Senate Study Bill 1125 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON DAWSON) A BILL FOR An Act relating to state and local revenue and finances by 1 modifying sales and use taxes, the charitable conservation 2 contribution tax credit available against individual and 3 corporate income taxes, the water service tax, property 4 taxes, transit funding, and local option taxes, crediting 5 moneys to the natural resources and outdoor recreation trust 6 fund, making appropriations, and including effective date, 7 retroactive applicability, and applicability provisions. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 TLSB 1461XC (12) 90 md/jh
S.F. _____ DIVISION I 1 SALES AND USE TAX RATES AND DISTRIBUTION 2 Section 1. Section 423.2, subsection 1, unnumbered 3 paragraph 1, Code 2023, is amended to read as follows: 4 There is imposed a tax of six percent at the rate specified 5 in subsection 12 upon the sales price of all sales of tangible 6 personal property, sold at retail in the state to consumers or 7 users except as otherwise provided in this subchapter . 8 Sec. 2. Section 423.2, subsections 2 and 3, Code 2023, are 9 amended to read as follows: 10 2. A tax of six percent at the rate specified in subsection 11 12 is imposed upon the sales price of the sale or furnishing 12 of gas, electricity, water, heat, pay television service, and 13 communication service, including the sales price from such 14 sales by any municipal corporation or joint water utility 15 furnishing gas, electricity, water, heat, pay television 16 service, and communication service to the public in its 17 proprietary capacity, except as otherwise provided in this 18 subchapter , when sold at retail in the state to consumers or 19 users. 20 3. A tax of six percent at the rate specified in subsection 21 12 is imposed upon the sales price of all sales of tickets 22 or admissions to places of amusement, fairs, and athletic 23 events except those of elementary and secondary educational 24 institutions. A tax of six percent at the rate specified in 25 subsection 12 is imposed on the sales price of an entry fee or 26 like charge imposed solely for the privilege of participating 27 in an activity at a place of amusement, fair, or athletic event 28 unless the sales price of tickets or admissions charges for 29 observing the same activity are taxable under this subchapter . 30 A tax of six percent at the rate specified in subsection 12 31 is imposed upon that part of private club membership fees or 32 charges paid for the privilege of participating in any athletic 33 sports provided club members. 34 Sec. 3. Section 423.2, subsection 4, paragraph a, Code 2023, 35 -1- LSB 1461XC (12) 90 md/jh 1/ 71
S.F. _____ is amended to read as follows: 1 a. A tax of six percent at the rate specified in subsection 2 12 is imposed upon the sales price derived from the operation 3 of all forms of amusement devices and games of skill, games of 4 chance, raffles, and bingo games as defined in chapter 99B , and 5 card game tournaments conducted under section 99B.27 , that are 6 operated or conducted within the state, the tax to be collected 7 from the operator in the same manner as for the collection of 8 taxes upon the sales price of tickets or admission as provided 9 in this section . Nothing in this subsection shall legalize any 10 games of skill or chance or slot-operated devices which are now 11 prohibited by law. 12 Sec. 4. Section 423.2, subsection 5, Code 2023, is amended 13 to read as follows: 14 5. There is imposed a tax of six percent at the rate 15 specified in subsection 12 upon the sales price from the 16 furnishing of services as defined in section 423.1 . 17 Sec. 5. Section 423.2, subsection 7, paragraph a, 18 unnumbered paragraph 1, Code 2023, is amended to read as 19 follows: 20 A tax of six percent at the rate specified in subsection 12 21 is imposed upon the sales price from the sales, furnishing, or 22 service of solid waste collection and disposal service. 23 Sec. 6. Section 423.2, subsection 8, paragraph a, Code 2023, 24 is amended to read as follows: 25 a. A tax of six percent at the rate specified in subsection 26 12 is imposed on the sales price from sales of bundled 27 transactions. For the purposes of this subsection , a “bundled 28 transaction” is the retail sale of two or more distinct and 29 identifiable products, except real property and services to 30 real property, which are sold for one nonitemized price. A 31 “bundled transaction” does not include the sale of any products 32 in which the sales price varies, or is negotiable, based on 33 the selection by the purchaser of the products included in the 34 transaction. 35 -2- LSB 1461XC (12) 90 md/jh 2/ 71
S.F. _____ Sec. 7. Section 423.2, subsection 9, Code 2023, is amended 1 to read as follows: 2 9. A tax of six percent at the rate specified in 3 subsection 12 is imposed upon the sales price from any mobile 4 telecommunications service, including all paging services, 5 that this state is allowed to tax pursuant to the provisions 6 of the federal Mobile Telecommunications Sourcing Act, Pub. 7 L. No. 106-252, 4 U.S.C. §116 et seq. For purposes of this 8 subsection , taxes on mobile telecommunications service, as 9 defined under the federal Mobile Telecommunications Sourcing 10 Act that are deemed to be provided by the customer’s home 11 service provider, shall be paid to the taxing jurisdiction 12 whose territorial limits encompass the customer’s place of 13 primary use, regardless of where the mobile telecommunications 14 service originates, terminates, or passes through and 15 shall in all other respects be taxed in conformity with 16 the federal Mobile Telecommunications Sourcing Act. All 17 other provisions of the federal Mobile Telecommunications 18 Sourcing Act are adopted by the state of Iowa and incorporated 19 into this subsection by reference. With respect to mobile 20 telecommunications service under the federal Mobile 21 Telecommunications Sourcing Act, the director shall, if 22 requested, enter into agreements consistent with the provisions 23 of the federal Act. 24 Sec. 8. Section 423.2, subsection 10, paragraph a, Code 25 2023, is amended to read as follows: 26 a. A tax of six percent at the rate specified in subsection 27 12 is imposed on the sales price of specified digital products 28 sold at retail in the state. The tax applies whether the 29 purchaser obtains permanent use or less than permanent use of 30 the specified digital product, whether the sale is conditioned 31 or not conditioned upon continued payment from the purchaser, 32 and whether the sale is on a subscription basis or is not on a 33 subscription basis. 34 Sec. 9. Section 423.2, subsection 12, Code 2023, is amended 35 -3- LSB 1461XC (12) 90 md/jh 3/ 71
S.F. _____ by striking the subsection and inserting in lieu thereof the 1 following: 2 12. a. For the period beginning January 1, 2025, through 3 December 31, 2050, the sales tax rate is seven percent. 4 b. Beginning January 1, 2051, the sales tax rate is six 5 percent. 6 Sec. 10. Section 423.2A, subsection 2, paragraphs a, b, and 7 c, Code 2023, are amended to read as follows: 8 a. (1) Transfer For the period beginning January 1, 9 2025, through December 31, 2027, transfer twenty-eight 10 one-hundred-fortieths of the revenues collected under deposited 11 into the general fund of the state under subsection 1 to the 12 appropriate county accounts under chapter 423B for the counties 13 from which the tax was collected . 14 (2) For the period beginning January 1, 2028, through 15 December 31, 2028, transfer twenty-seven one-hundred-fortieths 16 of the revenues deposited into the general fund of the state 17 under subsection 1 to the appropriate county accounts under 18 chapter 423B for the counties from which the tax was collected. 19 (3) For the period beginning January 1, 2029, through 20 December 31, 2029, transfer twenty-six one-hundred-fortieths of 21 the revenues deposited into the general fund of the state under 22 subsection 1 to the appropriate county accounts under chapter 23 423B for the counties from which the tax was collected. 24 (4) For the period beginning January 1, 2030, through 25 December 31, 2050, transfer twenty-five one-hundred-fortieths 26 of the revenues deposited into the general fund of the state 27 under subsection 1 to the appropriate county accounts under 28 chapter 423B for the counties from which the tax was collected. 29 (5) Beginning January 1, 2051, transfer five twenty-fourths 30 of the revenues deposited into the general fund of the state 31 under subsection 1 to the appropriate county accounts under 32 chapter 423B for the counties from which the tax was collected. 33 b. Transfer from the remaining revenues the amounts required 34 under Article VII, section 10, of the Constitution of the State 35 -4- LSB 1461XC (12) 90 md/jh 4/ 71
S.F. _____ of Iowa to the natural resources and outdoor recreation trust 1 fund created in section 461.31 , if applicable . 2 c. Transfer one-sixth of from the remaining revenues an 3 amount equal to one-seventh of the revenues deposited into the 4 general fund of the state under subsection 1 to the secure an 5 advanced vision for education fund created in section 423F.2 . 6 This paragraph “c” is repealed January 1, 2051. 7 Sec. 11. Section 423.5, subsection 1, unnumbered paragraph 8 1, Code 2023, is amended to read as follows: 9 Except as provided in paragraph “b” , an excise tax at the 10 rate of six percent specified in subsection 4 of the purchase 11 price or installed purchase price is imposed on the following: 12 Sec. 12. Section 423.5, subsection 4, Code 2023, is amended 13 by striking the subsection and inserting in lieu thereof the 14 following: 15 4. a. For the period beginning January 1, 2025, through 16 December 31, 2050, the use tax rate is seven percent. 17 b. Beginning January 1, 2051, the use tax rate is six 18 percent. 19 Sec. 13. Section 423.43, subsection 1, paragraph b, Code 20 2023, is amended by striking the paragraph and inserting in 21 lieu thereof the following: 22 b. Subsequent to the deposit into the general fund of 23 the state the department shall do the following in the order 24 prescribed: 25 (1) (a) For the period beginning January 1, 2025, through 26 December 31, 2043, transfer one-seventh of such revenues to the 27 local use tax supplement fund, under section 423B.1A. 28 (b) For the period beginning January 1, 2044, through 29 December 31, 2050, transfer one-seventh of such revenues to the 30 appropriate county accounts under chapter 423B for the counties 31 from which the tax was paid. 32 (c) Beginning January 1, 2051, transfer one-sixth of such 33 revenues to the appropriate county accounts under chapter 423B 34 for the counties from which the tax was paid. 35 -5- LSB 1461XC (12) 90 md/jh 5/ 71
S.F. _____ (2) Transfer one-sixth of such remaining revenues to the 1 secure an advanced vision for education fund created in section 2 423F.2. This subparagraph is repealed January 1, 2051. 3 Sec. 14. EFFECTIVE DATE. This division of this Act takes 4 effect January 1, 2025. 5 DIVISION II 6 WATER SERVICE TAX 7 Sec. 15. Section 423G.3, Code 2023, is amended to read as 8 follows: 9 423G.3 Water service tax. 10 An excise tax at the a rate of six percent equal to the rate 11 being imposed under section 423.2, subsection 12, is imposed on 12 the sales price from the sale or furnishing by a water utility 13 of a water service in the state to consumers or users. 14 Sec. 16. Section 423G.6, subsection 2, Code 2023, is amended 15 by striking the subsection. 16 Sec. 17. REPEAL. Chapter 423G.7, Code 2023, is repealed. 17 Sec. 18. EFFECTIVE DATE. This division of this Act takes 18 effect January 1, 2025. 19 DIVISION III 20 LOCAL OPTION TAXES 21 Sec. 19. Section 15J.7, subsection 2, Code 2023, is amended 22 to read as follows: 23 2. In addition to the moneys received pursuant to section 24 15J.6 , a municipality may deposit in the reinvestment project 25 fund any other moneys lawfully at the municipality’s disposal, 26 including but not limited to local sales and services tax 27 receipts collected revenues received under chapter 423B if such 28 use is a purpose authorized for the municipality under chapter 29 423B . 30 Sec. 20. Section 28A.17, Code 2023, is amended to read as 31 follows: 32 28A.17 Local sales and services tax. 33 1. If an authority is established as provided in section 34 28A.6 and after approval of a referendum by a simple majority 35 -6- LSB 1461XC (12) 90 md/jh 6/ 71
