Senate Study Bill 3272
SENATE FILE
BY (PROPOSED COMMITTEE ON
WAYS AND MEANS BILL BY
CO=CHAIRPERSON BOLKCOM)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to the percentage of actual value at which
2 residential property and certain commercial property are
3 assessed for purposes of property taxation and providing an
4 annual appropriation for a specified number of years to
5 replace commercial property revenues lost to counties and
6 cities.
7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
8 TLSB 6631XK 81
9 sc/je/5
PAG LIN
1 1 Section 1. NEW SECTION. 426C.1 REPLACEMENT FUND CREATED.
1 2 A commercial property replacement fund is created under the
1 3 control of the department of revenue. For the fiscal period
1 4 beginning July 1, 2008, and ending June 30, 2013, there is
1 5 appropriated annually from the general fund of the state to
1 6 the department of revenue to be credited to the commercial
1 7 property replacement fund the sum of eighteen million dollars.
1 8 Any balance in the fund on June 30 shall revert to the general
1 9 fund of the state.
1 10 Sec. 2. NEW SECTION. 426C.2 REPLACEMENT.
1 11 For the fiscal year beginning July 1, 2008, through the
1 12 fiscal year ending June 30, 2013, each county treasurer shall
1 13 be paid from the commercial property replacement fund an
1 14 amount equal to the amount of the commercial property
1 15 replacement claim calculated in section 426C.3.
1 16 If the amount appropriated to the commercial property
1 17 replacement fund for a fiscal year is insufficient to pay all
1 18 claims, the director shall prorate the disbursements to the
1 19 county treasurers and shall notify the county auditors of the
1 20 pro rata percentage on or before September 30.
1 21 Sec. 3. NEW SECTION. 426C.3 COMPUTATION OF REPLACEMENT
1 22 CLAIM.
1 23 1. On or before July 1, 2008, the county auditor shall
1 24 prepare a statement listing for the county and each city in
1 25 the county:
1 26 a. The difference between the assessed value of the
1 27 property defined in section 441.21, subsection 5, paragraph
1 28 "c", as assessed on January 1, 2006, and the assessed value of
1 29 such property as assessed pursuant to section 441.21,
1 30 subsection 5, paragraph "b", for the assessment year beginning
1 31 January 1, 2007.
1 32 b. The tax levy rate for the county and each city
1 33 certified for the fiscal year beginning July 1, 2007.
1 34 c. The commercial property replacement claim for the
1 35 county and each city, which is equal to the amount determined
2 1 pursuant to paragraph "a" multiplied by the tax rate specified
2 2 in paragraph "b".
2 3 2. The county auditor shall certify and forward one copy
2 4 of the statement to the department of revenue not later than
2 5 July 1, 2008. The amount certified by the auditor for the
2 6 fiscal year beginning July 1, 2008, shall be the amount of the
2 7 replacement claim for each fiscal year of the fiscal period
2 8 beginning July 1, 2008, and ending June 30, 2013.
2 9 Sec. 4. NEW SECTION. 426C.4 REIMBURSEMENT.
2 10 Each county treasurer shall be reimbursed an amount equal
2 11 to the commercial property replacement claim for that county
2 12 determined pursuant to section 426C.3, subsection 1, paragraph
2 13 "c". The reimbursement shall be made in two equal
2 14 installments on or before September 30 and March 31 of each
2 15 year. The county treasurer shall apportion the disbursement
2 16 to the county and to each city in the county, as applicable,
2 17 in the manner provided in section 445.57.
2 18 Sec. 5. Section 441.21, subsection 4, Code 2005, is
2 19 amended by adding the following new unnumbered paragraph:
2 20 NEW UNNUMBERED PARAGRAPH. For valuations established as of
2 21 January 1, 2007, and each year thereafter, the percentage of
2 22 actual value, as equalized by the director of revenue as
2 23 provided in section 441.49, at which residential property
2 24 shall be assessed shall not be less than forty=six percent.
2 25 If the percentage of actual value of residential property as
2 26 calculated in accordance with this subsection is less than
2 27 forty=six percent, the director of revenue shall increase the
2 28 percentage to forty=six percent. For purposes of determining
2 29 valuations in the assessment year beginning January 1, 2008,
2 30 and for each subsequent assessment year, the percentage for
2 31 the prior year as determined under this subsection before
2 32 adjustment under this paragraph, if necessary, shall be the
2 33 percentage used in making the calculation of the dividend for
2 34 that assessment year.
