S.F. 365 Section 1. Section 404.2, subsection 2, paragraph f, Code 1 2021, is amended to read as follows: 2 f. A statement specifying whether the revitalization is 3 applicable to none, some, or all of the property assessed as 4 residential, multiresidential, agricultural, commercial, or 5 industrial property within the designated area or a combination 6 thereof and whether the revitalization is for rehabilitation 7 and additions to existing buildings or new construction or 8 both. If revitalization is made applicable only to some 9 property within an assessment classification, the definition of 10 that subset of eligible property must be by uniform criteria 11 which further some planning objective identified in the plan. 12 The city shall state how long it is estimated that the area 13 shall remain a designated revitalization area which time 14 shall be longer than one year from the date of designation 15 and shall state any plan by the city to issue revenue bonds 16 for revitalization projects within the area. For a county, 17 a revitalization area shall include only property which 18 will be used as industrial property, commercial property, 19 multiresidential property, or residential property. However, a 20 county shall not provide a tax exemption under this chapter to 21 commercial property , multiresidential property, or residential 22 property which is located within the limits of a city. 23 Sec. 2. Section 404.3, subsection 4, paragraph a, Code 2021, 24 is amended by striking the paragraph and inserting in lieu 25 thereof the following: 26 a. All qualified real estate assessed as residential 27 property is eligible to receive a one hundred percent exemption 28 from taxation on the actual value added by the improvements. 29 Sec. 3. Section 441.21, subsection 2, Code 2021, is amended 30 to read as follows: 31 2. In the event market value of the property being assessed 32 cannot be readily established in the foregoing manner, then 33 the assessor may determine the value of the property using the 34 other uniform and recognized appraisal methods including its 35 -1- LSB 1406SV (1) 89 md/jh 1/ 11

S.F. 365 productive and earning capacity, if any, industrial conditions, 1 its cost, physical and functional depreciation and obsolescence 2 and replacement cost, and all other factors which would assist 3 in determining the fair and reasonable market value of the 4 property but the actual value shall not be determined by use 5 of only one such factor. The following shall not be taken into 6 consideration: Special value or use value of the property to 7 its present owner, and the goodwill or value of a business 8 which uses the property as distinguished from the value of 9 the property as property. In addition, for assessment years 10 beginning on or after January 1, 2018, and unless otherwise 11 required for property valued by the department of revenue 12 pursuant to chapters 428 , 433 , 437 , and 438 , the assessor 13 shall not take into consideration and shall not request from 14 any person sales or receipts data, expense data, balance 15 sheets, bank account information, or other data related to 16 the financial condition of a business operating in whole or 17 in part on the property if the property is both classified as 18 commercial or industrial property and owned and used by the 19 owner of the business. However, in assessing property that 20 is rented or leased to low-income individuals and families 21 as authorized by section 42 of the Internal Revenue Code, 22 as amended, and which section limits the amount that the 23 individual or family pays for the rental or lease of units 24 in the property, the assessor shall, unless the owner elects 25 to withdraw the property from the assessment procedures for 26 section 42 property, use the productive and earning capacity 27 from the actual rents received as a method of appraisal and 28 shall take into account the extent to which that use and 29 limitation reduces the market value of the property. The 30 assessor shall not consider any tax credit equity or other 31 subsidized financing as income provided to the property in 32 determining the assessed value. The property owner shall 33 notify the assessor when property is withdrawn from section 42 34 eligibility under the Internal Revenue Code or if the owner 35 -2- LSB 1406SV (1) 89 md/jh 2/ 11

S.F. 365 elects to withdraw the property from the assessment procedures 1 for section 42 property under this subsection . The property 2 shall not be subject to section 42 assessment procedures 3 for the assessment year for which section 42 eligibility is 4 withdrawn or an election is made. This notification must 5 be provided to the assessor no later than March 1 of the 6 assessment year or the owner will be subject to a penalty of 7 five hundred dollars for that assessment year. The penalty 8 shall be collected at the same time and in the same manner 9 as regular property taxes. An election to withdraw from the 10 assessment procedures for section 42 property is irrevocable. 11 Property that is withdrawn from the assessment procedures 12 for section 42 property shall be classified and assessed as 13 multiresidential residential property unless the property 14 otherwise fails to meet the requirements of subsection 13 14 . 15 Upon adoption of uniform rules by the department of revenue 16 or succeeding authority covering assessments and valuations 17 of such properties, the valuation on such properties shall be 18 determined in accordance with such rules and in accordance with 19 forms and guidelines contained in the real property appraisal 20 manual prepared by the department as updated from time to time 21 for assessment purposes to assure uniformity, but such rules, 22 forms, and guidelines shall not be inconsistent with or change 23 the foregoing means of determining the actual, market, taxable 24 and assessed values. 25 Sec. 4. Section 441.21, subsection 8, paragraph b, Code 26 2021, is amended to read as follows: 27 b. Notwithstanding paragraph “a” , any construction or 28 installation of a solar energy system on property classified 29 as agricultural, residential, commercial, multiresidential, or 30 industrial property shall not increase the actual, assessed, 31 and taxable values of the property for five full assessment 32 years. 33 Sec. 5. Section 441.21, subsections 9 and 10, Code 2021, are 34 amended to read as follows: 35 -3- LSB 1406SV (1) 89 md/jh 3/ 11

