S.F. 306 Section 1. Section 441.21, subsections 4 and 5, Code 2011, 1 are amended to read as follows: 2 4. For valuations established as of January 1, 1979, 3 the percentage of actual value at which agricultural and 4 residential property shall be assessed shall be the quotient 5 of the dividend and divisor as defined in this section . The 6 dividend for each class of property shall be the dividend 7 as determined for each class of property for valuations 8 established as of January 1, 1978, adjusted by the product 9 obtained by multiplying the percentage determined for that 10 year by the amount of any additions or deletions to actual 11 value, excluding those resulting from the revaluation of 12 existing properties, as reported by the assessors on the 13 abstracts of assessment for 1978, plus six percent of the 14 amount so determined. However, if the difference between the 15 dividend so determined for either class of property and the 16 dividend for that class of property for valuations established 17 as of January 1, 1978, adjusted by the product obtained by 18 multiplying the percentage determined for that year by the 19 amount of any additions or deletions to actual value, excluding 20 those resulting from the revaluation of existing properties, 21 as reported by the assessors on the abstracts of assessment 22 for 1978, is less than six percent, the 1979 dividend for the 23 other class of property shall be the dividend as determined for 24 that class of property for valuations established as of January 25 1, 1978, adjusted by the product obtained by multiplying 26 the percentage determined for that year by the amount of 27 any additions or deletions to actual value, excluding those 28 resulting from the revaluation of existing properties, as 29 reported by the assessors on the abstracts of assessment for 30 1978, plus a percentage of the amount so determined which is 31 equal to the percentage by which the dividend as determined 32 for the other class of property for valuations established 33 as of January 1, 1978, adjusted by the product obtained by 34 multiplying the percentage determined for that year by the 35 -1- LSB 1851XS (5) 84 md/sc 1/ 8

S.F. 306 amount of any additions or deletions to actual value, excluding 1 those resulting from the revaluation of existing properties, 2 as reported by the assessors on the abstracts of assessment 3 for 1978, is increased in arriving at the 1979 dividend for 4 the other class of property. The divisor for each class of 5 property shall be the total actual value of all such property 6 in the state in the preceding year, as reported by the 7 assessors on the abstracts of assessment submitted for 1978, 8 plus the amount of value added to said total actual value by 9 the revaluation of existing properties in 1979 as equalized 10 by the director of revenue pursuant to section 441.49 . The 11 director shall utilize information reported on abstracts of 12 assessment submitted pursuant to section 441.45 in determining 13 such percentage. For valuations established as of January 14 1, 1980, and each year thereafter, the percentage of actual 15 value as equalized by the director of revenue as provided 16 in section 441.49 at which agricultural and residential 17 property shall be assessed shall be calculated in accordance 18 with the methods provided herein including the limitation of 19 increases in agricultural and residential assessed values to 20 the percentage increase of the other class of property if the 21 other class increases less than the allowable limit adjusted 22 to include the applicable and current values as equalized by 23 the director of revenue in this subsection , except that any 24 references to six percent in this subsection shall be four 25 percent. For valuations established for the assessment year 26 beginning January 1, 2012, and each assessment year thereafter, 27 the percentage of actual value as equalized by the director of 28 revenue as provided in section 441.49 at which agricultural 29 and residential property shall be assessed shall be calculated 30 in accordance with the methods provided in this subsection and 31 subsection 5A, except that any references to six percent in 32 this subsection shall be two percent. 33 5. For valuations established as of January 1, 1979, 34 commercial property and industrial property, excluding 35 -2- LSB 1851XS (5) 84 md/sc 2/ 8

S.F. 306 properties referred to in section 427A.1, subsection 8 , shall 1 be assessed as a percentage of the actual value of each class 2 of property. The percentage shall be determined for each 3 class of property by the director of revenue for the state in 4 accordance with the provisions of this section . For valuations 5 established as of January 1, 1979, the percentage shall be 6 the quotient of the dividend and divisor as defined in this 7 section . The dividend for each class of property shall be the 8 total actual valuation for each class of property established 9 for 1978, plus six percent of the amount so determined. The 10 divisor for each class of property shall be the valuation 11 for each class of property established for 1978, as reported 12 by the assessors on the abstracts of assessment for 1978, 13 plus the amount of value added to the total actual value by 14 the revaluation of existing properties in 1979 as equalized 15 by the director of revenue pursuant to section 441.49 . For 16 valuations established as of January 1, 1979, property valued 17 by the department of revenue pursuant to chapters 428 , 433 , 18 437 , and 438 shall be considered as one class of property and 19 shall be assessed as a percentage of its actual value. The 20 percentage shall be determined by the director of revenue in 21 accordance with the provisions of this section . For valuations 22 established as of January 1, 1979, the percentage shall be 23 the quotient of the dividend and divisor as defined in this 24 section . The dividend shall be the total actual valuation 25 established for 1978 by the department of revenue, plus ten 26 percent of the amount so determined. The divisor for property 27 valued by the department of revenue pursuant to chapters 428 , 28 433 , 437 , and 438 shall be the valuation established for 1978, 29 plus the amount of value added to the total actual value by 30 the revaluation of the property by the department of revenue 31 as of January 1, 1979. For valuations established as of 32 January 1, 1980, commercial property and industrial property, 33 excluding properties referred to in section 427A.1, subsection 34 8 , shall be assessed at a percentage of the actual value of 35 -3- LSB 1851XS (5) 84 md/sc 3/ 8

