House File 2162 - Introduced HOUSE FILE 2162 BY SIECK A BILL FOR An Act relating to property assessment standards and 1 litigation. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5132YH (4) 90 dg/jh

H.F. 2162 Section 1. Section 421.17, subsection 6, paragraph b, Code 1 2024, is amended to read as follows: 2 b. (1) The director shall require all city and county 3 assessors to prepare a quarterly report in the manner and form 4 to be prescribed by the director showing for each warranty deed 5 or contract of sale of real estate, divided between rural and 6 urban, during the last completed quarter the amount of real 7 property transfer tax, the sale price or consideration, and the 8 equalized value at which that property was assessed that year. 9 This report with further information required by the director 10 shall be submitted to the department within sixty days after 11 the end of each quarter. 12 (2) The department shall prepare annual summaries of the 13 records of the ratio of assessments to actual sales prices 14 for all counties, and for cities having city assessors , and 15 the . The information for the preceding year shall be available 16 for public inspection by May 1 , and shall be available on the 17 department’s internet website for a minimum of twenty years 18 from the date of publication . 19 Sec. 2. Section 421.17, subsection 17, Code 2024, is amended 20 to read as follows: 21 17. a. To prepare and issue a state appraisal manual 22 which each county and city assessor shall use in assessing and 23 valuing all classes of property in the state. 24 b. The appraisal manual shall be continuously revised and 25 the manual and revisions shall be issued to the county and 26 city assessors in such form and manner as prescribed by the 27 director. 28 c. Each county and city assessor shall use the most recently 29 issued manual in assessing and valuing all classes of property 30 in the state within two years of the publication date of the 31 most recently issued manual. The department may grant an 32 extension of up to two years to a county or city assessor 33 upon request and demonstration of substantial hardship by an 34 assessor. 35 -1- LSB 5132YH (4) 90 dg/jh 1/ 5

H.F. 2162 d. When preparing the state appraisal manual, the director 1 shall adopt standards for assessing property developed and 2 published by the international association of assessing 3 officers. Such standards must include all of the following: 4 (1) Use of a coefficient of dispersion analysis in 5 determining whether properties are equitably assessed. 6 Assessments shall maintain a coefficient of dispersion less 7 than fifteen and ninety-nine hundredths percent unless there 8 is good cause for a variance. 9 (2) Use of a price-related differential analysis in 10 determining whether properties are equitably assessed. 11 Assessments shall maintain a price-related differential between 12 ninety-eight hundredths and one and three hundredths unless 13 there is good cause for a variance. 14 Sec. 3. Section 441.21, subsection 1, Code 2024, is amended 15 by adding the following new paragraph: 16 NEW PARAGRAPH . 0i. The coefficient of dispersion and 17 price-related differentials of a class of property shall be 18 calculated based on comparisons of the actual value of property 19 in the same class within the state. 20 Sec. 4. Section 441.37, subsection 1, paragraph a, 21 subparagraph (1), subparagraph division (a), Code 2024, is 22 amended to read as follows: 23 (a) That said assessment is not equitable as compared with 24 assessments of other like property in the taxing district. 25 Sec. 5. Section 441.37, subsection 1, paragraph a, Code 26 2024, is amended by adding the following new subparagraph: 27 NEW SUBPARAGRAPH . (04) For purposes of this section, “like 28 property” means all property within a given class of property. 29 Sec. 6. Section 441.41, subsection 1, Code 2024, is amended 30 to read as follows: 31 1. a. In the case of cities having an assessor, the city 32 legal department shall represent the assessor and board of 33 review in all litigation dealing with assessments. In the case 34 of counties, the county attorney shall represent the assessor 35 -2- LSB 5132YH (4) 90 dg/jh 2/ 5

H.F. 2162 and board of review in all litigation dealing with assessments. 1 Any taxing district interested in the taxes received from such 2 assessments may be represented by an attorney and shall be 3 required to appear by attorney upon written request of the 4 assessor to the presiding officer of any such taxing district. 5 Subject 6 b. In cases where the opposing party is a legal business 7 entity, including nonprofit entities, and subject to review and 8 prior approval by either the city legal department in the case 9 of a city or the county attorney in the case of a county, the 10 conference board may employ special counsel to assist the city 11 legal department or county attorney as the case may be. 12 Sec. 7. Section 441.42, Code 2024, is amended by adding the 13 following new subsection: 14 NEW SUBSECTION . 1A. A property owner may appeal the 15 assessment of any property to the board of review or a court 16 with jurisdiction over the assessed property provided that the 17 assessed property is located in a taxing district to which the 18 property owner appealing the assessment owns property of the 19 same class. Appeals made pursuant to this subsection shall be 20 made in accordance with section 441.37. 21 EXPLANATION 22 The inclusion of this explanation does not constitute agreement with 23 the explanation’s substance by the members of the general assembly. 24 This bill relates to property assessment standards and 25 litigation. 26 The international association of assessing officers 27 (IAAO) is a nonprofit professional membership organization 28 of government assessment officials and others interested in 29 the administration of the property tax. The IAAO regularly 30 publishes standards related to property assessments with 31 the goal of advancing more equitable property appraisals, 32 assessment administration, and property tax policies. 33 Current law requires the director of the department of 34 revenue (director) to prepare and issue a state appraisal 35 -3- LSB 5132YH (4) 90 dg/jh 3/ 5

H.F. 2162 manual which each county and city assessor must use to assess 1 and value all classes of property. The bill requires the 2 director to adopt real estate property assessment standards for 3 the state appraisal manual in conformance with the standards 4 developed and published by the IAAO. Such standards must 5 include the use of the coefficient of dispersion (COD) and 6 price-related differentials (PRD). 7 COD is the measure of the spread of values about the median 8 value of a class of properties. When the difference between 9 the median value of a class of properties and the actual value 10 to sales value ratio of a property increases, the COD will 11 increase as well. CODs above a certain percentage are seen as 12 inequitable. The bill requires assessors to maintain a COD 13 of less than 15.99 percent unless there is good cause for a 14 variance. 15 PRD, or analysis of assessment bias, is used in order to 16 determine whether higher-valued properties are overvalued or 17 undervalued in relation to lower-valued properties. The bill 18 requires assessors to maintain a PRD between .98 and 1.03 19 unless there is good cause for a variance. 20 The bill requires the COD and PRD of a class of property 21 to be calculated based on comparisons of the actual value of 22 property in the same class. 23 The bill defines, for the purposes of protesting an 24 assessment, “like property” as all property within a given 25 class of property. 26 The bill limits the employment of special counsel to assist a 27 city legal department or county attorney in litigation dealing 28 with assessments to cases where the opposing party is a legal 29 business entity, including a nonprofit entity. Under current 30 law, a city legal department or county attorney may employ 31 special counsel to assist the city legal department or county 32 attorney in any litigation dealing with assessments. 33 The bill allows a property owner to appeal the assessment 34 of any other property provided that the property with the 35 -4- LSB 5132YH (4) 90 dg/jh 4/ 5

H.F. 2162 assessment to be appealed is located in a taxing district to 1 which the property owner appealing the assessment owns property 2 of the same class. The bill requires such appeals to be made 3 in accordance with Code section 441.37 (protest of assessment 4 —— grounds). 5 -5- LSB 5132YH (4) 90 dg/jh 5/ 5