House File 691 - Introduced HOUSE FILE 691 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HSB 240) A BILL FOR An Act relating to state and local government finances by 1 increasing the regular program foundation base, establishing 2 property tax levy limits for cities and counties, 3 establishing certain property assessment limitations, and 4 including applicability provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 2786HV (2) 84 md/sc

H.F. 691 DIVISION I 1 EDUCATION FINANCE 2 Section 1. Section 257.1, subsection 2, paragraph b, Code 3 2011, is amended by striking the paragraph and inserting in 4 lieu thereof the following: 5 b. (1) The regular program foundation base per pupil is the 6 following: 7 (a) For the budget year commencing July 1, 2011, the 8 regular program foundation base per pupil is eighty-seven and 9 five-tenths percent of the regular program state cost per 10 pupil. 11 (b) For the budget year commencing July 1, 2012, the 12 regular program foundation base per pupil is eighty-nine and 13 twenty-eight hundredths percent of the regular program state 14 cost per pupil. 15 (c) For the budget year commencing July 1, 2013, the 16 regular program foundation base per pupil is ninety-one and six 17 hundredths percent of the regular program state cost per pupil. 18 (d) For the budget year commencing July 1, 2014, the regular 19 program foundation base per pupil is ninety-two and eighty-four 20 hundredths percent of the regular program state cost per pupil. 21 (e) For the budget year commencing July 1, 2015, the regular 22 program foundation base per pupil is ninety-four and sixty-two 23 hundredths percent of the regular program state cost per pupil. 24 (f) For the budget year commencing July 1, 2016, the regular 25 program foundation base per pupil is ninety-six and forty 26 hundredths percent of the regular program state cost per pupil. 27 (g) For the budget year commencing July 1, 2017, the regular 28 program foundation base per pupil is ninety-eight and eighteen 29 hundredths percent of the regular program state cost per pupil. 30 (h) For the budget year commencing July 1, 2018, and 31 succeeding budget years, the regular program foundation base 32 per pupil is one hundred percent of the regular program state 33 cost per pupil. 34 (2) For each budget year, the special education support 35 -1- LSB 2786HV (2) 84 md/sc 1/ 29

H.F. 691 services foundation base is seventy-nine percent of the special 1 education support services state cost per pupil. The combined 2 foundation base is the sum of the regular program foundation 3 base, the special education support services foundation base, 4 the total teacher salary supplement district cost, the total 5 professional development supplement district cost, the total 6 early intervention supplement district cost, the total area 7 education agency teacher salary supplement district cost, 8 and the total area education agency professional development 9 supplement district cost. 10 DIVISION II 11 PROPERTY ASSESSMENT LIMITATIONS 12 Sec. 2. Section 441.21, subsection 4, Code 2011, is amended 13 to read as follows: 14 4. For valuations established as of January 1, 1979, 15 the percentage of actual value at which agricultural and 16 residential property shall be assessed shall be the quotient 17 of the dividend and divisor as defined in this section . The 18 dividend for each class of property shall be the dividend 19 as determined for each class of property for valuations 20 established as of January 1, 1978, adjusted by the product 21 obtained by multiplying the percentage determined for that 22 year by the amount of any additions or deletions to actual 23 value, excluding those resulting from the revaluation of 24 existing properties, as reported by the assessors on the 25 abstracts of assessment for 1978, plus six percent of the 26 amount so determined. However, if the difference between the 27 dividend so determined for either class of property and the 28 dividend for that class of property for valuations established 29 as of January 1, 1978, adjusted by the product obtained by 30 multiplying the percentage determined for that year by the 31 amount of any additions or deletions to actual value, excluding 32 those resulting from the revaluation of existing properties, 33 as reported by the assessors on the abstracts of assessment 34 for 1978, is less than six percent, the 1979 dividend for the 35 -2- LSB 2786HV (2) 84 md/sc 2/ 29

