House Study Bill 500 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON SANDS) A BILL FOR An Act relating to state and local government finances by 1 increasing the regular program foundation base percentage, 2 establishing a property tax exemption for commercial and 3 industrial property, establishing property tax levy limits 4 for cities and counties, eliminating certain reporting 5 requirements, and including applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 5325YC (18) 84 md/sc

H.F. _____ 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, 2012, 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, 2013, 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, 2014, 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, 2015, 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, 2016, 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, 2017, 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, 2018, 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, 2019, 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 5325YC (18) 84 md/sc 1/ 31

H.F. _____ 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 Sec. 2. Section 257.4, subsection 1, paragraph b, Code 2011, 11 is amended to read as follows: 12 b. For the budget year beginning July 1, 2008, and 13 succeeding budget years beginning before July 1, 2019 , the 14 department of management shall annually determine an adjusted 15 additional property tax levy and a statewide maximum adjusted 16 additional property tax levy rate, not to exceed the statewide 17 average additional property tax levy rate, calculated by 18 dividing the total adjusted additional property tax levy 19 dollars statewide by the statewide total net taxable valuation. 20 For purposes of this paragraph, the adjusted additional 21 property tax levy shall be that portion of the additional 22 property tax levy corresponding to the state cost per pupil 23 multiplied by a school district’s weighted enrollment, and then 24 multiplied by one hundred percent less the regular program 25 foundation base per pupil percentage pursuant to section 26 257.1 . The For budget years beginning before July 1, 2019, the 27 district shall receive adjusted additional property tax levy 28 aid in an amount equal to the difference between the adjusted 29 additional property tax levy rate and the statewide maximum 30 adjusted additional property tax levy rate, as applied per 31 thousand dollars of assessed valuation on all taxable property 32 in the district. The statewide maximum adjusted additional 33 property tax levy rate shall be annually determined by the 34 department taking into account amounts allocated pursuant to 35 -2- LSB 5325YC (18) 84 md/sc 2/ 31

H.F. _____ section 257.15, subsection 4 . The For budget years beginning 1 before July 1, 2019, the statewide maximum adjusted additional 2 property tax levy rate shall be annually determined by the 3 department taking into account amounts allocated pursuant to 4 section 257.15, subsection 4 , and the balance of the property 5 tax equity and relief fund created in section 257.16A at the 6 end of the calendar year. 7 Sec. 3. Section 257.15, subsection 4, Code 2011, is amended 8 to read as follows: 9 4. a. Allocations for maximum adjusted additional property 10 tax levy rate calculation and adjusted additional property 11 tax levy aid. The For fiscal years beginning before July 1, 12 2019, the department of management shall allocate from amounts 13 appropriated pursuant to section 257.16, subsection 1 , and from 14 funds appropriated from the property tax equity and relief 15 fund created in section 257.16A for the purpose of calculating 16 the statewide maximum adjusted additional property tax levy 17 rate and providing adjusted additional property tax levy aid 18 as provided in section 257.4, subsection 1 , paragraph “b” , 19 an amount equal to the sum of subparagraphs (1) and (2) as 20 follows: 21 (1) From the amount appropriated from the general fund of 22 the state pursuant to section 257.16, subsection 1 , equal to 23 the following: 24 (a) For the budget year beginning July 1, 2006, six million 25 dollars. 26 (b) For the budget year beginning July 1, 2007, twelve 27 million dollars. 28 (c) For the budget year beginning July 1, 2008, eighteen 29 million dollars. 30 (d) For the budget year beginning July 1, 2009, and 31 succeeding budget years beginning before July 1, 2019 , 32 twenty-four million dollars. 33 (2) From the amount appropriated from the property tax 34 equity and relief fund created in section 257.16A . 35 -3- LSB 5325YC (18) 84 md/sc 3/ 31

