House File 2583 - Introduced
HOUSE FILE
BY STRUYK
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to property taxation and the school finance
2 formula by providing for an increase in the foundation
3 property tax and an increase in the regular program foundation
4 base, and providing effective and applicability dates.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
6 TLSB 5945YH 81
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PAG LIN
1 1 Section 1. Section 257.1, subsection 2, unnumbered
1 2 paragraph 2, Code 2005, is amended to read as follows:
1 3 For the budget year commencing July 1, 1999, and for each
1 4 succeeding budget year the regular program foundation base per
1 5 pupil is eighty=seven and five=tenths percent of the regular
1 6 program state cost per pupil. For the budget years beginning
1 7 July 1, 2006, through July 1, 2010, the regular program
1 8 foundation base per pupil shall be annually determined by the
1 9 department of management, in consultation with the legislative
1 10 services agency and the department of education, in an amount
1 11 which maintains the proportion of state foundation aid and
1 12 property taxation on a statewide basis as it existed for the
1 13 budget year beginning July 1, 2005. For the budget year
1 14 beginning July 1, 2011, and each succeeding budget year, the
1 15 regular program foundation base per pupil is one hundred
1 16 percent of the regular program state cost per pupil. For the
1 17 budget year commencing July 1, 1991, and for each succeeding
1 18 budget year the special education support services foundation
1 19 base is seventy=nine percent of the special education support
1 20 services state cost per pupil. The combined foundation base
1 21 is the sum of the regular program foundation base and the
1 22 special education support services foundation base.
1 23 Sec. 2. Section 257.3, subsection 1, unnumbered paragraph
1 24 1, Code 2005, is amended to read as follows:
1 25 Except as provided in subsections 2 and 3, a school
1 26 district shall cause to be levied each year, for the school
1 27 general fund, a foundation property tax equal to five dollars
1 28 and forty cents calculated per thousand dollars of assessed
1 29 valuation on all taxable property in the district as follows:
1 30 a. For the budget year beginning July 1, 2006, six dollars
1 31 and ten cents per thousand dollars of assessed valuation.
1 32 b. For the budget year beginning July 1, 2007, six dollars
1 33 and eighty cents per thousand dollars of assessed valuation.
1 34 c. For the budget year beginning July 1, 2008, seven
1 35 dollars and fifty cents per thousand dollars of assessed
2 1 valuation.
2 2 d. For the budget year beginning July 1, 2009, eight
2 3 dollars and twenty cents per thousand dollars of assessed
2 4 valuation.
2 5 e. For the budget year beginning July 1, 2010, eight
2 6 dollars and ninety cents per thousand dollars of assessed
2 7 valuation.
2 8 f. For the budget year beginning July 1, 2011, and each
2 9 succeeding budget year, the foundation property tax shall be
2 10 annually determined by the department of management, in
2 11 consultation with the legislative services agency and the
2 12 department of education, in an amount which maintains the
2 13 proportion of state foundation aid and property taxation on a
2 14 statewide basis as it existed for the budget year beginning
2 15 July 1, 2005.
2 16 PARAGRAPH DIVIDED. The county auditor shall spread the
2 17 foundation levy over all taxable property in the district.
2 18 Sec. 3. Section 257.3, subsection 2, paragraphs a and b,
2 19 Code 2005, are amended to read as follows:
2 20 a. Notwithstanding subsection 1, a reorganized school
2 21 district shall cause a reduced foundation property tax of four
2 22 dollars and forty cents per thousand dollars of assessed
2 23 valuation to be levied on all taxable property which, in the
2 24 year preceding a reorganization, was within a school district
2 25 affected by the reorganization as defined in section 275.1, or
2 26 in the year preceding a dissolution was a part of a school
2 27 district that dissolved if the dissolution proposal has been
2 28 approved by the director of the department of education
2 29 pursuant to section 275.55. The amount of the reduction shall
2 30 be determined by the department of management in an amount
2 31 corresponding to one dollar per thousand dollars of assessed
2 32 valuation for the initial budget year in which the
2 33 reorganization or dissolution takes place, fifty cents per
2 34 thousand dollars of assessed valuation for the first
2 35 succeeding year, and twenty=five cents per thousand dollars of
3 1 assessed valuation for the second succeeding year. Beginning
3 2 in the third succeeding year, the foundation property tax
3 3 shall be levied at the rate otherwise applicable had the
3 4 reorganization or dissolution not taken place.