H.F. 691 other class of property shall be the dividend as determined for 1 that class of property for valuations established as of January 2 1, 1978, adjusted by the product obtained by multiplying 3 the percentage determined for that year by the amount of 4 any additions or deletions to actual value, excluding those 5 resulting from the revaluation of existing properties, as 6 reported by the assessors on the abstracts of assessment for 7 1978, plus a percentage of the amount so determined which is 8 equal to the percentage by which the dividend as determined 9 for the other class of property for valuations established 10 as of January 1, 1978, adjusted by the product obtained by 11 multiplying the percentage determined for that year by the 12 amount of any additions or deletions to actual value, excluding 13 those resulting from the revaluation of existing properties, 14 as reported by the assessors on the abstracts of assessment 15 for 1978, is increased in arriving at the 1979 dividend for 16 the other class of property. The divisor for each class of 17 property shall be the total actual value of all such property 18 in the state in the preceding year, as reported by the 19 assessors on the abstracts of assessment submitted for 1978, 20 plus the amount of value added to said total actual value by 21 the revaluation of existing properties in 1979 as equalized 22 by the director of revenue pursuant to section 441.49 . The 23 director shall utilize information reported on abstracts of 24 assessment submitted pursuant to section 441.45 in determining 25 such percentage. For valuations established as of January 1, 26 1980, and each assessment year thereafter beginning before 27 January 1, 2012 , the percentage of actual value as equalized 28 by the director of revenue as provided in section 441.49 at 29 which agricultural and residential property shall be assessed 30 shall be calculated in accordance with the methods provided 31 herein including the limitation of increases in agricultural 32 and residential assessed values to the percentage increase of 33 the other class of property if the other class increases less 34 than the allowable limit adjusted to include the applicable 35 -3- LSB 2786HV (2) 84 md/sc 3/ 29

H.F. 691 and current values as equalized by the director of revenue, 1 except that any references to six percent in this subsection 2 shall be four percent. For valuations established as of 3 January 1, 2012, and each assessment year thereafter, the 4 percentage of actual value as equalized by the director of 5 revenue as provided in section 441.49 at which agricultural 6 and residential property shall be assessed shall be calculated 7 in accordance with the methods provided herein including 8 the limitation of increases in agricultural and residential 9 assessed values to the percentage increase of the other 10 class of property if the other class increases less than the 11 allowable limit adjusted to include the applicable and current 12 values as equalized by the director of revenue, except that 13 any references to six percent in this subsection shall be two 14 percent. 15 Sec. 3. Section 441.21, subsection 5, Code 2011, is amended 16 to read as follows: 17 5. a. For valuations established as of January 1, 1979, 18 commercial property and industrial property, excluding 19 properties referred to in section 427A.1, subsection 8 , shall 20 be assessed as a percentage of the actual value of each class 21 of property. The percentage shall be determined for each 22 class of property by the director of revenue for the state in 23 accordance with the provisions of this section . For valuations 24 established as of January 1, 1979, the percentage shall be 25 the quotient of the dividend and divisor as defined in this 26 section . The dividend for each class of property shall be the 27 total actual valuation for each class of property established 28 for 1978, plus six percent of the amount so determined. The 29 divisor for each class of property shall be the valuation 30 for each class of property established for 1978, as reported 31 by the assessors on the abstracts of assessment for 1978, 32 plus the amount of value added to the total actual value by 33 the revaluation of existing properties in 1979 as equalized 34 by the director of revenue pursuant to section 441.49 . For 35 -4- LSB 2786HV (2) 84 md/sc 4/ 29

