S.F. _____ H.F. _____ Section 1. Section 441.21, subsection 5, Code 2011, is 1 amended to read as follows: 2 5. a. For valuations established as of January 1, 1979, 3 commercial property and industrial property, excluding 4 properties referred to in section 427A.1, subsection 8 , shall 5 be assessed as a percentage of the actual value of each class 6 of property . The percentage shall be determined for each 7 class of property by the director of revenue for the state in 8 accordance with the provisions of this section . For valuations 9 established as of January 1, 1979, the percentage shall be 10 the quotient of the dividend and divisor as defined in this 11 section . The dividend for each class of property shall be the 12 total actual valuation for each class of property established 13 for 1978, plus six percent of the amount so determined. The 14 divisor for each class of property shall be the valuation 15 for each class of property established for 1978, as reported 16 by the assessors on the abstracts of assessment for 1978, 17 plus the amount of value added to the total actual value by 18 the revaluation of existing properties in 1979 as equalized 19 by the director of revenue pursuant to section 441.49 . For 20 valuations established as of January 1, 1979, property valued 21 by the department of revenue pursuant to chapters 428 , 433 , 22 437 , and 438 shall be considered as one class of property and 23 shall be assessed as a percentage of its actual value. The 24 percentage shall be determined by the director of revenue in 25 accordance with the provisions of this section . For valuations 26 established as of January 1, 1979, the percentage shall be 27 the quotient of the dividend and divisor as defined in this 28 section . The dividend shall be the total actual valuation 29 established for 1978 by the department of revenue, plus ten 30 percent of the amount so determined. The divisor for property 31 valued by the department of revenue pursuant to chapters 428 , 32 433 , 437 , and 438 shall be the valuation established for 1978, 33 plus the amount of value added to the total actual value by 34 the revaluation of the property by the department of revenue 35 -1- LSB 2311XL (13) 84 md/sc 1/ 8

S.F. _____ H.F. _____ as of January 1, 1979. For valuations established as of 1 January 1, 1980, commercial property and industrial property, 2 excluding properties referred to in section 427A.1, subsection 3 8 , shall be assessed at a percentage of the actual value of 4 each class of property . The percentage shall be determined 5 for each class of property by the director of revenue for the 6 state in accordance with the provisions of this section . For 7 valuations established as of January 1, 1980, the percentage 8 shall be the quotient of the dividend and divisor as defined in 9 this section . The dividend for each class of property shall 10 be the dividend as determined for each class of property for 11 valuations established as of January 1, 1979, adjusted by the 12 product obtained by multiplying the percentage determined 13 for that year by the amount of any additions or deletions to 14 actual value, excluding those resulting from the revaluation 15 of existing properties, as reported by the assessors on the 16 abstracts of assessment for 1979, plus four percent of the 17 amount so determined. The divisor for each class of property 18 shall be the total actual value of all such property in 1979, 19 as equalized by the director of revenue pursuant to section 20 441.49 , plus the amount of value added to the total actual 21 value by the revaluation of existing properties in 1980. The 22 director shall utilize information reported on the abstracts of 23 assessment submitted pursuant to section 441.45 in determining 24 such percentage. For valuations established as of January 1, 25 1980, property valued by the department of revenue pursuant 26 to chapters 428 , 433 , 437 , and 438 shall be assessed at a 27 percentage of its actual value. The percentage shall be 28 determined by the director of revenue in accordance with the 29 provisions of this section . For valuations established as of 30 January 1, 1980, the percentage shall be the quotient of the 31 dividend and divisor as defined in this section . The dividend 32 shall be the total actual valuation established for 1979 by 33 the department of revenue, plus eight percent of the amount so 34 determined. The divisor for property valued by the department 35 -2- LSB 2311XL (13) 84 md/sc 2/ 8