S.F. _____ of votes cast in each metropolitan area in favor of the sales 1 and services tax, the governing board of a county in this state 2 within a metropolitan area which is part of the authority shall 3 impose, at the request of the authority, a local sales and 4 services tax at the rate of one-fourth of one percent on the 5 sales price taxed by this state under section 423.2 , within 6 the metropolitan area located in this state. The referendum 7 shall be called by resolution of the board and shall be held 8 as provided in section 28A.6 to the extent applicable. The 9 ballot proposition shall contain a statement as to the specific 10 purpose or purposes for which the revenues shall be expended 11 and the date of expiration of the tax. The local sales and 12 services tax shall be imposed on the same basis, with the same 13 exceptions, and following the same administrative procedures as 14 provided for a county under sections 423B.5 and 423B.6 , Code 15 2023 . The amount of the sale, for the purposes of determining 16 the amount of the local sales and services tax under this 17 section , does not include the amount of any local sales and 18 services tax imposed under sections 423B.5 and 423B.6 , Code 19 2023 . 20 2. The treasurer of state shall credit the local sales 21 and services tax receipts and interest and penalties to the 22 authority’s account. Moneys in this account shall be remitted 23 quarterly to the authority. The proceeds of the tax imposed 24 under this section shall be used only for the construction, 25 reconstruction, or repair of metropolitan facilities as 26 specified in the referendum. The local sales and services tax 27 imposed under this section may be suspended for not less than 28 a fiscal quarter or more than one year by action of the board. 29 The suspension may be renewed or continued by the board, but 30 the board shall act on the suspension at least annually. 31 The local sales and services tax may also be repealed by a 32 petition and favorable referendum following the procedures and 33 requirements of sections 28A.5 and 28A.6 as applicable. The 34 board shall give the department of revenue at least forty days’ 35 -7- LSB 1461XC (12) 90 md/jh 7/ 71
S.F. _____ notice of the repeal, suspension, or reinstatement of the tax 1 and the effective dates for imposition, suspension, or repeal 2 of the tax shall be as provided in section 423B.6 , Code 2023 . 3 3. A local sales and services tax authorized under this 4 section shall not be imposed or collected on or after January 5 1, 2025. 6 Sec. 21. Section 76.4, Code 2023, is amended to read as 7 follows: 8 76.4 Permissive application of funds. 9 Whenever the governing authority of such political 10 subdivision shall have on hand funds derived from any other 11 source than taxation which may be appropriated to the payment 12 either of interest or principal, or both principal and interest 13 of such bonds, such funds may be so appropriated and used 14 and the levy for the payment of the bonds correspondingly 15 reduced. This section shall not restrict the authority of a 16 political subdivision to apply sales and services tax receipts 17 collected received pursuant to chapter 423B for such purpose. 18 Notwithstanding section 423F.3 , a school district may apply tax 19 receipts received pursuant to chapter 423F for the purposes of 20 this section . 21 Sec. 22. Section 99B.1, subsection 23, Code 2023, is amended 22 to read as follows: 23 23. “Net receipts” means gross receipts less amounts awarded 24 as prizes and less state and local sales tax paid upon the 25 gross receipts. 26 Sec. 23. Section 99B.14, subsection 1, Code 2023, is amended 27 to read as follows: 28 1. A licensed qualified organization shall certify 29 that the receipts from all charitable gambling conducted 30 by the organization under this chapter , less reasonable 31 expenses, charges, fees, taxes, and deductions, either will 32 be distributed as prizes to participants or will be dedicated 33 and distributed for educational, civic, public, charitable, 34 patriotic, or religious uses. Reasonable expenses, charges, 35 -8- LSB 1461XC (12) 90 md/jh 8/ 71
S.F. _____ fees, taxes other than the state and local sales tax, and 1 deductions allowed by the department shall not exceed forty 2 percent of net receipts. 3 Sec. 24. Section 99G.4, subsection 2, Code 2023, is amended 4 to read as follows: 5 2. The income and property of the authority shall be exempt 6 from all state and local taxes, and the sale of lottery tickets 7 and shares issued and sold by the authority and its retail 8 licensees shall be exempt from all state and local sales taxes. 9 Sec. 25. Section 99G.30A, subsection 2, paragraph a, Code 10 2023, is amended to read as follows: 11 a. The director of revenue shall administer the monitor 12 vending machine excise tax as nearly as possible in conjunction 13 with the administration of state sales tax laws. The director 14 shall provide appropriate forms or provide appropriate entries 15 on the regular state tax forms for reporting local sales and 16 services tax liability. 17 Sec. 26. Section 279.63, subsection 2, paragraph a, Code 18 2023, is amended to read as follows: 19 a. All property tax levies , and income surtaxes , and local 20 option sales taxes in place in the school district, listed by 21 type of levy, rate, amount, duration, and notification of the 22 maximum rate and amount limitations permitted by statute. 23 Sec. 27. Section 321.40, subsection 5, Code 2023, is amended 24 by striking the subsection. 25 Sec. 28. Section 321.130, Code 2023, is amended to read as 26 follows: 27 321.130 Fees in lieu of taxes. 28 The registration fees imposed by this chapter upon private 29 passenger motor vehicles or semitrailers are in lieu of all 30 state and local taxes , except local vehicle taxes, to which 31 motor vehicles or semitrailers are subject. 32 Sec. 29. Section 418.13, subsection 2, Code 2023, is amended 33 to read as follows: 34 2. In addition to the moneys received pursuant to section 35 -9- LSB 1461XC (12) 90 md/jh 9/ 71
S.F. _____ 418.10 or 418.12 , a governmental entity may deposit in the 1 flood project fund any other moneys lawfully received by the 2 governmental entity, including but not limited to local sales 3 and services tax receipts collected amounts received under 4 chapter 423B . 5 Sec. 30. Section 421.26, Code 2023, is amended to read as 6 follows: 7 421.26 Personal liability for tax due. 8 If a licensee or other person under section 452A.65 , a 9 retailer or purchaser under chapter 423A , 423B , 423C , 423D , or 10 423E , or section 423.14 , 423.14A , 423.29 , 423.31 , or 423.33 , 11 or a user under section 423.34 , or a permit holder or licensee 12 under section 453A.13 , 453A.16 , or 453A.44 fails to pay a tax 13 under those sections when due, an officer of a corporation 14 or association, notwithstanding section 489.304 , a member or 15 manager of a limited liability company, or a partner of a 16 partnership, having control or supervision of or the authority 17 for remitting the tax payments and having a substantial legal 18 or equitable interest in the ownership of the corporation, 19 association, limited liability company, or partnership, who has 20 intentionally failed to pay the tax is personally liable for 21 the payment of the tax, interest, and penalty due and unpaid. 22 However, this section shall not apply to taxes on accounts 23 receivable. The dissolution of a corporation, association, 24 limited liability company, or partnership shall not discharge a 25 person’s liability for failure to remit the tax due. 26 Sec. 31. Section 421.28, Code 2023, is amended to read as 27 follows: 28 421.28 Exceptions to successor liability. 29 The immediate successor to a licensee’s or retailer’s 30 business or stock of goods under chapter 423A or 423B , or 31 section 423.33 or 452A.65 , is not personally liable for 32 the amount of delinquent tax, interest, or penalty due and 33 unpaid if the immediate successor shows that the purchase of 34 the business or stock of goods was made in good faith that 35 -10- LSB 1461XC (12) 90 md/jh 10/ 71
S.F. _____ no delinquent tax, interest, or penalty was due and unpaid. 1 For purposes of this section the immediate successor shows 2 good faith by evidence that the department had provided 3 the immediate successor with a certified statement that 4 no delinquent tax, interest, or penalty is unpaid, or that 5 the immediate successor had taken in good faith a certified 6 statement from the licensee, retailer, or seller that no 7 delinquent tax, interest, or penalty is unpaid. When requested 8 to do so by a person with whom the licensee or retailer is 9 negotiating the sale of the business or stock of goods, the 10 director of revenue shall, upon being satisfied that such 11 a situation exists, inform that person as to the amount of 12 unpaid delinquent tax, interest, or penalty due by the licensee 13 or the retailer. The giving of the information under this 14 circumstance is not a violation of section 422.20 , 422.72 , or 15 452A.63 . 16 Sec. 32. Section 421.60, subsection 2, paragraph m, 17 subparagraphs (1) and (2), Code 2023, are amended to read as 18 follows: 19 (1) The director may abate unpaid state sales and use 20 taxes and local sales and services taxes owed by a retailer 21 in the event that the retailer failed to collect tax from the 22 purchaser as a result of erroneous written advice issued by 23 the department that was specially directed to the retailer 24 by the department and the retailer is unable to collect the 25 tax, interest, or penalties from the purchaser. Before the 26 tax, interest, and penalties shall be abated on the basis of 27 erroneous written advice, the retailer must present a copy of 28 the retailer’s request for written advice to the department and 29 a copy of the department’s reply. The department shall not 30 maintain a position against the retailer that is inconsistent 31 with the erroneous written advice, except on the basis of 32 subsequent written advice sent by the department to that 33 retailer, or a change in state or federal law, a reported 34 court case to the contrary, a contrary rule adopted by the 35 -11- LSB 1461XC (12) 90 md/jh 11/ 71
S.F. _____ department, a change in material facts or circumstances 1 relating to the retailer, or the retailer’s misrepresentation 2 or incomplete or inadequate representation of material facts 3 and circumstances in requesting the written advice. 4 (2) (a) The director shall abate the unpaid state sales 5 and use taxes and any local sales and services taxes owed by a 6 retailer where the retailer failed to collect the tax from the 7 purchaser on the charges paid for access to on-line computer 8 services as a result of erroneous written advice issued by the 9 department regarding the taxability of charges paid for access 10 to on-line computer services. To qualify for the abatement 11 under this subparagraph, the erroneous written advice shall 12 have been issued by the department prior to July 1, 1999, and 13 shall have been specially directed to the retailer by the 14 department. 15 (b) If an abatement of unpaid state sales and use taxes and 16 any local sales and services taxes is granted to the retailer 17 by the director pursuant to this subparagraph, the department 18 is precluded from collecting from the purchaser any unpaid 19 state sales and use taxes and any local sales and services 20 taxes which were abated. 21 Sec. 33. Section 422.72, subsection 6, paragraph a, Code 22 2023, is amended to read as follows: 23 a. The department may enter into a written informational 24 exchange agreement for tax administration purposes with a city 25 or county which is entitled to receive funds due to a local 26 hotel and motel tax or a local sales and services tax . The 27 written informational exchange agreement shall designate no 28 more than two paid city or county employees that have access to 29 actual return information relating to that city’s or county’s 30 receipts from a local hotel and motel tax or a local sales and 31 services tax . 32 Sec. 34. Section 423.4, subsection 2, paragraph d, Code 33 2023, is amended by striking the paragraph. 34 Sec. 35. Section 423.4, subsection 5, paragraph f, Code 35 -12- LSB 1461XC (12) 90 md/jh 12/ 71
