Senate Study Bill 3205 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON BOLKCOM) A BILL FOR An Act relating to state and local taxation by providing for 1 an increase in the amount of the earned income tax credit, 2 establishing and modifying property assessment limitations, 3 modifying the assessment and taxation of telecommunications 4 company property, establishing property tax credits for 5 certain commercial, industrial, and railway property, 6 establishing a multiresidential property classification, 7 providing penalties, making appropriations, and including 8 effective date, retroactive applicability, and other 9 applicability provisions. 10 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 11 TLSB 6143XC (13) 84 md/sc

S.F. _____ DIVISION I 1 EARNED INCOME TAX CREDIT 2 Section 1. Section 422.12B, subsection 1, Code 2011, is 3 amended to read as follows: 4 1. The taxes imposed under this division less the credits 5 allowed under section 422.12 shall be reduced by an earned 6 income credit equal to seven fifteen percent of the federal 7 earned income credit provided in section 32 of the Internal 8 Revenue Code. Any credit in excess of the tax liability is 9 refundable. 10 Sec. 2. RETROACTIVE APPLICABILITY. This division of this 11 Act applies retroactively to January 1, 2012, for tax years 12 beginning on or after that date. 13 DIVISION II 14 PROPERTY TAX ASSESSMENT LIMITATIONS 15 Sec. 3. Section 441.21, subsection 4, Code Supplement 2011, 16 is amended to read as follows: 17 4. For valuations established as of January 1, 1979, 18 the percentage of actual value at which agricultural and 19 residential property shall be assessed shall be the quotient 20 of the dividend and divisor as defined in this section . The 21 dividend for each class of property shall be the dividend 22 as determined for each class of property for valuations 23 established as of January 1, 1978, adjusted by the product 24 obtained by multiplying the percentage determined for that 25 year by the amount of any additions or deletions to actual 26 value, excluding those resulting from the revaluation of 27 existing properties, as reported by the assessors on the 28 abstracts of assessment for 1978, plus six percent of the 29 amount so determined. However, if the difference between the 30 dividend so determined for either class of property and the 31 dividend for that class of property for valuations established 32 as of January 1, 1978, adjusted by the product obtained by 33 multiplying the percentage determined for that year by the 34 amount of any additions or deletions to actual value, excluding 35 -1- LSB 6143XC (13) 84 md/sc 1/ 44

S.F. _____ those resulting from the revaluation of existing properties, 1 as reported by the assessors on the abstracts of assessment 2 for 1978, is less than six percent, the 1979 dividend for the 3 other class of property shall be the dividend as determined for 4 that class of property for valuations established as of January 5 1, 1978, adjusted by the product obtained by multiplying 6 the percentage determined for that year by the amount of 7 any additions or deletions to actual value, excluding those 8 resulting from the revaluation of existing properties, as 9 reported by the assessors on the abstracts of assessment for 10 1978, plus a percentage of the amount so determined which is 11 equal to the percentage by which the dividend as determined 12 for the other class of property for valuations established 13 as of January 1, 1978, adjusted by the product obtained by 14 multiplying the percentage determined for that year by the 15 amount of any additions or deletions to actual value, excluding 16 those resulting from the revaluation of existing properties, 17 as reported by the assessors on the abstracts of assessment 18 for 1978, is increased in arriving at the 1979 dividend for 19 the other class of property. The divisor for each class 20 of property shall be the total actual value of all such 21 property in the state in the preceding year, as reported by 22 the assessors on the abstracts of assessment submitted for 23 1978, plus the amount of value added to said total actual 24 value by the revaluation of existing properties in 1979 as 25 equalized by the director of revenue pursuant to section 26 441.49 . The director shall utilize information reported on 27 abstracts of assessment submitted pursuant to section 441.45 28 in determining such percentage. For valuations established 29 as of January 1, 1980, and each assessment year thereafter 30 beginning before January 1, 2013 , the percentage of actual 31 value as equalized by the director of revenue as provided 32 in section 441.49 at which agricultural and residential 33 property shall be assessed shall be calculated in accordance 34 with the methods provided herein including the limitation of 35 -2- LSB 6143XC (13) 84 md/sc 2/ 44