H.F. 691 valuations established as of January 1, 1979, property valued 1 by the department of revenue pursuant to chapters 428 , 433 , 2 437 , and 438 shall be considered as one class of property and 3 shall be assessed as a percentage of its actual value. The 4 percentage shall be determined by the director of revenue in 5 accordance with the provisions of this section . For valuations 6 established as of January 1, 1979, the percentage shall be 7 the quotient of the dividend and divisor as defined in this 8 section . The dividend shall be the total actual valuation 9 established for 1978 by the department of revenue, plus ten 10 percent of the amount so determined. The divisor for property 11 valued by the department of revenue pursuant to chapters 428 , 12 433 , 437 , and 438 shall be the valuation established for 1978, 13 plus the amount of value added to the total actual value by 14 the revaluation of the property by the department of revenue 15 as of January 1, 1979. For valuations established as of 16 January 1, 1980, commercial property and industrial property, 17 excluding properties referred to in section 427A.1, subsection 18 8 , shall be assessed at a percentage of the actual value of 19 each class of property. The percentage shall be determined 20 for each class of property by the director of revenue for the 21 state in accordance with the provisions of this section . For 22 valuations established as of January 1, 1980, the percentage 23 shall be the quotient of the dividend and divisor as defined in 24 this section . The dividend for each class of property shall 25 be the dividend as determined for each class of property for 26 valuations established as of January 1, 1979, adjusted by the 27 product obtained by multiplying the percentage determined 28 for that year by the amount of any additions or deletions to 29 actual value, excluding those resulting from the revaluation 30 of existing properties, as reported by the assessors on the 31 abstracts of assessment for 1979, plus four percent of the 32 amount so determined. The divisor for each class of property 33 shall be the total actual value of all such property in 1979, 34 as equalized by the director of revenue pursuant to section 35 -5- LSB 2786HV (2) 84 md/sc 5/ 29

H.F. 691 441.49 , plus the amount of value added to the total actual 1 value by the revaluation of existing properties in 1980. The 2 director shall utilize information reported on the abstracts of 3 assessment submitted pursuant to section 441.45 in determining 4 such percentage. For valuations established as of January 1, 5 1980, property valued by the department of revenue pursuant 6 to chapters 428 , 433 , 437 , and 438 shall be assessed at a 7 percentage of its actual value. The percentage shall be 8 determined by the director of revenue in accordance with the 9 provisions of this section . For valuations established as of 10 January 1, 1980, the percentage shall be the quotient of the 11 dividend and divisor as defined in this section . The dividend 12 shall be the total actual valuation established for 1979 by 13 the department of revenue, plus eight percent of the amount so 14 determined. The divisor for property valued by the department 15 of revenue pursuant to chapters 428 , 433 , 437 , and 438 shall be 16 the valuation established for 1979, plus the amount of value 17 added to the total actual value by the revaluation of the 18 property by the department of revenue as of January 1, 1980. 19 For valuations established as of January 1, 1981, and each 20 year thereafter, the percentage of actual value as equalized 21 by the director of revenue as provided in section 441.49 at 22 which commercial property and industrial property, excluding 23 properties referred to in section 427A.1, subsection 8 , shall 24 be assessed shall be calculated in accordance with the methods 25 provided herein, except that any references to six percent 26 in this subsection shall be four percent. For valuations 27 established as of January 1, 1981, and each year thereafter, 28 the percentage of actual value at which property valued by 29 the department of revenue pursuant to chapters 428 , 433 , 437 , 30 and 438 shall be assessed shall be calculated in accordance 31 with the methods provided herein, except that any references 32 to ten percent in this subsection shall be eight percent. 33 Beginning with valuations established as of January 1, 1979, 34 and each year thereafter, property valued by the department of 35 -6- LSB 2786HV (2) 84 md/sc 6/ 29

H.F. 691 revenue pursuant to chapter 434 shall also be assessed at a 1 percentage of its actual value which percentage shall be equal 2 to the percentage determined by the director of revenue for 3 commercial property, industrial property, or property valued by 4 the department of revenue pursuant to chapters 428 , 433 , 437 , 5 and 438 , whichever is lowest . 6 b. For valuations established on or after January 1, 2012, 7 commercial property, excluding properties referred to in 8 section 427A.1, subsection 8 , shall be assessed as a percentage 9 of the actual value, as determined in this paragraph. 10 (1) For valuations established for the assessment year 11 beginning January 1, 2012, the percentage of actual value as 12 equalized by the director of revenue as provided in section 13 441.49 at which commercial property shall be assessed shall be 14 ninety-two percent. 15 (2) For valuations established for the assessment year 16 beginning January 1, 2013, the percentage of actual value as 17 equalized by the director of revenue as provided in section 18 441.49 at which commercial property shall be assessed shall be 19 eighty-four percent. 20 (3) For valuations established for the assessment year 21 beginning January 1, 2014, the percentage of actual value as 22 equalized by the director of revenue as provided in section 23 441.49 at which commercial property shall be assessed shall be 24 seventy-six percent. 25 (4) For valuations established for the assessment year 26 beginning January 1, 2015, the percentage of actual value as 27 equalized by the director of revenue as provided in section 28 441.49 at which commercial property shall be assessed shall be 29 sixty-eight percent. 30 (5) For valuations established for the assessment year 31 beginning January 1, 2016, and each assessment year thereafter, 32 the percentage of actual value as equalized by the director 33 of revenue as provided in section 441.49 at which commercial 34 property shall be assessed shall be sixty percent. 35 -7- LSB 2786HV (2) 84 md/sc 7/ 29

