House Study Bill 676 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON SANDS) A BILL FOR An Act relating to taxation and local government budgets 1 by providing for an increase in the amount of the earned 2 income tax credit, establishing and modifying property 3 assessment limitations, providing for certain property tax 4 replacement payments, modifying the assessment and taxation 5 of telecommunications company property, establishing budget 6 limitations for counties and cities, modifying certain 7 reporting requirements, establishing a property tax credit 8 for certain commercial, industrial, and railway property, 9 establishing a multiresidential property classification, 10 providing penalties, making appropriations, and including 11 effective date, retroactive applicability, and other 12 applicability provisions. 13 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 14 TLSB 6140YC (10) 84 md/sc
H.F. _____ DIVISION I 1 EARNED INCOME TAX CREDIT 2 Section 1. Section 422.12B, subsection 1, Code 2011, is 3 amended to read as follows: 4 1. The taxes imposed under this division less the credits 5 allowed under section 422.12 shall be reduced by an earned 6 income credit equal to seven ten percent of the federal earned 7 income credit provided in section 32 of the Internal Revenue 8 Code. Any credit in excess of the tax liability is refundable. 9 Sec. 2. RETROACTIVE APPLICABILITY. This division of this 10 Act applies retroactively to January 1, 2012, for tax years 11 beginning on or after that date. 12 DIVISION II 13 PROPERTY TAX ASSESSMENT LIMITATIONS —— PROPERTY TAX REPLACEMENT 14 Sec. 3. Section 257.3, subsection 1, Code 2011, is amended 15 by adding the following new paragraph: 16 NEW PARAGRAPH . d. The amount paid to each school district 17 for the commercial and industrial property tax replacement 18 claim under section 441.21A shall be regarded as property tax. 19 The portion of the payment which is foundation property tax 20 shall be determined by applying the foundation property tax 21 rate to the amount computed under section 441.21A, subsection 22 4, paragraph “a” , and such amount shall be prorated pursuant to 23 section 441.21A, subsection 2, if applicable. 24 Sec. 4. Section 331.512, Code 2011, is amended by adding the 25 following new subsection: 26 NEW SUBSECTION . 13A. Carry out duties relating to the 27 calculation and payment of commercial and industrial property 28 tax replacement claims under section 441.21A. 29 Sec. 5. Section 331.559, Code 2011, is amended by adding the 30 following new subsection: 31 NEW SUBSECTION . 25A. Carry out duties relating to the 32 calculation and payment of commercial and industrial property 33 tax replacement claims under section 441.21A. 34 Sec. 6. Section 441.21, subsection 4, Code Supplement 2011, 35 -1- LSB 6140YC (10) 84 md/sc 1/ 58
H.F. _____ is amended to read as follows: 1 4. For valuations established as of January 1, 1979, 2 the percentage of actual value at which agricultural and 3 residential property shall be assessed shall be the quotient 4 of the dividend and divisor as defined in this section . The 5 dividend for each class of property shall be the dividend 6 as determined for each class of property for valuations 7 established as of January 1, 1978, adjusted by the product 8 obtained by multiplying the percentage determined for that 9 year by the amount of any additions or deletions to actual 10 value, excluding those resulting from the revaluation of 11 existing properties, as reported by the assessors on the 12 abstracts of assessment for 1978, plus six percent of the 13 amount so determined. However, if the difference between the 14 dividend so determined for either class of property and the 15 dividend for that class of property for valuations established 16 as of January 1, 1978, adjusted by the product obtained by 17 multiplying the percentage determined for that year by the 18 amount of any additions or deletions to actual value, excluding 19 those resulting from the revaluation of existing properties, 20 as reported by the assessors on the abstracts of assessment 21 for 1978, is less than six percent, the 1979 dividend for the 22 other class of property shall be the dividend as determined for 23 that class of property for valuations established as of January 24 1, 1978, adjusted by the product obtained by multiplying 25 the percentage determined for that year by the amount of 26 any additions or deletions to actual value, excluding those 27 resulting from the revaluation of existing properties, as 28 reported by the assessors on the abstracts of assessment for 29 1978, plus a percentage of the amount so determined which is 30 equal to the percentage by which the dividend as determined 31 for the other class of property for valuations established 32 as of January 1, 1978, adjusted by the product obtained by 33 multiplying the percentage determined for that year by the 34 amount of any additions or deletions to actual value, excluding 35 -2- LSB 6140YC (10) 84 md/sc 2/ 58
H.F. _____ those resulting from the revaluation of existing properties, 1 as reported by the assessors on the abstracts of assessment 2 for 1978, is increased in arriving at the 1979 dividend for 3 the other class of property. The divisor for each class of 4 property shall be the total actual value of all such property 5 in the state in the preceding year, as reported by the 6 assessors on the abstracts of assessment submitted for 1978, 7 plus the amount of value added to said total actual value by 8 the revaluation of existing properties in 1979 as equalized 9 by the director of revenue pursuant to section 441.49 . The 10 director shall utilize information reported on abstracts of 11 assessment submitted pursuant to section 441.45 in determining 12 such percentage. For valuations established as of January 1, 13 1980, and each assessment year thereafter beginning before 14 January 1, 2013 , the percentage of actual value as equalized 15 by the director of revenue as provided in section 441.49 at 16 which agricultural and residential property shall be assessed 17 shall be calculated in accordance with the methods provided 18 herein including the limitation of increases in agricultural 19 and residential assessed values to the percentage increase of 20 the other class of property if the other class increases less 21 than the allowable limit adjusted to include the applicable 22 and current values as equalized by the director of revenue, 23 except that any references to six percent in this subsection 24 shall be four percent. For valuations established as of 25 January 1, 2013, and each assessment year thereafter, the 26 percentage of actual value as equalized by the director of 27 revenue as provided in section 441.49 at which agricultural 28 and residential property shall be assessed shall be calculated 29 in accordance with the methods provided herein including 30 the limitation of increases in agricultural and residential 31 assessed values to the percentage increase of the other 32 class of property if the other class increases less than the 33 allowable limit adjusted to include the applicable and current 34 values as equalized by the director of revenue, except that any 35 -3- LSB 6140YC (10) 84 md/sc 3/ 58
H.F. _____ references to six percent in this subsection shall be three 1 percent. 2 Sec. 7. Section 441.21, subsection 5, Code Supplement 2011, 3 is amended to read as follows: 4 5. a. For valuations established as of January 1, 1979, 5 commercial property and industrial property, excluding 6 properties referred to in section 427A.1, subsection 8 , shall 7 be assessed as a percentage of the actual value of each class 8 of property. The percentage shall be determined for each 9 class of property by the director of revenue for the state in 10 accordance with the provisions of this section . For valuations 11 established as of January 1, 1979, the percentage shall be 12 the quotient of the dividend and divisor as defined in this 13 section . The dividend for each class of property shall be the 14 total actual valuation for each class of property established 15 for 1978, plus six percent of the amount so determined. The 16 divisor for each class of property shall be the valuation 17 for each class of property established for 1978, as reported 18 by the assessors on the abstracts of assessment for 1978, 19 plus the amount of value added to the total actual value by 20 the revaluation of existing properties in 1979 as equalized 21 by the director of revenue pursuant to section 441.49 . For 22 valuations established as of January 1, 1979, property valued 23 by the department of revenue pursuant to chapters 428 , 433 , 24 437 , and 438 shall be considered as one class of property and 25 shall be assessed as a percentage of its actual value. The 26 percentage shall be determined by the director of revenue in 27 accordance with the provisions of this section . For valuations 28 established as of January 1, 1979, the percentage shall be 29 the quotient of the dividend and divisor as defined in this 30 section . The dividend shall be the total actual valuation 31 established for 1978 by the department of revenue, plus ten 32 percent of the amount so determined. The divisor for property 33 valued by the department of revenue pursuant to chapters 428 , 34 433 , 437 , and 438 shall be the valuation established for 1978, 35 -4- LSB 6140YC (10) 84 md/sc 4/ 58
H.F. _____ plus the amount of value added to the total actual value by 1 the revaluation of the property by the department of revenue 2 as of January 1, 1979. For valuations established as of 3 January 1, 1980, commercial property and industrial property, 4 excluding properties referred to in section 427A.1, subsection 5 8 , shall be assessed at a percentage of the actual value of 6 each class of property. The percentage shall be determined 7 for each class of property by the director of revenue for the 8 state in accordance with the provisions of this section . For 9 valuations established as of January 1, 1980, the percentage 10 shall be the quotient of the dividend and divisor as defined in 11 this section . The dividend for each class of property shall 12 be the dividend as determined for each class of property for 13 valuations established as of January 1, 1979, adjusted by the 14 product obtained by multiplying the percentage determined 15 for that year by the amount of any additions or deletions to 16 actual value, excluding those resulting from the revaluation 17 of existing properties, as reported by the assessors on the 18 abstracts of assessment for 1979, plus four percent of the 19 amount so determined. The divisor for each class of property 20 shall be the total actual value of all such property in 1979, 21 as equalized by the director of revenue pursuant to section 22 441.49 , plus the amount of value added to the total actual 23 value by the revaluation of existing properties in 1980. The 24 director shall utilize information reported on the abstracts of 25 assessment submitted pursuant to section 441.45 in determining 26 such percentage. For valuations established as of January 1, 27 1980, property valued by the department of revenue pursuant 28 to chapters 428 , 433 , 437 , and 438 shall be assessed at a 29 percentage of its actual value. The percentage shall be 30 determined by the director of revenue in accordance with the 31 provisions of this section . For valuations established as of 32 January 1, 1980, the percentage shall be the quotient of the 33 dividend and divisor as defined in this section . The dividend 34 shall be the total actual valuation established for 1979 by 35 -5- LSB 6140YC (10) 84 md/sc 5/ 58
H.F. _____ the department of revenue, plus eight percent of the amount so 1 determined. The divisor for property valued by the department 2 of revenue pursuant to chapters 428 , 433 , 437 , and 438 shall be 3 the valuation established for 1979, plus the amount of value 4 added to the total actual value by the revaluation of the 5 property by the department of revenue as of January 1, 1980. 6 For valuations established as of January 1, 1981, and each 7 year thereafter, the percentage of actual value as equalized 8 by the director of revenue as provided in section 441.49 at 9 which commercial property and industrial property, excluding 10 properties referred to in section 427A.1, subsection 8 , shall 11 be assessed shall be calculated in accordance with the methods 12 provided herein, except that any references to six percent 13 in this subsection shall be four percent. For valuations 14 established as of January 1, 1981, and each year thereafter, 15 the percentage of actual value at which property valued by 16 the department of revenue pursuant to chapters 428 , 433 , 437 , 17 and 438 shall be assessed shall be calculated in accordance 18 with the methods provided herein, except that any references 19 to ten percent in this subsection shall be eight percent. 20 Beginning with valuations established as of January 1, 1979, 21 and each assessment year thereafter beginning before January 22 1, 2013 , property valued by the department of revenue pursuant 23 to chapter 434 shall also be assessed at a percentage of its 24 actual value which percentage shall be equal to the percentage 25 determined by the director of revenue for commercial property, 26 industrial property, or property valued by the department of 27 revenue pursuant to chapters 428 , 433 , 437 , and 438 , whichever 28 is lowest. For valuations established on or after January 1, 29 2013, property valued by the department of revenue pursuant to 30 chapter 434 shall be assessed at a percentage of its actual 31 value equal to the percentage of actual value at which property 32 assessed as commercial property is assessed for the same 33 assessment year under paragraph “b” . 34 b. For valuations established on or after January 1, 2013, 35 -6- LSB 6140YC (10) 84 md/sc 6/ 58
