Senate File 391 - Introduced
SENATE FILE
BY BRUNKHORST
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to school finance and related tax changes,
2 providing a penalty, and including effective and applicability
3 date provisions.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 1909XS 81
6 rn/gg/14
PAG LIN
1 1 DIVISION I
1 2 SALES AND USE TAX RATE INCREASE
1 3 Section 1. Section 423.2, subsection 1, unnumbered
1 4 paragraph 1, Code 2005, is amended to read as follows:
1 5 There is imposed a tax of five six percent upon the sales
1 6 price of all sales of tangible personal property, consisting
1 7 of goods, wares, or merchandise, sold at retail in the state
1 8 to consumers or users except as otherwise provided in this
1 9 subchapter.
1 10 Sec. 2. Section 423.2, subsections 2, 3, 4, 5, 7, 8, and
1 11 9, Code 2005, are amended to read as follows:
1 12 2. A tax of five six percent is imposed upon the sales
1 13 price of the sale or furnishing of gas, electricity, water,
1 14 heat, pay television service, and communication service,
1 15 including the sales price from such sales by any municipal
1 16 corporation or joint water utility furnishing gas,
1 17 electricity, water, heat, pay television service, and
1 18 communication service to the public in its proprietary
1 19 capacity, except as otherwise provided in this subchapter,
1 20 when sold at retail in the state to consumers or users.
1 21 3. A tax of five six percent is imposed upon the sales
1 22 price of all sales of tickets or admissions to places of
1 23 amusement, fairs, and athletic events except those of
1 24 elementary and secondary educational institutions. A tax of
1 25 five six percent is imposed on the sales price of an entry fee
1 26 or like charge imposed solely for the privilege of
1 27 participating in an activity at a place of amusement, fair, or
1 28 athletic event unless the sales price of tickets or admissions
1 29 charges for observing the same activity are taxable under this
1 30 subchapter. A tax of five six percent is imposed upon that
1 31 part of private club membership fees or charges paid for the
1 32 privilege of participating in any athletic sports provided
1 33 club members.
1 34 4. A tax of five six percent is imposed upon the sales
1 35 price derived from the operation of all forms of amusement
2 1 devices and games of skill, games of chance, raffles, and
2 2 bingo games as defined in chapter 99B, operated or conducted
2 3 within the state, the tax to be collected from the operator in
2 4 the same manner as for the collection of taxes upon the sales
2 5 price of tickets or admission as provided in this section.
2 6 Nothing in this subsection shall legalize any games of skill
2 7 or chance or slot=operated devices which are now prohibited by
2 8 law.
2 9 The tax imposed under this subsection covers the total
2 10 amount from the operation of games of skill, games of chance,
2 11 raffles, and bingo games as defined in chapter 99B, and
2 12 musical devices, weighing machines, shooting galleries,
2 13 billiard and pool tables, bowling alleys, pinball machines,
2 14 slot=operated devices selling merchandise not subject to the
2 15 general sales taxes and on the total amount from devices or
2 16 systems where prizes are in any manner awarded to patrons and
2 17 upon the receipts from fees charged for participation in any
2 18 game or other form of amusement, and generally upon the sales
2 19 price from any source of amusement operated for profit, not
2 20 specified in this section, and upon the sales price from which
2 21 tax is not collected for tickets or admission, but tax shall
2 22 not be imposed upon any activity exempt from sales tax under
2 23 section 423.3, subsection 78. Every person receiving any
2 24 sales price from the sources described in this section is
2 25 subject to all provisions of this subchapter relating to
2 26 retail sales tax and other provisions of this chapter as
2 27 applicable.
2 28 5. There is imposed a tax of five six percent upon the
2 29 sales price from the furnishing of services as defined in
2 30 section 423.1.
2 31 7. a. A tax of five six percent is imposed upon the sales
2 32 price from the sales, furnishing, or service of solid waste
2 33 collection and disposal service.
2 34 For purposes of this subsection, "solid waste" means
2 35 garbage, refuse, sludge from a water supply treatment plant or
3 1 air contaminant treatment facility, and other discarded waste
3 2 materials and sludges, in solid, semisolid, liquid, or
3 3 contained gaseous form, resulting from nonresidential
3 4 commercial operations, but does not include auto hulks; street
3 5 sweepings; ash; construction debris; mining waste; trees;
3 6 tires; lead acid batteries; used oil; hazardous waste; animal
3 7 waste used as fertilizer; earthen fill, boulders, or rock;
3 8 foundry sand used for daily cover at a sanitary landfill;
3 9 sewage sludge; solid or dissolved material in domestic sewage
3 10 or other common pollutants in water resources, such as silt,
3 11 dissolved or suspended solids in industrial wastewater
3 12 effluents or discharges which are point sources subject to
3 13 permits under section 402 of the federal Water Pollution
3 14 Control Act, or dissolved materials in irrigation return
3 15 flows; or source, special nuclear, or by=product material
3 16 defined by the federal Atomic Energy Act of 1954.
3 17 A recycling facility that separates or processes recyclable
3 18 materials and that reduces the volume of the waste by at least
3 19 eighty=five percent is exempt from the tax imposed by this
3 20 subsection if the waste exempted is collected and disposed of
3 21 separately from other solid waste.
3 22 b. A person who transports solid waste generated by that
3 23 person or another person without compensation shall pay the
3 24 tax imposed by this subsection at the collection or disposal
3 25 facility based on the disposal charge or tipping fee.
3 26 However, the costs of a service or portion of a service to
3 27 collect and manage recyclable materials separated from solid
3 28 waste by the waste generator are exempt from the tax imposed
3 29 by this subsection.
3 30 8. a. A tax of five six percent is imposed upon the sales
3 31 price from sales of bundled services contracts. For purposes
3 32 of this subsection, a "bundled services contract" means an
3 33 agreement providing for a retailer's performance of services,
3 34 one or more of which is a taxable service enumerated in this
3 35 section and one or more of which is not, in return for a
4 1 consumer's or user's single payment for the performance of the
4 2 services, with no separate statement to the consumer or user
4 3 of what portion of that payment is attributable to any one
4 4 service which is a part of the contract.
4 5 b. For purposes of the administration of the tax on
4 6 bundled services contracts, the director may enter into
4 7 agreements of limited duration with individual retailers,
4 8 groups of retailers, or organizations representing retailers
4 9 of bundled services contracts. Such an agreement shall impose
4 10 the tax rate only upon that portion of the sales price from a
4 11 bundled services contract which is attributable to taxable
4 12 services provided under the contract.
4 13 9. A tax of five six percent is imposed upon the sales
4 14 price from any mobile telecommunications service which this
4 15 state is allowed to tax by the provisions of the federal
4 16 Mobile Telecommunications Sourcing Act, Pub. L. No. 106=252, 4
4 17 U.S.C. } 116 et seq. For purposes of this subsection, taxes
4 18 on mobile telecommunications service, as defined under the
4 19 federal Mobile Telecommunications Sourcing Act that are deemed
4 20 to be provided by the customer's home service provider, shall
4 21 be paid to the taxing jurisdiction whose territorial limits
4 22 encompass the customer's place of primary use, regardless of
4 23 where the mobile telecommunications service originates,
4 24 terminates, or passes through and shall in all other respects
4 25 be taxed in conformity with the federal Mobile
4 26 Telecommunications Sourcing Act. All other provisions of the
4 27 federal Mobile Telecommunications Sourcing Act are adopted by
4 28 the state of Iowa and incorporated into this subsection by
4 29 reference. With respect to mobile telecommunications service
4 30 under the federal Mobile Telecommunications Sourcing Act, the
4 31 director shall, if requested, enter into agreements consistent
4 32 with the provisions of the federal Act.
4 33 Sec. 3. Section 423.4, Code 2005, is amended by adding the
4 34 following new subsection:
4 35 NEW SUBSECTION. 4. Construction contractors may make
5 1 application to the department for a refund of the additional
5 2 one percent tax paid under this subchapter by reason of the
5 3 increase in the tax from five to six percent for taxes paid on
5 4 goods, wares, or merchandise under the following conditions:
5 5 a. The goods, wares, or merchandise are incorporated into
5 6 an improvement to real estate in fulfillment of a written
5 7 contract fully executed prior to January 1, 2006. The refund
5 8 shall not apply to equipment transferred in fulfillment of a
5 9 mixed construction contract.