S.F. _____ increases in agricultural and residential assessed values to 1 the percentage increase of the other class of property if the 2 other class increases less than the allowable limit adjusted to 3 include the applicable and current values as equalized by the 4 director of revenue, except that any references to six percent 5 in this subsection shall be four percent. For valuations 6 established as of January 1, 2013, and each assessment year 7 thereafter, the percentage of actual value as equalized by the 8 director of revenue as provided in section 441.49 at which 9 agricultural and residential property shall be assessed shall 10 be calculated in accordance with the methods provided herein 11 including the limitation of increases in agricultural and 12 residential assessed values to the percentage increase of the 13 other class of property if the other class increases less 14 than the allowable limit adjusted to include the applicable 15 and current values as equalized by the director of revenue, 16 except that any references to six percent in this subsection 17 shall be three percent. However, for valuations established 18 for the assessment year beginning January 1, 2013, and each 19 assessment year thereafter, if the percentage of actual value 20 at which residential property shall be assessed, as calculated 21 in accordance with the methods provided herein, exceeds sixty 22 percent or is less than fifty percent the director of revenue 23 shall decrease the percentage to sixty percent or increase 24 the percentage to fifty percent, as applicable. For purposes 25 of determining valuations in assessment years beginning on 26 or after January 1, 2014, the percentage for the prior year 27 as determined under this subsection before any increase or 28 decrease by the director of revenue, if necessary, shall be the 29 percentage used in calculating the dividend for that assessment 30 year. 31 Sec. 4. SAVINGS PROVISION. This division of this Act, 32 pursuant to section 4.13, does not affect the operation of, 33 or prohibit the application of, prior provisions of section 34 441.21, or rules adopted under chapter 17A to administer prior 35 -3- LSB 6143XC (13) 84 md/sc 3/ 44

S.F. _____ provisions of section 441.21, for assessment years beginning 1 before January 1, 2013, and for duties, powers, protests, 2 appeals, proceedings, actions, or remedies attributable to an 3 assessment year beginning before January 1, 2013. 4 Sec. 5. APPLICABILITY. This division of this Act applies to 5 assessment years beginning on or after January 1, 2013. 6 DIVISION III 7 TELECOMMUNICATIONS PROPERTY TAX 8 Sec. 6. Section 427A.1, subsection 1, paragraph h, Code 9 2011, is amended to read as follows: 10 h. Property assessed by the department of revenue pursuant 11 to sections 428.24 to 428.29 , or chapters 433 , 434 , 437 , 437A , 12 and 438 . 13 Sec. 7. Section 433.4, Code 2011, is amended to read as 14 follows: 15 433.4 Assessment. 16 1. The director of revenue shall on or before October 31 17 each year, proceed to find the actual value of the property 18 of these companies in this state used by the companies in the 19 transaction of telegraph and telephone business , taking into 20 consideration the information obtained from the statements 21 required, and any further information the director can obtain, 22 using the same as a means for determining the actual cash value 23 of the property of these companies within this state. The 24 director shall also take into consideration the valuation of 25 all property of these companies, including franchises and the 26 use of the property in connection with lines outside the state, 27 and making these deductions as may be necessary on account of 28 extra value of property outside the state as compared with 29 the value of property in the state, in order that the actual 30 cash value of the property of the company within this state 31 may be ascertained. The assessment shall include all property 32 of every kind and character whatsoever, real, personal, or 33 mixed, used by the companies in the transaction of telegraph 34 and telephone business; and the The property so included in 35 -4- LSB 6143XC (13) 84 md/sc 4/ 44