H.F. _____ commercial property, excluding properties referred to in 1 section 427A.1, subsection 8, shall be assessed as a percentage 2 of its actual value, as determined in this paragraph “b” . 3 For valuations established for the assessment year beginning 4 January 1, 2013, the percentage of actual value as equalized by 5 the director of revenue as provided in section 441.49 at which 6 commercial property shall be assessed shall be ninety-eight 7 percent. 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 shall be assessed shall 11 be ninety-six percent. For valuations established for the 12 assessment year beginning January 1, 2015, the percentage 13 of actual value as equalized by the director of revenue as 14 provided in section 441.49 at which commercial property shall 15 be assessed shall be ninety-four percent. For valuations 16 established for the assessment year beginning January 1, 2016, 17 the percentage of actual value as equalized by the director 18 of revenue as provided in section 441.49 at which commercial 19 property shall be assessed shall be ninety-two percent. For 20 valuations established for the assessment year beginning 21 January 1, 2017, and each assessment year thereafter, the 22 percentage of actual value as equalized by the director of 23 revenue as provided in section 441.49 at which commercial 24 property shall be assessed shall be ninety percent. 25 c. For valuations established on or after January 1, 26 2013, industrial property, excluding properties referred to in 27 section 427A.1, subsection 8, shall be assessed as a percentage 28 of its actual value, as determined in this paragraph “c” . 29 For valuations established for the assessment year beginning 30 January 1, 2013, the percentage of actual value as equalized by 31 the director of revenue as provided in section 441.49 at which 32 industrial property shall be assessed shall be ninety-eight 33 percent. For valuations established for the assessment year 34 beginning January 1, 2014, the percentage of actual value as 35 -7- LSB 6140YC (10) 84 md/sc 7/ 58
H.F. _____ equalized by the director of revenue as provided in section 1 441.49 at which industrial property shall be assessed shall 2 be ninety-six percent. For valuations established for the 3 assessment year beginning January 1, 2015, the percentage 4 of actual value as equalized by the director of revenue as 5 provided in section 441.49 at which industrial property shall 6 be assessed shall be ninety-four percent. For valuations 7 established for the assessment year beginning January 1, 2016, 8 the percentage of actual value as equalized by the director 9 of revenue as provided in section 441.49 at which industrial 10 property shall be assessed shall be ninety-two percent. For 11 valuations established for the assessment year beginning 12 January 1, 2017, and each assessment year thereafter, the 13 percentage of actual value as equalized by the director of 14 revenue as provided in section 441.49 at which industrial 15 property shall be assessed shall be ninety percent. 16 Sec. 8. NEW SECTION . 441.21A Commercial and industrial 17 property tax replacement fund —— replacement claims. 18 1. a. The commercial and industrial property tax 19 replacement fund is created in the state treasury under 20 the control of the department of revenue for the payment of 21 commercial and industrial property tax replacement claims in 22 fiscal years beginning on or after July 1, 2014. 23 b. For the fiscal year beginning July 1, 2014, there 24 is appropriated from the general fund of the state to the 25 department of revenue to be credited to the fund an amount 26 necessary to pay all commercial and industrial property 27 tax replacement claims for the fiscal year, not to exceed 28 twenty-eight million dollars. For the fiscal year beginning 29 July 1, 2015, there is appropriated from the general fund of 30 the state to the department of revenue to be credited to the 31 fund an amount necessary to pay all commercial and industrial 32 property tax replacement claims for the fiscal year, not 33 to exceed fifty-six million dollars. For the fiscal year 34 beginning July 1, 2016, there is appropriated from the general 35 -8- LSB 6140YC (10) 84 md/sc 8/ 58
H.F. _____ fund of the state to the department of revenue to be credited 1 to the fund an amount necessary to pay all commercial and 2 industrial property tax replacement claims for the fiscal year, 3 not to exceed eighty-four million dollars. For the fiscal 4 year beginning July 1, 2017, there is appropriated from the 5 general fund of the state to the department of revenue to be 6 credited to the fund an amount necessary to pay all commercial 7 and industrial property tax replacement claims for the fiscal 8 year, not to exceed one hundred twelve million dollars. For 9 the fiscal year beginning July 1, 2018, and each fiscal year 10 thereafter, there is appropriated from the general fund of 11 the state to the department of revenue to be credited to the 12 fund an amount necessary to pay all commercial and industrial 13 property tax replacement claims for the fiscal year, not to 14 exceed one hundred forty million dollars. 15 2. Beginning with the fiscal year beginning July 1, 2014, 16 each county treasurer shall be paid from the commercial and 17 industrial property tax replacement fund an amount equal to 18 the amount of the commercial and industrial property tax 19 replacement claims in the county, as calculated in subsection 20 4. If an amount appropriated for a fiscal year is insufficient 21 to pay all replacement claims, the director of revenue 22 shall prorate the disbursements from the fund to the county 23 treasurers and shall notify the county auditors of the pro rata 24 percentage on or before September 30. Any unspent balance in 25 the fund as of June 30 of each year shall revert to the general 26 fund of the state as provided by section 8.33. 27 3. a. On or before July 1 of each fiscal year beginning on 28 or after July 1, 2014, the assessor shall determine the total 29 assessed value of all commercial property, industrial property, 30 and property assessed by the department of revenue pursuant to 31 chapter 434 assessed for taxes due and payable in that fiscal 32 year and the total assessed value of such property assessed 33 as of January 1, 2012, and shall report the valuations to the 34 county auditor. 35 -9- LSB 6140YC (10) 84 md/sc 9/ 58
H.F. _____ b. For purposes of calculating replacement claims under this 1 division of this Act, the total assessed value of commercial 2 property, industrial property, and property assessed by the 3 department of revenue pursuant to chapter 434 as of January 1, 4 2012, shall not include property classified as multiresidential 5 property under section 441.21, subsection 13, if enacted by 6 division VI of this Act, which was classified as commercial 7 property, industrial property, or property assessed by the 8 department of revenue pursuant to chapter 434 for assessment 9 years beginning before January 1, 2013. 10 4. On or before September 1 of each fiscal year beginning 11 on or after July 1, 2014, the county auditor shall prepare 12 a statement, based upon the report received pursuant to 13 subsection 3, listing for each taxing district in the county: 14 a. The difference between the assessed valuation of all 15 commercial property, industrial property, and property assessed 16 by the department of revenue pursuant to chapter 434 for the 17 assessment year used to calculate taxes which are due and 18 payable in the applicable fiscal year and the assessed value 19 of all commercial property, industrial property, and property 20 assessed by the department of revenue pursuant to chapter 434 21 assessed as of January 1, 2012. If the assessed value of all 22 commercial property, industrial property, and property assessed 23 by the department of revenue pursuant to chapter 434 assessed 24 as of January 1, 2012, is less than the assessed valuation of 25 all commercial property, industrial property, and property 26 assessed by the department of revenue pursuant to chapter 434 27 for the assessment year used to calculate taxes which are due 28 and payable in the applicable fiscal year, there is no tax 29 replacement for that taxing district for the fiscal year. 30 b. The tax levy rate for each taxing district for that 31 fiscal year. 32 c. The commercial and industrial property tax replacement 33 claim for each taxing district. For fiscal years beginning on 34 or after July 1, 2014, the replacement claim is equal to the 35 -10- LSB 6140YC (10) 84 md/sc 10/ 58
H.F. _____ amount determined pursuant to paragraph “a” , multiplied by the 1 tax rate specified in paragraph “b” . 2 5. For purposes of computing replacement amounts under 3 this section, that portion of an urban renewal area defined as 4 the sum of the assessed valuations defined in section 403.19, 5 subsections 1 and 2, shall be considered a taxing district. 6 6. a. The county auditor shall certify and forward one copy 7 of the statement to the department of revenue not later than 8 September 1 of each year. 9 b. The replacement claims shall be paid to each county 10 treasurer in equal installments in September and March of each 11 year. The county treasurer shall apportion the replacement 12 claim payments among the eligible taxing districts in the 13 county. 14 c. If the taxing district is an urban renewal area, the 15 amount of the replacement claim shall be apportioned as 16 provided in subsection 7. 17 7. a. If the total assessed value of property located in an 18 urban renewal area taxing district for the assessment year for 19 property taxes due and payable in the applicable fiscal year is 20 equal to or more than that portion of such valuation defined 21 in section 403.19, subsection 1, the total replacement claim 22 amount computed pursuant to subsection 4 shall be credited to 23 that portion of the assessed value defined in section 403.19, 24 subsection 2. 25 b. If the total assessed value of the property located in an 26 urban renewal area taxing district for the assessment year for 27 property taxes due and payable in the applicable fiscal year 28 is less than that portion of such valuation defined in section 29 403.19, subsection 1, the replacement amount shall be credited 30 to those portions of the assessed value defined in section 31 403.19, subsections 1 and 2, as follows: 32 (1) To that portion defined in section 403.19, subsection 33 1, an amount equal to the amount that would be produced by 34 multiplying the applicable consolidated levy rate times the 35 -11- LSB 6140YC (10) 84 md/sc 11/ 58
H.F. _____ difference between the assessed value of the taxable property 1 defined in section 403.19, subsection 1, and the total assessed 2 value of the property located in the urban renewal area taxing 3 district in the assessment year for property taxes due and 4 payable in the fiscal year for which the replacement claim is 5 computed. 6 (2) To that portion defined in section 403.19, subsection 2, 7 the remaining amount, if any. 8 c. Notwithstanding the allocation provisions of paragraphs 9 “a” and “b” , the amount of the tax replacement amount that shall 10 be allocated to that portion of the assessed value defined 11 in section 403.19, subsection 2, shall not exceed the amount 12 equal to the amount certified to the county auditor under 13 section 403.19 for the fiscal year in which the claim is paid, 14 after deduction of the amount of other revenues committed for 15 payment on that amount for the fiscal year. The amount not 16 allocated to that portion of the assessed value defined in 17 section 403.19, subsection 2, as a result of the operation of 18 this paragraph, shall be allocated to that portion of assessed 19 value defined in section 403.19, subsection 1. 20 d. The amount of the replacement claim amount credited to 21 the portion of the assessed value defined in section 403.19, 22 subsection 1, shall be allocated to and when received be paid 23 into the fund for the respective taxing district as taxes by 24 or for the taxing district into which all other property taxes 25 are paid. The amount of the replacement claim amount credited 26 to the portion of the assessed value defined in section 403.19, 27 subsection 2, shall be allocated to and when collected be paid 28 into the special fund of the municipality under section 403.19, 29 subsection 2. 30 Sec. 9. SAVINGS PROVISION. This division of this Act, 31 pursuant to section 4.13, does not affect the operation of, 32 or prohibit the application of, prior provisions of section 33 441.21, or rules adopted under chapter 17A to administer prior 34 provisions of section 441.21, for assessment years beginning 35 -12- LSB 6140YC (10) 84 md/sc 12/ 58