H.F. 691 c. For valuations established on or after January 1, 2012, 1 industrial property, excluding properties referred to in 2 section 427A.1, subsection 8, shall be assessed as a percentage 3 of the actual value, as determined in this paragraph. 4 (1) For valuations established for the assessment year 5 beginning January 1, 2012, the percentage of actual value as 6 equalized by the director of revenue as provided in section 7 441.49 at which industrial property shall be assessed shall be 8 ninety-two percent. 9 (2) For valuations established for the assessment year 10 beginning January 1, 2013, the percentage of actual value as 11 equalized by the director of revenue as provided in section 12 441.49 at which industrial property shall be assessed shall be 13 eighty-four percent. 14 (3) For valuations established for the assessment year 15 beginning January 1, 2014, the percentage of actual value as 16 equalized by the director of revenue as provided in section 17 441.49 at which industrial property shall be assessed shall be 18 seventy-six percent. 19 (4) For valuations established for the assessment year 20 beginning January 1, 2015, the percentage of actual value as 21 equalized by the director of revenue as provided in section 22 441.49 at which industrial property shall be assessed shall be 23 sixty-eight percent. 24 (5) For valuations established for the assessment year 25 beginning January 1, 2016, and each assessment year thereafter, 26 the percentage of actual value as equalized by the director 27 of revenue as provided in section 441.49 at which industrial 28 property shall be assessed shall be sixty percent. 29 Sec. 4. NEW SECTION . 441.21A Legislative intent. 30 1. It is the intent of the general assembly that 31 appropriations be made annually to reimburse local taxing 32 authorities in this state for reductions in property tax 33 collections on commercial and industrial property as a result 34 of the assessment limitations on such property established 35 -8- LSB 2786HV (2) 84 md/sc 8/ 29

H.F. 691 under section 441.21, subsection 5, paragraphs “b” and “c” , in 1 the following amounts: 2 a. For the fiscal year beginning July 1, 2013, fifty million 3 dollars. 4 b. For the fiscal year beginning July 1, 2014, one hundred 5 million dollars. 6 c. For the fiscal year beginning July 1, 2015, one hundred 7 fifty million dollars. 8 d. For the fiscal year beginning July 1, 2016, two hundred 9 million dollars. 10 e. For the fiscal year beginning July 1, 2017, and each 11 fiscal year thereafter, two hundred fifty million dollars. 12 2. The committee on ways and means of the senate and the 13 committee on ways and means of the house of representatives 14 shall each conduct an annual review of the implementation 15 and fiscal impact of the commercial and industrial property 16 assessment limitations established under section 441.21, 17 subsection 5, paragraphs “b” and “c” , on local taxing 18 authorities in this state. 19 Sec. 5. SAVINGS PROVISION. This division of this Act, 20 pursuant to section 4.13, does not affect the operation of, 21 or prohibit the application of, prior provisions of section 22 441.21, or rules adopted under chapter 17A to administer prior 23 provisions of section 441.21, for assessment years beginning 24 before January 1, 2012, and for duties, powers, protests, 25 appeals, proceedings, actions, or remedies attributable to an 26 assessment year beginning before January 1, 2012. 27 Sec. 6. APPLICABILITY. This division of this Act applies 28 to property tax assessment years beginning on or after January 29 1, 2012. 30 DIVISION III 31 COUNTY AND CITY BUDGET LIMITATION 32 Sec. 7. Section 23A.2, subsection 10, paragraph h, Code 33 2011, is amended to read as follows: 34 h. The performance of an activity listed in section 331.424 , 35 -9- LSB 2786HV (2) 84 md/sc 9/ 29

