Senate Study Bill 1253 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON DAWSON) A BILL FOR An Act relating to state and local government financing, 1 programs, and operations, by modifying provisions relating 2 to mental health and disability services funding, school 3 district funding, commercial and industrial property tax 4 replacement payments, and other specified tax provisions, 5 making appropriations, providing penalties, and including 6 effective date, applicability, and retroactive applicability 7 provisions. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 TLSB 2179XC (16) 89 md/jh
S.F. _____ DIVISION I 1 MENTAL HEALTH FUNDING 2 Section 1. Section 123.38, subsection 2, paragraph b, Code 3 2021, is amended to read as follows: 4 b. For purposes of this subsection , any portion of license 5 or permit fees used for the purposes authorized in section 6 331.424, subsection 1 , paragraph “a” , subparagraphs (1) and 7 (2), and in section 331.424A , shall not be deemed received 8 either by the division or by a local authority. 9 Sec. 2. Section 218.99, Code 2021, is amended to read as 10 follows: 11 218.99 Counties to be notified of patients’ personal 12 accounts. 13 The administrator in control of a state institution shall 14 direct the business manager of each institution under the 15 administrator’s jurisdiction which is mentioned in section 16 331.424, subsection 1 , paragraph “a” , subparagraphs (1) and 17 (2), and for which services are paid under section 331.424A 18 by the county of residence or a mental health and disability 19 services region , to quarterly inform the county of residence 20 of any patient or resident who has an amount in excess of two 21 hundred dollars on account in the patients’ personal deposit 22 fund and the amount on deposit. The administrators shall 23 direct the business manager to further notify the county of 24 residence at least fifteen days before the release of funds in 25 excess of two hundred dollars or upon the death of the patient 26 or resident. If the patient or resident has no residency in 27 this state or the person’s residency is unknown, notice shall 28 be made to the director of human services and the administrator 29 in control of the institution involved. 30 Sec. 3. Section 225.24, Code 2021, is amended to read as 31 follows: 32 225.24 Collection of preliminary expense. 33 Unless a committed private patient or those legally 34 responsible for the patient’s support offer to settle the 35 -1- LSB 2179XC (16) 89 md/jh 1/ 51
S.F. _____ amount of the claims, the regional administrator for the 1 person’s county of residence shall collect, by action if 2 necessary, the amount of all claims for per diem and expenses 3 that have been approved by the regional administrator for the 4 county and paid by the regional administrator as provided under 5 section 225.21 . Any amount collected shall be credited to the 6 county mental health and disabilities disability services fund 7 region combined account created in accordance with section 8 331.424A 331.391 . 9 Sec. 4. Section 249N.8, subsection 1, Code 2021, is amended 10 to read as follows: 11 1. Biennially, a report of the results of a review, by 12 county and region, of mental health services previously funded 13 through taxes levied by counties pursuant to section 331.424A , 14 Code 2021, or funds administered by a mental health and 15 disability services region that are funded during the reporting 16 period under the Iowa health and wellness plan. 17 Sec. 5. Section 331.389, subsection 1, paragraph b, Code 18 2021, is amended to read as follows: 19 b. If a county has been exempted prior to July 1, 2014, from 20 the requirement to enter into a regional service system, the 21 county and the county’s board of supervisors shall fulfill all 22 requirements and be eligible as a region under this chapter and 23 chapter chapters 222, 225, 225C , 226, 227, 229, and 230 for a 24 regional service system, regional service system management 25 plan, regional governing board, and regional administrator, 26 and any other provisions applicable to a region of counties 27 providing local mental health and disability services. 28 Additionally, a county exempted under this subsection shall be 29 considered a region for purposes of chapter 426B. 30 Sec. 6. Section 331.389, subsection 5, paragraph a, 31 subparagraph (2), Code 2021, is amended to read as follows: 32 (2) Reduce the amount of the annual state funding provided 33 for the regional service system or exempted county, including 34 amounts received under section 426B.3 or from the risk pool 35 -2- LSB 2179XC (16) 89 md/jh 2/ 51
S.F. _____ under section 426B.6 , not to exceed fifteen percent of the 1 amount. 2 Sec. 7. Section 331.391, subsection 1, Code 2021, is amended 3 to read as follows: 4 1. The funding under the control of the governing board 5 shall be maintained in a combined account , in separate county 6 accounts that are under the control of the governing board, or 7 pursuant to other arrangements authorized by law that limit the 8 administrative burden of such control while facilitating public 9 scrutiny of financial processes . A county exempted under 10 section 331.389, subsection 1, shall maintain a county mental 11 health and disability services fund for the deposit of funding 12 received under section 426B.3 or from the risk pool under 13 section 426B.6 and appropriations specifically authorized to be 14 made from the county mental health and disability services fund 15 shall not be made from any other fund of the county. A county 16 mental health and disability services fund established by an 17 exempt county, to the extent feasible, shall be considered to 18 be the same as a region combined account and shall be subject 19 to the same requirements as a region’s combined account. 20 Sec. 8. Section 331.391, subsection 4, paragraphs a and b, 21 Code 2021, are amended to read as follows: 22 a. If a region is meeting the financial obligations for 23 implementation of its regional service system management plan 24 for a fiscal year and residual funding is anticipated, the 25 regional administrator shall may reserve an adequate amount of 26 unobligated and unencumbered funds for cash flow of expenditure 27 obligations in the next fiscal year. 28 b. Each region shall certify to the department of management 29 human services on or before December 1, 2022 2021 , and each 30 December 1 thereafter, the amount of the region’s cash flow 31 amount in the combined account that is attributable to each 32 county within the region based upon each county’s proportionate 33 amount of funding and contributions to the region or other 34 methodology specified in the regional governance agreement 35 -3- LSB 2179XC (16) 89 md/jh 3/ 51
S.F. _____ or certify the cash flow amount for each separate county 1 account that is under the control of the governing board at the 2 conclusion of the most recently completed fiscal year. 3 Sec. 9. Section 331.391, subsection 4, paragraph c, Code 4 2021, is amended by striking the paragraph. 5 Sec. 10. Section 331.392, subsection 4, paragraph a, Code 6 2021, is amended to read as follows: 7 a. Methods for pooling, management, and expenditure of the 8 funding under the control of the regional administrator. If 9 the agreement does not provide for pooling of the participating 10 county moneys in a single fund, the agreement shall specify how 11 the participating county moneys will be subject to the control 12 of the regional administrator. 13 Sec. 11. Section 331.393, subsection 10, Code 2021, is 14 amended to read as follows: 15 10. The director’s approval of a regional plan shall not be 16 construed to constitute certification of the respective county 17 budgets or of the region’s budget. 18 Sec. 12. Section 331.394, subsection 4, Code 2021, is 19 amended to read as follows: 20 4. If a county of residence is part of a mental health and 21 disability services region that has agreed to pool funding and 22 liability for services, the The responsibilities of the county 23 under law regarding such mental health and disability services 24 shall be performed on behalf of the county by the regional 25 administrator. The county of residence or the county’s mental 26 health and disability services region , as applicable, is 27 responsible for paying the public costs of the mental health 28 and disability services that are not covered by the medical 29 assistance program under chapter 249A and are provided in 30 accordance with the region’s approved service management plan 31 to persons who are residents of the county or region. 32 Sec. 13. Section 331.424A, subsection 1, paragraph b, Code 33 2021, is amended by striking the paragraph. 34 Sec. 14. Section 331.424A, subsection 3, Code 2021, is 35 -4- LSB 2179XC (16) 89 md/jh 4/ 51
S.F. _____ amended to read as follows: 1 3. a. County revenues from taxes and other sources 2 designated by a county for mental health and disabilities 3 services shall be credited to the county mental health and 4 disabilities services fund which shall be created by the 5 county. The Until the required transfer of funds under 6 paragraph “b” , the board shall make appropriations from the fund 7 for payment of services provided under the regional service 8 system management plan approved pursuant to section 331.393 . 9 The For fiscal years beginning before July 1, 2022, the county 10 may pay for the services in cooperation with other counties 11 by pooling appropriations from the county services fund with 12 appropriations from the county services fund of other counties 13 through the county’s regional administrator, or through another 14 arrangement specified in the regional governance agreement 15 entered into by the county under section 331.392 . 16 b. Notwithstanding section 331.432, subsection 3, upon 17 conclusion of the fiscal year beginning July 1, 2021, except 18 for an exempt county under section 331.391, subsection 1, 19 the county treasurer shall transfer the remaining balance of 20 the county’s county services fund created under paragraph 21 “a” , including all unobligated and unencumbered funds, to the 22 county’s region to which the county belongs in the fiscal year 23 beginning July 1, 2022, for deposit in the region’s combined 24 account under section 331.391. 25 Sec. 15. Section 331.424A, subsection 4, paragraph a, Code 26 2021, is amended to read as follows: 27 a. An amount of unobligated and unencumbered funds, as 28 specified in the regional governance agreement entered into 29 by the county under section 331.392 , shall , for fiscal years 30 beginning before July 1, 2022, be reserved in the county 31 services fund to address cash flow obligations in the next 32 fiscal year , subject to the limitations of this subsection . 33 Sec. 16. Section 331.424A, subsection 4, paragraphs c and d, 34 Code 2021, are amended by striking the paragraphs. 35 -5- LSB 2179XC (16) 89 md/jh 5/ 51
S.F. _____ Sec. 17. Section 331.424A, subsections 5, 6, and 9, Code 1 2021, are amended to read as follows: 2 5. Receipts from the state or federal government for fiscal 3 years beginning before July 1, 2022, for the mental health 4 and disability services administered or paid for by a county 5 shall be credited to the county services fund, including moneys 6 distributed to the county from the department of human services 7 and moneys allocated under chapter 426B . 8 6. For each fiscal year beginning before July 1, 2022 , the 9 county shall certify a levy for payment of services. For each 10 such fiscal year, county revenues from taxes imposed by the 11 county credited to the county services fund shall not exceed an 12 amount equal to the county budgeted amount for the fiscal year. 13 A levy certified under this section is not subject to the 14 appeal provisions of section 331.426 or to any other provision 15 in law authorizing a county to exceed, increase, or appeal a 16 property tax levy limit. 17 9. a. For the fiscal year beginning July 1, 2017, and 18 each subsequent fiscal year beginning before July 1, 2022 , the 19 county budgeted amount determined for each county shall be the 20 amount necessary to meet the county’s financial obligations for 21 the payment of services provided under the regional service 22 system management plan approved pursuant to section 331.393 , 23 not to exceed an amount equal to the product of the regional 24 per capita expenditure target amount twenty-one dollars and 25 fourteen cents multiplied by the county’s population , and, for 26 fiscal years beginning on or after July 1, 2023, reduced by 27 the amount of the county’s cash flow reduction amount for the 28 fiscal year calculated under subsection 4 , if applicable . 29 b. If a county officially joins a different region, the 30 county’s budgeted amount for a fiscal year beginning before 31 July 1, 2022, shall be the amount necessary to meet the 32 county’s financial obligations for payment of services provided 33 under the new region’s regional service system management plan 34 approved pursuant to section 331.393 , not to exceed an amount 35 -6- LSB 2179XC (16) 89 md/jh 6/ 51