5 10 b. The contractor has paid to the department or to a
5 11 retailer the full six percent tax.
5 12 c. The claim is filed on forms provided by the department
5 13 and is filed within one year of the date the tax is paid.
5 14 A contractor who makes an erroneous application for refund
5 15 shall be liable for payment of the excess refund paid plus
5 16 interest at the rate in effect under section 421.7. In
5 17 addition, a contractor who willfully makes a false application
5 18 for refund is guilty of a simple misdemeanor and is liable for
5 19 a penalty equal to fifty percent of the excess refund claimed.
5 20 Excess refunds, penalties, and interest due under this
5 21 subsection may be enforced and collected in the same manner as
5 22 the tax imposed by this subchapter.
5 23 Sec. 4. Section 423.5, unnumbered paragraph 1, Code 2005,
5 24 is amended to read as follows:
5 25 An excise tax at the rate of five six percent of the
5 26 purchase price or installed purchase price is imposed on the
5 27 following:
5 28 Sec. 5. Section 423C.3, subsection 1, Code 2005, is
5 29 amended to read as follows:
5 30 1. A tax of five six percent is imposed upon the rental
5 31 price of an automobile if the rental transaction is subject to
5 32 the sales and services tax under chapter 423, subchapter II,
5 33 or the use tax under chapter 423, subchapter III. The tax
5 34 shall not be imposed on any rental transaction not taxable
5 35 under the state sales and services tax, as provided in section
6 1 423.3, or the state use tax, as provided in section 423.6, on
6 2 automobile rental receipts.
6 3 Sec. 6. APPLICABILITY. This section of this division of
6 4 this Act applies in regard to the increase in the state sales
6 5 tax from five to six percent. The six percent rate applies to
6 6 all sales of taxable personal property, consisting of goods,
6 7 wares, or merchandise if delivery occurs on or after January
6 8 1, 2006. The six percent rate applies to the sales price of
6 9 the sale, furnishing, or service of gas, electricity, water,
6 10 heat, pay television service, and communication service if the
6 11 date of billing the customer is on or after January 1, 2006.
6 12 In the case of a service contract entered into prior to
6 13 January 1, 2006, which contract calls for periodic payments,
6 14 the six percent rate applies to those payments made or due on
6 15 or after January 1, 2006. This periodic payment applies, but
6 16 is not limited to, tickets or admissions, private club
6 17 membership fees, sources of amusement, equipment rental, dry
6 18 cleaning, reducing salons, dance schools, and all other
6 19 services subject to tax, except the aforementioned utility
6 20 services which are subject to a special transitional rule.
6 21 Unlike periodic payments under service contracts, installment
6 22 sales of goods, wares, and merchandise are subject to the full
6 23 amount of sales or use tax when the sales contract is entered
6 24 into.
6 25 Sec. 7. EFFECTIVE DATE. This division of this Act takes
6 26 effect January 1, 2006.
6 27 DIVISION II
6 28 HOMESTEAD TAX CREDIT
6 29 REPEAL
6 30 Sec. 8. Chapter 425, Code 2005, is repealed.
6 31 COORDINATING AMENDMENTS
6 32 Sec. 9. Section 25B.7, subsection 2, paragraphs a and b,
6 33 Code 2005, are amended by striking the paragraphs.
6 34 Sec. 10. Section 100.18, subsection 2, paragraph b, Code
6 35 2005, is amended to read as follows:
7 1 b. The rules shall require the installation of smoke
7 2 detectors in existing single=family rental units and multiple=
7 3 unit residential buildings. Existing single=family dwelling
7 4 units shall be equipped with approved smoke detectors. A
7 5 person who files for a homestead credit pursuant to chapter
7 6 425 shall certify that the single=family dwelling unit for
7 7 which the credit is filed has a smoke detector installed in
7 8 compliance with this section, or that one will be installed
7 9 within thirty days of the date the filing for the credit is
7 10 made. The state fire marshal shall adopt rules and establish
7 11 appropriate procedures to administer this subsection.
7 12 Sec. 11. Section 216.12, subsection 5, Code 2005, is
7 13 amended to read as follows:
7 14 5. The rental or leasing of a housing accommodation in a
7 15 building which contains housing accommodations for not more
7 16 than four families living independently of each other, if the
7 17 owner resides in one of the housing accommodations for which
7 18 the owner qualifies would have qualified for the homestead tax
7 19 credit under section 425.1, Code 2005.
7 20 Sec. 12. Section 321.1A, subsection 1, Code 2005, is
7 21 amended by striking the subsection.
7 22 Sec. 13. Section 331.401, subsection 1, paragraphs e and
7 23 f, Code 2005, are amended to read as follows:
7 24 e. Adopt resolutions authorizing the county assessor to
7 25 provide forms for homestead exemption claimants as provided in
7 26 section 425.2 and military service tax exemptions as provided
7 27 in section 426A.14.
7 28 f. Examine and allow or disallow claims for homestead
7 29 exemption in accordance with section 425.3 and claims for
7 30 military service tax exemption in accordance with chapter
7 31 426A. The board, by a single resolution, may allow or
7 32 disallow the exemptions recommended by the assessor.
7 33 Sec. 14. Section 331.403, subsection 3, Code 2005, is
7 34 amended to read as follows:
7 35 3. A county that fails to meet the filing deadline imposed
8 1 by this section shall have withheld from any state
8 2 reimbursement payments to be made to the county and allocated
8 3 to the county pursuant to section 425.1 an amount equal to
8 4 five cents per capita until the financial report is filed.
8 5 Sec. 15. Section 331.512, subsection 3, Code 2005, is
8 6 amended to read as follows:
8 7 3. Carry out duties relating to the homestead tax credit
8 8 and agricultural land tax credit as provided in chapters 425
8 9 and chapter 426.
8 10 Sec. 16. Section 331.559, subsection 12, Code 2005, is
8 11 amended by striking the subsection.
8 12 Sec. 17. Section 384.22, unnumbered paragraph 2, Code
8 13 2005, is amended to read as follows:
8 14 A city that fails to meet the filing deadline imposed by
8 15 this section shall have withheld from any state reimbursement
8 16 payments to be made to the county which are allocated to the
8 17 city pursuant to section 425.1 an amount equal to five cents
8 18 per capita until the annual report is filed with the auditor
8 19 of state.
8 20 Sec. 18. Section 404.3, subsection 1, Code 2005, is
8 21 amended to read as follows:
8 22 1. All qualified real estate assessed as residential
8 23 property is eligible to receive an exemption from taxation
8 24 based on the actual value added by the improvements. The
8 25 exemption is for a period of ten years. The amount of the
8 26 exemption is equal to a percent of the actual value added by
8 27 the improvements, determined as follows: One hundred fifteen
8 28 percent of the value added by the improvements. However, the
8 29 amount of the actual value added by the improvements which
8 30 shall be used to compute the exemption shall not exceed twenty
8 31 thousand dollars and the granting of the exemption shall not
8 32 result in the actual value of the qualified real estate being
8 33 reduced below the actual value on which the homestead credit
8 34 is computed under section 425.1.
8 35 Sec. 19. Section 427.9, Code 2005, is amended to read as
9 1 follows:
9 2 427.9 SUSPENSION OF TAXES, ASSESSMENTS, AND RATES OR
9 3 CHARGES, INCLUDING INTEREST, FEES, AND COSTS.