H.F. 691 Code 2011, as a service for which a supplemental levy county 1 may be certified include in its budget . 2 Sec. 8. Section 28M.5, subsection 2, Code 2011, is amended 3 to read as follows: 4 2. If a regional transit district budget allocates 5 revenue responsibilities to the board of supervisors of a 6 participating county, the amount of the regional transit 7 district levy that is the responsibility of the participating 8 county shall be deducted from the maximum rates amount of taxes 9 authorized to be levied by the county pursuant to section 10 331.423 , subsections 1 and 2 subsection 3, paragraphs “b” 11 and “c” , as applicable, unless the county meets its revenue 12 responsibilities as allocated in the budget from other 13 available revenue sources. However, for a regional transit 14 district that includes a county with a population of less than 15 three hundred thousand, the amount of the regional transit 16 district levy that is the responsibility of such participating 17 county shall be deducted from the maximum rate amount of taxes 18 authorized to be levied by the county pursuant to section 19 331.423, subsection 1 3, paragraph “b” . 20 Sec. 9. Section 123.38, subsection 2, Code 2011, is amended 21 to read as follows: 22 2. Any licensee or permittee, or the licensee’s or 23 permittee’s executor or administrator, or any person duly 24 appointed by the court to take charge of and administer the 25 property or assets of the licensee or permittee for the benefit 26 of the licensee’s or permittee’s creditors, may voluntarily 27 surrender a license or permit to the division. When a license 28 or permit is surrendered the division shall notify the local 29 authority, and the division or the local authority shall 30 refund to the person surrendering the license or permit, a 31 proportionate amount of the fee received by the division or 32 the local authority for the license or permit as follows: if 33 a license or permit is surrendered during the first three 34 months of the period for which it was issued, the refund shall 35 -10- LSB 2786HV (2) 84 md/sc 10/ 29

H.F. 691 be three-fourths of the amount of the fee; if surrendered 1 more than three months but not more than six months after 2 issuance, the refund shall be one-half of the amount of the 3 fee; if surrendered more than six months but not more than 4 nine months after issuance, the refund shall be one-fourth of 5 the amount of the fee. No refund shall be made, however, for 6 any special liquor permit, nor for a liquor control license, 7 wine permit, or beer permit surrendered more than nine months 8 after issuance. For purposes of this subsection, any portion 9 of license or permit fees used for the purposes authorized in 10 section 331.424, subsection 1 , paragraph “a” , subparagraphs 11 (1) and (2), Code 2011, and in section 331.424A , shall not be 12 deemed received either by the division or by a local authority. 13 No refund shall be made to any licensee or permittee, upon the 14 surrender of the license or permit, if there is at the time 15 of surrender, a complaint filed with the division or local 16 authority, charging the licensee or permittee with a violation 17 of this chapter . If upon a hearing on a complaint the license 18 or permit is not revoked or suspended, then the licensee or 19 permittee is eligible, upon surrender of the license or permit, 20 to receive a refund as provided in this section ; but if the 21 license or permit is revoked or suspended upon hearing the 22 licensee or permittee is not eligible for the refund of any 23 portion of the license or permit fee. 24 Sec. 10. Section 218.99, Code 2011, is amended to read as 25 follows: 26 218.99 Counties to be notified of patients’ personal 27 accounts. 28 The administrator in control of a state institution shall 29 direct the business manager of each institution under the 30 administrator’s jurisdiction which is mentioned in section 31 331.424, subsection 1 , paragraph “a” , subparagraphs (1) 32 and (2), and for which services are paid under section 33 331.424A , to quarterly inform the county of legal settlement’s 34 entity designated to perform the county’s central point of 35 -11- LSB 2786HV (2) 84 md/sc 11/ 29

