House File 884 - Introduced
HOUSE FILE
BY TYMESON
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to school district property taxes collected as
2 incremental taxes and collected in urban revitalization areas
3 and providing an applicability date.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 1904HH 82
6 sc/je/5
PAG LIN
1 1 Section 1. Section 260E.4, Code 2007, is amended to read
1 2 as follows:
1 3 260E.4 INCREMENTAL PROPERTY TAXES.
1 4 If an agreement provides that all or part of program costs
1 5 are to be paid for by incremental property taxes, the board of
1 6 directors shall provide by resolution that taxes levied on the
1 7 employer's taxable business property, where new jobs are
1 8 created as a result of a project, each year by or for the
1 9 benefit of the state, city, county, school district, or other
1 10 taxing district after the effective date of the resolution
1 11 shall be divided as provided in section 403.19, subsections 1
1 12 and 2, in the same manner as if the employer's business
1 13 property, where new jobs are created as a result of a project,
1 14 was taxable property in an urban renewal project and the
1 15 resolution was an ordinance within the meaning of those
1 16 subsections. The taxes received by the board of directors
1 17 shall be allocated to and when collected be paid into a
1 18 special fund of the community college and may be irrevocably
1 19 pledged by the community college to pay the principal of and
1 20 interest on the certificates issued by the community college
1 21 to finance or refinance, in whole or in part, the project.
1 22 However, with respect to any urban renewal project as to which
1 23 an ordinance is in effect under section 403.19, the collection
1 24 of incremental property taxes authorized by this chapter are
1 25 suspended in favor of collection of incremental taxes under
1 26 section 403.19. As used in this section, "taxes" includes,
1 27 but is not limited to, all levies on an ad valorem basis upon
1 28 land or real property of the employer's business, where new
1 29 jobs are created as a result of a project.
1 30 Sec. 2. Section 298.3, subsection 12, Code 2007, is
1 31 amended by striking the subsection.
1 32 Sec. 3. Section 357H.9, Code 2007, is amended to read as
1 33 follows:
1 34 357H.9 INCREMENTAL PROPERTY TAXES.
1 35 The board of trustees shall provide by resolution that
2 1 taxes levied on the taxable property in a rural improvement
2 2 zone each year by or for the benefit of the state, city,
2 3 county, school district, or other taxing district after the
2 4 effective date of the resolution shall be divided as provided
2 5 in section 403.19, subsections 1 and 2, in the same manner as
2 6 if the taxable property in the rural improvement zone was
2 7 taxable property in an urban renewal area and the resolution
2 8 was an ordinance within the meaning of those subsections. The
2 9 taxes received by the board of trustees shall be allocated to,
2 10 and when collected be paid into, a special fund and may be
2 11 irrevocably pledged by the trustees to pay the principal of
2 12 and interest on the certificates, contracts, or other
2 13 obligations approved by the board of trustees to finance or
2 14 refinance, in whole or in part, an improvement project. As
2 15 used in this section, "taxes" includes, but is not limited to,
2 16 all levies on an ad valorem basis upon land or real property
2 17 located in the rural improvement zone.
2 18 Sec. 4. Section 403.17, subsection 1, Code 2007, is
2 19 amended to read as follows:
2 20 1. "Affected taxing entity" means a city, community
2 21 college, or county, or school district which levied or
2 22 certified for levy a property tax on any portion of the
2 23 taxable property located within the urban renewal area in the
2 24 fiscal year beginning prior to the calendar year in which a
2 25 proposed urban renewal plan is submitted to the local
2 26 governing body for approval.
2 27 Sec. 5. Section 403.19, unnumbered paragraph 1, Code 2007,
2 28 is amended to read as follows:
2 29 A municipality may provide by ordinance that taxes levied
2 30 on taxable property in an urban renewal area each year by or
2 31 for the benefit of the state, city, county, school district,
2 32 or other taxing district, shall be divided as follows:
2 33 Sec. 6. Section 403.19, subsection 2, Code 2007, is
2 34 amended to read as follows:
2 35 2. That portion of the taxes each year in excess of such
3 1 amount shall be allocated to and when collected be paid into a
3 2 special fund of the municipality to pay the principal of and
3 3 interest on loans, moneys advanced to, or indebtedness,
3 4 whether funded, refunded, assumed, or otherwise, including
3 5 bonds issued under the authority of section 403.9, subsection
3 6 1, incurred by the municipality to finance or refinance, in
3 7 whole or in part, an urban renewal project within the area,
3 8 and to provide assistance for low and moderate income family
3 9 housing as provided in section 403.22, except that all taxes
3 10 for the regular and voter=approved physical plant and
3 11 equipment levy of levied by a school district imposed pursuant
3 12 to section 298.2 and taxes for the payment of bonds and
3 13 interest of each taxing district must be collected against all
3 14 taxable property within the taxing district without limitation
3 15 by the provisions of this subsection. However, all or a
3 16 portion of the taxes for the physical plant and equipment levy
3 17 shall be paid by the school district to the municipality if
3 18 the auditor certifies to the school district by July 1 the
3 19 amount of such levy that is necessary to pay the principal and
3 20 interest on bonds issued by the municipality to finance an
3 21 urban renewal project, which bonds were issued before July 1,
3 22 2001. Indebtedness incurred to refund bonds issued prior to
3 23 July 1, 2001, shall not be included in the certification.