H.F. _____ before January 1, 2013, and for duties, powers, protests, 1 appeals, proceedings, actions, or remedies attributable to an 2 assessment year beginning before January 1, 2013. 3 Sec. 10. APPLICABILITY. This division of this Act applies 4 to assessment years beginning on or after January 1, 2013. 5 DIVISION III 6 TELECOMMUNICATIONS PROPERTY TAX 7 Sec. 11. Section 427A.1, subsection 1, paragraph h, Code 8 2011, is amended to read as follows: 9 h. Property assessed by the department of revenue pursuant 10 to sections 428.24 to 428.29 , or chapters 433 , 434 , 437 , 437A , 11 and 438 . 12 Sec. 12. Section 433.4, Code 2011, is amended to read as 13 follows: 14 433.4 Assessment. 15 1. The director of revenue shall on or before October 31 16 each year, proceed to find the actual value of the property 17 of these companies in this state used by the companies in the 18 transaction of telegraph and telephone business , taking into 19 consideration the information obtained from the statements 20 required, and any further information the director can obtain, 21 using the same as a means for determining the actual cash value 22 of the property of these companies within this state. The 23 director shall also take into consideration the valuation of 24 all property of these companies, including franchises and the 25 use of the property in connection with lines outside the state, 26 and making these deductions as may be necessary on account of 27 extra value of property outside the state as compared with 28 the value of property in the state, in order that the actual 29 cash value of the property of the company within this state 30 may be ascertained. The assessment shall include all property 31 of every kind and character whatsoever, real, personal, or 32 mixed, used by the companies in the transaction of telegraph 33 and telephone business; and the The property so included in 34 the assessment shall not be taxed in any other manner than as 35 -13- LSB 6140YC (10) 84 md/sc 13/ 58
H.F. _____ provided in this chapter . 1 2. a. Except as provided in paragraph “c ”, for assessment 2 years beginning on or after January 1, 2013, a company’s 3 property, excluding the property identified in paragraph “b” 4 as exempt from taxation, shall be subject to assessment and 5 taxation under this chapter by the director of revenue in 6 the same manner as property assessed and taxed as commercial 7 property under chapters 427, 427A, 427B, 428, and 441. 8 b. All of the following is exempt from taxation and shall 9 not be assessed for taxation under this chapter: 10 (1) Central office equipment. 11 (2) Transmission equipment. 12 (3) Qualified telephone company property. However, 13 qualified telephone company property shall be valued and 14 included in the company’s assessment for the assessment years, 15 and to the extent specified, in paragraph “c” . 16 (4) Intangible property. 17 c. For assessment years beginning on or after January 1, 18 2013, but before January 1, 2018, the director of revenue shall 19 include as part of the actual value determined under paragraph 20 “a” for the applicable assessment year, the following: 21 (1) For the assessment year beginning January 1, 2013, an 22 amount equal to the actual value of the company’s qualified 23 telephone company property that exceeds five million dollars. 24 (2) For the assessment year beginning January 1, 2014, an 25 amount equal to the actual value of the company’s qualified 26 telephone company property that exceeds twenty-five million 27 dollars. 28 (3) For the assessment year beginning January 1, 2015, an 29 amount equal to the actual value of the company’s qualified 30 telephone company property that exceeds fifty million dollars. 31 (4) For the assessment year beginning January 1, 2016, an 32 amount equal to the actual value of the company’s qualified 33 telephone company property that exceeds one hundred million 34 dollars. 35 -14- LSB 6140YC (10) 84 md/sc 14/ 58
H.F. _____ (5) For the assessment year beginning January 1, 2017, an 1 amount equal to the actual value of the company’s qualified 2 telephone company property that exceeds one hundred fifty 3 million dollars. 4 Sec. 13. Section 433.12, Code 2011, is amended by adding the 5 following new subsections: 6 NEW SUBSECTION . 1A. As used in this chapter, “central 7 office equipment” means equipment owned or leased by a company 8 and used in initiating, amplifying, switching, or monitoring 9 telecommunications services, including such ancillary equipment 10 necessary for the support, regulation, control, repair, or 11 testing of such equipment. 12 NEW SUBSECTION . 2A. As used in this chapter, “intangible 13 property” includes but is not limited to goodwill associated 14 with a company. 15 NEW SUBSECTION . 3. As used in this chapter, “qualified 16 telephone company property” means telephone wire, telephone 17 cable, fiber optic cable, conduit systems, poles, or other 18 equipment owned or leased by a company and used by the company 19 to transmit sound or data. 20 NEW SUBSECTION . 4. As used in this chapter, “transmission 21 equipment” means equipment owned or leased by a company and 22 used in the process of sending information from one location to 23 another location, including such ancillary equipment necessary 24 for the support, regulation, control, repair, or testing of 25 such equipment. 26 Sec. 14. Section 476.1D, subsection 10, Code Supplement 27 2011, is amended by striking the subsection. 28 Sec. 15. SAVINGS PROVISION. This division of this Act, 29 pursuant to section 4.13, does not affect the operation of, 30 or prohibit the application of, prior provisions of chapter 31 433, or rules adopted under chapter 17A to administer prior 32 provisions of chapter 433, for assessment years beginning 33 before January 1, 2013, and for duties, powers, protests, 34 appeals, proceedings, actions, or remedies attributable to an 35 -15- LSB 6140YC (10) 84 md/sc 15/ 58
H.F. _____ assessment year beginning before January 1, 2013. 1 Sec. 16. EFFECTIVE DATE. 2 1. Except as provided in subsection 2, this division of this 3 Act takes effect July 1, 2012. 4 2. The section of this division of this Act amending section 5 476.1D takes effect July 1, 2017. 6 Sec. 17. APPLICABILITY. 7 1. Except as provided in subsection 2, this division of this 8 Act applies to assessment years beginning on or after January 9 1, 2013. 10 2. The section of this division of this Act amending section 11 476.1D applies to assessment years beginning on or after 12 January 1, 2018. 13 DIVISION IV 14 COUNTY AND CITY BUDGET LIMITATION 15 Sec. 18. Section 23A.2, subsection 10, paragraph h, Code 16 2011, is amended to read as follows: 17 h. The performance of an activity listed in section 331.424 , 18 Code 2011, as a service for which a supplemental levy county 19 may be certified include in its budget . 20 Sec. 19. Section 28M.5, subsection 2, Code 2011, is amended 21 to read as follows: 22 2. If a regional transit district budget allocates 23 revenue responsibilities to the board of supervisors of a 24 participating county, the amount of the regional transit 25 district levy that is the responsibility of the participating 26 county shall be deducted from the maximum rates amount of taxes 27 authorized to be levied by the county pursuant to section 28 331.423 , subsections 1 and 2 subsection 3, paragraphs “b” 29 and “c” , as applicable, unless the county meets its revenue 30 responsibilities as allocated in the budget from other 31 available revenue sources. However, for a regional transit 32 district that includes a county with a population of less than 33 three hundred thousand, the amount of the regional transit 34 district levy that is the responsibility of such participating 35 -16- LSB 6140YC (10) 84 md/sc 16/ 58
H.F. _____ county shall be deducted from the maximum rate amount of taxes 1 authorized to be levied by the county pursuant to section 2 331.423, subsection 1 3, paragraph “b” . 3 Sec. 20. Section 123.38, subsection 2, Code 2011, is amended 4 to read as follows: 5 2. Any licensee or permittee, or the licensee’s or 6 permittee’s executor or administrator, or any person duly 7 appointed by the court to take charge of and administer the 8 property or assets of the licensee or permittee for the benefit 9 of the licensee’s or permittee’s creditors, may voluntarily 10 surrender a license or permit to the division. When a license 11 or permit is surrendered the division shall notify the local 12 authority, and the division or the local authority shall 13 refund to the person surrendering the license or permit, a 14 proportionate amount of the fee received by the division or 15 the local authority for the license or permit as follows: if 16 a license or permit is surrendered during the first three 17 months of the period for which it was issued, the refund shall 18 be three-fourths of the amount of the fee; if surrendered 19 more than three months but not more than six months after 20 issuance, the refund shall be one-half of the amount of the 21 fee; if surrendered more than six months but not more than 22 nine months after issuance, the refund shall be one-fourth of 23 the amount of the fee. No refund shall be made, however, for 24 any special liquor permit, nor for a liquor control license, 25 wine permit, or beer permit surrendered more than nine months 26 after issuance. For purposes of this subsection, any portion 27 of license or permit fees used for the purposes authorized in 28 section 331.424, subsection 1 , paragraph “a” , subparagraphs 29 (1) and (2), Code 2011, and in section 331.424A , shall not be 30 deemed received either by the division or by a local authority. 31 No refund shall be made to any licensee or permittee, upon the 32 surrender of the license or permit, if there is at the time 33 of surrender, a complaint filed with the division or local 34 authority, charging the licensee or permittee with a violation 35 -17- LSB 6140YC (10) 84 md/sc 17/ 58
H.F. _____ of this chapter . If upon a hearing on a complaint the license 1 or permit is not revoked or suspended, then the licensee or 2 permittee is eligible, upon surrender of the license or permit, 3 to receive a refund as provided in this section ; but if the 4 license or permit is revoked or suspended upon hearing the 5 licensee or permittee is not eligible for the refund of any 6 portion of the license or permit fee. 7 Sec. 21. Section 218.99, Code 2011, is amended to read as 8 follows: 9 218.99 Counties to be notified of patients’ personal 10 accounts. 11 The administrator in control of a state institution shall 12 direct the business manager of each institution under the 13 administrator’s jurisdiction which is mentioned in section 14 331.424, subsection 1 , paragraph “a” , subparagraphs (1) 15 and (2), and for which services are paid under section 16 331.424A , to quarterly inform the county of legal settlement’s 17 entity designated to perform the county’s central point of 18 coordination process of any patient or resident who has an 19 amount in excess of two hundred dollars on account in the 20 patients’ personal deposit fund and the amount on deposit. The 21 administrators shall direct the business manager to further 22 notify the entity designated to perform the county’s central 23 point of coordination process at least fifteen days before the 24 release of funds in excess of two hundred dollars or upon the 25 death of the patient or resident. If the patient or resident 26 has no county of legal settlement, notice shall be made to the 27 director of human services and the administrator in control of 28 the institution involved. 29 Sec. 22. Section 331.263, subsection 2, Code 2011, is 30 amended to read as follows: 31 2. The governing body of the community commonwealth 32 shall have the authority to levy county taxes and shall 33 have the authority to levy city taxes to the extent the 34 city tax levy authority is transferred by the charter to 35 -18- LSB 6140YC (10) 84 md/sc 18/ 58
