House File 626 - Introduced



                                       HOUSE FILE       
                                       BY  JACOBY


    Passed House, Date               Passed Senate,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to taxation by making changes to assessment of
  2    property for purposes of property taxation, county and city
  3    budgets funded primarily by property taxes and service
  4    charges, school district budgets funded primarily by state and
  5    local taxes, state mandates funding, local assessors, and
  6    property tax exemptions and credits, creating an
  7    implementation committee, and including effective and
  8    applicability date provisions.
  9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
 10 TLSB 2033YH 83
 11 md/sc/14

PAG LIN



  1  1                           DIVISION I
  1  2                LOCAL BUDGETS AND PROPERTY TAXES
  1  3    Section 1.  Section 23A.2, subsection 10, paragraph h, Code
  1  4 2009, is amended to read as follows:
  1  5    h.  The performance of an activity listed in section
  1  6 331.424, Code 2009, as a service for which a supplemental levy
  1  7 county may be certified include in its budget.
  1  8    Sec. 2.  Section 24.48, subsection 4, Code 2009, is amended
  1  9 by striking the subsection.
  1 10    Sec. 3.  Section 24.48, subsection 5, Code 2009, is amended
  1 11 to read as follows:
  1 12    5.  a.  For purposes of this section only, "political
  1 13 subdivision" means a city, school district, or any other
  1 14 special purpose district which certifies its budget to the
  1 15 county auditor and derives funds from a property tax levied
  1 16 against taxable property situated within the political
  1 17 subdivision.
  1 18    b.  For the purpose of this section, when the political
  1 19 subdivision is a city, the director of the department of
  1 20 management, and the city finance committee on appeal of the
  1 21 director's decision, shall be the state appeal board.
  1 22    Sec. 4.  Section 25B.2, subsection 3, Code 2009, is amended
  1 23 by striking the subsection.
  1 24    Sec. 5.  NEW SECTION.  25B.3A  UNFUNDED STATE MANDATES ==
  1 25 EFFECT.
  1 26    If, on or after July 1, 2010, a state mandate is enacted by
  1 27 the general assembly, or otherwise imposed, on a political
  1 28 subdivision and the state mandate requires a political
  1 29 subdivision to engage in any new activity, to provide a new
  1 30 service, or to provide any service beyond that required by any
  1 31 law enacted prior to July 1, 2010, and the state does not
  1 32 appropriate moneys to fully fund the cost of the state mandate
  1 33 as those costs are identified pursuant to section 25B.5, the
  1 34 political subdivision is not required to perform the activity
  1 35 or provide the new or increased service and the political
  2  1 subdivision shall not be subject to any liabilities imposed by
  2  2 the state or the imposition of any fines or penalties for the
  2  3 failure to comply with the state mandate.
  2  4    Sec. 6.  Section 28M.5, subsections 1 and 2, Code 2009, are
  2  5 amended to read as follows:
  2  6    1.  The commission, with the approval of the board of
  2  7 supervisors of participating counties and the city council of
  2  8 participating cities in the chapter 28E agreement, may levy
  2  9 annually a tax not to exceed ninety=five cents per thousand
  2 10 dollars of the assessed value of all taxable property in a
  2 11 regional transit district to the extent provided in this
  2 12 section.  The chapter 28E agreement may authorize the
  2 13 commission to levy the tax at different rates within the
  2 14 participating cities and counties in amounts sufficient to
  2 15 meet the revenue responsibilities of such cities and counties
  2 16 as allocated in the budget adopted by the commission.
  2 17 However, for a city participating in a regional transit
  2 18 district, the total of all the tax levies imposed in the city
  2 19 pursuant to section 384.12, subsection 10, and this section
  2 20 shall not exceed the aggregate of ninety=five cents per
  2 21 thousand dollars of the assessed value of all taxable property
  2 22 in the participating city.
  2 23    2.  If a regional transit district budget allocates revenue
  2 24 responsibilities to the board of supervisors of a
  2 25 participating county, the amount of the regional transit
  2 26 district levy that is the responsibility of the participating
  2 27 county shall be deducted from the maximum rates of taxes
  2 28 authorized to be levied by the county pursuant to section
  2 29 331.423, subsections 1 and 2, as applicable for general and
  2 30 rural county services, unless the county meets its revenue
  2 31 responsibilities as allocated in the budget from other
  2 32 available revenue sources.  However, for a regional transit
  2 33 district that includes a county with a population of less than
  2 34 three hundred thousand, the amount of the regional transit
  2 35 district levy that is the responsibility of such participating
  3  1 county shall be deducted from the maximum rate of taxes
  3  2 authorized to be levied by the county pursuant to section
  3  3 331.423, subsection 1 for general county services.
  3  4    Sec. 7.  Section 37.8, Code 2009, is amended to read as
  3  5 follows:
  3  6    37.8  LEVY FOR MAINTENANCE.
  3  7    For the development, operation, and maintenance of a
  3  8 building or monument constructed, purchased, or donated under
  3  9 this chapter, a city may levy a tax not to exceed eighty=one
  3 10 cents per thousand dollars of assessed value on all the
  3 11 taxable property within the city, as provided in section
  3 12 384.12, subsection 2 subject to the limitation in section
  3 13 384.1.
  3 14    Sec. 8.  Section 123.38, unnumbered paragraph 2, Code 2009,
  3 15 is amended to read as follows:
  3 16    Any licensee or permittee, or the licensee's or permittee's
  3 17 executor or administrator, or any person duly appointed by the
  3 18 court to take charge of and administer the property or assets
  3 19 of the licensee or permittee for the benefit of the licensee's
  3 20 or permittee's creditors, may voluntarily surrender a license
  3 21 or permit to the division.  When a license or permit is
  3 22 surrendered the division shall notify the local authority, and
  3 23 the division or the local authority shall refund to the person
  3 24 surrendering the license or permit, a proportionate amount of
  3 25 the fee received by the division or the local authority for
  3 26 the license or permit as follows:  if a license or permit is
  3 27 surrendered during the first three months of the period for
  3 28 which it was issued, the refund shall be three=fourths of the
  3 29 amount of the fee; if surrendered more than three months but
  3 30 not more than six months after issuance, the refund shall be
  3 31 one=half of the amount of the fee; if surrendered more than
  3 32 six months but not more than nine months after issuance, the
  3 33 refund shall be one=fourth of the amount of the fee.  No
  3 34 refund shall be made, however, for any special liquor permit,
  3 35 nor for a liquor control license, wine permit, or beer permit
  4  1 surrendered more than nine months after issuance.  For
  4  2 purposes of this paragraph, any portion of license or permit
  4  3 fees used for the purposes authorized in section 331.424,
  4  4 subsection 1, paragraphs "a" and "b", Code 2009, and in
  4  5 section 331.424A, shall not be deemed received either by the
  4  6 division or by a local authority.  No refund shall be made to
  4  7 any licensee or permittee, upon the surrender of the license
  4  8 or permit, if there is at the time of surrender, a complaint
  4  9 filed with the division or local authority, charging the
  4 10 licensee or permittee with a violation of this chapter.  If
  4 11 upon a hearing on a complaint the license or permit is not
  4 12 revoked or suspended, then the licensee or permittee is
  4 13 eligible, upon surrender of the license or permit, to receive
  4 14 a refund as provided in this section; but if the license or
  4 15 permit is revoked or suspended upon hearing the licensee or
  4 16 permittee is not eligible for the refund of any portion of the
  4 17 license or permit fee.
  4 18    Sec. 9.  Section 218.99, Code 2009, is amended to read as
  4 19 follows:
  4 20    218.99  COUNTIES TO BE NOTIFIED OF PATIENTS' PERSONAL
  4 21 ACCOUNTS.
  4 22    The administrator in control of a state institution shall
  4 23 direct the business manager of each institution under the
  4 24 administrator's jurisdiction which is mentioned in section
  4 25 331.424, subsection 1, paragraphs "a" and "b", Code 2009, and
  4 26 for which services are paid under section 331.424A, to
  4 27 quarterly inform the county of legal settlement's entity
  4 28 designated to perform the county's central point of
  4 29 coordination process of any patient or resident who has an
  4 30 amount in excess of two hundred dollars on account in the
  4 31 patients' personal deposit fund and the amount on deposit.
  4 32 The administrators shall direct the business manager to
  4 33 further notify the entity designated to perform the county's
  4 34 central point of coordination process at least fifteen days
  4 35 before the release of funds in excess of two hundred dollars
  5  1 or upon the death of the patient or resident.  If the patient
  5  2 or resident has no county of legal settlement, notice shall be
  5  3 made to the director of human services and the administrator
  5  4 in control of the institution involved.
  5  5    Sec. 10.  Section 257.1, subsection 2, paragraph b, Code
  5  6 2009, is amended to read as follows:
  5  7    b.  For the budget year commencing July 1, 1999 2011, and
  5  8 for each succeeding budget year the regular program foundation
  5  9 base per pupil is eighty=seven and five=tenths ninety=five
  5 10 percent of the regular program state cost per pupil.  For the
  5 11 budget year commencing July 1, 1991, and for each succeeding
  5 12 budget year the special education support services foundation
  5 13 base is seventy=nine percent of the special education support
  5 14 services state cost per pupil.  The combined foundation base
  5 15 is the sum of the regular program foundation base, the special
  5 16 education support services foundation base, the total teacher
  5 17 salary supplement district cost, the total professional
  5 18 development supplement district cost, the total early
  5 19 intervention supplement district cost, the total area
  5 20 education agency teacher salary supplement district cost, and
  5 21 the total area education agency professional development
  5 22 supplement district cost.
  5 23    Sec. 11.  Section 257.3, subsection 1, unnumbered paragraph
  5 24 1, Code 2009, is amended to read as follows:
  5 25    Except as provided in subsections 2 and 3, a school
  5 26 district shall cause to be levied each year, for the school
  5 27 general fund, a foundation property tax equal to five four
  5 28 dollars and forty thirty=two cents per thousand dollars of
  5 29 assessed valuation on all taxable property in the district.
  5 30 The county auditor shall spread the foundation levy over all
  5 31 taxable property in the district.
  5 32    Sec. 12.  Section 257.3, subsection 2, paragraphs a and b,
  5 33 Code 2009, are amended to read as follows:
  5 34    a.  Notwithstanding subsection 1, a reorganized school
  5 35 district shall cause a foundation property tax of four three
  6  1 dollars and forty fifty=two cents per thousand dollars of
  6  2 assessed valuation to be levied on all taxable property which,
  6  3 in the year preceding a reorganization, was within a school
  6  4 district affected by the reorganization as defined in section
  6  5 275.1, or in the year preceding a dissolution was a part of a
  6  6 school district that dissolved if the dissolution proposal has
  6  7 been approved by the director of the department of education
  6  8 pursuant to section 275.55.
  6  9    b.  In succeeding school years, the foundation property tax
  6 10 levy on that portion shall be increased to the rate of four
  6 11 three dollars and ninety ninety=two cents per thousand dollars
  6 12 of assessed valuation the first succeeding year, five four
  6 13 dollars and fifteen twelve cents per thousand dollars of
  6 14 assessed valuation the second succeeding year, and five four
  6 15 dollars and forty thirty=two cents per thousand dollars of
  6 16 assessed valuation the third succeeding year and each year
  6 17 thereafter.
  6 18    Sec. 13.  NEW SECTION.  257A.1  PROPERTY TAX LIMITATION.
  6 19    1.  For property taxes due and payable in the fiscal year
  6 20 beginning July 1, 2011, and all subsequent fiscal years,
  6 21 property taxes levied by a school district shall not exceed
  6 22 the following percentages of the actual value of the property
  6 23 as determined by the assessor after application of the
  6 24 appropriate reduction in section 441.21:
  6 25    a.  For residential property, one=fourth of one percent.
  6 26    b.  For income residential property, one=fourth of one
  6 27 percent.
  6 28    c.  For commercial property, three=fourths of one percent.
  6 29    d.  For industrial property, one=half of one percent.
  6 30    e.  For agricultural property, one=fourth of one percent.
  6 31    2.  In any fiscal year, the ratio of the percentage amount
  6 32 actually levied to the maximum percentage levy allowed shall
  6 33 be the same for each type of property in subsection 1.
  6 34    3.  This section applies to all school district property
  6 35 tax levies, other than those authorized in sections 257.3 and
  7  1 257.4.
  7  2    4.  a.  For the fiscal year beginning July 1, 2011, the
  7  3 percentage tax rate levied against each type of property
  7  4 described in subsection 1 shall not exceed the sum of one=
  7  5 fourth of one percent plus the corresponding percentage tax
  7  6 rate imposed against that type of property in the fiscal year
  7  7 beginning July 1, 2010.  For the fiscal years beginning July
  7  8 1, 2012, and July 1, 2013, the percentage tax rate levied
  7  9 against each type of property described in subsection 1 shall
  7 10 not exceed the sum of one=fourth of one percent plus the
  7 11 percentage tax rate imposed for the previous fiscal year.
  7 12 Implementation of this subsection shall not cause the
  7 13 percentage tax rate levied against any type of property
  7 14 described in subsection 1 to exceed the limitations in that
  7 15 subsection.
  7 16    b.  If, for the fiscal year beginning July 1, 2010, the
  7 17 corresponding percentage tax rate imposed against each type of
  7 18 property described in subsection 1 exceeds the percentage rate
  7 19 limitations in subsection 1, a school district shall reduce
  7 20 its levy over a three=year period in order to meet the
  7 21 percentage rate limitation requirements of subsection 1.
  7 22    Sec. 14.  NEW SECTION.  257A.2  PROPERTY TAX LIMITATION ==
  7 23 CONSUMER PRICE INDEX.
  7 24    1.  Notwithstanding the limitation in section 257A.1,
  7 25 beginning with the fiscal year beginning July 1, 2014, the
  7 26 amount of property taxes to be levied by a school district
  7 27 against any class of property for the budget year cannot
  7 28 exceed the amount computed in this section.  This section
  7 29 applies to all school district property tax levies, other than
  7 30 those authorized in sections 257.3 and 257.4.
  7 31    2.  The school district property tax limitation shall be
  7 32 computed as follows:
  7 33    a.  Determine the amount of property taxes levied as a
  7 34 percent of taxable value in the current fiscal year.
  7 35    b.  Determine the sum of the amount of taxable value of
  8  1 property for the current fiscal year, and the amount of
  8  2 increase in taxable value of property due to new construction,
  8  3 additions or improvements to existing structures, expiration
  8  4 of tax abatement under chapter 404, and any increase in
  8  5 valuation because of reclassification of property.
  8  6    c.  Multiply the percent calculated in paragraph "a" times
  8  7 the amount in paragraph "b".
  8  8    d.  Multiply the product determined in paragraph "c" times
  8  9 the sum of one plus the consumer price index.
  8 10    3.  For purposes of this section, "consumer price index"
  8 11 means the percentage rate of change in the consumer price
  8 12 index as tabulated by the United States department of labor,
  8 13 bureau of labor statistics, for the twelve=month period ending
  8 14 June 30 of the previous fiscal year.
  8 15    Sec. 15.  Section 331.263, subsection 2, Code 2009, is
  8 16 amended to read as follows:
  8 17    2.  The governing body of the community commonwealth shall
  8 18 have the authority to levy county taxes and shall have the
  8 19 authority to levy city taxes to the extent the city tax levy
  8 20 authority is transferred by the charter to the community
  8 21 commonwealth.  A city participating in the community
  8 22 commonwealth shall transfer a portion of the city's tax levy
  8 23 authorized under section 384.1 or 384.12, whichever is
  8 24 applicable, to the governing body of the community
  8 25 commonwealth.  The maximum rates of taxes authorized to be
  8 26 levied under sections section 384.1 and 384.12 by a city
  8 27 participating in the community commonwealth shall be reduced
  8 28 by an amount equal to the rates of the same or similar taxes
  8 29 levied in the city by the governing body of the community
  8 30 commonwealth.
  8 31    Sec. 16.  Section 331.301, subsections 11 and 12, Code
  8 32 2009, are amended to read as follows:
  8 33    11.  A county may levy for tort liability insurance,
  8 34 property insurance, and any other insurance that may be
  8 35 necessary in the operation of the county, costs of a
  9  1 self=insurance program, costs of a local government risk pool,
  9  2 and amounts payable under any insurance agreements to provide
  9  3 or procure such insurance, self=insurance program, or local
  9  4 government risk pool.  A county may enter into insurance
  9  5 agreements obligating the county to make payments beyond its
  9  6 current budget year to procure or provide for a policy of
  9  7 insurance, a self=insurance program, or a local government
  9  8 risk pool to protect the county against tort liability, loss
  9  9 of property, or any other risk associated with the operation
  9 10 of the county.  Such a self=insurance program or local
  9 11 government risk pool is not insurance and is not subject to
  9 12 regulation under chapters 505 through 523C.  However, those
  9 13 self=insurance plans regulated pursuant to section 509A.14
  9 14 shall remain subject to the requirements of section 509A.14
  9 15 and rules adopted pursuant to that section.
  9 16    12.  The board of supervisors may credit funds to a reserve
  9 17 for the purposes authorized by subsection 11 of this section;
  9 18 section 331.424, subsection 1, paragraph "f"; and section
  9 19 331.441, subsection 2, paragraph "b".  Moneys credited to the
  9 20 reserve, and interest earned on such moneys, shall remain in
  9 21 the reserve until expended for purposes authorized by
  9 22 subsection 11 of this section; section 331.424, subsection 1,
  9 23 paragraph "f"; or section 331.441, subsection 2, paragraph
  9 24 "b".
  9 25    Sec. 17.  Section 331.421, Code 2009, is amended by adding
  9 26 the following new subsections:
  9 27    NEW SUBSECTION.  1A.  "Budget year" is the fiscal year
  9 28 beginning during the calendar year in which a budget is first
  9 29 certified.
  9 30    NEW SUBSECTION.  2A.  "Current fiscal year" is the fiscal
  9 31 year ending during the calendar year in which a budget is
  9 32 first certified.
  9 33    Sec. 18.  Section 331.421, subsection 10, Code 2009, is
  9 34 amended by striking the subsection.
  9 35    Sec. 19.  Section 331.422, unnumbered paragraph 1, Code
 10  1 2009, is amended to read as follows:
 10  2    Subject to this section and sections 331.423 through
 10  3 331.426 331.424C or as otherwise provided by state law, the
 10  4 board of each county shall certify property taxes annually at
 10  5 its March session to be levied for county purposes as follows:
 10  6    Sec. 20.  Section 331.423, Code 2009, is amended by
 10  7 striking the section and inserting in lieu thereof the
 10  8 following:
 10  9    331.423  PROPERTY TAX LEVY LIMITATION.
 10 10    1.  Annually, the board may certify a levy subject to the
 10 11 limits in this section and section 444.29.  For property taxes
 10 12 due and payable in the fiscal year beginning July 1, 2011, and
 10 13 all subsequent fiscal years, property taxes levied by a county
 10 14 shall not exceed the following percentages of the actual value
 10 15 of the property as determined by the assessor after the
 10 16 appropriate reduction in section 441.21 is applied:
 10 17    a.  For residential property in the incorporated areas of
 10 18 the county, one=fourth of one percent.
 10 19    b.  For residential property in the unincorporated areas of
 10 20 the county, one percent.
 10 21    c.  For commercial property in the incorporated areas of
 10 22 the county, three=fourths of one percent.
 10 23    d.  For commercial property in the unincorporated areas of
 10 24 the county, two percent.
 10 25    e.  For industrial property in the incorporated areas of
 10 26 the county, one percent.
 10 27    f.  For industrial property in the unincorporated areas of
 10 28 the county, three percent.
 10 29    g.  For agricultural property in the incorporated areas of
 10 30 the county, one=fourth of one percent.
 10 31    h.  For agricultural property in the unincorporated areas
 10 32 of the county, three=fourths of one percent.