H.F. _____ b. After lowering all school district additional property 1 tax levy rates to the statewide maximum adjusted additional 2 property tax levy rate under paragraph “a” , the department of 3 management shall use any remaining funds at the end of the 4 calendar year to further lower additional property taxes by 5 increasing for the budget year beginning the following July 6 1, the state foundation base percentage. If, however, the 7 state foundation base percentage is one hundred percent, the 8 department of management shall deposit those remaining funds 9 in the taxpayers trust fund created in section 8.57E. Moneys 10 used pursuant to this paragraph shall supplant an equal amount 11 of the appropriation made from the general fund of the state 12 pursuant to section 257.16 that represents the increase in 13 state foundation aid. 14 Sec. 4. Section 257.16A, subsections 2 and 3, Code 2011, are 15 amended to read as follows: 16 2. There For fiscal years beginning before July 1, 2019, 17 there is appropriated annually all moneys in the fund to the 18 department of management for purposes of section 257.15, 19 subsection 4 . 20 3. Notwithstanding Except as provided in subsection 4, 21 and notwithstanding section 8.33 , any moneys remaining in the 22 property tax equity and relief fund at the end of a fiscal year 23 shall not revert to any other fund but shall remain in the 24 property tax equity and relief fund for use as provided in this 25 section for the following fiscal year. 26 Sec. 5. Section 257.16A, Code 2011, is amended by adding the 27 following new subsection: 28 NEW SUBSECTION . 4. Any moneys in the property tax equity 29 and relief fund on June 30, 2019, shall be deposited by the 30 department of management in the taxpayers trust fund created 31 in section 8.57E. 32 Sec. 6. Section 423F.2, subsection 3, Code 2011, is amended 33 to read as follows: 34 3. The moneys available in a fiscal year in the secure an 35 -4- LSB 5325YC (18) 84 md/sc 4/ 31

H.F. _____ advanced vision for education fund shall be distributed by the 1 department of revenue to each school district in an amount 2 equal to the amount the school district would have received 3 pursuant to the formula in section 423E.4 as if the local 4 sales and services tax for school infrastructure purposes was 5 imposed. Moneys collected in a fiscal year beginning before 6 July 1, 2017, that are in excess of that needed to provide each 7 school district with its formula amount shall be distributed 8 and credited to the property tax equity and relief fund 9 created in section 257.16A . Moneys collected in a fiscal year 10 beginning on or after July 1, 2017, that are in excess of that 11 amount needed to provide each school district with its formula 12 amount shall be deposited in the taxpayers trust fund created 13 in section 8.57E. 14 DIVISION II 15 COMMERCIAL AND INDUSTRIAL 16 PROPERTY TAX EXEMPTION 17 Sec. 7. Section 331.512, Code 2011, is amended by adding the 18 following new subsection: 19 NEW SUBSECTION . 13A. Carry out duties relating to the 20 commercial and industrial property tax exemption as provided in 21 section 427.1, subsection 38. 22 Sec. 8. Section 427.1, Code Supplement 2011, is amended by 23 adding the following new subsection: 24 NEW SUBSECTION . 38. Commercial and industrial property. 25 a. Property that is improved with permanent construction 26 and classified for property tax purposes as commercial property 27 or industrial property. For assessment years beginning on 28 or after January 1, 2013, but before January 1, 2020, the 29 exemption provided under this subsection is limited to an 30 amount of actual value of the permanent improvements to 31 the property equal to twenty percent of the exemption base 32 applicable under paragraph “b” . For assessment years beginning 33 on or after January 1, 2020, the exemption provided under this 34 subsection is limited to an amount of actual value of the 35 -5- LSB 5325YC (18) 84 md/sc 5/ 31

H.F. _____ permanent improvements to the property equal to forty percent 1 of the exemption base applicable under paragraph “b” . 2 b. (1) For the assessment year beginning January 1, 2013, 3 the exemption base is one hundred thousand dollars or the 4 actual value of the permanent improvements to the property, 5 whichever is less. 6 (2) For the assessment year beginning January 1, 2014, the 7 exemption base is one hundred fifty thousand dollars or the 8 actual value of the permanent improvements to the property, 9 whichever is less. 10 (3) For the assessment year beginning January 1, 2015, the 11 exemption base is two hundred thousand dollars or the actual 12 value of the permanent improvements to the property, whichever 13 is less. 14 (4) For the assessment year beginning January 1, 2016, the 15 exemption base is three hundred thousand dollars or the actual 16 value of the permanent improvements to the property, whichever 17 is less. 18 (5) For the assessment year beginning January 1, 2017, the 19 exemption base is four hundred thousand dollars or the actual 20 value of the permanent improvements to the property, whichever 21 is less. 22 (6) For the assessment year beginning January 1, 2018, the 23 exemption base is seven hundred thousand dollars or the actual 24 value of the permanent improvements to the property, whichever 25 is less. 26 (7) For the assessment year beginning January 1, 2019, the 27 exemption base is one million dollars or the actual value of 28 the permanent improvements to the property, whichever is less. 29 (8) For the assessment year beginning January 1, 2020, the 30 exemption base is five hundred thousand dollars or the actual 31 value of the permanent improvements to the property, whichever 32 is less. 33 (9) For the assessment year beginning January 1, 2021, the 34 exemption base is eight hundred thousand dollars or the actual 35 -6- LSB 5325YC (18) 84 md/sc 6/ 31

