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House Study Bill 165 - IntroducedA Bill ForAn Act 1establishing budget limitations for counties and cities
2and including applicability provisions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 23A.2, subsection 10, paragraph h, Code
22019, is amended to read as follows:
3h. The performance of an activity listed in section 331.424,
4Code 2019, as a service for which a supplemental levy county
5 may be certified include in its budget.
6 Sec. 2. Section 28M.5, subsection 2, Code 2019, is amended
7to read as follows:
82. If a regional transit district budget allocates
9revenue responsibilities to the board of supervisors of a
10participating county, the amount of the regional transit
11district levy that is the responsibility of the participating
12county shall be deducted from the maximum rates amount of taxes
13authorized to be levied by the county pursuant to section
14331.423, subsections 1 and 2 subsection 3, paragraphs “b”
15 and “c”, as applicable, unless the county meets its revenue
16responsibilities as allocated in the budget from other
17available revenue sources. However, for a regional transit
18district that includes a county with a population of less than
19three hundred thousand, the amount of the regional transit
20district levy that is the responsibility of such participating
21county shall be deducted from the maximum rate amount of taxes
22authorized to be levied by the county pursuant to section
23331.423, subsection 1 3, paragraph “b”.
24 Sec. 3. Section 29C.17, subsection 2, paragraph a, Code
252019, is amended to read as follows:
26a. A countywide special supplemental levy pursuant to
27section 331.424, subsection 1.
28 Sec. 4. Section 123.38, subsection 2, paragraph b, Code
292019, is amended to read as follows:
30b. For purposes of this subsection, any portion of license
31or permit fees used for the purposes authorized in section
32331.424, subsection 1, paragraph “a”, subparagraphs (1) and
33(2), Code 2019, and in section 331.424A, shall not be deemed
34received either by the division or by a local authority.
35 Sec. 5. Section 218.99, Code 2019, is amended to read as
-1-1follows:
2218.99 Counties to be notified of patients’ personal
3accounts.
4The administrator in control of a state institution shall
5direct the business manager of each institution under the
6administrator’s jurisdiction which is mentioned in section
7331.424, subsection 1, paragraph “a”, subparagraphs (1) and
8(2), and for which services are paid under section 331.424A,
9to quarterly inform the county of residence of any patient or
10resident who has an amount in excess of two hundred dollars on
11account in the patients’ personal deposit fund and the amount
12on deposit. The administrators shall direct the business
13manager to further notify the county of residence at least
14fifteen days before the release of funds in excess of two
15hundred dollars or upon the death of the patient or resident.
16If the patient or resident has no residency in this state or
17the person’s residency is unknown, notice shall be made to the
18director of human services and the administrator in control of
19the institution involved.
20 Sec. 6. Section 331.263, subsection 2, Code 2019, is amended
21to read as follows:
222. The governing body of the community commonwealth
23shall have the authority to levy county taxes and shall
24have the authority to levy city taxes to the extent the
25city tax levy authority is transferred by the charter to
26the community commonwealth. A city participating in the
27community commonwealth shall transfer a portion of the
28city’s tax levy authorized under section 384.1 or 384.12,
29whichever is applicable, to the governing body of the community
30commonwealth. The maximum rates amount of taxes authorized to
31be levied under sections section 384.1 and the maximum amount
32of taxes authorized to be levied under section384.12 by a city
33participating in the community commonwealth shall be reduced
34by an amount equal to the rates of the same or similar taxes
35levied in the city by the governing body of the community
-2-1commonwealth.
2 Sec. 7. Section 331.301, subsection 12, Code 2019, is
3amended to read as follows:
412. The board of supervisors may credit funds to a reserve
5for the purposes authorized by subsection 11 of this section;
6section 331.424, subsection 1, paragraph “a”, subparagraph
7(5); and section 331.441, subsection 2, paragraph “b”. Moneys
8credited to the reserve, and interest earned on such moneys,
9shall remain in the reserve until expended for purposes
10authorized by subsection 11 of this section; section 331.424,
11subsection 1, paragraph “a”, subparagraph (5); or section
12331.441, subsection 2, paragraph “b”.
