House File 478 - Reprinted HOUSE FILE 478 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HSB 44) (As Amended and Passed by the House March 9, 2017 ) A BILL FOR An Act relating to property tax assessments by modifying 1 requirements for the determination of value, modifying 2 provisions related to the property assessment appeal board 3 by striking the future repeal of provisions relating to the 4 board, modifying procedures and requirements for appeals to 5 the board, and including applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 HF 478 (3) 87 md/sc/jh/md

H.F. 478 Section 1. Section 331.559, subsection 20, Code 2017, is 1 amended to read as follows: 2 20. Apportion and collect the costs assessed by the district 3 court against the board of review or any taxing body district 4 resulting from an appeal of property assessments as provided 5 in section 441.40 . 6 Sec. 2. Section 428.4, subsection 1, Code 2017, is amended 7 to read as follows: 8 1. Property shall be assessed for taxation each year. 9 Real estate shall be listed and assessed in 1981 and every 10 two years thereafter. The assessment of real estate shall 11 be the value of the real estate as of January 1 of the year 12 of the assessment. The year 1981 and each odd-numbered year 13 thereafter shall be a reassessment year. In any year, after 14 the year in which an assessment has been made of all the real 15 estate in an assessing jurisdiction, the assessor shall value 16 and assess or revalue and reassess, as the case may require, 17 any real estate that the assessor finds was incorrectly valued 18 or assessed, or was not listed, valued, and assessed, in the 19 assessment year immediately preceding, also any real estate 20 the assessor finds has changed in value subsequent to January 21 1 of the preceding real estate assessment year. However, a 22 percentage increase on a class of property shall not be made 23 in a year not subject to an equalization order unless ordered 24 by the department of revenue. The assessor shall determine 25 the actual value and compute the taxable value thereof as of 26 January 1 of the year of the revaluation and reassessment. The 27 assessment shall be completed as specified in section 441.28 , 28 but no reduction or increase in actual value shall be made for 29 prior years. If an assessor makes a change in the valuation 30 of the real estate as provided for, sections 441.23 , 441.37 , 31 441.37A , and 441.38 , and 441.39 apply. 32 Sec. 3. Section 441.19, subsection 1, paragraph a, Code 33 2017, is amended to read as follows: 34 a. Supplemental and optional to the procedure for the 35 -1- HF 478 (3) 87 md/sc/jh/md 1/ 12

H.F. 478 assessment of property by the assessor as provided in this 1 chapter , the assessor may require from all persons required 2 to list their property for taxation as provided by sections 3 428.1 and 428.2 , a supplemental return to be prescribed by 4 the director of revenue upon which the person shall list 5 the person’s property. The supplemental return shall be in 6 substantially the same form as now prescribed by law for 7 the assessment rolls used in the listing of property by the 8 assessors. However, for assessment years beginning on or after 9 January 1, 2018, and unless otherwise required for property 10 valued by the department of revenue pursuant to chapters 428, 11 433, 437, and 438, a supplemental return shall not request, 12 and a person shall not be otherwise required to provide to the 13 assessor for property assessment purposes, sales or receipts 14 data, expense data, balance sheets, bank account information, 15 or other data related to the financial condition of a business 16 operating in whole or in part on the property if the property 17 is both classified as commercial or industrial property and 18 owned and used by the owner of the business. Every person 19 required to list property for taxation shall make a complete 20 listing of the property upon supplemental forms and return the 21 listing to the assessor as promptly as possible. The return 22 shall be verified over the signature of the person making the 23 return and section 441.25 applies to any person making such 24 a return. The assessor shall make supplemental return forms 25 available as soon as practicable after the first day of January 26 of each year. The assessor shall make supplemental return 27 forms available to the taxpayer by mail, or at a designated 28 place within the taxing district. 29 Sec. 4. Section 441.21, subsection 2, Code 2017, is amended 30 to read as follows: 31 2. In the event market value of the property being assessed 32 cannot be readily established in the foregoing manner, then 33 the assessor may determine the value of the property using the 34 other uniform and recognized appraisal methods including its 35 -2- HF 478 (3) 87 md/sc/jh/md 2/ 12