 10 33    i.  For income residential property in the incorporated
 10 34 areas of the county, one=half of one percent.
 10 35    j.  For income residential property in the unincorporated
 11  1 areas of the county, one=half of one percent.
 11  2    2.  Notwithstanding subsection 1, paragraph "c", property
 11  3 taxes levied by a county against commercial property in the
 11  4 incorporated areas of the county shall not exceed the
 11  5 following percentages of the actual value of the property as
 11  6 determined by the assessor after the appropriate reduction in
 11  7 section 441.21 is applied:
 11  8    a.  For property taxes due and payable in the fiscal year
 11  9 beginning July 1, 2011, one percent.
 11 10    b.  For property taxes due and payable in the fiscal year
 11 11 beginning July 1, 2012, seven=eighths of one percent.
 11 12    3.  a.  In any fiscal year, the ratio of the percentage
 11 13 amount actually levied and the maximum percentage levy allowed
 11 14 shall be the same for each type of property in subsection 1,
 11 15 paragraphs "a", "c", "e", "g", and "i", and subsection 2, when
 11 16 applicable.
 11 17    b.  In any fiscal year, the ratio of the percentage amount
 11 18 actually levied and the maximum percentage levy allowed shall
 11 19 be the same for each type of property in subsection 1,
 11 20 paragraphs "b", "d", "f", "h", and "j".
 11 21    4.  The limitations in subsections 1 and 2 do not apply to
 11 22 amounts levied for debt service pursuant to section 331.430.
 11 23    5.  a.  For the fiscal year beginning July 1, 2011, the
 11 24 percentage tax rate levied against each type of property
 11 25 described in subsections 1 and 2 shall not exceed the sum of
 11 26 one=fourth of one percent plus the corresponding percentage
 11 27 tax rate imposed against that type of property in the fiscal
 11 28 year beginning July 1, 2010.  For the fiscal years beginning
 11 29 July 1, 2012, and July 1, 2013, the percentage tax rate levied
 11 30 against each type of property described in subsections 1 and 2
 11 31 shall not exceed the sum of one=fourth of one percent plus the
 11 32 percentage tax rate imposed for the previous fiscal year.
 11 33 Implementation of this subsection shall not cause the
 11 34 percentage tax rate levied against any type of property
 11 35 described in subsections 1 and 2 to exceed the limitations in
 12  1 those subsections.
 12  2    b.  If, for the fiscal year beginning July 1, 2010, the
 12  3 corresponding percentage tax rate imposed against each type of
 12  4 property described in subsections 1 and 2 exceeds the
 12  5 percentage rate limitations in those subsections, a county
 12  6 shall reduce its levy over a three=year period in order to
 12  7 meet the percentage rate limitation requirements of
 12  8 subsections 1 and 2.
 12  9    Sec. 21.  NEW SECTION.  331.423A  ENDING FUND BALANCE.
 12 10    1.  Effective for a fiscal year beginning on or after July
 12 11 1, 2014, budgeted ending fund balances for a budget year in
 12 12 excess of twenty=five percent of budgeted expenditures in
 12 13 either the general fund or rural services fund for that budget
 12 14 year shall be explicitly reserved or designated for a specific
 12 15 purpose and specifically described in the certified budget.
 12 16 The certified budget for the budget year shall include a
 12 17 description of any changes from the current fiscal year to the
 12 18 explicitly reserved or designated purpose for the excess
 12 19 ending fund balance as specifically described in the certified
 12 20 budget.  For purposes of this section, ending fund balances
 12 21 shall be determined either on a cash basis or an accrual
 12 22 basis, whichever is consistent with the method used for the
 12 23 county's budget.  The description shall include the projected
 12 24 date that the expenditures will be appropriated for the
 12 25 specific purpose.  Budgeted ending fund balances reserved or
 12 26 designated shall only be used for the purpose specifically
 12 27 described in the certified budget.  The certified budget shall
 12 28 not be amended for the purpose of changing the specific
 12 29 purpose after the budget year begins.
 12 30    2.  In a protest to the county budget under section
 12 31 331.436, the county shall have the burden of proving that the
 12 32 budgeted ending fund balances in excess of twenty=five percent
 12 33 are reasonably likely to be appropriated for the explicitly
 12 34 reserved or designated specific purpose by the date identified
 12 35 in the certified budget.
 13  1    3.  The budgeted ending fund balance in excess of twenty=
 13  2 five percent of expenditures for the general fund or rural
 13  3 services fund shall be considered an increase in an item in
 13  4 the budget for purposes of section 24.28.  The state appeal
 13  5 board may certify a decision in accordance with section 24.32
 13  6 that requires a reduction in the budgeted ending fund balance
 13  7 for a particular fund.
 13  8    Sec. 22.  NEW SECTION.  331.423B  SERVICE CHARGE IN LIEU OF
 13  9 PROPERTY TAXES.
 13 10    A county may adopt an ordinance imposing a service charge
 13 11 against all property located in the county.  Service charges
 13 12 are due and payable at the same time and in the same manner as
 13 13 property taxes are paid.  Service charges collected pursuant
 13 14 to this section shall be deposited into the county general
 13 15 services fund or rural services fund, as applicable, for use
 13 16 in funding the service for which the service charge was
 13 17 imposed.  The maximum percentages of actual value allowed to
 13 18 be levied pursuant to section 331.423 shall be adjusted to
 13 19 reflect the amount of service charges estimated to be
 13 20 collected in a fiscal year.
 13 21    Real property subject to a service charge, which property
 13 22 is exempt from property taxation, shall be valued and assessed
 13 23 as required in section 427.1, subsection 18, and in accordance
 13 24 with chapter 441, and the owner or other persons as authorized
 13 25 by chapter 441 are entitled to protest any assessment and take
 13 26 appeals in the same manner as any taxpayer.
 13 27    Sec. 23.  Section 331.424A, subsection 4, Code 2009, is
 13 28 amended to read as follows:
 13 29    4.  For the fiscal year beginning July 1, 1996, and for
 13 30 each subsequent fiscal year, the county shall certify a levy
 13 31 for payment of services.  For each fiscal year, county
 13 32 revenues from taxes imposed by the county credited to the
 13 33 services fund shall not exceed an amount equal to the amount
 13 34 of base year expenditures for services as defined in section
 13 35 331.438, less the amount of property tax relief to be received
 14  1 pursuant to section 426B.2, in the fiscal year for which the
 14  2 budget is certified.  The county auditor and the board of
 14  3 supervisors shall reduce the amount of the levy certified for
 14  4 the services fund by the amount of property tax relief to be
 14  5 received.  A levy certified under this section is not subject
 14  6 to the any appeal provisions of section 331.426 or to any
 14  7 other provision in law authorizing a county to exceed,
 14  8 increase, or appeal a property tax levy limit.
 14  9    Sec. 24.  Section 331.427, subsection 3, paragraph 1, Code
 14 10 2009, is amended to read as follows:
 14 11    l.  Services listed in section 331.424, subsection 1, Code
 14 12 2009, and section 331.554.
 14 13    Sec. 25.  Section 331.428, subsection 2, paragraph d, Code
 14 14 2009, is amended to read as follows:
 14 15    d.  Services listed under section 331.424, subsection 2,
 14 16 Code 2009.
 14 17    Sec. 26.  Section 331.429, subsection 1, paragraphs a and
 14 18 b, Code 2009, are amended to read as follows:
 14 19    a.  Transfers from the general fund not to exceed in any
 14 20 year the dollar equivalent of a tax of sixteen and
 14 21 seven=eighths cents per thousand dollars of assessed value on
 14 22 all taxable property in the county multiplied by the ratio of
 14 23 current taxes actually collected and apportioned for the
 14 24 general basic levy to the total general basic levy for the
 14 25 current year in section 331.423, subsection 3, paragraph "a",
 14 26 and an amount equivalent to the moneys derived by the general
 14 27 fund from military service tax credits under chapter 426A,
 14 28 manufactured or mobile home taxes under section 435.22, and
 14 29 delinquent taxes for prior years collected and apportioned to
 14 30 the general basic fund in the current year, multiplied by the
 14 31 ratio of sixteen and seven=eighths cents to three dollars and
 14 32 fifty cents.  The limit on transfers in this paragraph applies
 14 33 only to property tax revenue and is not a limit on transfers
 14 34 of revenue generated from sources other than property taxes.
 14 35    b.  Transfers from the rural services fund not to exceed in
 15  1 any year the dollar equivalent of a tax of three dollars and
 15  2 three=eighths cents per thousand dollars of assessed value on
 15  3 all taxable property not located within the corporate limits
 15  4 of a city in the county multiplied by the ratio of current
 15  5 taxes actually collected and apportioned for the rural
 15  6 services basic levy to the total rural services basic levy for
 15  7 the current year in section 331.423, subsection 3, paragraph
 15  8 "b", and an amount equivalent to the moneys derived by the
 15  9 rural services fund from military service tax credits under
 15 10 chapter 426A, manufactured or mobile home taxes under section
 15 11 435.22, and delinquent taxes for prior years collected and
 15 12 apportioned to the rural services basic fund in the current
 15 13 year, multiplied by the ratio of three dollars and
 15 14 three=eighths cents to three dollars and ninety=five cents.
 15 15 The limit on transfers in this paragraph applies only to
 15 16 property tax revenue and is not a limit on transfers of
 15 17 revenue generated from sources other than property taxes.
 15 18    Sec. 27.  Section 331.434, unnumbered paragraph 1, Code
 15 19 2009, is amended to read as follows:
 15 20    Annually, the board of each county, subject to sections
 15 21 331.423 through 331.426 331.424C and other applicable state
 15 22 law, shall prepare and adopt a budget, certify taxes, and
 15 23 provide appropriations as follows:
 15 24    Sec. 28.  Section 331.435, unnumbered paragraph 1, Code
 15 25 2009, is amended to read as follows:
 15 26    The board may amend the adopted county budget, subject to
 15 27 sections 331.423 through 331.426 331.424C and other applicable
 15 28 state law, to permit increases in any class of proposed
 15 29 expenditures contained in the budget summary published under
 15 30 section 331.434, subsection 3.
 15 31    Sec. 29.  Section 331.436, Code 2009, is amended by adding
 15 32 the following new unnumbered paragraph:
 15 33    NEW UNNUMBERED PARAGRAPH.  For purposes of a protest to the
 15 34 adopted budget, "item" means a budgeted expenditure,
 15 35 appropriation, or cash reserve from a fund for a service area,
 16  1 program, program element, or purpose.
 16  2    Sec. 30.  Section 335.30A, unnumbered paragraph 2, Code
 16  3 2009, is amended to read as follows:
 16  4    "Land=leased community" means any site, lot, field, or
 16  5 tract of land under common ownership upon which ten or more
 16  6 occupied manufactured homes are harbored, either free of
 16  7 charge or for revenue purposes, and shall include any
 16  8 building, structure, or enclosure used or intended for use as
 16  9 part of the equipment of the land=leased community.  The term
 16 10 "land=leased community" shall not be construed to include
 16 11 homes, buildings, or other structures temporarily maintained
 16 12 by any individual, educational institution, or company on
 16 13 their own premises and used exclusively to house their own
 16 14 labor or students.  A manufactured home located in a
 16 15 land=leased community shall be taxed under section 435.22 as
 16 16 if the manufactured home were located in a mobile home park.
 16 17    Sec. 31.  Section 373.10, Code 2009, is amended to read as
 16 18 follows:
 16 19    373.10  TAXING AUTHORITY.
 16 20    The metropolitan council shall have the authority to levy
 16 21 city taxes to the extent the city tax levy authority is
 16 22 transferred by the charter to the metropolitan council.  A
 16 23 member city shall transfer a portion of the city's tax levy
 16 24 authorized under section 384.1 or 384.12, whichever is
 16 25 applicable, to the metropolitan council.  The maximum rates of
 16 26 taxes authorized to be levied under sections section 384.1 and
 16 27 384.12 by a member city shall be reduced by an amount equal to
 16 28 the rates of the same or similar taxes levied in the city by
 16 29 the metropolitan council.
 16 30    Sec. 32.  Section 384.1, Code 2009, is amended by striking
 16 31 the section and inserting in lieu thereof the following:
 16 32    384.1  PROPERTY TAX LEVY LIMITATION.
 16 33    1.  Annually, a city may certify a levy subject to the
 16 34 limits in this section and section 444.29.  For property taxes
 16 35 due and payable in the fiscal year beginning July 1, 2011, and
 17  1 all subsequent fiscal years, property taxes levied by a city
 17  2 shall not exceed the following percentages of the actual value
 17  3 of the property as determined by the assessor after the
 17  4 appropriate reduction in section 441.21 is applied:
 17  5    a.  For residential property, one percent.
 17  6    b.  For commercial property, one and one=half percent.
 17  7    c.  For industrial property, two percent.
 17  8    d.  For agricultural property, three=fourths of one
 17  9 percent.
 17 10    e.  For income residential property, one and one=half
 17 11 percent.
 17 12    2.  Notwithstanding subsection 1, paragraph "b", property
 17 13 taxes levied by a city against commercial property shall not
 17 14 exceed the following percentages of the actual value of the
 17 15 property as determined by the assessor after the appropriate
 17 16 reduction in section 441.21 is applied:
 17 17    a.  For property taxes due and payable in the fiscal year
 17 18 beginning July 1, 2011, two percent.
 17 19    b.  For property taxes due and payable in the fiscal year
 17 20 beginning July 1, 2012, one and three=fourths percent.
 17 21    3.  In any fiscal year, the ratio of the percentage amount
 17 22 actually levied to the maximum percentage levy allowed shall
 17 23 be the same for each type of property in subsections 1 and 2.
 17 24    4.  The limitations in subsections 1 and 2 do not apply to
 17 25 amounts levied for debt service pursuant to section 384.4.
 17 26    5.  a.  For the fiscal year beginning July 1, 2011, the
 17 27 percentage tax rate levied against each type of property
 17 28 described in subsections 1 and 2 shall not exceed the sum of
 17 29 one=fourth of one percent plus the corresponding percentage
 17 30 tax rate imposed against that type of property in the fiscal
 17 31 year beginning July 1, 2010.  For the fiscal years beginning
 17 32 July 1, 2012, and July 1, 2013, the percentage tax rate levied
 17 33 against each type of property described in subsections 1 and 2
 17 34 shall not exceed the sum of one=fourth of one percent plus the
 17 35 percentage tax rate imposed for the previous fiscal year.
 18  1 Implementation of this subsection shall not cause the
 18  2 percentage tax rate levied against any type of property
 18  3 described in subsections 1 and 2 to exceed the limitations in
 18  4 those subsections.
 18  5    b.  If, for the fiscal year beginning July 1, 2010, the
 18  6 corresponding percentage tax rate imposed against each type of
 18  7 property described in subsections 1 and 2 exceeds the
 18  8 percentage rate limitations in those subsections, a city shall
 18  9 reduce its levy over a three=year period in order to meet the
 18 10 percentage rate limitation requirements of subsections 1 and
 18 11 2.
 18 12    Sec. 33.  Section 384.6, subsection 1, unnumbered paragraph
 18 13 1, Code 2009, is amended to read as follows:
 18 14    Accounting for pension and related employee benefit funds
 18 15 as provided by the city finance committee.  A city may certify
 18 16 taxes to be levied for a trust and agency fund in the amount
 18 17 necessary to meet its obligations, subject to the limitation
 18 18 in section 384.1.
 18 19    Sec. 34.  Section 384.7, Code 2009, is amended to read as
 18 20 follows:
 18 21    384.7  CAPITAL IMPROVEMENTS FUND.
 18 22    A city may establish a capital improvements reserve fund,
 18 23 and may certify taxes not to exceed sixty=seven and one=half
 18 24 cents per thousand dollars of taxable value each year to be
 18 25 levied for the fund, subject to the limitation in section
 18 26 384.1, for the purpose of accumulating moneys for the
 18 27 financing of specified capital improvements, or carrying out a
 18 28 specific capital improvement plan.
 18 29    The question of the establishment of a capital improvements
 18 30 reserve fund, the time period during which a levy will be made
 18 31 for the fund, and the tax rate to be levied for the fund is
 18 32 subject to approval by the voters, and may be submitted at any
 18 33 city election upon the council's motion, or shall be submitted
 18 34 at the next regular city election upon receipt of a valid
 18 35 petition as provided in section 362.4.
 19  1    If a continuing capital improvements levy is established by
 19  2 election, it may be terminated in the same manner, upon the
 19  3 council's motion or upon petition.  Balances in a capital
 19  4 improvements reserve fund are not unencumbered or
 19  5 unappropriated funds for the purpose of reducing tax levies.
 19  6 Transfers may be made between the capital improvements reserve
 19  7 fund, construction funds, and the general fund, as provided in
 19  8 rules promulgated by the city finance committee created in
 19  9 section 384.13.
 19 10    Sec. 35.  Section 384.8, Code 2009, is amended to read as
 19 11 follows:
 19 12    384.8  EMERGENCY FUND.
 19 13    A city may establish an emergency fund and may certify
 19 14 taxes not to exceed twenty=seven cents per thousand dollars of
 19 15 taxable value each year to be levied for the fund, subject to
 19 16 the limitation in section 384.1.  Transfers may be made from
 19 17 the emergency fund to the general fund as provided in rules
 19 18 promulgated by the city finance committee created in section
 19 19 384.13.
 19 20    Sec. 36.  NEW SECTION.  384.12A  SERVICE CHARGE IN LIEU OF
 19 21 PROPERTY TAXES.
 19 22    A city may adopt an ordinance imposing a service charge
 19 23 against all property located in the city.  Service charges are
 19 24 due and payable at the same time and in the same manner as
 19 25 property taxes are paid.  Service charges collected pursuant
 19 26 to this section shall be deposited into the city general fund
 19 27 for use in funding the service for which the service charge
 19 28 was imposed.  The maximum percentages of actual value allowed
 19 29 to be levied pursuant to section 384.1 shall be adjusted to
 19 30 reflect the amount of service charges estimated to be
 19 31 collected in a fiscal year.
 19 32    Real property subject to a service charge, which property
 19 33 is exempt from property taxation, shall be valued and assessed
 19 34 as required in section 427.1, subsection 18, and in accordance
 19 35 with chapter 441, and the owner or other persons as authorized
 20  1 by chapter 441 are entitled to protest any assessment and take
 20  2 appeals in the same manner as any taxpayer.
 20  3    Sec. 37.  Section 384.19, unnumbered paragraph 1, Code
 20  4 2009, is amended to read as follows:
 20  5    Within a period of ten days after the final date that a
 20  6 budget or amended budget may be certified to the county
 20  7 auditor, persons affected by the budget may file a written
 20  8 protest with the county auditor specifying their objections to
 20  9 the budget or any part of it.  For the purposes of a protest
 20 10 to the budget, "part" means a budgeted expenditure,
 20 11 appropriation, or cash reserve from a fund for a service area,
 20 12 program, program element, or purpose.  A protest must be
 20 13 signed by registered voters equal in number to one=fourth of
 20 14 one percent of the votes cast for governor in the last
 20 15 preceding general election in the city, but the number shall
 20 16 not be less than ten persons and the number need not be more
 20 17 than one hundred persons.
 20 18    Sec. 38.  Section 384.84, subsection 8, Code 2009, is
 20 19 amended to read as follows:
 20 20    8.  For the purposes of this section, "premises" includes a
 20 21 mobile home, modular home, or manufactured home as defined in
 20 22 section 435.1, when the mobile home, modular home, or
 20 23 manufactured home is taxed as real estate.
 20 24    Sec. 39.  Section 384.110, Code 2009, is amended to read as
 20 25 follows:
 20 26    384.110  INSURANCE, SELF=INSURANCE, AND RISK POOLING FUNDS.