S.F. _____ equal to the product of the new region’s regional per capita 1 expenditure target amount twenty-one dollars and fourteen cents 2 multiplied by the county’s population , and, for fiscal years 3 beginning on or after July 1, 2023, reduced by the amount of 4 the county’s cash flow reduction amount for the fiscal year 5 calculated under subsection 4 , if applicable . 6 Sec. 18. Section 331.424A, Code 2021, is amended by adding 7 the following new subsection: 8 NEW SUBSECTION . 10. This section is repealed July 1, 2022. 9 Sec. 19. Section 331.432, subsection 3, Code 2021, is 10 amended by striking the subsection and inserting in lieu 11 thereof the following: 12 3. Payments or transfers of moneys from any fund of the 13 county to a mental health and disability services region’s 14 combined account under section 331.391 are prohibited. 15 Sec. 20. Section 347.7, subsection 1, paragraph c, Code 16 2021, is amended by striking the paragraph. 17 Sec. 21. Section 426B.1, subsection 2, Code 2021, is amended 18 to read as follows: 19 2. Moneys shall be distributed from the property tax relief 20 fund to counties for the mental health and disability regional 21 service system for mental health and disabilities services, in 22 accordance with the appropriations made to the fund and other 23 statutory requirements. 24 Sec. 22. Section 426B.2, Code 2021, is amended to read as 25 follows: 26 426B.2 Property tax relief fund payments. 27 The director of human services shall draw warrants on the 28 property tax relief fund, payable to the county treasurer 29 regional administrator in the amount due to a county mental 30 health and disability services region in accordance with 31 statutory requirements, and mail the warrants to the county 32 auditors regional administrator in July and January of each 33 year. 34 Sec. 23. NEW SECTION . 426B.3 Mental health and disability 35 -7- LSB 2179XC (16) 89 md/jh 7/ 51
S.F. _____ services regional supplement fund. 1 1. A mental health and disability services regional 2 supplement fund is created in the office of the treasurer of 3 state under the authority of the department of human services. 4 The fund shall be separate from the general fund of the state 5 and the balance in the fund shall not be considered part of 6 the balance of the general fund of the state. Moneys in the 7 fund include appropriations made to the fund and other moneys 8 deposited into the fund. Moneys in the fund shall be used 9 solely for purposes of making regional supplement payments 10 under this section. 11 2. For each fiscal year beginning on or after July 1, 2021, 12 there is appropriated from the general fund of the state to the 13 mental health and disability services regional supplement fund 14 an amount necessary to make all regional supplement payments 15 under this section for that fiscal year. 16 3. For each fiscal year beginning on or after July 1, 2021, 17 the moneys available in a fiscal year in the mental health and 18 disability services state supplement fund are appropriated to 19 the department of human services and shall be distributed to 20 each mental health and disability services region, as defined 21 in section 426B.6, on a per capita basis calculated under 22 subsection 4 using each region’s population, as defined in 23 section 426B.6, for that fiscal year. 24 4. The amount of each region’s regional supplement payment 25 shall be determined as follows: 26 a. For the fiscal year beginning July 1, 2021, an amount 27 equal to the product of fifteen dollars and eighty-six cents 28 multiplied by the sum of the region’s population for the fiscal 29 year. 30 b. For the fiscal year beginning July 1, 2022, an amount 31 equal to the product of thirty-eight dollars multiplied by the 32 sum of the region’s population for the fiscal year. 33 c. For the fiscal year beginning July 1, 2023, an amount 34 equal to the product of forty dollars multiplied by the sum of 35 -8- LSB 2179XC (16) 89 md/jh 8/ 51
S.F. _____ the region’s population for the fiscal year. 1 d. For the fiscal year beginning July 1, 2024, an amount 2 equal to the product of forty-two dollars multiplied by the sum 3 of the region’s population for the fiscal year. 4 e. (1) For the fiscal year beginning July 1, 2025, and each 5 succeeding fiscal year, an amount equal to the product of the 6 sum of the region’s population for the fiscal year multiplied 7 by the sum of the dollar amount used to calculate the regional 8 supplement payments under this subsection for the immediately 9 preceding fiscal year plus the regional supplement growth 10 factor for the fiscal year. 11 (2) For purposes of this paragraph, “regional supplement 12 growth factor” for a fiscal year is an amount equal to the 13 product of the dollar amount used to calculate the regional 14 supplement payments under this subsection for the immediately 15 preceding fiscal year multiplied by the percent increase, if 16 any, in the amount of sales tax revenue deposited into the 17 general fund of the state under section 423.2A, subsection 18 1, paragraph “a” , less the transfers required under section 19 423.2A, subsection 2, between the fiscal year beginning three 20 years prior to the applicable fiscal year and the fiscal year 21 beginning two years prior to the applicable year, but not to 22 exceed one and one-half percent. 23 5. Regional supplement payments received by a region 24 shall be deposited in the region’s combined account under 25 section 331.391 and used solely for providing mental health 26 and disability services under the regional service system 27 management plan. 28 6. Regional supplement payments from the mental health 29 and disability services regional supplement fund shall be 30 paid in quarterly installments to the appropriate regional 31 administrator in July, October, January, and April of each 32 fiscal year. 33 7. a. For the fiscal year beginning July 1, 2021, each 34 mental health and disability services region for which the 35 -9- LSB 2179XC (16) 89 md/jh 9/ 51
S.F. _____ amount certified during the fiscal year under section 331.391, 1 subsection 4, paragraph “b” , exceeds forty percent of the 2 proposed gross expenditures of the region for the fiscal year, 3 the remaining quarterly payments of the region’s regional 4 supplement payment shall be reduced by an amount equal to the 5 amount by which the region’s amount certified under section 6 331.391, subsection 4, paragraph “b” , exceeds forty percent of 7 the proposed gross expenditures of the region for the fiscal 8 year, but the amount of the reduction shall not exceed the 9 total amount of the region’s regional supplement payment for 10 the fiscal year. If the region’s remaining quarterly payments 11 are insufficient to effectuate the required reductions under 12 this paragraph, the region is required to pay to the department 13 of human services any amount for which the reduction in 14 quarterly payments could not be made. The amount of reductions 15 to quarterly payments and amounts paid to the department under 16 this paragraph shall be transferred and credited to the risk 17 pool under section 426B.6. 18 b. For the fiscal year beginning July 1, 2022, each mental 19 health and disability services region for which the amount 20 certified during the fiscal year under section 331.391, 21 subsection 4, paragraph “b” , exceeds twenty percent of the 22 proposed gross expenditures of the region for the fiscal year, 23 the remaining quarterly payments of the region’s regional 24 supplement payment shall be reduced by an amount equal to the 25 amount by which the region’s amount certified under section 26 331.391, subsection 4, paragraph “b” , exceeds twenty percent of 27 the proposed gross expenditures of the region for the fiscal 28 year, but the amount of the reduction shall not exceed the 29 total amount of the region’s regional supplement payment for 30 the fiscal year. If the region’s remaining quarterly payments 31 are insufficient to effectuate the required reductions under 32 this paragraph, the region is required to pay to the department 33 of human services any amount for which the reduction in 34 quarterly payments could not be made. The amount of reductions 35 -10- LSB 2179XC (16) 89 md/jh 10/ 51
S.F. _____ to quarterly payments and amounts paid to the department under 1 this paragraph shall be transferred and credited to the risk 2 pool under section 426B.6. 3 c. For the fiscal year beginning July 1, 2023, and each 4 succeeding fiscal year, each mental health and disability 5 services region for which an amount greater than zero is 6 certified during the fiscal year under section 331.391, 7 subsection 4, paragraph “b” , the remaining quarterly payments 8 of the region’s regional supplement payment shall be reduced by 9 an amount equal to the amount certified under section 331.391, 10 subsection 4, paragraph “b” , but the amount of the reduction 11 shall not exceed the total amount of the region’s regional 12 supplement payment for the fiscal year. If the region’s 13 remaining quarterly payments are insufficient to effectuate 14 the required reductions under this paragraph, the region is 15 required to pay to the department of human services any amount 16 for which the reduction in quarterly payments could not be 17 made. The amount of reductions to quarterly payments and 18 amounts paid to the department under this paragraph shall be 19 transferred and credited to the risk pool under section 426B.6. 20 Sec. 24. Section 426B.4, Code 2021, is amended to read as 21 follows: 22 426B.4 Rules. 23 The mental health and disability services commission shall 24 consult with county representatives regional administrators 25 and the director of human services in prescribing forms and 26 adopting rules pursuant to chapter 17A to administer this 27 chapter . 28 Sec. 25. NEW SECTION . 426B.6 Risk pool. 29 1. For the purposes of this chapter, unless the context 30 otherwise requires: 31 a. “Mental health and disability services region” means 32 a mental health and disability services region formed in 33 accordance with section 331.389. 34 b. “Population” means, as of July 1 of the fiscal year 35 -11- LSB 2179XC (16) 89 md/jh 11/ 51
S.F. _____ preceding the fiscal year in which the population figure is 1 applied, the county population shown by the latest preceding 2 certified federal census or the latest applicable population 3 estimate issued by the United States census bureau, whichever 4 is most recent. 5 c. “Regional administrator” means the regional administrator 6 of a mental health and disability services region, as defined 7 in section 331.388. 8 2. A risk pool is created in the property tax relief fund 9 under section 426B.1. The pool shall consist of the moneys 10 appropriated or credited to the pool by law, including amounts 11 credited to the risk pool under section 426B.3, subsection 7. 12 For fiscal years beginning on or after July 1, 2021, there is 13 appropriated from the general fund of the state to the risk 14 pool the following amounts to be used for the purposes of this 15 section: 16 a. For the fiscal year beginning July 1, 2021, nine million 17 nine hundred sixty thousand five hundred ninety dollars. 18 b. For the fiscal year beginning July 1, 2022, five million 19 one hundred seven thousand three hundred forty dollars. 20 c. (1) For each fiscal year beginning on or after July 1, 21 2025, an amount equal to the risk pool growth factor multiplied 22 by the ending balance of the risk pool at the conclusion of 23 the fiscal year ending June 30 immediately preceding the 24 application deadline under subsection 4 for the fiscal year for 25 which the appropriation is made. 26 (2) For purposes of this paragraph, the “risk pool growth 27 factor” for each fiscal year is the percent increase, if any, in 28 the amount of sales tax revenue deposited into the general fund 29 of the state under section 423.2A, subsection 1, paragraph “a” , 30 less the transfers required under section 423.2A, subsection 31 2, between the fiscal year beginning three years prior to the 32 applicable fiscal year and the fiscal year beginning two years 33 prior to the applicable year, minus one and one-half percent, 34 and the risk pool growth factor for any fiscal year shall not 35 -12- LSB 2179XC (16) 89 md/jh 12/ 51