9 4 If a person is a recipient of federal supplementary
9 5 security income or state supplementary assistance, as defined
9 6 in section 249.1, or is a resident of a health care facility,
9 7 as defined by section 135C.1, which is receiving payment from
9 8 the department of human services for the person's care, the
9 9 person shall be deemed to be unable to contribute to the
9 10 public revenue. The director of human services shall notify a
9 11 person receiving such assistance of the tax suspension
9 12 provision and shall provide the person with evidence to
9 13 present to the appropriate county board of supervisors which
9 14 shows the person's eligibility for tax suspension on parcels
9 15 owned, possessed, or upon which the person is paying taxes as
9 16 a purchaser under contract. The board of supervisors so
9 17 notified, without the filing of a petition and statement as
9 18 specified in section 427.8, shall order the county treasurer
9 19 to suspend the collection of all the taxes, special
9 20 assessments, and rates or charges, including interest, fees,
9 21 and costs, assessed against the parcels and remaining unpaid
9 22 by the person or contractually payable by the person, for such
9 23 time as the person remains the owner or contractually
9 24 prospective owner of the parcels, and during the period the
9 25 person receives assistance as described in this section. The
9 26 county board of supervisors shall annually send to the
9 27 department of human services the names and social security
9 28 numbers of persons receiving a tax suspension pursuant to this
9 29 section. The department shall verify the continued
9 30 eligibility for tax suspension of each name on the list and
9 31 shall return the list to the board of supervisors. The
9 32 director of human services shall advise the person that the
9 33 person may apply for an additional property tax credit
9 34 pursuant to sections 425.16 to 425.39 which shall be credited
9 35 against the amount of the taxes suspended.
10 1 Sec. 20. Section 435.22, subsection 2, Code 2005, is
10 2 amended by striking the subsection.
10 3 Sec. 21. Section 435.22, subsection 3, Code 2005, is
10 4 amended to read as follows:
10 5 3. The amount thus computed shall be the annual tax for
10 6 all homes, except as follows:
10 7 a. For the sixth through ninth years after the year of
10 8 manufacture the annual tax is ninety percent of the tax
10 9 computed according to subsection 1 or 2 of this section,
10 10 whichever is applicable.
10 11 b. For all homes ten or more years after the year of
10 12 manufacture the annual tax is eighty percent of the tax
10 13 computed according to subsection 1 or 2 of this section,
10 14 whichever is applicable.
10 15 Sec. 22. Section 435.22, subsection 5, Code 2005, is
10 16 amended by striking the subsection.
10 17 Sec. 23. Section 435.26, subsection 1, paragraph a, Code
10 18 2005, is amended to read as follows:
10 19 a. A mobile home or manufactured home which is located
10 20 outside a manufactured home community or mobile home park
10 21 shall be converted to real estate by being placed on a
10 22 permanent foundation and shall be assessed for real estate
10 23 taxes. A home, after conversion to real estate, is eligible
10 24 for the homestead tax credit and the military service tax
10 25 exemption as provided in sections 425.2 and section 426A.11.
10 26 Sec. 24. Section 435.26A, subsection 3, Code 2005, is
10 27 amended to read as follows:
10 28 3. After the surrender of a manufactured home's
10 29 certificate of title under this section, the manufactured home
10 30 shall continue to be taxed under section 435.22 and is not
10 31 eligible for the homestead tax credit or the military service
10 32 tax exemption. A foreclosure action on a manufactured home
10 33 whose title has been surrendered under this section shall be
10 34 conducted as a real estate foreclosure. A tax lien and its
10 35 priority shall remain the same on a manufactured home after
11 1 its certificate of title has been surrendered.
11 2 Sec. 25. Section 441.73, subsection 4, Code 2005, is
11 3 amended to read as follows:
11 4 4. The executive council shall transfer for the fiscal
11 5 year beginning July 1, 1992 2006, and each fiscal year
11 6 thereafter, from funds the fund established in sections 425.1
11 7 and section 426.1, an amount necessary to pay litigation
11 8 expenses. The amount of the fund for each fiscal year shall
11 9 not exceed seven hundred thousand dollars. The executive
11 10 council shall determine annually the proportionate amounts to
11 11 be transferred from the two separate funds. At any time when
11 12 no litigation is pending or in progress the balance in the
11 13 litigation expense fund shall not exceed one hundred thousand
11 14 dollars. Any excess moneys shall be transferred in a
11 15 proportionate amount back to the funds fund from which they
11 16 were originally transferred.
11 17 Sec. 26. Section 499A.14, Code 2005, is amended to read as
11 18 follows:
11 19 499A.14 TAXATION.
11 20 The real estate shall be taxed in the name of the
11 21 cooperative, and each member of the cooperative shall pay that
11 22 member's proportionate share of the tax in accordance with the
11 23 proration formula set forth in the bylaws, and each member
11 24 occupying an apartment as a residence shall receive that
11 25 member's proportionate homestead tax credit and each veteran
11 26 of the military services of the United States identified as
11 27 such under the laws of the state of Iowa or the United States
11 28 shall receive as a credit that member's veterans tax benefit
11 29 as prescribed by the laws of the state of Iowa.
11 30 Sec. 27. Section 541A.1, Code 2005, is amended by adding
11 31 the following new subsections:
11 32 NEW SUBSECTION. 5A. "Household income" means all income
11 33 of an individual and the individual's spouse in a household
11 34 and actual monetary contributions received from any other
11 35 person living with the individual during their respective
12 1 twelve=month income tax accounting periods ending with or
12 2 during the previous calendar year.
12 3 NEW SUBSECTION. 5B. "Income" means the sum of Iowa net
12 4 income as defined in section 422.7, plus all of the following
12 5 to the extent not already included in Iowa net income: capital
12 6 gains, alimony, child support money, cash public assistance
12 7 and relief, amount of in=kind assistance for housing expenses,
12 8 the gross amount of any pension or annuity, including but not
12 9 limited to railroad retirement benefits, payments received
12 10 under the federal Social Security Act, except child insurance
12 11 benefits received by a member of the individual's household,
12 12 and all military retirement and veterans' disability pensions,
12 13 interest received from the state or federal government or any
12 14 of its instrumentalities, workers' compensation, and the gross
12 15 amount of disability income or "loss of time" insurance.
12 16 "Income" does not include gifts from nongovernmental sources,
12 17 or surplus foods or other relief in kind supplied by a
12 18 governmental agency. In determining income, net operating
12 19 losses and net capital losses shall not be considered.
12 20 Sec. 28. Section 541A.3, subsection 1, paragraph a, Code
12 21 2005, is amended to read as follows:
12 22 a. For an account holder with a household income, as
12 23 defined in section 425.17, subsection 6, which is one hundred
12 24 fifty percent or less of the federal poverty level, twenty=
12 25 five percent.
12 26 Sec. 29. Section 435.33, Code 2005, is repealed.
12 27 Sec. 30. EFFECTIVE AND APPLICABILITY DATE. This division
12 28 of this Act takes effect January 1, 2006, for property taxes
12 29 payable in fiscal years beginning on or after July 1, 2006.
12 30 DIVISION III
12 31 AGRICULTURAL LAND TAX CREDIT
12 32 REPEAL
12 33 Sec. 31. Chapter 426, Code 2005, is repealed.
12 34 COORDINATING AMENDMENTS
12 35 Sec. 32. Section 331.401, subsection 1, paragraph g, Code
13 1 2005, is amended by striking the paragraph.
13 2 Sec. 33. Section 331.512, subsection 3, Code 2005, is
13 3 amended to read as follows:
13 4 3. Carry out duties relating to the homestead tax credit
13 5 and agricultural land family farm tax credit as provided in
13 6 chapters 425 and 426 425A.
13 7 Sec. 34. Section 331.559, subsection 13, Code 2005, is
13 8 amended to read as follows:
13 9 13. Carry out duties relating to the administration of the
13 10 agricultural land family farm tax credit as provided in
13 11 section 426.8 chapter 425A.
13 12 Sec. 35. Section 425A.1, Code 2005, is amended to read as
13 13 follows:
13 14 425A.1 FAMILY FARM TAX CREDIT FUND.
13 15 The family farm tax credit fund is created in the office of
13 16 the treasurer of state. There shall be transferred annually
13 17 to the fund the first ten million dollars of the amount
13 18 annually appropriated to the agricultural land credit fund,
13 19 provided in section 426.1 is annually appropriated to the fund
13 20 from moneys in the general fund of the state not otherwise
13 21 appropriated the sum of ten million dollars. Any balance in
13 22 the fund on June 30 shall revert to the general fund.