 20 27    A city may credit funds to a fund or funds for the purposes
 20 28 authorized by section 364.4, subsection 5; section 384.12,
 20 29 subsection 18; or section 384.24, subsection 3, paragraph "s";
 20 30 or to pay the premium costs on tort liability insurance,
 20 31 property insurance, and any other insurance that may be
 20 32 necessary in the operation of the city, the costs of a self=
 20 33 insurance program, the costs of a local government risk pool
 20 34 and amounts payable under any insurance agreements to provide
 20 35 or procure such insurance, self=insurance program, or local
 21  1 government risk pool.  Moneys credited to the fund or funds,
 21  2 and interest earned on such moneys, shall remain in the fund
 21  3 or funds until expended for purposes authorized by section
 21  4 364.4, subsection 5; section 384.12, subsection 18; or section
 21  5 384.24, subsection 3, paragraph "s"; or for purposes specified
 21  6 in this section.
 21  7    Sec. 40.  Section 414.28A, unnumbered paragraph 2, Code
 21  8 2009, is amended to read as follows:
 21  9    "Land=leased community" means any site, lot, field, or
 21 10 tract of land under common ownership upon which ten or more
 21 11 occupied manufactured homes are harbored, either free of
 21 12 charge or for revenue purposes, and shall include any
 21 13 building, structure, or enclosure used or intended for use as
 21 14 part of the equipment of the land=leased community.  The term
 21 15 "land=leased community" shall not be construed to include
 21 16 homes, buildings, or other structures temporarily maintained
 21 17 by any individual, educational institution, or company on
 21 18 their own premises and used exclusively to house their own
 21 19 labor or students.  A manufactured home located in a
 21 20 land=leased community shall be taxed under section 435.22 as
 21 21 if the manufactured home were located in a mobile home park.
 21 22    Sec. 41.  Section 426B.1, subsection 3, Code 2009, is
 21 23 amended to read as follows:
 21 24    3.  There is annually appropriated from the property tax
 21 25 relief fund to the department of human services to supplement
 21 26 the medical assistance appropriation for the fiscal year
 21 27 beginning July 1, 1997, and for succeeding fiscal years, six
 21 28 million six hundred thousand dollars to be used for the
 21 29 nonfederal share of the costs of services provided to minors
 21 30 with mental retardation under the medical assistance program
 21 31 to meet the requirements of section 249A.12, subsection 4.
 21 32 The appropriation in this subsection shall be charged to the
 21 33 property tax relief fund prior to the distribution of moneys
 21 34 from the fund under section 426B.2 and the amount of moneys
 21 35 available for distribution shall be reduced accordingly.
 22  1 However, the appropriation in this subsection shall be
 22  2 considered to be a property tax relief payment for purposes of
 22  3 the combined amount of payments required to achieve fifty
 22  4 seventy=five percent of the counties' base year expenditures
 22  5 as provided in section 426B.2, subsection 2.
 22  6    Sec. 42.  Section 426B.2, subsection 2, Code 2009, is
 22  7 amended to read as follows:
 22  8    2.  The distributions under subsection 1 shall continue to
 22  9 be made until the combined amount of the distributions made
 22 10 under subsection 1 are equal to fifty seventy=five percent of
 22 11 the total of all counties' base year expenditures as defined
 22 12 in section 331.438.
 22 13    Sec. 43.  Section 427A.1, subsection 1, paragraph c, Code
 22 14 2009, is amended to read as follows:
 22 15    c.  Buildings, structures or improvements, any of which are
 22 16 constructed on or in the land, attached to the land, or placed
 22 17 upon a foundation whether or not attached to the foundation.
 22 18 However, property taxed under chapter 435 and property that is
 22 19 a concrete batch plant as that term is defined in subsection 4
 22 20 shall not be assessed and taxed as real property.
 22 21    Sec. 44.  Section 435.1, subsections 3, 5, and 7, Code
 22 22 2009, are amended to read as follows:
 22 23    3.  "Manufactured home" means a factory=built structure
 22 24 built under authority of 42 U.S.C. } 5403, that is required by
 22 25 federal law to display a seal from the United States
 22 26 department of housing and urban development, and was
 22 27 constructed on or after June 15, 1976.  If a A manufactured
 22 28 home is placed in a manufactured home community or a mobile
 22 29 home park, the home must be titled and is subject to the
 22 30 manufactured or mobile home square foot tax.  If a
 22 31 manufactured home is placed outside a manufactured home
 22 32 community or a mobile home park, the home must be titled and
 22 33 is to be assessed and taxed as real estate.
 22 34    5.  "Mobile home" means any vehicle without motive power
 22 35 used or so manufactured or constructed as to permit its being
 23  1 used as a conveyance upon the public streets and highways and
 23  2 so designed, constructed, or reconstructed as will permit the
 23  3 vehicle to be used as a place for human habitation by one or
 23  4 more persons; but shall also include any such vehicle with
 23  5 motive power not registered as a motor vehicle in Iowa.  A
 23  6 "mobile home" is not built to a mandatory building code,
 23  7 contains no state or federal seals, and was built before June
 23  8 15, 1976.  If a A mobile home is placed outside a mobile home
 23  9 park, the home is to be assessed and taxed as real estate.
 23 10    7.  "Modular home" means a factory=built structure which is
 23 11 manufactured to be used as a place of human habitation, is
 23 12 constructed to comply with the Iowa state building code for
 23 13 modular factory=built structures, as adopted pursuant to
 23 14 section 103A.7, and must display the seal issued by the state
 23 15 building code commissioner.  If a modular home is placed in a
 23 16 manufactured home community or mobile home park, the home is
 23 17 subject to the annual tax as required by section 435.22.  If a
 23 18 A modular home is placed outside a manufactured home community
 23 19 or a mobile home park, the home shall be considered real
 23 20 property and is to be assessed and taxed as real estate.
 23 21    Sec. 45.  Section 435.22, Code 2009, is amended by striking
 23 22 the section and inserting in lieu thereof the following:
 23 23    435.22  ASSESSMENT == CREDITS.
 23 24    A mobile home or manufactured home used primarily as a
 23 25 residence shall be assessed as improved residential property
 23 26 pursuant to section 441.21, subsection 4, and shall be taxed
 23 27 an annual ad valorem tax in the same manner as other
 23 28 residential property.  A mobile home or manufactured home used
 23 29 primarily for commercial or industrial purposes shall be
 23 30 assessed as improved commercial or industrial property
 23 31 pursuant to section 441.21, subsection 5A, and shall be taxed
 23 32 an annual ad valorem tax in the same manner as other
 23 33 commercial or industrial property.  Persons who own a mobile
 23 34 home or manufactured home as a homestead and who meet the
 23 35 qualifications provided in section 425.2 are eligible for the
 24  1 homestead exemption and if they meet the qualifications
 24  2 provided in sections 425.17 through 425.37 are eligible for an
 24  3 extraordinary property tax exemption.  A person who owns a
 24  4 mobile home or manufactured home is eligible to apply for the
 24  5 military tax exemption as provided in section 426A.11.
 24  6    Real estate located in a manufactured home community or a
 24  7 mobile home park, as defined in section 435.1, shall be
 24  8 assessed and taxed as improved residential property.  Real
 24  9 estate located in a land=leased community, as defined in
 24 10 sections 335.30A and 414.28A, shall be assessed and taxed as
 24 11 improved residential property.
 24 12    Sec. 46.  Section 435.23, Code 2009, is amended to read as
 24 13 follows:
 24 14    435.23  EXEMPTIONS == PRORATING TAX.
 24 15    The manufacturer's and dealer's inventory of mobile homes,
 24 16 manufactured homes, or modular homes not in use as a place of
 24 17 human habitation shall be exempt from the annual tax.  All
 24 18 travel trailers shall be exempt from this tax.  The homes and
 24 19 travel trailers in the inventory of manufacturers and dealers
 24 20 shall be exempt from personal property tax.  The homes coming
 24 21 into Iowa from out of state and located in a manufactured home
 24 22 community or mobile home park shall be liable for the tax
 24 23 computed pro rata to the nearest whole month, for the time the
 24 24 home is actually situated in Iowa.
 24 25    Sec. 47.  Section 435.24, subsections 1, 2, and 4, Code
 24 26 2009, are amended to read as follows:
 24 27    1.  The annual tax is due and payable to the county
 24 28 treasurer on or after July 1 in each fiscal year and is
 24 29 collectible in the same manner and at the same time as
 24 30 ordinary taxes as provided in sections 445.36, 445.37, and
 24 31 445.39.  Interest at the rate prescribed by law shall accrue
 24 32 on unpaid taxes.  Both installments of taxes may be paid at
 24 33 one time.  The September installment represents a tax period
 24 34 beginning July 1 and ending December 31.  The March
 24 35 installment represents a tax period beginning January 1 and
 25  1 ending June 30.  A mobile home, manufactured home, or modular
 25  2 home coming into this state from outside the state, put in use
 25  3 from a dealer's inventory, or put in use at any time after
 25  4 July 1 or January 1, and located in a manufactured home
 25  5 community or mobile home park, is subject to the taxes
 25  6 prorated for the remaining unexpired months of the tax period,
 25  7 but the purchaser is not required to pay the tax at the time
 25  8 of purchase.  Interest attaches the following April 1 for
 25  9 taxes prorated on or after October 1.  Interest attaches the
 25 10 following October 1 for taxes prorated on or after April 1.
 25 11 Interest at the rate prescribed by law shall accrue on unpaid
 25 12 taxes.  If the taxes are not paid, the county treasurer shall
 25 13 send a statement of delinquent taxes as part of the notice of
 25 14 tax sale as provided in section 446.9.  The owner of a home
 25 15 who sells the home between July 1 and December 31 and obtains
 25 16 a tax clearance statement is responsible only for the
 25 17 September tax payment and is not required to pay taxes for
 25 18 subsequent tax periods.  If the owner of a home located in a
 25 19 manufactured home community or mobile home park sells the
 25 20 home, obtains a tax clearance statement, and obtains a
 25 21 replacement home to be located in a manufactured home
 25 22 community or mobile home park, the owner shall not pay taxes
 25 23 under this chapter for the newly acquired home for the same
 25 24 tax period that the owner has paid taxes on the home sold.
 25 25 Interest for delinquent taxes shall be calculated to the
 25 26 nearest whole dollar.  In calculating interest each fraction
 25 27 of a month shall be counted as an entire month.
 25 28    2.  The home owners upon issuance of a certificate of title
 25 29 or upon transporting to a new site shall file the address,
 25 30 township, and school district, of the location where the home
 25 31 is parked with the county treasurer's office.  Failure to
 25 32 comply is punishable as set out in section 435.18.  When the
 25 33 new location is outside of a manufactured home community or
 25 34 mobile home park, the The county treasurer shall provide to
 25 35 the assessor a copy of the tax clearance statement for
 26  1 purposes of assessment as real estate on the following January
 26  2 1.
 26  3    4.  The tax is a lien on the vehicle senior to any other
 26  4 lien upon it except a judgment obtained in an action to
 26  5 dispose of an abandoned home under section 555B.8.  The home
 26  6 bearing a current registration issued by any other state and
 26  7 remaining within this state for an accumulated period not to
 26  8 exceed ninety days in any twelve=month period is not subject
 26  9 to Iowa tax.  However, when one or more persons occupying a
 26 10 home bearing a foreign registration are employed in this
 26 11 state, there is no exemption from the Iowa tax.  This tax is
 26 12 in lieu of all other taxes general or local on a home.
 26 13    Sec. 48.  Section 435.26, subsection 1, paragraph a, Code
 26 14 2009, is amended to read as follows:
 26 15    a.  A mobile home or manufactured home which is located
 26 16 outside a manufactured home community or mobile home park
 26 17 shall be converted to real estate by being placed on a
 26 18 permanent foundation and shall be assessed for real estate
 26 19 taxes.  A home, after conversion to real estate, is eligible
 26 20 for the homestead tax credit and the military service tax
 26 21 exemption as provided in sections 425.2 and 426A.11.  Such
 26 22 mobile home or manufactured home is subject to the
 26 23 requirements of this section.
 26 24    Sec. 49.  Section 435.27, subsection 1, Code 2009, is
 26 25 amended to read as follows:
 26 26    1.  A mobile home or manufactured home converted to real
 26 27 estate under section 435.26 may be reconverted to a home as
 26 28 provided in this section when it that is moved to a
 26 29 manufactured home community or mobile home park or a
 26 30 manufactured or mobile home retailer's inventory is subject to
 26 31 the requirements of this section.  When the home is located
 26 32 within a manufactured home community or mobile home park, the
 26 33 home shall be taxed pursuant to section 435.22, subsection 1.
 26 34    Sec. 50.  Section 435.27, subsection 3, Code 2009, is
 26 35 amended by striking the subsection.
 27  1    Sec. 51.  Section 435.28, Code 2009, is amended to read as
 27  2 follows:
 27  3    435.28  COUNTY TREASURER TO NOTIFY ASSESSOR.
 27  4    Upon issuance of a certificate of title to a mobile home or
 27  5 manufactured home which is not located in a manufactured home
 27  6 community or mobile home park or dealer's inventory, the
 27  7 county treasurer shall notify the assessor of the existence of
 27  8 the home for tax assessment purposes.
 27  9    Sec. 52.  Section 435.35, Code 2009, is amended to read as
 27 10 follows:
 27 11    435.35  EXISTING HOME OUTSIDE OF MANUFACTURED HOME
 27 12 COMMUNITY OR MOBILE HOME PARK == EXEMPTION.
 27 13    A taxable mobile home or manufactured home which is not
 27 14 located in a manufactured home community or mobile home park
 27 15 as of January 1, 1995, shall be assessed and taxed as real
 27 16 estate.  The home is also exempt from the permanent foundation
 27 17 requirements of this chapter until the home is relocated.
 27 18    Sec. 53.  Section 441.16, unnumbered paragraph 7, Code
 27 19 2009, is amended to read as follows:
 27 20    Any tax for the maintenance of the office of assessor and
 27 21 other assessment procedure shall be levied only upon the
 27 22 property in the area assessed by said assessor and such tax
 27 23 levy shall not exceed forty and one=half cents per thousand
 27 24 dollars of assessed value in assessing areas where the
 27 25 valuation upon which the tax is levied does not exceed
 27 26 ninety=two million, six hundred thousand dollars; thirty=three
 27 27 and three=fourths cents per thousand dollars of assessed value
 27 28 in assessing areas where the valuation upon which the tax is
 27 29 levied exceeds ninety=two million, six hundred thousand
 27 30 dollars and does not exceed one hundred eleven million, one
 27 31 hundred twenty thousand dollars; twenty=seven cents per
 27 32 thousand dollars of assessed value in assessing areas where
 27 33 the valuation upon which the tax is levied exceeds one hundred
 27 34 eleven million, one hundred twenty thousand dollars is subject
 27 35 to the limitation in section 331.423 or 384.1, as applicable.
 28  1 The county treasurer shall credit the sums received from such
 28  2 levy to a separate fund to be known as the "assessment expense
 28  3 fund" and from which fund all expenses incurred under this
 28  4 chapter shall be paid.  In the case of a county where there is
 28  5 more than one assessor the treasurer shall maintain separate
 28  6 assessment expense funds for each assessor.
 28  7    Sec. 54.  Section 441.50, Code 2009, is amended to read as
 28  8 follows:
 28  9    441.50  APPRAISERS EMPLOYED.
 28 10    The conference board shall have power to employ appraisers
 28 11 or other technical or expert help to assist in the valuation
 28 12 of property, the cost thereof to be paid in the same manner as
 28 13 other expenses of the assessor's office.  The conference board
 28 14 may certify for levy annually an amount not to exceed forty
 28 15 and one=half cents per thousand dollars of assessed value of
 28 16 taxable property, subject to the limitation in section 331.423
 28 17 or 384.1, as applicable, for the purpose of establishing a
 28 18 special appraiser's fund, to be used only for such purposes.
 28 19 From time to time the conference board may direct the transfer
 28 20 of any unexpended balance in the special appraiser's fund to
 28 21 the assessment expense fund.
 28 22    Sec. 55.  NEW SECTION.  444.29  PROPERTY TAX LIMITATION ==
 28 23 CONSUMER PRICE INDEX.
 28 24    1.  Notwithstanding the limitations in sections 331.423 and
 28 25 384.1, beginning with the fiscal year beginning July 1, 2014,
 28 26 the percentage increase in the amount of property taxes to be
 28 27 levied by a city or a county against any class of property for
 28 28 a fiscal year cannot exceed the amount computed in this
 28 29 section.
 28 30    2.  The property tax limitation shall be computed as
 28 31 follows:
 28 32    a.  Determine the amount of property taxes levied as a
 28 33 percent of taxable value in the current fiscal year.
 28 34    b.  Determine the sum of the amount of taxable value of
 28 35 property for the current fiscal year, and the amount of
 29  1 increase in taxable value of property due to new construction,
 29  2 additions or improvements to existing structures, expiration
 29  3 of tax abatement under chapter 404, and any increase in
 29  4 valuation because of reclassification of property.
 29  5    c.  Multiply the percent calculated in paragraph "a" times
 29  6 the amount in paragraph "b".
 29  7    d.  Multiply the product determined in paragraph "c" times
 29  8 the sum of one plus the consumer price index.
 29  9    3.  a.  A city or county may exceed the limitation in this
 29 10 section if the purpose of exceeding the limitation is to
 29 11 provide additional property tax credits, exemptions, or
 29 12 abatements, and if the proposition to exceed the limitation is
 29 13 submitted at the regular city election in the case of a city
 29 14 or at the general election in the case of a county.
 29 15    b.  Notice of the election shall be given by publication as
 29 16 required by section 49.53.
 29 17    c.  The proposition of exceeding the limitation is not
 29 18 adopted unless the proposition receives a favorable majority
 29 19 of the votes cast on the proposition.
 29 20    d.  If the proposition of exceeding the limitation is
 29 21 approved by the voters, the city or county may proceed to
 29 22 exceed the limitation for a period not to exceed four years.
 29 23    e.  In no case shall the percentage rate limitations in
 29 24 sections 331.423 and 384.1 be exceeded by operation of this
 29 25 subsection.
 29 26    4.  For purposes of this section, "consumer price index"
 29 27 means the percentage rate of change in the consumer price
 29 28 index as tabulated by the United States department of labor,
 29 29 bureau of labor statistics, for the twelve=month period ending
 29 30 June 30 of the previous fiscal year.
 29 31    Sec. 56.  Section 445.1, subsection 6, Code 2009, is
 29 32 amended to read as follows:
 29 33    6.  "Taxes" means an annual ad valorem tax, a special
 29 34 assessment, a drainage tax, and a rate or charge, and taxes on
 29 35 homes pursuant to chapter 435 which are collectible by the
 30  1 county treasurer.
 30  2    Sec. 57.  Section 445.39, Code 2009, is amended to read as
 30  3 follows:
 30  4    445.39  INTEREST ON DELINQUENT TAXES.
 30  5    If the first installment of taxes is not paid by the
 30  6 delinquent date specified in section 445.37, the installment
 30  7 becomes due and draws interest of one and one=half percent per
 30  8 month until paid, from the delinquent date following the levy.
 30  9 If the last half is not paid by the delinquent date specified
 30 10 for it in section 445.37, the same interest shall be charged
 30 11 from the date the last half became delinquent.  However, after
 30 12 April 1 in a fiscal year when late delivery of the tax list
 30 13 referred to in chapter 443 results in a delinquency date later
 30 14 than October 1 for the first installment, interest on
 30 15 delinquent first installments shall accrue as if delivery were
 30 16 made on the previous June 30.  The interest imposed under this
 30 17 section shall be computed to the nearest whole dollar and the
 30 18 amount of interest shall not be less than one dollar.  In
 30 19 calculating interest each fraction of a month shall be counted
 30 20 as an entire month.  The interest percentage on delinquent
 30 21 special assessments and rates or charges is the same as that
 30 22 for the first installment of delinquent ad valorem taxes.