S.F. _____ 2023, is amended to read as follows: 1 f. Notwithstanding the state sales tax imposed in section 2 423.2 , a rebate issued pursuant to this subsection shall not 3 exceed an amount equal to five percent of the sales price 4 of the tangible personal property or services furnished to 5 purchasers at the automobile racetrack facility. Any local 6 option taxes paid and collected shall not be subject to rebate 7 under this subsection . 8 Sec. 36. Section 423.4, subsection 7, paragraph f, Code 9 2023, is amended to read as follows: 10 f. The refund in this subsection applies only to state 11 sales and use tax paid and does not apply to local option 12 sales and services taxes imposed pursuant to chapter 423B . 13 Notwithstanding the state sales tax imposed in section 423.2 , 14 a refund issued pursuant to this section shall not exceed 15 an amount equal to five percent of the sales price of the 16 fuel used to create heat, power, and steam for processing 17 or generating electrical current or from the sale price 18 of electricity consumed by computers, machinery, or other 19 equipment for operation of the data center business facility. 20 Sec. 37. Section 423.4, subsection 8, paragraph g, Code 21 2023, is amended to read as follows: 22 g. The refund in this subsection applies only to state 23 sales and use tax paid and does not apply to local option 24 sales and services taxes imposed pursuant to chapter 423B . 25 Notwithstanding the state sales tax imposed in section 423.2 , 26 a refund issued pursuant to this section shall not exceed an 27 amount equal to five percent of the sales price of the items 28 listed in paragraph “a” , subparagraphs (1), (2), and (3). 29 Sec. 38. Section 423.14A, subsection 2, Code 2023, is 30 amended to read as follows: 31 2. In addition to and not in lieu of any application of 32 this chapter to sellers who are retailers and sellers who are 33 retailers maintaining a place of business in this state, any 34 person described in subsection 3 , or the person’s agents, 35 -13- LSB 1461XC (12) 90 md/jh 13/ 71
S.F. _____ shall be considered a retailer in this state and a retailer 1 maintaining a place of business in this state for purposes of 2 this chapter on or after January 1, 2019, and shall be subject 3 to all requirements of this chapter imposed on retailers and 4 retailers maintaining a place of business in this state, 5 including but not limited to the requirement to collect and 6 remit sales and use taxes pursuant to sections 423.14 and 7 423.29 , and local option taxes under chapter 423B . 8 Sec. 39. Section 423.33, subsection 1, paragraph c, Code 9 2023, is amended to read as follows: 10 c. If the retailer fails to collect sales tax at the time 11 of the transaction, the retailer shall thereafter remit the 12 applicable sales tax, or the purchaser thereafter shall remit 13 the applicable use tax. If the purchaser remits all applicable 14 use tax, the retailer remains liable for any local sales and 15 services tax under chapter 423B that the retailer failed to 16 collect. 17 Sec. 40. Section 423.34A, unnumbered paragraph 1, Code 18 2023, is amended to read as follows: 19 A purchaser is relieved of liability for payment of state 20 sales or use tax, for payment of any local option sales tax, 21 for payment of interest, or for payment of any penalty for 22 nonpayment of tax which nonpayment is not fraudulent, willful, 23 or intentional, under the following circumstances: 24 Sec. 41. Section 423.36, subsection 9, paragraph a, Code 25 2023, is amended to read as follows: 26 a. Except as provided in paragraph “b” , purchasers, users, 27 and consumers of tangible personal property, specified digital 28 products, or enumerated services taxed pursuant to subchapter 29 II or III of this chapter or chapter 423B may be authorized, 30 pursuant to rules adopted by the director, to remit tax owed 31 directly to the department instead of the tax being collected 32 and paid by the seller. To qualify for a direct pay tax permit, 33 the purchaser, user, or consumer must accrue a tax liability 34 of more than four thousand dollars in tax under subchapters 35 -14- LSB 1461XC (12) 90 md/jh 14/ 71
S.F. _____ II and III in a semimonthly period and make deposits and file 1 returns pursuant to section 423.31 . This authority shall not 2 be granted or exercised except upon application to the director 3 and then only after issuance by the director of a direct pay 4 tax permit. 5 Sec. 42. Section 423B.1, Code 2023, is amended by striking 6 the section and inserting in lieu thereof the following: 7 423B.1 Use of revenues deposited in the local sales and use 8 tax fund —— revenue purpose statement. 9 1. a. Revenues credited to and deposited in each county’s 10 account within the local sales and use tax fund shall be 11 expended by each recipient county and city as required by the 12 revenue purpose statement, subject to the requirements of 13 section 423B.7, subsection 7, and approved under this section 14 for the city or for the county for the unincorporated areas of 15 the county, or as required by subsection 3. 16 b. A revenue purpose statement for the use of local option 17 sales and services tax revenue under this chapter approved at 18 election prior to January 1, 2025, and in effect on or set 19 to take effect on or after January 1, 2025, and the use of 20 revenues received under this chapter for purposes authorized 21 under section 423B.10 for ordinances in effect and approved 22 before January 1, 2025, shall continue in effect for revenues 23 received under this chapter until the expiration of the revenue 24 purpose statement or ordinance, if applicable, or until the 25 county board of supervisors or city council, as applicable, 26 adopts a new revenue purpose statement under subsection 2 or 27 repeals or amends the ordinance for the use of revenues under 28 section 423B.10. 29 2. The board of supervisors of each county and the city 30 council of each city may adopt by resolution a revenue purpose 31 statement for the expenditure of funds received under this 32 chapter. 33 3. Each city and county without a valid revenue purpose 34 statement shall expend the revenues received for the following 35 -15- LSB 1461XC (12) 90 md/jh 15/ 71
S.F. _____ purposes in the order prescribed in this subsection, except 1 that the payment of bonds for which the revenues have been 2 pledged shall be paid first: 3 a. Reduction of the county’s basic levies under section 4 331.423 or reduction of the city general fund levy under 5 section 384.1, as applicable. 6 b. Reduction of any debt service levy of the county or city, 7 as applicable. 8 c. Reduction of the city’s additional taxes levied under 9 section 384.12 or the county’s supplemental levies under 10 section 331.424, as applicable. 11 d. Reduction of any other property tax levy of the county 12 or city, as applicable. 13 Sec. 43. NEW SECTION . 423B.1A Local use tax supplement 14 fund. 15 1. A local use tax supplement fund is created in the state 16 treasury under the control of the department of revenue. The 17 fund shall consist of all moneys transferred under section 18 423.43, subsection 1, paragraph “b” , subparagraph (1), 19 subparagraph division (a), and moneys appropriated to the fund. 20 2. Moneys in the local use tax supplement fund are annually 21 appropriated to the department of revenue and shall be used for 22 supplement payments to cities and counties under this section. 23 3. For each year during the period beginning January 1, 24 2025, through December 31, 2043, each city or county for the 25 unincorporated portion of the county, shall receive a local 26 use tax supplement payment equal to the difference, but not 27 less than zero between the amount of revenue received by the 28 city or county under section 423B.7, Code 2023, for the period 29 beginning January 1, 2024, and ending December 31, 2024, minus 30 the amount that would have been received by that city or county 31 for that period if all cities and the county were eligible for 32 distributions of such revenues under section 423B.7, Code 2023. 33 If moneys in the fund are insufficient to pay all supplement 34 amounts for the year, the director of revenue shall prorate the 35 -16- LSB 1461XC (12) 90 md/jh 16/ 71
S.F. _____ payment of the supplement payments and shall notify the cities 1 and counties of the pro rata percentage. 2 4. The supplement payment calculated under subsection 3 3 shall be paid to each city or county for the unincorporated 4 area of the county and shall be combined with and be used in the 5 same manner and be subject to the same requirements as moneys 6 received by the city or county under section 423B.7 for that 7 year. 8 5. Notwithstanding section 12C.7, subsection 2, interest or 9 earnings on moneys deposited in the local use tax supplement 10 fund shall be credited to the local use tax supplement fund. 11 Notwithstanding section 8.33, moneys credited to the local use 12 tax supplement fund shall not revert at the close of a fiscal 13 year. 14 6. This section is repealed January 1, 2044. Moneys in the 15 fund upon the repeal of this section shall be transferred to 16 the appropriate county accounts under section 423B.7 for the 17 counties from which the tax was paid. 18 Sec. 44. Section 423B.7, subsection 1, Code 2023, is amended 19 to read as follows: 20 1. a. Except as provided in paragraphs paragraph “b” and 21 “c” , the director shall credit the local sales and services tax 22 receipts and interest and penalties from a county-imposed tax 23 as specified in section 423.2A, subsection 2, paragraph “a” , 24 including any interest and penalties, to the county’s account 25 in the local sales and services use tax fund for the county in 26 from which the tax was collected. The director shall credit 27 the use tax receipts as specified in section 423.43, subsection 28 1, paragraph “b” , subparagraph (1), subparagraph divisions (b) 29 and (c), including any interest and penalties, to the county’s 30 account in the local sales and use tax fund for the county 31 from which the use tax was paid. If the director is unable to 32 determine from which county any of the receipts were collected 33 or paid, as applicable , those receipts shall be allocated among 34 the possible counties based on allocation rules adopted by the 35 -17- LSB 1461XC (12) 90 md/jh 17/ 71
S.F. _____ director. 1 b. The director shall credit the designated amount of the 2 increase in local sales and services tax receipts, as computed 3 in section 423B.10 , collected in an urban renewal area of an 4 eligible city that has adopted an ordinance pursuant to section 5 423B.10, subsection 2 , into a special city account in the local 6 sales and services use tax fund. 7 c. The director shall credit the local sales and services 8 tax receipts and interest and penalties from a city-imposed tax 9 under section 423B.1, subsection 2 , to the city’s account in 10 the local sales and services tax fund. 11 Sec. 45. Section 423B.7, subsections 2, 3, and 4, Code 2023, 12 are amended to read as follows: 13 2. The director of revenue by the last day of each 14 month shall transfer to each city or county where the local 15 option tax is imposed the amount of tax moneys remitted to 16 the department attributable to each city or county from the 17 preceding month. 18 3. Seventy-five percent of each county’s account shall be 19 remitted on the basis of the county’s population residing in 20 the unincorporated area where the tax was imposed and those the 21 incorporated areas where the tax was imposed as follows: 22 a. To the board of supervisors a pro rata share based upon 23 the percentage of the above population of the county residing 24 in the unincorporated area of the county where the tax was 25 imposed according to the most recent certified federal census. 26 b. To each city in the county where the tax was imposed 27 a pro rata share based upon the percentage of the city’s 28 population residing in the county to the above population of 29 the county according to the most recent certified federal 30 census. 31 c. If a subsequent certified census exists which modifies 32 that most recent certified federal census for a participating 33 jurisdiction under paragraphs “a” and “b” , the computations 34 under paragraphs “a” and “b” shall utilize the subsequent 35 -18- LSB 1461XC (12) 90 md/jh 18/ 71
