITY LIMITATION. The maximum amount of property tax
2 3 dollars that may be certified by a city for taxes payable in
2 4 the fiscal year beginning July 1, 2004, shall not exceed the
2 5 amount in property tax dollars certified by the city for taxes
2 6 payable in the fiscal year beginning July 1, 2003, and the
2 7 maximum amount of property tax dollars that may be certified
2 8 by a city for taxes payable in the fiscal year beginning July
2 9 1, 2005, shall not exceed the amount of property tax dollars
2 10 certified by the city for taxes payable in the fiscal year
2 11 beginning July 1, 2004, for each of the levies for the
2 12 following:
2 13 a. City government purposes under section 384.1.
2 14 b. Capital improvements reserve fund under section 384.7.
2 15 c. Emergency fund purposes under section 384.8.
2 16 d. Other city government purposes under section 384.12.
2 17 The limitation provided in this subsection does not apply
2 18 to the levies on the increase in taxable valuation due to new
2 19 construction, additions or improvements to existing
2 20 structures, remodeling of existing structures for which a
2 21 building permit is required, annexation, and phasing out of
2 22 tax exemptions, and on the increase in valuation of taxable
2 23 property as a result of a comprehensive revaluation by a
2 24 private appraiser under a contract entered into prior to
2 25 January 1, 2003, or as a result of a comprehensive revaluation
2 26 directed or authorized by the conference board prior to
2 27 January 1, 2003, with documentation of the contract,
2 28 authorization, or directive on the revaluation provided to the
2 29 director of revenue and finance, if the levies are equal to or
2 30 less than the levies for the previous year; levies on that
2 31 portion of the taxable property located in an urban renewal
2 32 project the tax revenues from which are no longer divided as
2 33 provided in section 403.19, subsection 2; or as otherwise
2 34 provided in this section.
2 35 3. EXCEPTIONS. The limitations provided in subsections 1
3 1 and 2 do not apply to the levies made for the following:
3 2 a. Debt service to be deposited into the debt service fund
3 3 pursuant to section 331.430 or 384.4.
3 4 b. Taxes approved by a vote of the people which are
3 5 payable during the fiscal year beginning July 1, 2004, or July
3 6 1, 2005.
3 7 c. Hospitals pursuant to chapters 37, 347, and 347A.
3 8 d. Unusual need for additional moneys to finance existing
3 9 programs which would provide substantial benefit to city or
3 10 county residents or compelling need to finance new programs
3 11 which would provide substantial benefit to city or county
3 12 residents. The increase in taxes levied under this exception
3 13 for the fiscal year beginning July 1, 2004, is limited to no
3 14 more than the product of the total tax dollars levied in the
3 15 fiscal year beginning July 1, 2003, and the percent change in
3 16 the price index for government purchases by type for state and
3 17 local governments computed for calendar year 2003. The
3 18 increase in taxes levied under this exception for the fiscal
3 19 year beginning July 1, 2005, is limited to no more than the
3 20 product of the total tax dollars levied in the fiscal year
3 21 beginning July 1, 2004, and the percent change in the price
3 22 index for government purchases by type for state and local
3 23 governments computed for calendar year 2004. The price index
3 24 used shall be the state and local government chain=type price
3 25 index used in the quantity and price indexes for gross
3 26 domestic product as published by the United States department
3 27 of commerce. For purposes of this paragraph, tax dollars
3 28 levied in the fiscal years beginning July 1, 2003, and July 1,
3 29 2004, shall not include funds levied for the purposes set out
3 30 in paragraphs "a", "b", and "c".
3 31 Application of this exception shall require an original
3 32 publication of the budget and a public hearing and a second
3 33 publication and a second hearing both in the manner and form
3 34 prescribed by the director of the department of management,
3 35 notwithstanding the provisions of sections 331.434, 362.3, and
4 1 384.16. The publications and hearings prescribed in this
4 2 paragraph shall be held and the budget certified no later than
4 3 March 15. The taxes levied for counties and cities whose
4 4 budgets are certified after March 15, 2004, are limited as
4 5 provided in section 331.434, subsection 7, and section 384.16,
4 6 subsection 6.
4 7 4. APPEAL PROCEDURES. In lieu of the procedures in
4 8 sections 24.48 and 331.426, which procedures, pursuant to
4 9 section 444.25B, do not apply for taxes payable in the fiscal
4 10 years beginning July 1, 2004, and July 1, 2005, if a city or
4 11 county needs to raise property tax dollars from a tax levy in
4 12 excess of the limitations imposed by subsection 1 or 2, the
4 13 following procedures apply:
4 14 a. Not later than March 1, and after the publication and
4 15 public hearing on the budget in the manner and form prescribed
4 16 by the director of the department of management,
4 17 notwithstanding sections 331.434, 362.3, and 384.16, the city
4 18 or county shall petition the state appeal board for approval
4 19 of a property tax increase in excess of the increase provided
4 20 for in subsection 3, paragraph "d", on forms furnished by the
4 21 director of the department of management. Applications
4 22 received after March 1 shall be automatically ineligible for
4 23 consideration by the board.
