House File 730 - Introduced
HOUSE FILE
BY PAULSEN
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act establishing a property tax limitation for cities and
2 counties and including an effective date and applicability
3 date provision.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 2890YH 81
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PAG LIN
1 1 Section 1. NEW SECTION. 444.25 PROPERTY TAX LIMITATIONS.
1 2 1. COUNTY LIMITATION.
1 3 a. For the fiscal year beginning July 1, 2006, and for all
1 4 subsequent fiscal years, the maximum amount of property tax
1 5 dollars that may be certified by a county for taxes payable in
1 6 the budget year shall not exceed the amount of property tax
1 7 dollars certified by the county for taxes payable in the
1 8 current fiscal year for each of the levies for the following:
1 9 (1) General county services under section 331.422,
1 10 subsection 1.
1 11 (2) Rural county services under section 331.422,
1 12 subsection 2.
1 13 (3) Other taxes under section 331.422, subsection 4.
1 14 b. The limitation provided in this subsection does not
1 15 apply to the levies on the increase in taxable valuation due
1 16 to new construction, additions or improvements to existing
1 17 structures, remodeling of existing structures for which a
1 18 building permit is required, annexation, and phasing out of
1 19 tax exemptions, and on the increase in valuation of taxable
1 20 property as a result of a comprehensive revaluation by a
1 21 private appraiser under a contract entered into prior to
1 22 January 1, 2005, or as a result of a comprehensive revaluation
1 23 directed or authorized by the conference board prior to
1 24 January 1, 2005, with documentation of the contract,
1 25 authorization, or directive on the revaluation provided to the
1 26 director of revenue, if the levies are equal to or less than
1 27 the levies for the previous year; levies on that portion of
1 28 the taxable property located in an urban renewal project the
1 29 tax revenues from which are no longer divided as provided in
1 30 section 403.19, subsection 2; or as otherwise provided in this
1 31 section.
1 32 2. CITY LIMITATION.
1 33 a. For the fiscal year beginning July 1, 2006, and for all
1 34 subsequent fiscal years, the maximum amount of property tax
1 35 dollars that may be certified by a city for taxes payable in
2 1 the budget year shall not exceed the amount in property tax
2 2 dollars certified by the city for taxes payable in the current
2 3 fiscal year for each of the levies for the following:
2 4 (1) City government purposes under section 384.1.
2 5 (2) Emergency fund purposes under section 384.8.
2 6 (3) Other city government purposes under section 384.12
2 7 unless such levies have been approved by a vote of the people.
2 8 b. The limitation provided in this subsection does not
2 9 apply to the levies on the increase in taxable valuation due
2 10 to new construction, additions or improvements to existing
2 11 structures, remodeling of existing structures for which a
2 12 building permit is required, annexation, and phasing out of
2 13 tax exemptions, and on the increase in valuation of taxable
2 14 property as a result of a comprehensive revaluation by a
2 15 private appraiser under a contract entered into prior to
2 16 January 1, 2005, or as a result of a comprehensive revaluation
2 17 directed or authorized by the conference board prior to
2 18 January 1, 2005, with documentation of the contract,
2 19 authorization, or directive on the revaluation provided to the
2 20 director of revenue, if the levies are equal to or less than
2 21 the levies for the previous year; levies on that portion of
2 22 the taxable property located in an urban renewal project the
2 23 tax revenues from which are no longer divided as provided in
2 24 section 403.19, subsection 2; or as otherwise provided in this
2 25 section.
2 26 3. GROWTH OPPORTUNITIES. The dollar amount computed under
2 27 subsection 1 or 2 may be increased each year, as provided in
2 28 this subsection.
2 29 a. The dollar amount determined in subsection 1, paragraph
2 30 "a", or subsection 2, paragraph "a", shall be increased by the
2 31 product of the amount in subsection 1, paragraph "a", or
2 32 subsection 2, paragraph "a", and the percentage change in the
2 33 consumer price index or times one and one=half percent,
2 34 whichever is lower. For purposes of this subsection,
2 35 "consumer price index" means the percentage rate of change in
3 1 the consumer price index as tabulated by the United States
3 2 department of labor, bureau of labor statistics, for the
3 3 twelve=month period ending June 30 of the fiscal year
3 4 immediately preceding the current fiscal year.