2 35 Sec. 6. Section 441.21, subsection 5, Code Supplement
3 1 2005, is amended to read as follows:
3 2 5. a. For valuations established as of January 1, 1979,
3 3 commercial property and industrial property, excluding
3 4 properties referred to in section 427A.1, subsection 7, shall
3 5 be assessed as a percentage of the actual value of each class
3 6 of property. The percentage shall be determined for each
3 7 class of property by the director of revenue for the state in
3 8 accordance with the provisions of this section. For
3 9 valuations established as of January 1, 1979, the percentage
3 10 shall be the quotient of the dividend and divisor as defined
3 11 in this section. The dividend for each class of property
3 12 shall be the total actual valuation for each class of property
3 13 established for 1978, plus six percent of the amount so
3 14 determined. The divisor for each class of property shall be
3 15 the valuation for each class of property established for 1978,
3 16 as reported by the assessors on the abstracts of assessment
3 17 for 1978, plus the amount of value added to the total actual
3 18 value by the revaluation of existing properties in 1979 as
3 19 equalized by the director of revenue pursuant to section
3 20 441.49. For valuations established as of January 1, 1979,
3 21 property valued by the department of revenue pursuant to
3 22 chapters 428, 433, 437, and 438 shall be considered as one
3 23 class of property and shall be assessed as a percentage of its
3 24 actual value. The percentage shall be determined by the
3 25 director of revenue in accordance with the provisions of this
3 26 section. For valuations established as of January 1, 1979,
3 27 the percentage shall be the quotient of the dividend and
3 28 divisor as defined in this section. The dividend shall be the
3 29 total actual valuation established for 1978 by the department
3 30 of revenue, plus ten percent of the amount so determined. The
3 31 divisor for property valued by the department of revenue
3 32 pursuant to chapters 428, 433, 437, and 438 shall be the
3 33 valuation established for 1978, plus the amount of value added
3 34 to the total actual value by the revaluation of the property
3 35 by the department of revenue as of January 1, 1979. For
4 1 valuations established as of January 1, 1980, commercial
4 2 property and industrial property, excluding properties
4 3 referred to in section 427A.1, subsection 7, shall be assessed
4 4 at a percentage of the actual value of each class of property.
4 5 The percentage shall be determined for each class of property
4 6 by the director of revenue for the state in accordance with
4 7 the provisions of this section. For valuations established as
4 8 of January 1, 1980, the percentage shall be the quotient of
4 9 the dividend and divisor as defined in this section. The
4 10 dividend for each class of property shall be the dividend as
4 11 determined for each class of property for valuations
4 12 established as of January 1, 1979, adjusted by the product
4 13 obtained by multiplying the percentage determined for that
4 14 year by the amount of any additions or deletions to actual
4 15 value, excluding those resulting from the revaluation of
4 16 existing properties, as reported by the assessors on the
4 17 abstracts of assessment for 1979, plus four percent of the
4 18 amount so determined. The divisor for each class of property
4 19 shall be the total actual value of all such property in 1979,
4 20 as equalized by the director of revenue pursuant to section
4 21 441.49, plus the amount of value added to the total actual
4 22 value by the revaluation of existing properties in 1980. The
4 23 director shall utilize information reported on the abstracts
4 24 of assessment submitted pursuant to section 441.45 in
4 25 determining such percentage. For valuations established as of
4 26 January 1, 1980, property valued by the department of revenue
4 27 pursuant to chapters 428, 433, 437, and 438 shall be assessed
4 28 at a percentage of its actual value. The percentage shall be
4 29 determined by the director of revenue in accordance with the
4 30 provisions of this section. For valuations established as of
4 31 January 1, 1980, the percentage shall be the quotient of the
4 32 dividend and divisor as defined in this section. The dividend
4 33 shall be the total actual valuation established for 1979 by
4 34 the department of revenue, plus eight percent of the amount so
4 35 determined. The divisor for property valued by the department
5 1 of revenue pursuant to chapters 428, 433, 437, and 438 shall
5 2 be the valuation established for 1979, plus the amount of
5 3 value added to the total actual value by the revaluation of
5 4 the property by the department of revenue as of January 1,
5 5 1980. For valuations established as of January 1, 1981, and
5 6 each year thereafter, the percentage of actual value as
5 7 equalized by the director of revenue as provided in section
5 8 441.49 at which commercial property and industrial property,
5 9 excluding properties referred to in section 427A.1, subsection
5 10 7, shall be assessed shall be calculated in accordance with
5 11 the methods provided herein, except that any references to six
5 12 percent in this subsection shall be four percent. For
5 13 valuations established as of January 1, 1981, and each year
5 14 thereafter, the percentage of actual value at which property
5 15 valued by the department of revenue pursuant to chapters 428,
5 16 433, 437, and 438 shall be assessed shall be calculated in
5 17 accordance with the methods provided herein, except that any
5 18 references to ten percent in this subsection shall be eight
5 19 percent. Beginning with valuations established as of January
5 20 1, 1979, and each year thereafter, property valued by the
5 21 department of revenue pursuant to chapter 434 shall also be
5 22 assessed at a percentage of its actual value which percentage
5 23 shall be equal to the percentage determined by the director of
5 24 revenue for commercial property, industrial property, or
5 25 property valued by the department of revenue pursuant to
5 26 chapters 428, 433, 437, and 438, whichever is lowest.