3 5 b. In succeeding school years, the foundation property tax
3 6 levy on that portion shall be increased to the rate of four
3 7 dollars and ninety cents per thousand dollars of assessed
3 8 valuation the first succeeding year, five dollars and fifteen
3 9 cents per thousand dollars of assessed valuation the second
3 10 succeeding year, and five dollars and forty cents per thousand
3 11 dollars of assessed valuation the third succeeding year and
3 12 each year thereafter.
3 13 Sec. 4. Section 257.16, Code 2005, is amended by adding
3 14 the following new subsection:
3 15 NEW SUBSECTION. 5. a. For the school budget year
3 16 beginning July 1, 2006, the department of management shall
3 17 calculate for each district the difference between the sum of
3 18 the revenues generated by the foundation property tax and the
3 19 additional property tax in the district calculated for the
3 20 budget year beginning July 1, 2006, and the revenues that
3 21 would have been generated by the foundation property tax and
3 22 the additional property tax in that district for the budget
3 23 year beginning July 1, 2005. However, in making the
3 24 calculation of the difference in revenues under this
3 25 subsection, the department shall not include the revenues
3 26 generated under section 257.37 for funding media and
3 27 educational services through the area education agencies. If
3 28 the property tax revenues for a district calculated for the
3 29 budget year beginning July 1, 2006, exceed the property tax
3 30 revenues for that district calculated for the budget year
3 31 beginning July 1, 2005, the department of management shall
3 32 reduce the revenues raised by the the additional property tax
3 33 levy in that district by that difference and the department of
3 34 education shall pay property tax adjustment aid to the
3 35 district equal to that difference from moneys appropriated for
4 1 property tax adjustment aid.
4 2 b. For the budget year beginning July 1, 2007, and
4 3 succeeding budget years, the department of education shall pay
4 4 property tax adjustment aid to a school district equal to the
4 5 amount paid to the district for the base year less an amount
4 6 equal to the product of the state percent of growth for the
4 7 budget year multiplied by the amount paid to the district for
4 8 the base year. The department of management shall adjust the
4 9 rate of the additional property tax accordingly and notify the
4 10 department of education of the amount of aid to be paid to
4 11 each district from moneys appropriated for property tax
4 12 adjustment aid.
4 13 c. Property tax adjustment aid shall be paid to school
4 14 districts in the manner provided in this section.
4 15 Sec. 5. Section 425A.3, subsection 1, Code 2005, is
4 16 amended to read as follows:
4 17 1. The family farm tax credit fund shall be apportioned
4 18 each year in the manner provided in this chapter so as to give
4 19 a credit against the tax on each eligible tract of
4 20 agricultural land within the several school districts of the
4 21 state in which the levy for the general school fund exceeds
4 22 five dollars and forty cents per thousand dollars of assessed
4 23 value the amount specified in section 257.3, subsection 1.
4 24 The amount of the credit on each eligible tract of
4 25 agricultural land shall be the amount the tax levied for the
4 26 general school fund exceeds the amount of tax which would be
4 27 levied on each eligible tract of agricultural land were the
4 28 levy for the general school fund five dollars and forty cents
4 29 per thousand dollars of assessed value the amount specified in
4 30 section 257.3, subsection 1 for the previous year. However,
4 31 in the case of a deficiency in the family farm tax credit fund
4 32 to pay the credits in full, the credit on each eligible tract
4 33 of agricultural land in the state shall be proportionate and
4 34 applied as provided in this chapter.
4 35 Sec. 6. Section 425A.5, Code 2005, is amended to read as
5 1 follows:
5 2 425A.5 COMPUTATION BY COUNTY AUDITOR.