13 23 Sec. 36. Section 441.73, subsection 4, Code 2005, is
13 24 amended to read as follows:
13 25 4. The executive council shall transfer for the fiscal
13 26 year beginning July 1, 1992 2006, and each fiscal year
13 27 thereafter, from funds the fund established in sections
13 28 section 425.1 and 426.1, an amount necessary to pay litigation
13 29 expenses. The amount of the fund for each fiscal year shall
13 30 not exceed seven hundred thousand dollars. The executive
13 31 council shall determine annually the proportionate amounts to
13 32 be transferred from the two separate funds. At any time when
13 33 no litigation is pending or in progress the balance in the
13 34 litigation expense fund shall not exceed one hundred thousand
13 35 dollars. Any excess moneys shall be transferred in a
14 1 proportionate amount back to the funds fund from which they
14 2 were originally transferred.
14 3 Sec. 37. EFFECTIVE AND APPLICABILITY DATE. This division
14 4 of this Act takes effect January 1, 2006, for property taxes
14 5 payable in fiscal years beginning on or after July 1, 2006.
14 6 DIVISION IV
14 7 SCHOOL DISTRICT LEVIES
14 8 Sec. 38. Section 257.19, unnumbered paragraph 2, Code
14 9 2005, is amended to read as follows:
14 10 Certification of a board's intent to participate for a
14 11 budget year, the method of funding, and the amount to be
14 12 raised shall be made to the department of management not later
14 13 than April 15 of the base year. Funding for the instructional
14 14 support program shall be obtained from instructional support
14 15 state aid and from local funding using either an instructional
14 16 support property tax or a combination of an instructional
14 17 support property tax and an instructional support income
14 18 surtax. However, a board of directors shall not fund the
14 19 instructional support program with an income surtax for a
14 20 budget year beginning on or after July 1, 2006, unless the
14 21 board funded the program with an income surtax for the budget
14 22 year beginning July 1, 2005, in which case the income surtax
14 23 may continue to be used until the expiration of the
14 24 participation period.
14 25 Sec. 39. Section 257.29, Code 2005, is amended by adding
14 26 the following new unnumbered paragraph:
14 27 NEW UNNUMBERED PARAGRAPH. This section is repealed July 1,
14 28 2006, and the additional funding provided by an educational
14 29 improvement program shall not be available for school
14 30 districts for budget years beginning on or after July 1, 2006.
14 31 Sec. 40. Section 298.2, subsection 4, unnumbered paragraph
14 32 1, Code 2005, is amended to read as follows:
14 33 The board may, and upon the written request of not less
14 34 than one hundred eligible electors or thirty percent of the
14 35 number of eligible electors voting at the last regular school
15 1 election, whichever is greater, shall, direct the county
15 2 commissioner of elections to provide for submitting the
15 3 proposition of levying the voter=approved physical plant and
15 4 equipment levy for a period of time authorized by the voters
15 5 in the notice of election, not to exceed ten years, in the
15 6 notice of the regular school election. The proposition is
15 7 adopted if a majority of those voting on the proposition at
15 8 the election approves it. The voter=approved physical plant
15 9 and equipment levy shall be funded either by a physical plant
15 10 and equipment property tax or by a combination of a physical
15 11 plant and equipment property tax and a physical plant and
15 12 equipment income surtax, as determined by the board. However,
15 13 if the board intends to enter into a rental or lease
15 14 arrangement under section 279.26, or intends to enter into a
15 15 loan agreement under section 297.36, only a property tax shall
15 16 be levied for those purposes. However, a board of directors
15 17 shall not fund the physical plant and equipment levy with an
15 18 income surtax for a budget year beginning on or after July 1,
15 19 2006, unless the board funded the levy with an income surtax
15 20 for the budget year beginning July 1, 2005, in which case the
15 21 income surtax may continue to be used until the expiration of
15 22 the participation period. Subject to the limitations of
15 23 section 298.14, if the board uses a combination of a physical
15 24 plant and equipment property tax and a physical plant and
15 25 equipment surtax, for each fiscal year the board shall
15 26 determine the percent of income surtax to be imposed expressed
15 27 as full percentage points, not to exceed twenty percent.
15 28 Sec. 41. Section 298A.5, Code 2005, is amended by adding
15 29 the following new unnumbered paragraph:
15 30 NEW UNNUMBERED PARAGRAPH. This section is repealed July 1,
15 31 2006, and the additional funding provided by a schoolhouse tax
15 32 levy shall not be available for school districts for budget
15 33 years beginning on or after July 1, 2006.
15 34 Sec. 42. Section 300.3, Code 2005, is amended to read as
15 35 follows:
16 1 300.3 DISCONTINUANCE OF LEVY.
16 2 Once approved at an election, the authority of the board to
16 3 levy and collect the tax under section 300.2 shall continue
16 4 until the board votes to rescind the levy and collection of
16 5 the tax or the voters of the school district by majority vote
16 6 order the discontinuance of the levy and collection of the
16 7 tax. The tax shall be discontinued in the manner provided in
16 8 this section or in the manner provided for imposition of the
16 9 tax in section 300.2 or for budget years beginning on or after
16 10 July 1, 2014, whichever is the earliest. However, if the
16 11 board of directors did not levy and collect the tax under
16 12 section 300.2 during the budget year beginning July 1, 2005,
16 13 the authority to levy and collect the tax is repealed for
16 14 budget years beginning on or after July 1, 2006.
16 15 DIVISION V
16 16 FOUNDATION PROPERTY TAX == URBAN RENEWAL
16 17 Sec. 43. Section 403.19, subsection 2, Code 2005, is
16 18 amended to read as follows:
16 19 2. That portion of the taxes each year in excess of such
16 20 amount shall be allocated to and when collected be paid into a
16 21 special fund of the municipality to pay the principal of and
16 22 interest on loans, moneys advanced to, or indebtedness,
16 23 whether funded, refunded, assumed, or otherwise, including
16 24 bonds issued under the authority of section 403.9, subsection
16 25 1, incurred by the municipality to finance or refinance, in
16 26 whole or in part, an urban renewal project within the area,
16 27 and to provide assistance for low and moderate income family
16 28 housing as provided in section 403.22, except that. However,
16 29 taxes for the regular and voter=approved physical plant and
16 30 equipment levy of a school district imposed pursuant to
16 31 section 298.2, and taxes for the payment of bonds and interest
16 32 of each taxing district must, and the foundation property tax
16 33 imposed pursuant to section 257.3, subsection 1, but only as
16 34 provided in subsection 8, shall be collected against all
16 35 taxable property within the taxing district without limitation
17 1 by the provisions of this subsection. However In addition,
17 2 all or a portion of the taxes for the physical plant and
17 3 equipment levy shall be paid by the school district to the
17 4 municipality if the auditor certifies to the school district
17 5 by July 1 the amount of such levy that is necessary to pay the
17 6 principal and interest on bonds issued by the municipality to
17 7 finance an urban renewal project, which bonds were issued
17 8 before July 1, 2001. Indebtedness incurred to refund bonds
17 9 issued prior to July 1, 2001, shall not be included in the
17 10 certification. Such school district shall pay over the amount
17 11 certified by November 1 and May 1 of the fiscal year following
17 12 certification to the school district. Unless and until the
17 13 total assessed valuation of the taxable property in an urban
17 14 renewal area exceeds the total assessed value of the taxable
17 15 property in such area as shown by the last equalized
17 16 assessment roll referred to in subsection 1, all of the taxes
17 17 levied and collected upon the taxable property in the urban
17 18 renewal area shall be paid into the funds for the respective
17 19 taxing districts as taxes by or for the taxing districts in
17 20 the same manner as all other property taxes. When such loans,
17 21 advances, indebtedness, and bonds, if any, and interest
17 22 thereon, have been paid, all moneys thereafter received from
17 23 taxes upon the taxable property in such urban renewal area
17 24 shall be paid into the funds for the respective taxing
17 25 districts in the same manner as taxes on all other property.
17 26 Sec. 44. Section 403.19, Code 2005, is amended by adding
17 27 the following new subsection:
17 28 NEW SUBSECTION. 8. a. For urban renewal plans adopted on
17 29 or after the effective date of this Act, taxes collected under
17 30 subsection 2 shall not include the foundation property tax
17 31 imposed pursuant to section 257.3, subsection 1.