S.F. _____ certified census in the distribution formula under rules 1 established by the director of revenue. 2 4. Twenty-five percent of each county’s account shall 3 be remitted based on the sum of property tax dollars levied 4 by the board of supervisors if the tax was imposed in the 5 unincorporated areas and by each city in the county where the 6 tax was imposed during the three-year period beginning July 1, 7 1982, and ending June 30, 1985, as follows: 8 a. To the board of supervisors a pro rata share based upon 9 the percentage of the total property tax dollars levied by the 10 board of supervisors during the above three-year period. 11 b. To each city council where the tax was imposed a pro rata 12 share based upon the percentage of property tax dollars levied 13 by the city during the above three-year period of the above 14 total property tax dollars levied by the board of supervisors 15 and each city where the tax was imposed during the above 16 three-year period. 17 Sec. 46. Section 423B.7, subsection 5, Code 2023, is amended 18 by striking the subsection. 19 Sec. 47. Section 423B.7, subsections 6 and 7, Code 2023, are 20 amended to read as follows: 21 6. From each special city account under subsection 1, 22 paragraph “b” , the sales and services tax revenues shall be 23 remitted to the city council for deposit in the special fund 24 created in section 403.19, subsection 2 , to be used by the city 25 as provided in section 423B.10 . The distribution from the 26 special city account is not subject to the distribution formula 27 provided in subsections 3 , and 4 , and 5 . 28 7. a. Subject to the requirement of paragraph “b” and the 29 requirements under section 423B.1, subsection 3 , local sales 30 and services tax moneys amounts received by a city or county 31 under this chapter may be expended for any lawful purpose of 32 the city or county, including but not limited to expenses 33 related to providing emergency medical services within the 34 applicable city or county. 35 -19- LSB 1461XC (12) 90 md/jh 19/ 71
S.F. _____ b. Each city located in whole or in part in a qualified 1 county and each qualified county for the unincorporated area 2 for which the imposition of the local sales and services tax 3 in the city or portion thereof or the unincorporated area, as 4 applicable, was revenue purpose statement approved at election 5 on or after January 1, 2019 2025 , shall require the use of 6 not less than fifty percent of the moneys received from the 7 qualified county’s account in the local sales and services 8 tax fund applicable county under this chapter for property 9 tax relief. However, for a county with a population of four 10 hundred thousand or more, a revenue purpose statement governing 11 the use of revenues for the unincorporated area of the county 12 approved on or after January 1, 2025, shall require the use of 13 seventy-five percent of the moneys received by the county under 14 this chapter for property tax relief. 15 c. For purposes of this subsection, property tax relief 16 includes payments under a chapter 28E agreement for purposes of 17 a regional transit district if such payments are used to reduce 18 the regional transit district levy under section 28M.5. For a 19 city located in whole or in part in a county with a population 20 of four hundred thousand or more, the use of revenues received 21 under this chapter for the purposes of this paragraph shall 22 not exceed ten percent of the amount received and for a county 23 with a population of four hundred thousand or more, for the 24 unincorporated area, shall not exceed twenty-five percent of 25 the amount received under this chapter. 26 Sec. 48. Section 423B.9, subsection 1, paragraphs b and c, 27 Code 2023, are amended to read as follows: 28 b. “Designated portion” means the portion of the local 29 option sales and services tax revenues received under this 30 chapter which is authorized to be expended for one or a 31 combination of purposes under an adopted public measure. 32 c. “Secondary recipient” means a political subdivision of 33 the state which is to receive revenues amounts from a local 34 option sales and services tax revenues under this chapter 35 -20- LSB 1461XC (12) 90 md/jh 20/ 71
S.F. _____ over a period of years pursuant to the terms of a chapter 28E 1 agreement with one or more cities or counties. 2 Sec. 49. Section 423B.9, subsections 2 and 3, Code 2023, are 3 amended to read as follows: 4 2. An issuer of public bonds which is a recipient of 5 revenues from a local option sales and services tax imposed 6 pursuant to this chapter may issue bonds in anticipation of 7 the collection of one or more designated portions of the 8 local option sales and services tax such revenues and may 9 pledge irrevocably an amount of the revenue derived from the 10 designated portions for each of the years the bonds remain 11 outstanding to the payment of the bonds. Bonds may be issued 12 only for one or more of the purposes set forth on the ballot 13 proposition concerning the imposition of the local option sales 14 and services tax in the revenue purpose statement , except bonds 15 shall not be issued which are payable from that portion of tax 16 revenues designated for property tax relief. The bonds may be 17 issued in accordance with the procedures set forth in either 18 subsection 3 or 4 . 19 3. The governing body of an issuer may authorize the 20 issuance of bonds which are payable from the designated portion 21 of the revenues of the local option sales and services tax 22 received under this chapter , and not from property tax, by 23 following the authorization procedures set forth for cities 24 in section 384.83 . Bonds may be issued for the purpose of 25 refunding outstanding and previously issued bonds under this 26 subsection without otherwise complying with the provisions of 27 this subsection . 28 Sec. 50. Section 423B.9, subsection 4, paragraph b, Code 29 2023, is amended to read as follows: 30 b. The provisions of chapter 76 apply to the bonds payable 31 as provided in this subsection , except that the mandatory levy 32 to be assessed pursuant to section 76.2 shall be at a rate 33 to generate an amount which together with the receipts from 34 the pledged designated portion of the local option sales and 35 -21- LSB 1461XC (12) 90 md/jh 21/ 71
S.F. _____ services tax revenues received under this chapter is sufficient 1 to pay the interest and principal on the bonds. All amounts 2 collected as a result of the levy assessed pursuant to section 3 76.2 and paid out in the first instance for bond principal 4 and interest shall be repaid to the bond issuer which levied 5 the tax from the first available designated portion of local 6 option sales and services tax collections revenues received 7 under this chapter in excess of the requirement for the payment 8 of the principal and interest of the bonds and when repaid 9 shall be applied in reduction of property taxes. The amount 10 of bonds which may be issued under section 76.3 shall be the 11 amount which could be retired from the actual collections of 12 the designated portions of the local option sales and services 13 tax revenues received under this chapter for the last four 14 calendar quarters, as certified by the director of revenue. 15 The amount of tax revenues pledged jointly by other cities or 16 counties may be considered for the purpose of determining the 17 amount of bonds which may be issued. If the local option sales 18 and services tax has been in effect revenues have been received 19 under this chapter for less than four calendar quarters, the 20 tax collected revenues received within the shorter period may 21 be adjusted to project the collections amount of the designated 22 portion for the full year for the purpose of determining the 23 amount of the bonds which may be issued. The provisions of 24 this section constitute separate authorization for the issuance 25 of bonds and shall prevail in the event of conflict with 26 any other provision of the Code limiting the amount of bonds 27 which may be issued or the source of payment of the bonds. 28 Bonds issued under this section shall not limit or restrict 29 the authority of the bond issuer to issue bonds under other 30 provisions of the Code. 31 Sec. 51. Section 423B.9, subsection 5, Code 2023, is amended 32 to read as follows: 33 5. A city or county, jointly with one or more other 34 political subdivisions as provided in chapter 28E , may pledge 35 -22- LSB 1461XC (12) 90 md/jh 22/ 71
S.F. _____ irrevocably any amount derived from the designated portions 1 of the revenues of the local option sales and services tax 2 received under this chapter to the support or payment of bonds 3 of an issuer, issued for one or more purposes set forth on 4 the ballot proposition concerning the imposition of the local 5 option sales and services tax in the revenue purpose statement 6 or a political subdivision may apply the proceeds of its bonds 7 to the support of any such purpose. 8 Sec. 52. Section 423B.10, subsection 1, paragraph b, Code 9 2023, is amended to read as follows: 10 b. “Eligible city” means a city in which a local sales and 11 services tax imposed by the county applies or a city described 12 in section 423B.1, subsection 2 , paragraph “a” , and in which an 13 urban renewal area has been designated. 14 Sec. 53. Section 423B.10, subsections 2, 3, 5, and 6, Code 15 2023, are amended to read as follows: 16 2. a. Upon approval by the board of supervisors of each 17 applicable county pursuant to paragraph “b” , an eligible city 18 may by ordinance of the city council provide for the use of a 19 designated amount of the increased local sales and services 20 tax revenues collected received under this chapter which are 21 attributable to retail establishments in an urban renewal 22 area to fund urban renewal projects located in the area. The 23 designated amount may be all or a portion of such increased 24 revenues. 25 b. A city shall not adopt an ordinance under paragraph 26 “a” unless the board of supervisors of each county where the 27 urban renewal area from which such local sales and services 28 tax revenues are to be collected and used to fund urban 29 renewal projects is located first adopts a resolution approving 30 the collection and use of such local sales and services tax 31 revenues. 32 3. To determine the revenue increase for purposes of 33 subsection 2 , revenue amounts shall be calculated by the 34 department of revenue as follows: 35 -23- LSB 1461XC (12) 90 md/jh 23/ 71
S.F. _____ a. Determine the amount of local sales and services tax 1 revenue collected and attributable to a one percent sales and 2 services tax from retail establishments located in the area 3 comprising the urban renewal area during the base year. 4 b. Determine the current year one percent sales and services 5 tax revenue amount for each fiscal year following the base year 6 in the manner specified in paragraph “a” . 7 c. The excess of the amount determined in paragraph “b” over 8 the base year revenue amount determined in paragraph “a” is the 9 increase in the local sales and services tax revenues of which 10 the designated amount is to be deposited in the special city 11 account created in section 423B.7, subsection 6 . 12 5. In addition to the moneys received pursuant to the 13 ordinance authorized under subsection 2 , an eligible city 14 may deposit any other local sales and services tax revenues 15 received by it the city pursuant to the distribution formula in 16 section 423B.7, subsections 3, 4, and 5 , to the special fund 17 described in section 403.19, subsection 2 . 18 6. For purposes of this section , the eligible city shall 19 assist the department of revenue in identifying retail 20 establishments in the urban renewal area that are collecting 21 the local sales and services tax. This process shall be 22 ongoing until the ordinance is repealed. 23 Sec. 54. REPEAL. Sections 423B.2, 423B.3, 423B.4, 423B.5, 24 423B.6, and 423B.8, Code 2023, are repealed. 25 Sec. 55. EFFECTIVE DATE. This division of this Act takes 26 effect January 1, 2025. 27 DIVISION IV 28 HOMESTEAD PROPERTY TAX CREDIT 29 Sec. 56. Section 2.48, subsection 3, paragraph f, 30 subparagraph (1), Code 2023, is amended to read as follows: 31 (1) The homestead tax exemption and credit under chapter 32 425 . 33 Sec. 57. Section 25B.7, subsection 2, paragraph a, Code 34 2023, is amended by striking the paragraph. 35 -24- LSB 1461XC (12) 90 md/jh 24/ 71
