House File 609 - Introduced HOUSE FILE 609 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HSB 150) A BILL FOR An Act relating to state and local finances by establishing and 1 modifying property assessment limitations, providing for 2 commercial and industrial property tax replacement payments, 3 increasing the regular program foundation base percentage, 4 making appropriations, and including effective date and 5 retroactive applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 1481HV (2) 85 md/sc
H.F. 609 DIVISION I 1 PROPERTY ASSESSMENT LIMITATION AND REPLACEMENT 2 Section 1. Section 257.3, subsection 1, Code 2013, is 3 amended by adding the following new paragraph: 4 NEW PARAGRAPH . d. The amount paid to each school district 5 for the commercial and industrial property tax replacement 6 claim under section 441.21A shall be regarded as property tax. 7 The portion of the payment which is foundation property tax 8 shall be determined by applying the foundation property tax 9 rate to the amount computed under section 441.21A, subsection 10 4, paragraph “a” , and such amount shall be prorated pursuant to 11 section 441.21A, subsection 2, if applicable. 12 Sec. 2. Section 331.512, Code 2013, is amended by adding the 13 following new subsection: 14 NEW SUBSECTION . 13A. Carry out duties relating to the 15 calculation and payment of commercial and industrial property 16 tax replacement claims under section 441.21A. 17 Sec. 3. Section 331.559, Code 2013, is amended by adding the 18 following new subsection: 19 NEW SUBSECTION . 25A. Carry out duties relating to the 20 calculation and payment of commercial and industrial property 21 tax replacement claims under section 441.21A. 22 Sec. 4. Section 441.21, subsection 4, Code 2013, is amended 23 to read as follows: 24 4. For valuations established as of January 1, 1979, 25 the percentage of actual value at which agricultural and 26 residential property shall be assessed shall be the quotient 27 of the dividend and divisor as defined in this section . The 28 dividend for each class of property shall be the dividend 29 as determined for each class of property for valuations 30 established as of January 1, 1978, adjusted by the product 31 obtained by multiplying the percentage determined for that 32 year by the amount of any additions or deletions to actual 33 value, excluding those resulting from the revaluation of 34 existing properties, as reported by the assessors on the 35 -1- LSB 1481HV (2) 85 md/sc 1/ 16
H.F. 609 abstracts of assessment for 1978, plus six percent of the 1 amount so determined. However, if the difference between the 2 dividend so determined for either class of property and the 3 dividend for that class of property for valuations established 4 as of January 1, 1978, adjusted by the product obtained by 5 multiplying the percentage determined for that year by the 6 amount of any additions or deletions to actual value, excluding 7 those resulting from the revaluation of existing properties, 8 as reported by the assessors on the abstracts of assessment 9 for 1978, is less than six percent, the 1979 dividend for the 10 other class of property shall be the dividend as determined for 11 that class of property for valuations established as of January 12 1, 1978, adjusted by the product obtained by multiplying 13 the percentage determined for that year by the amount of 14 any additions or deletions to actual value, excluding those 15 resulting from the revaluation of existing properties, as 16 reported by the assessors on the abstracts of assessment for 17 1978, plus a percentage of the amount so determined which is 18 equal to the percentage by which the dividend as determined 19 for the other class of property for valuations established 20 as of January 1, 1978, adjusted by the product obtained by 21 multiplying the percentage determined for that year by the 22 amount of any additions or deletions to actual value, excluding 23 those resulting from the revaluation of existing properties, 24 as reported by the assessors on the abstracts of assessment 25 for 1978, is increased in arriving at the 1979 dividend for 26 the other class of property. The divisor for each class of 27 property shall be the total actual value of all such property 28 in the state in the preceding year, as reported by the 29 assessors on the abstracts of assessment submitted for 1978, 30 plus the amount of value added to said total actual value by 31 the revaluation of existing properties in 1979 as equalized 32 by the director of revenue pursuant to section 441.49 . The 33 director shall utilize information reported on abstracts of 34 assessment submitted pursuant to section 441.45 in determining 35 -2- LSB 1481HV (2) 85 md/sc 2/ 16