H.F. _____ the community commonwealth. A city participating in the 1 community commonwealth shall transfer a portion of the 2 city’s tax levy authorized under section 384.1 or 384.12 , 3 whichever is applicable, to the governing body of the community 4 commonwealth. The maximum rates amount of taxes authorized to 5 be levied under sections section 384.1 and the maximum amount 6 of taxes authorized to be levied under section 384.12 by a city 7 participating in the community commonwealth shall be reduced 8 by an amount equal to the rates of the same or similar taxes 9 levied in the city by the governing body of the community 10 commonwealth. 11 Sec. 23. Section 331.301, subsection 12, Code Supplement 12 2011, is amended to read as follows: 13 12. The board of supervisors may credit funds to a reserve 14 for the purposes authorized by subsection 11 of this section ; 15 section 331.424, subsection 1 , paragraph “a” , subparagraph 16 (6); and section 331.441, subsection 2 , paragraph “b” . Moneys 17 credited to the reserve, and interest earned on such moneys, 18 shall remain in the reserve until expended for purposes 19 authorized by subsection 11 of this section ; section 331.424, 20 subsection 1 , paragraph “a” , subparagraph (6); or section 21 331.441, subsection 2 , paragraph “b” . 22 Sec. 24. Section 331.421, subsections 1 and 10, Code 2011, 23 are amended by striking the subsections. 24 Sec. 25. Section 331.421, Code 2011, is amended by adding 25 the following new subsection: 26 NEW SUBSECTION . 7A. “Item” means a budgeted expenditure, 27 appropriation, or cash reserve from a fund for a service area, 28 program, program element, or purpose. 29 Sec. 26. Section 331.423, Code 2011, is amended by striking 30 the section and inserting in lieu thereof the following: 31 331.423 Property tax dollars —— maximums. 32 1. Annually, the board shall determine separate property 33 tax levy limits to pay for general county services and rural 34 county services in accordance with this section. The property 35 -19- LSB 6140YC (10) 84 md/sc 19/ 58
H.F. _____ tax levies separately certified for general county services and 1 rural county services under section 331.434 shall not raise 2 property tax dollars that exceed the amount determined under 3 this section. 4 2. For purposes of this section and section 331.423B, unless 5 the context otherwise requires: 6 a. “Annual growth factor” means an index, expressed as 7 a percentage, determined by the department of management by 8 January 1 of the calendar year in which the budget year begins. 9 In determining the annual growth factor, the department shall 10 calculate the average of the preceding twelve-month percentage 11 change, which shall be computed on a monthly basis, in the 12 midwest consumer price index, ending with the percentage change 13 for the month of November. The department shall then add that 14 average percentage change to one hundred percent. In no case, 15 however, shall the annual growth factor exceed one hundred four 16 percent. 17 b. “Boundary adjustment” means annexation, severance, 18 incorporation, or discontinuance as those terms are defined in 19 section 368.1. 20 c. “Budget year” is the fiscal year beginning during the 21 calendar year in which a budget is certified. 22 d. “Current fiscal year” is the fiscal year ending during 23 the calendar year in which a budget is certified. 24 e. “Net new valuation taxes” means the amount of property 25 tax dollars equal to the current fiscal year’s levy rate in 26 the county for general county services or for rural county 27 services, as applicable, multiplied by the increase from the 28 current fiscal year to the budget year in taxable valuation due 29 to the following: 30 (1) Net new construction, excluding all incremental 31 valuation that is released in any one year from either a 32 division of revenue under section 260E.4 or 357H.9, or an 33 urban renewal area for which taxes were being divided under 34 section 403.19 if the property for the valuation being released 35 -20- LSB 6140YC (10) 84 md/sc 20/ 58
H.F. _____ remains subject to the division of revenue under section 260E.4 1 or 357H.9, or remains part of the urban renewal area that is 2 subject to a division of revenue under section 403.19. 3 (2) Additions or improvements to existing structures. 4 (3) Remodeling of existing structures for which a building 5 permit is required. 6 (4) Net boundary adjustment. 7 (5) A municipality no longer dividing tax revenues in an 8 urban renewal area as provided in section 403.19, a community 9 college no longer dividing revenues as provided in section 10 260E.4, or a rural improvement zone no longer dividing revenues 11 as provided in section 357H.9. 12 (6) That portion of taxable property located in an urban 13 revitalization area on which an exemption was allowed and such 14 exemption has expired. 15 3. a. For the fiscal year beginning July 1, 2013, and 16 subsequent fiscal years, the maximum amount of property tax 17 dollars which may be certified for levy by a county for general 18 county services and rural county services shall be the maximum 19 property tax dollars calculated under paragraphs “b” and “c” , 20 respectively. 21 b. The maximum property tax dollars that may be levied for 22 general county services is an amount equal to the sum of the 23 following: 24 (1) The annual growth factor times the current fiscal year’s 25 maximum property tax dollars for general county services. 26 (2) The amount of net new valuation taxes in the county. 27 c. The maximum property tax dollars that may be levied for 28 rural county services is an amount equal to the sum of the 29 following: 30 (1) The annual growth factor times the current fiscal year’s 31 maximum property tax dollars for rural county services. 32 (2) The amount of net new valuation taxes in the 33 unincorporated area of the county. 34 4. a. For purposes of calculating maximum property tax 35 -21- LSB 6140YC (10) 84 md/sc 21/ 58
H.F. _____ dollars for general county services for the fiscal year 1 beginning July 1, 2013, only, the term “current fiscal year’s 2 maximum property tax dollars” shall mean the total amount of 3 property tax dollars certified by the county for general county 4 services for the fiscal year beginning July 1, 2012. 5 b. For purposes of calculating maximum property tax dollars 6 for rural county services for the fiscal year beginning July 7 1, 2013, only, the term “current fiscal year’s maximum property 8 tax dollars” shall mean the total amount of property tax dollars 9 certified by the county for rural county services for the 10 fiscal year beginning July 1, 2012. 11 5. Property taxes certified for mental health, mental 12 retardation, and developmental disabilities services, the 13 emergency services fund in section 331.424C, the debt service 14 fund in section 331.430, any capital projects fund established 15 by the county for deposit of bond, loan, or note proceeds, and 16 any temporary increase approved pursuant to section 331.424, 17 are not included in the maximum amount of property tax dollars 18 that may be certified for a budget year under subsection 3. 19 6. The department of management, in consultation with the 20 county finance committee, shall adopt rules to administer this 21 section. The department shall prescribe forms to be used by 22 counties when making calculations required by this section. 23 Sec. 27. NEW SECTION . 331.423B Ending fund balance. 24 1. a. Budgeted ending fund balances for a budget year 25 in excess of twenty-five percent of budgeted expenditures in 26 either the general fund or rural services fund for that budget 27 year shall be explicitly reserved or designated for a specific 28 purpose. 29 b. A county is encouraged, but not required, to reduce 30 ending fund balances for the budget year to an amount equal to 31 approximately twenty-five percent of budgeted expenditures and 32 transfers from the general fund and rural services fund for 33 that budget year unless a decision is certified by the state 34 appeal board ordering a reduction in the ending fund balance 35 -22- LSB 6140YC (10) 84 md/sc 22/ 58
H.F. _____ of any of those funds. 1 c. In a protest to the county budget under section 331.436, 2 the county shall have the burden of proving that the budgeted 3 balances in excess of twenty-five percent are reasonably likely 4 to be appropriated for the explicitly reserved or designated 5 specific purpose. The excess budgeted balance for the specific 6 purpose shall be considered an increase in an item in the 7 budget for purposes of section 24.28. 8 2. a. For a county that has, as of June 30, 2012, reduced 9 its actual ending fund balance to less than twenty-five 10 percent of actual expenditures, additional property taxes may 11 be computed and levied as provided in this subsection. The 12 additional property tax levy amount is an amount not to exceed 13 twenty-five percent of actual expenditures from the general 14 fund and rural services fund for the fiscal year beginning July 15 1, 2011, minus the combined ending fund balances for those 16 funds for that year. 17 b. The amount of the additional property taxes shall be 18 apportioned between the general fund and the rural services 19 fund. However, the amount apportioned for general county 20 services and for rural county services shall not exceed for 21 each fund twenty-five percent of actual expenditures for the 22 fiscal year beginning July 1, 2011. 23 c. All or a portion of additional property tax dollars 24 may be levied for the purpose of increasing cash reserves 25 for general county services and rural county services in the 26 budget year. The additional property tax dollars authorized 27 under this subsection but not levied may be carried forward as 28 unused ending fund balance taxing authority until and for the 29 fiscal year beginning July 1, 2018. The amount carried forward 30 shall not exceed twenty-five percent of the maximum amount of 31 property tax dollars available in the current fiscal year. 32 Additionally, property taxes that are levied as unused ending 33 fund balance taxing authority under this subsection may be the 34 subject of a protest under section 331.436, and the amount 35 -23- LSB 6140YC (10) 84 md/sc 23/ 58
H.F. _____ will be considered an increase in an item in the budget for 1 purposes of section 24.28. The amount of additional property 2 taxes levied under this subsection shall not be included in the 3 computation of the maximum amount of property tax dollars which 4 may be certified and levied under section 331.423. 5 Sec. 28. Section 331.424, Code 2011, is amended by striking 6 the section and inserting in lieu thereof the following: 7 331.424 Authority to levy beyond maximum property tax 8 dollars. 9 1. The board may certify additions to the maximum amount 10 of property tax dollars to be levied for a period of time not 11 to exceed two years if the proposition has been submitted at a 12 special election and received a favorable majority of the votes 13 cast on the proposition. 14 2. The special election is subject to the following: 15 a. The board must give at least thirty-two days’ notice to 16 the county commissioner of elections that the special election 17 is to be held. In no case, however, shall a notice be given to 18 the county commissioner of elections after December 31 for an 19 election on a proposition to exceed the statutory limits during 20 the fiscal year beginning in the next calendar year. 21 b. The special election shall be conducted by the county 22 commissioner of elections in accordance with law. 23 c. The proposition to be submitted shall be substantially 24 in the following form: 25 Vote “yes” or “no” on the following: Shall the county of 26 _______ levy for an additional $_______ each year for ___ years 27 beginning July 1, _____, in excess of the statutory limits 28 otherwise applicable for the (general county services or rural 29 services) fund? 30 d. The canvass shall be held beginning at 1:00 p.m. on 31 the second day which is not a holiday following the special 32 election. 33 e. Notice of the special election shall be published at 34 least once in a newspaper as specified in section 331.305 prior 35 -24- LSB 6140YC (10) 84 md/sc 24/ 58
