Senate File 199 - Introduced SENATE FILE 199 BY DIX , SORENSON , JOHNSON , WARD , McKINLEY , BEHN , KAPUCIAN , HAHN , ANDERSON , BERTRAND , HAMERLINCK , ERNST , SEYMOUR , FEENSTRA , BOETTGER , HOUSER , and WHITVER A BILL FOR An Act establishing a limitation on the amount of property tax 1 dollars that may be certified by a county or a city and 2 including effective date and applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1161XS (3) 84 md/sc

S.F. 199 Section 1. NEW SECTION . 331.422A Property tax dollars —— 1 maximums. 2 1. a. The maximum amount in property tax dollars which may 3 be certified by a county for taxes shall not exceed the amount 4 of property tax dollars determined under subsection 3. 5 b. This section shall not be construed as removing or 6 otherwise affecting the property tax limitations otherwise 7 provided by law for any tax levy of the county, except that, 8 upon an appeal from the county, the state appeal board may 9 approve a tax levy consistent with the provisions of section 10 24.48 or 331.426. 11 2. For purposes of this section: 12 a. “Boundary adjustment” means annexation, severance, 13 incorporation, or discontinuance as those terms are defined in 14 section 368.1. 15 b. “Budget year” is the fiscal year beginning during the 16 calendar year in which a budget is certified. 17 c. “Current fiscal year” is the fiscal year ending during 18 the calendar year in which a budget is certified. 19 d. “Inflation rate” means the average of the preceding 20 twelve-month percentage change, which shall be computed on 21 a monthly basis, in the consumer price index for all urban 22 consumers, not seasonally adjusted, published by the United 23 States department of labor, bureau of labor statistics, 24 calculated for the calendar year ending six months after the 25 beginning of the current fiscal year. 26 e. “Net new valuation taxes” means the amount of property 27 tax dollars equal to the sum of all the current fiscal year’s 28 levy rates certified by the county multiplied by the increase 29 from the current fiscal year to the budget year in taxable 30 valuation due to the following: 31 (1) New construction. 32 (2) Additions or improvements to existing structures. 33 (3) Remodeling of existing structures for which a building 34 permit is required. 35 -1- LSB 1161XS (3) 84 md/sc 1/ 5

S.F. 199 (4) Net boundary adjustment. 1 (5) A municipality no longer dividing tax revenues in 2 an urban renewal area as provided in section 403.19, to the 3 extent that the incremental valuation released is due to new 4 construction or revaluation of property newly constructed, 5 additions or improvements to existing property, net boundary 6 adjustment, or expiration of tax abatements or exemptions, all 7 occurring after the division of revenue begins. 8 (6) That portion of taxable property located in an urban 9 revitalization area on which an exemption was allowed and such 10 exemption has expired. 11 3. For the budget year beginning July 1, 2012, and 12 subsequent budget years, the maximum amount of property tax 13 dollars which may be certified for levy by a county shall be an 14 amount equal to the sum of the following: 15 a. The current fiscal year’s total property tax dollars 16 certified by the county. 17 b. The amount of net new valuation taxes in the county. 18 c. Any additional amount of property tax dollars certified 19 by the board under subsection 5. 20 4. Property taxes certified for deposit in the debt service 21 fund in section 331.430 or any other property taxes resulting 22 from a property tax levy approved at election are not included 23 in the maximum amount of property tax dollars that may be 24 certified for a budget year under subsection 3. 25 5. The board may certify and levy an additional amount of 26 property tax dollars to finance existing programs which would 27 provide substantial benefit to the county in an amount not to 28 exceed the current fiscal year’s total property tax dollars 29 multiplied by the inflation rate. 30 6. The department of management, in consultation with the 31 county finance committee, shall adopt rules to administer this 32 section. 33 Sec. 2. NEW SECTION . 384.1A Property tax dollars —— 34 maximums. 35 -2- LSB 1161XS (3) 84 md/sc 2/ 5