13 Sec. 8. Section 331.421, subsections 1 and 10, Code 2019,
14are amended by striking the subsections.
15 Sec. 9. Section 331.421, Code 2019, is amended by adding the
16following new subsection:
17 NEW SUBSECTION. 7A. “Item” means, in accordance
18with protests under chapter 24, a budgeted expenditure,
19appropriation, or cash reserve from a fund for a service area,
20program, program element, or purpose.
21 Sec. 10. Section 331.422, unnumbered paragraph 1, Code
222019, is amended to read as follows:
23Subject to this section and sections 331.423 through 331.426
24 331.424C or as otherwise provided by state law, the board of
25each county shall certify property taxes annually at its March
26session to be levied for county purposes as follows:
27 Sec. 11. Section 331.423, Code 2019, is amended by striking
28the section and inserting in lieu thereof the following:
29331.423 Property tax dollars — maximums.
301. Annually, the board shall determine separate property
31tax levy limits to pay for general county services and rural
32county services in accordance with this section. The property
33tax levies separately certified for general county services and
34rural county services under section 331.434 shall not raise
35property tax dollars that exceed the amount determined under
-3-1this section.
22. For purposes of this section, unless the context
3otherwise requires:
4a. “Annual growth factor” means an index, expressed as
5a percentage, determined by the department of management by
6January 1 of the calendar year in which the budget year begins.
7In determining the annual growth factor, the department shall
8calculate the percentage change in the median family income
9in midwest census region between the two most recent calendar
10years for which information is available. The department shall
11then add that percentage change to one hundred percent. In no
12case, however, shall the annual growth factor be less than one
13hundred percent.
14b. “Boundary adjustment” means annexation, severance,
15incorporation, or discontinuance as those terms are defined in
16section 368.1.
17c. “Budget year” is the fiscal year beginning during the
18calendar year in which a budget is certified.
19d. “Current fiscal year” is the fiscal year ending during
20the calendar year in which a budget is certified.
21e. “Net new valuation taxes” means the amount of property
22tax dollars equal to the current fiscal year’s levy rate in
23the county for general county services or for rural county
24services, as applicable, multiplied by the increase from the
25current fiscal year to the budget year in taxable valuation due
26to the following:
27(1) Net new construction, excluding all incremental
28valuation that is released in any one year from either a
29division of revenue under section 260E.4 or an urban renewal
30area for which taxes were being divided under section 403.19 if
31the property for the valuation being released remains subject
32to the division of revenue under section 260E.4 or remains part
33of the urban renewal area that is subject to a division of
34revenue under section 403.19.
35(2) Additions or improvements to existing structures.
-4- 1(3) Remodeling of existing structures for which a building
2permit is required.
3(4) Net boundary adjustment.
4(5) A municipality no longer dividing tax revenues in an
5urban renewal area as provided in section 403.19 or a community
6college no longer dividing revenues as provided in section
7260E.4.
8(6) That portion of taxable property located in an urban
9revitalization area on which an exemption was allowed and such
10exemption has expired.
113. a. For the fiscal year beginning July 1, 2020, and
12subsequent fiscal years, the maximum amount of property tax
13dollars which may be certified for levy by a county for general
14county services and rural county services shall be the maximum
15property tax dollars calculated under paragraphs “b” and “c”,
16respectively.
17b. The maximum property tax dollars that may be levied for
18general county services is an amount equal to the sum of the
19following:
20(1) The annual growth factor times the current fiscal year’s
21maximum property tax dollars for general county services.
22(2) The amount of net new valuation taxes in the county.
23c. The maximum property tax dollars that may be levied for
24rural county services is an amount equal to the sum of the
25following:
26(1) The annual growth factor times the current fiscal year’s
27maximum property tax dollars for rural county services.
28(2) The amount of net new valuation taxes in the
29unincorporated area of the county.
304. a. For purposes of calculating maximum property tax
31dollars for general county services for the fiscal year
32beginning July 1, 2020, only, the term “current fiscal year’s
33maximum property tax dollars” shall mean the total amount of
34property tax dollars certified by the county for general county
35services for the fiscal year beginning July 1, 2019.