 30 23    Sec. 58.  Section 447.1, unnumbered paragraph 1, Code 2009,
 30 24 is amended to read as follows:
 30 25    A parcel sold under this chapter and chapter 446 may be
 30 26 redeemed at any time before the right of redemption expires,
 30 27 by payment to the county treasurer, to be held by the
 30 28 treasurer subject to the order of the purchaser, of the amount
 30 29 for which the parcel was sold, including the fee for the
 30 30 certificate of purchase, and interest of two one and one=half
 30 31 percent per month, counting each fraction of a month as an
 30 32 entire month, from the month of sale, and the total amount
 30 33 paid by the purchaser or the purchaser's assignee for any
 30 34 subsequent year, with interest at the same rate added on the
 30 35 amount of the payment for each subsequent year from the month
 31  1 of payment, counting each fraction of a month as an entire
 31  2 month.  The amount of interest must be at least one dollar and
 31  3 shall be rounded to the nearest whole dollar.  Interest shall
 31  4 accrue on subsequent amounts as provided in section 446.32.
 31  5 The redemption must be received by the treasurer on or before
 31  6 the last day of the month to avoid additional interest being
 31  7 added to the amount necessary to redeem.  However, if the last
 31  8 day of a month falls on a Saturday, Sunday, or a holiday, the
 31  9 payment must be received by the treasurer by the close of
 31 10 business on the first business day of the following month.
 31 11    Sec. 59.  Sections 331.424, 331.424B, 331.425, 331.426,
 31 12 384.12, 435.33, and 435.34, Code 2009, are repealed.
 31 13    Sec. 60.  EFFECTIVE AND APPLICABILITY DATES.
 31 14    1.  The sections of this division of this Act amending
 31 15 sections 445.39 and 447.1 take effect July 1, 2009, and apply
 31 16 to property taxes which become delinquent on or after July 1,
 31 17 2009, and to parcels sold for delinquent taxes on or after
 31 18 July 1, 2009.
 31 19    2.  The remainder of this division of this Act takes effect
 31 20 July 1, 2010, and applies to fiscal years beginning on or
 31 21 after July 1, 2011.
 31 22                           DIVISION II
 31 23                     ASSESSMENT OF PROPERTY
 31 24    Sec. 61.  Section 403.20, Code 2009, is amended to read as
 31 25 follows:
 31 26    403.20  PERCENTAGE OF ADJUSTMENT CONSIDERED IN VALUE
 31 27 ASSESSMENT.
 31 28    In determining the assessed value of property within an
 31 29 urban renewal area which is subject to a division of tax
 31 30 revenues pursuant to section 403.19, the difference between
 31 31 the actual value of the property as determined by the assessor
 31 32 each year and the percentage of adjustment certified for that
 31 33 year by the director of revenue on or before November 1
 31 34 reductions applied to the property pursuant to section 441.21,
 31 35 subsection 9 4, 5, 5A, 5B, or 5C, multiplied by the actual
 32  1 value of the property as determined by the assessor, shall be
 32  2 subtracted from the actual value of the property as determined
 32  3 pursuant to section 403.19, subsection 1.  If the assessed
 32  4 value of the property as determined pursuant to section
 32  5 403.19, subsection 1, is reduced to zero, the additional
 32  6 valuation reduction shall be subtracted from the actual value
 32  7 of the property as determined by the assessor.
 32  8    Sec. 62.  Section 433.6, Code 2009, is amended to read as
 32  9 follows:
 32 10    433.6  TAXABLE VALUE.
 32 11    The taxable value shall be determined by taking the
 32 12 percentage of the actual value so ascertained, reduced as
 32 13 provided by section 441.21, and the ratio between the actual
 32 14 value and the assessed or taxable value of the property of
 32 15 each of said companies shall be the same as in the case of
 32 16 property of private individuals.
 32 17    Sec. 63.  Section 437.7, Code 2009, is amended to read as
 32 18 follows:
 32 19    437.7  TAXABLE VALUE.
 32 20    The taxable value of such line or lines of which the
 32 21 director of revenue by this chapter is required to find the
 32 22 value, shall be determined by taking the percentage of the
 32 23 actual reduction in value so ascertained, as provided by
 32 24 section 441.21, and the ratio between the actual value and the
 32 25 assessed or taxable value of the transmission line or lines of
 32 26 each of said companies located outside of cities shall be the
 32 27 same as in the case of the property of private individuals.
 32 28    Sec. 64.  Section 441.6, Code 2009, is amended to read as
 32 29 follows:
 32 30    441.6  APPOINTMENT OF ASSESSOR.
 32 31    1.  a.  When a vacancy occurs in the office of city or
 32 32 county assessor, the examining board shall, within seven days
 32 33 of the occurrence of the vacancy, request the director of
 32 34 revenue to forward a register containing the names of all
 32 35 individuals eligible for appointment as assessor.  The
 33  1 examining board may, at its own expense, conduct a further
 33  2 examination, either written or oral, of any person whose name
 33  3 appears on the register, and shall make written report of the
 33  4 examination and submit the report together with the names of
 33  5 those individuals certified by the director of revenue to the
 33  6 conference board within fifteen days after the receipt of the
 33  7 register from the director of revenue.
 33  8    b.  Upon receipt of the report of the examining board, the
 33  9 chairperson of the conference board shall by written notice
 33 10 call a meeting of the conference board to appoint an assessor.
 33 11 The meeting shall be held not later than seven days after the
 33 12 receipt of the report of the examining board by the conference
 33 13 board.  At the meeting, the conference board shall appoint an
 33 14 assessor from the register of eligible candidates.  However,
 33 15 if a special examination has not been conducted previously for
 33 16 the same vacancy, the conference board may request the
 33 17 director of revenue to hold a special examination pursuant to
 33 18 section 441.7.  The chairperson of the conference board shall
 33 19 give written notice to the director of revenue of the
 33 20 appointment and its effective date within ten days of the
 33 21 decision of the board.
 33 22    2.  In lieu of subsection 1, a vacancy in the office of
 33 23 assessor occurring during an unexpired term may be filled by
 33 24 appointment of an assessor currently serving in another
 33 25 assessing jurisdiction if the conference boards of both
 33 26 assessing jurisdictions agree to jointly employ an assessor.
 33 27 The appointment to fill the vacancy shall be for the length of
 33 28 the unexpired term.  The chairperson of the conference board
 33 29 of the assessing jurisdiction where the vacancy has occurred
 33 30 shall give written notice to the director of revenue of the
 33 31 agreement to jointly employ an assessor for the remainder of
 33 32 the unexpired term within ten days of the date of the
 33 33 appointment.  If the conference boards jointly employing an
 33 34 assessor under this subsection wish to continue joint
 33 35 employment of an assessor beyond completion of the unexpired
 34  1 term, they must do so pursuant to section 441.16A.
 34  2    Sec. 65.  Section 441.8, unnumbered paragraphs 9 and 10,
 34  3 Code 2009, are amended to read as follows:
 34  4    If the incumbent assessor is not reappointed as above
 34  5 provided, then not less than sixty days before the expiration
 34  6 of the term of said assessor, a new assessor shall be selected
 34  7 as provided in section 441.6, subsection 1, or section
 34  8 441.16A.
 34  9    In the event of the removal, resignation, death, or removal
 34 10 from the county of the said assessor, the conference board
 34 11 shall proceed to fill the vacancy by appointing an assessor to
 34 12 serve the unexpired term in the manner provided in section
 34 13 441.6, subsection 1 or 2.  Until the vacancy is filled, the
 34 14 chief deputy shall act as assessor, and in the event there be
 34 15 no deputy, in the case of counties the auditor shall act as
 34 16 assessor and in the case of cities having an assessor the city
 34 17 clerk shall act as assessor.
 34 18    Sec. 66.  NEW SECTION.  441.16A  COUNTIES JOINING IN
 34 19 EMPLOYMENT OF MULTICOUNTY ASSESSOR.
 34 20    The conference boards of two or more adjacent counties may
 34 21 enter into an agreement pursuant to chapter 28E to jointly
 34 22 employ a county assessor for one or more terms of office.
 34 23 Such agreement shall be written and entered in their
 34 24 respective minutes and a copy of the agreement transmitted to
 34 25 the conference board of each county that is a party to the
 34 26 agreement and to the director of revenue.  The duration of the
 34 27 agreement shall not be for a period of less than six years
 34 28 beginning from the date the multicounty assessor is appointed
 34 29 by joint action of the conference boards.  The incumbent
 34 30 assessor of each county that is a party to the agreement shall
 34 31 be allowed to complete the current term of office and the
 34 32 multicounty assessor shall be appointed for the succeeding
 34 33 term.
 34 34    The agreement shall provide that the conference board of
 34 35 each county that is a party to the agreement shall meet
 35  1 jointly on matters pertaining to appointment, retention, or
 35  2 compensation of the assessor, or on other personnel matters
 35  3 relating to the assessor.  When meeting jointly, the co=
 35  4 chairpersons of the conference boards shall be the chairperson
 35  5 of each board of supervisors represented on each conference
 35  6 board.  When voting on matters at a joint meeting, section
 35  7 441.2 applies except that no action shall be valid except by
 35  8 the vote of not less than four out of the six units.
 35  9    Sec. 67.  Section 441.21, subsection 1, paragraph b,
 35 10 unnumbered paragraph 1, Code 2009, is amended to read as
 35 11 follows:
 35 12    The actual value of all property subject to assessment and
 35 13 taxation shall be the fair and reasonable market value of such
 35 14 property except as otherwise provided in this section.
 35 15 "Market value" is defined as the fair and reasonable exchange
 35 16 in the year in which the property is listed and valued between
 35 17 a willing buyer and a willing seller, neither being under any
 35 18 compulsion to buy or sell and each being familiar with all the
 35 19 facts relating to the particular property.  Sale prices of the
 35 20 property or comparable property in normal transactions
 35 21 reflecting market value, and the probable availability or
 35 22 unavailability of persons interested in purchasing the
 35 23 property, shall be taken into consideration in arriving at its
 35 24 market value.  In arriving at market value, sale prices of
 35 25 property in abnormal transactions not reflecting market value
 35 26 shall not be taken into account, or shall be adjusted to
 35 27 eliminate the effect of factors which distort market value,
 35 28 including but not limited to sales to immediate family of the
 35 29 seller, foreclosure or other forced sales, contract sales,
 35 30 discounted purchase transactions or purchase of adjoining land
 35 31 or other land to be operated as a unit.  The sales price of
 35 32 property sold at public auction shall not be presumed to be a
 35 33 sales price of an abnormal transaction, nor shall a sale at
 35 34 public auction be presumed to be a factor which distorts
 35 35 market value.  The sale price of property sold in the calendar
 36  1 year prior to the assessment year shall be presumed to be the
 36  2 market value of the property for that assessment year if the
 36  3 buyer and seller in such transaction were not immediate family
 36  4 members.  If the assessment of such property is protested, the
 36  5 assessor has the burden of proving by a preponderance of the
 36  6 evidence that the market value is other than the sale price.
 36  7    Sec. 68.  Section 441.21, subsection 1, paragraphs e and f,
 36  8 Code 2009, are amended by striking the paragraphs.
 36  9    Sec. 69.  Section 441.21, subsection 1, paragraph g, Code
 36 10 2009, is amended to read as follows:
 36 11    g.  Notwithstanding any other provision of this section,
 36 12 the The actual value of any property shall not exceed its fair
 36 13 and reasonable market value, except agricultural property
 36 14 which shall be valued exclusively as provided in paragraph "e"
 36 15 of this subsection as otherwise provided in this section.
 36 16    Sec. 70.  Section 441.21, subsection 2, Code 2009, is
 36 17 amended by adding the following new unnumbered paragraph:
 36 18    NEW UNNUMBERED PARAGRAPH.  In the event market value of
 36 19 newly constructed residential property being assessed cannot
 36 20 be readily established because of insufficient comparable
 36 21 sales, the assessor shall use the replacement cost method to
 36 22 value the property.
 36 23    Sec. 71.  Section 441.21, subsection 4, Code 2009, is
 36 24 amended by striking the subsection and inserting in lieu
 36 25 thereof the following:
 36 26    4.  a.  (1)  For valuations established for the assessment
 36 27 year beginning January 1, 2010, and each year thereafter, the
 36 28 actual value at which residential property is assessed shall
 36 29 be the sum of the market value for the assessment year and for
 36 30 the previous four assessment years, as determined by the
 36 31 assessor, divided by five.
 36 32    (2)  For valuations established for the assessment year
 36 33 beginning January 1, 2010, and each year thereafter, the
 36 34 actual value determined under subparagraph (1) shall be
 36 35 reduced by fifty percent up to a maximum of twenty thousand
 37  1 dollars on each parcel of residential property assessed for
 37  2 taxation.  The reduction shall be applied to an improved
 37  3 parcel only.
 37  4    b.  (1)  For valuations established for the assessment year
 37  5 beginning January 1, 2010, and each year thereafter, the
 37  6 actual value at which income residential property is assessed
 37  7 shall be the sum of the market value for the assessment year
 37  8 and for the previous four assessment years, as determined by
 37  9 the assessor, divided by five.
 37 10    (2)  For valuations established for the assessment year
 37 11 beginning January 1, 2010, and each year thereafter, the
 37 12 actual value determined under subparagraph (1) shall be
 37 13 reduced by fifty percent up to a maximum of twenty thousand
 37 14 dollars on each parcel of income residential property assessed
 37 15 for taxation.  The reduction shall be applied to an improved
 37 16 parcel only.  "Income residential property" means residential
 37 17 property consisting of three or more separate living quarters
 37 18 with at least seventy=five percent of the space used for
 37 19 residential purposes.
 37 20    Sec. 72.  Section 441.21, subsection 5, Code 2009, is
 37 21 amended to read as follows:
 37 22    5.  For valuations established as of January 1, 1979,
 37 23 commercial property and industrial property, excluding
 37 24 properties referred to in section 427A.1, subsection 8, shall
 37 25 be assessed as a percentage of the actual value of each class
 37 26 of property.  The percentage shall be determined for each
 37 27 class of property by the director of revenue for the state in
 37 28 accordance with the provisions of this section.  For
 37 29 valuations established as of January 1, 1979, the percentage
 37 30 shall be the quotient of the dividend and divisor as defined
 37 31 in this section.  The dividend for each class of property
 37 32 shall be the total actual valuation for each class of property
 37 33 established for 1978, plus six percent of the amount so
 37 34 determined.  The divisor for each class of property shall be
 37 35 the valuation for each class of property established for 1978,
 38  1 as reported by the assessors on the abstracts of assessment
 38  2 for 1978, plus the amount of value added to the total actual
 38  3 value by the revaluation of existing properties in 1979 as
 38  4 equalized by the director of revenue pursuant to section
 38  5 441.49.  For valuations established as of January 1, 1979,
 38  6 property valued by the department of revenue pursuant to
 38  7 sections 428.24 through 428.29, and chapters 428, 433, 437,
 38  8 and 438 shall be considered as one class of property and shall
 38  9 be assessed as a percentage of its actual value.  The
 38 10 percentage shall be determined by the director of revenue in
 38 11 accordance with the provisions of this section.  For
 38 12 valuations established as of January 1, 1979, the percentage
 38 13 shall be the quotient of the dividend and divisor as defined
 38 14 in this section.  The dividend shall be the total actual
 38 15 valuation established for 1978 by the department of revenue,
 38 16 plus ten percent of the amount so determined.  The divisor for
 38 17 property valued by the department of revenue pursuant to
 38 18 sections 428.24 through 428.29 and chapters 428, 433, 437, and
 38 19 438 shall be the valuation established for 1978, plus the
 38 20 amount of value added to the total actual value by the
 38 21 revaluation of the property by the department of revenue as of
 38 22 January 1, 1979.  For valuations established as of January 1,
 38 23 1980, commercial property and industrial property, excluding
 38 24 properties referred to in section 427A.1, subsection 8, shall
 38 25 be assessed at a percentage of the actual value of each class
 38 26 of property.  The percentage shall be determined for each
 38 27 class of property by the director of revenue for the state in
 38 28 accordance with the provisions of this section.  For
 38 29 valuations established as of January 1, 1980, the percentage
 38 30 shall be the quotient of the dividend and divisor as defined
 38 31 in this section.  The dividend for each class of property
 38 32 shall be the dividend as determined for each class of property
 38 33 for valuations established as of January 1, 1979, adjusted by
 38 34 the product obtained by multiplying the percentage determined
 38 35 for that year by the amount of any additions or deletions to
 39  1 actual value, excluding those resulting from the revaluation
 39  2 of existing properties, as reported by the assessors on the
 39  3 abstracts of assessment for 1979, plus four percent of the
 39  4 amount so determined.  The divisor for each class of property
 39  5 shall be the total actual value of all such property in 1979,
 39  6 as equalized by the director of revenue pursuant to section
 39  7 441.49, plus the amount of value added to the total actual
 39  8 value by the revaluation of existing properties in 1980.  The
 39  9 director shall utilize information reported on the abstracts
 39 10 of assessment submitted pursuant to section 441.45 in
 39 11 determining such percentage.  For valuations established as of
 39 12 January 1, 1980, property valued by the department of revenue
 39 13 pursuant to sections 428.24 through 428.29, and chapters 428,
 39 14 433, 437, and 438 shall be assessed at a percentage of its
 39 15 actual value.  The percentage shall be determined by the
 39 16 director of revenue in accordance with the provisions of this
 39 17 section.  For valuations established as of January 1, 1980,
 39 18 the percentage shall be the quotient of the dividend and
 39 19 divisor as defined in this section.  The dividend shall be the
 39 20 total actual valuation established for 1979 by the department
 39 21 of revenue, plus eight percent of the amount so determined.
 39 22 The divisor for property valued by the department of revenue
 39 23 pursuant to sections 428.24 through 428.29, and chapters 428,
 39 24 433, 437, and 438 shall be the valuation established for 1979,
 39 25 plus the amount of value added to the total actual value by
 39 26 the revaluation of the property by the department of revenue
 39 27 as of January 1, 1980.  For valuations established as of
 39 28 January 1, 1981, and each year thereafter, the percentage of
 39 29 actual value as equalized by the director of revenue as
 39 30 provided in section 441.49 at which commercial property and
 39 31 industrial property, excluding properties referred to in
 39 32 section 427A.1, subsection 8, shall be assessed shall be
 39 33 calculated in accordance with the methods provided herein,
 39 34 except that any references to six percent in this subsection
 39 35 shall be four percent.  For valuations established as of
 40  1 January 1, 1981, and each year thereafter, the percentage of
 40  2 actual value at which property valued by the department of
 40  3 revenue pursuant to sections 428.24 through 428.29, and
 40  4 chapters 428, 433, 437, and 438 shall be assessed shall be
 40  5 calculated in accordance with the methods provided herein in
 40  6 this section, except that any references to ten percent in
 40  7 this subsection shall be eight percent.  Beginning with
 40  8 valuations established as of January 1, 1979, and each year
 40  9 thereafter, property valued by the department of revenue
 40 10 pursuant to chapter 434 shall also be assessed at a percentage
 40 11 of its actual value which percentage shall be equal to the
 40 12 percentage determined by the director of revenue for
 40 13 commercial property, industrial property, or property valued
 40 14 by the department of revenue pursuant to sections 428.24
 40 15 through 428.29, and chapters 428, 433, 437, and 438, whichever
 40 16 is lowest.
 40 17    Sec. 73.  Section 441.21, Code 2009, is amended by adding
 40 18 the following new subsections:
 40 19    NEW SUBSECTION.  5A.  a.  For valuations established for
 40 20 the assessment year beginning January 1, 2010, and each year
 40 21 thereafter, the actual value at which commercial property is
 40 22 assessed shall be the sum of the market value for the
 40 23 assessment year and for the previous four assessment years, as
 40 24 determined by the assessor, divided by five.
