SENATE FILE 505

BY  FEENSTRA

A BILL FOR

An Act relating to assessment of property for property tax purposes, property assessment protests, powers of the property assessment appeal board, funding of the property assessment appeal board, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 441.21, subsection 1, paragraph a, Code 2011, is amended to read as follows:
   a.  Except as provided in section 405.1, property subject to taxation shall be classified on January 1 of each assessment year according to its primary use on January 1 and not its highest and best use. There shall be only one classification per parcel of property. The land and the buildings on the land shall be considered separate properties if owned by different persons. An assessor shall not classify the land differently than a building located on the land unless the building and the land are owned by different persons or the property consists of an agricultural dwelling located on agricultural land. Land shall be classified as agricultural property if used in good faith primarily for agricultural purposes.  All property subject to taxation shall be valued based on its classification and present primary use at its actual value which shall be entered opposite each item, and, except as otherwise provided in this section, shall be assessed at one hundred percent of its actual value, and the value so assessed shall be taken and considered as the assessed value and taxable value of the property upon which the levy shall be made.
   Sec. 2.  Section 441.21, subsection 1, paragraph b, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   The actual value of all property subject to assessment and taxation shall be the fair and reasonable market value of such property except as otherwise provided in this section. “Market value” is defined as the fair and reasonable exchange in the year in which the property is listed and valued between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and each being familiar with all the facts relating to the particular property. Sale prices of the property or comparable property having the same classification in normal transactions reflecting market value, and the probable availability or unavailability of persons interested in purchasing the property, shall be taken into consideration in arriving at its market value. In arriving at market value, sale prices of property in abnormal transactions not reflecting market value shall not be taken into account, or shall be adjusted to eliminate the effect of factors which distort market value, including but not limited to sales to immediate family of the seller, foreclosure or other forced sales, contract sales, discounted purchase transactions or purchase of adjoining land or other land to be operated as a unit.
   Sec. 3.  Section 441.26, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   The director of revenue shall each year prescribe the form of assessment roll to be used by all assessors in assessing property, in this state, also the form of pages of the assessor’s assessment book. The assessment rolls shall be in a form that will permit entering, separately, the names of all persons assessed, and shall also contain a notice in substantially the following form:
  If you are not satisfied that the foregoing assessment is correct, you may file a protest against such assessment with the board of review on or after April 16, to and including May 5 20, of the year of the assessment, such protest to be confined to the grounds specified in section 441.37.

Dated:  ... day of ... (month), ... (year)

..............