-5- 1b. For purposes of calculating maximum property tax dollars
2for rural county services for the fiscal year beginning July
31, 2020, only, the term “current fiscal year’s maximum property
4tax dollars” shall mean the total amount of property tax dollars
5certified by the county for rural county services for the
6fiscal year beginning July 1, 2019.
75. Property taxes certified for mental health and
8disabilities services in section 331.424A, the emergency
9services fund in section 331.424C, the debt service fund in
10section 331.430, any capital projects fund established by the
11county for deposit of bond, loan, or note proceeds, and any
12temporary increase approved pursuant to section 331.424, are
13not included in the maximum amount of property tax dollars that
14may be certified for a budget year under subsection 3.
156. The department of management, in consultation with the
16county finance committee, shall adopt rules to administer this
17section. The department shall prescribe forms to be used by
18counties when making calculations required by this section.
19 Sec. 12. NEW SECTION. 331.423A Ending fund balance.
201. a. Budgeted ending fund balances for a budget year
21in excess of twenty-five percent of budgeted expenditures in
22either the general fund or rural services fund for that budget
23year shall be explicitly reserved or designated for a specific
24purpose.
25b. A county is encouraged, but not required, to reduce
26budgeted, unreserved, or undesignated ending fund balances for
27the budget year to an amount equal to approximately twenty-five
28percent of budgeted expenditures and transfers from the general
29fund and rural services fund for that budget year unless a
30decision is certified by the state appeal board ordering a
31reduction in the ending fund balance of any of those funds.
32c. In a protest to the county budget under section 331.436,
33the county shall have the burden of proving that the budgeted
34balances in excess of twenty-five percent are reasonably likely
35to be appropriated for the explicitly reserved or designated
-6-1specific purpose. The excess budgeted balance for the specific
2purpose shall be considered an increase in an item in the
3budget for purposes of section 24.28.
42. a. For a county that has, as of June 30, 2019, reduced
5its actual ending fund balance to less than twenty-five
6percent of actual expenditures, additional property taxes may
7be computed and levied as provided in this subsection. The
8additional property tax levy amount is an amount not to exceed
9twenty-five percent of actual expenditures from the general
10fund and rural services fund for the fiscal year beginning July
111, 2018, minus the combined ending fund balances for those
12funds for that year.
13b. The amount of the additional property taxes shall be
14apportioned between the general fund and the rural services
15fund. However, the amount apportioned for general county
16services and for rural county services shall not exceed for
17each fund twenty-five percent of actual expenditures for the
18fiscal year beginning July 1, 2018.
19c. All or a portion of additional property tax dollars
20may be levied for the purpose of increasing cash reserves
21for general county services and rural county services in the
22budget year. The additional property tax dollars authorized
23under this subsection but not levied may be carried forward as
24unused ending fund balance taxing authority until and for the
25fiscal year beginning July 1, 2025. The amount carried forward
26shall not exceed twenty-five percent of the maximum amount of
27property tax dollars available in the current fiscal year.
28Additionally, property taxes that are levied as unused ending
29fund balance taxing authority under this subsection may be the
30subject of a protest under section 331.436, and the amount
31will be considered an increase in an item in the budget for
32purposes of section 24.28. The amount of additional property
33taxes levied under this subsection shall not be included in the
34computation of the maximum amount of property tax dollars which
35may be certified and levied under section 331.423.
-7-1 Sec. 13. Section 331.424, Code 2019, is amended by striking
2the section and inserting in lieu thereof the following:
3331.424 Authority to levy beyond maximum property tax
4dollars.
51. a. The board may annually certify additions to the
6maximum amount of property tax dollars to be levied if the
7board publishes the notice of the proposed action, including a
8statement of the amount and purpose of the proposed additions,
9and the time and place of a public meeting at which the board
10proposes to take action on the proposal. At the meeting,
11the board shall receive oral or written objections from any
12resident or property owner of the county. After all objections
13have been received and considered, the board may, following
14twenty days after the meeting and subject to paragraph “b”, take
15action on the proposal or abandon the proposal.