S.F. _____ the assessment shall not be taxed in any other manner than as 1 provided in this chapter . 2 2. a. Except as provided in paragraph “c ”, for assessment 3 years beginning on or after January 1, 2013, a company’s 4 property, excluding the property identified in paragraph “b” 5 as exempt from taxation, shall be subject to assessment and 6 taxation under this chapter by the director of revenue in 7 the same manner as property assessed and taxed as commercial 8 property under chapters 427, 427A, 427B, 428, and 441. 9 b. All of the following is exempt from taxation and shall 10 not be assessed for taxation under this chapter: 11 (1) Central office equipment. 12 (2) Qualified telephone company property. However, 13 qualified telephone company property shall be valued and 14 included in the company’s assessment for the assessment years, 15 and to the extent specified, in paragraph “c” . 16 c. For assessment years beginning on or after January 1, 17 2013, the director of revenue shall include as part of the 18 actual value determined under paragraph “a” for the applicable 19 assessment year, the following: 20 (1) For the assessment year beginning January 1, 2013, an 21 amount equal to the actual value of the company’s qualified 22 telephone company property that exceeds four million dollars. 23 (2) For the assessment year beginning January 1, 2014, an 24 amount equal to the actual value of the company’s qualified 25 telephone company property that exceeds eight million dollars. 26 (3) For the assessment year beginning January 1, 2015, an 27 amount equal to the actual value of the company’s qualified 28 telephone company property that exceeds twelve million dollars. 29 (4) For the assessment year beginning January 1, 2016, an 30 amount equal to the actual value of the company’s qualified 31 telephone company property that exceeds sixteen million 32 dollars. 33 (5) For the assessment year beginning January 1, 2017, and 34 each assessment year thereafter, an amount equal to the actual 35 -5- LSB 6143XC (13) 84 md/sc 5/ 44

S.F. _____ value of the company’s qualified telephone company property 1 that exceeds twenty million dollars. 2 Sec. 8. Section 433.12, Code 2011, is amended by adding the 3 following new subsections: 4 NEW SUBSECTION . 1A. As used in this chapter, “central 5 office equipment” means motor vehicles, aircraft, tools and 6 other work equipment, furniture, office equipment, general 7 purpose computers, central office switching equipment, 8 nondigital switching equipment, digital electronic switching 9 equipment, operator systems, central office transmission 10 equipment, radio systems, circuit equipment, information 11 origination/termination equipment, station apparatus, customer 12 premises wiring, large private branch exchanges, public 13 telephone terminal equipment, and other terminal equipment, 14 within the meaning of the telecommunications companies account 15 provisions of 47 C.F.R. pt. 32, in effect on the effective date 16 of this division of this Act. 17 NEW SUBSECTION . 3. As used in this chapter, “qualified 18 telephone company property” means poles, aerial cable, 19 underground cable, buried cable, submarine and deep sea cable, 20 intrabuilding network cable, aerial wire, and conduit systems 21 within the meaning of the telecommunications companies account 22 provisions of 47 C.F.R. pt. 32, in effect on the effective date 23 of this division of this Act. 24 Sec. 9. Section 441.21, subsection 5, Code Supplement 2011, 25 is amended to read as follows: 26 5. For valuations established as of January 1, 1979, 27 commercial property and industrial property, excluding 28 properties referred to in section 427A.1, subsection 8 , shall 29 be assessed as a percentage of the actual value of each class 30 of property. The percentage shall be determined for each 31 class of property by the director of revenue for the state in 32 accordance with the provisions of this section . For valuations 33 established as of January 1, 1979, the percentage shall be 34 the quotient of the dividend and divisor as defined in this 35 -6- LSB 6143XC (13) 84 md/sc 6/ 44

S.F. _____ section . The dividend for each class of property shall be the 1 total actual valuation for each class of property established 2 for 1978, plus six percent of the amount so determined. The 3 divisor for each class of property shall be the valuation 4 for each class of property established for 1978, as reported 5 by the assessors on the abstracts of assessment for 1978, 6 plus the amount of value added to the total actual value by 7 the revaluation of existing properties in 1979 as equalized 8 by the director of revenue pursuant to section 441.49 . For 9 valuations established as of January 1, 1979, property valued 10 by the department of revenue pursuant to chapters 428 , 433 , 11 437 , and 438 shall be considered as one class of property and 12 shall be assessed as a percentage of its actual value. The 13 percentage shall be determined by the director of revenue in 14 accordance with the provisions of this section . For valuations 15 established as of January 1, 1979, the percentage shall be 16 the quotient of the dividend and divisor as defined in this 17 section . The dividend shall be the total actual valuation 18 established for 1978 by the department of revenue, plus ten 19 percent of the amount so determined. The divisor for property 20 valued by the department of revenue pursuant to chapters 428 , 21 433 , 437 , and 438 shall be the valuation established for 1978, 22 plus the amount of value added to the total actual value by 23 the revaluation of the property by the department of revenue 24 as of January 1, 1979. For valuations established as of 25 January 1, 1980, commercial property and industrial property, 26 excluding properties referred to in section 427A.1, subsection 27 8 , shall be assessed at a percentage of the actual value of 28 each class of property. The percentage shall be determined 29 for each class of property by the director of revenue for the 30 state in accordance with the provisions of this section . For 31 valuations established as of January 1, 1980, the percentage 32 shall be the quotient of the dividend and divisor as defined in 33 this section . The dividend for each class of property shall 34 be the dividend as determined for each class of property for 35 -7- LSB 6143XC (13) 84 md/sc 7/ 44