H.F. 478 productive and earning capacity, if any, industrial conditions, 1 its cost, physical and functional depreciation and obsolescence 2 and replacement cost, and all other factors which would assist 3 in determining the fair and reasonable market value of the 4 property but the actual value shall not be determined by use 5 of only one such factor. The following shall not be taken into 6 consideration: Special value or use value of the property to 7 its present owner, and the goodwill or value of a business 8 which uses the property as distinguished from the value of 9 the property as property. In addition, for assessment years 10 beginning on or after January 1, 2018, and unless otherwise 11 required for property valued by the department of revenue 12 pursuant to chapters 428, 433, 437, and 438, the assessor 13 shall not take into consideration and shall not request from 14 any person sales or receipts data, expense data, balance 15 sheets, bank account information, or other data related to 16 the financial condition of a business operating in whole or 17 in part on the property if the property is both classified as 18 commercial or industrial property and owned and used by the 19 owner of the business. However, in assessing property that 20 is rented or leased to low-income individuals and families 21 as authorized by section 42 of the Internal Revenue Code, 22 as amended, and which section limits the amount that the 23 individual or family pays for the rental or lease of units 24 in the property, the assessor shall, unless the owner elects 25 to withdraw the property from the assessment procedures for 26 section 42 property, use the productive and earning capacity 27 from the actual rents received as a method of appraisal and 28 shall take into account the extent to which that use and 29 limitation reduces the market value of the property. The 30 assessor shall not consider any tax credit equity or other 31 subsidized financing as income provided to the property in 32 determining the assessed value. The property owner shall 33 notify the assessor when property is withdrawn from section 42 34 eligibility under the Internal Revenue Code or if the owner 35 -3- HF 478 (3) 87 md/sc/jh/md 3/ 12

H.F. 478 elects to withdraw the property from the assessment procedures 1 for section 42 property under this subsection . The property 2 shall not be subject to section 42 assessment procedures 3 for the assessment year for which section 42 eligibility is 4 withdrawn or an election is made. This notification must 5 be provided to the assessor no later than March 1 of the 6 assessment year or the owner will be subject to a penalty of 7 five hundred dollars for that assessment year. The penalty 8 shall be collected at the same time and in the same manner 9 as regular property taxes. An election to withdraw from the 10 assessment procedures for section 42 property is irrevocable. 11 Property that is withdrawn from the assessment procedures 12 for section 42 property shall be classified and assessed as 13 multiresidential property unless the property otherwise fails 14 to meet the requirements of section 441.21, subsection 13 . 15 Upon adoption of uniform rules by the department of revenue 16 or succeeding authority covering assessments and valuations 17 of such properties, the valuation on such properties shall be 18 determined in accordance with such rules and in accordance with 19 forms and guidelines contained in the real property appraisal 20 manual prepared by the department as updated from time to time 21 for assessment purposes to assure uniformity, but such rules, 22 forms, and guidelines shall not be inconsistent with or change 23 the foregoing means of determining the actual, market, taxable 24 and assessed values. 25 Sec. 5. Section 441.37A, subsection 1, Code 2017, is amended 26 to read as follows: 27 1. a. For the assessment year beginning January 1, 2007, 28 and all subsequent assessment years beginning before January 1, 29 2021, appeals Appeals may be taken from the action of the board 30 of review with reference to protests of assessment, valuation, 31 or application of an equalization order to the property 32 assessment appeal board created in section 421.1A . However, a 33 property owner or aggrieved taxpayer or an appellant described 34 in section 441.42 may bypass the property assessment appeal 35 -4- HF 478 (3) 87 md/sc/jh/md 4/ 12