H.F. _____ value of the permanent improvements to the property, whichever 1 is less. 2 (10) For the assessment year beginning January 1, 2022, the 3 exemption base is one million dollars or the actual value of 4 the permanent improvements to the property, whichever is less. 5 (11) For the assessment year beginning January 1, 2023, the 6 exemption base is two million dollars or the actual value of 7 the permanent improvements to the property, whichever is less. 8 (12) For the assessment year beginning January 1, 2024, the 9 exemption base is four million dollars or the actual value of 10 the permanent improvements to the property, whichever is less. 11 (13) For the assessment year beginning January 1, 2025, 12 the exemption base is seven million five hundred thousand 13 dollars or the actual value of the permanent improvements to 14 the property, whichever is less. 15 (14) For assessment years beginning on or after January 1, 16 2026, the exemption base is the actual value of the permanent 17 improvements to the property. 18 c. If property that is eligible for the exemption under this 19 subsection also receives a property tax exemption under another 20 provision of law for the same assessment year, the amount of 21 the exemption determined under this subsection shall be reduced 22 by all or a portion of the amount of the other exemption. 23 The amount of the reduction shall be determined by prorating 24 the other exemption amount in the proportion that the actual 25 value of the permanent improvements to the property bears to 26 the total actual value of the property, and such prorated 27 amount attributable to the permanent improvements shall be the 28 amount of the reduction. If, however, such exemption under 29 another provision of law applies only to the actual value of 30 the permanent improvements to the property, the amount of 31 the exemption determined under this subsection shall instead 32 be reduced by the amount of the exemption under the other 33 provision of law for the same assessment year. 34 d. Wind energy conversion property as defined in section 35 -7- LSB 5325YC (18) 84 md/sc 7/ 31

H.F. _____ 427B.26 is not eligible for the exemption provided under this 1 subsection. 2 e. Upon receiving the appropriate valuation information and 3 data from the assessor, the county auditor shall calculate the 4 amount of each exemption under this subsection and shall enter 5 such exemption amounts in the county system. 6 Sec. 9. IMPLEMENTATION. Section 25B.7 shall not apply to 7 this division of this Act. 8 Sec. 10. APPLICABILITY. This division of this Act applies 9 to assessment years beginning on or after January 1, 2013. 10 DIVISION III 11 COUNTY AND CITY BUDGET LIMITATION 12 Sec. 11. Section 23A.2, subsection 10, paragraph h, Code 13 2011, is amended to read as follows: 14 h. The performance of an activity listed in section 331.424 , 15 Code 2011, as a service for which a supplemental levy county 16 may be certified include in its budget . 17 Sec. 12. Section 28M.5, subsection 2, Code 2011, is amended 18 to read as follows: 19 2. If a regional transit district budget allocates 20 revenue responsibilities to the board of supervisors of a 21 participating county, the amount of the regional transit 22 district levy that is the responsibility of the participating 23 county shall be deducted from the maximum rates amount of taxes 24 authorized to be levied by the county pursuant to section 25 331.423 , subsections 1 and 2 subsection 3, paragraphs “b” 26 and “c” , as applicable, unless the county meets its revenue 27 responsibilities as allocated in the budget from other 28 available revenue sources. However, for a regional transit 29 district that includes a county with a population of less than 30 three hundred thousand, the amount of the regional transit 31 district levy that is the responsibility of such participating 32 county shall be deducted from the maximum rate amount of taxes 33 authorized to be levied by the county pursuant to section 34 331.423, subsection 1 3, paragraph “b” . 35 -8- LSB 5325YC (18) 84 md/sc 8/ 31

