H.F. 418 Section 1. Section 386.8, Code 2021, is amended to read as 1 follows: 2 386.8 Operation tax. 3 A city may establish a self-supported improvement district 4 operation fund, and may certify taxes not to exceed the 5 rate limitation as established in the ordinance creating the 6 district, or any amendment thereto, each year to be levied 7 for the fund against all of the property in the district, 8 for the purpose of paying the administrative expenses of 9 the district, which may include but are not limited to 10 administrative personnel salaries, a separate administrative 11 office, planning costs including consultation fees, engineering 12 fees, architectural fees, and legal fees and all other expenses 13 reasonably associated with the administration of the district 14 and the fulfilling of the purposes of the district. The taxes 15 levied for this fund may also be used for the purpose of paying 16 maintenance expenses of improvements or self-liquidating 17 improvements for a specified length of time with one or more 18 options to renew if such is clearly stated in the petition 19 which requests the council to authorize construction of the 20 improvement or self-liquidating improvement, whether or not 21 such petition is combined with the petition requesting creation 22 of a district. Parcels of property which are assessed as 23 residential property for property tax purposes are exempt 24 from the tax levied under this section except residential 25 properties within a duly designated historic district or 26 property classified as residential property under section 27 441.21, subsection 14, paragraph “a” , subparagraph (6) . A tax 28 levied under this section is not subject to the levy limitation 29 in section 384.1 . 30 Sec. 2. Section 386.9, Code 2021, is amended to read as 31 follows: 32 386.9 Capital improvement tax. 33 A city may establish a capital improvement fund for a 34 district and may certify taxes, not to exceed the rate 35 -1- LSB 1406HV (2) 89 md/jh 1/ 14

H.F. 418 established by the ordinance creating the district, or any 1 subsequent amendment thereto, each year to be levied for 2 the fund against all of the property in the district, for 3 the purpose of accumulating moneys for the financing or 4 payment of a part or all of the costs of any improvement or 5 self-liquidating improvement. However, parcels of property 6 which are assessed as residential property for property tax 7 purposes are exempt from the tax levied under this section 8 except residential properties within a duly designated historic 9 district or property classified as residential property under 10 section 441.21, subsection 14, paragraph “a” , subparagraph (6) . 11 A tax levied under this section is not subject to the levy 12 limitations in section 384.1 or 384.7 . 13 Sec. 3. Section 386.10, Code 2021, is amended to read as 14 follows: 15 386.10 Debt service tax. 16 A city shall establish a self-supported municipal 17 improvement district debt service fund whenever any 18 self-supported municipal improvement district bonds are issued 19 and outstanding, other than revenue bonds, and shall certify 20 taxes to be levied against all of the property in the district 21 for the debt service fund in the amount necessary to pay 22 interest as it becomes due and the amount necessary to pay, 23 or to create a sinking fund to pay, the principal at maturity 24 of all self-supported municipal improvement district bonds as 25 authorized in section 386.11 , issued by the city. However, 26 parcels of property which are assessed as residential property 27 for property tax purposes at the time of the issuance of the 28 bonds are exempt from the tax levied under this section until 29 the parcels are no longer assessed as residential property 30 or until the residential properties are designated as a part 31 of a historic district or property classified as residential 32 property under section 441.21, subsection 14, paragraph “a” , 33 subparagraph (6) . 34 Sec. 4. Section 404.2, subsection 2, paragraph f, Code 2021, 35 -2- LSB 1406HV (2) 89 md/jh 2/ 14

H.F. 418 is amended to read as follows: 1 f. A statement specifying whether the revitalization is 2 applicable to none, some, or all of the property assessed as 3 residential, multiresidential, agricultural, commercial, or 4 industrial property within the designated area or a combination 5 thereof and whether the revitalization is for rehabilitation 6 and additions to existing buildings or new construction or 7 both. If revitalization is made applicable only to some 8 property within an assessment classification, the definition of 9 that subset of eligible property must be by uniform criteria 10 which further some planning objective identified in the plan. 11 The city shall state how long it is estimated that the area 12 shall remain a designated revitalization area which time 13 shall be longer than one year from the date of designation 14 and shall state any plan by the city to issue revenue bonds 15 for revitalization projects within the area. For a county, 16 a revitalization area shall include only property which 17 will be used as industrial property, commercial property, 18 multiresidential property, or residential property. However, a 19 county shall not provide a tax exemption under this chapter to 20 commercial property , multiresidential property, or residential 21 property which is located within the limits of a city. 22 Sec. 5. Section 404.3, subsection 4, paragraph a, Code 2021, 23 is amended by striking the paragraph and inserting in lieu 24 thereof the following: 25 a. All qualified real estate assessed as residential 26 property is eligible to receive a one hundred percent exemption 27 from taxation on the actual value added by the improvements. 28 Sec. 6. Section 404.3A, Code 2021, is amended to read as 29 follows: 30 404.3A Residential development area exemption. 31 Notwithstanding the schedules provided for in section 404.3 , 32 all qualified real estate assessed as residential property , 33 excluding property classified as residential property under 34 section 441.21, subsection 14, paragraph “a” , subparagraph (6), 35 -3- LSB 1406HV (2) 89 md/jh 3/ 14