H.F. 609 such percentage. For valuations established as of January 1, 1 1980, and each assessment year thereafter beginning before 2 January 1, 2013 , the percentage of actual value as equalized 3 by the director of revenue as provided in section 441.49 at 4 which agricultural and residential property shall be assessed 5 shall be calculated in accordance with the methods provided 6 herein including the limitation of increases in agricultural 7 and residential assessed values to the percentage increase of 8 the other class of property if the other class increases less 9 than the allowable limit adjusted to include the applicable 10 and current values as equalized by the director of revenue, 11 except that any references to six percent in this subsection 12 shall be four percent. For valuations established as of 13 January 1, 2013, and each assessment year thereafter, the 14 percentage of actual value as equalized by the director of 15 revenue as provided in section 441.49 at which agricultural and 16 residential property shall be assessed shall be calculated in 17 accordance with the methods provided in this subsection, except 18 that any references to six percent in this subsection shall 19 be two percent, and including, for assessment years beginning 20 on or after January 1, 2013, but before January 1, 2017, 21 the limitation of increases in agricultural and residential 22 assessed values to the percentage increase of the other 23 class of property if the other class increases less than the 24 allowable limit adjusted to include the applicable and current 25 values as equalized by the director of revenue, and including, 26 for assessment years beginning on or after January 1, 2017, the 27 limitation in subsection 5A. 28 Sec. 5. Section 441.21, subsection 5, Code 2013, is amended 29 to read as follows: 30 5. a. For valuations established as of January 1, 1979, 31 commercial property and industrial property, excluding 32 properties referred to in section 427A.1, subsection 8 , shall 33 be assessed as a percentage of the actual value of each class 34 of property. The percentage shall be determined for each 35 -3- LSB 1481HV (2) 85 md/sc 3/ 16
H.F. 609 class of property by the director of revenue for the state in 1 accordance with the provisions of this section . For valuations 2 established as of January 1, 1979, the percentage shall be 3 the quotient of the dividend and divisor as defined in this 4 section . The dividend for each class of property shall be the 5 total actual valuation for each class of property established 6 for 1978, plus six percent of the amount so determined. The 7 divisor for each class of property shall be the valuation 8 for each class of property established for 1978, as reported 9 by the assessors on the abstracts of assessment for 1978, 10 plus the amount of value added to the total actual value by 11 the revaluation of existing properties in 1979 as equalized 12 by the director of revenue pursuant to section 441.49 . For 13 valuations established as of January 1, 1979, property valued 14 by the department of revenue pursuant to chapters 428 , 433 , 15 437 , and 438 shall be considered as one class of property and 16 shall be assessed as a percentage of its actual value. The 17 percentage shall be determined by the director of revenue in 18 accordance with the provisions of this section . For valuations 19 established as of January 1, 1979, the percentage shall be 20 the quotient of the dividend and divisor as defined in this 21 section . The dividend shall be the total actual valuation 22 established for 1978 by the department of revenue, plus ten 23 percent of the amount so determined. The divisor for property 24 valued by the department of revenue pursuant to chapters 428 , 25 433 , 437 , and 438 shall be the valuation established for 1978, 26 plus the amount of value added to the total actual value by 27 the revaluation of the property by the department of revenue 28 as of January 1, 1979. For valuations established as of 29 January 1, 1980, commercial property and industrial property, 30 excluding properties referred to in section 427A.1, subsection 31 8 , shall be assessed at a percentage of the actual value of 32 each class of property. The percentage shall be determined 33 for each class of property by the director of revenue for the 34 state in accordance with the provisions of this section . For 35 -4- LSB 1481HV (2) 85 md/sc 4/ 16