H.F. _____ Sec. 13. Section 123.38, subsection 2, Code 2011, is amended 1 to read as follows: 2 2. Any licensee or permittee, or the licensee’s or 3 permittee’s executor or administrator, or any person duly 4 appointed by the court to take charge of and administer the 5 property or assets of the licensee or permittee for the benefit 6 of the licensee’s or permittee’s creditors, may voluntarily 7 surrender a license or permit to the division. When a license 8 or permit is surrendered the division shall notify the local 9 authority, and the division or the local authority shall 10 refund to the person surrendering the license or permit, a 11 proportionate amount of the fee received by the division or 12 the local authority for the license or permit as follows: if 13 a license or permit is surrendered during the first three 14 months of the period for which it was issued, the refund shall 15 be three-fourths of the amount of the fee; if surrendered 16 more than three months but not more than six months after 17 issuance, the refund shall be one-half of the amount of the 18 fee; if surrendered more than six months but not more than 19 nine months after issuance, the refund shall be one-fourth of 20 the amount of the fee. No refund shall be made, however, for 21 any special liquor permit, nor for a liquor control license, 22 wine permit, or beer permit surrendered more than nine months 23 after issuance. For purposes of this subsection, any portion 24 of license or permit fees used for the purposes authorized in 25 section 331.424, subsection 1 , paragraph “a” , subparagraphs 26 (1) and (2), Code 2011, and in section 331.424A , shall not be 27 deemed received either by the division or by a local authority. 28 No refund shall be made to any licensee or permittee, upon the 29 surrender of the license or permit, if there is at the time 30 of surrender, a complaint filed with the division or local 31 authority, charging the licensee or permittee with a violation 32 of this chapter . If upon a hearing on a complaint the license 33 or permit is not revoked or suspended, then the licensee or 34 permittee is eligible, upon surrender of the license or permit, 35 -9- LSB 5325YC (18) 84 md/sc 9/ 31

H.F. _____ to receive a refund as provided in this section ; but if the 1 license or permit is revoked or suspended upon hearing the 2 licensee or permittee is not eligible for the refund of any 3 portion of the license or permit fee. 4 Sec. 14. Section 218.99, Code 2011, is amended to read as 5 follows: 6 218.99 Counties to be notified of patients’ personal 7 accounts. 8 The administrator in control of a state institution shall 9 direct the business manager of each institution under the 10 administrator’s jurisdiction which is mentioned in section 11 331.424, subsection 1 , paragraph “a” , subparagraphs (1) 12 and (2), and for which services are paid under section 13 331.424A , to quarterly inform the county of legal settlement’s 14 entity designated to perform the county’s central point of 15 coordination process of any patient or resident who has an 16 amount in excess of two hundred dollars on account in the 17 patients’ personal deposit fund and the amount on deposit. The 18 administrators shall direct the business manager to further 19 notify the entity designated to perform the county’s central 20 point of coordination process at least fifteen days before the 21 release of funds in excess of two hundred dollars or upon the 22 death of the patient or resident. If the patient or resident 23 has no county of legal settlement, notice shall be made to the 24 director of human services and the administrator in control of 25 the institution involved. 26 Sec. 15. Section 331.263, subsection 2, Code 2011, is 27 amended to read as follows: 28 2. The governing body of the community commonwealth 29 shall have the authority to levy county taxes and shall 30 have the authority to levy city taxes to the extent the 31 city tax levy authority is transferred by the charter to 32 the community commonwealth. A city participating in the 33 community commonwealth shall transfer a portion of the 34 city’s tax levy authorized under section 384.1 or 384.12 , 35 -10- LSB 5325YC (18) 84 md/sc 10/ 31

H.F. _____ whichever is applicable, to the governing body of the community 1 commonwealth. The maximum rates amount of taxes authorized to 2 be levied under sections section 384.1 and the maximum amount 3 of taxes authorized to be levied under section 384.12 by a city 4 participating in the community commonwealth shall be reduced 5 by an amount equal to the rates of the same or similar taxes 6 levied in the city by the governing body of the community 7 commonwealth. 8 Sec. 16. Section 331.301, subsection 12, Code Supplement 9 2011, is amended to read as follows: 10 12. The board of supervisors may credit funds to a reserve 11 for the purposes authorized by subsection 11 of this section ; 12 section 331.424, subsection 1 , paragraph “a” , subparagraph 13 (6); and section 331.441, subsection 2 , paragraph “b” . Moneys 14 credited to the reserve, and interest earned on such moneys, 15 shall remain in the reserve until expended for purposes 16 authorized by subsection 11 of this section ; section 331.424, 17 subsection 1 , paragraph “a” , subparagraph (6); or section 18 331.441, subsection 2 , paragraph “b” . 19 Sec. 17. Section 331.421, subsections 1 and 10, Code 2011, 20 are amended by striking the subsections. 21 Sec. 18. Section 331.421, Code 2011, is amended by adding 22 the following new subsection: 23 NEW SUBSECTION . 7A. “Item” means a budgeted expenditure, 24 appropriation, or cash reserve from a fund for a service area, 25 program, program element, or purpose. 26 Sec. 19. Section 331.423, Code 2011, is amended by striking 27 the section and inserting in lieu thereof the following: 28 331.423 Property tax dollars —— maximums. 29 1. Annually, the board shall determine separate property 30 tax levy limits to pay for general county services and rural 31 county services in accordance with this section. The property 32 tax levies separately certified for general county services and 33 rural county services under section 331.434 shall not raise 34 property tax dollars that exceed the amount determined under 35 -11- LSB 5325YC (18) 84 md/sc 11/ 31