County/City Assessor.
   Sec. 4.  Section 441.37, subsection 1, Code 2011, is amended to read as follows:
   1.  Any property owner or aggrieved taxpayer who is dissatisfied with the owner’s or taxpayer’s assessment may file a protest against such assessment with the board of review on or after April 16, to and including May 5 20, of the year of the assessment. In any county which has been declared to be a disaster area by proper federal authorities after March 1 and prior to May 20 June 5 of said year of assessment, the board of review shall be authorized to remain in session until June 15 30 and the time for filing a protest shall be extended to and include the period from May 25 June 10 to June 5 20 of such year. Said The protest shall be in writing and signed by the one protesting or by the protester’s duly authorized agent. The taxpayer may have an oral hearing thereon on the protest if request therefor request for the oral hearing is made in writingis made at the time of filing the protest. Said The protest must be confined to one or more of the following grounds:
   a.
  That said assessment is not equitable as compared with assessments of other like property in the taxing district. When this ground is relied upon as the basis of a protest the legal description and assessments of a representative number of comparable properties, as described by the aggrieved taxpayer shall be listed on the protest, otherwise said protest shall not be considered on this ground. For odd-numbered assessment years and even-numbered assessment years for properties having a change in actual value from the previous assessment year:
   b.  (1)  That the property is assessed for more than the value authorized by law, stating. When this ground is relied upon, the specific amount which the protesting party believes the property to be overassessed, and the amount which the party considers to be its actual value andthe amount the party considers a fair assessment shall be stated.
   c.  (2)  That the property is not assessable, is exempt from taxes, or is misclassified and stating the reasons for the protest.
   d.  (3)  That there is an error in the assessment and state the specific alleged error.  When this ground is relied upon, it may include but is not limited to listing errors, including clerical or mathematical errors, listing claims of inequity in the assessment, or listing any ground under this paragraph “a” that results in an error in the assessment.
   e.  (4)  That there is fraud in the assessment which shall be specifically stated.
   In addition to the above, the property owner may protest annually to the board of review under the provisions of section 441.35, but such protest shall be in the same manner and upon the same terms as heretofore prescribed in this section.
   The property owner or aggrieved taxpayer may combine on one form protests of assessment on parcels separately assessed if the same grounds are relied upon as the basis for protesting each separate assessment. If an oral hearing is requested on more than one of such protests, the person making the combined protests may request that the oral hearings be held consecutively.
   b.  For even-numbered assessment years for properties having no change in assessment from the previous assessment year, that there has been a decrease in actual value from the previous assessment year. When this ground is relied upon, the protesting party shall provide specific evidence that the market value of the property is less than the assessed value. Such protest shall be made under the provisions of section 441.35, but in the same manner and upon the same terms as described in this section.
   Sec. 5.  Section 441.37, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  1A.  The property owner or aggrieved taxpayer may combine on one form protests of assessment on parcels separately assessed if the same grounds are relied upon as the basis for protesting each separate assessment. If an oral hearing is requested on more than one of such protests, the person making the combined protests may request that the oral hearings be held consecutively.
   Sec. 6.  Section 441.37, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  The property assessment appeal board shall adopt rules pursuant to chapter 17A to implement the provisions of this section relating to protests of assessment.
   Sec. 7.  Section 441.73, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  5.  For purposes of this section, “litigation expenses” includes the operational costs of the property assessment appeal board created in section 421.1A.
   Sec. 8.  APPLICABILITY.  The sections of this Act amending sections 441.21 and 441.37 apply to property tax assessment years beginning on or after January 1, 2012.
EXPLANATION
   This bill specifies that except for certain housing development property, all property subject to taxation shall be classified on January 1 of each assessment year according to its primary use on January 1 and not its highest and best use. The bill also specifies that there shall be only one classification per property. The bill provides that land and the buildings on the land shall be considered separate properties if owned by different persons. Under the bill, an assessor shall not classify the land differently than a building located on the land unless the building and the land are owned by different persons or the property consists of an agricultural dwelling located on agricultural land. The bill specifies that land is classified as agricultural property if used in good faith primarily for agricultural purposes. The bill specifies that when determining market value of a property using sales of comparable properties, only properties with the same property tax classification may be used.
   The bill amends several of the dates relating to the protest period for the local board of review under Code section 441.37, including the dates for filing a protest. The bill also amends provisions relating to the grounds upon which a property assessment protest may be brought. The bill strikes a provision that allows a protest on the ground that the assessment is not equitable as compared with assessments of other like property in the taxing district. The bill specifies that for odd-numbered assessment years and even-numbered assessment years for properties having a different assessment from the previous assessment year protests may only be brought by asserting that the assessment is more than the value authorized by law, that the property is not assessable, is exempt from taxes, or is misclassified, that there is an error in the assessment, or that there is fraud in the assessment. A protest on the ground that there is an error in the assessment may include but is not limited to listing errors, including clerical or mathematical errors, claims of inequity in the assessment, or any other specified ground that results in an error in the assessment. 
   For even-numbered assessment years for properties having no change in assessment from the previous assessment year, a protest under the bill is only allowed on the ground that there has been a decrease in actual value from the previous assessment year. The bill requires such a protest in the even-numbered year to be made under the provisions of Code section 441.35, but in the same manner and upon the same terms as described in Code section 441.37.
   The bill requires the property assessment appeal board to adopt rules pursuant to Code chapter 17A to implement the provisions of Code section 441.37 relating to protests of assessment.
   The bill specifies that the operational costs of the property assessment appeal board are litigation expenses for purposes of Code section 441.73, and that such costs shall be paid from the litigation expense fund under the control of the department of revenue.
   The bill, except the section of the bill amending Code section 441.73, applies to property tax assessment years beginning on or after January 1, 2012.