HOUSE FILE 202

BY  ISENHART, HANSON, and MURPHY

A BILL FOR

An Act relating to the property tax exemption for property owned by certain municipalities and the Iowa national guard and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 427.1, subsection 2, Code 2011, is amended to read as follows:
   2.  Municipal and military property.
   a.  The property of a county, township, city, school corporation, levee district, drainage district, or the Iowa national guard, when devoted to public use and not held for pecuniary profit, except property as provided in paragraph “e”.
   b.  The exemption under paragraph“a” shall not apply to any of the following:
   (1)  Property of a municipally owned electric utility held under joint ownership and property of an electric power facility financed under chapter 28F or 476A that shall be subject to taxation under chapter 437A and facilities.
   (2)  Facilities of a municipal utility that are used for the provision of local exchange services pursuant to chapter 476, but only to the extent such facilities are used to provide such services, which shall be subject to taxation under chapter 433, except that section 433.11 shall not apply.
   c.  The exemption for property owned by a city or county also applies to property which is operated by a city or county as a library, art gallery or museum, conservatory, botanical garden or display, observatory or science museum, or as a location for holding athletic contests, sports or entertainment events, expositions, meetings, or conventions, or leased from the city or county for any such purposes, or leased from the city or county by the Iowa national guard or by a federal agency for the benefit of the Iowa national guard when the property owned by the city or county is devoted for public use and not for pecuniary profit, except as provided in paragraph “e”.
   d.  Food and beverages may be served at the events or locations without affecting the exemptions, provided the city has approved the serving of food and beverages on the property if the property is owned by the city or the county has approved the serving of food and beverages on the property if the property is owned by the county. The exemption for property owned by a city or county also applies to property which is located at an airport and leased to a fixed base operator providing aeronautical services to the public.
   e.  The exemption for property owned by a county, township, city, school corporation, levee district, drainage district, or the Iowa national guard under paragraph“a” shall also include property held by such entities for pecuniary profit if such property is leased to and used by a person who, if the person owned the property, would qualify for an exemption authorized by law. An exemption under this paragraph shall be limited to the proportion of the exemption that the lessee would be entitled to if the lessee owned the property.
   Sec. 2.  APPLICABILITY.  This Act applies to assessment years beginning on or after January 1, 2012.
EXPLANATION
   Current Code section 427.1, subsection 2, provides a general property tax exemption for the property of a county, township, city, school corporation, levee district, drainage district, or the Iowa national guard, when devoted to public use and not held for pecuniary profit. This bill applies the exemption to property held by such entities for pecuniary profit if such property is leased to and used by a person who, if the person owned the property, would qualify for an exemption authorized by law. An exemption allowed under the bill is limited to the proportion of the exemption that the lessee would be entitled to if the lessee owned the property.
   The bill applies to assessment years beginning on or after January 1, 2012.