Senate File 496 - Introduced SENATE FILE BY ZIEMAN Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act providing for a commercial property tax credit for 2 proportional increases in the state percent of growth, making 3 an appropriation, and including an applicability date. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2271XS 82 6 ak/gg/14 PAG LIN 1 1 Section 1. NEW SECTION. 426C.1 COMMERCIAL PROPERTY TAX 1 2 CREDIT FUND. 1 3 There is created as a permanent fund in the office of the 1 4 treasurer of state a fund to be known as the commercial 1 5 property tax credit fund, and for the purpose of establishing 1 6 and maintaining this fund, for each fiscal year there is 1 7 appropriated from the general fund of the state and deposited 1 8 into the commercial property tax credit fund an amount 1 9 sufficient to implement this chapter. 1 10 Sec. 2. NEW SECTION. 426C.2 DEFINITIONS. 1 11 As used in this chapter: 1 12 1. "Base year" means the budget year beginning July 1, 1 13 2007. 1 14 2. "Budget year" means as defined in section 257.2. 1 15 3. "Commercial property" means property assessed for 1 16 property taxation as commercial and industrial real estate, 1 17 except for property intended for human habitation. 1 18 Sec. 3. NEW SECTION. 426C.3 WHERE CREDIT GIVEN. 1 19 The commercial property tax credit fund shall be 1 20 apportioned each year so as to give a credit against the tax 1 21 levied against commercial property that is equal in amount to 1 22 the amount by which the additional property tax levy rate 1 23 computed under section 257.4 for the budget year exceeds the 1 24 amount that the additional property tax levy rate would be for 1 25 the budget year if the combined district cost is the same as 1 26 the combined district cost for the base year. 1 27 Sec. 4. NEW SECTION. 426C.4 COMPUTATION BY DEPARTMENT OF 1 28 MANAGEMENT. 1 29 1. On or before May 15 of each year, the department of 1 30 management shall calculate the tax rate for each of the 1 31 several school districts to be used by the county auditor in 1 32 computing the amount of credit that shall be owed to 1 33 commercial property taxpayers in the county for taxes due and 1 34 payable in the ensuing fiscal year. 1 35 2. The department of management shall use the following 2 1 formula to calculate the tax rate per one thousand dollars of 2 2 assessed value of taxable property for each school district: 2 3 a. Calculate the additional property tax levy rate under 2 4 section 257.4 for the budget year. 2 5 b. Calculate the additional property tax levy rate under 2 6 section 257.4 as if the combined district cost for the budget 2 7 year was equal to the combined district cost for the base 2 8 year. 2 9 c. Subtract the amount in paragraph "b" from the amount in 2 10 paragraph "a". If the amount in paragraph "a" does not exceed 2 11 the amount in paragraph "b", there is no credit for the budget 2 12 year and the department shall notify the county auditors of 2 13 that fact. 2 14 d. On or before May 15 the department shall certify the 2 15 applicable tax rates to each county auditor. 2 16 Sec. 5. NEW SECTION. 426C.5 APPORTIONMENT BY AUDITOR. 2 17 Upon receiving the applicable tax rates from the department 2 18 of management, the county auditor shall determine the amount 2 19 to be credited to each parcel of commercial property and shall 2 20 enter such amounts upon the tax list as a credit against the 2 21 tax levied on each parcel of commercial property before 2 22 delivering the tax list to the county treasurer. The county 2 23 treasurer shall show on the tax statement the amount of tax 2 24 credit for each parcel of commercial property. In case of 2 25 change of ownership, the credit shall follow the title. 2 26 Sec. 6. NEW SECTION. 426C.6 WARRANTS AUTHORIZED BY 2 27 DIRECTOR. 2 28 1. The county auditor shall certify to the department of 2 29 management the total amount of credits provided to commercial 2 30 property taxpayers in the county. 2 31 2. During the following budget year, the department of 2 32 management shall draw warrants on the commercial property tax 2 33 credit fund created in section 426C.1, payable to the county 2 34 treasurers, in the amount certified by the county auditors of 2 35 the respective counties and shall mail the warrants to the 3 1 counties. The amount due each county shall be paid in two 3 2 payments on November 15 and March 15 of each fiscal year. The 3 3 two payments shall be as nearly equal as possible. Upon 3 4 receipt of the warrant by the county auditor, the auditor 3 5 shall deliver the warrant to the county treasurer. 3 6 Sec. 7. APPLICABLE DATE. This Act applies to property 3 7 taxes due and payable on or after July 1, 2008. 3 8 EXPLANATION 3 9 This bill provides commercial property taxpayers with an 3 10 annual property tax credit equal to the increase in the 3 11 additional property tax levy caused by an increase in the 3 12 state percent of growth. Commercial property is defined as 3 13 real estate that is assessed as commercial and industrial 3 14 property, except for property used for human habitation. 3 15 The bill creates a commercial property tax credit fund in 3 16 the office of state treasurer and annually appropriates an 3 17 amount sufficient to pay the credits. The credit amount each 3 18 year is the amount of tax that is levied that is more than the 3 19 commercial property taxpayer would have paid in the base year 3 20 due to the state percent of growth. The bill defines "base 3 21 year" as the budget year beginning July 1, 2007. 3 22 The department of management is responsible for calculating 3 23 the tax rates upon which the credit will be computed. The 3 24 county auditor is responsible for determining how much each 3 25 parcel of commercial property will be credited and for 3 26 delivering the adjusted tax list to the county treasurer. The 3 27 county treasurer shall show on each commercial property tax 3 28 statement the amount of the tax credit. 3 29 The bill applies to property taxes due and payable on or 3 30 after July 1, 2008. 3 31 LSB 2271XS 82 3 32 ak:sc/gg/14