S.F. _____ exceed three and one-half percent. 1 3. A risk pool board is created. The board shall consist of 2 two county supervisors, two county auditors, a member of the 3 mental health and disability services commission who is not a 4 member of a county board of supervisors, a member of the county 5 finance committee created in chapter 333A who is not an elected 6 official, a representative of a provider of mental health or 7 developmental disabilities services selected from nominees 8 submitted by the Iowa association of community providers, 9 and two staff members of regional administrators of county 10 mental health and disability services regions, all appointed 11 by the governor, and one member appointed by the director of 12 human services. All members appointed by the governor shall 13 be subject to confirmation by the senate. Members shall serve 14 for three-year terms. A vacancy shall be filled in the same 15 manner as the original appointment. Expenses and other costs 16 of the risk pool board members representing counties shall be 17 paid by the county of origin. Expenses and other costs of risk 18 pool board members who do not represent counties shall be paid 19 by the department of human services. Staff assistance to the 20 board shall be provided by the department of human services. 21 Actuarial expenses and other direct administrative costs shall 22 be charged to the pool. 23 4. To receive assistance from the risk pool, a regional 24 administrator must apply to the risk pool board on or before 25 October 31 preceding the fiscal year for which assistance is 26 requested. The purpose of the assistance shall be to provide 27 financial support for services provided by the regional 28 administrator’s mental health and disability services region. 29 The risk pool board shall make its final decisions on or 30 before December 15 regarding acceptance or rejection of the 31 applications for assistance and the total amount accepted shall 32 be considered obligated. 33 5. Basic eligibility for risk pool assistance requires that 34 a mental health and disability services region meet all of the 35 -13- LSB 2179XC (16) 89 md/jh 13/ 51
S.F. _____ following conditions: 1 a. The mental health and disability services region is in 2 compliance with the regional service system management plan 3 requirements of section 331.393. 4 b. (1) For applications for assistance for the fiscal year 5 beginning July 1, 2021, and the fiscal year beginning July 1, 6 2022, in the fiscal year that commenced two years prior to the 7 fiscal year of application for assistance, the ending balance, 8 under generally accepted accounting principles, of the mental 9 health and disability services region’s combined services funds 10 was equal to or less than the ending balance threshold under 11 subparagraph (2) for the fiscal year for which assistance is 12 requested. 13 (2) For purposes of this paragraph “b” , “ending balance 14 threshold” means the following: 15 (a) For applications for assistance for the fiscal year 16 beginning July 1, 2021, forty percent of the actual gross 17 expenditures of the mental health and disability services 18 region for the fiscal year that commenced two years prior to 19 the fiscal year of application for assistance. 20 (b) For applications for assistance for the fiscal year 21 beginning July 1, 2022, twenty percent of the actual gross 22 expenditures of the mental health and disability services 23 region for the fiscal year that commenced two years prior to 24 the fiscal year of application for assistance. 25 6. The board shall review the fiscal year-end financial 26 records for all mental health and disability services regions 27 that are granted risk pool assistance. If the board determines 28 a mental health and disability services region’s actual need 29 for risk pool assistance was less than the amount of risk pool 30 assistance granted to the mental health and disability services 31 region, the mental health and disability services region 32 shall refund the difference between the amount of assistance 33 granted and the actual need. The mental health and disability 34 services region shall submit the refund within thirty days of 35 -14- LSB 2179XC (16) 89 md/jh 14/ 51
S.F. _____ receiving notice from the board. Refunds shall be credited 1 to the risk pool. The mental health and disability services 2 commission shall adopt rules pursuant to chapter 17A providing 3 criteria for the purposes of this subsection and as necessary 4 to implement the other provisions of this section. 5 7. The board shall determine application requirements to 6 ensure prudent use of risk pool assistance. The board may 7 accept or reject an application for assistance in whole or in 8 part. The decision of the board is final. 9 8. The total amount of risk pool assistance shall be limited 10 to the amount available in the risk pool for a fiscal year. Any 11 unobligated balance in the risk pool at the close of a fiscal 12 year shall remain in the risk pool for distribution in the 13 succeeding fiscal year. 14 9. Risk pool assistance shall only be made available to 15 address one or more of the following circumstances: 16 a. Continuing support for mandated services. 17 b. Avoiding the need for reduction or elimination of 18 critical services when the reduction or elimination places 19 consumers’ health or safety at risk. 20 c. Avoiding the need for reduction or elimination of a 21 mobile crisis team or other critical emergency services when 22 the reduction or elimination places the public’s health or 23 safety at risk. 24 d. Avoiding the need for reduction or elimination of the 25 services or other support provided to entire populations of 26 consumers with disabilities. 27 e. Avoiding the need for reduction or elimination of 28 services or other support that maintain consumers in a 29 community setting or that would create a risk that the 30 consumers would be placed in more restrictive, higher cost 31 settings. 32 10. Subject to the amount available and obligated from the 33 risk pool for a fiscal year, the department of human services 34 shall annually calculate the amount of moneys due to eligible 35 -15- LSB 2179XC (16) 89 md/jh 15/ 51
S.F. _____ mental health and disability services regions in accordance 1 with the board’s decisions and that amount is appropriated from 2 the risk pool to the department for payment of the moneys due. 3 The department shall authorize the issuance of warrants payable 4 to the mental health and disability services regions for the 5 amounts due and the warrants shall be issued on or before 6 January 1. 7 11. On or before March 1 and September 1 of each fiscal 8 year, the department of human services shall provide the risk 9 pool board with a report of the financial condition of each 10 funding source administered by the board. The report shall 11 include but is not limited to an itemization of the funding 12 source’s balances, types and amount of revenues credited, and 13 payees and payment amounts for the expenditures made from the 14 funding source during the reporting period. 15 12. If the board has made its decisions but has determined 16 that there are otherwise qualifying requests for risk pool 17 assistance that are beyond the amount available in the risk 18 pool fund for a fiscal year, the board shall compile a list of 19 such requests and the supporting information for the requests. 20 The list and information shall be submitted to the mental 21 health and disability services commission, the department of 22 human services, and the general assembly. 23 Sec. 26. ADJUSTMENT TO PROPERTY TAXES CERTIFIED UNDER 24 SECTION 331.424A —— FY 2021-2022. If this division of this 25 Act takes effect after March 31, 2021, for each county for 26 which the amount of taxes certified for levy for the purposes 27 of section 331.424A for the fiscal year beginning July 1, 28 2021, exceeds the product of the population of the county as 29 determined under section 331.424A, subsection 1, paragraph 30 “e”, multiplied by twenty-one dollars and fourteen cents, 31 the department of management shall reduce the amount of such 32 taxes certified for levy to an amount not to exceed the 33 product of the population of the county as determined under 34 section 331.424A, subsection 1, paragraph “e”, multiplied by 35 -16- LSB 2179XC (16) 89 md/jh 16/ 51
S.F. _____ twenty-one dollars and fourteen cents and shall revise the rate 1 of taxation as necessary to raise the reduced amount. The 2 department of management shall report the reduction in the 3 certified taxes and the revised rate of taxation to the county 4 auditors by June 15, 2021. 5 Sec. 27. IMPLEMENTATION OF RISK POOL UNDER SECTION 426B.6 6 —— EMERGENCY RULEMAKING. 7 1. In order to timely implement the provisions of this 8 division of this Act establishing the risk pool for mental 9 health and disability services regions for the fiscal year 10 beginning July 1, 2021, and the fiscal year beginning July 11 1, 2022, the director of human services shall, subject to 12 the membership requirements of section 426B.6, subsection 3, 13 appoint temporary members of the risk pool board to review 14 and approve risk pool assistance applications and establish 15 alternative application deadlines and expedited application 16 review and approval timelines. 17 2. The department of human services may adopt 18 administrative rules under section 17A.4, subsection 3, and 19 section 17A.5, subsection 2, paragraph “b”, to implement 20 provisions of this division of this Act and the rules shall 21 become effective immediately upon filing or on a later 22 effective date specified in the rules, unless the effective 23 date of the rules is delayed or the applicability of the rules 24 is suspended by the administrative rules review committee. Any 25 rules adopted in accordance with this section shall not take 26 effect before the rules are reviewed by the administrative 27 rules review committee. The delay authority provided to the 28 administrative rules review committee under section 17A.8, 29 subsection 9, shall be applicable to a delay imposed under this 30 section, notwithstanding a provision in that section making it 31 inapplicable to section 17A.5, subsection 2, paragraph “b”. 32 Any rules adopted in accordance with the provisions of this 33 section shall also be published as a notice of intended action 34 as provided in section 17A.4. 35 -17- LSB 2179XC (16) 89 md/jh 17/ 51
S.F. _____ Sec. 28. EFFECTIVE DATE. Except as provided in this 1 division of this Act, this division of this Act, being deemed 2 of immediate importance, takes effect upon enactment. 3 Sec. 29. EFFECTIVE DATE. The following take effect July 1, 4 2022: 5 1. The section of this division of this Act amending section 6 331.432, subsection 3. 7 2. The section of this division of this Act amending section 8 347.7, subsection 1, paragraph “c”. 9 DIVISION II 10 COMMERCIAL AND INDUSTRIAL PROPERTY TAX REPLACEMENT PAYMENTS 11 Sec. 30. Section 2.48, subsection 3, paragraph f, 12 subparagraph (6), Code 2021, is amended by striking the 13 subparagraph. 14 Sec. 31. Section 331.512, subsection 15, Code 2021, is 15 amended by striking the subsection. 16 Sec. 32. Section 331.559, subsection 27, Code 2021, is 17 amended by striking the subsection. 18 Sec. 33. Section 441.21A, subsection 1, paragraph a, Code 19 2021, is amended to read as follows: 20 a. For each fiscal year beginning on or after July 1, 2014, 21 but before July 1, 2027, 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 years beginning 26 on or after July 1, 2017, July 1, 2018, July 1, 2019, July 1, 27 2020, and July 1, 2021, the total amount of moneys appropriated 28 from the general fund of the state to the department of revenue 29 for the payment of commercial and industrial property tax 30 replacement claims in that each fiscal year shall not exceed 31 the total amount of money necessary to pay all commercial and 32 industrial property tax replacement claims for the fiscal year 33 beginning July 1, 2016. 34 Sec. 34. Section 441.21A, subsections 2 and 3, Code 2021, 35 -18- LSB 2179XC (16) 89 md/jh 18/ 51