S.F. 306 each class of property. The percentage shall be determined 1 for each class of property by the director of revenue for the 2 state in accordance with the provisions of this section . For 3 valuations established as of January 1, 1980, the percentage 4 shall be the quotient of the dividend and divisor as defined in 5 this section . The dividend for each class of property shall 6 be the dividend as determined for each class of property for 7 valuations established as of January 1, 1979, adjusted by the 8 product obtained by multiplying the percentage determined 9 for that year by the amount of any additions or deletions to 10 actual value, excluding those resulting from the revaluation 11 of existing properties, as reported by the assessors on the 12 abstracts of assessment for 1979, plus four percent of the 13 amount so determined. The divisor for each class of property 14 shall be the total actual value of all such property in 1979, 15 as equalized by the director of revenue pursuant to section 16 441.49 , plus the amount of value added to the total actual 17 value by the revaluation of existing properties in 1980. The 18 director shall utilize information reported on the abstracts of 19 assessment submitted pursuant to section 441.45 in determining 20 such percentage. For valuations established as of January 1, 21 1980, property valued by the department of revenue pursuant 22 to chapters 428 , 433 , 437 , and 438 shall be assessed at a 23 percentage of its actual value. The percentage shall be 24 determined by the director of revenue in accordance with the 25 provisions of this section . For valuations established as of 26 January 1, 1980, the percentage shall be the quotient of the 27 dividend and divisor as defined in this section . The dividend 28 shall be the total actual valuation established for 1979 by 29 the department of revenue, plus eight percent of the amount so 30 determined. The divisor for property valued by the department 31 of revenue pursuant to chapters 428 , 433 , 437 , and 438 shall 32 be the valuation established for 1979, plus the amount of 33 value added to the total actual value by the revaluation of 34 the property by the department of revenue as of January 1, 35 -4- LSB 1851XS (5) 84 md/sc 4/ 8

S.F. 306 1980. For valuations established as of January 1, 1981, 1 and each year thereafter, the percentage of actual value as 2 equalized by the director of revenue as provided in section 3 441.49 at which commercial property and industrial property, 4 excluding properties referred to in section 427A.1, subsection 5 8 , shall be assessed shall be calculated in accordance with 6 the methods provided herein in this subsection , except that 7 any references to six percent in this subsection shall be four 8 percent. For valuations established as of January 1, 1981, 9 and each year thereafter, the percentage of actual value at 10 which property valued by the department of revenue pursuant 11 to chapters 428 , 433 , 437 , and 438 shall be assessed shall be 12 calculated in accordance with the methods provided herein, 13 except that any references to ten percent in this subsection 14 shall be eight percent. Beginning with valuations established 15 as of January 1, 1979, and each year thereafter, property 16 valued by the department of revenue pursuant to chapter 434 17 shall also be assessed at a percentage of its actual value 18 which percentage shall be equal to the percentage determined 19 by the director of revenue for commercial property, industrial 20 property, or property valued by the department of revenue 21 pursuant to chapters 428 , 433 , 437 , and 438 , whichever is 22 lowest. For valuations established for the assessment year 23 beginning January 1, 2012, and each assessment year thereafter, 24 the percentage of actual value as equalized by the director 25 of revenue as provided in section 441.49 at which commercial 26 property, other than new commercial property, and industrial 27 property shall be assessed shall be calculated in accordance 28 with the methods provided in this subsection and subsection 5A, 29 except that any references to six percent in this subsection 30 shall be two percent. For valuations established for the 31 assessment year beginning January 1, 2012, and each assessment 32 year thereafter, the percentage of actual value as equalized 33 by the director of revenue as provided in section 441.49 at 34 which commercial property that is new commercial property 35 -5- LSB 1851XS (5) 84 md/sc 5/ 8