H.F. 478 board and appeal the decision of the local board of review to 1 the district court pursuant to section 441.38 . 2 b. For an appeal to the property assessment appeal board to 3 be valid, written notice must be filed by the party appealing 4 the decision with the secretary of the property assessment 5 appeal board a party must file an appeal with the board within 6 twenty days after the date of adjournment of the local board 7 of review or May 31, whichever is later. The written notice 8 of appeal shall include a petition setting forth the basis of 9 the appeal and the relief sought. No new grounds in addition 10 to those set out in the protest to the local board of review 11 as provided in section 441.37 can be pleaded, but additional 12 evidence to sustain those grounds may be introduced. The 13 assessor shall have the same right to appeal to the assessment 14 appeal board as an individual taxpayer, public body, or other 15 public officer as provided in section 441.42 . An appeal to the 16 board is a contested case under chapter 17A . 17 c. Filing of the written notice of appeal and petition 18 with the secretary of the property assessment appeal board 19 shall preserve all rights of appeal of the appellant, except as 20 otherwise provided in subsection 2 . A copy of the appellant’s 21 written notice of appeal and petition shall be mailed by the 22 secretary of the property assessment appeal board to the local 23 board of review whose decision is being appealed. 24 d. In all cases where a change in assessed valuation of one 25 hundred thousand dollars or more is petitioned for, the local 26 board of review shall mail a copy of the written notice of 27 appeal and petition to all affected taxing districts as shown 28 on the last available tax list. A copy of the appellant’s 29 appeal shall be sent by the property assessment appeal board to 30 the local board of review whose decision is being appealed. 31 e. The property assessment appeal board may, by rule, 32 provide for the filing of a notice of appeal and petition with 33 the secretary of the board an appeal by electronic means. All 34 requirements of this section for an appeal to the board shall 35 -5- HF 478 (3) 87 md/sc/jh/md 5/ 12

H.F. 478 apply to an appeal filed electronically. 1 Sec. 6. Section 441.37A, subsection 2, paragraph b, Code 2 2017, is amended to read as follows: 3 b. Each appeal may be considered by one or more members of 4 the board, and the chairperson of the board may assign members 5 to consider appeals. If a hearing is requested, it shall be 6 open to the public and shall be conducted in accordance with 7 the rules of practice and procedure adopted by the board. The 8 board may provide by rule for participation in such hearings 9 by telephone or other means of electronic communication. 10 However, any deliberation of the board or of board members 11 considering the appeal in reaching a decision on any appeal 12 shall be confidential. Any deliberation of the board or of 13 board members to rule on procedural motions in a pending appeal 14 or to deliberate on the decision to be reached in an appeal 15 is exempt from the provisions of chapter 21 . The property 16 assessment appeal board or any member of the board considering 17 the appeal may require the production of any books, records, 18 papers, or documents as evidence in any matter pending before 19 the board that may be material, relevant, or necessary for the 20 making of a just decision. Any books, records, papers, or 21 documents produced as evidence shall become part of the record 22 of the appeal. Any testimony given relating to the appeal 23 shall be transcribed electronically recorded and made a part of 24 the record of the appeal. 25 Sec. 7. Section 441.37A, subsection 3, Code 2017, is amended 26 to read as follows: 27 3. a. The burden of proof for all appeals before the 28 board shall be as stated in section 441.21, subsection 3 . The 29 board members considering the appeal shall determine anew all 30 questions arising before the local board of review which that 31 relate to the liability of the property to assessment or the 32 amount thereof of the assessment . All of the evidence shall 33 be considered and there shall be no presumption as to the 34 correctness of the valuation of assessment appealed from. The 35 -6- HF 478 (3) 87 md/sc/jh/md 6/ 12

H.F. 478 property assessment appeal board shall issue a decision in each 1 appeal filed with the board. If the appeal is considered by 2 less than the full membership of the board, the determination 3 made by such members shall be forwarded to the full board 4 for approval, rejection, or modification. If the initial 5 determination is rejected by the board, it shall be returned 6 for reconsideration to the board members making the initial 7 determination. Any deliberation of the board regarding an 8 initial determination shall be confidential. 9 b. The decision of the board shall be considered the final 10 agency action for purposes of further appeal, and is subject 11 to judicial review as provided in section 441.37B, except as 12 otherwise provided in section 441.49 . The decision shall be 13 final unless appealed to district court as provided in section 14 441.38 . A decision of the board modifying an assessment shall 15 be sent to the county auditor and the assessor, who shall 16 correct the assessment books accordingly. An appeal of the 17 board’s decision under section 441.37B shall not itself stay 18 execution or enforcement of the board’s decision. 19 c. The levy of taxes on any assessment appealed to the board 20 shall not be delayed by any proceeding before the board, and 21 if the assessment appealed from is reduced by the decision of 22 the board, any taxes levied upon that portion of the assessment 23 reduced shall be abated or, if already paid, shall , by order 24 of the board, be refunded or credited against future property 25 taxes levied against the property at the option of the property 26 owner or aggrieved taxpayer . 27 d. If the subject of an appeal is the application of an 28 equalization order, the property assessment appeal board shall 29 not order a reduction in assessment greater than the amount 30 that the assessment was increased due to application of the 31 equalization order. 32 e. Each party to the appeal shall be responsible for the 33 costs of the appeal incurred by that party. 34 Sec. 8. NEW SECTION . 441.37B Appeal to district court from 35 -7- HF 478 (3) 87 md/sc/jh/md 7/ 12