H.F. 609 valuations established as of January 1, 1980, the percentage 1 shall be the quotient of the dividend and divisor as defined in 2 this section . The dividend for each class of property shall 3 be the dividend as determined for each class of property for 4 valuations established as of January 1, 1979, adjusted by the 5 product obtained by multiplying the percentage determined 6 for that year by the amount of any additions or deletions to 7 actual value, excluding those resulting from the revaluation 8 of existing properties, as reported by the assessors on the 9 abstracts of assessment for 1979, plus four percent of the 10 amount so determined. The divisor for each class of property 11 shall be the total actual value of all such property in 1979, 12 as equalized by the director of revenue pursuant to section 13 441.49 , plus the amount of value added to the total actual 14 value by the revaluation of existing properties in 1980. The 15 director shall utilize information reported on the abstracts of 16 assessment submitted pursuant to section 441.45 in determining 17 such percentage. For valuations established as of January 1, 18 1980, property valued by the department of revenue pursuant 19 to chapters 428 , 433 , 437 , and 438 shall be assessed at a 20 percentage of its actual value. The percentage shall be 21 determined by the director of revenue in accordance with the 22 provisions of this section . For valuations established as 23 of January 1, 1980, the percentage shall be the quotient of 24 the dividend and divisor as defined in this section . The 25 dividend shall be the total actual valuation established for 26 1979 by the department of revenue, plus eight percent of the 27 amount so determined. The divisor for property valued by the 28 department of revenue pursuant to chapters 428 , 433 , 437 , 29 and 438 shall be the valuation established for 1979, plus 30 the amount of value added to the total actual value by the 31 revaluation of the property by the department of revenue as 32 of January 1, 1980. For valuations established as of January 33 1, 1981, and each assessment year thereafter beginning before 34 January 1, 2013 , the percentage of actual value as equalized 35 -5- LSB 1481HV (2) 85 md/sc 5/ 16
H.F. 609 by the director of revenue as provided in section 441.49 at 1 which commercial property and industrial property, excluding 2 properties referred to in section 427A.1, subsection 8 , shall 3 be assessed shall be calculated in accordance with the methods 4 provided herein, except that any references to six percent 5 in this subsection shall be four percent. For valuations 6 established as of January 1, 1981, and each year thereafter, 7 the percentage of actual value at which property valued by 8 the department of revenue pursuant to chapters 428 , 433 , 437 , 9 and 438 shall be assessed shall be calculated in accordance 10 with the methods provided herein, except that any references 11 to ten percent in this subsection shall be eight percent. 12 Beginning with valuations established as of January 1, 1979, 13 and each assessment year thereafter beginning before January 14 1, 2013 , property valued by the department of revenue pursuant 15 to chapter 434 shall also be assessed at a percentage of its 16 actual value which percentage shall be equal to the percentage 17 determined by the director of revenue for commercial property, 18 industrial property, or property valued by the department of 19 revenue pursuant to chapters 428 , 433 , 437 , and 438 , whichever 20 is lowest. For valuations established on or after January 21 1, 2013, but before January 1, 2017, commercial property and 22 industrial property shall be assessed as provided in paragraphs 23 “b” and “c” , as applicable. For valuations established as 24 of January 1, 2017, and each assessment year thereafter, the 25 percentage of actual value as equalized by the director of 26 revenue as provided in section 441.49 at which commercial 27 property shall be assessed shall be calculated in accordance 28 with the methods provided in this subsection, including the 29 limitation in subsection 5A, except that any references to 30 six percent in this subsection shall be two percent. For 31 valuations established on or after January 1, 2017, industrial 32 property shall be assessed at a percentage of its actual value 33 equal to the percentage of actual value at which property 34 assessed as commercial property is assessed for the same 35 -6- LSB 1481HV (2) 85 md/sc 6/ 16
H.F. 609 assessment year following application of the limitation in 1 subsection 5A, if applicable. For valuations established on 2 or after January 1, 2013, property valued by the department 3 of revenue pursuant to chapter 434 shall be assessed at a 4 percentage of its actual value equal to the percentage of 5 actual value at which property assessed as commercial property 6 is assessed for the same assessment year following application 7 of the limitation in subsection 5A, if applicable. 