S.F. _____ are 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, 2022, 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 6 in subsection 4 . If an amount appropriated for a the fiscal 7 year beginning on July 1, 2017, July 1, 2018, July 1, 2019, 8 July 1, 2020, or July 1, 2021, is insufficient to pay all 9 replacement claims for the fiscal year , the director of revenue 10 shall prorate the payment of replacement claims to the county 11 treasurers and shall notify the county auditors of the pro rata 12 percentage on or before September 30. 13 b. For each fiscal year beginning on or after July 1, 2022, 14 but before July 1, 2027, each taxing authority shall be paid by 15 the department of revenue an amount equal to the amount of the 16 commercial and industrial property tax replacement claim for 17 the taxing authority, as calculated in subsection 4A. 18 3. a. On or before July 1 of each fiscal year beginning on 19 or after July 1, 2014, but before July 1, 2022, the assessor 20 shall report to the county auditor the total actual value of 21 all commercial property and industrial property in the county 22 that is subject to assessment and taxation for the assessment 23 year used to calculate the taxes due and payable in that fiscal 24 year. 25 b. On or before July 1, 2022, the department of revenue, in 26 consultation with the department of management, shall calculate 27 for each taxing authority in this state that is a city or a 28 county all of the following: 29 (1) The total assessed value as of January 1, 2012, of 30 all taxable property located in the taxing authority that is 31 subject to assessment and taxation used to calculate taxes 32 which are due and payable in the fiscal year beginning July 1, 33 2013, excluding property subject to the statewide property tax 34 imposed under section 437A.18 or 437B.14. 35 -19- LSB 2179XC (16) 89 md/jh 19/ 51
S.F. _____ (2) The total assessed value as of January 1, 2019, of 1 all taxable property located in the taxing authority that is 2 subject to assessment and taxation used to calculate taxes 3 which are due and payable in the fiscal year beginning July 1, 4 2020, excluding property subject to the statewide property tax 5 imposed under section 437A.18 or 437B.14. 6 Sec. 35. Section 441.21A, subsection 4, unnumbered 7 paragraph 1, Code 2021, is amended to read as follows: 8 On or before a date established by rule of the department 9 of revenue of each fiscal year beginning on or after July 10 1, 2014, but before July 1, 2022, the county auditor shall 11 prepare a statement, based upon the report received pursuant to 12 subsection 3 , paragraph “a” , listing for each taxing district 13 in the county: 14 Sec. 36. Section 441.21A, Code 2021, is amended by adding 15 the following new subsection: 16 NEW SUBSECTION . 4A. a. As used in this subsection, unless 17 the context clearly requires otherwise: 18 (1) “Qualified taxing authority” means any of the following: 19 (a) A taxing authority that is not a city or a county. 20 (b) A taxing authority that is a city or county for which 21 the amount determined under subsection 3, paragraph “b” , 22 subparagraph (2), is less than one hundred thirty-one and 23 fourteen hundredths percent of the amount determined under 24 subsection 3, paragraph “b” , subparagraph (1). 25 (2) “Taxing authority” means a city, county, community 26 college, or other governmental entity or political subdivision 27 in this state authorized to certify a levy on property located 28 within such authority, but does not include a school district. 29 b. For fiscal years beginning on or after July 1, 2022, 30 but before July 1, 2027, the amount of each taxing authority’s 31 replacement claim is as follows: 32 (1) If the taxing authority is a qualified taxing authority: 33 (a) For the fiscal year beginning July 1, 2022, five-sixths 34 of the amount received by the taxing authority under this 35 -20- LSB 2179XC (16) 89 md/jh 20/ 51
S.F. _____ section for the fiscal year beginning July 1, 2021. 1 (b) For the fiscal year beginning July 1, 2023, four-sixths 2 of the amount received by the taxing authority under this 3 section for the fiscal year beginning July 1, 2021. 4 (c) For the fiscal year beginning July 1, 2024, three-sixths 5 of the amount received by the taxing authority under this 6 section for the fiscal year beginning July 1, 2021. 7 (d) For the fiscal year beginning July 1, 2025, two-sixths 8 of the amount received by the taxing authority under this 9 section for the fiscal year beginning July 1, 2021. 10 (e) For the fiscal year beginning July 1, 2026, one-sixth of 11 the amount received by the taxing authority under this section 12 for the fiscal year beginning July 1, 2021. 13 (2) If the taxing authority is not a qualified taxing 14 authority: 15 (a) For the fiscal year beginning July 1, 2022, 16 three-fourths of the amount received by the taxing authority 17 under this section for the fiscal year beginning July 1, 2021. 18 (b) For the fiscal year beginning July 1, 2023, two-fourths 19 of the amount received by the taxing authority under this 20 section for the fiscal year beginning July 1, 2021. 21 (c) For the fiscal year beginning July 1, 2024, one-fourth 22 of the amount received by the taxing authority under this 23 section for the fiscal year beginning July 1, 2021. 24 (d) For the fiscal year beginning July 1, 2025, and each 25 succeeding fiscal year beginning before July 1, 2027, zero. 26 (3) The department of revenue shall consult with the 27 department of management to calculate the amount received by 28 each taxing authority in this state as the result of commercial 29 and industrial property tax replacement claims paid for the 30 fiscal year beginning July 1, 2021. 31 Sec. 37. Section 441.21A, subsection 5, Code 2021, is 32 amended to read as follows: 33 5. For purposes of computing replacement amounts under 34 this section for fiscal years beginning on or after July 1, 35 -21- LSB 2179XC (16) 89 md/jh 21/ 51
S.F. _____ 2014, but before July 1, 2022 , that portion of an urban renewal 1 area defined as the sum of the assessed valuations defined in 2 section 403.19, subsections 1 and 2 , shall be considered a 3 taxing district. 4 Sec. 38. Section 441.21A, subsection 6, paragraph a, Code 5 2021, is amended to read as follows: 6 a. The For fiscal years beginning on or after July 1, 2014, 7 but before July 1, 2022, the county auditor shall certify 8 and forward one copy of the statement to the department of 9 revenue not later than a date of each year established by the 10 department of revenue by rule. 11 Sec. 39. Section 441.21A, subsection 6, Code 2021, is 12 amended by adding the following new paragraph: 13 NEW PARAGRAPH . f. This subsection shall apply to the 14 apportionment of replacement claim amounts for fiscal years 15 beginning on or after July 1, 2014, but before July 1, 2022. 16 Sec. 40. Section 441.21A, Code 2021, is amended by adding 17 the following new subsections: 18 NEW SUBSECTION . 7. a. For fiscal years beginning on 19 or after July 1, 2022, but before July 1, 2027, each taxing 20 authority’s replacement claim calculated under subsection 4A 21 shall be paid to the taxing authority in equal installments in 22 September and March of each year. 23 b. The taxing authority’s replacement claim shall be 24 apportioned and credited by the governing body of the taxing 25 authority among the taxing authority’s tax levies in the same 26 proportion that each property tax levy bears to the total of 27 all property tax levies imposed by the taxing authority for the 28 fiscal year for which the payment is 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 an 35 -22- LSB 2179XC (16) 89 md/jh 22/ 51
S.F. _____ amount of the replacement claim that is proportionate to the 1 amount of the total sum of the assessed value of the taxable 2 commercial and industrial property in the urban renewal area as 3 a share of total assessed value of all taxable property in the 4 taxing authority and shall be apportioned as follows: 5 (1) To the fund for the taxing authority as taxes by or for 6 the taxing authority into which all other property taxes are 7 paid, an amount proportionate to the amount of actual value of 8 the commercial and industrial property in the urban renewal 9 area as determined in section 403.19, subsection 1, that was 10 subtracted pursuant to section 403.20, as it bears to the 11 total amount of actual value of the commercial and industrial 12 property in the urban renewal area that was subtracted pursuant 13 to section 403.20 for the assessment year for property taxes 14 due and payable in the fiscal year for which the replacement 15 claim is computed. 16 (2) (a) To the special fund of the applicable municipality 17 under section 403.19, subsection 2, the remaining amount, if 18 any. 19 (b) The amount allocated under subparagraph division (a) 20 shall not exceed the amount equal to the amount certified to 21 the county auditor under section 403.19 for the fiscal year in 22 which the claim is paid, after deduction of the amount of other 23 revenues committed for payment on that amount for the fiscal 24 year. The amount not allocated as a result of the operation of 25 this subparagraph division (b) shall be allocated to and paid 26 into the fund for the taxing authority as taxes by or for the 27 taxing authority in the manner provided in subparagraph (1). 28 NEW SUBSECTION . 8. This section is repealed July 1, 2027. 29 Sec. 41. EFFECTIVE DATE. The following take effect July 1, 30 2027: 31 1. The section of this division of this Act amending section 32 331.512. 33 2. The section of this division of this Act amending section 34 331.559. 35 -23- LSB 2179XC (16) 89 md/jh 23/ 51
S.F. _____ DIVISION III 1 SCHOOL FOUNDATION PERCENTAGE 2 Sec. 42. Section 257.1, subsection 2, paragraph b, Code 3 2021, is amended to read as follows: 4 b. For the budget year commencing July 1, 1999, and for 5 each succeeding budget year beginning before July 1, 2022, 6 the regular program foundation base per pupil is eighty-seven 7 and five-tenths percent of the regular program state cost per 8 pupil. For the budget year commencing July 1, 2022, and for 9 each succeeding budget year, the regular program foundation 10 base per pupil is eighty-eight and four-tenths percent of the 11 regular program state cost per pupil. For the budget year 12 commencing July 1, 1991, and for each succeeding budget year 13 the special education support services foundation base is 14 seventy-nine percent of the special education support services 15 state cost per pupil. The combined foundation base is the sum 16 of the regular program foundation base, the special education 17 support services foundation base, the total teacher salary 18 supplement district cost, the total professional development 19 supplement district cost, the total early intervention 20 supplement district cost, the total teacher leadership 21 supplement district cost, the total area education agency 22 teacher salary supplement district cost, and the total area 23 education agency professional development supplement district 24 cost. 25 Sec. 43. Section 257.3, subsection 1, paragraph d, Code 26 2021, is amended by striking the paragraph. 27 Sec. 44. EFFECTIVE DATE. The section of this division of 28 this Act amending section 257.3, subsection 1, paragraph “d”, 29 takes effect July 1, 2022. 30 DIVISION IV 31 PUBLIC EDUCATION AND RECREATION TAX LEVY 32 Sec. 45. Section 276.10, subsection 1, Code 2021, is amended 33 to read as follows: 34 1. The board of directors of a local school district 35 -24- LSB 2179XC (16) 89 md/jh 24/ 51
S.F. _____ may establish a community education program for schools in 1 the district and provide for the general supervision of the 2 program. Financial support for the program shall may be 3 provided from funds raised pursuant to chapter 300 received by 4 the school district under chapter 423F and from any private 5 funds and any federal funds made available for the purpose of 6 implementing this chapter . The program which recognizes that 7 the schools belong to the people and which shall be centered 8 in the schools may include but shall not be limited to the use 9 of the school facilities day and night, year round including 10 weekends and regular school vacation periods for educational, 11 recreational, cultural, and other community services and 12 programs for all age, ethnic, and socioeconomic groups residing 13 in the community. 14 Sec. 46. Section 278.1, subsection 1, paragraph e, Code 15 2021, is amended to read as follows: 16 e. Direct the transfer of any surplus in the debt service 17 fund, physical plant and equipment levy fund , or other capital 18 project funds , or public education and recreation levy fund to 19 the general fund. 20 Sec. 47. Section 298A.6, Code 2021, is amended to read as 21 follows: 22 298A.6 Public education and recreation levy fund. 23 The public education and recreation levy fund is a special 24 revenue fund. A public education and recreation levy fund 25 must be established in any school corporation which levies 26 levied the tax authorized under section 300.2 , Code 2021, or 27 which receives received revenue from a chapter 28E agreement 28 authorized under section 300.1 , Code 2021 . Moneys available in 29 the fund at the conclusion of the fiscal year beginning July 1, 30 2021, and ending June 30, 2022, shall be expended by the school 31 corporation for the purposes authorized under chapter 300, Code 32 2021. 33 Sec. 48. Section 423F.3, subsection 1, paragraph c, Code 34 2021, is amended by striking the paragraph. 35 -25- LSB 2179XC (16) 89 md/jh 25/ 51