S.F. _____ Sec. 58. Section 100.18, subsection 2, paragraph b, Code 1 2023, is amended to read as follows: 2 b. The rules shall require the installation of smoke 3 detectors in existing single-family rental units and 4 multiple-unit residential buildings. Existing single-family 5 dwelling units shall be equipped with approved smoke detectors. 6 A person who files for a homestead tax exemption and credit 7 pursuant to chapter 425 shall certify that the single-family 8 dwelling unit for which the credit is filed has a smoke 9 detector installed in compliance with this section , or that one 10 will be installed within thirty days of the date the filing 11 for the credit is made. The state fire marshal shall adopt 12 rules and establish appropriate procedures to administer this 13 subsection . 14 Sec. 59. Section 100.18, subsection 3, paragraph b, Code 15 2023, is amended to read as follows: 16 b. The rules shall require the installation of carbon 17 monoxide alarms in existing single-family rental units and 18 multiple-unit residential buildings that have a fuel-fired 19 heater or appliance, a fireplace, or an attached garage. 20 Existing single-family dwellings that have a fuel-fired heater 21 or appliance, a fireplace, or an attached garage shall be 22 equipped with approved carbon monoxide alarms. For purposes 23 of this paragraph, “approved carbon monoxide alarm” means a 24 carbon monoxide alarm that meets the standards established by 25 the underwriters’ laboratories or is approved by the state fire 26 marshal as established by rule under subsection 5 . A person 27 who files for a homestead tax exemption and credit pursuant 28 to chapter 425 shall certify that the single-family dwelling 29 for which the credit is filed and that has a fuel-fired heater 30 or appliance, a fireplace, or an attached garage, has carbon 31 monoxide alarms installed in compliance with this section , 32 or that such alarms will be installed within thirty days of 33 the date the filing for the credit is made. The state fire 34 marshal shall adopt rules and establish appropriate procedures 35 -25- LSB 1461XC (12) 90 md/jh 25/ 71
S.F. _____ to administer this subsection . 1 Sec. 60. Section 103.22, subsection 7, Code 2023, is amended 2 to read as follows: 3 7. Prohibit an owner of property from performing work on the 4 owner’s principal residence, if such residence is an existing 5 dwelling rather than new construction and is not an apartment 6 that is attached to any other apartment or building, as those 7 terms are defined in section 499B.2 , and is not larger than a 8 single-family dwelling, or require such owner to be licensed 9 under this chapter . In order to qualify for inapplicability 10 pursuant to this subsection , a residence shall qualify for the 11 homestead tax exemption and credit . 12 Sec. 61. Section 105.11, subsection 3, Code 2023, is amended 13 to read as follows: 14 3. Prohibit an owner of property from performing work on the 15 owner’s principal residence, if such residence is an existing 16 dwelling rather than new construction and is not larger than a 17 single-family dwelling, or farm property, excluding commercial 18 or industrial installations or installations in public use 19 buildings or facilities, or require such owner to be licensed 20 under this chapter . In order to qualify for inapplicability 21 pursuant to this subsection , a residence shall qualify for the 22 homestead tax exemption and credit . 23 Sec. 62. Section 216.12, subsection 1, paragraph e, Code 24 2023, is amended to read as follows: 25 e. The rental or leasing of a housing accommodation in a 26 building which contains housing accommodations for not more 27 than four families living independently of each other, if the 28 owner resides in one of the housing accommodations for which 29 the owner qualifies for the homestead tax exemption and credit 30 under section 425.1 . 31 Sec. 63. Section 321.1, subsection 6C, Code 2023, is amended 32 to read as follows: 33 6C. “Bona fide residence” or “bona fide address” means the 34 current street or highway address of an individual’s residence. 35 -26- LSB 1461XC (12) 90 md/jh 26/ 71
S.F. _____ The bona fide residence of a person with more than one dwelling 1 is the dwelling for which the person claims a homestead tax 2 exemption and credit under chapter 425 , if applicable. The 3 bona fide residence of a homeless person is a primary nighttime 4 residence meeting one of the criteria listed in section 48A.2, 5 subsection 3 . 6 Sec. 64. Section 321.1A, subsection 1, paragraph a, Code 7 2023, is amended to read as follows: 8 a. The person has filed for a homestead tax exemption and 9 credit on property in this state. 10 Sec. 65. Section 331.401, subsection 1, paragraphs e and f, 11 Code 2023, are amended to read as follows: 12 e. Adopt resolutions authorizing the county assessor 13 to provide forms for homestead tax exemption and credit 14 claimants as provided in section 425.2 and military service tax 15 exemptions as provided in section 426A.14 . 16 f. Examine and allow or disallow claims for homestead tax 17 exemption and credit in accordance with section 425.3 and 18 claims for military service tax exemption in accordance with 19 chapter 426A . The board, by a single resolution, may allow or 20 disallow the exemptions recommended by the assessor. 21 Sec. 66. Section 331.512, subsection 3, Code 2023, is 22 amended to read as follows: 23 3. Carry out duties relating to the homestead tax exemption 24 and credit and agricultural land tax credit as provided in 25 chapters 425 and 426 . 26 Sec. 67. Section 331.559, subsection 12, Code 2023, is 27 amended to read as follows: 28 12. Carry out duties relating to the administration of 29 the homestead tax exemption and credit and other credits as 30 provided in sections 425.4 , 425.5 , 425.7 , 425.9 , 425.10 , and 31 425.25 . 32 Sec. 68. Section 404.3, subsection 1, Code 2023, is amended 33 to read as follows: 34 1. All qualified real estate assessed as residential 35 -27- LSB 1461XC (12) 90 md/jh 27/ 71
S.F. _____ property is eligible to receive an exemption from taxation 1 based on the actual value added by the improvements. The 2 exemption is for a period of ten years. The amount of the 3 exemption is equal to a percent of the actual value added by 4 the improvements, determined as follows: One hundred fifteen 5 percent of the value added by the improvements. However, the 6 amount of the actual value added by the improvements which 7 shall be used to compute the exemption shall not exceed twenty 8 thousand dollars and the granting of the exemption shall not 9 result in the actual value of the qualified real estate being 10 reduced below the actual value on which the homestead credit 11 exemption is computed under section 425.1 . 12 Sec. 69. Section 425.1, subsection 1, paragraph a, Code 13 2023, is amended to read as follows: 14 a. A homestead credit fund is created. There For fiscal 15 years beginning before July 1, 2028, there is appropriated 16 annually from the general fund of the state to the department 17 of revenue to be credited to the homestead credit fund, an 18 amount sufficient to implement this subchapter . 19 Sec. 70. Section 425.1, subsection 1, Code 2023, is amended 20 by adding the following new paragraph: 21 NEW PARAGRAPH . c. All moneys in the homestead credit fund 22 at the end of the fiscal year beginning July 1, 2028, shall be 23 transferred by the department of revenue for deposit in the 24 general fund of the state. 25 Sec. 71. Section 425.1, subsections 2, 4, and 5, Code 2023, 26 are amended to read as follows: 27 2. a. For fiscal years beginning before July 1, 2028, the 28 moneys in the homestead credit fund shall be apportioned each 29 year so as to give a credit against the tax on each eligible 30 homestead in the state, but not more than the amount under 31 paragraph “b” . 32 b. (1) The For assessment years beginning before July 33 1, 2025, the homestead credit fund shall be apportioned each 34 year so as to give a credit against the tax on each eligible 35 -28- LSB 1461XC (12) 90 md/jh 28/ 71
S.F. _____ homestead in the state in an amount equal to the actual levy on 1 the first four thousand eight hundred fifty dollars of actual 2 value for each homestead. 3 (2) For property taxes due and payable in the fiscal year 4 beginning July 1, 2025, the homestead credit fund shall be 5 apportioned each year so as to give a credit against the tax 6 on each eligible homestead in the state in an amount equal 7 to the actual levy on the first three thousand six hundred 8 forty dollars of actual value for each homestead exempted under 9 section 425.1A. 10 (3) For property taxes due and payable in the fiscal year 11 beginning July 1, 2026, the homestead credit fund shall be 12 apportioned each year so as to give a credit against the tax 13 on each eligible homestead in the state in an amount equal to 14 the actual levy on the first two thousand four hundred thirty 15 dollars of actual value for each homestead exempted under 16 section 425.1A. 17 (4) For property taxes due and payable in the fiscal year 18 beginning July 1, 2027, the homestead credit fund shall be 19 apportioned each year so as to give a credit against the tax 20 on each eligible homestead in the state in an amount equal to 21 the actual levy on the first one thousand two hundred twenty 22 dollars of actual value for each homestead exempted under 23 section 425.1A. 24 4. Annually For fiscal years beginning before July 1, 2028, 25 annually the department of revenue shall certify to the county 26 auditor of each county the credit and its amount in dollars. 27 Each county auditor shall then enter the credit against the 28 tax levied on each eligible homestead in each county payable 29 during the ensuing year, designating on the tax lists the 30 credit as being from the homestead credit fund, and credit 31 shall then be given to the several taxing districts in which 32 eligible homesteads are located in an amount equal to the 33 credits allowed on the taxes of the homesteads. The amount of 34 credits shall be apportioned by each county treasurer to the 35 -29- LSB 1461XC (12) 90 md/jh 29/ 71
S.F. _____ several taxing districts as provided by law, in the same manner 1 as though the amount of the credit had been paid by the owners 2 of the homesteads. However, the several taxing districts shall 3 not draw the funds so credited until after the semiannual 4 allocations have been received by the county treasurer, as 5 provided in this subchapter . Each county treasurer shall show 6 on each tax receipt the amount of credit received from the 7 homestead credit fund. 8 5. If For property taxes due and payable in fiscal years 9 beginning before July 1, 2028, if the homestead tax credit 10 computed under this section is less than sixty-two dollars 11 and fifty cents, the amount of homestead tax credit on that 12 eligible homestead shall be sixty-two dollars and fifty cents 13 subject to the limitation imposed in this section . 14 Sec. 72. NEW SECTION . 425.1A Homestead tax exemption. 15 The following exemptions from taxation shall be allowed: 16 1. For the assessment year beginning January 1, 2024, the 17 eligible homestead, not to exceed two thousand five hundred 18 dollars in actual value. 19 2. For the assessment year beginning January 1, 2025, the 20 eligible homestead, not to exceed five thousand dollars in 21 actual value. 22 3. For the assessment year beginning January 1, 2026, the 23 eligible homestead, not to exceed seven thousand five hundred 24 dollars in actual value. 25 4. For the assessment year beginning January 1, 2027, and 26 each succeeding assessment year, the eligible homestead, not to 27 exceed ten thousand dollars in actual value. 28 Sec. 73. Section 425.2, subsections 1, 2, 4, and 5, Code 29 2023, are amended to read as follows: 30 1. A person who wishes to qualify for the homestead 31 exemption and credit allowed under this subchapter shall 32 obtain the appropriate forms for filing for the exemption and 33 credit from the assessor. The person claiming the exemption 34 and credit shall file a verified statement and designation of 35 -30- LSB 1461XC (12) 90 md/jh 30/ 71
