S.F. 485 Section 1. Section 441.21, subsection 5, Code 2011, is 1 amended to read as follows: 2 5. a. For valuations established as of January 1, 1979, 3 commercial property and industrial property, excluding 4 properties referred to in section 427A.1, subsection 8 , shall 5 be assessed as a percentage of the actual value of each class 6 of property . The percentage shall be determined for each 7 class of property by the director of revenue for the state in 8 accordance with the provisions of this section . For valuations 9 established as of January 1, 1979, the percentage shall be 10 the quotient of the dividend and divisor as defined in this 11 section . The dividend for each class of property shall be the 12 total actual valuation for each class of property established 13 for 1978, plus six percent of the amount so determined. The 14 divisor for each class of property shall be the valuation 15 for each class of property established for 1978, as reported 16 by the assessors on the abstracts of assessment for 1978, 17 plus the amount of value added to the total actual value by 18 the revaluation of existing properties in 1979 as equalized 19 by the director of revenue pursuant to section 441.49 . For 20 valuations established as of January 1, 1979, property valued 21 by the department of revenue pursuant to chapters 428 , 433 , 22 437 , and 438 shall be considered as one class of property and 23 shall be assessed as a percentage of its actual value. The 24 percentage shall be determined by the director of revenue in 25 accordance with the provisions of this section . For valuations 26 established as of January 1, 1979, the percentage shall be 27 the quotient of the dividend and divisor as defined in this 28 section . The dividend shall be the total actual valuation 29 established for 1978 by the department of revenue, plus ten 30 percent of the amount so determined. The divisor for property 31 valued by the department of revenue pursuant to chapters 428 , 32 433 , 437 , and 438 shall be the valuation established for 1978, 33 plus the amount of value added to the total actual value by 34 the revaluation of the property by the department of revenue 35 -1- LSB 1793XS (2) 84 md/sc 1/ 4

S.F. 485 as of January 1, 1979. For valuations established as of 1 January 1, 1980, commercial property and industrial property, 2 excluding properties referred to in section 427A.1, subsection 3 8 , shall be assessed at a percentage of the actual value of 4 each class of property . The percentage shall be determined 5 for each class of property by the director of revenue for the 6 state in accordance with the provisions of this section . For 7 valuations established as of January 1, 1980, the percentage 8 shall be the quotient of the dividend and divisor as defined in 9 this section . The dividend for each class of property shall 10 be the dividend as determined for each class of property for 11 valuations established as of January 1, 1979, adjusted by the 12 product obtained by multiplying the percentage determined 13 for that year by the amount of any additions or deletions to 14 actual value, excluding those resulting from the revaluation 15 of existing properties, as reported by the assessors on the 16 abstracts of assessment for 1979, plus four percent of the 17 amount so determined. The divisor for each class of property 18 shall be the total actual value of all such property in 1979, 19 as equalized by the director of revenue pursuant to section 20 441.49 , plus the amount of value added to the total actual 21 value by the revaluation of existing properties in 1980. The 22 director shall utilize information reported on the abstracts of 23 assessment submitted pursuant to section 441.45 in determining 24 such percentage. For valuations established as of January 1, 25 1980, property valued by the department of revenue pursuant 26 to chapters 428 , 433 , 437 , and 438 shall be assessed at a 27 percentage of its actual value. The percentage shall be 28 determined by the director of revenue in accordance with the 29 provisions of this section . For valuations established as of 30 January 1, 1980, the percentage shall be the quotient of the 31 dividend and divisor as defined in this section . The dividend 32 shall be the total actual valuation established for 1979 by 33 the department of revenue, plus eight percent of the amount so 34 determined. The divisor for property valued by the department 35 -2- LSB 1793XS (2) 84 md/sc 2/ 4

S.F. 485 of revenue pursuant to chapters 428 , 433 , 437 , and 438 shall be 1 the valuation established for 1979, plus the amount of value 2 added to the total actual value by the revaluation of the 3 property by the department of revenue as of January 1, 1980. 4 For valuations established as of January 1, 1981, and each 5 year thereafter, the percentage of actual value as equalized 6 by the director of revenue as provided in section 441.49 at 7 which commercial property and industrial property, excluding 8 properties referred to in section 427A.1, subsection 8 , shall 9 be assessed shall be calculated in accordance with the methods 10 provided herein, except that any references to six percent 11 in this subsection shall be four percent. For valuations 12 established as of January 1, 1981, and each year thereafter, 13 the percentage of actual value at which property valued by 14 the department of revenue pursuant to chapters 428 , 433 , 437 , 15 and 438 shall be assessed shall be calculated in accordance 16 with the methods provided herein, except that any references 17 to ten percent in this subsection shall be eight percent. 18 Beginning with valuations established as of January 1, 1979, 19 and each year thereafter, property valued by the department of 20 revenue pursuant to chapter 434 shall also be assessed at a 21 percentage of its actual value which percentage shall be equal 22 to the percentage determined by the director of revenue for 23 commercial property, industrial property , or property valued by 24 the department of revenue pursuant to chapters 428 , 433 , 437 , 25 and 438 , whichever is lowest. 26 b. For valuations established on or after January 1, 2012, 27 commercial property, excluding properties referred to in 28 section 427A.1, subsection 8 , shall be assessed as a percentage 29 of its actual value. 30 For valuations established for the assessment year beginning 31 January 1, 2012, and each assessment year thereafter, the 32 percentage of actual value as equalized by the director of 33 revenue as provided in section 441.49 at which commercial 34 property shall be assessed shall be ninety-five percent. 35 -3- LSB 1793XS (2) 84 md/sc 3/ 4

S.F. 485 Sec. 2. APPLICABILITY. This Act applies to property tax 1 assessment years beginning on or after January 1, 2012. 2 EXPLANATION 3 This bill changes the property assessment limitation for 4 commercial property. 5 The bill strikes the methodology in Code section 441.21(5) 6 currently used to determine the percentage of actual value 7 at which commercial property is assessed for property tax 8 purposes. The bill provides that for the assessment year 9 beginning January 1, 2012, and each assessment year thereafter, 10 commercial property is assessed at 95 percent of actual value. 11 The bill also makes corresponding changes to other 12 provisions of Code section 441.21, including removing the 13 commercial property valuation limitation from the methodology 14 used to determine the percentage at which property valued by 15 the department of revenue pursuant to Code chapter 434 (railway 16 companies) is assessed. 17 The bill applies to property tax assessment years beginning 18 on or after January 1, 2012. 19 -4- LSB 1793XS (2) 84 md/sc 4/ 4