H.F. _____ to the date of the special election. The notice shall appear 1 as early as practicable after the board has voted to submit 2 a proposition to the voters to levy additional property tax 3 dollars. 4 3. Registered voters in the county may vote on the 5 proposition to increase property taxes for the general fund 6 in excess of the statutory limit. Registered voters residing 7 outside the corporate limits of a city within the county may 8 vote on the proposition to increase property taxes for the 9 rural services fund in excess of the statutory limit. 10 4. The amount of additional property tax dollars certified 11 under this section shall not be included in the computation 12 of the maximum amount of property tax dollars which may be 13 certified and levied under section 331.423. 14 Sec. 29. Section 331.424A, subsection 4, Code Supplement 15 2011, is amended to read as follows: 16 4. For the fiscal year beginning July 1, 1996, and for each 17 subsequent fiscal year, the county shall certify a levy for 18 payment of services. For each fiscal year, county revenues 19 from taxes imposed by the county credited to the services fund 20 shall not exceed an amount equal to the amount of base year 21 expenditures for services as defined in section 331.438 , less 22 the amount of property tax relief to be received pursuant to 23 section 426B.2 , in the fiscal year for which the budget is 24 certified. The county auditor and the board of supervisors 25 shall reduce the amount of the levy certified for the services 26 fund by the amount of property tax relief to be received. A 27 levy certified under this section is not subject to the appeal 28 provisions of section 331.426 or to any other provision in law 29 authorizing a county to exceed, increase, or appeal a property 30 tax levy limit. 31 Sec. 30. Section 331.427, subsection 3, paragraph l, Code 32 2011, is amended to read as follows: 33 l. Services listed in section 331.424, subsection 1 , Code 34 2011, and section 331.554 . 35 -25- LSB 6140YC (10) 84 md/sc 25/ 58
H.F. _____ Sec. 31. Section 331.428, subsection 2, paragraph d, Code 1 2011, is amended to read as follows: 2 d. Services listed under section 331.424, subsection 2 , Code 3 2011 . 4 Sec. 32. Section 331.434, subsection 1, Code 2011, is 5 amended to read as follows: 6 1. The budget shall show the amount required for each class 7 of proposed expenditures, a comparison of the amounts proposed 8 to be expended with the amounts expended for like purposes for 9 the two preceding years, the revenues from sources other than 10 property taxation, and the amount to be raised by property 11 taxation, in the detail and form prescribed by the director 12 of the department of management. For each county that has 13 established an urban renewal area, the budget shall include 14 estimated and actual tax increment financing revenues and all 15 estimated and actual expenditures of the revenues, proceeds 16 from debt and all estimated and actual expenditures of the 17 debt proceeds, and identification of any entity receiving a 18 direct payment of taxes funded by tax increment financing 19 revenues and shall include the total amount of loans, advances, 20 indebtedness, or bonds outstanding at the close of the most 21 recently ended fiscal year, which qualify for payment from the 22 special fund created in section 403.19 , including interest 23 negotiated on such loans, advances, indebtedness, or bonds. 24 For purposes of this subsection , “indebtedness” includes 25 written agreements whereby the county agrees to suspend, abate, 26 exempt, rebate, refund, or reimburse property taxes, provide 27 a grant for property taxes paid, or make a direct payment 28 of taxes, with moneys in the special fund. The amount of 29 loans, advances, indebtedness, or bonds shall be listed in 30 the aggregate for each county reporting. The county finance 31 committee, in consultation with the department of management 32 and the legislative services agency, shall determine reporting 33 criteria and shall prepare a form for reports filed with the 34 department pursuant to this section . The department shall make 35 -26- LSB 6140YC (10) 84 md/sc 26/ 58
H.F. _____ the information available by electronic means. 1 Sec. 33. Section 373.10, Code 2011, is amended to read as 2 follows: 3 373.10 Taxing authority. 4 The metropolitan council shall have the authority to 5 levy city taxes to the extent the city tax levy authority 6 is transferred by the charter to the metropolitan council. 7 A member city shall transfer a portion of the city’s tax 8 levy authorized under section 384.1 or 384.12 , whichever is 9 applicable, to the metropolitan council. The maximum rates 10 amount of taxes authorized to be levied under sections section 11 384.1 and the taxes authorized to be levied under section 12 384.12 by a member city shall be reduced by an amount equal to 13 the rates of the same or similar taxes levied in the city by the 14 metropolitan council. 15 Sec. 34. Section 384.1, Code 2011, is amended by striking 16 the section and inserting in lieu thereof the following: 17 384.1 Property tax dollars —— maximums. 18 1. A city shall certify taxes to be levied by the city 19 on all taxable property within the city limits, for all city 20 government purposes. Annually, the city council may certify 21 basic levies for city government purposes, subject to the 22 limitation on property tax dollars provided in this section. 23 2. For purposes of this section and section 384.1B, unless 24 the context otherwise requires: 25 a. “Annual growth factor” means an index, expressed as 26 a percentage, determined by the department of management by 27 January 1 of the calendar year in which the budget year begins. 28 In determining the annual growth factor, the department shall 29 calculate the average of the preceding twelve-month percentage 30 change, which shall be computed on a monthly basis, in the 31 midwest consumer price index, ending with the percentage change 32 for the month of November. The department shall then add that 33 average percentage change to one hundred percent. In no case, 34 however, shall the annual growth factor exceed one hundred four 35 -27- LSB 6140YC (10) 84 md/sc 27/ 58
H.F. _____ percent. 1 b. “Boundary adjustment” means annexation, severance, 2 incorporation, or discontinuance as those terms are defined in 3 section 368.1. 4 c. “Budget year” is the fiscal year beginning during the 5 calendar year in which a budget is certified. 6 d. “Current fiscal year” is the fiscal year ending during 7 the calendar year in which a budget is certified. 8 e. “Net new valuation taxes” means the amount of property 9 tax dollars equal to the current fiscal year’s levy rate in the 10 city for the general fund multiplied by the increase from the 11 current fiscal year to the budget year in taxable valuation due 12 to the following: 13 (1) Net new construction, excluding all incremental 14 valuation that is released in any one year from either a 15 division of revenue under section 260E.4 or an urban renewal 16 area for which taxes were being divided under section 403.19 if 17 the property for the valuation being released remains subject 18 to the division of revenue under section 260E.4 or remains part 19 of the urban renewal area that is subject to a division of 20 revenue under section 403.19. 21 (2) Additions or improvements to existing structures. 22 (3) Remodeling of existing structures for which a building 23 permit is required. 24 (4) Net boundary adjustment. 25 (5) A municipality no longer dividing tax revenues in an 26 urban renewal area as provided in section 403.19 or a community 27 college no longer dividing revenues as provided in section 28 260E.4. 29 (6) That portion of taxable property located in an urban 30 revitalization area on which an exemption was allowed and such 31 exemption has expired. 32 3. a. For the fiscal year beginning July 1, 2013, and 33 subsequent fiscal years, the maximum amount of property 34 tax dollars which may be certified for levy by a city for 35 -28- LSB 6140YC (10) 84 md/sc 28/ 58
H.F. _____ the general fund shall be the maximum property tax dollars 1 calculated under paragraph “b” . 2 b. The maximum property tax dollars that may be levied for 3 deposit in the general fund is an amount equal to the sum of the 4 following: 5 (1) The annual growth factor times the current fiscal year’s 6 maximum property tax dollars for the general fund. 7 (2) The amount of net new valuation taxes in the city. 8 4. For purposes of calculating maximum property tax dollars 9 for the city general fund for the fiscal year beginning July 10 1, 2013, only, the term “current fiscal year’s maximum property 11 tax dollars” shall mean the total amount of property tax dollars 12 certified by the city for the city’s general fund for the 13 fiscal year beginning July 1, 2012. 14 5. Property taxes certified for deposit in the debt service 15 fund in section 384.4, trust and agency funds in section 16 384.6, capital improvements reserve fund in section 384.7, 17 the emergency fund in section 384.8, any capital projects 18 fund established by the city for deposit of bond, loan, or 19 note proceeds, any temporary increase approved pursuant to 20 section 384.12A, property taxes collected from a voted levy in 21 section 384.12, and property taxes levied under section 384.12, 22 subsection 18, are not counted against the maximum amount of 23 property tax dollars that may be certified for a fiscal year 24 under subsection 3. 25 6. Notwithstanding the maximum amount of taxes a city 26 may certify for levy, the tax levied by a city on tracts of 27 land and improvements on the tracts of land used and assessed 28 for agricultural or horticultural purposes shall not exceed 29 three dollars and three-eighths cents per thousand dollars 30 of assessed value in any year. Improvements located on such 31 tracts of land and not used for agricultural or horticultural 32 purposes and all residential dwellings are subject to the same 33 rate of tax levied by the city on all other taxable property 34 within the city. 35 -29- LSB 6140YC (10) 84 md/sc 29/ 58
H.F. _____ 7. The department of management, in consultation with the 1 city finance committee, shall adopt rules to administer this 2 section. The department shall prescribe forms to be used by 3 cities when making calculations required by this section. 4 Sec. 35. NEW SECTION . 384.1B Ending fund balance. 5 1. a. Budgeted ending fund balances for a budget year in 6 excess of twenty-five percent of budgeted expenditures from the 7 general fund for that budget year shall be explicitly reserved 8 or designated for a specific purpose. 9 b. A city is encouraged, but not required, to reduce 10 ending fund balances for the budget year to an amount equal to 11 approximately twenty-five percent of budgeted expenditures and 12 transfers from the general fund for that budget year unless 13 a decision is certified by the state appeal board ordering a 14 reduction in the ending fund balance of the fund. 15 c. In a protest to the city budget under section 384.19, 16 the city shall have the burden of proving that the budgeted 17 balances in excess of twenty-five percent are reasonably likely 18 to be appropriated for the explicitly reserved or designated 19 specific purpose. The excess budgeted balance for the specific 20 purpose shall be considered an increase in an item in the 21 budget for purposes of section 24.28. 22 2. a. For a city that has, as of June 30, 2012, reduced its 23 ending fund balance to less than twenty-five percent of actual 24 expenditures, additional property taxes may be computed and 25 levied as provided in this subsection. The additional property 26 tax levy amount is an amount not to exceed the difference 27 between twenty-five percent of actual expenditures for city 28 government purposes for the fiscal year beginning July 1, 2011, 29 minus the ending fund balance for that year. 30 b. All or a portion of additional property tax dollars 31 may be levied for the purpose of increasing cash reserves for 32 city government purposes in the budget year. The additional 33 property tax dollars authorized under this subsection but not 34 levied may be carried forward as unused ending fund balance 35 -30- LSB 6140YC (10) 84 md/sc 30/ 58
H.F. _____ taxing authority until and for the fiscal year beginning 1 July 1, 2018. The amount carried forward shall not exceed 2 twenty-five percent of the maximum amount of property tax 3 dollars available in the current fiscal year. Additionally, 4 property taxes that are levied as unused ending fund balance 5 taxing authority under this subsection may be the subject of a 6 protest under section 384.19, and the amount will be considered 7 an increase in an item in the budget for purposes of section 8 24.28. The amount of additional property tax dollars levied 9 under this subsection shall not be included in the computation 10 of the maximum amount of property tax dollars which may be 11 certified and levied under section 384.1. 12 Sec. 36. Section 384.12, subsection 20, Code 2011, is 13 amended by striking the subsection. 14 Sec. 37. NEW SECTION . 384.12A Authority to levy beyond 15 maximum property tax dollars. 16 1. The city council may certify additions to the maximum 17 amount of property tax dollars to be levied for a period of 18 time not to exceed two years if the proposition has been 19 submitted at a special election and received a favorable 20 majority of the votes cast on the proposition. 21 2. The special election is subject to the following: 22 a. The city council must give at least thirty-two days’ 23 notice to the county commissioner of elections that the special 24 election is to be held. In no case, however, shall a notice be 25 given to the county commissioner of elections after December 31 26 for an election on a proposition to exceed the statutory limits 27 during the fiscal year beginning in the next calendar year. 28 b. The special election shall be conducted by the county 29 commissioner of elections in accordance with law. 30 c. The proposition to be submitted shall be substantially 31 in the following form: 32 Vote “yes” or “no” on the following: Shall the city of 33 _______ levy for an additional $_______ each year for ___ years 34 beginning next July 1, ____, in excess of the statutory limits 35 -31- LSB 6140YC (10) 84 md/sc 31/ 58