3 5 b. The dollar amount determined in subsection 1, paragraph
3 6 "a", or subsection 2, paragraph "a", may be increased by an
3 7 additional one percent for the fiscal year following the
3 8 calendar year that the federal government disseminates
3 9 population data pursuant to Pub. L. No. 94=171 if such data
3 10 shows that the population of the county or city, as
3 11 applicable, increased by ten percent or more from the previous
3 12 federal decennial census.
3 13 c. The dollar amount determined in subsection 1, paragraph
3 14 "a", or subsection 2, paragraph "a", may be increased by an
3 15 additional one percent if the budget year enrollment in the
3 16 county or city, as applicable, increased by more than two
3 17 percent over the enrollment in the current fiscal year. For
3 18 purposes of this paragraph, "enrollment" means the number of
3 19 pupils residing in the county or city, as applicable, and
3 20 attending kindergarten through twelfth grade in an accredited
3 21 public or nonpublic school in the state.
3 22 4. EXCEPTIONS. The limitations provided in subsections 1
3 23 and 2 do not apply to the levies made for the following:
3 24 a. Debt service to be deposited into the debt service fund
3 25 pursuant to section 331.430 or 384.4.
3 26 b. Trust and agency purposes as described in section 384.6
3 27 to be deposited in the trust and agency funds established by a
3 28 city or as described in section 331.424, subsection 1,
3 29 paragraph "d", and section 331.424, subsection 2, paragraph
3 30 "a".
3 31 c. Taxes or tax levies approved by a vote of the people.
3 32 d. Hospitals pursuant to chapters 37, 347, and 347A.
3 33 5. APPEAL PROCEDURES. If a city or county needs to
3 34 increase the amount of property tax dollars raised from a tax
3 35 levy in excess of the amounts allowed in subsections 1 through
4 1 3, the following procedures apply:
4 2 a. Not later than March 1, and after the publication and
4 3 public hearing on the budget in the manner and form prescribed
4 4 by the director of the department of management,
4 5 notwithstanding sections 331.434, 362.3, and 384.16, the city
4 6 or county shall petition the state appeal board for approval
4 7 of a property tax increase in excess of the increases provided
4 8 for in subsection 3, on forms furnished by the director of the
4 9 department of management. Applications received after March 1
4 10 shall be automatically ineligible for consideration by the
4 11 board.
4 12 b. Additional costs incurred by the city or county due to
4 13 any of the following circumstances shall be the basis for
4 14 justifying the extraordinary increase in property tax dollars
4 15 under this subsection:
4 16 (1) Natural disaster or other life=threatening
4 17 emergencies.
4 18 (2) Unusual need for additional moneys to finance existing
4 19 programs that would provide substantial benefit to city or
4 20 county residents or compelling need to finance new programs
4 21 that would provide substantial benefit to city or county
4 22 residents.
4 23 (3) Need for additional moneys for health care, treatment,
4 24 and facilities, including mental health and mental retardation
4 25 care and treatment pursuant to section 331.424, subsection 1,
4 26 paragraphs "a" and "b".
4 27 (4) Judgments, settlements, and related costs arising out
4 28 of civil claims against the city or county and its officers,
4 29 employees, and agents, as defined in chapter 670.
4 30 c. The state appeal board shall approve, disapprove, or
4 31 reduce the amount of excess property tax dollars requested.
4 32 The board shall take into account the intent of this section
4 33 to provide property tax relief. The decision of the board
4 34 shall be rendered at a regular or special meeting of the board
4 35 within twenty days of the board's receipt of an appeal.
5 1 d. Within seven days of receipt of the decision of the
5 2 state appeal board, the county or city shall adopt and certify
5 3 its budget under section 331.434 or 384.16, which budgets may
5 4 be protested as provided in section 331.436 or 384.19. The
5 5 budget shall not contain an amount of property tax dollars in
5 6 excess of the amount approved by the state appeal board.
5 7 6. COUNTY AUDITOR ADJUSTMENT. In addition to the
5 8 requirement of the county auditor in section 444.3 to
5 9 establish a rate of tax which does not exceed the rate
5 10 authorized by law, the county auditor shall also adjust the
5 11 rate if the amount of property tax dollars to be raised is in
5 12 excess of the amount specified in subsections 1 and 3 for a
5 13 county or subsections 2 and 3 for a city, as such rates may be
5 14 adjusted pursuant to subsection 5.
5 15 7. DEFINITIONS. For purposes of this section:
5 16 a. "Budget year" is the fiscal year beginning during the
5 17 calendar year in which a budget is first certified.
5 18 b. "Current fiscal year" is the fiscal year ending during
5 19 the calendar year in which a budget is first certified.
