SENATE FILE _____

BY  (PROPOSED COMMITTEE ON LOCAL GOVERNMENT BILL BY CHAIRPERSON WILHELM)

A BILL FOR

An Act relating to the powers and duties of county treasurers related to real property by modifying provisions for the payment of taxes and assessments in installments, modifying provisions providing for the apportionment of installment payments on delinquent taxes, modifying certain tax payment provisions following a tax sale, and specifying procedures for the payment of certain prorated taxes and assessments following a real estate transaction.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 161A.35, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   If the owner of any premises against which a levy exceeding one
 
five hundred dollars has been made and certified shall, within thirty days from the date of such levy, agree in writing in a separate agreement, that in consideration of having a right to pay the owner’s assessment in installments, the owner will not make any objection as to the legality of the assessment for benefit, or the levy of the taxes against the owner’s property, then such owner shall have the following options:
    Sec. 2.  Section 311.17, subsection 1, Code 2011, is amended to read as follows:
   1.  If an owner other than the state or a county or city, of any tracts of land on which the assessment is more than one
 
five hundred dollars, shall, within twenty days from the date of the assessment, agree in writing filed in the office of the county auditor, that in consideration of the owner having the right to pay the assessment in installments, the owner will not make any objection of illegality or irregularity as to the assessment upon the real estate, and will pay the assessment plus interest, the assessment shall be payable in ten equal installments. The first installment shall be payable on the date of the agreement. The other installments shall be paid annually at the same time and in the same manner as the September semiannual payment of ordinary taxes with interest accruing as provided in section 384.65, subsection 3. The rate of interest shall be as established by the board, but not exceeding that permitted by chapter 74A.
    Sec. 3.  Section 311.19, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   Assessments of one
 
five hundred dollars or less against any tract of land, and assessments against lands owned by the state, county, or city, shall be due and payable from the date of levy by the board of supervisors, or in the case of any appeal, from the date of final confirmation of the levy by the court.
    Sec. 4.  Section 331.384, subsection 3, Code 2011, is amended to read as follows:
   3.  If any amount assessed against property under this section exceeds one
 
five hundred dollars, a county may permit the assessment to be paid in up to ten annual installments in the same manner and with the same interest rates provided for assessments against benefited property under chapter 384, division IV.
    Sec. 5.  Section 357.20, Code 2011, is amended to read as follows:
   357.20  Due date —— bonds.
   Assessments of less than one
 
five hundred dollars
 
or less will come due at the first taxpaying date after the approval of the final assessment, and assessments of one hundred dollars or more
 
than five hundred dollars may be paid in ten annual installments with interest on the unpaid balance at a rate not exceeding that permitted by chapter 74A. The board of supervisors shall issue bonds against the completed assessment in an amount equal to the total cost of the project, so that the amount of the assessment will be approximately ten percent greater than the amount of the bonds.
    Sec. 6.  Section 358.16, subsection 3, Code 2011, is amended to read as follows:
   3.  If any amount assessed against property pursuant to this section will exceed one
 
five hundred dollars, the board of trustees may permit the assessment to be paid in up to ten annual installments, in the manner and with the same interest rates as provided for assessments against benefited property under chapter 384, division IV.
    Sec. 7.  Section 364.13, Code 2011, is amended to read as follows:
   364.13  Installments.
   If any amount assessed against property under section 364.12 will exceed one
 
five hundred dollars, a city may permit the assessment to be paid in up to ten annual installments, in the same manner and with the same interest rates provided for assessments against benefited property under chapter 384, division IV.
    Sec. 8.  Section 384.60, subsection 1, paragraph b, Code 2011, is amended to read as follows:
   b.  State the number of annual installments, not exceeding fifteen, into which assessments of one
 
more than five hundred dollars or more are divided.
    Sec. 9.  Section 384.65, subsection 1, Code 2011, is amended to read as follows:
   1.  The first installment of each assessment, or the total amount if less than one
 