H.F. 418 in an area designated under section 404.1, subsection 5 , is 1 eligible to receive an exemption from taxation on the first 2 seventy-five thousand dollars of actual value added by the 3 improvements. The exemption is for a period of five years. 4 Sec. 7. Section 441.21, subsection 2, Code 2021, is amended 5 to read as follows: 6 2. In the event market value of the property being assessed 7 cannot be readily established in the foregoing manner, then 8 the assessor may determine the value of the property using the 9 other uniform and recognized appraisal methods including its 10 productive and earning capacity, if any, industrial conditions, 11 its cost, physical and functional depreciation and obsolescence 12 and replacement cost, and all other factors which would assist 13 in determining the fair and reasonable market value of the 14 property but the actual value shall not be determined by use 15 of only one such factor. The following shall not be taken into 16 consideration: Special value or use value of the property to 17 its present owner, and the goodwill or value of a business 18 which uses the property as distinguished from the value of 19 the property as property. In addition, for assessment years 20 beginning on or after January 1, 2018, and unless otherwise 21 required for property valued by the department of revenue 22 pursuant to chapters 428 , 433 , 437 , and 438 , the assessor 23 shall not take into consideration and shall not request from 24 any person sales or receipts data, expense data, balance 25 sheets, bank account information, or other data related to 26 the financial condition of a business operating in whole or 27 in part on the property if the property is both classified as 28 commercial or industrial property and owned and used by the 29 owner of the business. However, in assessing property that 30 is rented or leased to low-income individuals and families 31 as authorized by section 42 of the Internal Revenue Code, 32 as amended, and which section limits the amount that the 33 individual or family pays for the rental or lease of units 34 in the property, the assessor shall, unless the owner elects 35 -4- LSB 1406HV (2) 89 md/jh 4/ 14

H.F. 418 to withdraw the property from the assessment procedures for 1 section 42 property, use the productive and earning capacity 2 from the actual rents received as a method of appraisal and 3 shall take into account the extent to which that use and 4 limitation reduces the market value of the property. The 5 assessor shall not consider any tax credit equity or other 6 subsidized financing as income provided to the property in 7 determining the assessed value. The property owner shall 8 notify the assessor when property is withdrawn from section 42 9 eligibility under the Internal Revenue Code or if the owner 10 elects to withdraw the property from the assessment procedures 11 for section 42 property under this subsection . The property 12 shall not be subject to section 42 assessment procedures 13 for the assessment year for which section 42 eligibility is 14 withdrawn or an election is made. This notification must 15 be provided to the assessor no later than March 1 of the 16 assessment year or the owner will be subject to a penalty of 17 five hundred dollars for that assessment year. The penalty 18 shall be collected at the same time and in the same manner 19 as regular property taxes. An election to withdraw from the 20 assessment procedures for section 42 property is irrevocable. 21 Property that is withdrawn from the assessment procedures 22 for section 42 property shall be classified and assessed as 23 multiresidential residential property unless the property 24 otherwise fails to meet the requirements of subsection 13 14 . 25 Upon adoption of uniform rules by the department of revenue 26 or succeeding authority covering assessments and valuations 27 of such properties, the valuation on such properties shall be 28 determined in accordance with such rules and in accordance with 29 forms and guidelines contained in the real property appraisal 30 manual prepared by the department as updated from time to time 31 for assessment purposes to assure uniformity, but such rules, 32 forms, and guidelines shall not be inconsistent with or change 33 the foregoing means of determining the actual, market, taxable 34 and assessed values. 35 -5- LSB 1406HV (2) 89 md/jh 5/ 14

