S.F. 2420 Section 1. Section 2.48, subsection 3, paragraph f, 1 subparagraph (6), Code 2018, is amended by striking the 2 subparagraph. 3 Sec. 2. Section 257.3, subsection 1, paragraph d, Code 2018, 4 is amended to read as follows: 5 d. The amount paid to each school district for the 6 commercial and industrial property tax replacement claim under 7 section 441.21A shall be regarded as property tax. The For 8 fiscal years beginning on or after July 1, 2014, but before 9 July 1, 2019, the portion of the payment which is foundation 10 property tax shall be determined by applying the foundation 11 property tax rate to the amount computed under section 441.21A, 12 subsection 4 , paragraph “a” , and such amount shall be prorated 13 pursuant to section 441.21A, subsection 2 , if applicable. 14 For fiscal years beginning on or after July 1, 2019, but 15 before July 1, 2025, the portion of the payment which is 16 foundation property tax shall be determined as the result of 17 the apportionment required under section 441.21A, subsection 7. 18 Sec. 3. Section 441.21A, subsection 1, paragraph a, Code 19 2018, is amended to read as follows: 20 a. For each fiscal year beginning on or after July 1, 2014, 21 but before July 1, 2025, there is appropriated from the general 22 fund of the state to the department of revenue an amount 23 necessary for the payment of all commercial and industrial 24 property tax replacement claims under this section for the 25 fiscal year. However, for a the fiscal year beginning on or 26 after July 1, 2017, and for the fiscal year beginning July 1, 27 2018, the total amount of moneys appropriated from the general 28 fund of the state to the department of revenue for the payment 29 of commercial and industrial property tax replacement claims 30 in that each fiscal year shall not exceed the total amount of 31 money necessary to pay all commercial and industrial property 32 tax replacement claims for the fiscal year beginning July 1, 33 2016. 34 Sec. 4. Section 441.21A, subsections 2 and 3, Code 2018, are 35 -1- LSB 5738SV (2) 87 md/jh 1/ 8

S.F. 2420 amended to read as follows: 1 2. a. Beginning with the For each fiscal year beginning 2 on or after July 1, 2014, but before July 1, 2019, each county 3 treasurer shall be paid by the department of revenue an 4 amount equal to the amount of the commercial and industrial 5 property tax replacement claims in the county, as calculated in 6 subsection 4 . If an amount appropriated for a the fiscal year 7 beginning on July 1, 2017, or July 1, 2018, is insufficient to 8 pay all replacement claims for the fiscal year , the director of 9 revenue shall prorate the payment of replacement claims to the 10 county treasurers and shall notify the county auditors of the 11 pro rata percentage on or before September 30. 12 b. For each fiscal year beginning on or after July 1, 2019, 13 but before July 1, 2025, each taxing authority shall be paid by 14 the department of revenue an amount equal to the amount of the 15 commercial and industrial property tax replacement claim for 16 the taxing authority, as calculated in subsection 4A. 17 3. a. On or before July 1 of each fiscal year beginning on 18 or after July 1, 2014, but before July 1, 2019, the assessor 19 shall report to the county auditor the total actual value of 20 all commercial property and industrial property in the county 21 that is subject to assessment and taxation for the assessment 22 year used to calculate the taxes due and payable in that fiscal 23 year. 24 b. On or before July 1, 2019, the department of revenue, in 25 consultation with the department of management, shall calculate 26 for each taxing authority in this state, the following: 27 (1) The total assessed value as of January 1, 2012, of 28 all taxable property located in the taxing authority that is 29 subject to assessment and taxation used to calculate taxes 30 which are due and payable in the fiscal year beginning July 1, 31 2013, excluding property subject to the statewide property tax 32 imposed under section 437A.18 or 437B.14. 33 (2) The total assessed value as of January 1, 2017, of 34 all taxable property located in the taxing authority that is 35 -2- LSB 5738SV (2) 87 md/jh 2/ 8