5 3 The family farm tax credit allowed each year shall be
5 4 computed as follows: On or before April 1, the county auditor
5 5 shall list by school districts all tracts of agricultural land
5 6 which are entitled to credit, the taxable value for the
5 7 previous year, the budget from each school district for the
5 8 previous year, and the tax rate determined for the general
5 9 fund of the school district in the manner prescribed in
5 10 section 444.3 for the previous year, and if the tax rate is in
5 11 excess of five dollars and forty cents per thousand dollars of
5 12 assessed value the rate specified in section 257.3, subsection
5 13 1, the auditor shall multiply the tax levy which is in excess
5 14 of five dollars and forty cents per thousand dollars of
5 15 assessed value the rate specified in section 257.3, subsection
5 16 1, by the total taxable value of the agricultural land
5 17 entitled to credit in the school district, and on or before
5 18 April 1, certify the total amount of credit and the total
5 19 number of acres entitled to the credit to the department of
5 20 revenue.
5 21 Sec. 7. Section 426.3, Code 2005, is amended to read as
5 22 follows:
5 23 426.3 WHERE CREDIT GIVEN.
5 24 The agricultural land credit fund shall be apportioned each
5 25 year in the manner hereinafter provided so as to give a credit
5 26 against the tax on each tract of agricultural lands within the
5 27 several school districts of the state in which the levy for
5 28 the general school fund exceeds five dollars and forty cents
5 29 per thousand dollars of assessed value the amount specified in
5 30 section 257.3, subsection 1; the amount of such credit on each
5 31 tract of such lands shall be the amount the tax levied for the
5 32 general school fund exceeds the amount of tax which would be
5 33 levied on said tract of such lands were the levy for the
5 34 general school fund five dollars and forty cents per thousand
5 35 dollars of assessed value for the previous year the amount
6 1 specified in section 257.3, subsection 1, except in the case
6 2 of a deficiency in the agricultural land credit fund to pay
6 3 said credits in full, in which case the credit on each
6 4 eligible tract of such lands in the state shall be
6 5 proportionate and shall be applied as hereinafter provided.
6 6 Sec. 8. Section 426.6, unnumbered paragraph 1, Code 2005,
6 7 is amended to read as follows:
6 8 The agricultural land tax credit allowed each year shall be
6 9 computed as follows: On or before April 1, the county auditor
6 10 shall list by school districts all tracts of agricultural
6 11 lands which are entitled to credit, together with the taxable
6 12 value for the previous year, together with the budget from
6 13 each school district for the previous year, and the tax rate
6 14 determined for the general fund of the district in the manner
6 15 prescribed in section 444.3 for the previous year, and if such
6 16 tax rate is in excess of five dollars and forty cents per
6 17 thousand dollars of assessed value the rate specified in
6 18 section 257.3, subsection 1, the auditor shall multiply the
6 19 tax levy which is in excess of five dollars and forty cents
6 20 per thousand dollars of assessed value the rate specified in
6 21 section 257.3, subsection 1, by the total taxable value of the
6 22 agricultural lands entitled to credit in the district, and on
6 23 or before April 1, certify the amount to the department of
6 24 revenue.
6 25 Sec. 9. EFFECTIVE AND APPLICABILITY DATES.
6 26 1. The sections of this Act amending section 257.1
6 27 relating to the calculation of the regular program foundation
6 28 base per pupil, relating to the foundation property tax
6 29 pursuant to section 257.3, and providing for the payment of
6 30 property tax adjustment aid pursuant to section 257.16, being
6 31 deemed of immediate importance, take effect upon enactment.
6 32 2. The sections of this Act amending provisions relating
6 33 to the family farm tax credit and the agricultural land tax
6 34 credit take effect January 1, 2007, for taxes payable in the
6 35 fiscal year beginning July 1, 2007.
7 1 EXPLANATION
7 2 This bill increases and modifies the levels and methods of
7 3 computation of the foundation property tax levy and the
7 4 regular program foundation base within the school finance
7 5 formula.
7 6 The bill provides that for the budget years beginning July
7 7 1, 2006, through July 1, 2010, the regular program foundation
7 8 base per pupil shall be annually determined by the department
7 9 of management, in consultation with the legislative services
7 10 agency and the department of education, in an amount which
7 11 maintains the proportion of state foundation aid and property
7 12 taxation on a statewide basis as it existed for the budget
7 13 year beginning July 1, 2005. For the budget year beginning
7 14 July 1, 2011, and succeeding budget years, the bill provides
7 15 that the regular program foundation base per pupil is 100
7 16 percent of the regular program state cost per pupil.