S.F. _____ Sec. 49. Section 423F.5, subsection 1, Code 2021, is amended 1 to read as follows: 2 1. A school district shall include as part of its financial 3 audit for the budget year beginning July 1, 2007, and for 4 each subsequent budget year the amount received during the 5 year pursuant to chapter 423E or this chapter , as applicable. 6 In addition, the financial audit shall include the amount 7 of bond levies , and physical plant and equipment levy , and 8 public educational and recreational levy reduced as a result 9 of the moneys received under chapter 423E or this chapter , 10 as applicable. The amount of the reductions shall be stated 11 in terms of dollars and cents per one thousand dollars of 12 valuation and in total amount of property tax dollars. Also 13 included shall be an accounting of the amount of moneys 14 received which were spent for infrastructure purposes pursuant 15 to chapter 423E or this chapter , as applicable. 16 Sec. 50. REPEAL. Sections 276.11 and 276.12, Code 2021, 17 are repealed. 18 Sec. 51. REPEAL. Chapter 300, Code 2021, is repealed. 19 Sec. 52. EFFECTIVE DATE. This division of this Act takes 20 effect July 1, 2022. 21 Sec. 53. APPLICABILITY. This division of this Act applies 22 to fiscal years beginning on or after July 1, 2022. 23 DIVISION V 24 ELDERLY PROPERTY TAX CREDIT 25 Sec. 54. Section 25B.7, subsection 2, paragraph b, Code 26 2021, is amended to read as follows: 27 b. Low-income property tax credit and elderly and disabled 28 property tax credit pursuant to sections 425.16 through 425.40 , 29 subject to the limitation of 425.39, subsection 2 . 30 Sec. 55. Section 425.1, subsection 1, paragraph a, Code 31 2021, is amended to read as follows: 32 a. A homestead credit fund is created. There is 33 appropriated annually from the general fund of the state to 34 the department of revenue to be credited to the homestead 35 -26- LSB 2179XC (16) 89 md/jh 26/ 51
S.F. _____ credit fund, an amount sufficient to implement this chapter 1 subchapter . 2 Sec. 56. Section 425.17, subsection 2, Code 2021, is amended 3 to read as follows: 4 2. a. “Claimant” means either any of the following: 5 (1) A person filing a claim for credit or reimbursement 6 under this subchapter who has attained the age of sixty-five 7 years but who has not attained the age of seventy years on 8 or before December 31 of the base year or , a person filing a 9 claim for credit or reimbursement under this subchapter who 10 is totally disabled and was totally disabled on or before 11 December 31 of the base year , or a person filing a claim for 12 reimbursement under this subchapter who has attained the age of 13 sixty-five years on or before December 31 of the base year and 14 who is domiciled in this state at the time the claim is filed or 15 at the time of the person’s death in the case of a claim filed 16 by the executor or administrator of the claimant’s estate. 17 (2) A person filing a claim for credit or reimbursement 18 under this subchapter who has attained the age of twenty-three 19 years on or before December 31 of the base year or was a head 20 of household on December 31 of the base year, as defined in 21 the Internal Revenue Code, but has not attained the age or 22 disability status described in this paragraph “a” , subparagraph 23 (1) or the age status and eligibility criteria of subparagraph 24 (3) , and is domiciled in this state at the time the claim is 25 filed or at the time of the person’s death in the case of a 26 claim filed by the executor or administrator of the claimant’s 27 estate, and was not claimed as a dependent on any other 28 person’s tax return for the base year. 29 (3) A person filing a claim for credit under this subchapter 30 who has attained the age of seventy years on or before December 31 31 of the base year, who has a household income of less than 32 two hundred fifty percent of the federal poverty level, as 33 defined by the most recently revised poverty income guidelines 34 published by the United States department of health and human 35 -27- LSB 2179XC (16) 89 md/jh 27/ 51
S.F. _____ services, and is domiciled in this state at the time the claim 1 is filed or at the time of the person’s death in the case of a 2 claim filed by the executor or administrator of the claimant’s 3 estate. 4 b. “Claimant” under paragraph “a” , subparagraph (1) or (2), 5 includes a vendee in possession under a contract for deed and 6 may include one or more joint tenants or tenants in common. 7 In the case of a claim for rent constituting property taxes 8 paid, the claimant shall have rented the property during any 9 part of the base year. In the case of a claim for property 10 taxes due, the claimant shall have occupied the property during 11 any part of the fiscal year beginning July 1 of the base year. 12 If a homestead is occupied by two or more persons, and more 13 than one person is able to qualify as a claimant, the persons 14 may each file a claim based upon each person’s income and rent 15 constituting property taxes paid or property taxes due. 16 Sec. 57. Section 425.23, subsection 1, paragraph a, 17 unnumbered paragraph 1, Code 2021, is amended to read as 18 follows: 19 The tentative credit or reimbursement for a claimant 20 described in section 425.17, subsection 2 , paragraph “a” , 21 subparagraphs subparagraph (1) and (2), if no appropriation is 22 made to the fund created in section 425.40 shall be determined 23 in accordance with the following schedule: 24 Sec. 58. Section 425.23, subsection 1, Code 2021, is amended 25 by adding the following new paragraph: 26 NEW PARAGRAPH . c. The tentative credit for a claimant 27 described in section 425.17, subsection 2, paragraph “a” , 28 subparagraph (3), shall be the greater of the following: 29 (1) The amount of the credit under the schedule specified 30 in paragraph “a” of this subsection as if the claimant was a 31 claimant as defined in section 425.17, subsection 2, paragraph 32 “a” , subparagraph (1), filing for a credit under paragraph “a” 33 of this subsection. 34 (2) The difference between the actual amount of property 35 -28- LSB 2179XC (16) 89 md/jh 28/ 51
S.F. _____ taxes due on the homestead during the fiscal year next 1 following the base year minus the actual amount of property 2 taxes due on the homestead during the first fiscal year for 3 which the claimant filed a claim for a credit calculated under 4 this paragraph “c” and for which the property taxes due on the 5 homestead were calculated on an assessed valuation that was 6 not a partial assessment and if the claimant has filed for the 7 credit calculated under this paragraph “c” for each of the 8 subsequent fiscal years after the first credit claimed. 9 Sec. 59. Section 425.23, subsection 4, paragraph a, Code 10 2021, is amended to read as follows: 11 a. For the base year beginning in the 1999 calendar year 12 and for each subsequent base year, the dollar amounts set 13 forth in subsections subsection 1 , paragraphs “a” and “b” , and 14 subsection 3 shall be multiplied by the cumulative adjustment 15 factor for that base year. “Cumulative adjustment factor” means 16 the product of the annual adjustment factor for the 1998 base 17 year and all annual adjustment factors for subsequent base 18 years. The cumulative adjustment factor applies to the base 19 year beginning in the calendar year for which the latest annual 20 adjustment factor has been determined. 21 Sec. 60. Section 425.24, Code 2021, is amended to read as 22 follows: 23 425.24 Maximum property tax for purpose of credit or 24 reimbursement. 25 In For claimants under section 425.17, subsection 2, 26 paragraph “a” , subparagraphs (1) and (2), and for the 27 calculation under section 425.23, subsection 1, paragraph “c” , 28 subparagraph (1), in any case in which property taxes due or 29 rent constituting property taxes paid for any household exceeds 30 one thousand dollars, the amount of property taxes due or rent 31 constituting property taxes paid shall be deemed to have been 32 one thousand dollars for purposes of this subchapter . 33 Sec. 61. Section 425.39, Code 2021, is amended to read as 34 follows: 35 -29- LSB 2179XC (16) 89 md/jh 29/ 51
S.F. _____ 425.39 Fund created —— appropriation —— priority. 1 1. The elderly and disabled property tax credit and 2 reimbursement fund is created. There is appropriated annually 3 from the general fund of the state to the department of revenue 4 to be credited to the elderly and disabled property tax credit 5 and reimbursement fund, from funds not otherwise appropriated, 6 an amount sufficient to implement this subchapter for claimants 7 described in section 425.17, subsection 2 , paragraph “a” , 8 subparagraph subparagraphs (1) and (3), subject to subsection 9 2 . 10 2. Regardless of the amount of the credit determined under 11 section 425.23, subsection 1, paragraph “c” , the amount paid by 12 the director of revenue to each county treasurer for credits 13 for claimants described under section 425.17, subsection 2, 14 paragraph “a” , subparagraph (3), shall not exceed the amount 15 calculated for the claimant under section 425.23, subsection 1, 16 paragraph “c” , subparagraph (1), and section 25B.7, subsection 17 1, shall not apply to the amount of the credit in excess of the 18 amount paid by the director of revenue. 19 Sec. 62. APPLICABILITY. This division of this Act applies 20 to claims under chapter 425, subchapter II, filed on or after 21 January 1, 2022. 22 DIVISION VI 23 FUTURE TAX CHANGES 24 Sec. 63. 2018 Iowa Acts, chapter 1161, section 133, is 25 amended by striking the section and inserting in lieu thereof 26 the following: 27 SEC. 133. EFFECTIVE DATE. This division of this Act takes 28 effect January 1, 2023. 29 DIVISION VII 30 CHARITABLE CONSERVATION CONTRIBUTION TAX CREDIT 31 Sec. 64. Section 2.48, subsection 3, paragraph e, 32 subparagraph (6), Code 2021, is amended by striking the 33 subparagraph. 34 Sec. 65. Section 422.33, subsection 25, Code 2021, is 35 -30- LSB 2179XC (16) 89 md/jh 30/ 51
S.F. _____ amended by striking the subsection. 1 Sec. 66. REPEAL. Section 422.11W, Code 2021, is repealed. 2 Sec. 67. APPLICABILITY. This division of this Act applies 3 to conveyances made on or after July 1, 2021. 4 DIVISION VIII 5 FOREST RESERVATIONS 6 Sec. 68. Section 427C.1, Code 2021, is amended to read as 7 follows: 8 427C.1 Tax exemption. 9 1. Any person who establishes a forest or The owner of a 10 fruit-tree reservation as provided in this chapter shall be 11 entitled to the tax exemption provided by law. 12 2. The owner of a forest reservation as provided in this 13 chapter shall be entitled to the tax exemption provided by law 14 for assessment years beginning on or after January 1, 2022, if 15 the owner is actively engaged in the operation or management of 16 the forest reservation. 17 3. a. The department of natural resources shall adopt 18 rules pursuant to chapter 17A to interpret the requirement 19 of subsection 2 that the owner of a forest reservation be 20 actively engaged in the operation or management of the forest 21 reservation. 22 b. For each forest reservation exemption for which the 23 application was filed on or before the effective date of 24 this division of this Act, in order to receive or continue 25 receiving the exemption under this chapter, the owner must 26 file by February 1, 2022, with the department of natural 27 resources, evidence that the owner meets the requirement for 28 active engagement in the operation or management of the forest 29 reservation. 30 c. The department of natural resources shall prepare and 31 make available a form to assist owners in complying with the 32 requirement of paragraph “b” . 33 Sec. 69. Section 427C.3, Code 2021, is amended to read as 34 follows: 35 -31- LSB 2179XC (16) 89 md/jh 31/ 51