5 20 Sec. 2. NEW SECTION. 444.25A OTHER PROPERTY TAX LEVY
5 21 LIMITATIONS NOT AFFECTED.
5 22 Section 444.25 shall not be construed as removing or
5 23 otherwise affecting the property tax limitations otherwise
5 24 provided by law for any tax levy of a political subdivision.
5 25 CORRESPONDING AMENDMENTS
5 26 Sec. 3. Section 24.48, unnumbered paragraphs 4, 5, and 7,
5 27 Code 2005, are amended by striking the unnumbered paragraphs.
5 28 Sec. 4. Section 24.48, unnumbered paragraph 6, Code 2005,
5 29 is amended to read as follows:
5 30 For purposes of this section only, "political subdivision"
5 31 means a city, school district, or any other special purpose
5 32 district which certifies its budget to the county auditor and
5 33 derives funds from a property tax levied against taxable
5 34 property situated within the political subdivision, except
5 35 that it does not mean a city or a county.
6 1 Sec. 5. Section 331.422, unnumbered paragraph 1, Code
6 2 2005, is amended to read as follows:
6 3 Subject to this section and sections 331.423 through
6 4 331.426 331.425 or as otherwise provided by state law, the
6 5 board of each county shall certify property taxes annually at
6 6 its March session to be levied for county purposes as follows:
6 7 Sec. 6. Section 331.424A, subsection 4, Code 2005, is
6 8 amended to read as follows:
6 9 4. For the fiscal year beginning July 1, 1996, and for
6 10 each subsequent fiscal year, the county shall certify a levy
6 11 for payment of services. For each fiscal year, county
6 12 revenues from taxes imposed by the county credited to the
6 13 services fund shall not exceed an amount equal to the amount
6 14 of base year expenditures for services as defined in section
6 15 331.438, less the amount of property tax relief to be received
6 16 pursuant to section 426B.2, in the fiscal year for which the
6 17 budget is certified. The county auditor and the board of
6 18 supervisors shall reduce the amount of the levy certified for
6 19 the services fund by the amount of property tax relief to be
6 20 received. A levy certified under this section is not subject
6 21 to the any appeal provisions of section 331.426 or to any
6 22 other provision in law authorizing a county to exceed,
6 23 increase, or appeal a property tax levy limit.
6 24 Sec. 7. Section 331.434, unnumbered paragraph 1, Code
6 25 2005, is amended to read as follows:
6 26 Annually, the board of each county, subject to sections
6 27 331.423 through 331.426 331.425 and other applicable state
6 28 law, shall prepare and adopt a budget, certify taxes, and
6 29 provide appropriations as follows:
6 30 Sec. 8. Section 331.435, unnumbered paragraph 1, Code
6 31 2005, is amended to read as follows:
6 32 The board may amend the adopted county budget, subject to
6 33 sections 331.423 through 331.426 331.425 and other applicable
6 34 state law, to permit increases in any class of proposed
6 35 expenditures contained in the certified budget.
7 1 Sec. 9. Section 331.426, Code 2005, is repealed.
7 2 Sec. 10. EFFECTIVE AND APPLICABILITY DATE. This Act takes
7 3 effect July 1, 2005, and applies to fiscal years beginning on
7 4 or after July 1, 2006.
7 5 EXPLANATION
7 6 This bill limits the maximum dollar amounts of property tax
7 7 levies to be imposed by cities and counties to the dollar
7 8 amounts of the property taxes levied in the previous year,
7 9 with certain exceptions. The bill also allows the amount of
7 10 the county's or city's previous year's tax levy to be
7 11 increased as follows: by 1.5 percent or the consumer price
7 12 index, whichever is lower; by 1 percent in the fiscal year
7 13 following the federal decennial census if the population of
7 14 the county or city, as applicable, has grown by 10 percent or
7 15 more; and by 1 percent if the budget year school pupil
7 16 enrollment in the county or city, as applicable, increased by
7 17 more than 2 percent over the school pupil enrollment in the
7 18 current fiscal year. The bill defines "enrollment". The
7 19 limitation on property taxes may be exceeded for certain
7 20 expenditures if the county or city, as applicable, files a
7 21 petition with the state appeal board by March 1 and the
7 22 petition is approved by the state appeal board. Conforming
7 23 amendments relating to exceeding property tax levies are made
7 24 to Code sections 24.48 and 331.426. The limitation on
7 25 property taxes takes effect July 1, 2005, and applies to
7 26 fiscal years beginning on or after July 1, 2006.
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