H.F. _____ this section. 1 2. For purposes of this section and section 331.423B, unless 2 the context otherwise requires: 3 a. “Annual growth factor” means an index, expressed as 4 a percentage, determined by the department of management by 5 January 1 of the calendar year in which the budget year begins. 6 In determining the annual growth factor, the department shall 7 calculate the average of the preceding twelve-month percentage 8 change, which shall be computed on a monthly basis, in the 9 midwest consumer price index, ending with the percentage change 10 for the month of November. The department shall then add that 11 average percentage change to one hundred percent. In no case, 12 however, shall the annual growth factor exceed one hundred four 13 percent. 14 b. “Boundary adjustment” means annexation, severance, 15 incorporation, or discontinuance as those terms are defined in 16 section 368.1. 17 c. “Budget year” is the fiscal year beginning during the 18 calendar year in which a budget is certified. 19 d. “Current fiscal year” is the fiscal year ending during 20 the calendar year in which a budget is certified. 21 e. “Net new valuation taxes” means the amount of property 22 tax dollars equal to the current fiscal year’s levy rate in 23 the county for general county services or for rural county 24 services, as applicable, multiplied by the increase from the 25 current fiscal year to the budget year in taxable valuation due 26 to the following: 27 (1) Net new construction, excluding all incremental 28 valuation that is released in any one year from either a 29 division of revenue under section 260E.4 or an urban renewal 30 area for which taxes were being divided under section 403.19 if 31 the property for the valuation being released remains subject 32 to the division of revenue under section 260E.4 or remains part 33 of the urban renewal area that is subject to a division of 34 revenue under section 403.19. 35 -12- LSB 5325YC (18) 84 md/sc 12/ 31

H.F. _____ (2) Additions or improvements to existing structures. 1 (3) Remodeling of existing structures for which a building 2 permit is required. 3 (4) Net boundary adjustment. 4 (5) A municipality no longer dividing tax revenues in an 5 urban renewal area as provided in section 403.19 or a community 6 college no longer dividing revenues as provided in section 7 260E.4. 8 (6) That portion of taxable property located in an urban 9 revitalization area on which an exemption was allowed and such 10 exemption has expired. 11 3. a. For the fiscal year beginning July 1, 2013, and 12 subsequent fiscal years, the maximum amount of property tax 13 dollars which may be certified for levy by a county for general 14 county services and rural county services shall be the maximum 15 property tax dollars calculated under paragraphs “b” and “c” , 16 respectively. 17 b. The maximum property tax dollars that may be levied for 18 general county services is an amount equal to the sum of the 19 following: 20 (1) The annual growth factor times the current fiscal year’s 21 maximum property tax dollars for general county services. 22 (2) The amount of net new valuation taxes in the county. 23 c. The maximum property tax dollars that may be levied for 24 rural county services is an amount equal to the sum of the 25 following: 26 (1) The annual growth factor times the current fiscal year’s 27 maximum property tax dollars for rural county services. 28 (2) The amount of net new valuation taxes in the 29 unincorporated area of the county. 30 4. a. For purposes of calculating maximum property tax 31 dollars for general county services for the fiscal year 32 beginning July 1, 2013, only, the term “current fiscal year’s 33 maximum property tax dollars” shall mean the total amount of 34 property tax dollars certified by the county for general county 35 -13- LSB 5325YC (18) 84 md/sc 13/ 31