H.F. _____ otherwise applicable for the city general fund? 1 d. The canvass shall be held beginning at 1:00 p.m. on 2 the second day which is not a holiday following the special 3 election. 4 e. Notice of the special election shall be published at 5 least once in a newspaper as specified in section 362.3 prior 6 to the date of the special election. The notice shall appear 7 as early as practicable after the city council has voted to 8 submit a proposition to the voters to levy additional property 9 tax dollars. 10 3. The amount of additional property tax dollars certified 11 under this section shall not be included in the computation 12 of the maximum amount of property tax dollars which may be 13 certified and levied under section 384.1. 14 Sec. 38. Section 384.16, subsection 1, paragraph b, Code 15 2011, is amended to read as follows: 16 b. A budget must show comparisons between the estimated 17 expenditures in each program in the following year, the latest 18 estimated expenditures in each program in the current year, 19 and the actual expenditures in each program from the annual 20 report as provided in section 384.22 , or as corrected by a 21 subsequent audit report. Wherever practicable, as provided in 22 rules of the committee, a budget must show comparisons between 23 the levels of service provided by each program as estimated for 24 the following year, and actual levels of service provided by 25 each program during the two preceding years. For each city 26 that has established an urban renewal area, the budget shall 27 include estimated and actual tax increment financing revenues 28 and all estimated and actual expenditures of the revenues, 29 proceeds from debt and all estimated and actual expenditures of 30 the debt proceeds, and identification of any entity receiving 31 a direct payment of taxes funded by tax increment financing 32 revenues and shall include the total amount of loans, advances, 33 indebtedness, or bonds outstanding at the close of the most 34 recently ended fiscal year, which qualify for payment from the 35 -32- LSB 6140YC (10) 84 md/sc 32/ 58
H.F. _____ special fund created in section 403.19 , including interest 1 negotiated on such loans, advances, indebtedness, or bonds. 2 The amount of loans, advances, indebtedness, or bonds shall 3 be listed in the aggregate for each city reporting. The city 4 finance committee, in consultation with the department of 5 management and the legislative services agency, shall determine 6 reporting criteria and shall prepare a form for reports filed 7 with the department pursuant to this section . The department 8 shall make the information available by electronic means. 9 Sec. 39. Section 384.19, Code 2011, is amended by adding the 10 following new unnumbered paragraph: 11 NEW UNNUMBERED PARAGRAPH . For purposes of a tax protest 12 filed under this section, “item” means a budgeted expenditure, 13 appropriation, or cash reserve from a fund for a service area, 14 program, program element, or purpose. 15 Sec. 40. Section 386.8, Code 2011, is amended to read as 16 follows: 17 386.8 Operation tax. 18 A city may establish a self-supported improvement district 19 operation fund, and may certify taxes not to exceed the 20 rate limitation as established in the ordinance creating the 21 district, or any amendment thereto, each year to be levied 22 for the fund against all of the property in the district, 23 for the purpose of paying the administrative expenses of 24 the district, which may include but are not limited to 25 administrative personnel salaries, a separate administrative 26 office, planning costs including consultation fees, engineering 27 fees, architectural fees, and legal fees and all other expenses 28 reasonably associated with the administration of the district 29 and the fulfilling of the purposes of the district. The taxes 30 levied for this fund may also be used for the purpose of paying 31 maintenance expenses of improvements or self-liquidating 32 improvements for a specified length of time with one or more 33 options to renew if such is clearly stated in the petition 34 which requests the council to authorize construction of the 35 -33- LSB 6140YC (10) 84 md/sc 33/ 58
H.F. _____ improvement or self-liquidating improvement, whether or not 1 such petition is combined with the petition requesting creation 2 of a district. Parcels of property which are assessed as 3 residential property for property tax purposes are exempt from 4 the tax levied under this section except residential properties 5 within a duly designated historic district. A tax levied under 6 this section is not subject to the levy limitation in section 7 384.1 . 8 Sec. 41. Section 386.9, Code 2011, is amended to read as 9 follows: 10 386.9 Capital improvement tax. 11 A city may establish a capital improvement fund for a 12 district and may certify taxes, not to exceed the rate 13 established by the ordinance creating the district, or any 14 subsequent amendment thereto, each year to be levied for 15 the fund against all of the property in the district, for 16 the purpose of accumulating moneys for the financing or 17 payment of a part or all of the costs of any improvement or 18 self-liquidating improvement. However, parcels of property 19 which are assessed as residential property for property tax 20 purposes are exempt from the tax levied under this section 21 except residential properties within a duly designated historic 22 district. A tax levied under this section is not subject to 23 the levy limitations in section 384.1 or 384.7 . 24 Sec. 42. REPEAL. Sections 331.425 and 331.426, Code 2011, 25 are repealed. 26 Sec. 43. APPLICABILITY. This division of this Act applies 27 to fiscal years beginning on or after July 1, 2013. 28 DIVISION V 29 BUSINESS PROPERTY TAX CREDIT 30 Sec. 44. Section 331.512, Code 2011, is amended by adding 31 the following new subsection: 32 NEW SUBSECTION . 13B. Carry out duties relating to the 33 business property tax credit as provided in chapter 426C. 34 Sec. 45. Section 331.559, Code 2011, is amended by adding 35 -34- LSB 6140YC (10) 84 md/sc 34/ 58
H.F. _____ the following new subsection: 1 NEW SUBSECTION . 14A. Carry out duties relating to the 2 business property tax credit as provided in chapter 426C. 3 Sec. 46. NEW SECTION . 426C.1 Definitions. 4 For the purposes of this chapter, unless the context 5 otherwise requires: 6 1. “Contiguous parcels” means any of the following: 7 a. Parcels that share a common boundary. 8 b. Parcels within the same building or structure regardless 9 of whether the parcels share a common boundary. 10 c. Permanent improvements to the land that are situated 11 on one or more parcels of land that are assessed and taxed 12 separately from the permanent improvements if the parcels of 13 land upon which the permanent improvements are situated share 14 a common boundary. 15 2. “Department” means the department of revenue. 16 3. “Fund” means the business property tax credit fund 17 created in section 426C.2. 18 4. “Parcel” means as defined in section 445.1. 19 5. “Property unit” means contiguous parcels all of which 20 are located within the same county, with the same property tax 21 classification, each of which contains permanent improvements, 22 are owned by the same person, and are operated by that person 23 for a common use and purpose. 24 Sec. 47. NEW SECTION . 426C.2 Business property tax credit 25 fund —— appropriation. 26 1. A business property tax credit fund is created in the 27 state treasury under the authority of the department. For 28 the fiscal year beginning July 1, 2014, there is appropriated 29 from the general fund of the state to the department to be 30 credited to the fund, the sum of twenty-four million dollars 31 to be used for business property tax credits authorized in 32 this chapter. For the fiscal year beginning July 1, 2015, 33 there is appropriated from the general fund of the state to the 34 department to be credited to the fund, the sum of forty-eight 35 -35- LSB 6140YC (10) 84 md/sc 35/ 58
H.F. _____ million dollars. For the fiscal year beginning July 1, 2016, 1 there is appropriated from the general fund of the state to the 2 department to be credited to the fund, the sum of seventy-two 3 million dollars. For the fiscal year beginning July 1, 2017, 4 there is appropriated from the general fund of the state to the 5 department to be credited to the fund, the sum of ninety-six 6 million dollars. For the fiscal year beginning July 1, 2018, 7 and each fiscal year thereafter, there is appropriated from the 8 general fund of the state to the department to be credited to 9 the fund, the sum of one hundred twenty million dollars. 10 2. Notwithstanding section 12C.7, subsection 2, interest or 11 earnings on moneys deposited in the fund shall be credited to 12 the fund. Moneys in the fund are not subject to the provisions 13 of section 8.33 and shall not be transferred, used, obligated, 14 appropriated, or otherwise encumbered except as provided in 15 this chapter. 16 Sec. 48. NEW SECTION . 426C.3 Claims for credit. 17 1. Each person who wishes to claim the credit allowed 18 under this chapter shall obtain the appropriate forms from the 19 assessor and file the claim with the assessor. The director 20 of revenue shall prescribe suitable forms and instructions for 21 such claims, and make such forms and instructions available to 22 the assessors. 23 2. a. Claims for the business property tax credit shall be 24 filed not later than March 15 preceding the fiscal year during 25 which the taxes for which the credit is claimed are due and 26 payable. 27 b. A claim filed after the deadline for filing claims shall 28 be considered as a claim for the following year. 29 3. Upon the filing of a claim and allowance of the credit, 30 the credit shall be allowed on the parcel or property unit for 31 successive years without further filing as long as the parcel 32 or property unit satisfies the requirements for the credit. If 33 the parcel or property unit owner ceases to qualify for the 34 credit under this chapter, the owner shall provide written 35 -36- LSB 6140YC (10) 84 md/sc 36/ 58
H.F. _____ notice to the assessor by the date for filing claims specified 1 in subsection 2 following the date on which the parcel or 2 property unit ceases to qualify for the credit. 3 4. When all or a portion of a parcel or property unit that 4 is allowed a credit under this chapter is sold, transferred, 5 or ownership otherwise changes, the buyer, transferee, or 6 new owner who wishes to receive the credit shall refile the 7 claim for credit. In addition, when a portion of a parcel or 8 property unit that is allowed a credit under this chapter is 9 sold, transferred, or ownership otherwise changes, the owner of 10 the portion of the parcel or property unit for which ownership 11 did not change shall refile the claim for credit. 12 5. The assessor shall remit the claims for credit to the 13 county auditor with the assessor’s recommendation for allowance 14 or disallowance. If the assessor recommends disallowance 15 of a claim, the assessor shall submit the reasons for the 16 recommendation, in writing, to the county auditor. The county 17 auditor shall forward the claims to the board of supervisors. 18 The board shall allow or disallow the claims. 19 6. For each claim and allowance of a credit for a property 20 unit, the county auditor shall calculate the average of all 21 consolidated levy rates applicable to the several parcels 22 within the property unit. All claims for credit which have 23 been allowed by the board of supervisors, the actual value of 24 the permanent improvements to such parcels and property units 25 applicable to the fiscal year for which the credit is claimed 26 that are subject to assessment and taxation prior to imposition 27 of any applicable assessment limitation, the consolidated levy 28 rates for such parcels and the average consolidated levy rates 29 for such property units applicable to the fiscal year for which 30 the credit is claimed, and the taxing districts in which the 31 parcel or property unit is located, shall be certified on or 32 before June 30, in each year, by the county auditor to the 33 department. 34 7. The assessor shall maintain a permanent file of current 35 -37- LSB 6140YC (10) 84 md/sc 37/ 58