S.F. _____ 427C.3 Forest reservation —— duration of exemption . 1 1. A forest reservation shall contain not less than two 2 hundred growing forest trees on each acre. If the area 3 selected is a forest containing the required number of growing 4 forest trees, it shall be accepted as a forest reservation 5 under this chapter for a period of five years provided 6 application is made or on file on or before February 1 of the 7 exemption year. If any buildings are standing on an area 8 selected as a forest reservation under this section or a 9 fruit-tree reservation under section 427C.7 , one acre of that 10 area shall be excluded from the tax exemption. However, the 11 exclusion of that acre shall not affect the area’s meeting the 12 acreage requirement of section 427C.2 . 13 2. For forest reservation exemption applications filed on 14 or before February 1, 2022, the five-year period provided under 15 subsection 1 begins with the assessment year beginning January 16 1, 2022, unless, if applicable, the owner fails to satisfy the 17 requirement of section 427C.1, subsection 3. 18 Sec. 70. Section 427C.7, Code 2021, is amended to read as 19 follows: 20 427C.7 Fruit-tree reservation —— duration of exemption. 21 A fruit-tree reservation shall contain on each acre, 22 at least forty apple trees, or seventy other fruit trees, 23 growing under proper care and annually pruned and sprayed. 24 A reservation may be claimed as a fruit-tree reservation, 25 under this chapter , for a period of eight years after planting 26 provided application is made or on file on or before February 27 1 of the exemption year. If any buildings are standing on an 28 area selected as a fruit-tree reservation under this section, 29 one acre of that area shall be excluded from the tax exemption. 30 However, the exclusion of that acre shall not affect the area’s 31 meeting the acreage requirement of section 427C.2. 32 Sec. 71. Section 427C.12, Code 2021, is amended to read as 33 follows: 34 427C.12 Application —— inspection —— continuation of 35 -32- LSB 2179XC (16) 89 md/jh 32/ 51
S.F. _____ exemption —— recapture of tax. 1 1. It shall be the duty of the assessor to secure the facts 2 relative to fruit-tree and forest reservations by taking the 3 sworn statement, or affirmation, of the owner or owners making 4 application under this chapter ; and to make special report to 5 the county auditor of all reservations made in the county under 6 the provisions of this chapter . 7 2. a. The board of supervisors shall designate the county 8 conservation board or the assessor who shall inspect the area 9 for which an application is filed for a fruit-tree or forest 10 reservation tax exemption before the application is accepted. 11 b. The department of natural resources shall review the 12 application for a forest reservation tax exemption before the 13 application is accepted. 14 c. Use of The department of natural resources shall use 15 aerial photographs may be substituted for on-site inspection 16 when appropriate provided by the county assessor to determine 17 if the application meets the criteria established by the 18 natural resource commission to be a forest reservation . 19 3. The application can only be accepted if it meets the 20 criteria established by the natural resource commission to 21 be a fruit-tree or forest reservation department of natural 22 resources may conduct an on-site review if necessary to verify 23 the eligibility of a forest reservation application . 24 4. Once the application has been accepted, the area shall 25 continue to receive the tax exemption during each year of the 26 applicable exemption period under section 427C.3 or 427C.7 27 in which the area is maintained as a fruit-tree or forest or 28 fruit-tree reservation without the owner having to refile. If 29 the property is sold or transferred, the seller shall notify 30 the buyer that all, or part of, the property is in fruit-tree 31 or forest reservation and subject to the recapture tax 32 provisions of this section . The tax exemption shall continue 33 to be granted for the remainder of the eight-year exemption 34 period for fruit-tree reservation and for the following years 35 -33- LSB 2179XC (16) 89 md/jh 33/ 51
S.F. _____ for forest reservation under section 427C.3 or 427C.7, or until 1 the property no longer qualifies as a fruit-tree or forest or 2 fruit-tree reservation. 3 5. a. The An area that is a fruit-tree reservation may 4 be inspected each year by the county conservation board or 5 the assessor to determine if the area is maintained as a 6 fruit-tree or forest reservation. An area that is a forest 7 reservation may be inspected each year by the department of 8 natural resources to determine if the area is maintained as 9 forest reservation. If the area is not maintained or is used 10 for economic gain other than as a fruit-tree reservation during 11 any year of the eight-year exemption period and any year of 12 the following five years following the exemption period, if 13 the property is no longer receiving an exemption under this 14 chapter, or as a forest reservation during any year for which 15 of the exemption is granted period and any of the five years 16 following those exemption years the exemption period, if 17 the property is no longer receiving an exemption under this 18 chapter , the assessor shall assess the property for taxation 19 at its fair market value as of January 1 of that year and 20 in addition the area shall be subject to a recapture tax. 21 However, the area shall not be subject to the recapture tax if 22 the owner, including one possessing under a contract of sale, 23 and the owner’s direct antecedents or descendants have owned 24 the area for more than ten years. 25 b. The recapture tax shall be computed by multiplying the 26 consolidated levy for each of those years, if any, of the five 27 preceding years for which the area received the exemption for 28 fruit-tree or forest reservation times the assessed value of 29 the area that would have been taxed but for the tax exemption. 30 This tax shall be entered against the property on the tax list 31 for the current year and shall constitute a lien against the 32 property in the same manner as a lien for property taxes. The 33 tax when collected shall be apportioned in the manner provided 34 for the apportionment of the property taxes for the applicable 35 -34- LSB 2179XC (16) 89 md/jh 34/ 51
S.F. _____ tax year. 1 6. Upon expiration of the applicable exemption period, the 2 owner of a forest or fruit-tree reservation may reapply for 3 an exemption under this chapter if the property meets all the 4 criteria for the exemption under this chapter. 5 Sec. 72. Section 441.22, Code 2021, is amended to read as 6 follows: 7 441.22 Forest and fruit-tree reservations. 8 Forest and fruit-tree reservations fulfilling the conditions 9 of sections 427C.1 to 427C.13 chapter 427C shall be exempt from 10 taxation to the extent authorized in that chapter . In all 11 other cases where trees are planted upon any tract of land, 12 without regard to area, for forest, fruit, shade, or ornamental 13 purposes, or for windbreaks, the assessor shall not increase 14 the valuation of the property because of such improvements. 15 Sec. 73. SAVINGS PROVISION. This division of this Act, 16 pursuant to section 4.13, does not affect the operation of, 17 or prohibit the application of, prior provisions of chapter 18 427C or section 441.22, or rules adopted under chapter 17A to 19 administer prior provisions of chapter 427C or section 441.22, 20 for assessment years beginning before January 1, 2022, and for 21 duties, powers, protests, appeals, proceedings, actions, or 22 remedies attributable to an assessment year beginning before 23 January 1, 2022. 24 Sec. 74. EFFECTIVE DATE. This division of this Act, being 25 deemed of immediate importance, takes effect upon enactment. 26 Sec. 75. APPLICABILITY. This division of this Act applies 27 to assessment years beginning on or after January 1, 2022. 28 Sec. 76. RETROACTIVE APPLICABILITY. The following applies 29 retroactively to February 2, 2021, for forest reservation 30 property tax exemption applications filed on or after that 31 date: 32 The provision of this division of this Act enacting section 33 427C.12, subsections 2 and 3. 34 EXPLANATION 35 -35- LSB 2179XC (16) 89 md/jh 35/ 51
S.F. _____ The inclusion of this explanation does not constitute agreement with 1 the explanation’s substance by the members of the general assembly. 2 This bill relates to state and local government financing, 3 programs, and operations by modifying provisions relating to 4 school district funding, mental health and disability services 5 funding, commercial and industrial property tax replacement 6 payments, and other specified tax provisions. 7 DIVISION I —— MENTAL HEALTH FUNDING. Division I of the bill 8 relates to mental health and disability services funding. 9 The bill creates a mental health and disability services 10 regional supplement fund under the authority of the department 11 of human services. For each fiscal year beginning on or after 12 July 1, 2021, the bill appropriates from the general fund of 13 the state to the mental health and disability services regional 14 supplement fund an amount necessary to make all regional 15 supplement payments for that fiscal year. The moneys available 16 in a fiscal year in the mental health and disability services 17 state supplement fund are appropriated to the department of 18 human services for distribution to each mental health and 19 disability services region on a per capita basis calculated 20 using each region’s population for that fiscal year. The 21 amount of each region’s regional supplement payment is as 22 follows: (1) for the fiscal year beginning July 1, 2021, an 23 amount equal to the product of $15.86 multiplied by the sum of 24 the region’s population for the fiscal year; (2) for the fiscal 25 year beginning July 1, 2022, an amount equal to the product of 26 $38 multiplied by the sum of the region’s population for the 27 fiscal year; (3) for the fiscal year beginning July 1, 2023, 28 an amount equal to the product of $40 multiplied by the sum of 29 the region’s population for the fiscal year; (4) for the fiscal 30 year beginning July 1, 2024, an amount equal to the product of 31 $42 multiplied by the sum of the region’s population for the 32 fiscal year; and (5) for each fiscal year beginning on or after 33 July 1, 2025, an amount equal to the product of the sum of the 34 region’s population for the fiscal year multiplied by the sum 35 -36- LSB 2179XC (16) 89 md/jh 36/ 51
S.F. _____ of the dollar amount used to calculate the regional supplement 1 payments for the immediately preceding fiscal year plus the 2 regional supplement growth factor for the fiscal year. The 3 bill defines “regional supplement growth factor” for a fiscal 4 year to be an amount equal to the product of the dollar amount 5 used to calculate the regional supplement payments for the 6 immediately preceding fiscal year multiplied by the percent 7 increase, if any, in the amount of sales tax revenue deposited 8 into the general fund of the state between the fiscal year 9 beginning three years prior to the applicable fiscal year and 10 the fiscal year beginning two years prior to the applicable 11 year, but not to exceed 1.5 percent. 12 Regional supplement payments received by a region are 13 paid in quarterly installments and shall be deposited in the 14 region’s combined account under Code section 331.391 and used 15 solely for providing mental health and disability services 16 under the regional service system management plan. 17 Under the bill, for the fiscal years beginning July 1, 2021, 18 and July 1, 2022, each mental health and disability services 19 region for which the region’s cash flow amount certified 20 during the fiscal year exceeds a specified percentage of the 21 proposed gross expenditures of the region for the fiscal year, 22 the remaining quarterly payments of the region’s regional 23 supplement payment are reduced by an amount equal to the amount 24 by which the region’s cash flow amount certified exceeds the 25 specified percentage of the proposed gross expenditures of the 26 region for the fiscal year, but the reduction amount shall not 27 exceed the total amount of the region’s regional supplement 28 payment for the fiscal year. If the region’s remaining 29 quarterly payments are insufficient to effectuate the required 30 reductions, the region is required to pay to the department of 31 human services any amount for which the reduction in quarterly 32 payments could not be made. 33 For the fiscal year beginning July 1, 2023, and each 34 succeeding fiscal year, each mental health and disability 35 -37- LSB 2179XC (16) 89 md/jh 37/ 51