H.F. _____ services for the fiscal year beginning July 1, 2012. 1 b. For purposes of calculating maximum property tax dollars 2 for rural county services for the fiscal year beginning July 3 1, 2013, only, the term “current fiscal year’s maximum property 4 tax dollars” shall mean the total amount of property tax dollars 5 certified by the county for rural county services for the 6 fiscal year beginning July 1, 2012. 7 5. Property taxes certified for mental health, mental 8 retardation, and developmental disabilities services, the 9 emergency services fund in section 331.424C, the debt service 10 fund in section 331.430, any capital projects fund established 11 by the county for deposit of bond, loan, or note proceeds, and 12 any temporary increase approved pursuant to section 331.424, 13 are not included in the maximum amount of property tax dollars 14 that may be certified for a budget year under subsection 3. 15 6. The department of management, in consultation with the 16 county finance committee, shall adopt rules to administer this 17 section. The department shall prescribe forms to be used by 18 counties when making calculations required by this section. 19 Sec. 20. NEW SECTION . 331.423B Ending fund balance. 20 1. a. Budgeted ending fund balances for a budget year 21 in excess of twenty-five percent of budgeted expenditures in 22 either the general fund or rural services fund for that budget 23 year shall be explicitly reserved or designated for a specific 24 purpose. 25 b. A county is encouraged, but not required, to reduce 26 budgeted, unreserved, or undesignated ending fund balances for 27 the budget year to an amount equal to approximately twenty-five 28 percent of budgeted expenditures and transfers from the general 29 fund and rural services fund for that budget year unless a 30 decision is certified by the state appeal board ordering a 31 reduction in the ending fund balance of any of those funds. 32 c. In a protest to the county budget under section 331.436, 33 the county shall have the burden of proving that the budgeted 34 balances in excess of twenty-five percent are reasonably likely 35 -14- LSB 5325YC (18) 84 md/sc 14/ 31

H.F. _____ to be appropriated for the explicitly reserved or designated 1 specific purpose. The excess budgeted balance for the specific 2 purpose shall be considered an increase in an item in the 3 budget for purposes of section 24.28. 4 2. a. For a county that has, as of June 30, 2012, reduced 5 its actual ending fund balance to less than twenty-five 6 percent of actual expenditures, additional property taxes may 7 be computed and levied as provided in this subsection. The 8 additional property tax levy amount is an amount not to exceed 9 twenty-five percent of actual expenditures from the general 10 fund and rural services fund for the fiscal year beginning July 11 1, 2011, minus the combined ending fund balances for those 12 funds for that year. 13 b. The amount of the additional property taxes shall be 14 apportioned between the general fund and the rural services 15 fund. However, the amount apportioned for general county 16 services and for rural county services shall not exceed for 17 each fund twenty-five percent of actual expenditures for the 18 fiscal year beginning July 1, 2011. 19 c. All or a portion of additional property tax dollars 20 may be levied for the purpose of increasing cash reserves 21 for general county services and rural county services in the 22 budget year. The additional property tax dollars authorized 23 under this subsection but not levied may be carried forward as 24 unused ending fund balance taxing authority until and for the 25 fiscal year beginning July 1, 2018. The amount carried forward 26 shall not exceed twenty-five percent of the maximum amount of 27 property tax dollars available in the current fiscal year. 28 Additionally, property taxes that are levied as unused ending 29 fund balance taxing authority under this subsection may be the 30 subject of a protest under section 331.436, and the amount 31 will be considered an increase in an item in the budget for 32 purposes of section 24.28. The amount of additional property 33 taxes levied under this subsection shall not be included in the 34 computation of the maximum amount of property tax dollars which 35 -15- LSB 5325YC (18) 84 md/sc 15/ 31

H.F. _____ may be certified and levied under section 331.423. 1 Sec. 21. Section 331.424, Code 2011, is amended by striking 2 the section and inserting in lieu thereof the following: 3 331.424 Authority to levy beyond maximum property tax 4 dollars. 5 1. The board may certify additions to the maximum amount 6 of property tax dollars to be levied for a period of time not 7 to exceed two years if the proposition has been submitted at a 8 special election and received a favorable majority of the votes 9 cast on the proposition. 10 2. The special election is subject to the following: 11 a. The board must give at least thirty-two days’ notice to 12 the county commissioner of elections that the special election 13 is to be held. In no case, however, shall a notice be given to 14 the county commissioner of elections after December 31 for an 15 election on a proposition to exceed the statutory limits during 16 the fiscal year beginning in the next calendar year. 17 b. The special election shall be conducted by the county 18 commissioner of elections in accordance with law. 19 c. The proposition to be submitted shall be substantially 20 in the following form: 21 Vote “yes” or “no” on the following: Shall the county of 22 _______ levy for an additional $_______ each year for ___ years 23 beginning July 1, _____, in excess of the statutory limits 24 otherwise applicable for the (general county services or rural 25 services) fund? 26 d. The canvass shall be held beginning at 1:00 p.m. on 27 the second day which is not a holiday following the special 28 election. 29 e. Notice of the special election shall be published at 30 least once in a newspaper as specified in section 331.305 prior 31 to the date of the special election. The notice shall appear 32 as early as practicable after the board has voted to submit 33 a proposition to the voters to levy additional property tax 34 dollars. 35 -16- LSB 5325YC (18) 84 md/sc 16/ 31