S.F. _____ valuations established as of January 1, 1979, adjusted by the 1 product obtained by multiplying the percentage determined 2 for that year by the amount of any additions or deletions to 3 actual value, excluding those resulting from the revaluation 4 of existing properties, as reported by the assessors on the 5 abstracts of assessment for 1979, plus four percent of the 6 amount so determined. The divisor for each class of property 7 shall be the total actual value of all such property in 1979, 8 as equalized by the director of revenue pursuant to section 9 441.49 , plus the amount of value added to the total actual 10 value by the revaluation of existing properties in 1980. The 11 director shall utilize information reported on the abstracts of 12 assessment submitted pursuant to section 441.45 in determining 13 such percentage. For valuations established as of January 1, 14 1980, property valued by the department of revenue pursuant 15 to chapters 428 , 433 , 437 , and 438 shall be assessed at a 16 percentage of its actual value. The percentage shall be 17 determined by the director of revenue in accordance with the 18 provisions of this section . For valuations established as of 19 January 1, 1980, the percentage shall be the quotient of the 20 dividend and divisor as defined in this section . The dividend 21 shall be the total actual valuation established for 1979 by 22 the department of revenue, plus eight percent of the amount so 23 determined. The divisor for property valued by the department 24 of revenue pursuant to chapters 428 , 433 , 437 , and 438 shall be 25 the valuation established for 1979, plus the amount of value 26 added to the total actual value by the revaluation of the 27 property by the department of revenue as of January 1, 1980. 28 For valuations established as of January 1, 1981, and each 29 year thereafter, the percentage of actual value as equalized 30 by the director of revenue as provided in section 441.49 at 31 which commercial property and industrial property, excluding 32 properties referred to in section 427A.1, subsection 8 , shall 33 be assessed shall be calculated in accordance with the methods 34 provided herein, except that any references to six percent 35 -8- LSB 6143XC (13) 84 md/sc 8/ 44

S.F. _____ in this subsection shall be four percent. For valuations 1 established as of January 1, 1981, and each year thereafter, 2 the percentage of actual value at which property valued by the 3 department of revenue pursuant to chapters 428 , 433 , 437 , and 4 438 shall be assessed shall be calculated in accordance with 5 the methods provided herein, except that any references to 6 ten percent in this subsection shall be eight percent. For 7 assessment years beginning on or after January 1, 2013, the 8 percentage of actual value at which property valued by the 9 department of revenue pursuant to chapters 428, 433, 437, 10 and 438 shall be assessed shall be calculated using property 11 valuations for the applicable assessment years that include 12 the total value of property exempt from taxation under section 13 433.4, subsection 2, paragraph “b” , notwithstanding section 14 433.4, subsection 2, paragraph “c” . Beginning with valuations 15 established as of January 1, 1979, and each year thereafter, 16 property valued by the department of revenue pursuant to 17 chapter 434 shall also be assessed at a percentage of its 18 actual value which percentage shall be equal to the percentage 19 determined by the director of revenue for commercial property, 20 industrial property, or property valued by the department of 21 revenue pursuant to chapters 428 , 433 , 437 , and 438 , whichever 22 is lowest. 23 Sec. 10. Section 476.1D, subsection 10, Code Supplement 24 2011, is amended by striking the subsection. 25 Sec. 11. PROPERTY TAXATION OF TELECOMMUNICATIONS COMPANIES 26 —— REPORT. The department of revenue, in consultation 27 with the department of management, representatives of the 28 telecommunications industry, and other interested stakeholders, 29 shall study the current system of assessing telecommunications 30 property and levying property tax against telecommunications 31 companies and make recommendations for changes. The 32 department of revenue shall prepare and file a report detailing 33 recommendations for changes to the current system of assessing 34 telecommunications property and levying property tax against 35 -9- LSB 6143XC (13) 84 md/sc 9/ 44