 40 25    b.  For valuations established for the assessment year
 40 26 beginning January 1, 2010, and each year thereafter, the
 40 27 actual value at which industrial property is assessed shall be
 40 28 the sum of the market value for the assessment year and for
 40 29 the previous four assessment years, as determined by the
 40 30 assessor, divided by five.
 40 31    c.  Notwithstanding subsection 2, an owner of commercial
 40 32 property that has a fair market value of less than five
 40 33 hundred thousand dollars may notify the assessor that the
 40 34 owner elects to have the actual value of the property be
 40 35 determined by the assessor using the productive and earning
 41  1 capacity of the property as the sole method of appraisal.
 41  2 This paragraph does not apply to commercial property described
 41  3 in paragraphs "e" and "f" of this subsection.  This
 41  4 notification must be provided to the assessor by no later than
 41  5 March 1 of each assessment year the election is taken.  In
 41  6 determining the actual value of property under this paragraph,
 41  7 the assessor shall not consider any tax credit equity or other
 41  8 subsidized financing as income provided to the property or
 41  9 property owner.
 41 10    d.  For valuations established for the assessment year
 41 11 beginning January 1, 2010, and each year thereafter, the
 41 12 actual value at which commercial property and industrial
 41 13 property is assessed shall be reduced by fifty percent up to a
 41 14 maximum of twenty=five thousand dollars on each parcel of
 41 15 commercial property or industrial property assessed for
 41 16 taxation.  The reduction shall be applied to an improved
 41 17 parcel only.
 41 18    e.  Commercial property includes agricultural land held for
 41 19 development, commercial, or investment purposes.
 41 20    f.  Commercial property includes a tract of land containing
 41 21 an animal feeding operation structure as defined in section
 41 22 459.102 if it is not classified as agricultural property under
 41 23 subsection 5C.
 41 24    NEW SUBSECTION.  5B.  a.  For valuations established for
 41 25 the assessment year beginning January 1, 2010, and each year
 41 26 thereafter, the actual value at which agricultural property
 41 27 that is not classified as a family farm pursuant to subsection
 41 28 5C or as commercial property pursuant to subsection 5A,
 41 29 paragraph "e" or "f", is assessed shall be the sum of the
 41 30 market value for the assessment year and for the previous four
 41 31 assessment years, as determined by the assessor, divided by
 41 32 five.
 41 33    b.  For valuations established for the assessment year
 41 34 beginning January 1, 2010, the actual value determined under
 41 35 paragraph "a" shall be reduced by fifty percent up to a
 42  1 maximum of sixty=five thousand dollars per farm unit.
 42  2    c.  For purposes of this subsection, "farm unit" means the
 42  3 same as defined by the farm services agency of the United
 42  4 States department of agriculture.  Before assigning assessed
 42  5 value per tract of agricultural land, the assessor shall
 42  6 establish a per acre assessment for the agricultural property.
 42  7    NEW SUBSECTION.  5C.  a.  For valuations established for
 42  8 the assessment year beginning January 1, 2010, and each year
 42  9 thereafter, the actual value of agricultural property shall be
 42 10 determined on the basis of productivity and net earning
 42 11 capacity of the property determined on the basis of its use
 42 12 for agricultural purposes capitalized at a rate of seven
 42 13 percent and applied uniformly among counties and among classes
 42 14 of property, except that increases in actual value are limited
 42 15 to four percent.  Any formula or method employed to determine
 42 16 productivity and net earning capacity of property shall be
 42 17 adopted in full by rule.  The agricultural property assessed
 42 18 under this subsection must be owned by an owner who is
 42 19 actively engaged in farming the agricultural land.
 42 20    b.  In counties or townships in which field work on a
 42 21 modern soil survey has been completed since January 1, 1949,
 42 22 the assessor shall place emphasis upon the results of the
 42 23 survey in spreading the valuation among individual parcels of
 42 24 such agricultural property.
 42 25    c.  For purposes of this subsection:
 42 26    (1)  "Actively engaged in farming" means that the owner
 42 27 inspects the production activities periodically and furnishes
 42 28 at least half of the value of the tools and pays at least half
 42 29 the direct cost of production; or regularly and frequently
 42 30 makes or takes an important part in making management
 42 31 decisions substantially contributing to or affecting the
 42 32 success of the farm operation; or performs physical work which
 42 33 significantly contributes to crop or livestock production.
 42 34 However, a lessor, whether under a cash or a crop share lease,
 42 35 is not actively engaged in farming on the area of the tract
 43  1 covered by the lease.  This provision applies to both written
 43  2 and oral leases.
 43  3    (2)  "Eligible tract" means an area of agricultural land
 43  4 which is comprised of all of the contiguous tracts under
 43  5 identical legal ownership that are located within the same
 43  6 county and, in the aggregate, more than half the acres of the
 43  7 contiguous tract are devoted to the production of crops or
 43  8 livestock by an owner who is actively engaged in farming.
 43  9    (3)  "Owner" means any of the following:
 43 10    (a)  An individual who holds the fee simple title to the
 43 11 agricultural land.
 43 12    (b)  An individual who owns the agricultural land under a
 43 13 contract of purchase which has been recorded in the office of
 43 14 the county recorder of the county in which the agricultural
 43 15 land is located.
 43 16    (c)  An individual who owns the agricultural land under
 43 17 devise or by operation of the inheritance laws, where the
 43 18 whole interest passes or where the divided interest is shared
 43 19 only by individuals related or formerly related to each other
 43 20 by blood, marriage, or adoption.
 43 21    (d)  An individual who owns the agricultural land under a
 43 22 deed which conveys a divided interest, where the divided
 43 23 interest is shared only by individuals related or formerly
 43 24 related to each other by blood, marriage, or adoption.
 43 25    (e)  A partnership where all partners are related or
 43 26 formerly related to each other by blood, marriage, or
 43 27 adoption.
 43 28    (f)  A family farm corporation or authorized farm
 43 29 corporation, as both are defined in section 9H.1, which owns
 43 30 the agricultural land.
 43 31    (4)  "Production of crops" includes pastureland.
 43 32    Sec. 74.  Section 441.21, subsections 9 and 10, Code 2009,
 43 33 are amended to read as follows:
 43 34    9.  Not later than November 1, 1979 2010, and November 1 of
 43 35 each subsequent year, the director shall certify to the county
 44  1 auditor of each county the percentages of actual value at
 44  2 which residential property, agricultural property, commercial
 44  3 property, industrial property, and property valued by the
 44  4 department of revenue pursuant to sections 428.24 through
 44  5 428.29, and chapters 428, 433, 434, 437, and 438 in each
 44  6 assessing jurisdiction in the county shall be assessed for
 44  7 taxation.  The county auditor shall proceed to determine the
 44  8 assessed values of agricultural property, residential
 44  9 property, commercial property, industrial property, and
 44 10 property valued by the department of revenue pursuant to
 44 11 sections 428.24 through 428.29, and chapters 428, 433, 434,
 44 12 437, and 438 by applying such percentages to the current
 44 13 actual value of such property, as reported to the county
 44 14 auditor by the assessor, and the assessed values so determined
 44 15 shall be the taxable values of such properties upon which the
 44 16 levy shall be made.
 44 17    10.  The percentage of actual value computed by the
 44 18 director for agricultural property, residential property,
 44 19 income residential property, commercial property, industrial
 44 20 property, and property valued by the department of revenue
 44 21 pursuant to sections 428.24 through 428.29, and chapters 428,
 44 22 433, 434, 437, and 438 and used to determine assessed values
 44 23 of those classes of property does not constitute a rule as
 44 24 defined in section 17A.2, subsection 11.
 44 25    Sec. 75.  Section 441.21, Code 2009, is amended by adding
 44 26 the following new subsection:
 44 27    NEW SUBSECTION.  13.  a.  The reduction amounts in
 44 28 subsections 4, 5A, and 5B shall each year be increased for
 44 29 inflation.  Upon determination of the latest cumulative
 44 30 inflation factor, the director of revenue shall multiply each
 44 31 dollar amount set forth in subsections 4, 5A, and 5B by this
 44 32 cumulative inflation factor, shall round off the resulting
 44 33 product to the nearest dollar, and shall transmit the result
 44 34 to each city and county assessor for each assessment year.
 44 35    b.  For purposes of this subsection, "cumulative inflation
 45  1 factor" means the product of the annual inflation factor for
 45  2 the 2010 calendar year and all annual inflation factors for
 45  3 subsequent calendar years as determined pursuant to this
 45  4 subsection.  The cumulative inflation factor applies to all
 45  5 tax years beginning on or after January 1 of the calendar year
 45  6 for which the latest annual inflation factor has been
 45  7 determined.
 45  8    c.  In determining the annual inflation factor, the
 45  9 department shall use the annual percent change, but not less
 45 10 than zero percent, in the gross domestic product price
 45 11 deflator computed for the second quarter of the calendar year
 45 12 by the bureau of economic analysis of the United States
 45 13 department of commerce and shall add all of that percent
 45 14 change to one hundred percent.  The annual inflation factor
 45 15 and the cumulative inflation factor shall each be expressed as
 45 16 a percentage rounded to the nearest one=tenth of one percent.
 45 17 The annual inflation factor shall not be less than one hundred
 45 18 percent.
 45 19    d.  The annual inflation factor for the 2010 assessment
 45 20 year is one hundred percent.
 45 21    Sec. 76.  Section 441.40, Code 2009, is amended to read as
 45 22 follows:
 45 23    441.40  COSTS, FEES, AND EXPENSES APPORTIONED.
 45 24    The clerk of the court shall likewise certify to the county
 45 25 treasurer the costs assessed by the court on any appeal from a
 45 26 board of review to the district court, in all cases where said
 45 27 costs are taxed against the board of review or any taxing
 45 28 body.  The district court may award payment of the property
 45 29 owner's or aggrieved taxpayer's attorney fees as part of the
 45 30 costs assessed by the court to be taxed against the board of
 45 31 review or any taxing body, unless the court determines that
 45 32 the protest was frivolous, and, in that case, the court may
 45 33 assess the costs of defending the protest against the owner or
 45 34 taxpayer who filed the protest.  Thereupon the county
 45 35 treasurer shall compute and apportion the said costs between
 46  1 the various taxing bodies participating in the proceeds of the
 46  2 collection of the taxes involved in any such appeal, and said
 46  3 treasurer shall so compute and apportion the various amounts
 46  4 which said taxing bodies are required to pay in proportion to
 46  5 the amount of taxes each of said taxing bodies is entitled to
 46  6 receive from the whole amount of taxes involved in each of
 46  7 such appeals.  The said county treasurer shall deduct from the
 46  8 proceeds of all general taxes collected the amount of costs so
 46  9 computed and apportioned by the treasurer from the moneys due
 46 10 to each taxing body from general taxes collected.  The amount
 46 11 so deducted shall be certified to each taxing body in lieu of
 46 12 moneys collected.  Said county treasurer shall pay to the
 46 13 clerk of the district court the amount of said costs so
 46 14 computed, apportioned and collected by the treasurer in all
 46 15 cases now on file or hereafter filed in which said costs have
 46 16 not been paid.
 46 17    Sec. 77.  Section 441.47, Code 2009, is amended to read as
 46 18 follows:
 46 19    441.47  ADJUSTED VALUATIONS.
 46 20    1.  The director of revenue on or about August 15, 1977,
 46 21 and every two years thereafter shall order the equalization of
 46 22 the levels of assessment of each class of property in the
 46 23 several assessing jurisdictions by adding to or deducting from
 46 24 the valuation of each class of property such percentage in
 46 25 each case as may be necessary to bring the same to its taxable
 46 26 value as fixed in this chapter and chapters 427 to 443.  The
 46 27 director shall adjust to actual value the valuation of any
 46 28 class of property as set out in the abstract of assessment
 46 29 when the valuation is at least five percent above or below
 46 30 actual value as determined by the director.
 46 31    2.  For purposes of such value adjustments and before such
 46 32 equalization the director shall adopt, in the manner
 46 33 prescribed by chapter 17A, such rules as may be necessary to
 46 34 determine the level of assessment for each class of property
 46 35 in each county.  The rules shall cover all of the following:
 47  1    (1) a.  The proposed use of the assessment=sales ratio
 47  2 study set out in section 421.17, subsection 6;.
 47  3    (2) b.  the The proposed use of any statewide income
 47  4 capitalization studies;.
 47  5    (3) c.  the The proposed use of other methods that would
 47  6 assist the director in arriving at the accurate level of
 47  7 assessment of each class of property in each assessing
 47  8 jurisdiction.
 47  9    3.  Each county for which a multicounty assessor is
 47 10 appointed pursuant to section 441.6, subsection 2, or section
 47 11 441.16A is considered a separate assessing jurisdiction for
 47 12 purposes of this section.
 47 13    Sec. 78.  Section 441.54, Code 2009, is amended to read as
 47 14 follows:
 47 15    441.54  CONSTRUCTION.
 47 16    Whenever in the laws of this state, the words "assessor" or
 47 17 "assessors" appear, singly or in combination with other words,
 47 18 they shall be deemed to mean and refer to the multicounty,
 47 19 county, or city assessor, as the case may be.
 47 20    Sec. 79.  NEW SECTION.  441.58  CONFIDENTIALITY OF CERTAIN
 47 21 INFORMATION REQUIRED == ASSESSOR AND BOARD OF REVIEW.
 47 22    The assessor, the board of review, and the assessment
 47 23 appeal board shall keep confidential any documents, reports,
 47 24 audits, and other information supplied by a taxpayer or
 47 25 property owner relating to the amount or source of income,
 47 26 profits, losses, or expenditures of the taxpayer or property
 47 27 owner, except that such information shall be made available to
 47 28 the taxpayer or property owner or that person's counsel and to
 47 29 the court in case any appeal is taken.
 47 30    Sec. 80.  Section 441.72, Code 2009, is amended to read as
 47 31 follows:
 47 32    441.72  ASSESSMENT OF PLATTED LOTS.
 47 33    When a subdivision plat is recorded pursuant to chapter
 47 34 354, the individual lots within the subdivision plat shall not
 47 35 be assessed in excess of the total assessment of the land as
 48  1 acreage or unimproved property for three six years after the
 48  2 recording of the plat or until the lot is actually improved
 48  3 with permanent construction, whichever occurs first.  When an
 48  4 individual lot has been improved with permanent construction,
 48  5 the lot shall be assessed for taxation purposes as provided in
 48  6 chapter 428 and this chapter.  This section does not apply to
 48  7 special assessment levies.
 48  8    Sec. 81.  Section 441.73, subsection 4, Code 2009, is
 48  9 amended to read as follows:
 48 10    4.  The executive council shall transfer for the fiscal
 48 11 year beginning July 1, 1992, and each fiscal year thereafter,
 48 12 from funds established in sections 425.1 and 426.1, an amount
 48 13 necessary to pay litigation expenses.  The amount of the fund
 48 14 for each fiscal year shall not exceed seven hundred thousand
 48 15 dollars.  The executive council shall determine annually the
 48 16 proportionate amounts to be transferred from the two separate
 48 17 funds.  At any time when no litigation is pending or in
 48 18 progress the balance in the litigation expense fund shall not
 48 19 exceed one hundred thousand dollars.  Any excess moneys shall
 48 20 be transferred in a proportionate amount back to the funds
 48 21 from which they were originally transferred.
 48 22    Sec. 82.  Section 443.2, unnumbered paragraph 2, Code 2009,
 48 23 is amended to read as follows:
 48 24    The county auditor shall list the aggregate actual value
 48 25 and the aggregate taxable value of all taxable property within
 48 26 the county and each political subdivision including property
 48 27 subject to the statewide property tax imposed under section
 48 28 437A.18 on the tax list in order that the actual value of the
 48 29 taxable property within the county or a political subdivision
 48 30 may be ascertained and shown by the tax list for the purpose
 48 31 of computing the debt=incurring capacity of the county or
 48 32 political subdivision.  As used in this section, "actual
 48 33 value" is the value determined under section 441.21,
 48 34 subsections 1 to 3, prior to the reduction to a percentage of
 48 35 in actual value as otherwise provided in section 441.21.
 49  1 "Actual value" of property subject to statewide property tax
 49  2 is the assessed value under section 437A.18.
 49  3    Sec. 83.  Chapter 405, Code 2009, is repealed.
 49  4    Sec. 84.  EFFECTIVE AND APPLICABILITY DATES.  Unless
 49  5 otherwise stated, this division of this Act takes effect
 49  6 January 1, 2010, and applies to assessment years beginning on
 49  7 or after that date.
 49  8                          DIVISION III
 49  9               PROPERTY TAX CREDITS AND EXEMPTIONS
 49 10    Sec. 85.  Section 25B.7, subsection 2, Code 2009, is
 49 11 amended by striking the subsection.
 49 12    Sec. 86.  Section 100.18, subsection 2, paragraph b, Code
 49 13 2009, is amended to read as follows:
 49 14    b.  The rules shall require the installation of smoke
 49 15 detectors in existing single=family rental units and
 49 16 multiple=unit residential buildings.  Existing single=family
 49 17 dwelling units shall be equipped with approved smoke
 49 18 detectors.  A person who files for a homestead credit
 49 19 exemption pursuant to chapter 425 shall certify that the
 49 20 single=family dwelling unit for which the credit exemption is
 49 21 filed has a smoke detector installed in compliance with this
 49 22 section, or that one will be installed within thirty days of
 49 23 the date the filing for the credit exemption is made.  The
 49 24 state fire marshal shall adopt rules and establish appropriate
 49 25 procedures to administer this subsection.
 49 26    Sec. 87.  Section 216.12, subsection 1, paragraph e, Code
 49 27 2009, is amended to read as follows:
 49 28    e.  The rental or leasing of a housing accommodation in a
 49 29 building which contains housing accommodations for not more
 49 30 than four families living independently of each other, if the
 49 31 owner resides in one of the housing accommodations for which
 49 32 the owner qualifies for the homestead tax credit exemption
 49 33 under section 425.1.
 49 34    Sec. 88.  Section 331.401, subsection 1, paragraph g, Code
 49 35 2009, is amended by striking the paragraph.
 50  1    Sec. 89.  Section 331.512, subsection 3, Code 2009, is
 50  2 amended to read as follows:
 50  3    3.  Carry out duties relating to the homestead tax credit
 50  4 and agricultural land tax credit exemptions and the military
 50  5 tax exemption as provided in chapters 425 and 426 426A.
 50  6    Sec. 90.  Section 331.512, subsection 4, Code 2009, is
 50  7 amended by striking the subsection.
 50  8    Sec. 91.  Section 331.559, subsections 12, 13, and 14, Code
 50  9 2009, are amended by striking the subsections.
 50 10    Sec. 92.  Section 404.3, subsection 1, Code 2009, is
 50 11 amended to read as follows:
 50 12    1.  All qualified real estate assessed as residential
 50 13 property is eligible to receive an exemption from taxation
 50 14 based on the actual value added by the improvements.  The
 50 15 exemption is for a period of ten years.  The amount of the
 50 16 exemption is equal to a percent of the actual value added by
 50 17 the improvements, determined as follows:  One hundred fifteen
 50 18 percent of the value added by the improvements.  However, the
 50 19 amount of the actual value added by the improvements which
 50 20 shall be used to compute the exemption shall not exceed twenty
 50 21 thousand dollars and the granting of the exemption shall not
 50 22 result in the actual value of the qualified real estate being
 50 23 reduced below the actual value on which amount of the
 50 24 homestead credit is computed exemption under section 425.1.
 50 25    Sec. 93.  Section 425.1, Code 2009, is amended by striking
 50 26 the section and inserting in lieu thereof the following:
 50 27    425.1  HOMESTEAD ASSESSMENT REDUCTION.