17 32 b. For urban renewal plans adopted before the effective
17 33 date of this Act, taxes collected under subsection 2 shall not
17 34 include the foundation property tax imposed pursuant to
17 35 section 257.3, subsection 1, for fiscal years beginning on or
18 1 after July 1, 2015. On or before October 31, 2005, a
18 2 municipality shall report to the department of management the
18 3 status of any loans, advances, indebtedness, or bonds issued
18 4 or incurred before the effective date of this Act for urban
18 5 renewal purposes and payable from the special fund in section
18 6 403.19, subsection 2. The report shall include a schedule of
18 7 payments for such loans, advances, indebtedness, or bonds.
18 8 Sec. 45. EFFECTIVE DATE. This division of this Act, being
18 9 deemed of immediate importance, takes effect upon enactment.
18 10 DIVISION VI
18 11 SCHOOL FINANCE FORMULA
18 12 Sec. 46. Section 256D.4, Code 2005, is amended by striking
18 13 the section and inserting in lieu thereof the following:
18 14 256D.4 PROGRAM FUNDING == ALLOCATION.
18 15 The Iowa early intervention block grant program shall be
18 16 funded through a combination of the following:
18 17 1. Thirty=five dollars of the increase in allowable growth
18 18 for the school budget year beginning July 1, 2006, pursuant to
18 19 section 257.8, subsection 4A, multiplied by a district's
18 20 budget enrollment, which dollar amount shall increase in
18 21 subsequent years by each year's state percent of growth. The
18 22 proportion of a school district's budget which corresponds to
18 23 the amount of funding received for the program based on the
18 24 increase in allowable growth for the school budget year
18 25 beginning July 1, 2006, shall be utilized exclusively for a
18 26 school district's Iowa early intervention block grant program.
18 27 2. The early childhood at=risk district cost per pupil
18 28 calculated in section 257.10, subsections 4A and 4B,
18 29 multiplied by the early childhood at=risk weighted enrollment.
18 30 For purposes of this section, the early childhood at=risk
18 31 weighted enrollment for a district is the percentage of
18 32 children who are eligible for free or reduced price meals
18 33 under the federal National School Lunch Act and the federal
18 34 Child Nutrition Act of 1966, 42 U.S.C. } 1751=1785, in grades
18 35 one through three of the school district multiplied by the
19 1 budget enrollment in the school district.
19 2 Sec. 47. Section 257.1, subsection 2, unnumbered paragraph
19 3 2, Code 2005, is amended to read as follow:
19 4 For the budget year commencing July 1, 1999 2006, and for
19 5 each succeeding budget year the regular program foundation
19 6 base per pupil is eighty=seven and five=tenths one hundred
19 7 percent of the regular program state cost per pupil. For the
19 8 budget year commencing July 1, 1991 2006, and for each
19 9 succeeding budget year the special education support services
19 10 foundation base is seventy=nine one hundred percent of the
19 11 special education support services state cost per pupil, the
19 12 media services foundation base is one hundred percent of the
19 13 media services state cost per pupil, the educational services
19 14 foundation base is one hundred percent of the educational
19 15 services state cost per pupil, and the early childhood at=risk
19 16 foundation base is one hundred percent of the early childhood
19 17 at=risk state cost per pupil. The combined foundation base is
19 18 the sum of the regular program foundation base, and the
19 19 special education support services foundation base, the media
19 20 services foundation base, the educational services foundation
19 21 base, and the early childhood at=risk foundation base.
19 22 Sec. 48. Section 257.2, subsections 5 and 6, Code 2005,
19 23 are amended to read as follows:
19 24 5. "Combined district cost per pupil" is an amount
19 25 determined by adding together the regular program district
19 26 cost per pupil for a year, and the special education support
19 27 services district cost per pupil for that year, the media
19 28 services district cost per pupil for that year, the
19 29 educational services district cost per pupil for that year,
19 30 and the early childhood at=risk district cost per pupil as
19 31 calculated under section 257.10.
19 32 6. "Combined state cost per pupil" is a per pupil amount
19 33 determined by adding together the regular program state cost
19 34 per pupil for a year, and the special education support
19 35 services state cost per pupil for that year, the media
20 1 services state cost per pupil for that year, the educational
20 2 services state cost per pupil for that year, and the early
20 3 childhood at=risk state cost per pupil as calculated under
20 4 section 257.9.
20 5 Sec. 49. Section 257.3, subsection 1, unnumbered paragraph
20 6 1, Code 2005, is amended to read as follows:
20 7 Except as provided in subsections 2 and 3, a school
20 8 district shall cause to be levied each year, for the school
20 9 general fund, a foundation property tax equal to five dollars
20 10 and forty seventy cents per thousand dollars of assessed
20 11 valuation on all taxable property in the district. The county
20 12 auditor shall spread the foundation levy over all taxable
20 13 property in the district.
20 14 Sec. 50. Section 257.3, subsection 2, paragraphs a and b,
20 15 Code 2005, are amended to read as follows:
20 16 a. Notwithstanding subsection 1, a reorganized school
20 17 district shall cause a foundation property tax of four dollars
20 18 and forty seventy cents per thousand dollars of assessed
20 19 valuation to be levied on all taxable property which, in the
20 20 year preceding a reorganization, was within a school district
20 21 affected by the reorganization as defined in section 275.1, or
20 22 in the year preceding a dissolution was a part of a school
20 23 district that dissolved if the dissolution proposal has been
20 24 approved by the director of the department of education
20 25 pursuant to section 275.55.
20 26 b. In succeeding school years, the foundation property tax
20 27 levy on that portion shall be increased to the rate of four
20 28 five dollars and ninety twenty cents per thousand dollars of
20 29 assessed valuation the first succeeding year, five dollars and
20 30 fifteen forty=five cents per thousand dollars of assessed
20 31 valuation the second succeeding year, and five dollars and
20 32 forty seventy cents per thousand dollars of assessed valuation
20 33 the third succeeding year and each year thereafter.
20 34 Sec. 51. Section 257.8, subsection 2, Code 2005, is
20 35 amended to read as follows:
21 1 2. ALLOWABLE GROWTH CALCULATION. The department of
21 2 management shall calculate the regular program allowable
21 3 growth for a budget year by multiplying the state percent of
21 4 growth for the budget year by the regular program state cost
21 5 per pupil for the base year, and shall calculate the special
21 6 education support services allowable growth for the budget
21 7 year by multiplying the state percent of growth for the budget
21 8 year by the special education support services state cost per
21 9 pupil for the base year, and the early childhood at=risk
21 10 allowable growth for a budget year by multiplying the state
21 11 percent of growth for the budget year by the early childhood
21 12 at=risk state cost per pupil for the base year.
21 13 Sec. 52. Section 257.8, Code 2005, is amended by adding
21 14 the following new subsection:
21 15 NEW SUBSECTION. 4A. ALTERNATIVE ALLOWABLE GROWTH == 2006
21 16 FORMULA ADJUSTMENTS.
21 17 a. Notwithstanding the calculation in subsection 2, for
21 18 purposes of funding the Iowa early intervention block grant
21 19 program and phase II of the educational excellence program,
21 20 the department of management shall calculate the regular
21 21 program allowable growth for the budget year beginning July 1,
21 22 2006, by increasing the allowable growth for the budget year
21 23 for the regular program state cost per pupil, as computed in
21 24 subsection 2, by one hundred seven dollars. For purposes of
21 25 determining the amount of a budget adjustment as defined in
21 26 section 257.14, amounts added to allowable growth pursuant to
21 27 this paragraph shall be subtracted from the school district's
21 28 regular program cost per pupil for the budget year beginning
21 29 July 1, 2006, prior to determining the amount of the
21 30 adjustment.
21 31 b. Notwithstanding the calculation in subsection 2, for
21 32 purposes of providing additional funding for the instructional
21 33 support program, the department of management shall add to the
21 34 calculation in paragraph "a" for the budget years beginning
21 35 July 1, 2006, through July 1, 2010, the following:
22 1 (1) For the budget year beginning July 1, 2006, ninety=two
22 2 dollars. Amounts received pursuant to this subparagraph for
22 3 the budget year beginning July 1, 2006, shall be restricted to
22 4 those school districts that were participating in the
22 5 instructional support program on July 1, 2005.