five hundred dollars
 
or less, is due and payable on July 1 next succeeding the date of the levy, unless the assessment is filed with the county treasurer after May 31 in any year. The first installment shall bear interest on the whole unpaid assessment from the date of acceptance of the work by the council to the first day of December following the due date.
    Sec. 10.  Section 435.24, subsection 6, paragraph b, Code 2011, is amended to read as follows:
   b.  Partial payment of taxes which are delinquent may be made to the county treasurer. For the installment being paid, payment shall first be applied toward any interest, fees, and costs accrued and the remainder applied to the tax due. A partial payment must equal or exceed the interest, fees, and costs of the installment being paid. A partial payment made under this paragraph shall be apportioned in accordance with section 445.57, however, such partial payment may, at the discretion of the county treasurer, be apportioned either on or before the tenth day of the month following the receipt of the partial payment or on or before the tenth day of the month following the due date of the next semiannual tax installment. If the payment does not include the whole of any installment of the delinquent tax, the unpaid tax shall continue to accrue interest pursuant to section 445.39. Partial payment shall not be permitted in lieu of redemption if the property has been sold for taxes under chapter 446 and under any circumstances shall not constitute an extension of the time period for a sale under chapter 446.
    Sec. 11.  Section 445.36A, subsection 2, Code 2011, is amended to read as follows:
   2.  Partial payment of taxes which are delinquent may be made to the county treasurer. For the installment being paid, payment shall first be applied to any interest, fees, and costs accrued and the remainder applied to the taxes due. A partial payment must equal or exceed the amount of interest, fees, and costs of the installment being paid. A partial payment made under this subsection shall be apportioned in accordance with section 445.57, however, such partial payment may, at the discretion of the county treasurer, be apportioned either on or before the tenth day of the month following the receipt of the partial payment or on or before the tenth day of the month following the due date of the next semiannual tax installment. If the payment does not include the whole of any installment of the delinquent tax, the unpaid tax shall continue to accrue interest pursuant to section 445.39. Partial payment shall not be permitted in lieu of redemption if the property has been sold for taxes under chapter 446 and under any circumstances shall not constitute an extension of the time period for a sale under chapter 446.
    Sec. 12.  Section 445.57, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   On or before the tenth day of each month, the county treasurer shall apportion all taxes collected during the preceding month, except partial payment amounts collected pursuant to section 445.36A, subsection 1 and, partial payments collected and not yet designated by the county treasurer for apportionment pursuant to section 445.36A, subsection 2, partial payments collected pursuant to section 435.24, subsection 6, paragraph “a”,
 
and partial payments collected and not yet designated by the county treasurer for apportionment pursuant to section 435.24, subsection 6, paragraph “b”, among the several funds to which they belong according to the amount levied for each fund, and shall apportion the interest, fees, and costs on the taxes to the general fund, and shall enter those amounts upon the treasurer’s cash account, and report the amounts to the county auditor.
    Sec. 13.  Section 446.32, Code 2011, is amended to read as follows:
   446.32  Payment of subsequent taxes by purchaser.
   The county treasurer shall provide to the purchaser of a parcel sold at tax sale a receipt for the total amount paid by the purchaser after the date of purchase for a subsequent year. Taxes for a subsequent year may be paid by the purchaser beginning
 
one month and fourteen days following the date from which an installment becomes delinquent as provided in section 445.37. Notwithstanding any provision to the contrary, a subsequent payment must be received and recorded by the treasurer in the county system no later than five
 
5:00 p.m. on the last business day of the month for interest for that month to accrue and be added to the amount due under section 447.1. However, the treasurer may establish a deadline for receipt of subsequent payments that is other than five
 
5:00 p.m. on the last business day of the month to allow for timely processing of the subsequent payments. Late interest shall be calculated through the date that the subsequent payment is recorded by the treasurer in the county system. In no instance shall the date of postmark of a subsequent payment be used by a treasurer either to calculate interest or to determine whether interest shall accrue on the subsequent payment.
    Sec. 14.  Section 468.57, subsection 1, Code Supplement 2011, is amended to read as follows:
   1.  If the owner of any land against which a levy exceeding one
 
five hundred dollars has been made and certified shall, within thirty days from the date of such levy, agree in writing endorsed upon any improvement certificate referred to in section 468.70, or in a separate agreement, that in consideration of having a right to pay the owner’s assessment in installments, the owner will not make any objection as to the legality of the assessment for benefit, or the levy of the taxes against the property, then such owner shall have the following options:
   a.  To pay one-third of the amount of the assessment at the time of filing the agreement; one-third within twenty days after the engineer in charge certifies to the auditor that the improvement is one-half completed; and the remaining one-third within twenty days after the improvement has been completed and accepted by the board. All installments shall be without interest if paid at said times, otherwise the assessments shall bear interest from the date of the levy at a rate determined by the board notwithstanding chapter 74A, payable annually, and be collected as other taxes on real estate, with like interest for delinquency.
   b.  To pay the assessments in not less than ten nor more than twenty equal installments, with the number of payments and interest rate determined by the board, notwithstanding chapter 74A. The first installment of each assessment, or the total amount if less than one
 