S.F. 199 1. a. The maximum amount in property tax dollars which may 1 be certified by a city for taxes shall not exceed the amount of 2 property tax dollars determined under subsection 3. 3 b. This section shall not be construed as removing or 4 otherwise affecting the property tax limitations otherwise 5 provided by law for any tax levy of the city, except that, upon 6 an appeal from the city, the state appeal board may approve a 7 tax levy consistent with the provisions of section 24.48. 8 2. For purposes of this section: 9 a. “Boundary adjustment” means annexation, severance, 10 incorporation, or discontinuance as those terms are defined in 11 section 368.1. 12 b. “Budget year” is the fiscal year beginning during the 13 calendar year in which a budget is certified. 14 c. “Current fiscal year” is the fiscal year ending during 15 the calendar year in which a budget is certified. 16 d. “Inflation rate” means the average of the preceding 17 twelve-month percentage change, which shall be computed on 18 a monthly basis, in the consumer price index for all urban 19 consumers, not seasonally adjusted, published by the United 20 States department of labor, bureau of labor statistics, 21 calculated for the calendar year ending six months after the 22 beginning of the current fiscal year. 23 e. “Net new valuation taxes” means the amount of property 24 tax dollars equal to the sum of all the current fiscal year’s 25 levy rates certified by the city multiplied by the increase 26 from the current fiscal year to the budget year in taxable 27 valuation due to the following: 28 (1) New construction. 29 (2) Additions or improvements to existing structures. 30 (3) Remodeling of existing structures for which a building 31 permit is required. 32 (4) Net boundary adjustment. 33 (5) A municipality no longer dividing tax revenues in 34 an urban renewal area as provided in section 403.19, to the 35 -3- LSB 1161XS (3) 84 md/sc 3/ 5

S.F. 199 extent that the incremental valuation released is due to new 1 construction or revaluation of property newly constructed, 2 additions or improvements to existing property, net boundary 3 adjustment, or expiration of tax abatements or exemptions, all 4 occurring after the division of revenue begins. 5 (6) That portion of taxable property located in an urban 6 revitalization area on which an exemption was allowed and such 7 exemption has expired. 8 3. For the budget year beginning July 1, 2012, and 9 subsequent budget years, the maximum amount of property tax 10 dollars which may be certified for levy by a city shall be an 11 amount equal to the sum of the following: 12 a. The current fiscal year’s total property tax dollars 13 certified by the city. 14 b. The amount of net new valuation taxes in the city. 15 c. Any additional amount of property tax dollars certified 16 by the city under subsection 5. 17 4. Property taxes certified for deposit in the debt service 18 fund in section 384.4 or any other property taxes resulting 19 from a property tax levy approved at election are not included 20 in the maximum amount of property tax dollars that may be 21 certified for a budget year under subsection 3. 22 5. The city may certify an additional amount of property 23 tax dollars to be levied to finance existing programs which 24 would provide substantial benefit to the city in an amount 25 not to exceed the current fiscal year’s property tax dollars 26 multiplied by the inflation rate. 27 6. The department of management, in consultation with the 28 city finance committee, shall adopt rules to administer this 29 section. 30 Sec. 3. APPLICABILITY. This Act applies to budget years 31 beginning on or after July 1, 2012. 32 EXPLANATION 33 This bill establishes limitations on the amount of property 34 tax dollars that may be certified by a county or by a city. 35 -4- LSB 1161XS (3) 84 md/sc 4/ 5

S.F. 199 For the budget year beginning July 1, 2012, and subsequent 1 budget years, the maximum amount of property tax dollars which 2 may be certified for levy by a county shall be an amount 3 equal to the sum of the current fiscal year’s total property 4 tax dollars certified by the county, the amount of net new 5 valuation taxes in the county, and any additional amount of 6 taxes certified by the board of supervisors. The additional 7 amount of property tax dollars that may be certified by the 8 county must be used to finance existing programs which would 9 provide substantial benefit to the county in an amount not to 10 exceed the current fiscal year’s total property tax dollars 11 multiplied by the inflation rate. 12 The bill also establishes a similar limitation for property 13 tax dollars certified by a city. 14 The bill does not remove or otherwise affect the property 15 tax limitations otherwise provided by law for any tax levy 16 of the county or the city, except that, upon an appeal, the 17 state appeal board may approve a tax levy consistent with other 18 provisions of law. 19 The bill establishes several definitions including 20 definitions for “inflation rate” and “net new valuation taxes”. 21 The bill excludes property taxes certified for deposit in a 22 city or a county debt service fund or any other property taxes 23 resulting from a property tax levy approved at election from 24 inclusion in the maximum dollar limitations established in the 25 bill. 26 The department of management, in consultation with the 27 county finance committee and the city finance committee, are 28 directed to adopt rules to administer the bill. 29 The bill applies to budget years beginning on or after July 30 1, 2012. 31 -5- LSB 1161XS (3) 84 md/sc 5/ 5