H.F. 418 Sec. 8. Section 441.21, subsection 8, paragraph b, Code 1 2021, is amended to read as follows: 2 b. Notwithstanding paragraph “a” , any construction or 3 installation of a solar energy system on property classified 4 as agricultural, residential, commercial, multiresidential, or 5 industrial property shall not increase the actual, assessed, 6 and taxable values of the property for five full assessment 7 years. 8 Sec. 9. Section 441.21, subsections 9 and 10, Code 2021, are 9 amended to read as follows: 10 9. Not later than November 1, 1979, and November 1 of each 11 subsequent year, the director shall certify to the county 12 auditor of each county the percentages of actual value at 13 which residential property, agricultural property, commercial 14 property, industrial property, multiresidential property, 15 property valued by the department of revenue pursuant to 16 chapter 434 , and property valued by the department of revenue 17 pursuant to chapters 428 , 433 , 437 , and 438 in each assessing 18 jurisdiction in the county shall be assessed for taxation. The 19 county auditor shall proceed to determine the assessed values 20 of agricultural property, residential property, commercial 21 property, industrial property, multiresidential property, 22 property valued by the department of revenue pursuant to 23 chapter 434 , and property valued by the department of revenue 24 pursuant to chapters 428 , 433 , 437 , and 438 by applying such 25 percentages to the current actual value of such property, 26 as reported to the county auditor by the assessor, and the 27 assessed values so determined shall be the taxable values of 28 such properties upon which the levy shall be made. 29 10. The percentage of actual value computed by the 30 department of revenue for agricultural property, residential 31 property, commercial property, industrial property, 32 multiresidential property, property valued by the department 33 of revenue pursuant to chapter 434 , and property valued by the 34 department of revenue pursuant to chapters 428 , 433 , 437 , and 35 -6- LSB 1406HV (2) 89 md/jh 6/ 14

H.F. 418 438 and used to determine assessed values of those classes 1 of property does not constitute a rule as defined in section 2 17A.2, subsection 11 . 3 Sec. 10. Section 441.21, subsection 13, paragraphs a, b, and 4 c, Code 2021, are amended to read as follows: 5 a. (1) For the assessment year beginning January 1, 2015, 6 mobile home parks, manufactured home communities, land-leased 7 communities, assisted living facilities, property primarily 8 used or intended for human habitation containing three or more 9 separate dwelling units, and that portion of a building that is 10 used or intended for human habitation and a proportionate share 11 of the land upon which the building is situated, regardless of 12 the number of dwelling units located in the building, if the 13 use for human habitation is not the primary use of the building 14 and such building is not otherwise classified as residential 15 property, shall be valued as a separate class of property 16 known as multiresidential property and, excluding properties 17 referred to in section 427A.1, subsection 9 , shall be assessed 18 at a percentage of its actual value, as determined in this 19 subsection . 20 (2) Beginning with valuations established on or after 21 January 1, 2016, but before January 1, 2022, all of the 22 following shall be valued as a separate class of property 23 known as multiresidential property and, excluding properties 24 referred to in section 427A.1, subsection 9 , shall be assessed 25 at a percentage of its actual value, as determined in this 26 subsection : 27 (a) (1) Mobile home parks. 28 (b) (2) Manufactured home communities. 29 (c) (3) Land-leased communities. 30 (d) (4) Assisted living facilities. 31 (e) (5) A parcel primarily used or intended for human 32 habitation containing three or more separate dwelling units. 33 If a portion of such a parcel is used or intended for a purpose 34 that, if the primary use, would be classified as commercial 35 -7- LSB 1406HV (2) 89 md/jh 7/ 14

H.F. 418 property or industrial property, each such portion, including 1 a proportionate share of the land included in the parcel, if 2 applicable, shall be assigned the appropriate classification 3 pursuant to paragraph “c” . 4 (f) (6) For a parcel that is primarily used or intended for 5 use as commercial property or industrial property, that portion 6 of the parcel that is used or intended for human habitation, 7 regardless of the number of dwelling units contained on the 8 parcel, including a proportionate share of the land included 9 in the parcel, if applicable. The portion of such a parcel 10 used or intended for use as commercial property or industrial 11 property, including a proportionate share of the land included 12 in the parcel, if applicable, shall be assigned the appropriate 13 classification pursuant to paragraph “c” . 14 b. For valuations established for the assessment year 15 beginning January 1, 2015, the percentage of actual value as 16 equalized by the department of revenue as provided in section 17 441.49 at which multiresidential property shall be assessed 18 shall be the greater of eighty-six and twenty-five hundredths 19 percent or the percentage of actual value determined by the 20 department of revenue at which property assessed as residential 21 property is assessed for the same assessment year under 22 subsection 4 . For valuations established for the assessment 23 year beginning January 1, 2016, the percentage of actual 24 value as equalized by the department of revenue as provided 25 in section 441.49 at which multiresidential property shall be 26 assessed shall be the greater of eighty-two and five-tenths 27 percent or the percentage of actual value determined by the 28 department of revenue at which property assessed as residential 29 property is assessed for the same assessment year under 30 subsection 4 . For valuations established for the assessment 31 year beginning January 1, 2017, the percentage of actual 32 value as equalized by the department of revenue as provided 33 in section 441.49 at which multiresidential property shall be 34 assessed shall be the greater of seventy-eight and seventy-five 35 -8- LSB 1406HV (2) 89 md/jh 8/ 14