8 b. For valuations established on or after January 1, 2013, 9 but before January 1, 2017, commercial property, excluding 10 properties referred to in section 427A.1, subsection 8, shall 11 be assessed at a percentage of its actual value, as determined 12 in this paragraph “b” . For valuations established for the 13 assessment year beginning January 1, 2013, the percentage 14 of actual value as equalized by the director of revenue as 15 provided in section 441.49 at which commercial property shall 16 be assessed shall be ninety-five percent. For valuations 17 established for the assessment year beginning January 1, 2014, 18 the percentage of actual value as equalized by the director 19 of revenue as provided in section 441.49 at which commercial 20 property shall be assessed shall be ninety percent. For 21 valuations established for the assessment year beginning 22 January 1, 2015, the percentage of actual value as equalized by 23 the director of revenue as provided in section 441.49 at which 24 commercial property shall be assessed shall be eighty-five 25 percent. For valuations established for the assessment year 26 beginning January 1, 2016, the percentage of actual value as 27 equalized by the director of revenue as provided in section 28 441.49 at which commercial property shall be assessed shall be 29 eighty percent. 30 c. For valuations established on or after January 1, 2013, 31 but before January 1, 2017, industrial property, excluding 32 properties referred to in section 427A.1, subsection 8, shall 33 be assessed at a percentage of its actual value, as determined 34 in this paragraph “c” . For valuations established for the 35 -7- LSB 1481HV (2) 85 md/sc 7/ 16
H.F. 609 assessment year beginning January 1, 2013, the percentage 1 of actual value as equalized by the director of revenue as 2 provided in section 441.49 at which industrial property shall 3 be assessed shall be ninety-five percent. For valuations 4 established for the assessment year beginning January 1, 2014, 5 the percentage of actual value as equalized by the director 6 of revenue as provided in section 441.49 at which industrial 7 property shall be assessed shall be ninety percent. For 8 valuations established for the assessment year beginning 9 January 1, 2015, the percentage of actual value as equalized by 10 the director of revenue as provided in section 441.49 at which 11 industrial property shall be assessed shall be eighty-five 12 percent. For valuations established for the assessment year 13 beginning January 1, 2016, the percentage of actual value as 14 equalized by the director of revenue as provided in section 15 441.49 at which industrial property shall be assessed shall be 16 eighty percent. 17 Sec. 6. Section 441.21, Code 2013, is amended by adding the 18 following new subsection: 19 NEW SUBSECTION . 5A. In addition to the limitation 20 of increases for agricultural and residential property 21 applicable under subsection 4 and the limitation of increase 22 for commercial property applicable under subsection 5, for 23 valuations established for the assessment year beginning 24 January 1, 2017, and each assessment year thereafter, for 25 residential, agricultural, and commercial property, the 26 assessed value of each of these three classes of property shall 27 be limited to the percentage increase of that class of property 28 that is the lowest percentage increase under the allowable 29 limit adjusted to include the applicable and current values as 30 equalized by the director of revenue. 31 Sec. 7. NEW SECTION . 441.21A Commercial and industrial 32 property tax replacement —— replacement claims. 33 1. a. For each fiscal year beginning on or after July 34 1, 2014, there is appropriated from the general fund of the 35 -8- LSB 1481HV (2) 85 md/sc 8/ 16
H.F. 609 state to the department of revenue an amount necessary for 1 the payment of all commercial and industrial property tax 2 replacement claims under this section for the fiscal year. 3 However, for a fiscal year beginning on or after July 1, 2018, 4 the total amount of moneys appropriated from the general fund 5 of the state to the department of revenue for the payment 6 of commercial and industrial property tax replacement claims 7 in that fiscal year shall not exceed the total amount of 8 money that was necessary to pay all commercial and industrial 9 property tax replacement claims for the fiscal year beginning 10 July 1, 2017. 11 b. Moneys appropriated by the general assembly to the 12 department under this subsection for the payment of commercial 13 and industrial property tax replacement claims are not subject 14 to a uniform reduction in appropriations in accordance with 15 section 8.31. 16 2. Beginning with the fiscal year beginning July 1, 2014, 17 each county treasurer shall be paid by the department of 18 revenue an amount equal to the amount of the commercial and 19 industrial property tax replacement claims in the county, as 20 calculated in subsection 4. For fiscal years beginning on or 21 after July 1, 2018, if an amount appropriated for a fiscal year 22 is insufficient to pay all replacement claims, the director of 23 revenue shall prorate the payment of replacement claims to the 24 county treasurers and shall notify the county auditors of the 25 pro rata percentage on or before September 30. 26 3. On or before July 1 of each fiscal year beginning on or 27 after July 1, 2014, the assessor shall report to the county 28 auditor the total actual value of all commercial property and 29 industrial property in the county for the assessment year used 30 to calculate the taxes due and payable in that fiscal year. 31 4. On or before a date established by rule of the department 32 of revenue of each fiscal year beginning on or after July 1, 33 2014, the county auditor shall prepare a statement, based upon 34 the report received pursuant to subsection 3, listing for each 35 -9- LSB 1481HV (2) 85 md/sc 9/ 16