22 6 (2) For the budget year beginning July 1, 2007, for school
22 7 districts that received alternate allowable growth pursuant to
22 8 subparagraph (1) for the budget year beginning July 1, 2006,
22 9 ninety=two dollars. For the budget year beginning July 1,
22 10 2007, for a school district that did not receive alternative
22 11 allowable growth pursuant to subparagraph (1) for the budget
22 12 year beginning July 1, 2006, one hundred eighty=four dollars.
22 13 (3) For the budget year beginning July 1, 2008, ninety=two
22 14 dollars.
22 15 (4) For the budget year beginning July 1, 2009, ninety=two
22 16 dollars.
22 17 (5) For the budget year beginning July 1, 2010, ninety=two
22 18 dollars.
22 19 Amounts provided pursuant to subparagraphs (3) through (5)
22 20 of this subsection shall be received by every school district
22 21 in the state.
22 22 For purposes of determining the amount of a budget
22 23 adjustment as defined in section 257.14, amounts added to
22 24 allowable growth pursuant to this paragraph "b" shall be
22 25 subtracted from the school district's regular program cost per
22 26 pupil for the budget years beginning July 1, 2006, through
22 27 July 1, 2010, prior to determining the amount of the
22 28 adjustment.
22 29 c. A school district shall calculate allowable growth
22 30 pursuant to the provisions of subsection 2 for the budget year
22 31 beginning July 1, 2007, and succeeding budget years, utilizing
22 32 a regular program state cost per pupil figure which
22 33 incorporates the increases in regular program allowable growth
22 34 calculated for each budget year pursuant to paragraphs "a" and
22 35 "b".
23 1 Sec. 53. Section 257.9, Code 2005, is amended by adding
23 2 the following new subsections:
23 3 NEW SUBSECTION. 4A. EARLY CHILDHOOD AT=RISK STATE COST
23 4 PER PUPIL FOR 2006=2007. For the budget year beginning July
23 5 1, 2006, the early childhood at=risk state cost per pupil is
23 6 four thousand seven hundred twenty=four dollars.
23 7 NEW SUBSECTION. 4B. EARLY CHILDHOOD AT=RISK STATE COST
23 8 PER PUPIL FOR 2007 AND SUCCEEDING YEARS. For the budget year
23 9 beginning July 1, 2007, and succeeding budget years, the early
23 10 childhood at=risk state cost per pupil for the budget year is
23 11 the early childhood at=risk state cost per pupil for the base
23 12 year plus the early childhood at=risk allowable growth for the
23 13 budget year.
23 14 Sec. 54. Section 257.9, subsection 5, Code 2005, is
23 15 amended to read as follows:
23 16 5. COMBINED STATE COST PER PUPIL. The combined state cost
23 17 per pupil is the sum of the regular program state cost per
23 18 pupil, and the special education support services state cost
23 19 per pupil, the media services state cost per pupil, the
23 20 educational services state cost per pupil, and the early
23 21 childhood at=risk state cost per pupil.
23 22 Sec. 55. Section 257.10, subsection 4, Code 2005, is
23 23 amended by adding the following new unnumbered paragraph:
23 24 NEW UNNUMBERED PARAGRAPH. For the budget year beginning
23 25 July 1, 2006, and succeeding budget years, the department of
23 26 management shall increase the special education support
23 27 services district cost per pupil, the media services district
23 28 cost per pupil, or the educational services district cost per
23 29 pupil, for a school district that has a special education
23 30 support services district cost per pupil, media services
23 31 district cost per pupil, or educational services district cost
23 32 per pupil, which falls below the respective state cost per
23 33 pupil, to equal the state cost per pupil for special education
23 34 support services, media services, or educational services.
23 35 Sec. 56. Section 257.10, Code 2005, is amended by adding
24 1 the following new subsections:
24 2 NEW SUBSECTION. 4A. EARLY CHILDHOOD AT=RISK DISTRICT COST
24 3 PER PUPIL FOR 2006. For the budget year beginning July 1,
24 4 2006, the early childhood at=risk district cost per pupil
24 5 shall be equal to the early childhood at=risk state cost per
24 6 pupil for the budget year beginning July 1, 2006.
24 7 NEW SUBSECTION. 4B. EARLY CHILDHOOD AT=RISK DISTRICT COST
24 8 PER PUPIL FOR 2007 AND SUCCEEDING BUDGET YEARS. For the
24 9 budget year beginning July 1, 2007, and succeeding budget
24 10 years, the early childhood at=risk district cost per pupil for
24 11 the budget year is the early childhood at=risk district cost
24 12 per pupil for the base year plus the early childhood at=risk
24 13 allowable growth for the budget year.
24 14 Sec. 57. Section 257.10, subsection 5, Code 2005, is
24 15 amended to read as follows:
24 16 5. COMBINED DISTRICT COST PER PUPIL. The combined
24 17 district cost per pupil for a school district is the sum of
24 18 the regular program district cost per pupil, and the special
24 19 education support services district cost per pupil, the media
24 20 services district cost per pupil, the educational services
24 21 district cost per pupil, and the early childhood at=risk
24 22 district cost per pupil. Combined district cost per pupil
24 23 does not include additional allowable growth added for school
24 24 districts that have a negative balance of funds raised for
24 25 special education instruction programs, additional allowable
24 26 growth granted by the school budget review committee for a
24 27 single school year, or additional allowable growth added for
24 28 programs for dropout prevention.
24 29 Sec. 58. Section 257.14, Code 2005, is amended by adding
24 30 the following new subsection:
24 31 NEW SUBSECTION. 4. For the budget years beginning July 1,
24 32 2006, through July 1, 2013, if the department of management
24 33 determines that the amount received pursuant to this section
24 34 by a school district is less than the amount the school
24 35 district would otherwise have received if the increase in
25 1 allowable growth received by the district pursuant to section
25 2 257.8, subsection 4A, had not been made, the district may
25 3 apply to the school budget review committee for additional
25 4 allowable growth in an amount equal to the difference.
25 5 Sec. 59. Section 257.20, Code 2005, is amended by striking
25 6 the section and inserting in lieu thereof the following:
25 7 257.20 INSTRUCTIONAL SUPPORT == STATE FUNDING.
25 8 1. For the budget year beginning July 1, 2006, and
25 9 succeeding budget years, instructional support state aid shall
25 10 be provided through the annual increases in allowable growth
25 11 pursuant to the schedule contained in section 257.8,
25 12 subsection 4A, paragraph "b". The remaining portion of
25 13 instructional support program funding for the budget years
25 14 beginning July 1, 2006, through July 1, 2009, shall be derived
25 15 from local funding using either the instructional support
25 16 property tax or a combination of the instructional support
25 17 property tax and an instructional support income surtax. For
25 18 the budget year commencing July 1, 2010, and succeeding budget
25 19 years, the increase in allowable growth pursuant to section
25 20 257.8, subsection 4A, paragraph "b", shall provide one hundred
25 21 percent of the funding for instructional support.
25 22 2. For the budget years beginning July 1, 2006, through
25 23 July 1, 2009, the board of directors of a school district
25 24 adopting a resolution to participate in the instructional
25 25 support program, or of a district reaching the expiration of
25 26 the period for which the instructional support program was
25 27 adopted, may impose or renew local funding only through the
25 28 budget year beginning July 1, 2009.
25 29 Sec. 60. Section 257.27, Code 2005, is amended to read as
25 30 follows:
25 31 257.27 CONTINUATION OF INSTRUCTIONAL SUPPORT PROGRAM.
25 32 At the expiration of the period for which the instructional
25 33 support program was adopted, the program may be extended for a
25 34 period of not exceeding five or ten years in the manner
25 35 provided in section 257.18.
26 1 If the voters do not approve adoption of the instructional
26 2 support program, the board shall wait at least one hundred
26 3 twenty days following the election before taking action to
26 4 adopt the program or resubmit the proposition.
26 5 Sec. 61. NEW SECTION. 257.27A FUTURE REPEAL.
26 6 Sections 257.18 through 257.27 are repealed July 1, 2010.