H.F. 418 hundredths percent or the percentage of actual value determined 1 by the department of revenue at which property assessed as 2 residential property is assessed for the same assessment 3 year under subsection 4 . For valuations established for the 4 assessment year beginning January 1, 2018, the percentage of 5 actual value as equalized by the department of revenue as 6 provided in section 441.49 at which multiresidential property 7 shall be assessed shall be the greater of seventy-five percent 8 or the percentage of actual value determined by the department 9 of revenue at which property assessed as residential property 10 is assessed for the same assessment year under subsection 4 . 11 For valuations established for the assessment year beginning 12 January 1, 2019, the percentage of actual value as equalized 13 by the department of revenue as provided in section 441.49 at 14 which multiresidential property shall be assessed shall be the 15 greater of seventy-one and twenty-five hundredths percent or 16 the percentage of actual value determined by the department 17 of revenue at which property assessed as residential property 18 is assessed for the same assessment year under subsection 4 . 19 For valuations established for the assessment year beginning 20 January 1, 2020, the percentage of actual value as equalized 21 by the department of revenue as provided in section 441.49 22 at which multiresidential property shall be assessed shall 23 be the greater of sixty-seven and five-tenths percent or the 24 percentage of actual value determined by the department of 25 revenue at which property assessed as residential property 26 is assessed for the same assessment year under subsection 4 . 27 For valuations established for the assessment year beginning 28 January 1, 2021, the percentage of actual value as equalized 29 by the department of revenue as provided in section 441.49 at 30 which multiresidential property shall be assessed shall be the 31 greater of sixty-three and seventy-five hundredths percent or 32 the percentage of actual value determined by the department 33 of revenue at which property assessed as residential property 34 is assessed for the same assessment year under subsection 4 . 35 -9- LSB 1406HV (2) 89 md/jh 9/ 14

H.F. 418 For valuations established for the assessment year beginning 1 January 1, 2022, and each assessment year thereafter, the 2 percentage of actual value as equalized by the department of 3 revenue as provided in section 441.49 at which multiresidential 4 property shall be assessed shall be equal to the percentage of 5 actual value determined by the department of revenue at which 6 property assessed as residential property is assessed under 7 subsection 4 for the same assessment year. 8 c. (1) For the assessment year beginning January 1, 9 2015, for parcels that, in part, satisfy the requirements for 10 classification as multiresidential property, the assessor 11 shall assign to that portion of the parcel the classification 12 of multiresidential property and to such other portions of 13 the parcel the property classification for which such other 14 portions qualify. 15 (2) Beginning with valuations established on or after 16 January 1, 2016, but before January 1, 2022, for parcels for 17 which a portion of the parcel satisfies the requirements 18 for classification as multiresidential property pursuant 19 to paragraph “a” , subparagraph (2), subparagraph division 20 (e) or (f) (5) or (6) , the assessor shall assign to that 21 portion of the parcel the classification of multiresidential 22 property and to such other portions of the parcel the property 23 classification for which such other portions qualify. 24 Sec. 11. Section 441.21, Code 2021, is amended by adding the 25 following new subsection: 26 NEW SUBSECTION . 14. a. Beginning with valuations 27 established on or after January 1, 2022, all of the following 28 shall be classified and valued as residential property: 29 (1) Property primarily used or intended for human 30 habitation containing two or fewer dwelling units. 31 (2) Mobile home parks. 32 (3) Manufactured home communities. 33 (4) Land-leased communities. 34 (5) Assisted living facilities. 35 -10- LSB 1406HV (2) 89 md/jh 10/ 14