S.F. 365 9. Not later than November 1, 1979, and November 1 of each 1 subsequent year, the director shall certify to the county 2 auditor of each county the percentages of actual value at 3 which residential property, agricultural property, commercial 4 property, industrial property, multiresidential property, 5 property valued by the department of revenue pursuant to 6 chapter 434 , and property valued by the department of revenue 7 pursuant to chapters 428 , 433 , 437 , and 438 in each assessing 8 jurisdiction in the county shall be assessed for taxation. The 9 county auditor shall proceed to determine the assessed values 10 of agricultural property, residential property, commercial 11 property, industrial property, multiresidential property, 12 property valued by the department of revenue pursuant to 13 chapter 434 , and property valued by the department of revenue 14 pursuant to chapters 428 , 433 , 437 , and 438 by applying such 15 percentages to the current actual value of such property, 16 as reported to the county auditor by the assessor, and the 17 assessed values so determined shall be the taxable values of 18 such properties upon which the levy shall be made. 19 10. The percentage of actual value computed by the 20 department of revenue for agricultural property, residential 21 property, commercial property, industrial property, 22 multiresidential property, property valued by the department 23 of revenue pursuant to chapter 434 , and property valued by the 24 department of revenue pursuant to chapters 428 , 433 , 437 , and 25 438 and used to determine assessed values of those classes 26 of property does not constitute a rule as defined in section 27 17A.2, subsection 11 . 28 Sec. 6. Section 441.21, subsection 13, paragraphs a, b, and 29 c, Code 2021, are amended to read as follows: 30 a. (1) For the assessment year beginning January 1, 2015, 31 mobile home parks, manufactured home communities, land-leased 32 communities, assisted living facilities, property primarily 33 used or intended for human habitation containing three or more 34 separate dwelling units, and that portion of a building that is 35 -4- LSB 1406SV (1) 89 md/jh 4/ 11

S.F. 365 used or intended for human habitation and a proportionate share 1 of the land upon which the building is situated, regardless of 2 the number of dwelling units located in the building, if the 3 use for human habitation is not the primary use of the building 4 and such building is not otherwise classified as residential 5 property, shall be valued as a separate class of property 6 known as multiresidential property and, excluding properties 7 referred to in section 427A.1, subsection 9 , shall be assessed 8 at a percentage of its actual value, as determined in this 9 subsection . 10 (2) Beginning with valuations established on or after 11 January 1, 2016, but before January 1, 2022, all of the 12 following shall be valued as a separate class of property 13 known as multiresidential property and, excluding properties 14 referred to in section 427A.1, subsection 9 , shall be assessed 15 at a percentage of its actual value, as determined in this 16 subsection : 17 (a) (1) Mobile home parks. 18 (b) (2) Manufactured home communities. 19 (c) (3) Land-leased communities. 20 (d) (4) Assisted living facilities. 21 (e) (5) A parcel primarily used or intended for human 22 habitation containing three or more separate dwelling units. 23 If a portion of such a parcel is used or intended for a purpose 24 that, if the primary use, would be classified as commercial 25 property or industrial property, each such portion, including 26 a proportionate share of the land included in the parcel, if 27 applicable, shall be assigned the appropriate classification 28 pursuant to paragraph “c” . 29 (f) (6) For a parcel that is primarily used or intended for 30 use as commercial property or industrial property, that portion 31 of the parcel that is used or intended for human habitation, 32 regardless of the number of dwelling units contained on the 33 parcel, including a proportionate share of the land included 34 in the parcel, if applicable. The portion of such a parcel 35 -5- LSB 1406SV (1) 89 md/jh 5/ 11

