Senate Study Bill 1189 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON BOLKCOM) A BILL FOR An Act providing for the exclusion of costs associated with 1 installation of a geothermal heating or cooling system 2 from a residence’s property value for purposes of property 3 taxation and including applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2675XC (3) 84 rn/sc

S.F. _____ Section 1. Section 441.21, subsection 8, Code 2011, is 1 amended to read as follows: 2 8. a. Any normal and necessary repairs to a building, not 3 amounting to structural replacements or modification, shall not 4 increase the taxable value of the building. This paragraph 5 applies only to repairs of two thousand five hundred dollars 6 or less per building per year. 7 b. Notwithstanding paragraph “a” , any construction or 8 installation of a solar energy system on property classified as 9 agricultural, residential, commercial, or industrial property 10 shall not increase the actual, assessed , and taxable values of 11 the property for five full assessment years. 12 c. (1) As used in this subsection paragraph “b” , “solar 13 energy system” means either of the following: 14 (1) (a) A system of equipment capable of collecting 15 and converting incident solar radiation or wind energy into 16 thermal, mechanical or electrical energy and transforming these 17 forms of energy by a separate apparatus to storage or to a 18 point of use which is constructed or installed after January 19 1, 1978. 20 (2) (b) A system that uses the basic design of the building 21 to maximize solar heat gain during the cold season and to 22 minimize solar heat gain in the hot season and that uses 23 natural means to collect, store, and distribute solar energy 24 which is constructed or installed after January 1, 1981. 25 d. (2) In assessing and valuing the property for tax 26 purposes, the assessor shall disregard any market value added 27 by a solar energy system to a building. The director of 28 revenue shall adopt rules, after consultation with the office 29 of energy independence, specifying the types of equipment and 30 structural components to be included under the guidelines 31 provided in this subsection . 32 c. Notwithstanding paragraph “a” , any new or retrofitted 33 construction or installation of a geothermal heating or cooling 34 system on property classified as residential shall not increase 35 -1- LSB 2675XC (3) 84 rn/sc 1/ 2

S.F. _____ the actual, assessed, and taxable values of the property for 1 ten full assessment years. In assessing and valuing the 2 property for tax purposes, the assessor shall disregard any 3 market value added by a geothermal heating or cooling system to 4 a residential building. For the purposes of this paragraph, 5 to the extent market value would be increased by the addition 6 of mechanical, electrical, plumbing, ductwork, or other 7 equipment, labor, and expenses included in or required for the 8 construction or installation of the geothermal system, they 9 shall also be disregarded, as shall the proportionate value 10 of any well field associated with the system and attributable 11 to the owner. The director of revenue shall adopt rules to 12 implement this paragraph. 13 Sec. 2. APPLICABILITY. This Act applies to assessment years 14 beginning on or after January 1, 2012. 15 EXPLANATION 16 This bill provides that a geothermal heating or cooling 17 system constructed or installed on new or existing residential 18 property will not increase the value of the property for 19 purposes of property taxation for 10 full assessment years. 20 The bill directs the assessor to disregard any market value 21 added by a geothermal heating or cooling system and, to 22 the extent market value would be increased, to disregard 23 mechanical, electrical, plumbing, ductwork, or other 24 equipment, labor, and expenses included in or required for the 25 construction or installation of the geothermal system. The 26 bill provides that the assessed value will also not include 27 the proportionate value of any well field associated with the 28 system and attributable to the owner. 29 The bill applies to assessment years beginning on or after 30 January 1, 2012. 31 -2- LSB 2675XC (3) 84 rn/sc 2/ 2