16b. If at any time within twenty days after the meeting under
17paragraph “a”, a petition is filed with the county auditor
18signed by eligible electors of the county equal in number to
19the lesser of two thousand or twenty percent of the persons
20in the county who voted for the office of president of the
21United States at the last preceding general election that
22had such office on the ballot, asking that the question of
23levying an additional amount be submitted to the registered
24voters of the county, the board shall either by resolution
25declare the proposal to be abandoned or shall direct the county
26commissioner of elections to call a special election upon the
27question.
282. The special election, if called, is subject to the
29following:
30a. The board must give at least thirty-two days’ notice to
31the county commissioner of elections that the special election
32is to be held. In no case, however, shall a notice be given to
33the county commissioner of elections after December 31 for an
34election on a proposition to exceed the statutory limits during
35the fiscal year beginning in the next calendar year.
-8- 1b. The proposition submitted to voters may propose authority
2for the board to certify additions to the maximum amount
3of property tax dollars for up to two fiscal years. The
4proposition is approved if it receives a favorable majority of
5the votes cast on the proposition.
6c. The proposition to be submitted shall be substantially
7in the following form:
8Vote “yes” or “no” on the following:
9Shall the county of levy for an additional $each
10year for years beginning July 1, , in excess of the
11statutory limits otherwise applicable for the (general county
12services or rural services) fund?
13d. The canvass shall be held beginning at 1:00 p.m.on
14the second day which is not a holiday following the special
15election.
16e. Notice of the special election shall be published at
17least once in a newspaper as specified in section 331.305 prior
18to the date of the special election. The notice shall appear
19as early as practicable after the board has voted to submit
20a proposition to the voters to levy additional property tax
21dollars.
223. Registered voters in the county may vote on the
23proposition to increase property taxes for the general fund
24in excess of the statutory limit. Registered voters residing
25outside the corporate limits of a city within the county may
26vote on the proposition to increase property taxes for the
27rural services fund in excess of the statutory limit.
284. The amount of additional property tax dollars certified
29under this section shall not be included in the computation
30of the maximum amount of property tax dollars which may be
31certified and levied under section 331.423.
32 Sec. 14. Section 331.424A, subsection 6, Code 2019, is
33amended to read as follows:
346. For each fiscal year, the county shall certify a levy
35for payment of services. For each fiscal year, county revenues
-9-1from taxes imposed by the county credited to the county
2services fund shall not exceed an amount equal to the county
3budgeted amount for the fiscal year. A levy certified under
4this section is not subject to the appeal provisions of section
5331.426or to any other provision in law authorizing a county
6to exceed, increase, or appeal a property tax levy limit.
7 Sec. 15. Section 331.427, subsection 3, paragraph l, Code
82019, is amended to read as follows:
9l. Services listed in section 331.424, subsection 1, Code
102019, and section 331.554.
11 Sec. 16. Section 331.428, subsection 2, paragraph d, Code
122019, is amended to read as follows:
13d. Services listed under section 331.424, subsection 2, Code
142019.
15 Sec. 17. Section 331.429, subsection 1, paragraphs a and b,
16Code 2019, are amended to read as follows:
17a. Transfers from the general fund not to exceed in any year
18the dollar equivalent of a tax of sixteen and seven-eighths
19cents per thousand dollars of assessed value on all taxable
20property in the county multiplied by the ratio of current
21taxes actually collected and apportioned for the general basic
22 county services levy to the total general basic county services
23 levy for the current year, and an amount equivalent to the
24moneys derived by the general fund from military service tax
25credits under chapter 426A, manufactured or mobile home taxes
26under section 435.22, and delinquent taxes for prior years
27collected and apportioned to the general basic county services
28 fund in the current year, multiplied by the ratio of sixteen
29and seven-eighths cents to three dollars and fifty cents.
30The limit on transfers in this paragraph applies only to
31property tax revenue and is not a limit on transfers of revenue
32generated from sources other than property taxes.