 50 28    For the assessment year beginning January 1, 2009, and each
 50 29 year thereafter, the actual value at which an eligible
 50 30 homestead is assessed pursuant to section 441.21, subsection
 50 31 4, shall be reduced by five thousand dollars.  For the
 50 32 assessment year beginning January 1, 2010, and all subsequent
 50 33 assessment years, the reduction allowed under this part is in
 50 34 addition to the reduction in section 441.21, subsection 4,
 50 35 paragraph "a".
 51  1    Sec. 94.  Section 425.2, Code 2009, is amended to read as
 51  2 follows:
 51  3    425.2  QUALIFYING FOR CREDIT EXEMPTION.
 51  4    A person who wishes to qualify for the credit exemption
 51  5 allowed under this chapter shall obtain the appropriate forms
 51  6 for filing for the credit exemption from the assessor.  The
 51  7 person claiming the credit exemption shall file a verified
 51  8 statement and designation of homestead with the assessor for
 51  9 the year for which the person is first claiming the credit
 51 10 exemption.  The claim shall be filed not later than July 1 of
 51 11 the year for which the person is claiming the credit
 51 12 exemption.  A claim filed after July 1 of the year for which
 51 13 the person is claiming the credit exemption shall be
 51 14 considered as a claim filed for the following year.
 51 15    Upon the filing and allowance of the claim, the claim shall
 51 16 be allowed on that homestead for successive years without
 51 17 further filing as long as the property is legally or equitably
 51 18 owned and used as a homestead by that person or that person's
 51 19 spouse on July 1 of each of those successive years, and the
 51 20 owner of the property being claimed as a homestead declares
 51 21 residency in Iowa for purposes of income taxation, and the
 51 22 property is occupied by that person or that person's spouse
 51 23 for at least six months in each of those calendar years in
 51 24 which the fiscal year begins.  When the property is sold or
 51 25 transferred, the buyer or transferee who wishes to qualify
 51 26 shall refile for the credit exemption.  However, when the
 51 27 property is transferred as part of a distribution made
 51 28 pursuant to chapter 598, the transferee who is the spouse
 51 29 retaining ownership of the property is not required to refile
 51 30 for the credit exemption.  Property divided pursuant to
 51 31 chapter 598 shall not be modified following the division of
 51 32 the property.  An owner who ceases to use a property for a
 51 33 homestead or intends not to use it as a homestead for at least
 51 34 six months in a calendar year shall provide written notice to
 51 35 the assessor by July 1 following the date on which the use is
 52  1 changed.  A person who sells or transfers a homestead or the
 52  2 personal representative of a deceased person who had a
 52  3 homestead at the time of death, shall provide written notice
 52  4 to the assessor that the property is no longer the homestead
 52  5 of the former claimant.
 52  6    In case the owner of the homestead is in active service in
 52  7 the armed forces of this state or of the United States, or is
 52  8 sixty=five years of age or older, or is disabled, the
 52  9 statement and designation may be signed and delivered by any
 52 10 member of the owner's family, by the owner's guardian or
 52 11 conservator, or by any other person who may represent the
 52 12 owner under power of attorney.  If the owner of the homestead
 52 13 is married, the spouse may sign and deliver the statement and
 52 14 designation.  The director of human services or the director's
 52 15 designee may make application for the benefits of this chapter
 52 16 as the agent for and on behalf of persons receiving assistance
 52 17 under chapter 249.
 52 18    Any person sixty=five years of age or older or any person
 52 19 who is disabled may request, in writing, from the appropriate
 52 20 assessor forms for filing for the homestead tax credit
 52 21 exemption.  Any person sixty=five years of age or older or who
 52 22 is disabled may complete the form, which shall include a
 52 23 statement of homestead, and mail or return it to the
 52 24 appropriate assessor.  The signature of the claimant on the
 52 25 statement shall be considered the claimant's acknowledgment
 52 26 that all statements and facts entered on the form are correct
 52 27 to the best of the claimant's knowledge.
 52 28    Upon adoption of a resolution by the county board of
 52 29 supervisors, any person may request, in writing, from the
 52 30 appropriate assessor forms for the filing for the homestead
 52 31 tax credit exemption.  The person may complete the form, which
 52 32 shall include a statement of homestead, and mail or return it
 52 33 to the appropriate assessor.  The signature of the claimant on
 52 34 the statement of homestead shall be considered the claimant's
 52 35 acknowledgment that all statements and facts entered on the
 53  1 form are correct to the best of the claimant's knowledge.
 53  2    Sec. 95.  Section 425.3, unnumbered paragraph 4, Code 2009,
 53  3 is amended to read as follows:
 53  4    The county auditor shall forward the claims to the board of
 53  5 supervisors.  The board shall allow or disallow the claims.
 53  6 If the board disallows a claim, it shall send written notice,
 53  7 by mail, to the claimant at the claimant's last known address.
 53  8 The notice shall state the reasons for disallowing the claim
 53  9 for the credit exemption.  The board is not required to send
 53 10 notice that a claim is disallowed if the claimant voluntarily
 53 11 withdraws the claim.
 53 12    Sec. 96.  Section 425.6, Code 2009, is amended to read as
 53 13 follows:
 53 14    425.6  WAIVER BY NEGLECT.
 53 15    If a person fails to file a claim or to have a claim on
 53 16 file with the assessor for the credits exemption provided in
 53 17 this chapter, the person is deemed to have waived the
 53 18 homestead credit exemption for the year in which the person
 53 19 failed to file the claim or to have a claim on file with the
 53 20 assessor.
 53 21    Sec. 97.  Section 425.7, subsection 3, Code 2009, is
 53 22 amended to read as follows:
 53 23    3.  If the director of revenue determines that a claim for
 53 24 the homestead credit exemption has been allowed by the board
 53 25 of supervisors which is not justifiable under the law and not
 53 26 substantiated by proper facts, the director may, at any time
 53 27 within thirty=six months from July 1 of the year in which the
 53 28 claim is allowed, set aside the allowance.  Notice of the
 53 29 disallowance shall be given to the county auditor of the
 53 30 county in which the claim has been improperly granted and a
 53 31 written notice of the disallowance shall also be addressed to
 53 32 the claimant at the claimant's last known address.  The
 53 33 claimant or board of supervisors may appeal to the state board
 53 34 of tax review pursuant to section 421.1, subsection 5.  The
 53 35 claimant or the board of supervisors may seek judicial review
 54  1 of the action of the state board of tax review in accordance
 54  2 with chapter 17A.
 54  3    If a claim is disallowed by the director of revenue and not
 54  4 appealed to the state board of tax review or appealed to the
 54  5 state board of tax review and thereafter upheld upon final
 54  6 resolution, including any judicial review, any amounts of
 54  7 credits allowed and paid from the homestead credit fund
 54  8 including the penalty, if any, the taxes that would have been
 54  9 due on the disallowed claim, if not otherwise paid, shall
 54 10 become a lien upon the property on which credit the exemption
 54 11 was originally granted, if still in the hands of the claimant,
 54 12 and not in the hands of a bona fide purchaser, and any amount
 54 13 so erroneously of such taxes not paid including the penalty,
 54 14 if any, shall be collected by the county treasurer in the same
 54 15 manner as other taxes and the collections shall be returned to
 54 16 the department of revenue and credited to the homestead credit
 54 17 fund.  The director of revenue may institute legal proceedings
 54 18 against a homestead credit claimant for the collection of
 54 19 payments made on disallowed credits and the penalty, if any.
 54 20 If a person makes a false claim or affidavit with fraudulent
 54 21 intent to obtain the homestead credit exemption, the person is
 54 22 guilty of a fraudulent practice and the claim shall be
 54 23 disallowed in full.  If the credit has been paid, the amount
 54 24 of the credit plus a penalty equal to twenty=five percent of
 54 25 the amount of credit plus interest, at the rate in effect
 54 26 under section 421.7, from the time of payment shall be
 54 27 collected by the county treasurer in the same manner as other
 54 28 property taxes, penalty, and interest are collected and when
 54 29 collected shall be paid to the director of revenue.  If a
 54 30 homestead credit exemption is disallowed and the claimant
 54 31 failed to give written notice to the assessor as required by
 54 32 section 425.2 when the property ceased to be used as a
 54 33 homestead by the claimant, a civil penalty equal to five
 54 34 percent of the amount of the taxes that would have been due on
 54 35 the disallowed credit exemption is assessed against the
 55  1 claimant.
 55  2    Sec. 98.  Section 425.8, unnumbered paragraph 1, Code 2009,
 55  3 is amended to read as follows:
 55  4    The director of revenue shall prescribe the form for the
 55  5 making of verified statement and designation of homestead, the
 55  6 form for the supporting affidavits required herein, and such
 55  7 other forms as may be necessary for the proper administration
 55  8 of this chapter.  Whenever necessary, the department of
 55  9 revenue shall forward to the county auditors of the several
 55 10 counties in the state the prescribed sample forms, and the
 55 11 county auditors shall furnish blank forms prepared in
 55 12 accordance therewith with the assessment rolls, books, and
 55 13 supplies delivered to the assessors.  The department of
 55 14 revenue shall prescribe and the county auditors shall provide
 55 15 on the forms for claiming the homestead credit exemption a
 55 16 statement to the effect that the owner realizes that the owner
 55 17 must give written notice to the assessor when the owner
 55 18 changes the use of the property.
 55 19    Sec. 99.  Section 425.9, Code 2009, is amended by striking
 55 20 the section and inserting in lieu thereof the following:
 55 21    425.9  EXEMPTION == APPEAL == CREDIT.
 55 22    If any claim for exemption made under this chapter has been
 55 23 denied by the board of supervisors, and such action is
 55 24 subsequently reversed on appeal, the exemption shall be
 55 25 allowed on the homestead involved in the appeal, and the
 55 26 director of revenue, the county auditor, and the county
 55 27 treasurer shall change their books and records accordingly.
 55 28    If the tax has been levied on the exemption amount of the
 55 29 homestead of the appealing taxpayer or the appealing taxpayer
 55 30 has paid one or both of the installments of the tax payable in
 55 31 the year or years in question on such homestead valuation, a
 55 32 credit for such taxes shall be applied to the property if
 55 33 still in the hands of the claimant.
 55 34    Sec. 100.  Section 425.10, Code 2009, is amended to read as
 55 35 follows:
 56  1    425.10  REVERSAL OF ALLOWED CLAIM.
 56  2    In the event any claim is allowed, and subsequently
 56  3 reversed on appeal, any credit exemption made thereunder shall
 56  4 be void, and the amount of such credit the taxes that would
 56  5 have been due on the exemption shall be charged against the
 56  6 property in question, and the director of revenue, the county
 56  7 auditor, and the county treasurer are authorized and directed
 56  8 to correct their books and records accordingly.  The amount of
 56  9 such taxes due on the erroneous credit exemption, when
 56 10 collected, shall be returned distributed by the county
 56 11 treasurer to the homestead credit fund to be reallocated the
 56 12 following year as provided herein other jurisdictions in the
 56 13 same proportion as the other taxes.
 56 14    Sec. 101.  Section 425.11, subsection 3, paragraph a,
 56 15 unnumbered paragraph 1, Code 2009, is amended to read as
 56 16 follows:
 56 17    The homestead includes the dwelling house which the owner,
 56 18 in good faith, is occupying as a home on July 1 of the year
 56 19 for which the credit exemption is claimed and occupies as a
 56 20 home for at least six months during the calendar year in which
 56 21 the fiscal year begins, except as otherwise provided.
 56 22    Sec. 102.  Section 425.11, subsection 3, paragraph c, Code
 56 23 2009, is amended to read as follows:
 56 24    c.  It must not embrace more than one dwelling house, but
 56 25 where a homestead has more than one dwelling house situated
 56 26 thereon, the credit exemption provided for in this chapter
 56 27 shall apply to the home and buildings used by the owner, but
 56 28 shall not apply to any other dwelling house and buildings
 56 29 appurtenant.
 56 30    Sec. 103.  Section 425.11, subsection 4, unnumbered
 56 31 paragraph 1, Code 2009, is amended to read as follows:
 56 32    The word "owner" shall mean the person who holds the fee
 56 33 simple title to the homestead, and in addition shall mean the
 56 34 person occupying as a surviving spouse or the person occupying
 56 35 under a contract of purchase which contract has been recorded
 57  1 in the office of the county recorder of the county in which
 57  2 the property is located; or the person occupying the homestead
 57  3 under devise or by operation of the inheritance laws where the
 57  4 whole interest passes or where the divided interest is shared
 57  5 only by persons related or formerly related to each other by
 57  6 blood, marriage or adoption; or the person occupying the
 57  7 homestead is a shareholder of a family farm corporation that
 57  8 owns the property; or the person occupying the homestead under
 57  9 a deed which conveys a divided interest where the divided
 57 10 interest is shared only by persons related or formerly related
 57 11 to each other by blood, marriage or adoption; or where the
 57 12 person occupying the homestead holds a life estate with the
 57 13 reversion interest held by a nonprofit corporation organized
 57 14 under chapter 504, provided that the holder of the life estate
 57 15 is liable for and pays property tax on the homestead; or where
 57 16 the person occupying the homestead holds an interest in a
 57 17 horizontal property regime under chapter 499B, regardless of
 57 18 whether the underlying land committed to the horizontal
 57 19 property regime is in fee or as a leasehold interest, provided
 57 20 that the holder of the interest in the horizontal property
 57 21 regime is liable for and pays property tax on the homestead;
 57 22 or where the person occupying the homestead is a member of a
 57 23 community land trust as defined in 42 U.S.C. } 12773,
 57 24 regardless of whether the underlying land is in fee or as a
 57 25 leasehold interest, provided that the member of the community
 57 26 land trust is occupying the homestead and is liable for and
 57 27 pays property tax on the homestead.  For the purpose of this
 57 28 chapter the word "owner" shall be construed to mean a bona
 57 29 fide owner and not one for the purpose only of availing the
 57 30 person of the benefits of this chapter.  In order to qualify
 57 31 for the homestead tax credit exemption, evidence of ownership
 57 32 shall be on file in the office of the clerk of the district
 57 33 court or recorded in the office of the county recorder at the
 57 34 time the owner files with the assessor a verified statement of
 57 35 the homestead claimed by the owner as provided in section
 58  1 425.2.
 58  2    Sec. 104.  Section 425.12, Code 2009, is amended to read as
 58  3 follows:
 58  4    425.12  INDIAN LAND.
 58  5    Each forty acres of land, or fraction thereof, occupied by
 58  6 a member or members of the Sac and Fox Indians in Tama county,
 58  7 which land is held in trust by the secretary of the interior
 58  8 of the United States for said Indians, shall be given a
 58  9 homestead tax credit exemption within the meaning and under
 58 10 the provisions of this chapter.  Application for such
 58 11 homestead tax credit exemption shall be made to the county
 58 12 auditor of Tama county and may be made by a representative of
 58 13 the tribal council.
 58 14    Sec. 105.  Section 425.13, Code 2009, is amended to read as
 58 15 follows:
 58 16    425.13  CONSPIRACY TO DEFRAUD.
 58 17    If any two or more persons conspire and confederate
 58 18 together with fraudulent intent to obtain the credit exemption
 58 19 provided for under the terms of this chapter by making a false
 58 20 deed, or a false contract of purchase, they are guilty of a
 58 21 fraudulent practice.
 58 22    Sec. 106.  Section 425.15, Code 2009, is amended to read as
 58 23 follows:
 58 24    425.15  DISABLED VETERAN TAX CREDIT EXEMPTION.
 58 25    If the owner of a homestead allowed a credit an exemption
 58 26 under this chapter is a veteran of any of the military forces
 58 27 of the United States, who acquired the homestead under 38
 58 28 U.S.C. } 21.801, 21.802, prior to August 6, 1991, or 38 U.S.C.
 58 29 } 2101, 2102, the credit exemption allowed on the homestead
 58 30 from the homestead credit fund shall be the entire amount of
 58 31 the tax levied assessed value on the homestead.  The credit
 58 32 exemption allowed shall be continued to the estate of a
 58 33 veteran who is deceased or the surviving spouse and any child,
 58 34 as defined in section 234.1, who are the beneficiaries of a
 58 35 deceased veteran, so long as the surviving spouse remains
 59  1 unmarried.  This section is not applicable to the holder of
 59  2 title to any homestead whose annual income, together with that
 59  3 of the titleholder's spouse, if any, for the last preceding
 59  4 twelve=month income tax accounting period exceeds thirty=five
 59  5 thousand dollars.  For the purpose of this section "income"
 59  6 means taxable income for federal income tax purposes plus
 59  7 income from securities of state and other political
 59  8 subdivisions exempt from federal income tax.  A veteran or a
 59  9 beneficiary of a veteran who elects to secure the credit
 59 10 exemption provided in this section is not eligible for any
 59 11 other real property tax exemption provided by law for veterans
 59 12 of military service.  If a veteran acquires a different
 59 13 homestead, the credit exemption allowed under this section may
 59 14 be claimed on the new homestead unless the veteran fails to
 59 15 meet the other requirements of this section.
 59 16    Sec. 107.  Section 425.16, Code 2009, is amended to read as
 59 17 follows:
 59 18    425.16  ADDITIONAL TAX CREDIT EXEMPTION.
 59 19    In addition to the homestead tax credit exemption allowed
 59 20 under section 425.1, subsections 1 to 4, persons who own or
 59 21 rent their homesteads and who meet the qualifications provided
 59 22 in this division are eligible for an extraordinary property
 59 23 tax credit or reimbursement exemption.
 59 24    For the assessment year beginning January 1, 2010, and each
 59 25 year thereafter, the actual value at which an eligible
 59 26 homestead under this part is assessed pursuant to section
 59 27 441.21 shall be reduced by two thousand five hundred dollars.
 59 28    The reduction allowed under this division is in addition to
 59 29 the reduction in section 425.1 and, for the assessment year
 59 30 beginning January 1, 2010, and all subsequent assessment
 59 31 years, section 441.21, subsection 4, paragraph "a".
 59 32    Sec. 108.  Section 425.17, subsection 2, Code 2009, is
 59 33 amended to read as follows:
 59 34    2.  "Claimant" means either of the following:
 59 35    a.  A person filing a claim for credit or reimbursement
 60  1 exemption under this division who has attained the age of
 60  2 sixty=five years on or before December 31 of the base year or
 60  3 who is totally disabled and was totally disabled on or before
 60  4 December 31 of the base year and is domiciled in this state at
 60  5 the time the claim is filed or at the time of the person's
 60  6 death in the case of a claim filed by the executor or
 60  7 administrator of the claimant's estate and whose income in the
 60  8 base year was less than sixteen thousand five hundred dollars.
 60  9    b.  A person filing a claim for credit or reimbursement
 60 10 exemption under this division who has attained the age of
 60 11 twenty=three years on or before December 31 of the base year
 60 12 or was a head of household on December 31 of the base year, as
 60 13 defined in the Internal Revenue Code, but has not attained the
 60 14 age or disability status described in paragraph "a", and is
 60 15 domiciled in this state at the time the claim is filed or at
 60 16 the time of the person's death in the case of a claim filed by
 60 17 the executor or administrator of the claimant's estate, and
 60 18 was not claimed as a dependent on any other person's tax
 60 19 return for the base year and whose income in the base year was
 60 20 less than sixteen thousand five hundred dollars.
 60 21    "Claimant" under paragraph "a" or "b" includes a vendee in
 60 22 possession under a contract for deed and may include one or
 60 23 more joint tenants or tenants in common.  In the case of a
 60 24 claim for rent constituting property taxes paid, the claimant
 60 25 shall have rented the property during any part of the base
 60 26 year.  In the case of a claim for property taxes due, the The
 60 27 claimant shall have occupied the property during any part of
 60 28 the fiscal year beginning July 1 of the base year.  If a
 60 29 homestead is occupied by two or more persons, and more than
 60 30 one person is able to qualify as a claimant, the persons may
 60 31 each file a claim based upon each person's income and rent
 60 32 constituting property taxes paid or property taxes due.