S.F. _____ homestead with the assessor for the year for which the person 1 is first claiming the exemption and credit. The claim shall be 2 filed not later than July 1 of the year for which the person is 3 claiming the exemption and credit. A claim filed after July 1 4 of the year for which the person is claiming the exemption and 5 credit shall be considered as a claim filed for the following 6 year. 7 2. Upon the filing and allowance of the claim, the claim 8 shall be allowed on that homestead for successive years without 9 further filing as long as the property is legally or equitably 10 owned and used as a homestead by that person or that person’s 11 spouse on July 1 of each of those successive years, and the 12 owner of the property being claimed as a homestead declares 13 residency in Iowa for purposes of income taxation, and the 14 property is occupied by that person or that person’s spouse 15 for at least six months in each of those calendar years in 16 which the fiscal year begins. When the property is sold or 17 transferred, the buyer or transferee who wishes to qualify 18 shall refile for the exemption and credit. However, when the 19 property is transferred as part of a distribution made pursuant 20 to chapter 598 , the transferee who is the spouse retaining 21 ownership of the property is not required to refile for the 22 exemption and credit. Property divided pursuant to chapter 598 23 shall not be modified following the division of the property. 24 An owner who ceases to use a property for a homestead or 25 intends not to use it as a homestead for at least six months in 26 a calendar year shall provide written notice to the assessor 27 by July 1 following the date on which the use is changed. A 28 person who sells or transfers a homestead or the personal 29 representative of a deceased person who had a homestead at the 30 time of death, shall provide written notice to the assessor 31 that the property is no longer the homestead of the former 32 claimant. 33 4. Any person sixty-five years of age or older or any person 34 who is disabled may request, in writing, from the appropriate 35 -31- LSB 1461XC (12) 90 md/jh 31/ 71
S.F. _____ assessor forms for filing for homestead tax exemption and 1 credit. Any person sixty-five years of age or older or who is 2 disabled may complete the form, which shall include a statement 3 of homestead, and mail or return it to the appropriate 4 assessor. The signature of the claimant on the statement shall 5 be considered the claimant’s acknowledgment that all statements 6 and facts entered on the form are correct to the best of the 7 claimant’s knowledge. 8 5. Upon adoption of a resolution by the county board of 9 supervisors, any person may request, in writing, from the 10 appropriate assessor forms for the filing for homestead tax 11 exemption and credit. The person may complete the form, which 12 shall include a statement of homestead, and mail or return it 13 to the appropriate assessor. The signature of the claimant on 14 the statement of homestead shall be considered the claimant’s 15 acknowledgment that all statements and facts entered on the 16 form are correct to the best of the claimant’s knowledge. 17 Sec. 74. Section 425.3, subsection 4, Code 2023, is amended 18 to read as follows: 19 4. The county auditor shall forward the claims to the board 20 of supervisors. The board shall allow or disallow the claims. 21 If the board disallows a claim, it shall send written notice, 22 by mail, to the claimant at the claimant’s last known address. 23 The notice shall state the reasons for disallowing the claim 24 for the credit . The board is not required to send notice that 25 a claim is disallowed if the claimant voluntarily withdraws the 26 claim. 27 Sec. 75. Section 425.4, Code 2023, is amended to read as 28 follows: 29 425.4 Certification to treasurer. 30 All claims which have been allowed by the board of 31 supervisors shall be certified on or before August 1, in each 32 year, by the county auditor to the county treasurer, which 33 certificates shall list the total amount of dollars, listed by 34 taxing district in the county, due for homestead tax exemptions 35 -32- LSB 1461XC (12) 90 md/jh 32/ 71
S.F. _____ and credits claimed and allowed. The county treasurer shall 1 forthwith then certify to the department of revenue the total 2 amount of dollars, listed by taxing district in the county, due 3 for homestead tax exemptions and credits claimed and allowed. 4 Sec. 76. Section 425.6, Code 2023, is amended to read as 5 follows: 6 425.6 Waiver by neglect. 7 If a person fails to file a claim or to have a claim on file 8 with the assessor for the credits provided in this subchapter , 9 the person is deemed to have waived the homestead exemption 10 and credit for the year in which the person failed to file the 11 claim or to have a claim on file with the assessor. 12 Sec. 77. Section 425.7, subsection 3, Code 2023, is amended 13 to read as follows: 14 3. a. If the department of revenue determines that a claim 15 for homestead exemption and credit has been allowed by the 16 board of supervisors which is not justifiable under the law 17 and not substantiated by proper facts, the department may, at 18 any time within thirty-six months from July 1 of the year in 19 which the claim is allowed, set aside the allowance. Notice 20 of the disallowance shall be given to the county auditor of 21 the county in which the claim has been improperly granted and 22 a written notice of the disallowance shall also be addressed 23 to the claimant at the claimant’s last known address. The 24 claimant or board of supervisors may appeal to the director 25 of revenue within thirty days from the date of the notice of 26 disallowance. The director shall grant a hearing and if, upon 27 the hearing, the director determines that the disallowance was 28 incorrect, the director shall set aside the disallowance. The 29 director shall notify the claimant and the board of supervisors 30 of the result of the hearing. The claimant or the board of 31 supervisors may seek judicial review of the action of the 32 director of revenue in accordance with chapter 17A . 33 b. If a claim is disallowed by the department of revenue 34 and not appealed to the director of revenue or appealed to 35 -33- LSB 1461XC (12) 90 md/jh 33/ 71
S.F. _____ the director of revenue and thereafter upheld upon final 1 resolution, including any judicial review, any amounts of 2 exemptions allowed and credits allowed and paid from the 3 homestead credit fund including the penalty, if any, become a 4 lien upon the property on which the exemption and credit was 5 originally granted, if still in the hands of the claimant, 6 and not in the hands of a bona fide purchaser, and any amount 7 so erroneously paid including the penalty, if any, shall be 8 collected by the county treasurer in the same manner as other 9 taxes and the collections shall be returned to the department 10 of revenue and credited to the homestead credit fund. The 11 director of revenue may institute legal proceedings against a 12 homestead credit claimant for the collection of payments made 13 on disallowed credits and the penalty, if any. If a person 14 makes a false claim or affidavit with fraudulent intent to 15 obtain the homestead exemption and credit, the person is guilty 16 of a fraudulent practice and the claim shall be disallowed in 17 full. If the credit has been paid, the amount of the credit 18 plus a penalty equal to twenty-five percent of the amount of 19 credit plus interest, at the rate in effect under section 20 421.7 , from the time of payment shall be collected by the 21 county treasurer in the same manner as other property taxes, 22 penalty, and interest are collected and when collected shall 23 be paid to the director of revenue. If a homestead exemption 24 and credit is disallowed and the claimant failed to give 25 written notice to the assessor as required by section 425.2 26 when the property ceased to be used as a homestead by the 27 claimant, a civil penalty equal to five percent of the amount 28 of the disallowed exemption or credit is assessed against the 29 claimant. 30 Sec. 78. Section 425.8, subsection 1, Code 2023, is amended 31 to read as follows: 32 1. The director of revenue shall prescribe the form 33 for the making of a verified statement and designation of 34 homestead, the form for the supporting affidavits required 35 -34- LSB 1461XC (12) 90 md/jh 34/ 71
S.F. _____ herein, and such other forms as may be necessary for the proper 1 administration of this subchapter . Whenever necessary, the 2 department of revenue shall forward to the county auditors of 3 the several counties in the state the prescribed sample forms, 4 and the county auditors shall furnish blank forms prepared 5 in accordance therewith with the assessment rolls, books, 6 and supplies delivered to the assessors. The department of 7 revenue shall prescribe and the county auditors shall provide 8 on the forms for claiming the homestead exemption and credit a 9 statement to the effect that the owner realizes that the owner 10 must give written notice to the assessor when the owner changes 11 the use of the property. 12 Sec. 79. Section 425.9, subsections 2, 3, and 4, Code 2023, 13 are amended to read as follows: 14 2. If any claim for exemption and credit made hereunder 15 has been denied by the board of supervisors, and such action 16 is subsequently reversed on appeal, the exemption and credit 17 shall be allowed on the homestead involved in said appeal, and 18 the director of revenue, the county auditor, and the county 19 treasurer shall make such exemption and credit and change their 20 books and records accordingly. 21 3. In the event the appealing taxpayer has paid one or both 22 of the installments of the tax payable in the year or years in 23 question on such homestead valuation, remittance shall be made 24 to such taxpayer of the amount of such credit or exemption . 25 4. The amount of such credit shall be allocated and paid 26 from the surplus redeposited in the homestead credit fund 27 provided for in subsection 1 . The amount of such exemption not 28 covered by the credit shall be allowed as a credit on future 29 taxes due and payable. 30 Sec. 80. Section 425.10, Code 2023, is amended to read as 31 follows: 32 425.10 Reversal of allowed claim. 33 In the event any claim is allowed, and subsequently reversed 34 on appeal, any exemption and credit made under the claim 35 -35- LSB 1461XC (12) 90 md/jh 35/ 71
S.F. _____ shall be void. The amount of the erroneous exemption and 1 credit shall be charged against the property in question, and 2 the director of revenue, the county auditor, and the county 3 treasurer are authorized and directed to correct their books 4 and records accordingly. The amount of the erroneous credit, 5 when collected, shall be returned by the county treasurer to 6 the homestead credit fund to be reallocated the following year 7 as provided in this subchapter . 8 Sec. 81. Section 425.11, subsection 1, paragraph d, 9 subparagraph (1), unnumbered paragraph 1, Code 2023, is amended 10 to read as follows: 11 The homestead includes the dwelling house which the owner, 12 in good faith, is occupying as a home on July 1 of the year for 13 which the exemption and credit is claimed and occupies as a 14 home for at least six months during the calendar year in which 15 the fiscal year begins, except as otherwise provided. 16 Sec. 82. Section 425.11, subsection 1, paragraph d, 17 subparagraph (3), Code 2023, is amended to read as follows: 18 (3) It must not embrace more than one dwelling house, but 19 where a homestead has more than one dwelling house situated 20 thereon, the exemption and credit provided for in this 21 subchapter shall apply to the home and buildings used by the 22 owner, but shall not apply to any other dwelling house and 23 buildings appurtenant. 24 Sec. 83. Section 425.11, subsection 1, paragraph e, Code 25 2023, is amended to read as follows: 26 e. “Owner” means the person who holds the fee simple 27 title to the homestead, and in addition shall mean the person 28 occupying as a surviving spouse or the person occupying under 29 a contract of purchase which contract has been recorded in 30 the office of the county recorder of the county in which the 31 property is located; or the person occupying the homestead 32 under devise or by operation of the inheritance laws where 33 the whole interest passes or where the divided interest is 34 shared only by persons related or formerly related to each 35 -36- LSB 1461XC (12) 90 md/jh 36/ 71