3 24 Such school district shall pay over the amount certified by
3 25 November 1 and May 1 of the fiscal year following
3 26 certification to the school district. Unless and until the
3 27 total assessed valuation of the taxable property in an urban
3 28 renewal area exceeds the total assessed value of the taxable
3 29 property in such area as shown by the last equalized
3 30 assessment roll referred to in subsection 1, all of the taxes
3 31 levied and collected upon the taxable property in the urban
3 32 renewal area shall be paid into the funds for the respective
3 33 taxing districts as taxes by or for the taxing districts in
3 34 the same manner as all other property taxes. When such loans,
3 35 advances, indebtedness, and bonds, if any, and interest
4 1 thereon, have been paid, all moneys thereafter received from
4 2 taxes upon the taxable property in such urban renewal area
4 3 shall be paid into the funds for the respective taxing
4 4 districts in the same manner as taxes on all other property.
4 5 In those instances where a school district has entered into an
4 6 agreement pursuant to section 279.64 for sharing of school
4 7 district taxes levied and collected from valuation described
4 8 in this subsection and released to the school district, the
4 9 school district shall transfer the taxes as provided in the
4 10 agreement.
4 11 Sec. 7. Section 403.19, subsection 7, Code 2007, is
4 12 amended by striking the subsection.
4 13 Sec. 8. Section 403.21, subsection 1, Code 2007, is
4 14 amended to read as follows:
4 15 1. In order to promote communication and cooperation among
4 16 cities, counties, and community colleges with respect to the
4 17 allocation and division of taxes, no jobs training projects as
4 18 defined in chapter 260E or 260F shall be undertaken within the
4 19 area of operation of a municipality after July 1, 1995, unless
4 20 the municipality and the community college have entered into
4 21 an agreement or have jointly adopted a plan relating to a
4 22 community college's new jobs training program which shall
4 23 provide for a procedure for advance notification to each
4 24 affected municipality, for exchange of information, for mutual
4 25 consultation, and for procedural guidelines for all such new
4 26 jobs training projects, including related project financing to
4 27 be undertaken within the area of operation of the
4 28 municipality. The joint agreement or the plan shall state its
4 29 precise duration and shall be binding on the community college
4 30 and the municipality with respect to all new jobs training
4 31 projects, including related project financing undertaken
4 32 during its existence. The joint agreement or plan shall be
4 33 effective upon adoption and shall be placed on file in the
4 34 office of the secretary of the board of directors of the
4 35 community college and such other location as may be stated in
5 1 the joint agreement or plan. The joint agreement or plan
5 2 shall also be sent to each school district which levied or
5 3 certified for levy a property tax on any portion of the
5 4 taxable property located in the area of operation of the
5 5 municipality in the fiscal year beginning prior to the
5 6 calendar year in which the plan is adopted or the agreement is
5 7 reached. If no such agreement is reached or plan adopted, the
5 8 community college shall not use incremental property tax
5 9 revenues to fund jobs training projects within the area of
5 10 operation of the municipality. Agreements entered into
5 11 between a community college and a city or county pursuant to
5 12 chapter 28E shall not apply.
5 13 Sec. 9. Section 404.3, subsection 8, Code 2007, is amended
5 14 to read as follows:
5 15 8. "Qualified real estate" as used in this chapter and
5 16 section 419.17 means real property, other than land, which is
5 17 located in a designated revitalization area and to which
5 18 improvements have been added, during the time the area was so
5 19 designated, which have increased the actual value by at least
5 20 the percent specified in the plan adopted by the city or
5 21 county pursuant to section 404.2 or if no percent is specified
5 22 then by at least fifteen percent, or at least ten percent in
5 23 the case of real property assessed as residential property or
5 24 which have, in the case of land upon which is located more
5 25 than one building and not assessed as residential property,
5 26 increased the actual value of the buildings to which the
5 27 improvements have been made by at least fifteen percent.