H.F. 478 property assessment appeal board. 1 A party who is aggrieved or adversely affected by a final 2 action of the property assessment appeal board may seek 3 judicial review of the action as provided in chapter 17A. 4 Notwithstanding section 17A.19, subsection 2, a petition for 5 judicial review of the action of the property assessment appeal 6 board shall be filed in the district court of the county where 7 the property that is subject to the appeal is located. 8 Sec. 9. Section 441.38, Code 2017, is amended to read as 9 follows: 10 441.38 Appeal to district court from local board of review . 11 1. Appeals may be taken from the action of the local board 12 of review with reference to protests of assessment, to the 13 district court of the county in which the board holds its 14 sessions within twenty days after its the board’s adjournment 15 or May 31, whichever date is later. Appeals may be taken from 16 the action of the property assessment appeal board to the 17 district court of the county where the property which is the 18 subject of the appeal is located within twenty days after the 19 letter of disposition of the appeal by the property assessment 20 appeal board is postmarked to the appellant. No new grounds 21 in addition to those set out in the protest to the local board 22 of review as provided in section 441.37 , or in addition to 23 those set out in the appeal to the property assessment appeal 24 board, if applicable, can be pleaded. Additional evidence 25 to sustain those grounds may be introduced in an appeal from 26 the local board of review to the district court . However, no 27 new evidence to sustain those grounds may be introduced in 28 an appeal from the property assessment appeal board to the 29 district court. The assessor shall have the same right to 30 appeal and in the same manner as an individual taxpayer, public 31 body, or other public officer as provided in section 441.42 . 32 Appeals shall be taken by filing a written notice of appeal 33 with the clerk of district court. Filing of the written notice 34 of appeal shall preserve all rights of appeal of the appellant. 35 -8- HF 478 (3) 87 md/sc/jh/md 8/ 12

H.F. 478 2. If the appeal to district court is taken from the action 1 of the local board of review, notice Notice of appeal shall 2 be served as an original notice on the chairperson, presiding 3 officer, or clerk of the board of review after the filing of 4 notice under subsection 1 with the clerk of district court. If 5 the appeal to district court is taken from the action of the 6 property assessment appeal board, notice of appeal shall be 7 served as an original notice on the secretary of the property 8 assessment appeal board after the filing of notice under 9 subsection 1 with the clerk of district court. 10 3. The court shall hear the appeal in equity and determine 11 anew all questions arising before the board of review that 12 relate to the liability of the property to assessment or 13 the amount of the assessment. The court shall consider all 14 of the evidence and there shall be no presumption as to the 15 correctness of the valuation or assessment appealed from. The 16 court’s decision shall be certified by the clerk of the court 17 to the county auditor and the assessor, who shall correct the 18 assessment books accordingly. 19 Sec. 10. Section 441.39, Code 2017, is amended by striking 20 the section and inserting in lieu thereof the following: 21 441.39 Notice of assessment protests and appeals to taxing 22 districts. 23 1. If a property owner or aggrieved taxpayer appeals a 24 decision of the board of review to the property assessment 25 appeal board or to district court and requests an adjustment in 26 valuation of one hundred thousand dollars or more, the assessor 27 shall notify all affected taxing districts as shown on the last 28 available tax list. 29 2. In addition to any other requirement for providing 30 of notice, if a property owner or aggrieved taxpayer files 31 a protest against the assessment of property valued by the 32 assessor at five million dollars or more or files an appeal 33 to the property assessment appeal board or the district court 34 with regard to such property, the assessor shall provide notice 35 -9- HF 478 (3) 87 md/sc/jh/md 9/ 12