H.F. 691 coordination process of any patient or resident who has an 1 amount in excess of two hundred dollars on account in the 2 patients’ personal deposit fund and the amount on deposit. The 3 administrators shall direct the business manager to further 4 notify the entity designated to perform the county’s central 5 point of coordination process at least fifteen days before the 6 release of funds in excess of two hundred dollars or upon the 7 death of the patient or resident. If the patient or resident 8 has no county of legal settlement, notice shall be made to the 9 director of human services and the administrator in control of 10 the institution involved. 11 Sec. 11. Section 331.263, subsection 2, Code 2011, is 12 amended to read as follows: 13 2. The governing body of the community commonwealth 14 shall have the authority to levy county taxes and shall 15 have the authority to levy city taxes to the extent the 16 city tax levy authority is transferred by the charter to 17 the community commonwealth. A city participating in the 18 community commonwealth shall transfer a portion of the 19 city’s tax levy authorized under section 384.1 or 384.12 , 20 whichever is applicable, to the governing body of the community 21 commonwealth. The maximum rates amount of taxes authorized to 22 be levied under sections section 384.1 and the maximum amount 23 of taxes authorized to be levied under section 384.12 by a city 24 participating in the community commonwealth shall be reduced 25 by an amount equal to the rates of the same or similar taxes 26 levied in the city by the governing body of the community 27 commonwealth. 28 Sec. 12. Section 331.301, subsection 12, Code 2011, is 29 amended to read as follows: 30 12. The board of supervisors may credit funds to a reserve 31 for the purposes authorized by subsection 11 of this section ; 32 section 331.424, subsection 1 , paragraph “a” , subparagraph 33 (6); and section 331.441, subsection 2 , paragraph “b” . Moneys 34 credited to the reserve, and interest earned on such moneys, 35 -12- LSB 2786HV (2) 84 md/sc 12/ 29

H.F. 691 shall remain in the reserve until expended for purposes 1 authorized by subsection 11 of this section ; section 331.424, 2 subsection 1 , paragraph “a” , subparagraph (6); or section 3 331.441, subsection 2 , paragraph “b” . 4 Sec. 13. Section 331.421, subsections 1 and 10, Code 2011, 5 are amended by striking the subsections. 6 Sec. 14. Section 331.421, Code 2011, is amended by adding 7 the following new subsection: 8 NEW SUBSECTION . 7A. “Item” means a budgeted expenditure, 9 appropriation, or cash reserve from a fund for a service area, 10 program, program element, or purpose. 11 Sec. 15. Section 331.423, Code 2011, is amended by striking 12 the section and inserting in lieu thereof the following: 13 331.423 Property tax dollars —— maximums. 14 1. Annually, the board shall determine separate property 15 tax levy limits to pay for general county services and rural 16 county services in accordance with this section. The property 17 tax levies separately certified for general county services and 18 rural county services under section 331.434 shall not raise 19 property tax dollars that exceed the amount determined under 20 this section. 21 2. For purposes of this section and section 331.423B, unless 22 the context otherwise requires: 23 a. “Annual growth factor” means an index, expressed as 24 a percentage, determined by the department of management by 25 January 1 of the calendar year in which the budget year begins. 26 In determining the annual growth factor, the department shall 27 calculate the average of the preceding twelve-month percentage 28 change, which shall be computed on a monthly basis, in the 29 midwest consumer price index. In no case, however, shall the 30 annual growth factor exceed four percent. 31 b. “Boundary adjustment” means annexation, severance, 32 incorporation, or discontinuance as those terms are defined in 33 section 368.1. 34 c. “Budget year” is the fiscal year beginning during the 35 -13- LSB 2786HV (2) 84 md/sc 13/ 29