 60 33    Sec. 109.  Section 425.17, subsection 3, Code 2009, is
 60 34 amended by striking the subsection.
 60 35    Sec. 110.  Section 425.17, subsection 4, Code 2009, is
 61  1 amended to read as follows:
 61  2    4.  "Homestead" means the dwelling owned or rented and
 61  3 actually used as a home by the claimant during the period
 61  4 specified in subsection 2, and so much of the land surrounding
 61  5 it including one or more contiguous lots or tracts of land, as
 61  6 is reasonably necessary for use of the dwelling as a home, and
 61  7 may consist of a part of a multidwelling or multipurpose
 61  8 building and a part of the land upon which it is built.  It
 61  9 does not include personal property except that a manufactured
 61 10 or mobile home may be a homestead.  Any dwelling or a part of
 61 11 a multidwelling or multipurpose building which is exempt from
 61 12 taxation does not qualify as a homestead under this division.
 61 13 However, solely for purposes of claimants living in a property
 61 14 and receiving reimbursement for rent constituting property
 61 15 taxes paid immediately before the property becomes tax exempt,
 61 16 and continuing to live in it after it becomes tax exempt, the
 61 17 property shall continue to be classified as a homestead.  A
 61 18 homestead must be located in this state.  When a person is
 61 19 confined in a nursing home, extended=care facility, or
 61 20 hospital, the person shall be considered as occupying or
 61 21 living in the person's homestead if the person is the owner of
 61 22 the homestead and the person maintains the homestead and does
 61 23 not lease, rent, or otherwise receive profits from other
 61 24 persons for the use of the homestead.
 61 25    Sec. 111.  Section 425.17, subsections 8 and 9, Code 2009,
 61 26 are amended by striking the subsections.
 61 27    Sec. 112.  Section 425.18, Code 2009, is amended to read as
 61 28 follows:
 61 29    425.18  RIGHT TO FILE A CLAIM.
 61 30    The right to file a claim for reimbursement or credit
 61 31 exemption under this division may be exercised by the claimant
 61 32 or on behalf of a claimant by the claimant's legal guardian,
 61 33 spouse, or attorney, or by the executor or administrator of
 61 34 the claimant's estate.  If a claimant dies after having filed
 61 35 a claim for reimbursement for rent constituting property taxes
 62  1 paid, the amount of the reimbursement may be paid to another
 62  2 member of the household as determined by the director.  If the
 62  3 claimant was the only member of the household, the
 62  4 reimbursement may be paid to the claimant's executor or
 62  5 administrator, but if neither is appointed and qualified
 62  6 within one year from the date of the filing of the claim, the
 62  7 reimbursement shall escheat to the state.  If a claimant dies
 62  8 after having filed a claim for credit for property taxes due
 62  9 exemption, the amount of credit the exemption shall be paid
 62 10 allowed as if the claimant had not died.
 62 11    Sec. 113.  Section 425.19, Code 2009, is amended to read as
 62 12 follows:
 62 13    425.19  CLAIM AND CREDIT OR REIMBURSEMENT EXEMPTION.
 62 14    Subject to the limitations provided in this division, a
 62 15 claimant may annually claim a credit for property taxes due an
 62 16 exemption during the fiscal year next following the base year
 62 17 or claim a reimbursement for rent constituting property taxes
 62 18 paid in the base year.  The amount of the credit for property
 62 19 taxes due for a homestead shall be paid on June 15 of each
 62 20 year by the director to the county treasurer who shall credit
 62 21 the money received against the amount of the property taxes
 62 22 due and payable on the homestead of the claimant and the
 62 23 amount of the reimbursement for rent constituting property
 62 24 taxes paid shall be paid to the claimant from the state
 62 25 general fund on or before December 31 of each year.
 62 26    Sec. 114.  Section 425.20, unnumbered paragraph 1, Code
 62 27 2009, is amended by striking the unnumbered paragraph.
 62 28    Sec. 115.  Section 425.20, unnumbered paragraphs 2 and 3,
 62 29 Code 2009, are amended to read as follows:
 62 30    1.  A claim for credit for property taxes due exemption
 62 31 shall not be paid or allowed unless the claim is filed with
 62 32 the county treasurer between January 1 and June 1, both dates
 62 33 inclusive, immediately preceding the fiscal year during which
 62 34 the property taxes are due.  However, in case of sickness,
 62 35 absence, or other disability of the claimant, or if in the
 63  1 judgment of the county treasurer good cause exists, the county
 63  2 treasurer may extend the time for filing a claim for credit
 63  3 exemption through September 30 of the same calendar year.  The
 63  4 county treasurer shall certify to the director of revenue on
 63  5 or before May 1 of each year the total amount of dollars due
 63  6 for claims allowed.
 63  7    2.  In case of sickness, absence, or other disability of
 63  8 the claimant or if, in the judgment of the director of
 63  9 revenue, good cause exists and the claimant requests an
 63 10 extension, the director may extend the time for filing a claim
 63 11 for reimbursement or credit exemption.  However, any further
 63 12 time granted shall not extend beyond December 31 of the year
 63 13 following the year in which the claim was required to be
 63 14 filed.  Claims filed as a result of this paragraph shall be
 63 15 filed with the director who shall provide for the
 63 16 reimbursement of the claim to the claimant.
 63 17    Sec. 116.  Section 425.22, Code 2009, is amended to read as
 63 18 follows:
 63 19    425.22  ONE CLAIMANT PER HOUSEHOLD.
 63 20    Only one claimant per household per year shall be entitled
 63 21 to reimbursement under this division and only one claimant per
 63 22 household per fiscal year shall be entitled to a credit an
 63 23 exemption under this division.
 63 24    Sec. 117.  Section 425.23, Code 2009, is amended by
 63 25 striking the section and inserting in lieu thereof the
 63 26 following:
 63 27    425.23  ANNUAL ADJUSTMENT TO INCOME.
 63 28    1.  For the base year beginning in the 2010 calendar year
 63 29 and for each subsequent base year, the dollar amounts set
 63 30 forth in section 425.17, subsection 2, shall be multiplied by
 63 31 the cumulative adjustment factor for that base year.
 63 32 "Cumulative adjustment factor" means the product of the annual
 63 33 adjustment factor for the 2009 base year and all annual
 63 34 adjustment factors for subsequent base years.  The cumulative
 63 35 adjustment factor applies to the base year beginning in the
 64  1 calendar year for which the latest annual adjustment factor
 64  2 has been determined.
 64  3    2.  The annual adjustment factor for the 2009 base year is
 64  4 one hundred percent.  For each subsequent base year, the
 64  5 annual adjustment factor equals the annual inflation factor
 64  6 for the calendar year, in which the base year begins, as
 64  7 computed in section 422.4 for purposes of the individual
 64  8 income tax.
 64  9    Sec. 118.  Section 425.26, subsections 2 and 3, Code 2009,
 64 10 are amended by striking the subsections.
 64 11    Sec. 119.  Section 425.27, Code 2009, is amended to read as
 64 12 follows:
 64 13    425.27  AUDIT == RECALCULATION OR DENIAL.
 64 14    If on the audit of a claim for credit or reimbursement
 64 15 exemption under this division, the director determines the
 64 16 amount of the claim to have been incorrectly calculated or
 64 17 that the claim is not allowable, the director shall
 64 18 recalculate the claim and notify the claimant of the
 64 19 recalculation or denial and the reasons for it.  The director
 64 20 shall not adjust a claim after three years from October 31 of
 64 21 the year in which the claim was filed.  If the claim for
 64 22 reimbursement has been paid, the amount may be recovered by
 64 23 assessment in the same manner that income taxes are assessed
 64 24 under sections 422.26 and 422.30.  If the claim for credit
 64 25 exemption has been paid allowed, the director shall give
 64 26 notification to the claimant and the county treasurer of the
 64 27 recalculation or denial of the claim and the county treasurer
 64 28 shall proceed to collect the tax owed in the same manner as
 64 29 other property taxes due and payable are collected, if the
 64 30 property on which the credit exemption was granted is still
 64 31 owned by the claimant, and repay the amount to the director
 64 32 upon collection.  If the property on which the credit
 64 33 exemption was granted is not owned by the claimant, the amount
 64 34 may be recovered from the claimant by assessment in the same
 64 35 manner that income taxes are assessed under sections 422.26
 65  1 and 422.30.  The recalculation of the claim property taxes due
 65  2 shall be final unless appealed as provided in section 425.31.
 65  3 Section 422.70 is applicable with respect to this division.
 65  4    Sec. 120.  Section 425.28, unnumbered paragraph 2, Code
 65  5 2009, is amended to read as follows:
 65  6    The department of revenue may release information
 65  7 pertaining to a person's eligibility or claim for or receipt
 65  8 of rent reimbursement to an employee of the department of
 65  9 inspections and appeals in the employee's official conduct of
 65 10 an audit or investigation.
 65 11    Sec. 121.  Section 425.29, Code 2009, is amended to read as
 65 12 follows:
 65 13    425.29  FALSE CLAIM == PENALTY.
 65 14    A person who makes a false affidavit for the purpose of
 65 15 obtaining credit or reimbursement an exemption provided for in
 65 16 this division or who knowingly receives the credit or
 65 17 reimbursement exemption without being legally entitled to it
 65 18 or makes claim for the credit or reimbursement exemption in
 65 19 more than one county in the state without being legally
 65 20 entitled to it is guilty of a fraudulent practice.  The claim
 65 21 for credit or reimbursement exemption shall be disallowed in
 65 22 full and if the claim reduction in value has been paid made,
 65 23 the amount of the exemption credited as taxes shall be
 65 24 recovered in the manner provided in section 425.27.  The
 65 25 director of revenue shall send a notice of disallowance of the
 65 26 claim.
 65 27    Sec. 122.  Section 425.32, Code 2009, is amended to read as
 65 28 follows:
 65 29    425.32  DISALLOWANCE OF CERTAIN CLAIMS.
 65 30    A claim for credit exemption shall be disallowed if the
 65 31 department finds that the claimant or a person of the
 65 32 claimant's  household received title to the homestead
 65 33 primarily for the purpose of receiving benefits under this
 65 34 division.
 65 35    Sec. 123.  Section 426A.6, Code 2009, is amended to read as
 66  1 follows:
 66  2    426A.6  SETTING ASIDE ALLOWANCE.
 66  3    If the director of revenue determines that a claim for
 66  4 military service tax exemption has been allowed by a board of
 66  5 supervisors which is not justifiable under the law and not
 66  6 substantiated by proper facts, the director may, at any time
 66  7 within thirty=six months from July 1 of the year in which the
 66  8 claim is allowed, set aside the allowance.  Notice of the
 66  9 disallowance shall be given to the county auditor of the
 66 10 county in which the claim has been improperly granted and a
 66 11 written notice of the disallowance shall also be addressed to
 66 12 the claimant at the claimant's last known address.  The
 66 13 claimant or the board of supervisors may appeal to the state
 66 14 board of tax review pursuant to section 421.1, subsection 5.
 66 15 The claimant or the board of supervisors may seek judicial
 66 16 review of the action of the state board of tax review in
 66 17 accordance with chapter 17A.  If a claim is disallowed by the
 66 18 director of revenue and not appealed to the state board of tax
 66 19 review or appealed to the state board of tax review and
 66 20 thereafter upheld upon final resolution, including judicial
 66 21 review, the credits allowed and paid from the general fund of
 66 22 the state the taxes that would have been due on the disallowed
 66 23 claim, if not otherwise paid, shall become a lien upon the
 66 24 property on which the credit exemption was originally granted,
 66 25 if still in the hands of the claimant and not in the hands of
 66 26 a bona fide purchaser, and the amount so erroneously of such
 66 27 taxes not paid shall be collected by the county treasurer in
 66 28 the same manner as other taxes, and the collections shall be
 66 29 returned to the department of revenue and credited to the
 66 30 general fund of the state.  The director of revenue county
 66 31 attorney may institute legal proceedings against a military
 66 32 service tax exemption claimant for the collection of payments
 66 33 made taxes due on disallowed exemptions.
 66 34    Sec. 124.  Section 426A.8, Code 2009, is amended by
 66 35 striking the section and inserting in lieu thereof the
 67  1 following:
 67  2    426A.8  APPEALS.
 67  3    If any claim for exemption made has been denied by the
 67  4 board of supervisors, and the action is subsequently reversed
 67  5 on appeal, the exemption shall be allowed on the assessed
 67  6 valuation, and the county auditor and the county treasurer
 67  7 shall change their books and records accordingly.
 67  8    If the appealing taxpayer has paid one or both of the
 67  9 installments of the tax payable in the year or years in
 67 10 question on such military service tax exemption valuation, a
 67 11 credit for such taxes shall be applied to the property if
 67 12 still in the hands of the claimant.
 67 13    Sec. 125.  Section 426A.9, Code 2009, is amended to read as
 67 14 follows:
 67 15    426A.9  ERRONEOUS CREDITS EXEMPTIONS.
 67 16    If any claim is allowed, and subsequently reversed on
 67 17 appeal, any credit exemption shall be void, and the amount of
 67 18 the credit taxes that would have been due on the exemption
 67 19 shall be charged against the property in question, and the
 67 20 director of revenue, the county auditor and the county
 67 21 treasurer shall correct their books and records.  The amount
 67 22 of taxes due on the erroneous credit exemption, when
 67 23 collected, shall be returned distributed by the county
 67 24 treasurer to the general fund of the state other jurisdictions
 67 25 in the same proportion as the other taxes.
 67 26    Sec. 126.  Section 426A.11, subsection 2, Code 2009, is
 67 27 amended to read as follows:
 67 28    2.  The property, not to exceed one two thousand eight
 67 29 hundred fifty=two dollars in taxable value of an honorably
 67 30 separated, retired, furloughed to a reserve, placed on
 67 31 inactive status, or discharged veteran, as defined in section
 67 32 35.1.
 67 33    Sec. 127.  Section 427.1, subsection 19, paragraph a,
 67 34 subparagraph (2), Code 2009, is amended to read as follows:
 67 35    (2)  This exemption shall be limited to the market value,
 68  1 as defined in section 441.21, of the pollution=control or
 68  2 recycling property.  If the pollution=control or recycling
 68  3 property is assessed with other property as a unit, this
 68  4 exemption shall be limited to the net market value added by
 68  5 the pollution=control or recycling property, determined as of
 68  6 the assessment date.  However, for pollution=control exemption
 68  7 on file as of July 1, 2010, or first applied for on or after
 68  8 July 1, 2010, the exemption is limited to one hundred thousand
 68  9 dollars of market value.
 68 10    Sec. 128.  Section 427.9, Code 2009, is amended to read as
 68 11 follows:
 68 12    427.9  SUSPENSION OF TAXES, ASSESSMENTS, AND RATES OR
 68 13 CHARGES, INCLUDING INTEREST, FEES, AND COSTS.
 68 14    If a person is a recipient of federal supplementary
 68 15 security income or state supplementary assistance, as defined
 68 16 in section 249.1, or is a resident of a health care facility,
 68 17 as defined by section 135C.1, which is receiving payment from
 68 18 the department of human services for the person's care, the
 68 19 person shall be deemed to be unable to contribute to the
 68 20 public revenue.  The director of human services shall notify a
 68 21 person receiving such assistance of the tax suspension
 68 22 provision and shall provide the person with evidence to
 68 23 present to the appropriate county board of supervisors which
 68 24 shows the person's eligibility for tax suspension on parcels
 68 25 owned, possessed, or upon which the person is paying taxes as
 68 26 a purchaser under contract.  The board of supervisors so
 68 27 notified, without the filing of a petition and statement as
 68 28 specified in section 427.8, shall order the county treasurer
 68 29 to suspend the collection of all the taxes, special
 68 30 assessments, and rates or charges, including interest, fees,
 68 31 and costs, assessed against the parcels and remaining unpaid
 68 32 by the person or contractually payable by the person, for such
 68 33 time as the person remains the owner or contractually
 68 34 prospective owner of the parcels, and during the period the
 68 35 person receives assistance as described in this section.  The
 69  1 county board of supervisors shall annually send to the
 69  2 department of human services the names and social security
 69  3 numbers of persons receiving a tax suspension pursuant to this
 69  4 section.  The department shall verify the continued
 69  5 eligibility for tax suspension of each name on the list and
 69  6 shall return the list to the board of supervisors.  The
 69  7 director of human services shall advise the person that the
 69  8 person may apply for an additional property tax credit
 69  9 pursuant to sections 425.16 to 425.39 through 425.37 which
 69 10 shall be credited against the amount of the taxes suspended.
 69 11    Sec. 128. Section 427C.12, unnumbered paragraph 2, Code
 69 12 2009, is amended to read as follows:
 69 13    The board of supervisors shall designate the county
 69 14 conservation board or the assessor who shall inspect the area
 69 15 for which an application is filed for a fruit=tree or forest
 69 16 reservation tax exemption before the application is accepted.
 69 17 Use of aerial photographs may be substituted for on=site
 69 18 inspection when appropriate.  The application can only be
 69 19 accepted if it meets the criteria established by the natural
 69 20 resource commission to be a fruit=tree or forest reservation.
 69 21 Once the application has been accepted, the area shall
 69 22 continue to receive the tax exemption during each year in
 69 23 which the area is maintained as a fruit=tree or forest
 69 24 reservation without the owner having to refile.  If accepted
 69 25 by the county, the application for a fruit=tree or forest
 69 26 reservation tax exemption shall be stamped approved and the
 69 27 assessor shall forward a copy of the application to the
 69 28 recorder for recording.  Acres in a forest reservation shall
 69 29 be exempt from school district levies only.  The county
 69 30 recorder shall collect recording fees pursuant to chapter 331,
 69 31 division V, part 3, for applications forwarded for recording
 69 32 under this section.
 69 33    PARAGRAPH DIVIDED.  If the property is sold or transferred,
 69 34 the seller shall notify the buyer that all, or part of, the
 69 35 property is in fruit=tree or forest reservation and subject to
 70  1 the recapture tax provisions of this section.  The tax
 70  2 exemption shall continue to be granted for the remainder of
 70  3 the eight=year period for fruit=tree reservation and for the
 70  4 following years for forest reservation or until the property
 70  5 no longer qualifies as a fruit=tree or forest reservation.
 70  6    The owner of the fruit=tree or forest reservation shall
 70  7 annually certify to the county conservation board or the
 70  8 assessor that the area is being maintained with proper fruit=
 70  9 tree or forest management, including necessary pruning and
 70 10 planting of trees.  The area may be inspected each year by the
 70 11 county conservation board or the assessor to determine if the
 70 12 area is maintained as a fruit=tree or forest reservation.  If
 70 13 the area is not maintained or is used for economic gain other
 70 14 than as a fruit=tree reservation during any year of the
 70 15 eight=year exemption period and any year of the following five
 70 16 years or as a forest reservation during any year for which the
 70 17 exemption is granted and any of the five years following those
 70 18 exemption years, the assessor shall assess the property for
 70 19 taxation at its fair market value as of January 1 of that year
 70 20 and in addition the area shall be subject to a recapture tax.
 70 21 However, the area shall not be subject to the recapture tax if
 70 22 the owner, including one possessing under a contract of sale,
 70 23 and the owner's direct antecedents or descendants have owned
 70 24 the area for more than ten years.  The In the case of a
 70 25 fruit=tree reservation, the tax shall be computed by
 70 26 multiplying the consolidated levy for each of those years, if
 70 27 any, of the five preceding years for which the area received
 70 28 the exemption for fruit=tree or forest reservation times the
 70 29 assessed value of the area that would have been taxed but for
 70 30 the tax exemption.  This In the case of a forest reservation,
 70 31 the tax shall be computed by multiplying the school district
 70 32 levy for each of those years, if any, of the five preceding
 70 33 years for which the area received the exemption for forest
 70 34 reservation times the assessed value of the area that would
 70 35 have been taxed but for the tax exemption.  The tax shall be
 71  1 entered against the property on the tax list for the current
 71  2 year and shall constitute a lien against the property in the
 71  3 same manner as a lien for property taxes.  The tax when
 71  4 collected shall be apportioned in the manner provided for the
 71  5 apportionment of the property taxes for the applicable tax
 71  6 year.