S.F. _____ telecommunications companies. The report shall be filed by the 1 department of revenue with the chairpersons and ranking members 2 of the ways and means committees of the senate and the house 3 of representatives and with the legislative services agency by 4 January 11, 2013. 5 Sec. 12. SAVINGS PROVISION. This division of this Act, 6 pursuant to section 4.13, does not affect the operation of, 7 or prohibit the application of, prior provisions of chapter 8 433, or rules adopted under chapter 17A to administer prior 9 provisions of chapter 433, for assessment years beginning 10 before January 1, 2013, and for duties, powers, protests, 11 appeals, proceedings, actions, or remedies attributable to an 12 assessment year beginning before January 1, 2013. 13 Sec. 13. EFFECTIVE DATE. 14 1. Except as provided in subsection 2, this division of this 15 Act takes effect July 1, 2012. 16 2. The section of this division of this Act amending section 17 476.1D takes effect July 1, 2016. 18 Sec. 14. APPLICABILITY. 19 1. Except as provided in subsection 2, this division of this 20 Act applies to assessment years beginning on or after January 21 1, 2013. 22 2. The section of this division of this Act amending section 23 476.1D applies to assessment years beginning on or after 24 January 1, 2017. 25 DIVISION IV 26 BUSINESS PROPERTY TAX CREDIT 27 Sec. 15. Section 331.512, Code 2011, is amended by adding 28 the following new subsection: 29 NEW SUBSECTION . 13A. Carry out duties relating to the 30 business property tax credit as provided in chapter 426C. 31 Sec. 16. Section 331.559, Code 2011, is amended by adding 32 the following new subsection: 33 NEW SUBSECTION . 14A. Carry out duties relating to the 34 business property tax credit as provided in chapter 426C. 35 -10- LSB 6143XC (13) 84 md/sc 10/ 44

S.F. _____ Sec. 17. NEW SECTION . 426C.1 Definitions. 1 For the purposes of this chapter, unless the context 2 otherwise requires: 3 1. “Contiguous parcels” means any of the following: 4 a. Parcels that share a common boundary. 5 b. Parcels within the same building or structure regardless 6 of whether the parcels share a common boundary. 7 c. Permanent improvements to the land that are situated 8 on one or more parcels of land that are assessed and taxed 9 separately from the permanent improvements if the parcels of 10 land upon which the permanent improvements are situated share 11 a common boundary. 12 2. “Department” means the department of revenue. 13 3. “Fund” means the business property tax credit fund 14 created in section 426C.2. 15 4. “Parcel” means as defined in section 445.1. 16 5. “Property unit” means contiguous parcels all of which 17 are located within the same county, with the same property tax 18 classification, are owned by the same person, and are operated 19 by that person for a common use and purpose. 20 Sec. 18. NEW SECTION . 426C.2 Business property tax credit 21 fund —— appropriation. 22 1. A business property tax credit fund is created in the 23 state treasury under the authority of the department. For the 24 fiscal year beginning July 1, 2013, there is appropriated from 25 the general fund of the state to the department to be credited 26 to the fund, the sum of twenty-five million dollars to be used 27 for business property tax credits authorized in this chapter. 28 For the fiscal year beginning July 1, 2014, and each fiscal 29 year thereafter, there is appropriated from the general fund 30 of the state to the department to be credited to the fund an 31 amount equal to the total amount appropriated by the general 32 assembly to the fund in the previous fiscal year. In addition, 33 the sum of twenty-five million dollars shall be added to the 34 appropriation in each fiscal year beginning on or after July 35 -11- LSB 6143XC (13) 84 md/sc 11/ 44