5 27 b. Notwithstanding paragraph "a", commercial property that
5 28 is an apartment building, a mobile home park, a manufactured
5 29 home community, or a land=leased community shall be assessed
5 30 at a percentage of its actual value, as equalized by the
5 31 director of revenue as provided in section 441.49, as follows:
5 32 (1) For valuations established for the assessment year
5 33 beginning January 1, 2007, ninety percent of actual value.
5 34 (2) For valuations established for the assessment year
5 35 beginning January 1, 2008, eighty percent of actual value.
6 1 (3) For valuations established for the assessment year
6 2 beginning January 1, 2009, seventy percent of actual value.
6 3 (4) For valuations established for the assessment year
6 4 beginning January 1, 2010, sixty percent of actual value.
6 5 (5) For valuations established for the assessment year
6 6 beginning January 1, 2011, and each year thereafter, forty=six
6 7 percent of actual value.
6 8 c. As used in paragraph "b":
6 9 (1) "Apartment building" means the land and building used
6 10 primarily for human habitation and containing three or more
6 11 separate living quarters, as well as structures and
6 12 improvements used primarily as a part of or in conjunction
6 13 with such land and building. "Apartment building" does not
6 14 include a hotel, motel, inn, or other building where rooms are
6 15 usually rented for less than one month, a nursing home, or a
6 16 rest home.
6 17 (2) "Land=leased community" means the same as defined in
6 18 sections 335.30A and 414.28A.
6 19 (3) "Manufactured home community" means the same as a
6 20 land=leased community.
6 21 (4) "Mobile home park" means the same as defined in
6 22 section 435.1.
6 23 EXPLANATION
6 24 This bill sets a percentage of actual value at which
6 25 residential property and commercial property that is an
6 26 apartment building, a mobile home park, a manufactured home
6 27 community, or a land=leased community are to be assessed for
6 28 property tax purposes.
6 29 The bill provides that the percentage of actual value at
6 30 which residential property may be assessed shall not be
6 31 reduced below 46 percent beginning with assessments made
6 32 January 1, 2007, for taxes payable in FY 2008=2009.
6 33 The bill also provides that for the 2007 assessment year,
6 34 the percentage of actual value at which commercial property
6 35 that is an apartment building, a mobile home park, a
7 1 manufactured home community, or a land=leased community shall
7 2 be assessed is 90 percent of actual value. For the 2008
7 3 assessment year, the percentage is 80 percent of actual value.
7 4 For the 2009 assessment year, the percentage is 70 percent of
7 5 actual value. For the 2010 assessment year, the percentage is
7 6 60 percent of actual value. For the 2011 assessment year, and
7 7 subsequent assessment years, the percentage is 46 percent of
7 8 actual value.
7 9 The bill creates the commercial property replacement fund
7 10 and appropriates $18 million annually to the fund for the
7 11 fiscal period beginning July 1, 2008, and ending June 30,
7 12 2013. A county, on behalf of the county and each city in the
7 13 county, may, for those fiscal years, claim reimbursement for
7 14 revenues lost due to the phaseout of the assessment down to 46
7 15 percent on commercial property that is an apartment building,
7 16 a mobile home park, a manufactured community, or a land=leased
7 17 community.
7 18 LSB 6631XK 81
7 19 sc:rj/je/5.1