H.F. _____ 3. Registered voters in the county may vote on the 1 proposition to increase property taxes for the general fund 2 in excess of the statutory limit. Registered voters residing 3 outside the corporate limits of a city within the county may 4 vote on the proposition to increase property taxes for the 5 rural services fund in excess of the statutory limit. 6 4. The amount of additional property tax dollars certified 7 under this section shall not be included in the computation 8 of the maximum amount of property tax dollars which may be 9 certified and levied under section 331.423. 10 Sec. 22. Section 331.424A, subsection 4, Code Supplement 11 2011, is amended to read as follows: 12 4. For the fiscal year beginning July 1, 1996, and for each 13 subsequent fiscal year, the county shall certify a levy for 14 payment of services. For each fiscal year, county revenues 15 from taxes imposed by the county credited to the services fund 16 shall not exceed an amount equal to the amount of base year 17 expenditures for services as defined in section 331.438 , less 18 the amount of property tax relief to be received pursuant to 19 section 426B.2 , in the fiscal year for which the budget is 20 certified. The county auditor and the board of supervisors 21 shall reduce the amount of the levy certified for the services 22 fund by the amount of property tax relief to be received. A 23 levy certified under this section is not subject to the appeal 24 provisions of section 331.426 or to any other provision in law 25 authorizing a county to exceed, increase, or appeal a property 26 tax levy limit. 27 Sec. 23. Section 331.427, subsection 3, paragraph l, Code 28 2011, is amended to read as follows: 29 l. Services listed in section 331.424, subsection 1 , Code 30 2011, and section 331.554 . 31 Sec. 24. Section 331.428, subsection 2, paragraph d, Code 32 2011, is amended to read as follows: 33 d. Services listed under section 331.424, subsection 2 , Code 34 2011 . 35 -17- LSB 5325YC (18) 84 md/sc 17/ 31

H.F. _____ Sec. 25. Section 331.434, subsection 1, Code 2011, is 1 amended to read as follows: 2 1. The budget shall show the amount required for each class 3 of proposed expenditures, a comparison of the amounts proposed 4 to be expended with the amounts expended for like purposes for 5 the two preceding years, the revenues from sources other than 6 property taxation, and the amount to be raised by property 7 taxation, in the detail and form prescribed by the director 8 of the department of management. For each county that has 9 established an urban renewal area, the budget shall include 10 estimated and actual tax increment financing revenues and all 11 estimated and actual expenditures of the revenues, proceeds 12 from debt and all estimated and actual expenditures of the 13 debt proceeds, and identification of any entity receiving a 14 direct payment of taxes funded by tax increment financing 15 revenues and shall include the total amount of loans, advances, 16 indebtedness, or bonds outstanding at the close of the most 17 recently ended fiscal year, which qualify for payment from the 18 special fund created in section 403.19 , including interest 19 negotiated on such loans, advances, indebtedness, or bonds. 20 For purposes of this subsection , “indebtedness” includes 21 written agreements whereby the county agrees to suspend, abate, 22 exempt, rebate, refund, or reimburse property taxes, provide 23 a grant for property taxes paid, or make a direct payment 24 of taxes, with moneys in the special fund. The amount of 25 loans, advances, indebtedness, or bonds shall be listed in 26 the aggregate for each county reporting. The county finance 27 committee, in consultation with the department of management 28 and the legislative services agency, shall determine reporting 29 criteria and shall prepare a form for reports filed with the 30 department pursuant to this section . The department shall make 31 the information available by electronic means. 32 Sec. 26. Section 373.10, Code 2011, is amended to read as 33 follows: 34 373.10 Taxing authority. 35 -18- LSB 5325YC (18) 84 md/sc 18/ 31