S.F. _____ 1, 2014, if the revenue estimating conference certifies during 1 its final meeting of the calendar year ending prior to the 2 beginning of the fiscal year that the total amount of general 3 fund revenues collected during the fiscal year ending during 4 such calendar year was at least one hundred three percent of 5 the total amount of general fund revenues collected during the 6 previous fiscal year. However, the total appropriation to the 7 fund shall not exceed one hundred twenty-five million dollars 8 for any one fiscal year. 9 2. Notwithstanding section 12C.7, subsection 2, interest or 10 earnings on moneys deposited in the fund shall be credited to 11 the fund. Moneys in the fund are not subject to the provisions 12 of section 8.33 and shall not be transferred, used, obligated, 13 appropriated, or otherwise encumbered except as provided in 14 this chapter. 15 Sec. 19. NEW SECTION . 426C.3 Claims for credit. 16 1. Each person who wishes to claim the credit allowed 17 under this chapter shall obtain the appropriate forms from the 18 assessor and file the claim with the assessor. The director 19 of revenue shall prescribe suitable forms and instructions for 20 such claims, and make such forms and instructions available to 21 the assessors. 22 2. a. Claims for the business property tax credit shall be 23 filed not later than March 15 preceding the fiscal year during 24 which the taxes for which the credit is claimed are due and 25 payable. 26 b. A claim filed after the deadline for filing claims shall 27 be considered as a claim for the following year. 28 3. Upon the filing of a claim and allowance of the credit, 29 the credit shall be allowed on the parcel or property unit for 30 successive years without further filing as long as the parcel 31 or property unit satisfies the requirements for the credit. If 32 the parcel or property unit ceases to qualify for the credit 33 under this chapter, the owner shall provide written notice 34 to the assessor by the date for filing claims specified in 35 -12- LSB 6143XC (13) 84 md/sc 12/ 44

S.F. _____ subsection 2 following the date on which the parcel or property 1 unit ceases to qualify for the credit. 2 4. When all or a portion of a parcel or property unit that 3 is allowed a credit under this chapter is sold, transferred, 4 or ownership otherwise changes, the buyer, transferee, or 5 new owner who wishes to receive the credit shall refile the 6 claim for credit. In addition, when a portion of a parcel or 7 property unit that is allowed a credit under this chapter is 8 sold, transferred, or ownership otherwise changes, the owner of 9 the portion of the parcel or property unit for which ownership 10 did not change shall refile the claim for credit. 11 5. The assessor shall remit the claims for credit to the 12 county auditor with the assessor’s recommendation for allowance 13 or disallowance. If the assessor recommends disallowance 14 of a claim, the assessor shall submit the reasons for the 15 recommendation, in writing, to the county auditor. The county 16 auditor shall forward the claims to the board of supervisors. 17 The board shall allow or disallow the claims. 18 6. For each claim and allowance of a credit for a property 19 unit, the county auditor shall calculate the average of all 20 consolidated levy rates applicable to the several parcels 21 within the property unit. All claims for credit which have 22 been allowed by the board of supervisors, the actual value of 23 such parcels and property units applicable to the fiscal year 24 for which the credit is claimed that are subject to assessment 25 and taxation prior to imposition of any applicable assessment 26 limitation, the consolidated levy rates for such parcels and 27 the average consolidated levy rates for such property units 28 applicable to the fiscal year for which the credit is claimed, 29 and the taxing districts in which the parcel or property unit 30 is located, shall be certified on or before June 30, in each 31 year, by the county auditor to the department. 32 7. The assessor shall maintain a permanent file of current 33 business property tax credits. The assessor shall file a 34 notice of transfer of property for which a credit has been 35 -13- LSB 6143XC (13) 84 md/sc 13/ 44

S.F. _____ allowed when notice is received from the office of the county 1 recorder, from the person who sold or transferred the property, 2 or from the personal representative of a deceased property 3 owner. The county recorder shall give notice to the assessor 4 of each transfer of title filed in the recorder’s office. The 5 notice from the county recorder shall describe the property 6 transferred, the name of the person transferring title to the 7 property, and the name of the person to whom title to the 8 property has been transferred. 9 Sec. 20. NEW SECTION . 426C.4 Eligibility and amount of 10 credit. 11 1. Each parcel classified and taxed as commercial property, 12 industrial property, or railway property under chapter 434 is 13 eligible for a credit under this chapter. A person may claim 14 and receive one credit under this chapter for each eligible 15 parcel unless the parcel is part of a property unit. A person 16 may only claim and receive one credit under this chapter for 17 each property unit. A credit approved for a property unit 18 shall be allocated to the several parcels within the property 19 unit in the proportion that each parcel’s total amount of 20 property taxes due and payable bears to the total amount of 21 property taxes due and payable on the property unit. Only 22 property units comprised of property assessed as commercial 23 property, industrial property, or railway property under 24 chapter 434 are eligible for a credit under this chapter. 25 However, property that is rented or leased to low-income 26 individuals and families as authorized by section 42 of the 27 Internal Revenue Code, as amended, and that is subject to 28 assessment procedures relating to section 42 property under 29 section 441.21, subsection 2, for the applicable assessment 30 year, shall not be eligible to receive a credit under this 31 chapter or be part of a property unit that receives a credit 32 under this chapter. 33 2. Using the actual value of each parcel or property unit 34 and the consolidated levy rate for each parcel or the average 35 -14- LSB 6143XC (13) 84 md/sc 14/ 44