S.F. 365 used or intended for use as commercial property or industrial 1 property, including a proportionate share of the land included 2 in the parcel, if applicable, shall be assigned the appropriate 3 classification pursuant to paragraph “c” . 4 b. For valuations established for the assessment year 5 beginning January 1, 2015, the percentage of actual value as 6 equalized by the department of revenue as provided in section 7 441.49 at which multiresidential property shall be assessed 8 shall be the greater of eighty-six and twenty-five hundredths 9 percent or the percentage of actual value determined by the 10 department of revenue at which property assessed as residential 11 property is assessed for the same assessment year under 12 subsection 4 . For valuations established for the assessment 13 year beginning January 1, 2016, the percentage of actual 14 value as equalized by the department of revenue as provided 15 in section 441.49 at which multiresidential property shall be 16 assessed shall be the greater of eighty-two and five-tenths 17 percent or the percentage of actual value determined by the 18 department of revenue at which property assessed as residential 19 property is assessed for the same assessment year under 20 subsection 4 . For valuations established for the assessment 21 year beginning January 1, 2017, the percentage of actual 22 value as equalized by the department of revenue as provided 23 in section 441.49 at which multiresidential property shall be 24 assessed shall be the greater of seventy-eight and seventy-five 25 hundredths percent or the percentage of actual value determined 26 by the department of revenue at which property assessed as 27 residential property is assessed for the same assessment 28 year under subsection 4 . For valuations established for the 29 assessment year beginning January 1, 2018, the percentage of 30 actual value as equalized by the department of revenue as 31 provided in section 441.49 at which multiresidential property 32 shall be assessed shall be the greater of seventy-five percent 33 or the percentage of actual value determined by the department 34 of revenue at which property assessed as residential property 35 -6- LSB 1406SV (1) 89 md/jh 6/ 11

S.F. 365 is assessed for the same assessment year under subsection 4 . 1 For valuations established for the assessment year beginning 2 January 1, 2019, the percentage of actual value as equalized 3 by the department of revenue as provided in section 441.49 at 4 which multiresidential property shall be assessed shall be the 5 greater of seventy-one and twenty-five hundredths percent or 6 the percentage of actual value determined by the department 7 of revenue at which property assessed as residential property 8 is assessed for the same assessment year under subsection 4 . 9 For valuations established for the assessment year beginning 10 January 1, 2020, the percentage of actual value as equalized 11 by the department of revenue as provided in section 441.49 12 at which multiresidential property shall be assessed shall 13 be the greater of sixty-seven and five-tenths percent or the 14 percentage of actual value determined by the department of 15 revenue at which property assessed as residential property 16 is assessed for the same assessment year under subsection 4 . 17 For valuations established for the assessment year beginning 18 January 1, 2021, the percentage of actual value as equalized 19 by the department of revenue as provided in section 441.49 at 20 which multiresidential property shall be assessed shall be the 21 greater of sixty-three and seventy-five hundredths percent or 22 the percentage of actual value determined by the department 23 of revenue at which property assessed as residential property 24 is assessed for the same assessment year under subsection 4 . 25 For valuations established for the assessment year beginning 26 January 1, 2022, and each assessment year thereafter, the 27 percentage of actual value as equalized by the department of 28 revenue as provided in section 441.49 at which multiresidential 29 property shall be assessed shall be equal to the percentage of 30 actual value determined by the department of revenue at which 31 property assessed as residential property is assessed under 32 subsection 4 for the same assessment year. 33 c. (1) For the assessment year beginning January 1, 34 2015, for parcels that, in part, satisfy the requirements for 35 -7- LSB 1406SV (1) 89 md/jh 7/ 11

S.F. 365 classification as multiresidential property, the assessor 1 shall assign to that portion of the parcel the classification 2 of multiresidential property and to such other portions of 3 the parcel the property classification for which such other 4 portions qualify. 5 (2) Beginning with valuations established on or after 6 January 1, 2016, but before January 1, 2022, for parcels for 7 which a portion of the parcel satisfies the requirements 8 for classification as multiresidential property pursuant 9 to paragraph “a” , subparagraph (2), subparagraph division 10 (e) or (f) (5) or (6) , the assessor shall assign to that 11 portion of the parcel the classification of multiresidential 12 property and to such other portions of the parcel the property 13 classification for which such other portions qualify. 14 Sec. 7. Section 441.21, Code 2021, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 14. a. Beginning with valuations 17 established on or after January 1, 2022, all of the following 18 shall be classified and valued as residential property: 19 (1) Property primarily used or intended for human 20 habitation containing two or fewer dwelling units. 21 (2) Mobile home parks. 22 (3) Manufactured home communities. 23 (4) Land-leased communities. 24 (5) Assisted living facilities. 25 (6) A parcel primarily used or intended for human habitation 26 containing three or more separate dwelling units. If a 27 portion of such a parcel is used or intended for a purpose 28 that, if the primary use, would be classified as commercial 29 property or industrial property, each such portion, including 30 a proportionate share of the land included in the parcel, if 31 applicable, shall be assigned the appropriate classification 32 pursuant to paragraph “b” . 33 (7) For a parcel that is primarily used or intended for use 34 as commercial property or industrial property, that portion 35 -8- LSB 1406SV (1) 89 md/jh 8/ 11