H.F. 418 (6) A parcel primarily used or intended for human habitation 1 containing three or more separate dwelling units. If a 2 portion of such a parcel is used or intended for a purpose 3 that, if the primary use, would be classified as commercial 4 property or industrial property, each such portion, including 5 a proportionate share of the land included in the parcel, if 6 applicable, shall be assigned the appropriate classification 7 pursuant to paragraph “b” . 8 (7) For a parcel that is primarily used or intended for use 9 as commercial property or industrial property, that portion 10 of the parcel that is used or intended for human habitation, 11 regardless of the number of dwelling units contained on the 12 parcel, including a proportionate share of the land included 13 in the parcel, if applicable. The portion of such a parcel 14 used or intended for use as commercial property or industrial 15 property, including a proportionate share of the land included 16 in the parcel, if applicable, shall be assigned the appropriate 17 classification pursuant to paragraph “b” . 18 b. Beginning with valuations established on or after 19 January 1, 2022, for parcels for which a portion of the parcel 20 satisfies the requirements for classification as residential 21 property pursuant to paragraph “a” , subparagraph (6) or (7), 22 the assessor shall assign to that portion of the parcel the 23 classification of residential property and to such other 24 portions of the parcel the property classification for which 25 such other portions qualify. 26 c. Property that is rented or leased to low-income 27 individuals and families as authorized by section 42 of the 28 Internal Revenue Code, and that has not been withdrawn from 29 section 42 assessment procedures under subsection 2 of this 30 section, or a hotel, motel, inn, or other building where rooms 31 or dwelling units are usually rented for less than one month 32 shall not be classified as residential property under this 33 subsection. 34 d. As used in this subsection: 35 -11- LSB 1406HV (2) 89 md/jh 11/ 14

H.F. 418 (1) “Assisted living facility” means property for providing 1 assisted living as defined in section 231C.2. “Assisted living 2 facility” also includes a health care facility, as defined in 3 section 135C.1, an elder group home, as defined in section 4 231B.1, a child foster care facility under chapter 237, or 5 property used for a hospice program as defined in section 6 135J.1. 7 (2) “Dwelling unit” means an apartment, group of rooms, 8 or single room which is occupied as separate living quarters 9 or, if vacant, is intended for occupancy as separate living 10 quarters, in which a tenant can live and sleep separately from 11 any other persons in the building. 12 (3) “Land-leased community” means the same as defined in 13 sections 335.30A and 414.28A. 14 (4) “Manufactured home community” means the same as a 15 land-leased community. 16 (5) “Mobile home park” means the same as defined in section 17 435.1. 18 Sec. 12. Section 558.46, subsection 5, Code 2021, is amended 19 by striking the subsection. 20 Sec. 13. SAVINGS PROVISION. This Act, pursuant to section 21 4.13, does not affect the operation of, or prohibit the 22 application of, prior provisions of the Code sections amended 23 by this Act, or rules adopted under chapter 17A to administer 24 such prior provisions, for assessment years beginning before 25 January 1, 2022, and for duties, powers, protests, appeals, 26 proceedings, actions, or remedies attributable to an assessment 27 year beginning before January 1, 2022. 28 Sec. 14. EFFECTIVE DATE. This Act takes effect January 1, 29 2022. 30 Sec. 15. APPLICABILITY. This Act applies to assessment 31 years beginning on or after January 1, 2022. 32 EXPLANATION 33 The inclusion of this explanation does not constitute agreement with 34 the explanation’s substance by the members of the general assembly. 35 -12- LSB 1406HV (2) 89 md/jh 12/ 14

H.F. 418 This bill relates to property tax classifications, 1 assessment limitations, and administration. 2 Code section 441.21 provides that for assessment years 3 beginning on or after January 1, 2015, property can be 4 classified as multiresidential property. Multiresidential 5 property largely includes property that prior to the assessment 6 year beginning January 1, 2015, was classified as commercial 7 property and includes mobile home parks, manufactured 8 home communities, land-leased communities, assisted living 9 facilities, and property primarily used or intended for human 10 habitation containing three or more separate dwelling units. 11 The percentage of actual value at which multiresidential 12 property is subject to tax has been reduced each assessment 13 year beginning with the 2015 assessment year. The percentage 14 of actual value is reduced by law until the percentage is equal 15 to or below the percentage that is applicable to residential 16 property, at which time the two classifications are subject to 17 the same percentage, but not later than the assessment year 18 beginning January 1, 2022. 19 The bill eliminates the classification of multiresidential 20 property for assessment years beginning on or after January 21 1, 2022. The bill also provides that the types of property 22 previously classified as multiresidential will, for assessment 23 years beginning on or after January 1, 2022, be classified as 24 residential property. 25 The bill makes corresponding changes to various other 26 provisions of law to reflect the elimination of the 27 multiresidential property classification. 28 The bill takes effect January 1, 2022, and applies to 29 assessment years beginning on or after that date. 30 The bill does not affect the operation of, or prohibit 31 the application of, prior provisions of the Code sections 32 amended by the bill, or rules adopted to administer such prior 33 provisions, for assessment years beginning before January 1, 34 2022, and for duties, powers, protests, appeals, proceedings, 35 -13- LSB 1406HV (2) 89 md/jh 13/ 14