S.F. _____ consolidated levy rate for each property unit, as certified 1 by the county auditor to the department under section 426C.3, 2 subsection 6, the department shall calculate, for each fiscal 3 year, an initial amount of actual value for use in determining 4 the amount of the credit for each such parcel or property 5 unit so as to provide the maximum possible credit according 6 to the credit formula and limitations under subsection 3, 7 and to provide a total dollar amount of credits against the 8 taxes due and payable in the fiscal year equal to ninety-eight 9 percent of the moneys in the fund following the deposit of the 10 appropriation for the fiscal year. 11 3. a. The amount of the credit for each parcel or property 12 unit for which a claim for credit under this chapter has been 13 approved shall be calculated under paragraph “b” using the 14 lesser of the initial amount of actual value determined by the 15 department under subsection 2, and the actual value of the 16 parcel or property unit as certified by the county auditor 17 under section 426C.3, subsection 6. 18 b. The amount of the credit for each parcel or property 19 unit for which a claim for credit under this chapter has 20 been approved shall be equal to the amount of actual value 21 determined under paragraph “a” multiplied by the difference 22 between the assessment limitation percentage applicable to the 23 parcel or property unit under section 441.21, subsection 5, and 24 the assessment limitation percentage applicable to residential 25 property under section 441.21, subsection 4, divided by one 26 thousand dollars, and then multiplied by the consolidated levy 27 rate or average consolidated levy rate for one thousand dollars 28 of taxable value applicable to the parcel or property unit for 29 the fiscal year for which the credit is claimed as certified by 30 the county auditor under section 426C.3, subsection 6. 31 Sec. 21. NEW SECTION . 426C.5 Payment to counties. 32 1. Annually the department shall certify to the county 33 auditor of each county the amounts of the business property 34 tax credits allowed in the county. Each county auditor shall 35 -15- LSB 6143XC (13) 84 md/sc 15/ 44

S.F. _____ then enter the credits against the tax levied on each eligible 1 parcel or property unit in the county, designating on the tax 2 lists the credit as being from the fund. Each taxing district 3 shall receive its share of the business property tax credit 4 allowed on each eligible parcel or property unit in such taxing 5 district, in the proportion that the levy made by such taxing 6 district upon the parcel or property unit bears to the total 7 levy upon the parcel or property unit by all taxing districts 8 imposing a property tax in such taxing district. However, the 9 several taxing districts shall not draw the moneys so credited 10 until after the semiannual allocations have been received by 11 the county treasurer, as provided in this section. Each county 12 treasurer shall show on each tax receipt the amount of credit 13 received from the fund. 14 2. The director of the department of administrative 15 services shall issue warrants on the fund payable to the county 16 treasurers of the several counties of the state under this 17 chapter. 18 3. The amount due each county shall be paid in two payments 19 on November 15 and March 15 of each fiscal year, drawn upon 20 warrants payable to the respective county treasurers. The two 21 payments shall be as nearly equal as possible. 22 Sec. 22. NEW SECTION . 426C.6 Appeals. 23 1. If the board of supervisors disallows a claim for credit 24 under section 426C.3, subsection 5, the board of supervisors 25 shall send written notice, by mail, to the claimant at the 26 claimant’s last known address. The notice shall state the 27 reasons for disallowing the claim for the credit. The board 28 of supervisors is not required to send notice that a claim for 29 credit is disallowed if the claimant voluntarily withdraws the 30 claim. Any person whose claim is denied under the provisions 31 of this chapter may appeal from the action of the board of 32 supervisors to the district court of the county in which the 33 parcel or property unit is located by giving written notice 34 of such appeal to the county auditor within twenty days from 35 -16- LSB 6143XC (13) 84 md/sc 16/ 44