H.F. 609 taxing district in the county: 1 a. The difference between the assessed valuation of all 2 commercial property and industrial property for the assessment 3 year used to calculate taxes which are due and payable in the 4 applicable fiscal year and the actual value of all commercial 5 property and industrial property for the same assessment year. 6 If the difference between the assessed value of all commercial 7 property and industrial property and the actual valuation of 8 all commercial property and industrial property is zero, there 9 is no tax replacement for that taxing district for the fiscal 10 year. 11 b. The tax levy rate per one thousand dollars of assessed 12 value for each taxing district for that fiscal year. 13 c. The commercial and industrial property tax replacement 14 claim for each taxing district. The replacement claim is equal 15 to the amount determined pursuant to paragraph “a” , multiplied 16 by the tax rate specified in paragraph “b” , and then divided by 17 one thousand dollars. 18 5. For purposes of computing replacement amounts under 19 this section, that portion of an urban renewal area defined as 20 the sum of the assessed valuations defined in section 403.19, 21 subsections 1 and 2, shall be considered a taxing district. 22 6. a. The county auditor shall certify and forward one copy 23 of the statement to the department of revenue not later than 24 a date of each year established by the department of revenue 25 by rule. 26 b. The replacement claims shall be paid to each county 27 treasurer in equal installments in September and March of each 28 year. The county treasurer shall apportion the replacement 29 claim payments among the eligible taxing districts in the 30 county. 31 c. If the taxing district is an urban renewal area, the 32 amount of the replacement claim shall be apportioned and 33 credited to those portions of the assessed value defined in 34 section 403.19, subsections 1 and 2, as follows: 35 -10- LSB 1481HV (2) 85 md/sc 10/ 16
H.F. 609 (1) To that portion defined in section 403.19, subsection 1 1, an amount of the replacement claim that is proportionate to 2 the amount of actual value of the commercial and industrial 3 property in the urban renewal area as determined in section 4 403.19, subsection 1, that was subtracted pursuant to section 5 403.20, as it bears to the total amount of actual value of 6 the commercial and industrial property in the urban renewal 7 area that was subtracted pursuant to section 403.20 for the 8 assessment year for property taxes due and payable in the 9 fiscal year for which the replacement claim is computed. 10 (2) To that portion defined in section 403.19, subsection 2, 11 the remaining amount, if any. 12 d. Notwithstanding the allocation provisions of paragraph 13 “c” , the amount of the tax replacement amount that shall be 14 allocated to that portion of the assessed value defined in 15 section 403.19, subsection 2, shall not exceed the amount equal 16 to the amount certified to the county auditor under section 17 403.19 for the fiscal year in which the claim is paid, after 18 deduction of the amount of other revenues committed for payment 19 on that amount for the fiscal year. The amount not allocated 20 to that portion of the assessed value defined in section 21 403.19, subsection 2, as a result of the operation of this 22 paragraph, shall be allocated to that portion of assessed value 23 defined in section 403.19, subsection 1. 24 e. The amount of the replacement claim amount credited to 25 the portion of the assessed value defined in section 403.19, 26 subsection 1, shall be allocated to and when received be paid 27 into the fund for the respective taxing district as taxes by 28 or for the taxing district into which all other property taxes 29 are paid. The amount of the replacement claim amount credited 30 to the portion of the assessed value defined in section 403.19, 31 subsection 2, shall be allocated to and when collected be paid 32 into the special fund of the municipality under section 403.19, 33 subsection 2. 34 Sec. 8. SAVINGS PROVISION. This division of this Act, 35 -11- LSB 1481HV (2) 85 md/sc 11/ 16