7 17 With regard to the level of the foundation property tax,
7 18 the bill provides that the tax shall equal for the budget year
7 19 beginning July 1, 2006, $6.10 per $1,000 of assessed
7 20 valuation, for the budget year beginning July 1, 2007, $6.80
7 21 per $1,000 of assessed valuation, for the budget year
7 22 beginning July 1, 2008, $7.50 per $1,000 of assessed
7 23 valuation, for the budget year beginning July 1, 2009, $8.20
7 24 per $1,000 of assessed valuation, and for the budget year
7 25 beginning July 1, 2010, $8.90 per $1,000 of assessed
7 26 valuation. The bill provides that for the budget year
7 27 beginning July 1, 2011, and succeeding budget years, the
7 28 foundation property tax shall be annually determined by the
7 29 department of management, in consultation with the legislative
7 30 services agency and the department of education, in an amount
7 31 which maintains the proportion of state foundation aid and
7 32 property taxation within each district on a statewide basis as
7 33 it existed for the budget year beginning July 1, 2005.
7 34 Currently, a district which reorganizes or dissolves
7 35 qualifies for a reduced foundation property tax level, which
8 1 gradually increases over the next succeeding budget years
8 2 following the reorganization or dissolution. The bill
8 3 modifies these provisions such that the amount of the
8 4 reduction shall be determined annually by the department of
8 5 management in an amount corresponding to $1 in the initial
8 6 year of the reorganization or dissolution, 50 cents in the
8 7 first succeeding year, and 25 cents in the second succeeding
8 8 year. The bill provides that the reduced foundation property
8 9 tax shall remain applicable for a period of three years
8 10 following the year in which the reorganization or dissolution
8 11 takes place, after which the level shall be increased to the
8 12 level which would otherwise be applicable in the event that a
8 13 reorganization or dissolution had not occurred.
8 14 The bill additionally provides that for the school budget
8 15 year beginning July 1, 2006, the department of management
8 16 shall calculate for each district the difference between the
8 17 sum of the revenues generated by the foundation property tax
8 18 and the additional property tax in the district calculated for
8 19 the budget year beginning July 1, 2006, and the revenues that
8 20 would have been generated by the foundation property tax and
8 21 the additional property tax in that district for the preceding
8 22 budget year. If the property tax revenues for a district
8 23 calculated for the budget year beginning July 1, 2006, exceed
8 24 the property tax revenues for that district calculated for the
8 25 preceding budget year, the bill provides that the department
8 26 of management shall reduce the revenues raised by the
8 27 foundation property tax and the additional property tax levy
8 28 in that district by that difference and the department of
8 29 education shall pay property tax adjustment aid to the
8 30 district equal to that difference. The bill provides that for
8 31 the budget year beginning July 1, 2007, and succeeding budget
8 32 years, the department of education shall pay property tax
8 33 adjustment aid to a school district equal to the amount paid
8 34 to the district for the base year less an amount equal to the
8 35 product of the state percent of growth for the budget year
9 1 multiplied by the amount paid to the district for the base
9 2 year. The bill provides that the department of management
9 3 shall adjust the rate of the foundation property tax and the
9 4 additional property tax accordingly and notify the department
9 5 of education of the amount of aid to be paid to each district.
9 6 The bill provides that the proportion of adjustment aid shall
9 7 be payable to school districts in the manner provided in
9 8 subsections 1 and 2 of Code section 257.16.
9 9 The bill makes conforming changes to provisions of the
9 10 family farm tax credit and the agricultural land tax credit,
9 11 relating to the increases in the levels of the foundation
9 12 property tax.
9 13 The bill provides that sections amending provisions
9 14 relating to the family farm tax credit and the agricultural
9 15 land tax credit take effect January 1, 2007, for taxes payable
9 16 in the fiscal year beginning July 1, 2007. The bill provides
9 17 that all other sections take effect upon enactment.
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