S.F. _____ other by blood, marriage or adoption; or the person occupying 1 the homestead is a shareholder of a family farm corporation 2 that owns the property; or the person occupying the homestead 3 under a deed which conveys a divided interest where the divided 4 interest is shared only by persons related or formerly related 5 to each other by blood, marriage or adoption; or where the 6 person occupying the homestead holds a life estate with the 7 reversion interest held by a nonprofit corporation organized 8 under chapter 504 , provided that the holder of the life estate 9 is liable for and pays property tax on the homestead; or where 10 the person occupying the homestead holds an interest in a 11 horizontal property regime under chapter 499B , regardless 12 of whether the underlying land committed to the horizontal 13 property regime is in fee or as a leasehold interest, provided 14 that the holder of the interest in the horizontal property 15 regime is liable for and pays property tax on the homestead; 16 or where the person occupying the homestead is a member of a 17 community land trust as defined in 42 U.S.C. §12773, regardless 18 of whether the underlying land is in fee or as a leasehold 19 interest, provided that the member of the community land trust 20 is occupying the homestead and is liable for and pays property 21 tax on the homestead. For the purpose of this subchapter , 22 the word “owner” shall be construed to mean a bona fide owner 23 and not one for the purpose only of availing the person of 24 the benefits of this subchapter . In order to qualify for the 25 homestead tax exemption and credit, evidence of ownership shall 26 be on file in the office of the clerk of the district court 27 or recorded in the office of the county recorder at the time 28 the owner files with the assessor a verified statement of the 29 homestead claimed by the owner as provided in section 425.2 . 30 Sec. 84. Section 425.12, Code 2023, is amended to read as 31 follows: 32 425.12 Indian land. 33 Each forty acres of land, or fraction thereof, occupied by 34 a member or members of the Sac and Fox Indians in Tama county, 35 -37- LSB 1461XC (12) 90 md/jh 37/ 71
S.F. _____ which land is held in trust by the secretary of the interior of 1 the United States for said Indians, shall be given a homestead 2 tax exemption and credit within the meaning and under the 3 provisions of this subchapter . Application for such homestead 4 tax exemption and credit shall be made to the county auditor of 5 Tama county and may be made by a representative of the tribal 6 council. 7 Sec. 85. Section 425.13, Code 2023, is amended to read as 8 follows: 9 425.13 Conspiracy to defraud. 10 If any two or more persons conspire and confederate together 11 with fraudulent intent to obtain the exemption and credit 12 provided for under the terms of this subchapter by making a 13 false deed, or a false contract of purchase, they are guilty of 14 a fraudulent practice. 15 Sec. 86. Section 425.15, subsection 1, unnumbered paragraph 16 1, Code 2023, is amended to read as follows: 17 If the owner of a homestead allowed a an exemption and credit 18 under this subchapter is any of the following, the exemption 19 shall be the total actual value of the homestead and, for 20 fiscal years for which credits are paid, the credit allowed 21 on the homestead from the homestead credit fund shall be the 22 entire amount of the tax levied on the homestead: 23 Sec. 87. Section 425.15, subsections 2, 3, and 4, Code 2023, 24 are amended to read as follows: 25 2. a. For an owner described in subsection 1 , paragraph 26 “a” , “b” , or “c” , the exemption and credit allowed shall be 27 continued to the estate of an owner who is deceased or the 28 surviving spouse and any child, as defined in section 234.1 , 29 who are the beneficiaries of a deceased owner, so long as the 30 surviving spouse remains unmarried. 31 b. An individual described in subsection 1 , paragraph 32 “d” , is no longer eligible for the exemption and credit upon 33 termination of dependency and indemnity compensation under 38 34 U.S.C. §1301 et seq. 35 -38- LSB 1461XC (12) 90 md/jh 38/ 71
S.F. _____ 3. An owner or a beneficiary of an owner who elects to 1 secure the exemption and credit provided in this section is not 2 eligible for any other real property tax exemption provided by 3 law for veterans of military service. 4 4. If an owner acquires a different homestead, the exemption 5 and credit allowed under this section may be claimed on the new 6 homestead unless the owner fails to meet the other requirements 7 of this section . 8 Sec. 88. Section 425.15, subsection 5, paragraph a, Code 9 2023, is amended to read as follows: 10 a. Except as provided in paragraph “b” , the list of the 11 names and addresses of individuals allowed a an exemption 12 and credit under this section and maintained by the county 13 recorder, county treasurer, county assessor, city assessor, or 14 other government body is confidential information and shall 15 not be disseminated to any person unless otherwise ordered by 16 a court or released by the lawful custodian of the records 17 pursuant to state or federal law. The county recorder, county 18 treasurer, county assessor, city assessor, or other government 19 body responsible for maintaining the names and addresses of 20 individuals allowed a an exemption and credit under this 21 section may display such exemption and credit on individual 22 paper records and individual electronic records, including 23 display on an internet site. 24 Sec. 89. Section 425.17, subsection 8, Code 2023, is amended 25 to read as follows: 26 8. “Property taxes due” means property taxes including any 27 special assessments, but exclusive of delinquent interest and 28 charges for services, due on a claimant’s homestead in this 29 state, but includes only property taxes for which the claimant 30 is liable and which will actually be paid by the claimant. 31 However, if the claimant is a person whose property taxes have 32 been suspended under sections 427.8 and 427.9 , “property taxes 33 due” means property taxes including any special assessments, 34 but exclusive of delinquent interest and charges for services, 35 -39- LSB 1461XC (12) 90 md/jh 39/ 71
S.F. _____ due on a claimant’s homestead in this state, but includes only 1 property taxes for which the claimant is liable and which 2 would have to be paid by the claimant if the payment of the 3 taxes has not been suspended pursuant to sections 427.8 and 4 427.9 . “Property taxes due” shall be computed with no deduction 5 for any credit under this subchapter or for any homestead 6 exemption or credit allowed under section 425.1 . Each claim 7 shall be based upon the taxes due during the fiscal year next 8 following the base year. If a homestead is owned by two or 9 more persons as joint tenants or tenants in common, and one or 10 more persons are not members of claimant’s household, “property 11 taxes due” is that part of property taxes due on the homestead 12 which equals the ownership percentage of the claimant and the 13 claimant’s household. The county treasurer shall include with 14 the tax receipt a statement that if the owner of the property 15 is eighteen years of age or over, the person may be eligible 16 for the credit allowed under this subchapter . If a homestead 17 is an integral part of a farm, the claimant may use the total 18 property taxes due for the larger unit. If a homestead is an 19 integral part of a multidwelling or multipurpose building the 20 property taxes due for the purpose of this subsection shall be 21 prorated to reflect the portion which the value of the property 22 that the household occupies as its homestead is to the value 23 of the entire structure. For purposes of this subsection , 24 “unit” refers to that parcel of property covered by a single tax 25 statement of which the homestead is a part. 26 Sec. 90. Section 425.23, subsection 2, Code 2023, is amended 27 to read as follows: 28 2. The actual credit for property taxes due shall be 29 determined by subtracting from the tentative credit the amount 30 of the tax reduction resulting from the homestead exemption 31 and credit under section sections 425.1 which is allowed 32 as a credit and 425.1A against property taxes due in the 33 fiscal year next following the base year by the claimant or 34 any person of the claimant’s household. If the subtraction 35 -40- LSB 1461XC (12) 90 md/jh 40/ 71
S.F. _____ produces a negative amount, there shall be no credit but 1 no refund shall be required. The actual reimbursement for 2 rent constituting property taxes paid shall be equal to the 3 tentative reimbursement. 4 Sec. 91. Section 435.26, subsection 1, paragraph a, Code 5 2023, is amended to read as follows: 6 a. A mobile home or manufactured home which is located 7 outside a manufactured home community or mobile home park shall 8 be converted to real estate by being placed on a permanent 9 foundation and shall be assessed for real estate taxes. A 10 home, after conversion to real estate, is eligible for the 11 homestead tax exemption and credit and the military service tax 12 exemption as provided in sections 425.2 and 426A.11 . A taxable 13 mobile home or manufactured home which is located outside 14 of a manufactured home community or mobile home park as of 15 January 1, 1995, is also exempt from the permanent foundation 16 requirements of this chapter until the home is relocated. 17 Sec. 92. Section 435.26A, subsection 3, Code 2023, is 18 amended to read as follows: 19 3. After the surrender of a manufactured home’s certificate 20 of title under this section , the manufactured home shall 21 continue to be taxed under section 435.22 and is not eligible 22 for the homestead tax exemption and credit or the military 23 service tax exemption and credit . A foreclosure action on a 24 manufactured home whose title has been surrendered under this 25 section shall be conducted as a real estate foreclosure. A tax 26 lien and its priority shall remain the same on a manufactured 27 home after its certificate of title has been surrendered. 28 Sec. 93. Section 483A.24, subsection 19, Code 2023, is 29 amended to read as follows: 30 19. Upon payment of a fee established by rules adopted 31 pursuant to section 483A.1 for a lifetime trout fishing 32 license, the department shall issue a lifetime trout fishing 33 license to a person who is at least sixty-five years of age or 34 to a person who qualifies for the disabled veteran homestead 35 -41- LSB 1461XC (12) 90 md/jh 41/ 71
S.F. _____ exemption and credit under section 425.15 . The department 1 shall prepare an application to be used by a person requesting 2 a lifetime trout fishing license under this subsection . 3 Sec. 94. Section 499A.14, Code 2023, is amended to read as 4 follows: 5 499A.14 Taxation. 6 The real estate shall be taxed in the name of the 7 cooperative, and each member of the cooperative shall pay 8 that member’s proportionate share of the tax in accordance 9 with the proration formula set forth in the bylaws, and each 10 member occupying an apartment as a residence shall receive 11 that member’s proportionate homestead tax exemption and credit 12 and each veteran of the military services of the United States 13 identified as such under the laws of the state of Iowa or the 14 United States shall receive as a credit that member’s veterans 15 tax benefit as prescribed by the laws of the state of Iowa. 16 Sec. 95. EXISTING HOMESTEAD CLAIMS. Homestead credit 17 claims approved under chapter 425, subchapter I, prior to and 18 valid on the effective date of this division of this Act shall 19 result in a homestead exemption under chapter 425, subchapter 20 I, as enacted in this division of this Act, without further 21 filing by the claimant. 22 Sec. 96. IMPLEMENTATION. Section 25B.7, subsection 1, 23 shall not apply to the property tax exemption provided in this 24 division of this Act. 25 Sec. 97. APPLICABILITY. This division of this Act applies 26 to assessment years beginning on or after January 1, 2024. 27 DIVISION V 28 ELDERLY PROPERTY TAX CREDIT 29 Sec. 98. Section 425.17, subsection 2, paragraph a, 30 subparagraph (3), Code 2023, is amended to read as follows: 31 (3) A person filing a claim for credit under this subchapter 32 who has attained the age of seventy years on or before December 33 31 of the base year, who has a household income of less than two 34 three hundred fifty percent of the federal poverty level, as 35 -42- LSB 1461XC (12) 90 md/jh 42/ 71