H.F. 691 calendar year in which a budget is certified. 1 d. “Current fiscal year” is the fiscal year ending during 2 the calendar year in which a budget is certified. 3 e. “Net new valuation taxes” means the amount of property 4 tax dollars equal to the current fiscal year’s levy rate in 5 the county for general county services or for rural county 6 services, as applicable, multiplied by the increase from the 7 current fiscal year to the budget year in taxable valuation due 8 to the following: 9 (1) Net new construction, excluding all incremental 10 valuation that is released in any one year from an urban 11 renewal area for which taxes were being divided under section 12 403.19 if the property for the valuation being released remains 13 part of the urban renewal area. 14 (2) Additions or improvements to existing structures. 15 (3) Remodeling of existing structures for which a building 16 permit is required. 17 (4) Net boundary adjustment. 18 (5) A municipality no longer dividing tax revenues in 19 an urban renewal area as provided in section 403.19, to the 20 extent that the incremental valuation released is due to new 21 construction or revaluation on property newly constructed, 22 additions or improvements to existing property, net boundary 23 adjustment, or expiration of tax abatements, all occurring 24 after the division of revenue begins. 25 (6) That portion of taxable property located in an urban 26 revitalization area on which an exemption was allowed and such 27 exemption has expired. 28 3. a. For the fiscal year beginning July 1, 2012, and 29 subsequent fiscal years, the maximum amount of property tax 30 dollars which may be certified for levy by a county for general 31 county services and rural county services shall be the maximum 32 property tax dollars calculated under paragraphs “b” and “c” , 33 respectively. 34 b. The maximum property tax dollars that may be levied for 35 -14- LSB 2786HV (2) 84 md/sc 14/ 29

H.F. 691 general county services is an amount equal to the sum of the 1 following: 2 (1) The annual growth factor times the current fiscal year’s 3 maximum property tax dollars for general county services. 4 (2) The amount of net new valuation taxes in the county. 5 c. The maximum property tax dollars that may be levied for 6 rural county services is an amount equal to the sum of the 7 following: 8 (1) The annual growth factor times the current fiscal year’s 9 maximum property tax dollars for rural county services. 10 (2) The amount of net new valuation taxes in the 11 unincorporated area of the county. 12 4. a. For purposes of calculating maximum property tax 13 dollars for general county services for the fiscal year 14 beginning July 1, 2012, only, the term “current fiscal year’s 15 maximum property tax dollars” shall mean the total amount of 16 property tax dollars certified by the county for general county 17 services for the fiscal year beginning July 1, 2011. 18 b. For purposes of calculating maximum property tax dollars 19 for rural county services for the fiscal year beginning July 20 1, 2012, only, the term “current fiscal year’s maximum property 21 tax dollars” shall mean the total amount of property tax dollars 22 certified by the county for rural county services for the 23 fiscal year beginning July 1, 2011. 24 5. Property taxes certified for deposit in the mental 25 health, mental retardation, and developmental disabilities 26 services fund in section 331.424A, the emergency services fund 27 in section 331.424C, the debt service fund in section 331.430, 28 any capital projects fund established by the county for deposit 29 of bond, loan, or note proceeds, and any temporary increase 30 approved pursuant to section 331.424, are not included in the 31 maximum amount of property tax dollars that may be certified 32 for a budget year under subsection 3. 33 6. The department of management, in consultation with the 34 county finance committee, shall adopt rules to administer this 35 -15- LSB 2786HV (2) 84 md/sc 15/ 29

H.F. 691 section. The department shall prescribe forms to be used by 1 counties when making calculations required by this section. 2 Sec. 16. NEW SECTION . 331.423B Ending fund balance. 3 1. a. Budgeted ending fund balances on a cash basis for 4 a budget year in excess of twenty-five percent of budgeted 5 expenditures in either the general fund or rural services 6 fund for that budget year shall be explicitly reserved or 7 designated for a specific purpose and specifically described 8 in the certified budget. The description shall include the 9 projected date that the expenditures will be appropriated for 10 the specific purpose. 11 b. A county is encouraged, but not required, to reduce 12 budgeted, unreserved, or undesignated ending fund balances for 13 the budget year to an amount equal to approximately twenty-five 14 percent of budgeted expenditures in the general fund and 15 rural services fund for that budget year unless a decision is 16 certified by the state appeal board ordering a reduction in the 17 ending fund balance of any of those funds. 18 c. In a protest to the county budget under section 331.436, 19 the county shall have the burden of proving that the budgeted 20 balances in excess of twenty-five percent are reasonably likely 21 to be appropriated for the explicitly reserved or designated 22 specific purpose by the date identified in the certified 23 budget. The excess budgeted balance for the specific purpose 24 shall be considered an increase in an item in the budget for 25 purposes of section 24.28. 26 2. a. For a county that has, as of June 30, 2011, reduced 27 its actual ending fund balance to less than twenty-five 28 percent of actual expenditures on a cash basis, additional 29 property taxes may be computed and levied as provided in this 30 subsection. The additional property tax levy amount is an 31 amount not to exceed twenty-five percent of actual expenditures 32 from the general fund and rural services fund for the fiscal 33 year beginning July 1, 2010, minus the combined ending fund 34 balances for those funds for that year. 35 -16- LSB 2786HV (2) 84 md/sc 16/ 29