S.F. _____ H.F. _____ of revenue pursuant to chapters 428 , 433 , 437 , and 438 shall be 1 the valuation established for 1979, plus the amount of value 2 added to the total actual value by the revaluation of the 3 property by the department of revenue as of January 1, 1980. 4 For valuations established as of January 1, 1981, and each 5 year thereafter, the percentage of actual value as equalized 6 by the director of revenue as provided in section 441.49 at 7 which commercial property and industrial property, excluding 8 properties referred to in section 427A.1, subsection 8 , shall 9 be assessed shall be calculated in accordance with the methods 10 provided herein, except that any references to six percent 11 in this subsection shall be four percent. For valuations 12 established as of January 1, 1981, and each year thereafter, 13 the percentage of actual value at which property valued by 14 the department of revenue pursuant to chapters 428 , 433 , 437 , 15 and 438 shall be assessed shall be calculated in accordance 16 with the methods provided herein, except that any references 17 to ten percent in this subsection shall be eight percent. 18 Beginning with valuations established as of January 1, 1979, 19 and each year thereafter, property valued by the department of 20 revenue pursuant to chapter 434 shall also be assessed at a 21 percentage of its actual value which percentage shall be equal 22 to the percentage determined by the director of revenue for 23 commercial property, industrial property , or property valued by 24 the department of revenue pursuant to chapters 428 , 433 , 437 , 25 and 438 , whichever is lowest. 26 b. For valuations established on or after January 1, 2012, 27 but before January 1, 2016, commercial property that is not 28 new commercial property as defined in paragraph “c” , excluding 29 properties referred to in section 427A.1, subsection 8 , shall 30 be assessed as a percentage of the actual value, as determined 31 in this paragraph. 32 (1) For valuations established for the assessment year 33 beginning January 1, 2012, the percentage of actual value as 34 equalized by the director of revenue as provided in section 35 -3- LSB 2311XL (13) 84 md/sc 3/ 8

S.F. _____ H.F. _____ 441.49 at which commercial property that is not new commercial 1 property shall be assessed shall be ninety-two percent. 2 (2) For valuations established for the assessment year 3 beginning January 1, 2013, the percentage of actual value as 4 equalized by the director of revenue as provided in section 5 441.49 at which commercial property that is not new commercial 6 property shall be assessed shall be eighty-four percent. 7 (3) For valuations established for the assessment year 8 beginning January 1, 2014, the percentage of actual value as 9 equalized by the director of revenue as provided in section 10 441.49 at which commercial property that is not new commercial 11 property shall be assessed shall be seventy-six percent. 12 (4) For valuations established for the assessment year 13 beginning January 1, 2015, the percentage of actual value as 14 equalized by the director of revenue as provided in section 15 441.49 at which commercial property that is not new commercial 16 property shall be assessed shall be sixty-eight percent. 17 c. (1) For valuations established on or after January 1, 18 2012, but before January 1, 2016, new commercial property, 19 excluding properties referred to in section 427A.1, subsection 20 8 , shall be assessed as a percentage of the actual value as 21 determined in this paragraph “c” . 22 (2) For valuations established for assessment years 23 beginning on or after January 1, 2012, but before January 24 1, 2016, the percentage of actual value as equalized by the 25 director of revenue as provided in section 441.49 at which 26 commercial property that is new commercial property shall be 27 assessed shall be sixty percent. 28 (3) For purposes of this section, “new commercial property” 29 means a parcel of real estate containing no buildings 30 or structures on or after July 1, 2011, upon which the 31 construction of buildings or structures is commenced after 32 July 1, 2011, and that, but for this paragraph, would be 33 assessed under paragraph “b” . “New commercial property” shall 34 be considered a subclassification of commercial property for 35 -4- LSB 2311XL (13) 84 md/sc 4/ 8

S.F. _____ H.F. _____ the assessment years beginning on or after January 1, 2012, but 1 before January 1, 2016. 2 d. (1) For valuations established on or after January 1, 3 2016, commercial property, excluding properties referred to in 4 section 427A.1, subsection 8 , shall be assessed as a percentage 5 of the actual value as determined in this paragraph “d”. 6 (2) For valuations established for the assessment year 7 beginning January 1, 2016, and each assessment year thereafter, 8 the percentage of actual value as equalized by the director 9 of revenue as provided in section 441.49 at which commercial 10 property shall be assessed shall be sixty percent. 11 Sec. 2. Section 441.21, subsections 9 and 10, Code 2011, are 12 amended to read as follows: 13 9. Not later than November 1, 1979, and November 1 of 14 each subsequent year, the director shall certify to the 15 county auditor of each county the percentages of actual 16 value at which residential property, agricultural property, 17 commercial property, new commercial property, industrial 18 property, and property valued by the department of revenue 19 pursuant to chapters 428 , 433 , 434 , 437 , and 438 in each 20 assessing jurisdiction in the county shall be assessed for 21 taxation. The county auditor shall proceed to determine the 22 assessed values of agricultural property, residential property, 23 commercial property, new commercial property, industrial 24 property, and property valued by the department of revenue 25 pursuant to chapters 428 , 433 , 434 , 437 , and 438 by applying 26 such percentages to the current actual value of such property, 27 as reported to the county auditor by the assessor, and the 28 assessed values so determined shall be the taxable values of 29 such properties upon which the levy shall be made. 30 10. The percentage of actual value computed by the 31 director for agricultural property, residential property, 32 commercial property, new commercial property, industrial 33 property , and property valued by the department of revenue 34 pursuant to chapters 428 , 433 , 434 , 437 , and 438 and used to 35 -5- LSB 2311XL (13) 84 md/sc 5/ 8