4 24 b. Additional costs incurred by the city or county due to
4 25 any of the following circumstances shall be the basis for
4 26 justifying the excess in property tax dollars under this
4 27 subsection:
4 28 (1) Natural disaster or other life=threatening
4 29 emergencies.
4 30 (2) Unusual need for additional moneys to finance existing
4 31 programs that would provide substantial benefit to city or
4 32 county residents or compelling need to finance new programs
4 33 that would provide substantial benefit to city or county
4 34 residents.
4 35 (3) Need for additional moneys for health care, treatment,
5 1 and facilities, including mental health and mental retardation
5 2 care and treatment pursuant to section 331.424, subsection 1,
5 3 paragraphs "a" and "b".
5 4 (4) Judgments, settlements, and related costs arising out
5 5 of civil claims against the city or county and its officers,
5 6 employees, and agents, as defined in chapter 670.
5 7 c. The state appeal board shall approve, disapprove, or
5 8 reduce the amount of excess property tax dollars requested.
5 9 The board shall take into account the intent of this section
5 10 to provide property tax relief. The decision of the board
5 11 shall be rendered at a regular or special meeting of the board
5 12 within twenty days of the board's receipt of an appeal.
5 13 d. Within seven days of receipt of the decision of the
5 14 state appeal board, the county or city shall adopt and certify
5 15 its budget under section 331.434 or 384.16, which budgets may
5 16 be protested as provided in section 331.436 or 384.19. The
5 17 budget shall not contain an amount of property tax dollars in
5 18 excess of the amount approved by the state appeal board.
5 19 5. COUNTY AUDITOR ADJUSTMENT. In addition to the
5 20 requirement of the county auditor in section 444.3 to
5 21 establish a rate of tax which does not exceed the rate
5 22 authorized by law, the county auditor shall also adjust the
5 23 rate if the amount of property tax dollars to be raised is in
5 24 excess of the amount specified in subsection 1 or 2, as may be
5 25 adjusted pursuant to subsection 4.
5 26 Sec. 2. NEW SECTION. 444.25A PROPERTY TAX LEVY
5 27 LIMITATIONS NOT AFFECTED.
5 28 Section 444.25 shall not be construed as removing or
5 29 otherwise affecting the property tax limitations otherwise
5 30 provided by law for any tax levy of the political subdivision,
5 31 except that, upon an appeal from the political subdivision,
5 32 the state appeal board may approve a tax levy consistent with
5 33 the provisions of section 24.48 or 331.426.
5 34 Sec. 3. NEW SECTION. 444.25B SECTIONS VOID.
5 35 Sections 24.48 and 331.426 are void for the fiscal years
6 1 beginning July 1, 2004, and July 1, 2005.
6 2 EXPLANATION
6 3 This bill limits, for FY 2004=2005 and FY 2005=2006, the
6 4 maximum dollar amounts of property tax levies to be imposed by
6 5 cities and counties to the dollar amounts of the property
6 6 taxes levied by the cities and counties in FY 2003=2004 and FY
6 7 2004=2005, with certain exceptions. In addition, current
6 8 property tax rate limits still apply. The following are
6 9 exceptions to the limitations: levies on the increase in
6 10 taxable valuation due to new construction or improvements,
6 11 annexation, or phasing out of tax exemptions, or due to a
6 12 comprehensive revaluation authorized before calendar year
6 13 2003, if equal to or less than the previous year's levies;
6 14 levies for discontinued tax increment financing areas; other
6 15 levies for debt service; taxes approved by a vote of the
6 16 people which are payable during FY 2004=2005 or FY 2005=2006;
6 17 certain levies for hospitals; and, only after publication and
6 18 public hearings, tax levies for moneys to permit, in cases of
6 19 unusual need, additional financing of existing programs
6 20 providing a substantial benefit or to permit, in cases of
6 21 compelling need, financing of new programs providing a
6 22 substantial benefit. If a petition is filed by March 1 and
6 23 approved by the state appeal board, the limitations may be
6 24 exceeded for expenditures relating to any of the following:
6 25 natural disaster or other life=threatening emergencies;
6 26 unusual need for additional financing of existing programs
6 27 providing a substantial benefit, or compelling need for
6 28 financing of new programs providing a substantial benefit;
6 29 need for additional financing for certain health care,
6 30 treatment, and facilities; and civil tort claims.
6 31 LSB 1152YH 80
6 32 sc/sh/8