H.F. 609 pursuant to section 4.13, does not affect the operation of, 1 or prohibit the application of, prior provisions of section 2 441.21, or rules adopted under chapter 17A to administer prior 3 provisions of section 441.21, for assessment years beginning 4 before January 1, 2013, and for duties, powers, protests, 5 appeals, proceedings, actions, or remedies attributable to an 6 assessment year beginning before January 1, 2013. 7 Sec. 9. EFFECTIVE UPON ENACTMENT. This division of this 8 Act, being deemed of immediate importance, takes effect upon 9 enactment. 10 Sec. 10. RETROACTIVE APPLICABILITY. This division of this 11 Act applies retroactively to January 1, 2013, for assessment 12 years beginning on or after that date. 13 DIVISION II 14 SCHOOL DISTRICT FUNDING 15 Sec. 11. Section 257.1, subsection 2, paragraph b, Code 16 2013, is amended by striking the paragraph and inserting in 17 lieu thereof the following: 18 b. (1) The regular program foundation base per pupil is the 19 following: 20 (a) For the budget year commencing July 1, 2012, and the 21 budget year commencing July 1, 2013, the regular program 22 foundation base per pupil is eighty-seven and five-tenths 23 percent of the regular program state cost per pupil. 24 (b) For the budget year commencing July 1, 2014, the regular 25 program foundation base per pupil is eighty-nine and three 26 hundred seventy-five thousandths percent of the regular program 27 state cost per pupil. 28 (c) For the budget year commencing July 1, 2015, the regular 29 program foundation base per pupil is ninety-one and twenty-five 30 hundredths percent of the regular program state cost per pupil. 31 (d) For the budget year commencing July 1, 2016, the regular 32 program foundation base per pupil is ninety-three and one 33 hundred twenty-five thousandths percent of the regular program 34 state cost per pupil. 35 -12- LSB 1481HV (2) 85 md/sc 12/ 16
H.F. 609 (e) For the budget year commencing July 1, 2017, and 1 succeeding budget years, the regular program foundation base 2 per pupil is ninety-five percent of the regular program state 3 cost per pupil. 4 (2) For each budget year, the special education support 5 services foundation base is seventy-nine percent of the special 6 education support services state cost per pupil. The combined 7 foundation base is the sum of the regular program foundation 8 base, the special education support services foundation base, 9 the total teacher salary supplement district cost, the total 10 professional development supplement district cost, the total 11 early intervention supplement district cost, the total area 12 education agency teacher salary supplement district cost, 13 and the total area education agency professional development 14 supplement district cost. 15 EXPLANATION 16 This bill relates to state and local government finances 17 by modifying property assessment limitations, providing for 18 commercial and industrial property tax replacement payments, 19 and by increasing the regular program foundation base 20 percentage. 21 Division I of the bill changes the property tax assessment 22 limitation percentage for residential property and agricultural 23 property from 4 percent to 2 percent for assessment years 24 beginning on or after January 1, 2013. 25 Division I of the bill modifies the methodology in Code 26 section 441.21(5) currently used to determine the percentage 27 of actual value at which commercial property and industrial 28 property are assessed for property tax purposes. The bill 29 provides that for valuations established for the assessment 30 year beginning January 1, 2013, the percentage of actual value 31 at which commercial and industrial property are assessed is 32 95 percent. For the assessment year beginning January 1, 33 2014, the percentage of actual value at which commercial and 34 industrial property are assessed is 90 percent. For the 35 -13- LSB 1481HV (2) 85 md/sc 13/ 16
H.F. 609 assessment year beginning January 1, 2015, the percentage of 1 actual value at which commercial and industrial property are 2 assessed is 85 percent. For the assessment year beginning 3 January 1, 2016, the percentage of actual value at which 4 commercial and industrial property are assessed is 80 percent. 5 For assessment years beginning on or after January 1, 2017, 6 the percentage of actual value at which commercial property is 7 assessed shall be calculated in accordance with the methodology 8 used to determine the percentage at which commercial property 9 is assessed for assessment years beginning before January 1, 10 2013, except that the percentage of permissible assessed value 11 growth is changed from 4 percent to 2 percent. For assessment 12 years beginning on or after January 1, 2017, the percentage of 13 actual value at which industrial property is assessed shall be 14 equal to the percentage of actual value at which commercial 15 property is assessed for the same assessment year. 16 Division I of the bill also provides that for assessment 17 years beginning on or after January 1, 2017, in addition to the 18 limitations on the growth in taxable value for agricultural 19 and residential property in Code section 441.21(4) and 20 commercial property in Code section 441.21(5), for residential, 21 agricultural, and commercial property, the assessed value of 22 each of these three classes of property shall be limited to 23 the percentage increase of that class of property that is the 24 lowest percentage increase under the allowable limit. 