26 7 Sec. 62. Section 273.9, subsection 4, Code 2005, is
26 8 amended to read as follows:
26 9 4. The costs of media services and education support
26 10 services provided through the area education agency shall be
26 11 funded as provided in chapter 257. Media services provided
26 12 through the area education agency shall not be funded until
26 13 the program plans submitted by the administrators of each area
26 14 education agency as required by section 273.4 are modified as
26 15 necessary and approved by the director of the department of
26 16 education according to the criteria of section 273.6.
26 17 Sec. 63. Section 294A.9, unnumbered paragraphs 1 and 2,
26 18 Code 2005, are amended by striking the unnumbered paragraphs
26 19 and inserting in lieu thereof the following:
26 20 Phase II is established to improve the salaries of
26 21 teachers. For each fiscal year beginning on or after July 1,
26 22 2006, phase II shall be funded by a proportionate percentage
26 23 of the dollar increase in allowable growth for the school
26 24 budget year beginning July 1, 2006, pursuant to section 257.8,
26 25 subsection 4A, multiplied by a district's budget enrollment,
26 26 which dollar increase shall increase in subsequent years by
26 27 each year's state percent of growth. The proportion of a
26 28 school district's budget which corresponds to the amount of
26 29 funding received for the program based on the increase in
26 30 allowable growth for the school budget year beginning July 1,
26 31 2006, shall be utilized exclusively for phase II.
26 32 Sec. 64. Section 294A.22, Code 2005, is amended to read as
26 33 follows:
26 34 294A.22 PAYMENTS.
26 35 Payments for each phase I of the educational excellence
27 1 program shall be made by the department of administrative
27 2 services on a monthly basis commencing on October 15 and
27 3 ending on June 15 of each fiscal year, taking into
27 4 consideration the relative budget and cash position of the
27 5 state resources. The payments shall be separate from state
27 6 aid payments made pursuant to sections 257.16 and 257.35. The
27 7 payments made under this section to a school district or area
27 8 education agency may be combined and a separate accounting of
27 9 the amount paid for each program shall be included.
27 10 Any payments made to school districts or area education
27 11 agencies for phase I under this chapter are miscellaneous
27 12 income for purposes of chapter 257.
27 13 Payments made to a teacher by a school district or area
27 14 education agency under this chapter are wages for the purposes
27 15 of chapter 91A.
27 16 If funds appropriated are insufficient to pay phase II
27 17 allocations in full, the department of administrative services
27 18 shall prorate payments to school districts and area education
27 19 agencies.
27 20 Sec. 65. Section 425A.3, subsection 1, Code 2005, is
27 21 amended to read as follows:
27 22 1. The family farm tax credit fund shall be apportioned
27 23 each year in the manner provided in this chapter so as to give
27 24 a credit against the tax on each eligible tract of
27 25 agricultural land within the several school districts of the
27 26 state in which the levy for the general school fund exceeds
27 27 five dollars and forty seventy cents per thousand dollars of
27 28 assessed value. The amount of the credit on each eligible
27 29 tract of agricultural land shall be the amount the tax levied
27 30 for the general school fund exceeds the amount of tax which
27 31 would be levied on each eligible tract of agricultural land
27 32 were the levy for the general school fund five dollars and
27 33 forty seventy cents per thousand dollars of assessed value for
27 34 the previous year. However, in the case of a deficiency in
27 35 the family farm tax credit fund to pay the credits in full,
28 1 the credit on each eligible tract of agricultural land in the
28 2 state shall be proportionate and applied as provided in this
28 3 chapter.
28 4 Sec. 66. Section 425A.5, Code 2005, is amended to read as
28 5 follows:
28 6 425A.5 COMPUTATION BY COUNTY AUDITOR.
28 7 The family farm tax credit allowed each year shall be
28 8 computed as follows: On or before April 1, the county auditor
28 9 shall list by school districts all tracts of agricultural land
28 10 which are entitled to credit, the taxable value for the
28 11 previous year, the budget from each school district for the
28 12 previous year, and the tax rate determined for the general
28 13 fund of the school district in the manner prescribed in
28 14 section 444.3 for the previous year, and if the tax rate is in
28 15 excess of five dollars and forty seventy cents per thousand
28 16 dollars of assessed value, the auditor shall multiply the tax
28 17 levy which is in excess of five dollars and forty seventy
28 18 cents per thousand dollars of assessed value by the total
28 19 taxable value of the agricultural land entitled to credit in
28 20 the school district, and on or before April 1, certify the
28 21 total amount of credit and the total number of acres entitled
28 22 to the credit to the department of revenue.
28 23 Sec. 67. Section 426.3, Code 2005, is amended to read as
28 24 follows:
28 25 426.3 WHERE CREDIT GIVEN.
28 26 The agricultural land credit fund shall be apportioned each
28 27 year in the manner hereinafter provided so as to give a credit
28 28 against the tax on each tract of agricultural lands within the
28 29 several school districts of the state in which the levy for
28 30 the general school fund exceeds five dollars and forty seventy
28 31 cents per thousand dollars of assessed value; the amount of
28 32 such credit on each tract of such lands shall be the amount
28 33 the tax levied for the general school fund exceeds the amount
28 34 of tax which would be levied on said tract of such lands were
28 35 the levy for the general school fund five dollars and forty
29 1 seventy cents per thousand dollars of assessed value for the
29 2 previous year, except in the case of a deficiency in the
29 3 agricultural land credit fund to pay said credits in full, in
29 4 which case the credit on each eligible tract of such lands in
29 5 the state shall be proportionate and shall be applied as
29 6 hereinafter provided.
29 7 Sec. 68. Section 426.6, unnumbered paragraph 1, Code 2005,
29 8 is amended to read as follows:
29 9 The agricultural land tax credit allowed each year shall be
29 10 computed as follows: On or before April 1, the county auditor
29 11 shall list by school districts all tracts of agricultural
29 12 lands which are entitled to credit, together with the taxable
29 13 value for the previous year, together with the budget from
29 14 each school district for the previous year, and the tax rate
29 15 determined for the general fund of the district in the manner
29 16 prescribed in section 444.3 for the previous year, and if such
29 17 tax rate is in excess of five dollars and forty seventy cents
29 18 per thousand dollars of assessed value, the auditor shall
29 19 multiply the tax levy which is in excess of five dollars and
29 20 forty seventy cents per thousand dollars of assessed value by
29 21 the total taxable value of the agricultural lands entitled to
29 22 credit in the district, and on or before April 1, certify the
29 23 amount to the department of revenue.
29 24 Sec. 69. Section 256D.5, Code 2005, is repealed.
29 25 Sec. 70. Section 256D.9, Code 2005, is repealed.
29 26 Sec. 71. Section 294A.25, Code 2005, is repealed.
29 27 Sec. 72. EFFECTIVE AND APPLICABILITY DATES.
29 28 1. The sections of this division of this Act increasing
29 29 the regular program foundation base and the special education
29 30 support services foundation base, increasing the foundation
29 31 property tax, providing for an alternative allowable growth
29 32 amount, and incorporating funding of media services and
29 33 educational services, Iowa early intervention block grant
29 34 funding, phase II of the educational excellence program, and
29 35 the instructional support program into the school finance
30 1 formula, take effect July 1, 2005, and are applicable to the
30 2 school budget year beginning July 1, 2006, and succeeding
30 3 budget years.
30 4 2. The section of this division of this Act amending
30 5 section 257.8 to include calculation of the early childhood
30 6 at=risk allowable growth takes effect July 1, 2007.
30 7 3. The sections of this division of this Act amending
30 8 provisions relating to the family farm tax credit and the
30 9 agricultural land tax credit take effect January 1, 2007, for
30 10 taxes payable in the fiscal year beginning July 1, 2007.
30 11 4. The section of this division of this Act repealing
30 12 section 256D.9, being deemed of immediate importance, takes
30 13 effect upon enactment.
30 14 DIVISION VII
30 15 ASSESSMENT OF PROPERTY
30 16 Sec. 73. Section 441.21, subsection 4, Code 2005, is
30 17 amended by striking the subsection and inserting in lieu
30 18 thereof the following:
30 19 4. For valuations established as of January 1, 2005, the
30 20 actual value at which residential property is assessed shall
30 21 be fifty percent of an amount equal to the sum of the market
30 22 value for the assessment year and for the previous four
30 23 assessment years, as determined by the assessor, divided by
30 24 five.