5 28 "Qualified real estate" also means land upon which no
5 29 structure existed at the start of the new construction, which
5 30 is located in a designated revitalization area and upon which
5 31 new construction has been added during the time the area was
5 32 so designated. "Improvements" as used in this chapter and
5 33 section 419.17 includes rehabilitation and additions to
5 34 existing structures as well as new construction on vacant land
5 35 or on land with existing structures. However, new
6 1 construction on land assessed as agricultural property shall
6 2 not qualify as "improvements" for purposes of this chapter and
6 3 section 419.17 unless the governing body of the city or county
6 4 has presented justification at a public hearing held pursuant
6 5 to section 404.2 for the revitalization of land assessed as
6 6 agricultural property by means of new construction. Such
6 7 justification shall demonstrate, in addition to the other
6 8 requirements of this chapter and section 419.17, that the
6 9 improvements on land assessed as agricultural land will
6 10 utilize the minimum amount of agricultural land necessary to
6 11 accomplish the revitalization of the other classes of property
6 12 within the urban revitalization area. However, if such
6 13 construction, rehabilitation or additions were begun prior to
6 14 January 29, 1979, or one year prior to the adoption by the
6 15 city or county of a plan of urban revitalization pursuant to
6 16 section 404.2, whichever occurs later, the value added by such
6 17 construction, rehabilitation or additions shall not constitute
6 18 an increase in value for purposes of qualifying for the
6 19 exemptions listed in this section. "Actual value added by the
6 20 improvements" as used in this chapter and section 419.17 means
6 21 the actual value added as of the first year for which the
6 22 exemption was received. "Exemption from taxation" as used in
6 23 this chapter means exemption from city and county property
6 24 taxes if the urban revitalization area is located in a city
6 25 and exemption from county property taxes if the urban
6 26 revitalization area is located in the area of a county outside
6 27 the boundaries of a city.
6 28 Sec. 10. Section 455H.309, Code 2007, is amended to read
6 29 as follows:
6 30 455H.309 INCREMENTAL PROPERTY TAXES.
6 31 To encourage economic development and the recycling of
6 32 contaminated land to promote the purposes of this chapter,
6 33 cities and counties may provide by ordinance that the costs of
6 34 carrying out response actions under this chapter are to be
6 35 reimbursed, in whole or in part, by incremental property taxes
7 1 over a six=year period. A city or county which implements the
7 2 option provided for under this section shall provide that
7 3 taxes levied on property enrolled in the land recycling
7 4 program under this chapter each year by or for the benefit of
7 5 the state, city, county, school district, or other taxing
7 6 district shall be divided as provided in section 403.19,
7 7 subsections 1 and 2, in the same manner as if the enrolled
7 8 property was taxable property in an urban renewal project.
7 9 Incremental property taxes collected under this section shall
7 10 be placed in a special fund of the city or county. A
7 11 participant shall be reimbursed with moneys from the special
7 12 fund for costs associated with carrying out a response action
7 13 in accordance with rules adopted by the commission. Beginning
7 14 in the fourth of the six years of collecting incremental
7 15 property taxes, the city or county shall begin decreasing by
7 16 twenty=five percent each year the amount of incremental
7 17 property taxes computed under this section.
7 18 Sec. 11. Section 279.64, Code 2007, is repealed.
7 19 Sec. 12. APPLICABILITY DATE. This Act applies to taxes
7 20 due and payable in the fiscal year beginning July 1, 2008, and
7 21 all subsequent fiscal years.
7 22 EXPLANATION
7 23 This bill exempts the school district tax levy from being
7 24 collected as part of the incremental taxes paid to a
7 25 municipality for an urban renewal area. The bill also exempts
7 26 the school district tax levy from being collected as
7 27 incremental taxes for industrial new jobs training programs,
7 28 rural improvement zone projects, and land recycling programs.
7 29 The bill repeals a section of the Code that allowed school
7 30 districts to enter into agreements to share school district
7 31 tax increment revenue released to a school district by a
7 32 municipality.
7 33 The bill defines "exemption from taxation" for purposes of
7 34 urban revitalization to mean exemption from city and county
7 35 property taxes or exemption from county property taxes, as
8 1 applicable.
8 2 The bill applies to taxes due and payable in the fiscal
8 3 year beginning July 1, 2008, and all subsequent fiscal years.
8 4 LSB 1904HH 82
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