33b. Transfers from the rural services fund not to exceed in
34any year the dollar equivalent of a tax of three dollars and
35three-eighths cents per thousand dollars of assessed value on
-10-1all taxable property not located within the corporate limits
2of a city in the county multiplied by the ratio of current
3taxes actually collected and apportioned for the rural county
4 services basic levy to the total rural county services basic
5 levy for the current year and an amount equivalent to the
6moneys derived by the rural services fund from military service
7tax credits under chapter 426A, manufactured or mobile home
8taxes under section 435.22, and delinquent taxes for prior
9years collected and apportioned to the rural county services
10basic fund in the current year, multiplied by the ratio of
11three dollars and three-eighths cents to three dollars and
12ninety-five cents. The limit on transfers in this paragraph
13applies only to property tax revenue and is not a limit on
14transfers of revenue generated from sources other than property
15taxes.
16 Sec. 18. Section 331.434, unnumbered paragraph 1, Code
172019, is amended to read as follows:
18Annually, the board of each county, subject to section
19331.403, subsection 4, sections 331.423 through 331.426
20 331.424C, and other applicable state law, shall prepare and
21adopt a budget, certify taxes, and provide appropriations as
22follows:
23 Sec. 19. Section 331.435, unnumbered paragraph 1, Code
242019, is amended to read as follows:
25The board may amend the adopted county budget, subject to
26sections 331.423 through 331.426 331.424C and other applicable
27state law, to permit increases in any class of proposed
28expenditures contained in the budget summary published under
29section 331.434, subsection 3.
30 Sec. 20. Section 373.10, Code 2019, is amended to read as
31follows:
32373.10 Taxing authority.
33The metropolitan council shall have the authority to
34levy city taxes to the extent the city tax levy authority
35is transferred by the charter to the metropolitan council.
-11-1A member city shall transfer a portion of the city’s tax
2levy authorized under section 384.1 or 384.12, whichever is
3applicable, to the metropolitan council. The maximum rates
4 amount of taxes authorized to be levied under sections section
5 384.1 and the taxes authorized to be levied under section
6 384.12 by a member city shall be reduced by an amount equal to
7the rates of the same or similar taxes levied in the city by the
8metropolitan council.
9 Sec. 21. Section 384.1, Code 2019, is amended by striking
10the section and inserting in lieu thereof the following:
11384.1 Property tax dollars — maximum.
121. A city shall certify taxes to be levied by the city
13on all taxable property within the city limits, for all city
14government purposes. Annually, the city council may certify
15a basic levy for city government purposes, subject to the
16limitation on property tax dollars provided in this section.
172. For purposes of this section, unless the context
18otherwise requires:
19a. “Annual growth factor” means an index, expressed as
20a percentage, determined by the department of management by
21January 1 of the calendar year in which the budget year begins.
22In determining the annual growth factor, the department shall
23calculate the percentage change in the median family income
24in midwest census region between the two most recent calendar
25years for which information is available. The department shall
26then add that percentage change to one hundred percent. In no
27case, however, shall the annual growth factor be less than one
28hundred percent.
29b. “Boundary adjustment” means annexation, severance,
30incorporation, or discontinuance as those terms are defined in
31section 368.1.
32c. “Budget year” is the fiscal year beginning during the
33calendar year in which a budget is certified.
34d. “Current fiscal year” is the fiscal year ending during
35the calendar year in which a budget is certified.
-12- 1e. “Net new valuation taxes” means the amount of property
2tax dollars equal to the current fiscal year’s levy rate in the
3city for the general fund multiplied by the increase from the
4current fiscal year to the budget year in taxable valuation due
5to the following:
6(1) Net new construction, excluding all incremental
7valuation that is released in any one year from either a
8division of revenue under section 260E.4 or an urban renewal
9area for which taxes were being divided under section 403.19 if
10the property for the valuation being released remains subject
11to the division of revenue under section 260E.4 or remains part
12of the urban renewal area that is subject to a division of
13revenue under section 403.19.
14(2) Additions or improvements to existing structures.
15(3) Remodeling of existing structures for which a building
16permit is required.
17(4) Net boundary adjustment.
18(5) A municipality no longer dividing tax revenues in an
19urban renewal area as provided in section 403.19 or a community
20college no longer dividing revenues as provided in section
21260E.4.
22(6) That portion of taxable property located in an urban
23revitalization area on which an exemption was allowed and such
24exemption has expired.
253. a. For the fiscal year beginning July 1, 2020, and
26subsequent fiscal years, the maximum amount of property
27tax dollars which may be certified for levy by a city for
28the general fund shall be the maximum property tax dollars
29calculated under paragraph “b”.