H.F. 478 to the school district in which such property is located 1 within ten days of the filing of the protest or the appeal, as 2 applicable. 3 Sec. 11. Section 441.40, Code 2017, is amended to read as 4 follows: 5 441.40 Costs, fees, and expenses apportioned. 6 The clerk of the court shall likewise certify to the county 7 treasurer the costs assessed by the court on any appeal from a 8 board of review to the district court, in all cases where said 9 the costs are taxed against the board of review or any taxing 10 body district . Thereupon the county treasurer shall compute 11 and apportion the said costs between the various taxing bodies 12 districts participating in the proceeds of the collection of 13 the taxes involved in any such appeal, and said the treasurer 14 shall so compute and apportion the various amounts which said 15 the taxing bodies districts are required to pay in proportion 16 to the amount of taxes each of said the taxing bodies districts 17 is entitled to receive from the whole amount of taxes involved 18 in each of such appeals. The said county treasurer shall 19 deduct from the proceeds of all general taxes collected the 20 amount of costs so computed and apportioned by the treasurer 21 from the moneys due to each taxing body district from general 22 taxes collected. The amount so deducted shall be certified to 23 each taxing body district in lieu of moneys collected. Said 24 The county treasurer shall pay to the clerk of the district 25 court the amount of said the costs so computed, apportioned , 26 and collected by the treasurer in all cases now on file or 27 hereafter filed in which said the costs have not been paid. 28 Sec. 12. Section 441.41, Code 2017, is amended to read as 29 follows: 30 441.41 Legal counsel. 31 In the case of cities having an assessor, the city legal 32 department shall represent the assessor and board of review 33 in all litigation dealing with assessments. In the case of 34 counties, the county attorney shall represent the assessor and 35 -10- HF 478 (3) 87 md/sc/jh/md 10/ 12

H.F. 478 board of review in all litigation dealing with assessments. 1 Any taxing body district interested in the taxes received from 2 such assessments may be represented by an attorney and shall 3 be required to appear by attorney upon written request of the 4 assessor to the presiding officer of any such taxing body 5 district . The conference board may employ special counsel to 6 assist the city legal department or county attorney as the case 7 may be. 8 Sec. 13. Section 441.44, Code 2017, is amended to read as 9 follows: 10 441.44 Notice of voluntary settlement. 11 1. The property assessment appeal board may adopt rules 12 establishing requirements for notices of voluntary settlements 13 in appeals before the board to be served upon affected taxing 14 districts. 15 2. No A voluntary court settlement of an assessment appeal 16 shall not be valid unless written notice thereof of the 17 settlement shall first be served upon each of the affected 18 taxing bodies interested in the taxes derived from such 19 assessment districts . 20 Sec. 14. Section 443.11, Code 2017, is amended to read as 21 follows: 22 443.11 Procedure on appeal. 23 The appeal provided for in section 443.8 shall be taken 24 within ten days from the time of the final action of the 25 assessor or auditor, by a written notice to that effect to the 26 assessor or auditor, and served as an original notice. The 27 court on appeal shall hear and determine the rights of the 28 parties in the same manner as appeals from the board of review, 29 as prescribed in sections 441.39 441.38 and 441.43 . 30 Sec. 15. Section 602.8102, subsection 61, Code 2017, is 31 amended to read as follows: 32 61. Certify the final decision of the district court 33 in an appeal of the tax assessments as provided in section 34 441.39 441.37B or 441.38 . Costs of the appeal to be assessed 35 -11- HF 478 (3) 87 md/sc/jh/md 11/ 12

H.F. 478 against the board of review or a taxing body district shall be 1 certified to the treasurer as provided in section 441.40 . 2 Sec. 16. REPEAL. 2005 Iowa Acts, chapter 150, section 134, 3 as amended by 2013 Iowa Acts, chapter 123, section 62, and 2015 4 Iowa Acts, chapter 109, section 1, is repealed. 5 Sec. 17. REPEAL. Sections 441.38A and 441.38B, Code 2017, 6 are repealed. 7 Sec. 18. APPLICABILITY. This Act applies to assessment 8 years beginning on or after January 1, 2018. 9 -12- HF 478 (3) 87 md/sc/jh/md 12/ 12