H.F. 691 b. The amount of the additional property taxes shall be 1 apportioned between the general fund and the rural services 2 fund. However, the amount apportioned for general county 3 services and for rural county services shall not exceed for 4 each fund twenty-five percent of actual expenditures for the 5 fiscal year beginning July 1, 2010. 6 c. All or a portion of additional property tax dollars 7 may be levied for the purpose of increasing cash reserves 8 for general county services and rural county services in the 9 budget year. The additional property tax dollars authorized 10 under this subsection but not levied may be carried forward as 11 unused ending fund balance taxing authority until and for the 12 fiscal year beginning July 1, 2017. The amount carried forward 13 shall not exceed twenty-five percent of the maximum amount of 14 property tax dollars available in the current fiscal year. 15 Additionally, property taxes that are levied as unused ending 16 fund balance taxing authority under this subsection may be the 17 subject of a protest under section 331.436, and the amount 18 will be considered an increase in an item in the budget for 19 purposes of section 24.28. The amount of additional property 20 taxes levied under this subsection shall not be included in the 21 computation of the maximum amount of property tax dollars which 22 may be certified and levied under section 331.423. 23 Sec. 17. Section 331.424, Code 2011, is amended by striking 24 the section and inserting in lieu thereof the following: 25 331.424 Authority to levy beyond maximum property tax 26 dollars. 27 1. The board may certify additions to the maximum amount 28 of property tax dollars to be levied for a period of time not 29 to exceed two years if the proposition has been submitted at a 30 special election and received a favorable majority of the votes 31 cast on the proposition. 32 2. The special election is subject to the following: 33 a. The board must give at least thirty-two days’ notice to 34 the county commissioner of elections that the special election 35 -17- LSB 2786HV (2) 84 md/sc 17/ 29

H.F. 691 is to be held. 1 b. The special election shall be conducted by the county 2 commissioner of elections in accordance with law. 3 c. The proposition to be submitted shall be substantially 4 in the following form: 5 Vote “yes” or “no” on the following: Shall the county of 6 _______ levy for an additional $_______ each year for ___ years 7 beginning July 1, _____, in excess of the statutory limits 8 otherwise applicable for the (general county services or rural 9 services) fund? 10 d. The canvass shall be held beginning at 1:00 p.m. on 11 the second day which is not a holiday following the special 12 election. 13 e. Notice of the special election shall be published at 14 least once in a newspaper as specified in section 331.305 prior 15 to the date of the special election. The notice shall appear 16 as early as practicable after the board has voted to submit 17 a proposition to the voters to levy additional property tax 18 dollars. 19 3. Registered voters in the county may vote on the 20 proposition to increase property taxes for the general fund 21 in excess of the statutory limit. Registered voters residing 22 outside the corporate limits of a city within the county may 23 vote on the proposition to increase property taxes for the 24 rural services fund in excess of the statutory limit. 25 4. The amount of additional property tax dollars certified 26 under this section shall not be included in the computation 27 of the maximum amount of property tax dollars which may be 28 certified and levied under section 331.423. 29 Sec. 18. Section 331.424A, subsection 4, Code 2011, is 30 amended to read as follows: 31 4. For the fiscal year beginning July 1, 1996, and for each 32 subsequent fiscal year, the county shall certify a levy for 33 payment of services. For each fiscal year, county revenues 34 from taxes imposed by the county credited to the services fund 35 -18- LSB 2786HV (2) 84 md/sc 18/ 29