30b. The maximum property tax dollars that may be levied for
31deposit in the general fund is an amount equal to the sum of the
32following:
33(1) The annual growth factor times the current fiscal year’s
34maximum property tax dollars for the general fund.
35(2) The amount of net new valuation taxes in the city.
-13- 14. For purposes of calculating maximum property tax dollars
2for the city general fund for the fiscal year beginning July
31, 2020, only, the term “current fiscal year’s maximum property
4tax dollars” shall mean the total amount of property tax dollars
5certified by the city for the city’s general fund for the
6fiscal year beginning July 1, 2019.
75. Property taxes certified for deposit in the debt service
8fund in section 384.4, trust and agency funds in section
9384.6, capital improvements reserve fund in section 384.7,
10the emergency fund in section 384.8, any capital projects
11fund established by the city for deposit of bond, loan, or
12note proceeds, any temporary increase approved pursuant to
13section 384.12A, property taxes collected from a voted levy in
14section 384.12, and property taxes levied under section 384.12,
15subsection 17, are not counted against the maximum amount of
16property tax dollars that may be certified for a fiscal year
17under subsection 3.
186. Notwithstanding the maximum amount of taxes a city
19may certify for levy, the tax levied by a city on tracts of
20land and improvements on the tracts of land used and assessed
21for agricultural or horticultural purposes shall not exceed
22three dollars and three-eighths cents per thousand dollars
23of assessed value in any year. Improvements located on such
24tracts of land and not used for agricultural or horticultural
25purposes and all residential dwellings are subject to the same
26rate of tax levied by the city on all other taxable property
27within the city.
287. The department of management, in consultation with the
29city finance committee, shall adopt rules to administer this
30section. The department shall prescribe forms to be used by
31cities when making calculations required by this section.
32 Sec. 22. NEW SECTION. 384.1A Ending fund balance.
331. a. Budgeted ending fund balances for a budget year in
34excess of twenty-five percent of budgeted expenditures from the
35general fund for that budget year shall be explicitly reserved
-14-1or designated for a specific purpose.
2b. A city is encouraged, but not required, to reduce
3budgeted, unreserved, or undesignated ending fund balances for
4the budget year to an amount equal to approximately twenty-five
5percent of budgeted expenditures and transfers from the general
6fund for that budget year unless a decision is certified by
7the state appeal board ordering a reduction in the ending fund
8balance of the fund.
9c. In a protest to the city budget under section 384.19,
10the city shall have the burden of proving that the budgeted
11balances in excess of twenty-five percent are reasonably likely
12to be appropriated for the explicitly reserved or designated
13specific purpose. The excess budgeted balance for the specific
14purpose shall be considered an increase in an item in the
15budget for purposes of section 24.28.
162. a. For a city that has, as of June 30, 2019, reduced its
17ending fund balance to less than twenty-five percent of actual
18expenditures, additional property taxes may be computed and
19levied as provided in this subsection. The additional property
20tax levy amount is an amount not to exceed the difference
21between twenty-five percent of actual expenditures for city
22government purposes for the fiscal year beginning July 1, 2018,
23minus the ending fund balance for that year.
24b. All or a portion of additional property tax dollars
25may be levied for the purpose of increasing cash reserves for
26city government purposes in the budget year. The additional
27property tax dollars authorized under this subsection but not
28levied may be carried forward as unused ending fund balance
29taxing authority until and for the fiscal year beginning
30July 1, 2025. The amount carried forward shall not exceed
31twenty-five percent of the maximum amount of property tax
32dollars available in the current fiscal year. Additionally,
33property taxes that are levied as unused ending fund balance
34taxing authority under this subsection may be the subject of a
35protest under section 384.19, and the amount will be considered
-15-1an increase in an item in the budget for purposes of section
224.28. The amount of additional property tax dollars levied
3under this subsection shall not be included in the computation
4of the maximum amount of property tax dollars which may be
5certified and levied under section 384.1.
6 Sec. 23. Section 384.12, subsection 19, Code 2019, is
7amended by striking the subsection.