S.F. _____ services region for which a cash flow amount is certified 1 during the fiscal year, the remaining quarterly payments of the 2 region’s regional supplement payment shall be reduced by an 3 amount equal to the amount certified, but the reduction amount 4 shall not exceed the total amount of the region’s regional 5 supplement payment for the fiscal year. If the region’s 6 remaining quarterly payments are insufficient to effectuate 7 the required reductions, the region is required to pay to the 8 department of human services any amount for which the reduction 9 in quarterly payments could not be made. 10 The amount of reductions to quarterly payments and amounts 11 paid to the department of human services as the result of a 12 region’s certified cash flow amounts shall be transferred and 13 credited to the risk pool created in the bill under new Code 14 section 426B.6. 15 The bill also establishes a risk pool in the property tax 16 relief fund under Code section 426B.1 to provide additional 17 funding to mental health and disability services regions 18 meeting certain eligibility criteria. The risk pool consists 19 of moneys appropriated or credited to the risk pool by law. 20 The bill appropriates $9,960,590 from the general fund of the 21 state to the risk pool for the fiscal year beginning July 1, 22 2021. The bill appropriates $5,107,340 from the general fund 23 of the state to the risk pool for the fiscal year beginning 24 July 1, 2022. For each fiscal year beginning on or after July 25 1, 2025, the bill appropriates an amount equal to the risk pool 26 growth factor multiplied by the ending balance of the risk pool 27 at the conclusion of a specified fiscal year. The “risk pool 28 growth factor” for each fiscal year is the percent increase, 29 if any, in the amount of sales tax revenue deposited into the 30 general fund of the state between the fiscal year beginning 31 three years prior to the applicable fiscal year and the fiscal 32 year beginning two years prior to the applicable year, minus 33 1.5 percent. The risk pool growth factor for any fiscal year 34 may not exceed 3.5 percent. 35 -38- LSB 2179XC (16) 89 md/jh 38/ 51
S.F. _____ The bill establishes the composition of the risk pool board 1 created in the bill. Members shall serve for three-year 2 terms. Staff assistance to the board shall be provided by the 3 department of human services. 4 A regional administrator must apply to the risk pool board 5 for assistance from the risk pool on or before October 31. 6 The purpose of the assistance shall be to provide financial 7 support for services provided by the regional administrator’s 8 mental health and disability services region. The board is 9 required to determine application requirements to ensure 10 prudent use of risk pool assistance. The board may accept or 11 reject an application for assistance in whole or in part. The 12 decision of the board is final. The total amount of risk pool 13 assistance shall be limited to the amount available in the risk 14 pool for a fiscal year. Any unobligated balance in the risk 15 pool at the close of a fiscal year shall remain in the risk pool 16 for distribution in the succeeding fiscal year. 17 Risk pool assistance shall only be made available to 18 address one or more of the following circumstances: (1) 19 continuing support for mandated services; (2) avoiding the need 20 for reduction or elimination of critical services when the 21 reduction or elimination places consumers’ health or safety 22 at risk; (3) avoiding the need for reduction or elimination 23 of a mobile crisis team or other critical emergency services 24 when the reduction or elimination places the public’s health 25 or safety at risk; (4) avoiding the need for reduction or 26 elimination of the services or other support provided to entire 27 populations of consumers with disabilities; and (5) avoiding 28 the need for reduction or elimination of services or other 29 support that maintain consumers in a community setting or that 30 would create a risk that the consumers would be placed in more 31 restrictive, higher cost settings. 32 The risk pool board shall make its final decisions on or 33 before December 15 regarding acceptance or rejection of the 34 applications for assistance and the total amount accepted 35 -39- LSB 2179XC (16) 89 md/jh 39/ 51
S.F. _____ shall be considered obligated. The bill establishes basic 1 eligibility for risk pool assistance, including requirements 2 that the mental health and disability services region is in 3 compliance with the regional service system management plan 4 requirements and that the region meets specified ending balance 5 thresholds for certain fiscal years. The ending balance 6 thresholds are a specified percentage of the actual gross 7 expenditures of the mental health and disability services 8 region for a specific fiscal year. The percentage for the 9 fiscal year beginning July 1, 2021, is 40 percent. The 10 percentage for the fiscal year beginning July 1, 2022, is 20 11 percent. 12 Current Code section 331.424A authorizes each county to 13 certify a property tax levy for payment of mental health and 14 disability services within the mental health and disability 15 services regional system. To coincide with the appropriation 16 and payment of mental health and disability services regional 17 supplement payments directly to the regions or to exempted 18 counties, the bill ends the authority for such a property tax 19 levy starting with the fiscal year beginning July 1, 2022. 20 Additionally, upon conclusion of the fiscal year beginning July 21 1, 2021, the county treasurer shall transfer the remaining 22 balance of the county’s county services fund to the county’s 23 region to which the county belongs in the fiscal year beginning 24 July 1, 2022, for deposit in the region’s combined account 25 under Code section 331.391. Effective July 1, 2022, the bill 26 prohibits a county from transferring any funds of the county to 27 the combined account of a mental health and disability services 28 region. 29 If the bill takes effect after March 31, 2021, for each 30 county for which the amount of taxes certified for levy for the 31 purposes of Code section 331.424A for the fiscal year beginning 32 July 1, 2021, exceeds the product of the population of the 33 county multiplied by $21.14, the department of management shall 34 reduce the amount of such taxes certified for levy to an amount 35 -40- LSB 2179XC (16) 89 md/jh 40/ 51
S.F. _____ not to exceed the product of the population of the county 1 multiplied by $21.14 and shall revise the rate of taxation 2 as necessary to raise the reduced amount. The department of 3 management is required to report the reduction in the certified 4 taxes and the revised rate of taxation to the county auditors 5 by June 15, 2021. 6 In order to timely implement the provisions of the bill 7 establishing the risk pool for mental health and disability 8 services regions for the fiscal year beginning July 1, 2021, 9 and the fiscal year beginning July 1, 2022, the director 10 of human services is required, subject to the membership 11 requirements in the bill, to appoint temporary members of the 12 risk pool board to review and approve risk pool assistance 13 applications and establish alternative application deadlines 14 and expedited application review and approval timelines. 15 The bill provides that the department of human services may 16 adopt emergency rules to implement the provisions of division 17 I of the bill. 18 Except as provided in division I of the bill, division I of 19 the bill takes effect upon enactment. 20 DIVISION II —— PROPERTY TAX REPLACEMENT PAYMENTS. Current 21 Code section 441.21A establishes and appropriates amounts from 22 the general fund of the state for commercial and industrial 23 property tax replacement claims. Such claims are calculated 24 by the department of revenue based on the difference between 25 the actual value and assessed value of all commercial and 26 industrial property in each taxing district in the state. 27 Current law appropriates an amount necessary for the payment 28 of all commercial and industrial property tax replacement 29 claims for each fiscal year beginning on or after July 1, 30 2014, subject to a maximum total appropriation for fiscal 31 years beginning on or after July 1, 2017, of the total 32 amount necessary for the payment of replacement claims in the 33 fiscal year beginning July 1, 2016. The bill eliminates the 34 appropriation for fiscal years beginning on or after July 1, 35 -41- LSB 2179XC (16) 89 md/jh 41/ 51
S.F. _____ 2027, and specifies that the maximum total appropriation for 1 the fiscal years beginning on or after July 1, 2022, but before 2 July 1, 2027, shall not exceed the total amount necessary for 3 the payment of replacement claims in the fiscal year. 4 The bill modifies the methodology for calculating and 5 apportioning commercial and industrial property tax replacement 6 claims for fiscal years beginning on or after July 1, 2022, 7 but before July 1, 2027. The bill requires such claims to be 8 calculated based on and paid to taxing authorities, as defined 9 in the bill, instead of taxing districts as is required under 10 current law. The amount of each taxing authority’s replacement 11 claim is determined based on specified fractions of the amount 12 received by the taxing authority under Code section 441.21A for 13 the fiscal year beginning July 1, 2021, as calculated by the 14 department of revenue in consultation with the department of 15 management, and whether the taxing authority is a qualified 16 taxing authority. The specified fractions are reduced over 17 the period of fiscal years beginning July 1, 2022, and ending 18 June 30, 2027, in the case of a qualified taxing authority, and 19 ending June 30, 2025, in the case of a taxing authority that 20 is not a qualified taxing authority. Under the bill, a taxing 21 authority that is eligible to continue to receive commercial 22 and industrial property tax replacement payments includes a 23 city, county, community college, or other governmental entity 24 or political subdivision in this state authorized to certify a 25 levy on property located within such authority, but does not 26 include a school district. A qualified taxing authority is 27 either a taxing authority that is not a city or a county or a 28 taxing authority that is a city or a county in which the total 29 assessed value as of January 1, 2019, of specified taxable 30 property located in the taxing authority is less than 131.14 31 percent of the total assessed value as of January 1, 2012, of 32 specified taxable property located in the taxing authority. 33 The bill requires each taxing authority’s property tax 34 replacement claim payment for fiscal years beginning on or 35 -42- LSB 2179XC (16) 89 md/jh 42/ 51
S.F. _____ after July 1, 2022, but before July 1, 2027, to be apportioned 1 and credited by the governing body of the taxing authority 2 among the taxing authority’s tax levies in the same proportion 3 that each property tax levy bears to the total of all property 4 tax levies imposed by the taxing authority for the fiscal year 5 for which the payment is received. The bill also establishes 6 requirements for the apportionment of amounts allocated to 7 property tax levies that are subject to a division of taxes 8 under Code section 403.19 (tax increment financing). 9 Under current law, the legislative tax expenditure committee 10 established under Code section 2.48 is required to review 11 the commercial and industrial property tax replacement claim 12 expenditures. The bill eliminates that required periodic 13 review. 14 DIVISION III —— SCHOOL FOUNDATION PERCENTAGE. For 15 purposes of calculating state foundation aid received by 16 school districts under Code chapter 257, the regular program 17 foundation base per pupil is 87.5 percent of the regular 18 program state cost per pupil. The bill increases that 19 percentage to 88.4 percent for school budget years beginning on 20 or after July 1, 2022. 21 The section of division III amending Code section 22 257.3(1)(d) takes effect July 1, 2022. 23 DIVISION IV —— PUBLIC EDUCATION AND RECREATIONAL TAX LEVY. 24 Code chapter 300 authorizes the imposition of a voter-approved 25 property tax levy for the establishment and maintenance 26 of public recreation places and playgrounds, and necessary 27 accommodations for the recreation places and playgrounds, in 28 the public school buildings and grounds of the district. Code 29 chapter 300 also authorizes each school board to cooperate 30 with public or private agencies having custody and management 31 of public parks or buildings or grounds open to the public 32 for the supervision and instruction necessary to carry on 33 public educational and recreational activities in the parks, 34 buildings, and grounds located within the district. Such 35 -43- LSB 2179XC (16) 89 md/jh 43/ 51