H.F. _____ business property tax credits. The assessor shall file a 1 notice of transfer of property for which a credit has been 2 allowed when notice is received from the office of the county 3 recorder, from the person who sold or transferred the property, 4 or from the personal representative of a deceased property 5 owner. The county recorder shall give notice to the assessor 6 of each transfer of title filed in the recorder’s office. The 7 notice from the county recorder shall describe the property 8 transferred, the name of the person transferring title to the 9 property, and the name of the person to whom title to the 10 property has been transferred. 11 Sec. 49. NEW SECTION . 426C.4 Eligibility and amount of 12 credit. 13 1. Each parcel classified and taxed as commercial property, 14 industrial property, or railway property under chapter 434, 15 and improved with permanent construction, is eligible for a 16 credit under this chapter. A person may claim and receive one 17 credit under this chapter for each eligible parcel unless the 18 parcel is part of a property unit. A person may only claim and 19 receive one credit under this chapter for each property unit. 20 A credit approved for a property unit shall be allocated to the 21 several parcels within the property unit in the proportion that 22 each parcel’s total amount of property taxes due and payable 23 attributable to the permanent improvements bears to the total 24 amount of property taxes due and payable attributable to the 25 permanent improvements for the property unit. Only property 26 units comprised of commercial property, comprised of industrial 27 property, or comprised of railway property under chapter 434 28 are eligible for a credit under this chapter. 29 2. Using the actual value of the permanent improvements 30 and the consolidated levy rate for each parcel or the average 31 consolidated levy rate for each property unit, as certified 32 by the county auditor to the department under section 426C.3, 33 subsection 6, the department shall calculate, for each 34 fiscal year, an initial amount of actual value of permanent 35 -38- LSB 6140YC (10) 84 md/sc 38/ 58
H.F. _____ improvements for use in determining the amount of the credit 1 for each such parcel or property unit so as to provide the 2 maximum possible credit according to the credit formula and 3 limitations under subsection 3, and to provide a total dollar 4 amount of credits against the taxes due and payable in the 5 fiscal year equal to ninety-eight percent of the moneys in the 6 fund following the deposit of the appropriation for the fiscal 7 year. 8 3. a. The amount of the credit for each parcel or property 9 unit for which a claim for credit under this chapter has been 10 approved shall be calculated under paragraph “b” using the 11 lesser of the initial amount of actual value of the permanent 12 improvements determined by the department under subsection 13 2, and the actual value of the permanent improvements to the 14 parcel or property unit as certified by the county auditor 15 under section 426C.3, subsection 6. 16 b. The amount of the credit for each parcel or property 17 unit for which a claim for credit under this chapter has 18 been approved shall be equal to the amount of actual value 19 determined under paragraph “a” multiplied by the difference, 20 stated as a percentage, between the assessment limitation 21 applicable to the parcel or property unit under section 441.21, 22 subsection 5, and the assessment limitation applicable to 23 residential property under section 441.21, subsection 4, 24 divided by one thousand dollars, and then multiplied by the 25 consolidated levy rate or average consolidated levy rate for 26 one thousand dollars of taxable value applicable to the parcel 27 or property unit for the fiscal year for which the credit 28 is claimed as certified by the county auditor under section 29 426C.3, subsection 6. 30 Sec. 50. NEW SECTION . 426C.5 Payment to counties. 31 1. Annually the department shall certify to the county 32 auditor of each county the amounts of the business property 33 tax credits allowed in the county. Each county auditor shall 34 then enter the credits against the tax levied on each eligible 35 -39- LSB 6140YC (10) 84 md/sc 39/ 58
H.F. _____ parcel or property unit in the county, designating on the tax 1 lists the credit as being from the fund. Each taxing district 2 shall receive its share of the business property tax credit 3 allowed on each eligible parcel or property unit in such taxing 4 district, in the proportion that the levy made by such taxing 5 district upon the parcel or property unit bears to the total 6 levy upon the parcel or property unit by all taxing districts 7 imposing a property tax in such taxing district. However, the 8 several taxing districts shall not draw the moneys so credited 9 until after the semiannual allocations have been received by 10 the county treasurer, as provided in this section. Each county 11 treasurer shall show on each tax receipt the amount of credit 12 received from the fund. 13 2. The director of the department of administrative 14 services shall issue warrants on the fund payable to the county 15 treasurers of the several counties of the state under this 16 chapter. 17 3. The amount due each county shall be paid in two payments 18 on November 15 and March 15 of each fiscal year, drawn upon 19 warrants payable to the respective county treasurers. The two 20 payments shall be as nearly equal as possible. 21 Sec. 51. NEW SECTION . 426C.6 Appeals. 22 1. If the board of supervisors disallows a claim for credit 23 under section 426C.3, subsection 5, the board of supervisors 24 shall send written notice, by mail, to the claimant at the 25 claimant’s last known address. The notice shall state the 26 reasons for disallowing the claim for the credit. The board 27 of supervisors is not required to send notice that a claim for 28 credit is disallowed if the claimant voluntarily withdraws the 29 claim. Any person whose claim is denied under the provisions 30 of this chapter may appeal from the action of the board of 31 supervisors to the district court of the county in which the 32 parcel or property unit is located by giving written notice 33 of such appeal to the county auditor within twenty days from 34 the date of mailing of notice of such action by the board of 35 -40- LSB 6140YC (10) 84 md/sc 40/ 58
H.F. _____ supervisors. 1 2. If any claim for credit has been denied by the board 2 of supervisors, and such action is subsequently reversed on 3 appeal, the credit shall be allowed on the applicable parcel 4 or property unit, and the director of revenue, the county 5 auditor, and the county treasurer shall provide the credit and 6 change their books and records accordingly. In the event the 7 appealing taxpayer has paid one or both of the installments of 8 the tax payable in the year or years in question, remittance 9 shall be made to such taxpayer of the amount of such credit. 10 The amount of such credit awarded on appeal shall be allocated 11 and paid from the balance remaining in the fund. 12 Sec. 52. NEW SECTION . 426C.7 Audit —— denial. 13 1. If on the audit of a credit provided under this chapter, 14 the director of revenue determines the amount of the credit 15 to have been incorrectly calculated or that the credit is 16 not allowable, the director shall recalculate the credit and 17 notify the taxpayer and the county auditor of the recalculation 18 or denial and the reasons for it. The director shall not 19 adjust a credit after three years from October 31 of the year 20 in which the claim for the credit was filed. If the credit 21 has been paid, the director shall give notification to the 22 taxpayer, the county treasurer, and the applicable assessor 23 of the recalculation or denial of the credit and the county 24 treasurer shall proceed to collect the tax owed in the same 25 manner as other property taxes due and payable are collected, 26 if the parcel or property unit for which the credit was allowed 27 is still owned by the taxpayer. If the parcel or property unit 28 for which the credit was allowed is not owned by the taxpayer, 29 the amount may be recovered from the taxpayer by assessment in 30 the same manner that income taxes are assessed under sections 31 422.26 and 422.30. The amount of such erroneous credit, when 32 collected, shall be deposited in the fund. 33 2. The taxpayer or board of supervisors may appeal any 34 decision of the director of revenue to the state board of tax 35 -41- LSB 6140YC (10) 84 md/sc 41/ 58
H.F. _____ review pursuant to section 421.1, subsection 5. The taxpayer, 1 the board of supervisors, or the director of revenue may seek 2 judicial review of the action of the state board of tax review 3 in accordance with chapter 17A. 4 Sec. 53. NEW SECTION . 426C.8 False claim —— penalty. 5 A person who makes a false claim for the purpose of obtaining 6 a credit provided for in this chapter or who knowingly receives 7 the credit without being legally entitled to it is guilty of a 8 fraudulent practice. The claim for a credit of such a person 9 shall be disallowed and if the credit has been paid the amount 10 shall be recovered in the manner provided in section 426C.7. 11 In such cases, the director of revenue shall send a notice of 12 disallowance of the credit. 13 Sec. 54. NEW SECTION . 426C.9 Rules. 14 The director of revenue shall prescribe forms, instructions, 15 and rules pursuant to chapter 17A, as necessary, to carry out 16 the purposes of this chapter. 17 Sec. 55. APPLICABILITY. This division of this Act applies 18 to property taxes due and payable in fiscal years beginning on 19 or after July 1, 2014. 20 DIVISION VI 21 MULTIRESIDENTIAL PROPERTY CLASSIFICATION 22 Sec. 56. Section 404.2, subsection 2, paragraph f, Code 23 2011, is amended to read as follows: 24 f. A statement specifying whether the revitalization is 25 applicable to none, some, or all of the property assessed as 26 residential, multiresidential, agricultural, commercial , or 27 industrial property within the designated area or a combination 28 thereof and whether the revitalization is for rehabilitation 29 and additions to existing buildings or new construction or 30 both. If revitalization is made applicable only to some 31 property within an assessment classification, the definition of 32 that subset of eligible property must be by uniform criteria 33 which further some planning objective identified in the plan. 34 The city shall state how long it is estimated that the area 35 -42- LSB 6140YC (10) 84 md/sc 42/ 58
H.F. _____ shall remain a designated revitalization area which time 1 shall be longer than one year from the date of designation 2 and shall state any plan by the city to issue revenue bonds 3 for revitalization projects within the area. For a county, a 4 revitalization area shall include only property which will be 5 used as industrial property, commercial property, commercial 6 property consisting of three or more separate living quarters 7 with at least seventy-five percent of the space used for 8 residential purposes, multiresidential property, or residential 9 property. However, a county shall not provide a tax exemption 10 under this chapter to commercial property, commercial property 11 consisting of three or more separate living quarters with at 12 least seventy-five percent of the space used for residential 13 purposes, multiresidential property, or residential property 14 which is located within the limits of a city. 15 Sec. 57. Section 404.3, subsection 4, Code 2011, is amended 16 to read as follows: 17 4. All qualified real estate assessed as residential 18 property or assessed as commercial property, if the commercial 19 property consists of three or more separate living quarters 20 with at least seventy-five percent of the space used for 21 residential purposes, or assessed as multiresidential property 22 is eligible to receive a one hundred percent exemption from 23 taxation on the actual value added by the improvements. The 24 exemption is for a period of ten years. 25 Sec. 58. Section 441.21, subsection 8, paragraph b, Code 26 Supplement 2011, is amended to read as follows: 27 b. Notwithstanding paragraph “a” , any construction or 28 installation of a solar energy system on property classified 29 as agricultural, residential, commercial, multiresidential, or 30 industrial property shall not increase the actual, assessed , 31 and taxable values of the property for five full assessment 32 years. 33 Sec. 59. Section 441.21, subsections 9 and 10, Code 34 Supplement 2011, are amended to read as follows: 35 -43- LSB 6140YC (10) 84 md/sc 43/ 58