8 Sec. 24. NEW SECTION. 384.12A Authority to levy beyond
9maximum property tax dollars.
101. a. The city council may annually certify additions
11to the maximum amount of property tax dollars to be levied
12if the city council publishes notice of the proposed action,
13including a statement of the amount and purpose of the proposed
14additions, and the time and place of a public meeting at which
15the city council proposes to take action on the proposal.
16At the meeting, the council shall receive oral or written
17objections from any resident or property owner of the city.
18After all objections have been received and considered, the
19council may, following twenty days after the meeting and
20subject to paragraph “b”, take action on the proposal or abandon
21the proposal.
22b. If, at any time within twenty days after the meeting
23under paragraph “a”, a petition is filed with the city clerk
24signed by eligible electors of the city equal in number to the
25lesser of two thousand or twenty percent of the persons in the
26city who voted for the office of president of the United States
27at the last preceding general election that had such office on
28the ballot, asking that the question of levying an additional
29amount be submitted to the registered voters of the city, the
30city council shall either by resolution declare the proposal
31to be abandoned or shall direct the county commissioner of
32elections to call a special election upon the question.
332. The special election, if called, is subject to the
34following:
35a. The city council must give at least thirty-two days’
-16-1notice to the county commissioner of elections that the special
2election is to be held. In no case, however, shall a notice be
3given to the county commissioner of elections after December 31
4for an election on a proposition to exceed the statutory limits
5during the fiscal year beginning in the next calendar year.
6b. The proposition submitted to voters may propose authority
7for the city council to certify additions to the maximum amount
8of property tax dollars for up to two fiscal years. The
9proposition is approved if it receives a favorable majority of
10the votes cast on the proposition.
11c. The proposition to be submitted shall be substantially
12in the following form:
13Vote “yes” or “no” on the following:
14Shall the city of levy for an additional $each
15year for years beginning next July 1, , in excess of
16the statutory limits otherwise applicable for the city general
17fund?
18d. The canvass shall be held beginning at 1:00 p.m.on
19the second day which is not a holiday following the special
20election.
21e. Notice of the special election shall be published at
22least once in a newspaper as specified in section 362.3 prior
23to the date of the special election. The notice shall appear
24as early as practicable after the city council has voted to
25submit a proposition to the voters to levy additional property
26tax dollars.
273. The amount of additional property tax dollars certified
28under this section shall not be included in the computation
29of the maximum amount of property tax dollars which may be
30certified and levied under section 384.1.
31 Sec. 25. Section 384.19, Code 2019, is amended by adding the
32following new subsection:
33 NEW SUBSECTION. 5. For purposes of a tax protest filed
34under this section and in accordance with the provisions of
35chapter 24, “item” means a budgeted expenditure, appropriation,
-17-1or cash reserve from a fund for a service area, program,
2program element, or purpose.
3 Sec. 26. Section 386.8, Code 2019, is amended to read as
4follows:
5386.8 Operation tax.
6A city may establish a self-supported improvement district
7operation fund, and may certify taxes not to exceed the
8rate limitation as established in the ordinance creating the
9district, or any amendment thereto, each year to be levied
10for the fund against all of the property in the district,
11for the purpose of paying the administrative expenses of
12the district, which may include but are not limited to
13administrative personnel salaries, a separate administrative
14office, planning costs including consultation fees, engineering
15fees, architectural fees, and legal fees and all other expenses
16reasonably associated with the administration of the district
17and the fulfilling of the purposes of the district. The taxes
18levied for this fund may also be used for the purpose of paying
19maintenance expenses of improvements or self-liquidating
20improvements for a specified length of time with one or more
21options to renew if such is clearly stated in the petition
22which requests the council to authorize construction of the
23improvement or self-liquidating improvement, whether or not
24such petition is combined with the petition requesting creation
25of a district. Parcels of property which are assessed as
26residential property for property tax purposes are exempt from
27the tax levied under this section except residential properties
28within a duly designated historic district. A tax levied under
29this section is not subject to the levy limitation in section
30384.1.