S.F. 306 shall be assessed shall be sixty percent. For purposes of 1 this section, “new commercial property” means a parcel of real 2 estate containing no existing buildings or structures and upon 3 which the construction of buildings or structures is commenced 4 on or after January 1, 2012, if such property is intended as a 5 place of business where goods, wares, services, or merchandise 6 is stored or offered for sale at wholesale or retail, unless 7 the property is located in an urban renewal area that includes 8 a division of revenue under section 403.19. 9 Sec. 2. Section 441.21, Code 2011, is amended by adding the 10 following new subsection: 11 NEW SUBSECTION . 5A. Notwithstanding the limitation 12 of increases for agricultural and residential property in 13 subsection 4 and the limitation of increases for commercial 14 property, other than new commercial property, and industrial 15 property in subsection 5, for valuations established for the 16 assessment year beginning January 1, 2012, and each assessment 17 year thereafter, for residential, agricultural, and commercial 18 property, other than new commercial property, the assessed 19 values of these three classes of property shall be limited to 20 the percentage increase of that class of property that is the 21 lowest percentage increase under the allowable limit adjusted 22 to include the applicable and current values as equalized 23 by the director of revenue. The lowest percentage increase 24 determined under this subsection shall also be applied to 25 industrial property in the same manner it is applied to the 26 other three classes of property. 27 Sec. 3. Section 441.21, subsection 8, paragraph b, Code 28 2011, is amended to read as follows: 29 b. Notwithstanding paragraph “a” , any construction or 30 installation of a solar energy system on property classified 31 as agricultural, residential, commercial, new commercial, or 32 industrial property shall not increase the actual, assessed , 33 and taxable values of the property for five full assessment 34 years. 35 -6- LSB 1851XS (5) 84 md/sc 6/ 8

S.F. 306 Sec. 4. Section 441.21, subsections 9 and 10, Code 2011, are 1 amended to read as follows: 2 9. Not later than November 1, 1979, and November 1 of 3 each subsequent year, the director shall certify to the 4 county auditor of each county the percentages of actual 5 value at which residential property, agricultural property, 6 commercial property, new commercial property, industrial 7 property, and property valued by the department of revenue 8 pursuant to chapters 428 , 433 , 434 , 437 , and 438 in each 9 assessing jurisdiction in the county shall be assessed for 10 taxation. The county auditor shall proceed to determine the 11 assessed values of agricultural property, residential property, 12 commercial property, new commercial property, industrial 13 property, and property valued by the department of revenue 14 pursuant to chapters 428 , 433 , 434 , 437 , and 438 by applying 15 such percentages to the current actual value of such property, 16 as reported to the county auditor by the assessor, and the 17 assessed values so determined shall be the taxable values of 18 such properties upon which the levy shall be made. 19 10. The percentage of actual value computed by the 20 director for agricultural property, residential property, 21 commercial property, new commercial property, industrial 22 property , and property valued by the department of revenue 23 pursuant to chapters 428 , 433 , 434 , 437 , and 438 and used to 24 determine assessed values of those classes of property does not 25 constitute a rule as defined in section 17A.2, subsection 11 . 26 EXPLANATION 27 This bill changes the property tax assessment limitation for 28 residential, agricultural, commercial, and industrial property 29 from 4 percent to 2 percent. The bill also ties together 30 the assessment limitations of residential, agricultural, and 31 commercial property, other than new commercial property as 32 defined in the bill, by limiting the percentage increase in all 33 of those classes of property to the percentage increase of that 34 class of property that is the lowest percentage increase under 35 -7- LSB 1851XS (5) 84 md/sc 7/ 8

S.F. 306 the allowable limit. The bill also provides that the lowest 1 percentage increase shall be applied to industrial property in 2 the same manner that it is applied to the other three classes 3 of property. 4 The bill provides that for valuations established for 5 assessment years beginning on or after January 1, 2012, the 6 percentage of actual value at which new commercial property 7 shall be assessed shall be 60 percent. The bill defines 8 “new commercial property” to mean a parcel of real estate 9 containing no existing buildings or structures and upon which 10 the construction of buildings or structures is commenced on or 11 after January 1, 2012, if such property is intended as a place 12 of business where goods, wares, services, or merchandise is 13 stored or offered for sale at wholesale or retail, unless the 14 property is located in an urban renewal area that includes a 15 division of revenue under Code section 403.19. 16 The bill makes corresponding changes to other provisions in 17 Code section 441.21. 18 -8- LSB 1851XS (5) 84 md/sc 8/ 8