S.F. 2420 subject to assessment and taxation used to calculate taxes 1 which are due and payable in the fiscal year beginning July 1, 2 2018, excluding property subject to the statewide property tax 3 imposed under section 437A.18 or 437B.14. 4 Sec. 5. Section 441.21A, subsection 4, unnumbered paragraph 5 1, Code 2018, is amended to read as follows: 6 On or before a date established by rule of the department 7 of revenue of each fiscal year beginning on or after July 8 1, 2014, but before July 1, 2019, the county auditor shall 9 prepare a statement, based upon the report received pursuant to 10 subsection 3 , paragraph “a” , listing for each taxing district 11 in the county: 12 Sec. 6. Section 441.21A, Code 2018, is amended by adding the 13 following new subsection: 14 NEW SUBSECTION . 4A. a. As used in this section, unless the 15 context clearly requires otherwise: 16 (1) “Qualified taxing authority” means a taxing authority 17 for which the amount determined under subsection 3, paragraph 18 “b” , subparagraph (2), is less than one hundred nineteen and 19 fifty-one hundredths percent of the amount determined under 20 subsection 3, paragraph “b” , subparagraph (1). 21 (2) “Taxing authority” means a city, county, community 22 college, school district, or other governmental entity or 23 political subdivision in this state authorized to certify a 24 levy on property located within such authority. 25 b. For fiscal years beginning on or after July 1, 2019, 26 but before July 1, 2025, the amount of each taxing authority’s 27 property tax replacement payment is as follows: 28 (1) If the taxing authority is a qualified taxing authority: 29 (a) For the fiscal year beginning July 1, 2019, six-sevenths 30 of the amount received by the taxing authority under this 31 section for the fiscal year beginning July 1, 2018. 32 (b) For the fiscal year beginning July 1, 2020, 33 five-sevenths of the amount received by the taxing authority 34 under this section for the fiscal year beginning July 1, 2018. 35 -3- LSB 5738SV (2) 87 md/jh 3/ 8

S.F. 2420 (c) For the fiscal year beginning July 1, 2021, 1 four-sevenths of the amount received by the taxing authority 2 under this section for the fiscal year beginning July 1, 2018. 3 (d) For the fiscal year beginning July 1, 2022, 4 three-sevenths of the amount received by the taxing authority 5 under this section for the fiscal year beginning July 1, 2018. 6 (e) For the fiscal year beginning July 1, 2023, two-sevenths 7 of the amount received by the taxing authority under this 8 section for the fiscal year beginning July 1, 2018. 9 (f) For the fiscal year beginning July 1, 2024, one-seventh 10 of the amount received by the taxing authority under this 11 section for the fiscal year beginning July 1, 2018. 12 (2) If the taxing authority is not a qualified taxing 13 authority: 14 (a) For the fiscal year beginning July 1, 2019, 15 three-fourths of the amount received by the taxing authority 16 under this section for the fiscal year beginning July 1, 2018. 17 (b) For the fiscal year beginning July 1, 2020, one-half of 18 the amount received by the taxing authority under this section 19 for the fiscal year beginning July 1, 2018. 20 (c) For the fiscal year beginning July 1, 2021, one-fourth 21 of the amount received by the taxing authority under this 22 section for the fiscal year beginning July 1, 2018. 23 (d) For the fiscal year beginning July 1, 2022, and each 24 succeeding fiscal year beginning before July 1, 2025, zero. 25 (3) The department of revenue shall consult with the 26 department of management to calculate the amount received by 27 each taxing authority in this state under this section as the 28 result of commercial and industrial property tax replacement 29 claims paid for the fiscal year beginning July 1, 2018. 30 Sec. 7. Section 441.21A, subsection 5, Code 2018, is amended 31 to read as follows: 32 5. For purposes of computing replacement amounts under 33 this section for fiscal years beginning on or after July 1, 34 2014, but before July 1, 2019 , that portion of an urban renewal 35 -4- LSB 5738SV (2) 87 md/jh 4/ 8

S.F. 2420 area defined as the sum of the assessed valuations defined in 1 section 403.19, subsections 1 and 2 , shall be considered a 2 taxing district. 3 Sec. 8. Section 441.21A, subsection 6, paragraph a, Code 4 2018, is amended to read as follows: 5 a. The For fiscal years beginning on or after July 1, 2014, 6 but before July 1, 2019, the county auditor shall certify 7 and forward one copy of the statement to the department of 8 revenue not later than a date of each year established by the 9 department of revenue by rule. 10 Sec. 9. Section 441.21A, subsection 6, Code 2018, is amended 11 by adding the following new paragraph: 12 NEW PARAGRAPH . f. This subsection shall apply to the 13 apportionment of replacement claim amounts for fiscal years 14 beginning on or after July 1, 2014, but before July 1, 2019. 15 Sec. 10. Section 441.21A, Code 2018, is amended by adding 16 the following new subsection: 17 NEW SUBSECTION . 7. a. For fiscal years beginning on 18 or after July 1, 2019, but before July 1, 2025, each taxing 19 authority’s property tax replacement claim payment calculated 20 under subsection 4A shall be paid to the taxing authority in 21 equal installments in September and March of each year. 22 b. The taxing authority’s property tax replacement claim 23 payment shall be apportioned and credited by the governing 24 body of the taxing authority among the taxing authority’s tax 25 levies in the same proportion that each property tax levy 26 bears to the total of all property tax levies imposed by the 27 taxing authority for the fiscal year for which the payment is 28 received. 29 c. Of the amounts allocated and credited to each property 30 tax levy that is subject to division under section 403.19, 31 the total amount paid into the fund for the taxing authority 32 as taxes by or for the taxing authority into which all other 33 property taxes are paid and the special fund of the applicable 34 municipality under section 403.19, subsection 2, shall be 35 -5- LSB 5738SV (2) 87 md/jh 5/ 8