S.F. _____ the date of mailing of notice of such action by the board of 1 supervisors. 2 2. If any claim for credit has been denied by the board 3 of supervisors, and such action is subsequently reversed on 4 appeal, the credit shall be allowed on the applicable parcel 5 or property unit, and the director of revenue, the county 6 auditor, and the county treasurer shall provide the credit and 7 change their books and records accordingly. In the event the 8 appealing taxpayer has paid one or both of the installments of 9 the tax payable in the year or years in question, remittance 10 shall be made to such taxpayer of the amount of such credit. 11 The amount of such credit awarded on appeal shall be allocated 12 and paid from the balance remaining in the fund. 13 Sec. 23. NEW SECTION . 426C.7 Audit —— denial. 14 1. If on the audit of a credit provided under this chapter, 15 the director of revenue determines the amount of the credit 16 to have been incorrectly calculated or that the credit is 17 not allowable, the director shall recalculate the credit and 18 notify the taxpayer and the county auditor of the recalculation 19 or denial and the reasons for it. The director shall not 20 adjust a credit after three years from October 31 of the year 21 in which the claim for the credit was filed. If the credit 22 has been paid, the director shall give notification to the 23 taxpayer, the county treasurer, and the applicable assessor 24 of the recalculation or denial of the credit and the county 25 treasurer shall proceed to collect the tax owed in the same 26 manner as other property taxes due and payable are collected, 27 if the parcel or property unit for which the credit was allowed 28 is still owned by the taxpayer. If the parcel or property unit 29 for which the credit was allowed is not owned by the taxpayer, 30 the amount may be recovered from the taxpayer by assessment in 31 the same manner that income taxes are assessed under sections 32 422.26 and 422.30. The amount of such erroneous credit, when 33 collected, shall be deposited in the fund. 34 2. The taxpayer or board of supervisors may appeal any 35 -17- LSB 6143XC (13) 84 md/sc 17/ 44

S.F. _____ decision of the director of revenue to the state board of tax 1 review pursuant to section 421.1, subsection 5. The taxpayer, 2 the board of supervisors, or the director of revenue may seek 3 judicial review of the action of the state board of tax review 4 in accordance with chapter 17A. 5 Sec. 24. NEW SECTION . 426C.8 False claim —— penalty. 6 A person who makes a false claim for the purpose of obtaining 7 a credit provided for in this chapter or who knowingly receives 8 the credit without being legally entitled to it is guilty of a 9 fraudulent practice. The claim for a credit of such a person 10 shall be disallowed and if the credit has been paid the amount 11 shall be recovered in the manner provided in section 426C.7. 12 In such cases, the director of revenue shall send a notice of 13 disallowance of the credit. 14 Sec. 25. NEW SECTION . 426C.9 Rules. 15 The director of revenue shall prescribe forms, instructions, 16 and rules pursuant to chapter 17A, as necessary, to carry out 17 the purposes of this chapter. 18 Sec. 26. IMPLEMENTATION. Notwithstanding the deadline 19 for filing claims established in section 426C.3, for a credit 20 against property taxes due and payable during the fiscal year 21 beginning July 1, 2013, the claim for the credit shall be filed 22 not later than January 15, 2013. 23 Sec. 27. APPLICABILITY. This division of this Act applies 24 to property taxes due and payable in fiscal years beginning on 25 or after July 1, 2013. 26 DIVISION V 27 ENTERPRISE PROPERTY TAX CREDIT 28 Sec. 28. Section 331.512, Code 2011, is amended by adding 29 the following new subsection: 30 NEW SUBSECTION . 13B. Carry out duties relating to the 31 enterprise property tax credit as provided in chapter 426D. 32 Sec. 29. Section 331.559, Code 2011, is amended by adding 33 the following new subsection: 34 NEW SUBSECTION . 14B. Carry out duties relating to the 35 -18- LSB 6143XC (13) 84 md/sc 18/ 44