S.F. 365 of the parcel that is used or intended for human habitation, 1 regardless of the number of dwelling units contained on the 2 parcel, including a proportionate share of the land included 3 in the parcel, if applicable. The portion of such a parcel 4 used or intended for use as commercial property or industrial 5 property, including a proportionate share of the land included 6 in the parcel, if applicable, shall be assigned the appropriate 7 classification pursuant to paragraph “b” . 8 b. Beginning with valuations established on or after 9 January 1, 2022, for parcels for which a portion of the parcel 10 satisfies the requirements for classification as residential 11 property pursuant to paragraph “a” , subparagraph (6) or (7), 12 the assessor shall assign to that portion of the parcel the 13 classification of residential property and to such other 14 portions of the parcel the property classification for which 15 such other portions qualify. 16 c. Property that is rented or leased to low-income 17 individuals and families as authorized by section 42 of the 18 Internal Revenue Code, and that has not been withdrawn from 19 section 42 assessment procedures under subsection 2 of this 20 section, or a hotel, motel, inn, or other building where rooms 21 or dwelling units are usually rented for less than one month 22 shall not be classified as residential property under this 23 subsection. 24 d. As used in this subsection: 25 (1) “Assisted living facility” means property for providing 26 assisted living as defined in section 231C.2. “Assisted living 27 facility” also includes a health care facility, as defined in 28 section 135C.1, an elder group home, as defined in section 29 231B.1, a child foster care facility under chapter 237, or 30 property used for a hospice program as defined in section 31 135J.1. 32 (2) “Dwelling unit” means an apartment, group of rooms, 33 or single room which is occupied as separate living quarters 34 or, if vacant, is intended for occupancy as separate living 35 -9- LSB 1406SV (1) 89 md/jh 9/ 11

S.F. 365 quarters, in which a tenant can live and sleep separately from 1 any other persons in the building. 2 (3) “Land-leased community” means the same as defined in 3 sections 335.30A and 414.28A. 4 (4) “Manufactured home community” means the same as a 5 land-leased community. 6 (5) “Mobile home park” means the same as defined in section 7 435.1. 8 Sec. 8. Section 558.46, subsection 5, Code 2021, is amended 9 by striking the subsection. 10 Sec. 9. SAVINGS PROVISION. This Act, pursuant to section 11 4.13, does not affect the operation of, or prohibit the 12 application of, prior provisions of the Code sections amended 13 by this Act, or rules adopted under chapter 17A to administer 14 such prior provisions, for assessment years beginning before 15 January 1, 2022, and for duties, powers, protests, appeals, 16 proceedings, actions, or remedies attributable to an assessment 17 year beginning before January 1, 2022. 18 Sec. 10. EFFECTIVE DATE. This Act takes effect January 1, 19 2022. 20 Sec. 11. APPLICABILITY. This Act applies to assessment 21 years beginning on or after January 1, 2022. 22 EXPLANATION 23 The inclusion of this explanation does not constitute agreement with 24 the explanation’s substance by the members of the general assembly. 25 This bill relates to property tax classifications, 26 assessment limitations, and administration. 27 Code section 441.21 provides that for assessment years 28 beginning on or after January 1, 2015, property can be 29 classified as multiresidential property. Multiresidential 30 property largely includes property that prior to the assessment 31 year beginning January 1, 2015, was classified as commercial 32 property and includes mobile home parks, manufactured 33 home communities, land-leased communities, assisted living 34 facilities, and property primarily used or intended for human 35 -10- LSB 1406SV (1) 89 md/jh 10/ 11

S.F. 365 habitation containing three or more separate dwelling units. 1 The percentage of actual value at which multiresidential 2 property is subject to tax has been reduced each assessment 3 year beginning with the 2015 assessment year. The percentage 4 of actual value is reduced by law until the percentage is equal 5 to or below the percentage that is applicable to residential 6 property, at which time the two classifications are subject to 7 the same percentage, but not later than the assessment year 8 beginning January 1, 2022. 9 The bill eliminates the classification of multiresidential 10 property for assessment years beginning on or after January 11 1, 2022. The bill also provides that the types of property 12 previously classified as multiresidential will, for assessment 13 years beginning on or after January 1, 2022, be classified as 14 residential property. 15 The bill makes corresponding changes to various other 16 provisions of law to reflect the elimination of the 17 multiresidential property classification. 18 The bill takes effect January 1, 2022, and applies to 19 assessment years beginning on or after that date. 20 The bill does not affect the operation of, or prohibit 21 the application of, prior provisions of the Code sections 22 amended by the bill, or rules adopted to administer such prior 23 provisions, for assessment years beginning before January 1, 24 2022, and for duties, powers, protests, appeals, proceedings, 25 actions, or remedies attributable to an assessment year 26 beginning before January 1, 2022. 27 -11- LSB 1406SV (1) 89 md/jh 11/ 11