five hundred dollars
 
or less, is due and payable on July 1 next succeeding the date of the levy, unless the assessment is filed with the county treasurer after May 31 in any year. The first installment shall bear interest on the whole unpaid assessment from the date of the levy as set by the board to the first day of December following the due date. The succeeding annual installments, with interest on the whole unpaid amount, to the first day of December following the due date, are respectively due on July 1 annually, and must be paid at the same time and in the same manner as the first semiannual payment of ordinary taxes. All future installments of an assessment may be paid on any date by payment of the then outstanding balance plus interest to the next December 1, or additional annual installments may be paid after the current installment has been paid before December 1 without interest. A payment must be for the full amount of the next installment. If installments remain to be paid, the next annual installment with interest added to December 1 will be due. After December 1, if a drainage assessment is not delinquent, a property owner may pay one-half or all of the next annual installment of principal and interest of a drainage assessment prior to the delinquency date of the installment. When the next installment has been paid in full, successive principal installments may be prepaid. The county treasurer shall accept the payments of the drainage assessment, and shall credit the next annual installment or future installments of the drainage assessment to the extent of the payment or payments, and shall remit the payments to the drainage fund. If a property owner elects to pay one or more principal installments in advance, the pay schedule shall be advanced by the number of principal installments prepaid. Each installment of an assessment with interest on the unpaid balance is delinquent from October 1 after its due date. However, when the last day of September is a Saturday or Sunday, that amount shall be delinquent from the second business day of October. Taxes assessed pursuant to this chapter which become delinquent shall bear the same delinquent interest as ordinary taxes. When collected, the interest must be credited to the same drainage fund as the drainage special assessment.
    Sec. 15.  NEW SECTION.  558.47  Prorated property taxes —— payment.
   When real property is transferred and prorated property taxes or assessments on the property are calculated as part of the transaction for payment by either the grantor or the grantee, the closing agent, real estate agent, or attorney shall, upon the receipt of any such payment for property taxes or assessments, pay the entire amount to the county treasurer or, if provided for in the transaction, to the designated escrow agent. If paid to the county treasurer, the county treasurer shall apply the amount to the tax liability of the property in the manner described in section 445.36A.
EXPLANATION
   This bill makes several changes to the powers and duties of county treasurers relating to real property.
   The bill amends Code section 161A.35, relating to installment payments on amounts levied against property for watershed protection and flood prevention improvements, by increasing from $100 to $500 the amount levied against a property in order to allow installment payments.
   The bill amends Code section 311.17, relating to secondary road assessment payments, by increasing from more than $100 to more than $500 the amount owed by the taxpayer before the amount may be paid in installments. The bill also specifies that such assessments of $500 or less are due and payable from the date of levy by the board of supervisors, or in the case of any appeal, from the date of final confirmation of the levy by the court.
   The bill amends Code sections 331.384 and 364.13, relating to special assessments on property for the abatement of specified public health and safety hazards, by increasing from more than $100 to more than $500 the amount owed by the taxpayer before the amount may be paid in installments.
   The bill amends Code section 357.20 to increase from $100 or more to $500 or more the amount owed by a taxpayer in a water district before the amount may be paid in installments.
   The bill amends Code section 358.16 to increase from $100 or more to $500 or more the amount owed by a taxpayer in a sanitary district before the amount may be paid in installments.
   The bill amends Code chapter 384, relating to city special assessments, to increase from $100 or more to $500 or more the amount owed by a taxpayer for a city special assessment before the amount may be paid in installments.
   Current Code sections 435.24(6)(b) and 445.36A(2) allow for the partial payment of taxes which are delinquent to the county treasurer. Current Code section 445.57 provides that such partial payments are to be apportioned monthly to the various local taxing entities. The bill amends Code sections 435.24(6)(b) and 445.36A(2) to allow the county treasurer to apportion such partial payments to the various local taxing entities either on a monthly basis after such amounts are collected or following the due date of the next semiannual tax installment.
   Current Code section 446.32 allows the purchaser of a parcel sold at tax sale to pay taxes on the parcel for a subsequent year beginning 14 days following the date from which a subsequent year’s installment becomes delinquent as provided in Code section 445.37. The bill changes the period of time for when the purchaser may begin paying taxes for a subsequent year to one month and 14 days following the date from which an installment becomes delinquent.
   The bill enacts new Code section 558.47. New Code section 558.47 provides that when real property is transferred and prorated property taxes or assessments on the property are calculated as part of the transaction for payment by either the grantor or the grantee, the closing agent, real estate agent, or attorney shall, upon the receipt of any such payment for property taxes or assessments, pay the entire amount to the county treasurer or, if provided for in the transaction, to the designated escrow agent. If paid to the county treasurer, the county treasurer shall apply the amount to the tax liability of the property in the manner described in Code section 445.36A.