S.F. _____ defined by the most recently revised poverty income guidelines 1 published by the United States department of health and human 2 services, and is domiciled in this state at the time the claim 3 is filed or at the time of the person’s death in the case of a 4 claim filed by the executor or administrator of the claimant’s 5 estate. 6 Sec. 99. Section 425.23, subsection 1, paragraph c, 7 subparagraph (2), Code 2023, is amended to read as follows: 8 (2) The difference between the actual amount of net 9 property taxes due on the homestead during the fiscal year next 10 following the base year minus the actual amount of net property 11 taxes due on the homestead during the first fiscal year for 12 which the claimant filed a claim for a credit calculated under 13 this paragraph “c” and for which the property taxes due on the 14 homestead were calculated on an assessed valuation that was 15 not a partial assessment and if the claimant has filed for the 16 credit calculated under this paragraph “c” for each of the 17 subsequent fiscal years after the first credit claimed. 18 Sec. 100. Section 425.23, subsection 2, Code 2023, is 19 amended to read as follows: 20 2. a. The Except as provided in paragraph “b” , the 21 actual credit for property taxes due shall be determined 22 by subtracting from the tentative credit the amount of the 23 homestead credit under section 425.1 which is allowed as a 24 credit against property taxes due in the fiscal year next 25 following the base year by the claimant or any person of 26 the claimant’s household. If the subtraction produces a 27 negative amount, there shall be no credit but no refund shall 28 be required. The actual reimbursement for rent constituting 29 property taxes paid shall be equal to the tentative 30 reimbursement. 31 b. If the claimant’s tentative credit is the amount 32 determined under subsection 1, paragraph “c” , subparagraph (2), 33 the actual credit amount shall be equal to the tentative credit 34 amount. 35 -43- LSB 1461XC (12) 90 md/jh 43/ 71
S.F. _____ Sec. 101. EFFECTIVE DATE. The following, being deemed of 1 immediate importance, take effect upon enactment: 2 1. The section of this division of this Act amending section 3 423.23, subsection 1, paragraph “c”, subparagraph (2). 4 2. The section of this division of this Act amending section 5 423.23, subsection 2. 6 Sec. 102. RETROACTIVE APPLICABILITY. The following apply 7 retroactively to claims under chapter 425, subchapter II, filed 8 on or after January 1, 2022: 9 1. The section of this division of this Act amending section 10 423.25, subsection 1, paragraph “c”, subparagraph (2). 11 2. The section of this division of this Act amending section 12 423.23, subsection 2. 13 Sec. 103. APPLICABILITY. The section of this division 14 of this Act amending section 425.17, subsection 2, paragraph 15 “a”, subparagraph (3), applies to claims under chapter 425, 16 subchapter II, filed on or after January 1, 2024. 17 DIVISION VI 18 MILITARY SERVICE PROPERTY TAX EXEMPTION AND CREDIT 19 Sec. 104. Section 25B.7, subsection 2, paragraph c, Code 20 2023, is amended by striking the paragraph. 21 Sec. 105. Section 426A.1A, Code 2023, is amended to read as 22 follows: 23 426A.1A Appropriation. 24 There For each fiscal year beginning before July 1, 2026, 25 there is appropriated from the general fund of the state the 26 amounts necessary to fund the credits provided under this 27 chapter . 28 Sec. 106. Section 426A.2, Code 2023, is amended to read as 29 follows: 30 426A.2 Military service tax credit. 31 The For each fiscal year beginning before July 1, 2026, the 32 moneys appropriated under section 426A.1A shall be apportioned 33 each year so as to replace all or a portion of the tax which 34 would be due on property eligible for military service tax 35 -44- LSB 1461XC (12) 90 md/jh 44/ 71
S.F. _____ exemption in the state, if the property were subject to 1 taxation, the amount of the credit to be not more than six 2 dollars and ninety-two cents per thousand dollars of assessed 3 value of property , not to exceed nine hundred forty-five 4 dollars, which would be subject to the tax, except for the 5 military service tax exemption. 6 Sec. 107. Section 426A.11, subsections 1 and 2, Code 2023, 7 are amended to read as follows: 8 1. The property, not to exceed two thousand seven hundred 9 seventy-eight dollars in taxable value for assessment years 10 beginning before January 1, 2024 , of any veteran, as defined in 11 section 35.1 , of World War I. 12 2. a. The property, not to exceed one thousand eight 13 hundred fifty-two dollars in taxable value for assessment years 14 beginning before January 1, 2024 , of an honorably separated, 15 retired, furloughed to a reserve, placed on inactive status, 16 or discharged veteran, as defined in section 35.1, subsection 17 2 , paragraph “a” or “b” . 18 b. The property, not to exceed two thousand fifty-five 19 dollars in taxable value for the assessment year beginning 20 January 1, 2024, of an honorably separated, retired, furloughed 21 to a reserve, placed on inactive status, or discharged veteran, 22 as defined in section 35.1, subsection 2, paragraph “a” or “b” . 23 c. The property, not to exceed four thousand dollars in 24 taxable value for assessment years beginning on or after 25 January 1, 2025, of an honorably separated, retired, furloughed 26 to a reserve, placed on inactive status, or discharged veteran, 27 as defined in section 35.1, subsection 2, paragraph “a” or “b” . 28 Sec. 108. IMPLEMENTATION. Section 25B.7, subsection 1, 29 shall not apply to the property tax exemption provided in this 30 Act. 31 Sec. 109. APPLICABILITY. This division of this Act applies 32 to assessment years beginning on or after January 1, 2024. 33 DIVISION VII 34 PROPERTY TAX ASSESSMENT LIMITATIONS 35 -45- LSB 1461XC (12) 90 md/jh 45/ 71
S.F. _____ Sec. 110. Section 441.21, subsections 5, 9, and 10, Code 1 2023, are amended to read as follows: 2 5. a. (1) For valuations established as of January 1, 3 1979, property valued by the department of revenue pursuant 4 to chapters 428 , 433 , and 437 , and 438 shall be considered as 5 one class of property and shall be assessed as a percentage 6 of its actual value. The percentage shall be determined by 7 the director of revenue in accordance with the provisions of 8 this section . For valuations established as of January 1, 9 1979, the percentage shall be the quotient of the dividend and 10 divisor as defined in this section . The dividend shall be the 11 total actual valuation established for 1978 by the department 12 of revenue, plus ten percent of the amount so determined. 13 The divisor for property valued by the department of revenue 14 pursuant to chapters 428 , 433 , and 437 , and 438 shall be the 15 valuation established for 1978, plus the amount of value added 16 to the total actual value by the revaluation of the property 17 by the department of revenue as of January 1, 1979. For 18 valuations established as of January 1, 1980, property valued 19 by the department of revenue pursuant to chapters 428 , 433 , and 20 437 , and 438 shall be assessed at a percentage of its actual 21 value. The percentage shall be determined by the director of 22 revenue in accordance with the provisions of this section . For 23 valuations established as of January 1, 1980, the percentage 24 shall be the quotient of the dividend and divisor as defined in 25 this section . The dividend shall be the total actual valuation 26 established for 1979 by the department of revenue, plus eight 27 percent of the amount so determined. The divisor for property 28 valued by the department of revenue pursuant to chapters 428 , 29 433 , and 437 , and 438 shall be the valuation established for 30 1979, plus the amount of value added to the total actual 31 value by the revaluation of the property by the department of 32 revenue as of January 1, 1980. For valuations established 33 as of January 1, 1981, and each year thereafter beginning 34 before January 1, 2025 , the percentage of actual value at 35 -46- LSB 1461XC (12) 90 md/jh 46/ 71
S.F. _____ which property valued by the department of revenue pursuant to 1 chapters 428 , 433 , and 437 , and 438 shall be assessed shall 2 be calculated in accordance with the methods provided herein, 3 except that any references to ten percent in this subsection 4 shall be eight percent. For valuations established on or after 5 January 1, 2013, property valued by the department of revenue 6 pursuant to chapter 434 shall be assessed at a portion of its 7 actual value determined in the same manner at which property 8 assessed as commercial property is assessed under paragraph “b” 9 for the same assessment year. For valuations established for 10 the assessment year beginning January 1, 2025, the percentage 11 of actual value at which property valued by the department of 12 revenue pursuant to chapter 438 shall be assessed shall be 13 ninety-five percent. For valuations established for assessment 14 years beginning on or after January 1, 2026, the percentage 15 of actual value at which property valued by the department of 16 revenue pursuant to chapter 438 shall be assessed shall be 17 ninety percent. 18 (2) (a) For valuations established for the assessment year 19 beginning January 1, 2025, the percentage of actual value at 20 which property valued by the department of revenue pursuant to 21 chapters 428 and 437 shall be assessed shall be ninety-seven 22 and one-half percent. 23 (b) For valuations established for the assessment year 24 beginning January 1, 2026, the percentage of actual value at 25 which property valued by the department of revenue pursuant to 26 chapters 428 and 437 shall be assessed shall be ninety-five 27 percent. 28 (c) For valuations established for the assessment year 29 beginning January 1, 2027, the percentage of actual value at 30 which property valued by the department of revenue pursuant to 31 chapters 428 and 437 shall be assessed shall be ninety-two and 32 one-half percent. 33 (d) For valuations established for the assessment year 34 beginning January 1, 2028, and each assessment year thereafter, 35 -47- LSB 1461XC (12) 90 md/jh 47/ 71
S.F. _____ the percentage of actual value at which property valued by the 1 department of revenue pursuant to chapters 428 and 437 shall be 2 assessed shall be ninety percent. 3 b. For valuations established on or after January 1, 2013, 4 commercial property, excluding properties referred to in 5 section 427A.1, subsection 9 , shall be assessed at a portion 6 of its actual value, as determined in this paragraph “b” . For 7 valuations established on or after January 1, 2013, property 8 valued by the department of revenue pursuant to chapter 434 9 shall be assessed at a portion of its actual value determined 10 in the same manner at which property assessed as commercial 11 property is assessed for the same assessment year. 12 (1) For valuations established for the assessment year 13 beginning January 1, 2013, the percentage of actual value 14 as equalized by the department of revenue as provided in 15 section 441.49 at which commercial property shall be assessed 16 shall be ninety-five percent. For valuations established 17 for the assessment year beginning January 1, 2014, and each 18 assessment year thereafter beginning before January 1, 2022, 19 the percentage of actual value as equalized by the department 20 of revenue as provided in section 441.49 at which commercial 21 property shall be assessed shall be ninety percent. 22 (2) For valuations established for the assessment year 23 beginning January 1, 2022, and each assessment year thereafter, 24 the portion of actual value at which each property unit of 25 commercial property shall be assessed shall be the sum of the 26 following: 27 (a) An amount equal to the product of the assessment 28 limitation percentage applicable to residential property under 29 subsection 4 for that assessment year multiplied by the actual 30 value of the property that exceeds zero dollars but does not 31 exceed one hundred fifty thousand dollars. 32 (b)