S.F. 2420 an amount of the property tax replacement claim that is 1 proportionate to the amount of the total sum of the assessed 2 value of the taxable commercial and industrial property in 3 the urban renewal area as a share of total assessed value 4 of all taxable property in the taxing authority and shall be 5 apportioned as follows: 6 (1) To the fund for the taxing authority as taxes by or for 7 the taxing authority into which all other property taxes are 8 paid, an amount proportionate to the amount of actual value of 9 the commercial and industrial property in the urban renewal 10 area as determined in section 403.19, subsection 1, that was 11 subtracted pursuant to section 403.20, as it bears to the 12 total amount of actual value of the commercial and industrial 13 property in the urban renewal area that was subtracted pursuant 14 to section 403.20 for the assessment year for property taxes 15 due and payable in the fiscal year for which the replacement 16 claim is computed. 17 (2) (a) To the special fund of the applicable municipality 18 under section 403.19, subsection 2, the remaining amount, if 19 any. 20 (b) The amount allocated under subparagraph division (a) 21 shall not exceed the amount equal to the amount certified to 22 the county auditor under section 403.19 for the fiscal year in 23 which the claim is paid, after deduction of the amount of other 24 revenues committed for payment on that amount for the fiscal 25 year. The amount not allocated as a result of the operation of 26 this subparagraph division (b) shall be allocated to and paid 27 into the fund for the taxing authority as taxes by or for the 28 taxing authority in the manner provided in subparagraph (1). 29 EXPLANATION 30 The inclusion of this explanation does not constitute agreement with 31 the explanation’s substance by the members of the general assembly. 32 Current Code section 441.21A establishes and appropriates 33 amounts from the general fund of the state for commercial 34 and industrial property tax replacement claims. Such claims 35 -6- LSB 5738SV (2) 87 md/jh 6/ 8

S.F. 2420 are calculated by the department of revenue based on the 1 difference between the actual value and assessed value of all 2 commercial and industrial property in each taxing district 3 in the state. Current law appropriates an amount necessary 4 for the payment of all commercial and industrial property tax 5 replacement claims for each fiscal year beginning on or after 6 July 1, 2014, subject to a maximum total appropriation for 7 fiscal years beginning on or after July 1, 2017, of the total 8 amount necessary for the payment of replacement claims in the 9 fiscal year beginning July 1, 2016. This bill eliminates the 10 appropriation for fiscal years beginning on or after July 1, 11 2025, and specifies that the maximum total appropriation for 12 the fiscal year beginning July 1, 2018, shall not exceed the 13 total amount necessary for the payment of replacement claims in 14 the fiscal year beginning July 1, 2016. 15 The bill modifies the methodology for calculating and 16 apportioning commercial and industrial property tax replacement 17 claims for fiscal years beginning on or after July 1, 2019, 18 but before July 1, 2025. The bill requires such claims to be 19 calculated based on and paid to taxing authorities, as defined 20 in the bill, instead of taxing districts as is required under 21 current law. The amount of each taxing authority’s replacement 22 claim is determined based on specified fractions of the amount 23 received by the taxing authority under Code section 441.21A for 24 the fiscal year beginning July 1, 2018, and whether the taxing 25 authority is a qualified taxing authority. The specified 26 fractions are reduced over the period of fiscal years beginning 27 July 1, 2019, and ending July 1, 2024, in the case of a 28 qualified taxing authority, and July 1, 2021, in the case of a 29 taxing authority that is not a qualified taxing authority. The 30 appropriation ceases at the end of the fiscal year beginning 31 July 1, 2024. Under the bill, a qualified taxing authority 32 is a taxing authority in which the total assessed value as 33 of January 1, 2017, of specified taxable property located in 34 the taxing authority is less than 119.51 percent of the total 35 -7- LSB 5738SV (2) 87 md/jh 7/ 8

S.F. 2420 assessed value as of January 1, 2012, of specified taxable 1 property located in the taxing authority. 2 The bill requires each taxing authority’s property tax 3 replacement claim payment for fiscal years beginning on or 4 after July 1, 2019, but before July 1, 2025, to be apportioned 5 and credited by the governing body of the taxing authority 6 among the taxing authority’s tax levies in the same proportion 7 that each property tax levy bears to the total of all property 8 tax levies imposed by the taxing authority for the fiscal year 9 for which the payment is received. The bill also establishes 10 requirements for the apportionment of amounts allocated to 11 property tax levies that are subject to a division of taxes 12 under Code section 403.19 (tax increment financing). 13 Under current law, the legislative tax expenditure committee 14 established under Code section 2.48 is required to review 15 the commercial and industrial property tax replacement claim 16 expenditures. The bill eliminates that required periodic 17 review. 18 -8- LSB 5738SV (2) 87 md/jh 8/ 8