25 Division I of the bill provides that for valuations 26 established on or after January 1, 2013, property valued by the 27 department of revenue pursuant to Code chapter 434 (railway 28 property) is assessed at a percentage of its actual value equal 29 to the percentage of actual value at which commercial property 30 is assessed for the same assessment year. 31 Division I of the bill provides for commercial and 32 industrial property tax replacement payments in new Code 33 section 441.21A. For the fiscal year beginning July 1, 2014, 34 and each fiscal year thereafter, the bill appropriates from 35 -14- LSB 1481HV (2) 85 md/sc 14/ 16
H.F. 609 the general fund of the state to the department of revenue an 1 amount necessary to pay all commercial and industrial property 2 tax replacement claims for that fiscal year. However, in no 3 fiscal year beginning on or after July 1, 2018, shall the total 4 amount of money appropriated from the general fund of the 5 state for the payment of commercial and industrial property 6 tax replacement claims in that fiscal year exceed the total 7 amount of money that was necessary to pay all commercial and 8 industrial property tax replacement payments for the fiscal 9 year beginning July 1, 2017. 10 Division I of the bill provides that moneys appropriated 11 by the general assembly to the department of revenue under 12 new Code section 441.21A for the payment of commercial and 13 industrial property tax replacement claims are not subject to 14 a uniform reduction in appropriations in accordance with Code 15 section 8.31. 16 For fiscal years beginning on or after July 1, 2018, if 17 an amount appropriated to the department of revenue for a 18 fiscal year is insufficient to pay all replacement claims, the 19 director of revenue shall prorate the replacement payments to 20 the county treasurers and shall notify the county auditors of 21 the pro rata percentage on or before September 30. 22 Division I of the bill requires the assessor to report to 23 the county auditor, on or before July 1 of each fiscal year 24 beginning on or after July 1, 2014, the total assessed value 25 of all commercial property and industrial property for taxes 26 due and payable in that fiscal year. On or before a date 27 established by the department of revenue, the county auditor 28 prepares a statement, based upon the report listing for each 29 taxing district in the county the difference between assessed 30 and actual values of such property located in the taxing 31 district, the tax levy rate per $1,000 of assessed value for 32 each taxing district, and the property tax replacement claim 33 for each taxing district. The replacement claim is equal to 34 the difference between the assessed valuation of all such 35 -15- LSB 1481HV (2) 85 md/sc 15/ 16
H.F. 609 property located in the taxing district and assessed for the 1 applicable assessment year and the total actual value of all 2 such property located in the taxing district for the same 3 assessment year, multiplied by the tax rate per $1,000 of 4 assessed value specified for the taxing district, and then 5 divided by $1,000. If the difference between the actual and 6 assessed values is zero, there is no replacement claim for the 7 taxing district for that year. 8 Replacement claims are paid to each county treasurer in 9 equal installments in September and March of each year. The 10 county treasurer apportions the replacement claim payments 11 among the eligible taxing districts in the county. 12 Division I of the bill defines a tax increment financing 13 district in an urban renewal area as a taxing district for 14 purposes of allocation of replacement moneys and provides for 15 the method of allocation in those districts. 16 Division I of the bill, pursuant to Code section 4.13, does 17 not affect the application of prior provisions of Code section 18 441.21 to assessment years beginning before January 1, 2013. 19 Division I of the bill takes effect upon enactment and 20 applies retroactively to January 1, 2013, for assessment years 21 beginning on or after that date. 22 Division II of the bill provides for an increase in the 23 regular program foundation base under the state school 24 foundation program. The regular program foundation base is 25 the specified percentage of the regular state program cost 26 per pupil calculation which is paid as state aid to school 27 districts, above and beyond the uniform property tax levy 28 imposed in Code section 257.3. Beginning with the budget 29 year commencing July 1, 2014, the increase is phased in over 30 a period of years from the current regular program foundation 31 base level of 87.5 percent of the regular program state 32 cost per pupil to the level of 95 percent for budget years 33 commencing on or after July 1, 2017. 34 -16- LSB 1481HV (2) 85 md/sc 16/ 16