House File 413 - Introduced HOUSE FILE 413 BY PETERSEN and KAUFMANN A BILL FOR An Act relating to urban revitalization areas by authorizing 1 a property tax exemption for certain vacant commercial 2 property, and including effective date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2410YH (2) 84 md/sc
H.F. 413 Section 1. Section 404.3, subsections 5 and 6, Code 2011, 1 are amended to read as follows: 2 5. A city or county may adopt a different tax exemption 3 schedule than those allowed in subsection 1, 2 , 3, or 4. The 4 different schedule adopted shall not allow a greater exemption, 5 but may allow a smaller exemption, in a particular year, 6 than allowed in the schedule specified in the corresponding 7 subsection of this section . A different schedule adopted by a 8 city or county shall apply to every revitalization area within 9 the city or county, unless the qualified property is eligible 10 for an exemption pursuant to section 404.3A , or 404.3B , or 11 404.3C, and except in areas of the city or county which have 12 been designated as both urban renewal and urban revitalization 13 areas. In an area designated for both urban renewal and urban 14 revitalization, a city or county may adopt a different schedule 15 than has been adopted for revitalization areas which have not 16 been designated as urban renewal areas. 17 6. The owners of qualified real estate eligible for the 18 exemption provided in this section or section 404.3A , or 19 404.3B , or 404.3C shall elect to take the applicable exemption 20 or shall elect to take the applicable exemption provided in 21 the different schedule authorized by subsection 5 and adopted 22 in the city or county plan if a different schedule has been 23 adopted. Once the election has been made and the exemption 24 granted, the owner is not permitted to change the method of 25 exemption. 26 Sec. 2. NEW SECTION . 404.3C Vacant commercial property 27 exemption. 28 1. Notwithstanding the schedules provided for in sections 29 404.3 and 404.3B, a city or county may provide that all 30 qualified real estate assessed as commercial property that is 31 vacant on the date the exemption is adopted, has been vacant 32 for at least the six months prior to the date the exemption 33 is adopted, and meets one or more of the following conditions 34 is eligible to receive an exemption from taxation based on a 35 -1- LSB 2410YH (2) 84 md/sc 1/ 4
H.F. 413 schedule established by the applicable city or county under 1 subsection 2 or 3: 2 a. The real estate regularly attracts unauthorized 3 residential use, unlicensed transient business, unauthorized 4 disposal of trash, or unauthorized parking. 5 b. The assessed value of the real estate has declined during 6 the period of time when the real estate has been vacant. 7 c. The real estate is determined to contain one or more 8 nuisances under chapter 657 or to be a public nuisance as 9 defined in section 657A.1, subsection 7. 10 2. a. All qualified real estate described in subsection 1 11 is eligible to receive an exemption from taxation on the actual 12 value added by the improvements. The exemption is for a period 13 of fifteen years. The amount of the partial exemption shall 14 be established by the applicable city or county and is equal 15 to a percent of the actual value added by the improvements, 16 determined as follows: 17 (1) For the first year, not more than eighty percent. 18 (2) For the second year, not more than seventy-five percent. 19 (3) For the third year, not more than seventy percent. 20 (4) For the fourth year, not more than sixty-five percent. 21 (5) For the fifth year, not more than sixty percent. 22 (6) For the sixth year, not more than fifty-five percent. 23 (7) For the seventh year, not more than fifty percent. 24 (8) For the eighth year, not more than forty-five percent. 25 (9) For the ninth year, not more than forty percent. 26 (10) For the tenth year, not more than thirty-five percent. 27 (11) For the eleventh year, not more than thirty percent. 28 (12) For the twelfth year, not more than twenty-five 29 percent. 30 (13) For the thirteenth year, not more than twenty percent. 31 (14) For the fourteenth year, not more than twenty percent. 32 (15) For the fifteenth year, not more than twenty percent. 33 b. All qualified real estate described in subsection 1 is, 34 in lieu of the exemption schedule established under paragraph 35 -2- LSB 2410YH (2) 84 md/sc 2/ 4
H.F. 413 “a” , eligible to receive an exemption from taxation established 1 by the applicable city or county not to exceed one hundred 2 percent on the actual value added by the improvements. The 3 exemption is for a period of five years. 4 3. All qualified real estate described in subsection 1 is, 5 in lieu of the exemption schedules under subsection 2, eligible 6 to receive an exemption from taxation on the actual value added 7 by the improvements if such improvements meet or exceed the 8 gold rating standard, or other comparable nationally recognized 9 environmental building rating standard identified by ordinance 10 of the city or county, and if such improvements are designed, 11 constructed, and certified to exceed standard 90.1-2007, 12 published by the American society of heating, refrigerating, 13 and air conditioning engineers, by thirty percent. For the 14 purposes of this subsection, “gold rating standard” means the 15 United States green building council leadership in energy and 16 environmental design green building rating standard, referred 17 to as the gold standard. Compliance with the requirements 18 of this subsection relating to standard 90.1-2007, published 19 by the American society of heating, refrigerating, and air 20 conditioning engineers, shall be certified by a qualified, 21 licensed engineer. The exemption is for a period of ten 22 years. The amount of the exemption shall be established by 23 the applicable city or county and is equal to a percent of the 24 actual value added by the improvements, determined as follows: 25 a. For the first year, not more than one hundred percent. 26 b. For the second year, not more than one hundred percent. 27 c. For the third year, not more than one hundred percent. 28 d. For the fourth year, not more than one hundred percent. 29 e. For the fifth year, not more than one hundred percent. 30 f. For the sixth year, not more than eighty percent. 31 g. For the seventh year, not more than sixty percent. 32 h. For the eighth year, not more than forty percent. 33 i. For the ninth year, not more than twenty percent. 34 j. For the tenth year, not more than ten percent. 35 -3- LSB 2410YH (2) 84 md/sc 3/ 4
H.F. 413 Sec. 3. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 1 immediate importance, takes effect upon enactment. 2 EXPLANATION 3 This bill relates to revitalization areas by authorizing a 4 property tax exemption for certain vacant commercial property. 5 The bill creates new Code section 404.3C that establishes 6 a property tax exemption for qualified real estate of a 7 revitalization area under Code chapter 404 that is assessed 8 as commercial property, remained vacant for a period of six 9 consecutive months, and which meets one or more specified 10 conditions. Those conditions include that the real estate 11 regularly attracts unauthorized residential use, unlicensed 12 transient business, unauthorized disposal of trash, or 13 unauthorized parking; that the assessed value of the real 14 estate has declined during the period of time when the real 15 estate has been vacant; and that the real estate is determined 16 to contain one or more specified nuisances. 17 The bill establishes a 15-year exemption schedule that 18 provides exemptions for each year ranging from not more than 80 19 percent to not more than 20 percent. The bill also establishes 20 a five-year exemption schedule, in lieu of the 15-year 21 schedule, that provides a 100 percent exemption for each of 22 the five years. For qualified real estate that includes 23 improvements meeting the LEED gold rating standard, as defined 24 in the bill, the bill provides an alternative 10-year exemption 25 schedule that begins with a 100 percent exemption for the first 26 five years and then is reduced each year during the last five 27 years of the exemption. 28 The bill takes effect upon enactment. 29 -4- LSB 2410YH (2) 84 md/sc 4/ 4