S.F. _____ activities may be supported by imposition of a voter-approved 1 property tax levy not to exceed $0.13 and one-half cents per 2 $1,000 of assessed value. The property tax levy under Code 3 chapter 300 also provides financial support to community 4 education programs established under Code chapter 276, 5 which provide educational, recreational, cultural, and other 6 community services and programs. 7 Division IV of the bill repeals Code chapter 300 and makes 8 corresponding amendments to other provisions of law effective 9 July 1, 2022, and applies to fiscal years beginning on or 10 after July 1, 2022. The bill provides that financial support 11 for a community education program under Code chapter 276 may 12 be provided from funds received by the school district under 13 Code chapter 423F. By operation of the definition of “school 14 infrastructure” under Code section 423F.3(6)(a)(1), moneys 15 received by a school district from the secure an advanced 16 vision for education fund may continue to be utilized for 17 activities previously provided for under Code chapter 300 and 18 Code chapter 276. 19 Division IV also provides that moneys available in the 20 public education and recreation levy fund at the conclusion 21 of the fiscal year beginning July 1, 2021, and ending June 22 30, 2022, shall be expended by the school corporation for the 23 purposes authorized under chapter 300, Code 2021. 24 DIVISION V —— ELDERLY PROPERTY TAX CREDIT. Division V of the 25 bill modifies the eligibility for and the calculation of the 26 amount of the property tax credit for persons ages 70 and older 27 under Code chapter 425, subchapter II. 28 Under the bill, a person filing a claim for the property tax 29 credit who is at least 70 years of age and who has a household 30 income of less than 250 percent of the federal poverty level 31 is eligible to receive a credit against property taxes due on 32 the claimant’s homestead. For such a claimant, the tentative 33 credit amount is equal to the greater of the following: (1) 34 the amount of the credit as calculated under the schedule 35 -44- LSB 2179XC (16) 89 md/jh 44/ 51
S.F. _____ of credit amounts specified in Code section 425.23(1)(a) as 1 if the claimant was an eligible claimant for a credit under 2 that provision; and (2) the difference between the actual 3 amount of property taxes due on the homestead during the 4 applicable fiscal year minus the actual amount of property 5 taxes due on the homestead based on a full assessment during 6 the first fiscal year for which the claimant filed for a credit 7 calculated under the bill and if the claimant has filed for the 8 credit for each of the subsequent fiscal years after the first 9 credit claimed. 10 The bill also modifies the appropriation to the elderly 11 and disabled property tax credit and reimbursement fund under 12 Code section 425.39, by limiting the amount of the credit to 13 be paid by the director of revenue to each county treasurer 14 for claimants who have reached 70 years of age and specifies 15 that Code section 25B.7(1), which requires the state to fund 16 the cost of providing new property tax credits, shall not apply 17 to the amount of the credit in excess of the amount paid by the 18 director of revenue as determined in the bill. 19 Division V of the bill applies to claims under Code chapter 20 425, subchapter II, filed on or after January 1, 2022. 21 DIVISION VI —— FUTURE TAX CHANGES. The bill amends 2018 Iowa 22 Acts, chapter 1161, section 133 (trigger), by striking the two 23 conditions necessary for the trigger to occur, and specifies 24 the provisions in 2018 Iowa Acts, chapter 1161, sections 25 99-132, take effect January 1, 2023. 26 Currently, the two conditions are necessary for the trigger 27 to occur include net general fund revenues for the fiscal year 28 ending June 30, 2022, equaling or exceeding $8.3146 billion, 29 and also equaling or exceeding 104 percent of the net general 30 fund revenues for the fiscal year ending June 30, 2021. If 31 these two conditions are not satisfied, current law institutes 32 the changes for tax years beginning on or after the January 1 33 following the first fiscal year for which the two conditions 34 do occur. By striking the “trigger”, the bill sets in motion 35 -45- LSB 2179XC (16) 89 md/jh 45/ 51
S.F. _____ numerous tax changes for tax years beginning on or after 1 January 1, 2023, described below. 2 INDIVIDUAL INCOME TAX. The tax changes include reducing the 3 number of individual income tax brackets from nine to four, and 4 modifying the taxable income amounts and tax rates as follows: 5 Income over: But not over: Tax Rate: 6 1) $0 $6,000 4.40% 7 2) $6,000 $30,000 4.82% 8 3) $30,000 $75,000 5.70% 9 4) $75,000 6.50% 10 For a married couple filing a joint return, the taxable 11 income amounts in each bracket above are doubled. Also, the 12 taxable income amounts in each bracket above will be indexed to 13 inflation and increased in future tax years, beginning in the 14 tax year following the 2023 tax year. 15 INDIVIDUAL INCOME TAX CALCULATION. Under current law, the 16 starting point for computing the Iowa individual income tax is 17 federal adjusted gross income before the net operating loss 18 deduction, which is generally a taxpayer’s gross income minus 19 several deductions. From that point, Iowa requires several 20 adjustments and then provides taxpayers with a deduction 21 for federal income taxes paid, and the option to deduct a 22 standard deduction or itemized deductions. The bill changes 23 the starting point for computing the individual income tax 24 to federal taxable income, which includes all deductions and 25 adjustments taken at the federal level in computing tax, 26 including a standard deduction or itemized deductions, and the 27 qualified business income deduction allowed for certain income 28 earned from a pass-through entity. Because the starting point 29 changes to federal taxable income, and federal law does not 30 provide for the filing status of married filing separately 31 on a combined return, the bill repeals that filing status 32 option for Iowa tax purposes. Because net operating loss is 33 no longer calculated at the state level, the bill requires a 34 taxpayer to add back any federal net operating loss deduction 35 -46- LSB 2179XC (16) 89 md/jh 46/ 51
S.F. _____ carried over from a taxable year beginning prior to the 2023 1 tax year, but allows taxpayers to deduct any remaining Iowa net 2 operating loss from a prior taxable year. The bill repeals the 3 individual alternative minimum tax (AMT), allows an individual 4 to claim any remaining AMT credit against the individual’s 5 regular tax liability for the 2023 tax year, and then repeals 6 the AMT credit in the tax year following the 2023 tax year. 7 The bill repeals most Iowa-specific deductions, exemptions, 8 and adjustments currently available when computing net income 9 and taxable income under Iowa law, including the Iowa optional 10 standard deduction and all itemized deductions, and the ability 11 to deduct federal income taxes, except for a one-year phase 12 out in the 2023 tax year for taxes paid, or refunds received, 13 that relate to a prior year. The bill maintains the add-back 14 for income from securities that are federally exempt but not 15 state-exempt, and for bonus depreciation amounts. The bill 16 maintains the general pension exclusion and the deduction 17 for income from federal securities. The bill maintains the 18 deduction for contributions to the Iowa 529 plan, the Iowa ABLE 19 plan, a first-time homebuyer savings account, and an individual 20 development account. The bill also maintains the deductions 21 for military pension income, military active duty pay, social 22 security retirement benefits, certain payments received for 23 providing unskilled in-home health care, certain amounts 24 received from the veterans trust fund, victim compensation 25 awards, biodiesel production refunds, certain wages paid 26 to individuals with disabilities or individuals previously 27 convicted of a felony, certain organ donations, and Segal 28 AmeriCorps education award payments. The bill modifies the 29 existing deduction for health insurance payments in Code 30 section 422.7(29) to make the deduction only applicable to 31 taxpayers who are at least 65 years old and who have net 32 income below $100,000. The bill also modifies the existing 33 capital gain deduction in Code section 422.7(21) to restrict 34 the deduction to the sale of real property used in farming 35 -47- LSB 2179XC (16) 89 md/jh 47/ 51
S.F. _____ businesses by permitting the taxpayer to take the deduction 1 if either of the following apply: the taxpayer materially 2 participated in the farming business for at least 10 years and 3 held the real property for at least 10 years; or the taxpayer 4 sold the real property to a relative. The bill expands the 5 definition of “relative” to include an entity in which a 6 relative of the taxpayer has a legal or equitable interest in 7 the entity as an owner, member, partner, or beneficiary. The 8 bill provides a new deduction for any income of an employee 9 resulting from the payment by an employer, whether paid to 10 the employee or a lender, of principal or interest on the 11 employee’s qualified education loan. The bill also modifies 12 the calculation of net income for purposes of the alternate 13 tax calculation in Code section 422.5(3) and (3B), and the tax 14 return filing thresholds in Code section 422.13, to require 15 that any amount of itemized deduction, standard deduction, 16 personal exemption deduction, or qualified business income 17 deduction that was allowed in computing federal taxable income 18 shall be added back. 19 CORPORATE INCOME TAX AND FRANCHISE TAX CALCULATION. Under 20 current law, the starting point for calculating the corporate 21 income tax and franchise tax is federal taxable income before 22 the net operating loss deduction, because net operating loss is 23 calculated at the state level. The bill repeals the separate 24 calculation of net operating loss at the state level. As a 25 result, the bill requires taxpayers to add back any federal 26 net operating loss deduction carried over from a taxable year 27 beginning prior to the trigger year, but allows taxpayers to 28 deduct any remaining Iowa net operating loss from a prior 29 taxable year. The bill also repeals most Iowa-specific 30 deductions, exemptions, and adjustments currently available 31 when computing net income and taxable income under Iowa law. 32 The bill maintains the add-back for income from securities 33 that are federally exempt but not state exempt, and for bonus 34 depreciation amounts. The bill maintains the deductions for 35 -48- LSB 2179XC (16) 89 md/jh 48/ 51
S.F. _____ income from federal securities, for foreign dividend and 1 subpart F income, for certain wages paid to individuals with 2 disabilities or individuals previously convicted of a felony, 3 and for biodiesel production refunds. 4 DIVISION VII —— CHARITABLE CONSERVATION CONTRIBUTION TAX 5 CREDIT. Division VII of the bill repeals the charitable 6 conservation contribution tax credit available against the 7 individual and corporate income taxes. Currently, individual 8 and corporate income taxes are reduced by an amount equal to 50 9 percent of the fair market value of real property located in 10 this state that is conveyed unconditionally in perpetuity by 11 the taxpayer for conservation purposes. Division VII of the 12 bill applies to such conveyances occurring on or after July 1, 13 2021. 14 DIVISION VIII —— FOREST RESERVATIONS. Current Code chapter 15 427C authorizes a property tax exemption for certain forest 16 reservations and fruit-tree reservations. 17 The bill provides that for assessment years beginning on 18 or after January 1, 2022, a forest reservation is allowed the 19 exemption authorized under Code chapter 427C if the owner is 20 actively engaged in the operation or management of the forest 21 reservation. For each forest reservation exemption for which 22 the application was filed on or before the effective date of 23 division VIII of the bill, in order to receive or continue 24 receiving the exemption, the owner must file by February 25 1, 2022, on a form prepared by the department of natural 26 resources, evidence that the owner meets the requirements 27 for active engagement in the operation or management of the 28 reservation. 29 Division VIII of the bill grants the department of natural 30 resources the authority to adopt rules to interpret the 31 provisions of the bill relating to the requirement that the 32 owner be actively engaged in the operation or management 33 of the forest reservation. If interpretive rulemaking 34 authority is clearly vested in the discretion of an agency by 35 -49- LSB 2179XC (16) 89 md/jh 49/ 51
S.F. _____ statute, the applicable judicial standard of review is whether 1 the rules constitute an irrational, illogical, or wholly 2 unjustifiable interpretation of law by the agency (Code section 3 17A.19(10)(l)). If interpretive rulemaking authority is not 4 clearly vested in the discretion of an agency, the applicable 5 judicial standard of review is whether the rules constitute an 6 erroneous interpretation of law (Code section 17A.19(10)(c)). 7 The bill limits the period of the exemption for forest 8 reservations to five years and provides that the five-year 9 exemption period for applications filed