30 25 Sec. 74. RETROACTIVE APPLICABILITY. This division of this
30 26 Act, being deemed of immediate importance, takes effect upon
30 27 enactment and applies retroactively to assessment years
30 28 beginning on or after January 1, 2005.
30 29 EXPLANATION
30 30 SALES AND USE TAX RATE INCREASE == This division I
30 31 increases from 5 percent to 6 percent the tax rate of the
30 32 sales and use taxes. In addition, the automobile rental
30 33 excise tax rate is increased from 5 percent to 6 percent. A
30 34 provision is made for a refund of the additional 1 percent in
30 35 the case of construction contractors where contracts have been
31 1 executed prior to January 1, 2006.
31 2 The division of the bill and the rate increases are
31 3 effective January 1, 2006.
31 4 HOMESTEAD TAX CREDIT == This division II repeals the
31 5 homestead tax credit and the related extraordinary property
31 6 tax credit and reimbursement beginning with property taxes
31 7 payable in the fiscal year beginning July 1, 2006.
31 8 AGRICULTURAL LAND TAX CREDIT == This division III repeals
31 9 the agricultural land tax credit beginning with property taxes
31 10 payable in the fiscal year beginning July 1, 2006. The family
31 11 farm tax credit with its $10 million appropriation is
31 12 maintained.
31 13 SCHOOL DISTRICT LEVIES == This division IV repeals the
31 14 authority of school districts to impose the educational
31 15 improvement program levy, the schoolhouse levy, and the
31 16 educational and recreational tax beginning with the budget
31 17 year beginning July 1, 2006. However, in the case of the
31 18 educational and recreational tax, that tax may continue if it
31 19 was imposed during the 2005=2006 budget year but not longer
31 20 than the 2013=2014 budget year. The division also eliminates
31 21 the authority of school districts to fund part of the
31 22 instructional support program and the physical plant and
31 23 equipment levy from an income surtax beginning with the 2006=
31 24 2007 budget year, unless the income surtax was used for
31 25 funding in the 2005=2006 budget year, in which case the
31 26 authority continues until the expiration of the period of the
31 27 districts' participation in the surtax funded programs.
31 28 EFFECTIVE AND APPLICABILITY DATES == This division of the
31 29 bill contains effective and applicability date provisions
31 30 which are specified in each division when applicable.
31 31 FOUNDATION PROPERTY TAX == URBAN RENEWAL == This division V
31 32 provides that the school foundation levy imposed pursuant to
31 33 Code section 257.3, subsection 1, shall not be collected as
31 34 incremental taxes for urban renewal purposes for urban renewal
31 35 plans adopted on or after the effective date of the division.
32 1 The division further provides that the school foundation levy
32 2 shall not be collected as incremental taxes for urban renewal
32 3 purposes for urban renewal plans adopted before the effective
32 4 date of the division beginning with the fiscal year beginning
32 5 July 1, 2015.
32 6 This division of this Act takes effect upon enactment.
32 7 SCHOOL FINANCE FORMULA == This division VI provides for an
32 8 increase in the foundation property tax imposed under the
32 9 state school foundation program pursuant to Code section
32 10 257.3, from the current level of $5.40 to $5.70 per $1,000 of
32 11 assessed valuation on all taxable property in a school
32 12 district.
32 13 The division also provides for an increase in the regular
32 14 program foundation base and the special education support
32 15 services foundation base under the state school foundation
32 16 program from the current levels of 87.5 percent and 79
32 17 percent, respectively, to 100 percent. The foundation base is
32 18 the specified percentage of the state cost per pupil
32 19 calculation which is paid as state aid to school districts
32 20 above the foundation property tax.
32 21 The division provides for incorporation of media services
32 22 and educational support services provided by area education
32 23 agencies, currently funded through property taxes, into the
32 24 school finance formula. The division provides for the
32 25 establishment of a media services foundation base and an
32 26 educational services foundation base which is 100 percent of
32 27 their respective state costs per pupil, and provides that the
32 28 combined district cost per pupil and state cost per pupil
32 29 calculations include media and educational services district
32 30 and state cost per pupil amounts.
32 31 The division provides that the department of management
32 32 shall calculate an alternative allowable growth amount which
32 33 adds a specified dollar amount to allowable growth in that
32 34 year to reflect incorporation of early childhood block grant
32 35 program funding, and phase II of the educational excellence
33 1 program into the school finance formula. The division
33 2 establishes an early childhood at=risk state cost and district
33 3 cost per pupil amount to facilitate this. The division also
33 4 provides for additional increases in allowable growth over a
33 5 five=year period beginning July 1, 2006, to gradually
33 6 incorporate an amount of funding corresponding to
33 7 instructional support program funding into the school finance
33 8 formula. The division provides that for the budget year
33 9 beginning July 1, 2006, school districts already participating
33 10 in the instructional support program will receive a $92
33 11 increase in allowable growth, and continue to receive
33 12 additional $92 increases through the budget year beginning
33 13 July 1, 2010. The division provides that school districts
33 14 which were not participating in the instructional support
33 15 program on July 1, 2006, shall not receive increased allowable
33 16 growth that year, but for the budget year beginning July 1,
33 17 2007, those school districts will receive $184, plus $92
33 18 increases through the budget year beginning July 1, 2010. The
33 19 division provides that school districts shall calculate the
33 20 regular program allowable growth for the budget year beginning
33 21 July 1, 2007, and succeeding budget years, utilizing a regular
33 22 program state cost per pupil figure which incorporates these
33 23 increases in regular program allowable growth. The division
33 24 makes changes to instructional support program provisions
33 25 relating to participation in the program and imposition of
33 26 property tax or income surtax, and provides for the future
33 27 repeal of the program effective July 1, 2010.
33 28 The division provides that for purposes of determining the
33 29 amount of a budget adjustment pursuant to Code section 257.14,
33 30 the alternative allowable growth increases shall be subtracted
33 31 from the school district's regular program cost per pupil
33 32 prior to determining the amount of the adjustment. The
33 33 division also provides that for the budget years beginning
33 34 July 1, 2006, through July 1, 2013, if the department of
33 35 management determines that the amount of a school district's
34 1 budget adjustment is less than the amount the school district
34 2 would otherwise have received if the increases in allowable
34 3 growth received by the district had not been made, the
34 4 district may apply to the school budget review committee for
34 5 additional allowable growth in an amount equal to the
34 6 difference.
34 7 The division provides for conforming changes to provisions
34 8 of the family farm tax credit and the agricultural land tax
34 9 credit contained in Code chapters 425A and 426 relating to the
34 10 increase in the level of the foundation property tax, and
34 11 makes additional conforming changes.
34 12 The division provides that provisions increasing the
34 13 regular program foundation base and the special education
34 14 support services foundation base, increasing the foundation
34 15 property tax, providing for an alternative allowable growth
34 16 amount, and incorporating funding of media services and
34 17 educational services, Iowa early intervention block grant
34 18 funding, phase II of the educational excellence program, and
34 19 the instructional support program into the school finance
34 20 formula, take effect July 1, 2005, and are applicable to the
34 21 school budget year beginning July 1, 2006, and succeeding
34 22 budget years. The provisions amending Code section 257.8 to
34 23 include calculation of the early childhood at=risk allowable
34 24 growth take effect July 1, 2007. Provisions relating to the
34 25 family farm tax credit and the agricultural land tax credit
34 26 take effect January 1, 2007, for taxes payable in the fiscal
34 27 year beginning July 1, 2007.
34 28 The repeal of the repeal of Code chapter 256A takes effect
34 29 upon enactment.
34 30 ASSESSMENT OF PROPERTY == This division VII eliminates the
34 31 assessment limitations for agricultural and residential
34 32 property. The division further provides that residential
34 33 property shall be assessed at 50 percent of an amount equal to
34 34 the sum of the market value for the assessment year and for
34 35 the previous four assessment years divided by five.
35 1 The division takes effect upon enactment and applies
35 2 retroactively to assessment years beginning on or after
35 3 January 1, 2005.
35 4 LSB 1909XS 81
35 5 rn:mg/gg/14.1