 71  7    Sec. 129.  Section 441.22, Code 2009, is amended to read as
 71  8 follows:
 71  9    441.22  FOREST AND FRUIT=TREE RESERVATIONS.
 71 10    Forest and fruit=tree reservations fulfilling the
 71 11 conditions of sections 427C.1 to 427C.13 shall be exempt from
 71 12 taxation, except as otherwise provided in section 427C.12.  In
 71 13 all other cases where trees are planted upon any tract of
 71 14 land, without regard to area, for forest, fruit, shade, or
 71 15 ornamental purposes, or for windbreaks, the assessor shall not
 71 16 increase the valuation of  the property because of such
 71 17 improvements.
 71 18    Sec. 130.  Section 499A.14, Code 2009, is amended to read
 71 19 as follows:
 71 20    499A.14  TAXATION.
 71 21    The real estate shall be taxed in the name of the
 71 22 cooperative, and each member of the cooperative shall pay that
 71 23 member's proportionate share of the tax in accordance with the
 71 24 proration formula set forth in the bylaws, and each member
 71 25 occupying an apartment as a residence, if eligible, shall
 71 26 receive that member's proportionate homestead tax credit
 71 27 exemption and each veteran of the military services of the
 71 28 United States identified as such under the laws of the state
 71 29 of Iowa or the United States shall receive as a credit an
 71 30 exemption that member's veterans tax benefit as prescribed by
 71 31 the laws of the state of Iowa.
 71 32    Sec. 131.  Chapters 425A and 426, Code 2009, are repealed.
 71 33    Sec. 132.  Sections 425.4, 425.21, 425.24, 425.25, 425.33
 71 34 through 425.36, 425.39, 425.40, 426A.1A through 426A.5, and
 71 35 435.33, Code 2009, are repealed.
 72  1    Sec. 133.  EXEMPTIONS NOT CONSIDERED NEWLY ENACTED.  The
 72  2 homestead property tax exemption, extraordinary homestead
 72  3 property tax exemption, and the military property tax
 72  4 exemption are not considered newly enacted after January 1,
 72  5 1997, for purposes of section 25B.7.
 72  6    Sec. 134.  CODE EDITOR DIRECTIVE.  The Code editor is
 72  7 directed to change the term "credit" to "exemption" anywhere
 72  8 it occurs in the Code in reference to the homestead credit.
 72  9 The Code editor is further directed to change the terms
 72 10 "credit" and "credit or reimbursement" to "exemption" anywhere
 72 11 those terms occur in the Code in reference to the
 72 12 extraordinary property tax credit or reimbursement.
 72 13    Sec. 135.  EFFECTIVE AND APPLICABILITY DATES.
 72 14    1.  Unless otherwise stated, this division of this Act
 72 15 takes effect January 1, 2010, and, except as provided in
 72 16 subsections 2 and 3, applies to assessment years beginning on
 72 17 or after that date.
 72 18    2.  The sections of this Act repealing chapters 425A and
 72 19 426, and amending sections in chapters 425 and 426A, apply to
 72 20 taxes due and payable in fiscal years beginning on or after
 72 21 July 1, 2010.
 72 22    3.  The section of this Act amending section 427.1,
 72 23 subsection 19, applies to exemptions on file or first applied
 72 24 for on or after July 1, 2010.
 72 25                           DIVISION IV
 72 26                         IMPLEMENTATION
 72 27    Sec. 136.  On or before July 1, 2009, the department of
 72 28 revenue, in conjunction with the department of management,
 72 29 shall initiate and coordinate the establishment of an
 72 30 implementation committee.  Both the department of revenue and
 72 31 the department of management shall provide staffing assistance
 72 32 to the committee.
 72 33    The committee shall include members appointed by the
 72 34 director of revenue representing the department of revenue,
 72 35 the department of management, the department of education,
 73  1 counties, cities, school districts, local assessors, and local
 73  2 auditors.
 73  3    The committee shall study the effects of implementation of
 73  4 divisions I, II, and III of this Act.  The committee shall
 73  5 prepare a fiscal analysis detailing the effects of
 73  6 implementation on different classes of property and on
 73  7 different property taxpayers and the effect on city and county
 73  8 revenues, school district revenues, and other local government
 73  9 revenues.  The fiscal analysis shall include a comparison of
 73 10 property taxes levied by cities and counties under the current
 73 11 system and property taxes that could be levied under the
 73 12 provisions of this Act.  The comparison shall include
 73 13 projections beyond the current fiscal year.
 73 14    The committee shall recommend adjustments to the property
 73 15 tax levy portion of the school foundation formula that will
 73 16 take into account the increased property tax valuation base
 73 17 created by this Act and the increased state percentage of
 73 18 school foundation funding provided in this Act.
 73 19    The committee shall consider, and make recommendations on,
 73 20 the conversion of all property tax certifying entities to a
 73 21 percentage limit basis as is provided in this Act for cities
 73 22 and counties, and partially for school districts.  The
 73 23 committee shall recommend percentage rates for cities,
 73 24 counties, school districts, and other local governments that
 73 25 are as nearly as possible revenue neutral.
 73 26    The committee shall report to the general assembly by
 73 27 January 15, 2010, and by January 15, 2011.
 73 28    Sec. 137.  CONFORMING AMENDMENTS LEGISLATION.  If this Act
 73 29 is enacted, the legislative services agency shall prepare
 73 30 committee study bills for submission in the 2010 regular
 73 31 session of the Eighty=third General Assembly to the committees
 73 32 on ways and means of the senate and house of representatives
 73 33 to amend the Code of Iowa as necessary to implement this Act.
 73 34 The provisions of the bill shall include but are not limited
 73 35 to repealing or amending Code provisions that are rendered
 74  1 obsolete, incorrect, or inaccurate as a result of the passage
 74  2 of this Act, and making other conforming amendments as
 74  3 necessary.
 74  4    Sec. 138.  EFFECTIVE DATE.  This division of this Act,
 74  5 being deemed of immediate importance, takes effect upon
 74  6 enactment.
 74  7                           EXPLANATION
 74  8    This bill makes various changes to the law relating to
 74  9 property taxes, assessment of property, city and county
 74 10 budgets funded primarily by property taxes, and school
 74 11 district budgets funded primarily by state and local taxes.
 74 12    Division I of the bill makes changes relating to local
 74 13 budgets and property taxes.  The division provides that if a
 74 14 new state mandate is imposed on or after July 1, 2010, which
 74 15 requires the performance of a new activity or service or the
 74 16 expansion of a service beyond what was required before July 1,
 74 17 2010, the state mandate must be fully funded.  If the state
 74 18 mandate is not fully funded, the affected political
 74 19 subdivisions are not required to comply or implement the state
 74 20 mandate.  Also, no fines or penalties may be imposed on a
 74 21 political subdivision for failure to comply or carry out an
 74 22 unfunded state mandate.
 74 23    The division strikes Code section 25B.2, subsection 3, and
 74 24 rewrites it as a new section outside the intent section of
 74 25 Code chapter 25B.  The rewritten section removes a qualifying
 74 26 phrase relating to specification of costs which provides that
 74 27 a political subdivision may still be required to carry out an
 74 28 unfunded state mandate.  The rewritten section also strikes
 74 29 the exception for federal mandates and for mandates relating
 74 30 to public retirement systems.  The rewritten section does not
 74 31 include area education agencies and community colleges in the
 74 32 definition of "political subdivision".
 74 33    The division increases the regular program foundation base
 74 34 per pupil from 87.5 percent to 95 percent, beginning with the
 74 35 budget year commencing July 1, 2011, to offset the increase in
 75  1 school property taxes due to the changed method of assessment.
 75  2 The division reduces the $5.40 foundation levy to $4.32.
 75  3    The division provides that, beginning with the fiscal year
 75  4 beginning July 1, 2011, a school district cannot levy property
 75  5 taxes, other than foundation and additional property taxes, in
 75  6 excess of .25 percent of the taxable value of residential and
 75  7 agricultural property and .75 percent of commercial property
 75  8 and .5 percent of industrial property.  The division contains
 75  9 transition provisions for tax levies for fiscal year 2011=
 75 10 2012, fiscal year 2012=2013, and fiscal year 2013=2014.  The
 75 11 division also provides that for the fiscal year beginning July
 75 12 1, 2014, and subsequent fiscal years, such school district
 75 13 property taxes by class cannot increase by more than the
 75 14 percent increase in the consumer price index for the preceding
 75 15 12 months.
 75 16    The division provides that, beginning with the fiscal year
 75 17 beginning July 1, 2011, a county cannot levy property taxes in
 75 18 excess of the following percentages:
 75 19    For residential property in the unincorporated area, 1
 75 20 percent of the taxable value.
 75 21    For income residential property in the unincorporated area,
 75 22 one=half of 1 percent.
 75 23    For agricultural property in the unincorporated area,
 75 24 three=fourths of 1 percent.
 75 25    For commercial property in the unincorporated area, 2
 75 26 percent.
 75 27    For industrial property in the unincorporated area, 3
 75 28 percent.
 75 29    For residential property in the incorporated area, one=
 75 30 fourth of 1 percent.
 75 31    For agricultural property in the incorporated area, one=
 75 32 fourth of 1 percent.
 75 33    For commercial property in the incorporated area, 1
 75 34 percent.  The 1 percent is lowered for successive years until
 75 35 it reaches three=fourths of 1 percent.
 76  1    For industrial property in the incorporated area, 1
 76  2 percent.
 76  3    For income residential property in the incorporated area,
 76  4 one=half of 1 percent.
 76  5    The division contains transition provisions for tax levies
 76  6 for fiscal year 2011=2012, fiscal year 2012=2013, and fiscal
 76  7 year 2013=2014.
 76  8    The division requires that if a county's ending fund
 76  9 balance for a budget year exceeds 25 percent of budgeted
 76 10 expenditures, the excess over 25 percent must be explicitly
 76 11 reserved or designated for a specific purpose.  The division
 76 12 applies to ending fund balances in the general fund and the
 76 13 rural services fund.  The division defines "budget year",
 76 14 "current fiscal year", and "item".
 76 15    The division provides that if the amount of the ending fund
 76 16 balance is protested to the state appeal board, the county has
 76 17 the burden of proving that the amount over 25 percent is
 76 18 reasonably likely to be appropriated for the reserved or
 76 19 designated purpose.  The limitation on ending fund balances
 76 20 applies to fiscal years beginning on or after July 1, 2014.
 76 21    The division also provides that, beginning with the fiscal
 76 22 year beginning July 1, 2011, a city cannot levy property taxes
 76 23 in excess of 1 percent of the taxable value of residential
 76 24 property, one and one=half percent for income residential
 76 25 property, three=fourths of 1 percent for agricultural
 76 26 property, and 2 percent for commercial property and industrial
 76 27 property.  The 2 percent for commercial property is lowered
 76 28 for successive years until it reaches 1 and one=half percent.
 76 29    The division contains transition provisions for tax levies
 76 30 for fiscal year 2011=2012, fiscal year 2012=2013, and fiscal
 76 31 year 2013=2014.
 76 32    The division allows a city or a county to impose, by
 76 33 ordinance, a service charge against property located in the
 76 34 city or county, as applicable.  If a city or county imposes a
 76 35 service charge, that city or county's maximum percentage levy
 77  1 shall be lowered to reflect the amount of service charges
 77  2 estimated to be collected for the fiscal year.
 77  3    The division increases from 50 percent to 75 percent the
 77  4 portion of base year expenditures paid by the state for mental
 77  5 health, mental retardation, and developmental disabilities.
 77  6    The division removes the square footage tax on mobile homes
 77  7 and manufactured homes and replaces it with the ad valorem tax
 77  8 imposed on other residences.  The bill provides that real
 77  9 estate of a mobile home park or land=leased community shall be
 77 10 assessed and taxed as improved residential property.
 77 11    The division also provides that, beginning with the fiscal
 77 12 year beginning July 1, 2014, and subsequent fiscal years, city
 77 13 or county property taxes by class cannot increase by more than
 77 14 the consumer price index for the preceding 12 months unless
 77 15 the increase is approved at election.
 77 16    The division lowers the amount of interest that can be
 77 17 charged against delinquent property taxes.  The interest rate
 77 18 is changed from 1 and one=half percent to 1 percent before tax
 77 19 sale.  The interest rate after the delinquent taxes are sold
 77 20 at tax sale is changed from 2 percent to 1 and one=half
 77 21 percent.
 77 22    The sections of the division relating to delinquent
 77 23 property tax interest rates take effect July 1, 2009, and
 77 24 apply to property taxes which become delinquent on or after
 77 25 July 1, 2009, and to parcels sold for delinquent taxes on or
 77 26 after July 1, 2009.  The remainder of the division takes
 77 27 effect July 1, 2010, and applies to fiscal years beginning on
 77 28 or after July 1, 2011.
 77 29    Division II of the bill, relating to assessment of
 77 30 property, provides that the sale price of property sold in the
 77 31 calendar year prior to the assessment year shall be presumed
 77 32 to be the market value of the property for that assessment
 77 33 year if the buyer and the seller were not immediate family
 77 34 members.  The bill also provides that property sold at public
 77 35 auction is not presumed to be an abnormal transaction or one
 78  1 that distorts market value.
 78  2    The division allows counties to share in the employment of
 78  3 a county assessor.
 78  4    The division also provides that if the assessor is unable
 78  5 to establish fair market value of newly constructed
 78  6 residential property because of a lack of comparable sales,
 78  7 the assessor shall use the replacement cost method to value
 78  8 the property.
 78  9    The division removes the property tax assessment
 78 10 limitations on residential, commercial, and industrial
 78 11 property and requires that all such property be valued at a
 78 12 five=year average of its fair market value with certain
 78 13 exceptions.  The division provides a reduction from actual
 78 14 value of 50 percent up to a maximum of $20,000 for improved
 78 15 residential property and for improved income residential
 78 16 property.
 78 17    The division also provides a reduction from actual value of
 78 18 50 percent up to a maximum of $25,000 for improved commercial
 78 19 and improved industrial property.  The division includes
 78 20 agricultural land held for development, commercial, or
 78 21 investment purposes as commercial property for assessment and
 78 22 taxation purposes.  Commercial property also includes a tract
 78 23 of land containing an animal feeding operation structure that
 78 24 is not being actively farmed by an owner.  The division
 78 25 further provides that the owner of commercial property with a
 78 26 fair market value of less than $500,000 may elect to have the
 78 27 actual value of the property determined on the basis of net
 78 28 earning capacity.  Such an election does not apply to
 78 29 commercial property that is agricultural land or that contains
 78 30 an animal feeding operation structure, as described above.
 78 31    The division makes conforming amendments to sections
 78 32 pertaining to valuation of property in an urban renewal area
 78 33 and valuation of property owned by telegraph and telephone
 78 34 companies, express companies, and electric cooperatives.
 78 35    The division provides that agricultural property that is
 79  1 owned by an owner who is actively engaged in farming the
 79  2 agricultural land shall be assessed based on the current
 79  3 productivity formula, and the current assessment limitation of
 79  4 4 percent is retained.  This includes agricultural land
 79  5 containing an animal feeding operation structure if it is
 79  6 owned by an owner who is actively engaged in farming the land.
 79  7 The division defines "owner" and "actively engaged in
 79  8 farming".
 79  9    The division provides that agricultural land that is not
 79 10 included in the class of commercial property and is not owned
 79 11 by an owner actively engaged in farming shall be valued at a
 79 12 five=year average of its fair market value.  Each farm unit
 79 13 assessed in this manner shall receive a reduction from actual
 79 14 value of 50 percent up to a maximum of $65,000.
 79 15    The division provides that attorney fees incurred by a
 79 16 property owner or aggrieved taxpayer in an appeal of an
 79 17 assessment to district court may be awarded by the court and
 79 18 assessed against the board of review or any taxing body
 79 19 involved in the appeal unless the court determines that the
 79 20 protest of assessment was frivolous and, in that case, the
 79 21 court may assess the costs of defending the protest against
 79 22 the owner or taxpayer.
 79 23    The division requires the local assessor and local board of
 79 24 review to keep confidential any documents, reports, audits,
 79 25 and other information supplied by a taxpayer or property owner
 79 26 relating to the amount or source of income, profits, losses,
 79 27 or expenditures of the taxpayer or property owner.
 79 28    The division increases from three years to six years the
 79 29 time period that subdivided property shall be assessed as
 79 30 acreage or unimproved property.
 79 31    The division takes effect January 1, 2010, and applies to
 79 32 assessment years beginning on or after January 1, 2010.
 79 33    Division III of the bill, relating to property tax credits
 79 34 and exemptions, strikes the state reimbursement for the
 79 35 homestead property tax credit and military property tax credit
 80  1 and changes the credits to exemptions from assessed value.
 80  2 The homestead exemption amount is increased from $4,850 to
 80  3 $5,000.  The military exemption amount is increased from
 80  4 $1,852 to $2,000.  The amount of exemption for veterans of
 80  5 World War I is retained at $2,778.
 80  6    The division amends provisions relating to the elderly,
 80  7 disabled, and low=income property tax credit by making it an
 80  8 exemption from assessed value and by eliminating the sliding
 80  9 scale for income and exemption amount and replacing it with a
 80 10 flat exemption amount of $2,500.  Elderly persons, disabled
 80 11 persons, and low=income persons all of whom have household
 80 12 income of less than $16,500 are eligible for the credit.
 80 13    The division directs the Code editor to change "credit" and
 80 14 "credit or reimbursement" to "exemption" wherever it occurs in
 80 15 the Code in relation to the military tax credit and the
 80 16 homestead tax credit.  The division also provides that all
 80 17 three exemptions are not considered to be newly enacted for
 80 18 purposes of state mandate funding requirements.
 80 19    The division limits the pollution=control property tax
 80 20 exemption to $100,000 of value.
 80 21    The division provides that any land in a forest reservation
 80 22 is exempt from school district levies only.  The division
 80 23 requires the owner of land in a forest or fruit=tree
 80 24 reservation to annually certify that proper management
 80 25 techniques, such as pruning and planting, are being followed.
 80 26    The division repeals the family farm property tax credit
 80 27 and the agricultural land property tax credit.  The division
 80 28 makes conforming amendments pertaining to these repeals.
 80 29    The sections of the division amending the homestead tax
 80 30 credit, the elderly, disabled, and low=income tax credit, and
 80 31 the military tax exemption and credit, and repealing the
 80 32 family farm tax credit and the agricultural land tax credit
 80 33 apply to taxes due and payable in fiscal years beginning on or
 80 34 after July 1, 2010.  The section of the division limiting the
 80 35 value of pollution control that is exempt applies to
 81  1 exemptions on file as of July 1, 2010, or first applied for on
 81  2 or after July 1, 2010.  The remainder of the division applies
 81  3 to assessment years beginning on or after January 1, 2010.
 81  4    Division IV of the bill establishes an implementation
 81  5 committee to study the effects of implementation of the bill.
 81  6 The committee is to report to the general assembly by January
 81  7 15, 2010, and by January 15, 2011.
 81  8    Division IV directs the legislative services agency to
 81  9 prepare and submit committee study bills for the 2010 regular
 81 10 legislative session to further amend the Code as necessary to
 81 11 implement the bill.
 81 12    The division takes effect upon enactment.
 81 13 LSB 2033YH 83
 81 14 md/sc/14