S.F. _____ H.F. _____ determine assessed values of those classes of property does not 1 constitute a rule as defined in section 17A.2, subsection 11 . 2 Sec. 3. FUTURE REPEAL. 3 1. The section of this Act amending section 441.21, 4 subsections 9 and 10, is repealed effective January 1, 2016, 5 and the Code editor shall remove the language added to section 6 441.21, subsections 9 and 10, by the repealed section of this 7 Act, from the Code. 8 2. Section 441.21, subsection 5, paragraphs “b” and “c”, as 9 enacted in this Act, are repealed effective January 1, 2020, 10 and the Code editor shall remove the language of the paragraphs 11 from the Code. 12 Sec. 4. SAVINGS PROVISION. This Act, pursuant to section 13 4.13, does not affect the prior operation of, or prohibit the 14 application of, the provisions of section 441.21, Code 2011, or 15 rules adopted under chapter 17A to administer section 441.21, 16 Code 2011, for assessment years beginning before January 1, 17 2012, and for duties, powers, protests, appeals, proceedings, 18 actions, or remedies attributable to an assessment year 19 beginning before January 1, 2012. 20 Sec. 5. APPLICABILITY. This Act applies to property tax 21 assessment years beginning on or after January 1, 2012. 22 EXPLANATION 23 This bill changes the property assessment limitation for 24 commercial property and establishes a new commercial property 25 subclassification of commercial property for specified 26 assessment years. 27 The bill establishes a “new commercial property” 28 subclassification for assessment years beginning on or after 29 January 1, 2012, but before January 1, 2016. “New commercial 30 property” is defined in the bill as a parcel of real estate 31 containing no buildings or structures on or after July 1, 32 2011, upon which the construction of buildings or structures 33 is commenced after July 1, 2011, and that, but for the 34 subclassification, would be assessed as commercial property. 35 -6- LSB 2311XL (13) 84 md/sc 6/ 8

S.F. _____ H.F. _____ For assessment years beginning on or after January 1, 2012, 1 but before January 1, 2016, the percentage of actual value 2 at which new commercial property is assessed is 60 percent. 3 For assessment years beginning on or after January 1, 2016, 4 new commercial property is assessed as all other commercial 5 property. 6 The bill strikes the methodology in Code section 441.21(5) 7 currently used to determine the percentage of actual value 8 at which commercial property is assessed for property tax 9 purposes. The bill provides that for valuations established 10 for the assessment year beginning January 1, 2012, the 11 percentage of actual value at which commercial property that 12 is not new commercial property shall be assessed shall be 13 92 percent. The bill provides that each assessment year 14 thereafter the percentage at which commercial property 15 that is not new commercial property is assessed is reduced 16 by 8 percentage points each year until the percentage is 17 60 percent. The bill provides that for the assessment 18 year beginning January 1, 2016, and each assessment year 19 thereafter, commercial property, including property previously 20 subclassified as new commercial property, is assessed at 60 21 percent. 22 The bill also makes corresponding changes to other 23 provisions of Code section 441.21, including removing the 24 commercial property valuation limitation from the methodology 25 used to determine the percentage at which property valued by 26 the department of revenue pursuant to Code chapter 434 (railway 27 companies) is assessed. 28 The bill includes future repeal provisions relating to the 29 temporary subclassification of new commercial property. The 30 repeal provisions are effective January 1, 2016, and January 31 1, 2020. 32 The bill applies to property tax assessment years beginning 33 on or after January 1, 2012. The bill pursuant to Code section 34 4.13, does not affect the application of the provisions of 35 -7- LSB 2311XL (13) 84 md/sc 7/ 8