HF 614 (LSB 1798HV (3) 87)

HOUSE FILE 614

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO HF 42)

A BILL FOR

An Act relating to the property tax exemption for the value added by certain geothermal heating or cooling systems and including applicability provisions. 
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 427.1, subsection 38, paragraphs a and b, Code 2017, are amended to read as follows:
   a.  The value added by any new or refitted construction or installation of a geothermal heating or cooling system on or after July 1, 2012, on property classified as residential, or the value added by any new or refitted construction or installation of a geothermal heating or cooling system on or after July 1, 2017, on property classified as multiresidential, commercial, industrial, or agricultural. The exemption shall be allowed for ten consecutive years beginning not earlier than the assessment year following the year that the system was placed in service. The exemption shall apply to any value added by the addition of mechanical, electrical, plumbing, ductwork, or other equipment, labor, and expenses included in or required for the construction or installation of the geothermal system, as well as the proportionate value of any well field associated with the system and attributable to the owner. 
   b.  A person claiming an exemption under this subsection shall obtain the appropriate forms from the assessor. The forms shall be prescribed by the director of revenue. The claim shall be filed no later than February 1 of the first assessment year the exemption is requested and shall contain information pertaining to all costs and other information associated with construction and installation of the system. Once the exemption is allowed, the exemption shall continue to be allowed for ten consecutive years without further filing as long as the property continues to be classified as residential, multiresidential, commercial, industrial, or agricultural property.
    Sec. 2.  IMPLEMENTATION.  Section 25B.7 does not apply to the property tax exemption enacted in this Act.
    Sec. 3.  APPLICABILITY.  This Act applies to assessment years beginning on or after January 1, 2018.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Current Code section 427.1(38) provides a property tax exemption on the value added by any new or refitted construction or installation of a geothermal heating or cooling system on or after July 1, 2012, on property classified as residential. Under current law, that exemption is allowed for 10 consecutive years.
   This bill authorizes the exemption for the valve added by any new or refitted construction or installation of a geothermal heating or cooling system on or after July 1, 2017, on property classified as multiresidential, commercial, industrial, or agricultural property. 
   The bill provides that the 10-year exemption period begins not earlier than the assessment year following the year that the system was placed in service. 
   The bill makes inapplicable Code section 25B.7. Code section 25B.7 provides that for a property tax credit or exemption enacted on or after January 1, 1997, if a state appropriation made to fund the credit or exemption is not sufficient to fully fund the credit or exemption, the political subdivision shall be required to extend to the taxpayer only that portion of the credit or exemption estimated by the department of revenue to be funded by the state appropriation.
   The bill applies to assessment years beginning on or after January 1, 2018.