H.F. _____ 9. Not later than November 1, 1979, and November 1 of each 1 subsequent year, the director shall certify to the county 2 auditor of each county the percentages of actual value at 3 which residential property, agricultural property, commercial 4 property, industrial property, multiresidential property, 5 and property valued by the department of revenue pursuant 6 to chapters 428 , 433 , 434 , 437 , and 438 in each assessing 7 jurisdiction in the county shall be assessed for taxation. The 8 county auditor shall proceed to determine the assessed values 9 of agricultural property, residential property, commercial 10 property, industrial property, multiresidential property, 11 and property valued by the department of revenue pursuant 12 to chapters 428 , 433 , 434 , 437 , and 438 by applying such 13 percentages to the current actual value of such property, 14 as reported to the county auditor by the assessor, and the 15 assessed values so determined shall be the taxable values of 16 such properties upon which the levy shall be made. 17 10. The percentage of actual value computed by the 18 director for agricultural property, residential property, 19 commercial property, industrial property , multiresidential 20 property, and property valued by the department of revenue 21 pursuant to chapters 428 , 433 , 434 , 437 , and 438 and used to 22 determine assessed values of those classes of property does not 23 constitute a rule as defined in section 17A.2, subsection 11 . 24 Sec. 60. Section 441.21, Code Supplement 2011, is amended by 25 adding the following new subsection: 26 NEW SUBSECTION . 13. a. Beginning with valuations 27 established on or after January 1, 2013, mobile home parks, 28 manufactured home communities, land-leased communities, 29 assisted living facilities, and that portion of a building 30 that is used for human habitation and a proportionate share 31 of the land upon which the building or structure is situated, 32 even if the use for human habitation is not the primary use 33 of the building, and regardless of the number of dwelling 34 units located in the building, and not otherwise classified 35 -44- LSB 6140YC (10) 84 md/sc 44/ 58
H.F. _____ as residential property, shall be valued as a separate class 1 of property known as multiresidential property and, excluding 2 properties referred to in section 427A.1, subsection 8, shall 3 be assessed at a percentage of its actual value, as determined 4 in this subsection. For valuations established for the 5 assessment year beginning January 1, 2013, the percentage 6 of actual value as equalized by the director of revenue as 7 provided in section 441.49 at which multiresidential property 8 shall be assessed shall be ninety percent. For valuations 9 established for the assessment year beginning January 1, 2014, 10 the percentage of actual value as equalized by the director of 11 revenue as provided in section 441.49 at which multiresidential 12 property shall be assessed shall be eighty percent. For 13 valuations established for the assessment year beginning 14 January 1, 2015, the percentage of actual value as equalized by 15 the director of revenue as provided in section 441.49 at which 16 multiresidential property shall be assessed shall be seventy 17 percent. For valuations established for the assessment year 18 beginning January 1, 2016, the percentage of actual value as 19 equalized by the director of revenue as provided in section 20 441.49 at which multiresidential property shall be assessed 21 shall be sixty percent. For valuations established for the 22 assessment year beginning January 1, 2017, and each assessment 23 year thereafter, the percentage of actual value as equalized by 24 the director of revenue as provided in section 441.49 at which 25 multiresidential property shall be assessed shall be equal to 26 the percentage of actual value at which property assessed as 27 residential property is assessed under subsection 4 for the 28 same assessment year. 29 b. Accordingly, the assessor may assign more than one 30 classification to a parcel of property that, in part, satisfies 31 the requirements of this subsection. In no case, however, 32 shall a hotel, motel, inn, or other building where rooms or 33 dwelling units are usually rented for less than one month be 34 classified as multiresidential property under this subsection. 35 -45- LSB 6140YC (10) 84 md/sc 45/ 58
H.F. _____ c. As used in this subsection: 1 (1) “Assisted living facility” means property for providing 2 assisted living as defined in section 231C.2. 3 (2) “Dwelling unit” means an apartment, group of rooms, 4 or single room which is occupied as separate living quarters 5 or, if vacant, is intended for occupancy as separate living 6 quarters, in which a tenant can live and sleep separately from 7 any other persons in the building. 8 (3) “Land-leased community” means the same as defined in 9 sections 335.30A and 414.28A. 10 (4) “Manufactured home community” means the same as a 11 land-leased community. 12 (5) “Mobile home park” means the same as defined in section 13 435.1. 14 Sec. 61. Section 558.46, subsection 5, Code 2011, is amended 15 to read as follows: 16 5. For the purposes of this section , “residential property” 17 includes commercial multiresidential property as defined in 18 section 441.21, subsection 13, consisting of three or more 19 separate living quarters with at least seventy-five percent of 20 the space used for residential purposes. 21 EXPLANATION 22 This bill relates to taxation and local government budgets 23 by providing for an increase in the amount of the earned 24 income tax credit, establishing and modifying property 25 assessment limitations, providing for certain property tax 26 replacement payments, modifying the assessment and taxation 27 of telecommunications company property, establishing budget 28 limitations for counties and cities, modifying certain 29 reporting requirements, establishing a property tax credit 30 for certain commercial, industrial, and railway property, and 31 classifying certain property as multiresidential property. 32 Division I of the bill increases the amount of the state 33 earned income tax credit. Currently, the credit is equal to 34 7 percent of the amount of a taxpayer’s federal earned income 35 -46- LSB 6140YC (10) 84 md/sc 46/ 58
H.F. _____ tax credit. The bill increases the amount of the credit to 10 1 percent. 2 Division I of the bill applies retroactively to January 1, 3 2012, for tax years beginning on or after that date. 4 Division II of the bill changes the property tax assessment 5 limitation percentage for residential property and agricultural 6 property from 4 percent to 3 percent for assessment years 7 beginning on or after January 1, 2013. 8 Division II of the bill strikes the methodology in Code 9 section 441.21(5) currently used to determine the percentage 10 of actual value at which commercial property and industrial 11 property are assessed for property tax purposes. The bill 12 provides that for valuations established for the assessment 13 year beginning January 1, 2013, the percentage of actual value 14 at which commercial and industrial property are assessed is 15 98 percent. For the assessment year beginning January 1, 16 2014, the percentage of actual value at which commercial and 17 industrial property are assessed is 96 percent. For the 18 assessment year beginning January 1, 2015, the percentage of 19 actual value at which commercial and industrial property are 20 assessed is 94 percent. For the assessment year beginning 21 January 1, 2016, the percentage of actual value at which 22 commercial and industrial property are assessed is 92 percent. 23 For assessment years beginning on or after January 1, 2017, the 24 percentage of actual value at which commercial and industrial 25 property are assessed is 90 percent. 26 Division II provides that for valuations established on 27 or after January 1, 2013, property valued by the department 28 of revenue pursuant to Code chapter 434 (railway property) 29 is assessed at a percentage of its actual value equal to the 30 percentage of actual value at which commercial property is 31 assessed for the same assessment year. 32 Division II creates a commercial and industrial property tax 33 replacement fund in new Code section 441.21A under the control 34 of the department of revenue. For the fiscal year beginning 35 -47- LSB 6140YC (10) 84 md/sc 47/ 58
H.F. _____ July 1, 2014, there is appropriated from the general fund of 1 the state to the department of revenue to be credited to the 2 fund an amount necessary to pay all commercial and industrial 3 property tax replacement claims for the fiscal year, not to 4 exceed $28 million. For the fiscal year beginning July 1, 5 2015, there is appropriated from the general fund of the state 6 to the department of revenue to be credited to the fund an 7 amount necessary to pay all commercial and industrial property 8 tax replacement claims for the fiscal year, not to exceed $56 9 million. For the fiscal year beginning July 1, 2016, there 10 is appropriated from the general fund of the state to the 11 department of revenue to be credited to the fund an amount 12 necessary to pay all commercial and industrial property tax 13 replacement claims for the fiscal year, not to exceed $84 14 million. For the fiscal year beginning July 1, 2017, there 15 is appropriated from the general fund of the state to the 16 department of revenue to be credited to the fund an amount 17 necessary to pay all commercial and industrial property tax 18 replacement claims for the fiscal year, not to exceed $112 19 million. For the fiscal year beginning July 1, 2018, and each 20 fiscal year thereafter, there is appropriated from the general 21 fund of the state to the department of revenue to be credited 22 to the fund an amount necessary to pay all commercial and 23 industrial property tax replacement claims for the fiscal year, 24 not to exceed $140 million. 25 Division II provides that beginning with the fiscal year 26 starting July 1, 2014, moneys appropriated to the commercial 27 and industrial property tax replacement fund are for the 28 payment of commercial and industrial property tax replacement 29 claims. The bill provides that if an amount appropriated for 30 a fiscal year is insufficient to pay all replacement claims, 31 the director of revenue shall prorate the disbursements from 32 the fund to the county treasurers and shall notify the county 33 auditors of the pro rata percentage on or before September 30. 34 Any unspent balance as of June 30 of each year shall revert to 35 -48- LSB 6140YC (10) 84 md/sc 48/ 58
H.F. _____ the general fund of the state as provided in Code section 8.33. 1 Division II requires the assessor to determine, on or 2 before July 1 of each fiscal year beginning on or after July 3 1, 2014, the total assessed value of all commercial property, 4 industrial property, and property assessed by the department 5 of revenue under Code chapter 434 (railway) for taxes due 6 and payable in that fiscal year and the total assessed value 7 of all such property assessed as of January 1, 2012, and to 8 report those valuations to the county auditor. On or before 9 September 1, the county auditor prepares a statement, based 10 upon the report listing for each taxing district in the county 11 the assessed values of such property located in the taxing 12 district for specified assessment years, the tax levy rate for 13 each taxing district, and the property tax replacement claim 14 for each taxing district. The replacement claim is equal to 15 the difference between the assessed valuation of all such 16 property located in the taxing district and assessed for the 17 applicable assessment year and the total assessed value of all 18 such property located in the taxing district and assessed as 19 of January 1, 2012, multiplied by the tax rate specified for 20 the taxing district. If the January 1, 2012, assessment amount 21 is less, there is no replacement claim for the taxing district 22 for that year. 23 Replacement claims are paid to each county treasurer in 24 equal installments in September and March of each year. The 25 county treasurer apportions the replacement claim payments 26 among the eligible taxing districts in the county. 27 Division II of the bill defines a tax increment financing 28 district in an urban renewal area as a taxing district for 29 purposes of allocation of replacement moneys and provides for 30 the method of allocation in those districts. 31 Division II, pursuant to Code section 4.13, does not affect 32 the application of prior provisions of Code section 441.21 to 33 assessment years beginning before January 1, 2013. 34 Division II of the bill applies to assessment years 35 -49- LSB 6140YC (10) 84 md/sc 49/ 58
H.F. _____ beginning on or after January 1, 2013. 1 Division III of the bill relates to the manner in which the 2 property of telecommunications companies is assessed and taxed. 3 The assessment provisions of current Code section 4 433.4 provide that in ascertaining the actual value of 5 telecommunications company property the director of revenue 6 shall include all property of every kind and character 7 whatsoever, real, personal, or mixed, used by the company in 8 the transaction of telegraph and telephone business. 9 Division III of the bill strikes the provisions that 10 included all kinds and character of property