31 Sec. 27. Section 386.9, Code 2019, is amended to read as
32follows:
33386.9 Capital improvement tax.
34A city may establish a capital improvement fund for a
35district and may certify taxes, not to exceed the rate
-18-1established by the ordinance creating the district, or any
2subsequent amendment thereto, each year to be levied for
3the fund against all of the property in the district, for
4the purpose of accumulating moneys for the financing or
5payment of a part or all of the costs of any improvement or
6self-liquidating improvement. However, parcels of property
7which are assessed as residential property for property tax
8purposes are exempt from the tax levied under this section
9except residential properties within a duly designated historic
10district. A tax levied under this section is not subject to
11the levy limitations in section 384.1 or 384.7.
12 Sec. 28. REPEAL. Sections 331.425 and 331.426, Code 2019,
13are repealed.
14 Sec. 29. APPLICABILITY. This Act applies to fiscal years
15beginning on or after July 1, 2020.
16EXPLANATION
17The inclusion of this explanation does not constitute agreement with
18the explanation’s substance by the members of the general assembly.
19This bill removes the property tax levy rate limitations on
20the general and rural funds for counties and on the general
21fund for cities and substitutes a limitation on the maximum
22amount of property tax dollars that may be certified for
23expenditure by a county or city for those funds for fiscal
24years beginning on or after July 1, 2020. For the fiscal
25year beginning July 1, 2020, and subsequent fiscal years, the
26maximum amount of property tax dollars which may be certified
27for levy shall be an amount equal to the sum of the current
28fiscal year’s total property tax dollars certified by the
29county or city multiplied by the annual growth factor, as
30defined in the bill, and the amount of net new valuation taxes,
31as defined in the bill.
32The bill also allows counties and cities to annually certify
33additions to the maximum amount of property tax dollars to
34be levied following a public meeting, subject to a voter
35referendum, if requested by petition. The bill specifies
-19-1the notice and election requirements for such a referendum
2election. The bill specifies that such additional amounts are
3not to be included in the computation of the maximum amount of
4property tax dollars for future budget years.
5The bill specifies certain requirements for ending fund
6balances for counties and cities. The bill provides that
7budgeted ending fund balances in certain specified funds for a
8budget year in excess of 25 percent of budgeted expenditures
9shall be explicitly reserved or designated for a specific
10purpose.
11Under the bill, counties and cities are encouraged, but
12not required, to reduce budgeted, unreserved, or undesignated
13ending fund balances for the budget year to an amount equal to
14approximately 25 percent of budgeted expenditures and certain
15transfers for that budget year unless a decision is certified
16by the state appeal board ordering a reduction in the ending
17fund balance of any of those funds. The county or city,
18as applicable, has the burden of proving that the budgeted
19balances in excess of 25 percent are reasonably likely to be
20appropriated for the explicitly reserved or designated specific
21purpose.
22The bill also allows for additional property taxes to be
23levied in certain fiscal years for those counties or cities
24that have, as of June 30, 2019, reduced their actual ending
25fund balance to less than 25 percent of actual expenditures.
26Such additional property tax dollars authorized but not levied
27may be carried forward as unused ending fund balance taxing
28authority until and for the fiscal year beginning July 1, 2025.
29However, the amount carried forward shall not exceed 25 percent
30of the maximum amount of property tax dollars available in the
31current fiscal year. The amount of such additional property
32taxes levied shall not, however, be included in the computation
33of the maximum amount of property tax dollars which may be
34certified and levied in future budget years.
35The bill also makes conforming amendments to other
-20-1provisions of the Code.
2The bill applies to fiscal years beginning on or after July
31, 2020.
-21-md/jh
2and including applicability provisions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 23A.2, subsection 10, paragraph h, Code
22019, is amended to read as follows:
3h. The performance of an activity listed in section 331.424,
4Code 2019, as a service for which a supplemental levy county
5 may be certified include in its budget.
6 Sec. 2. Section 28M.5, subsection 2, Code 2019, is amended
7to read as follows:
82. If a regional transit district budget allocates
9revenue responsibilities to the board of supervisors of a
10participating county, the amount of the regional transit
11district levy that is the responsibility of the participating
12county shall be deducted from the maximum rates amount of taxes
13authorized to be levied by the county pursuant to section
14331.423, subsections 1 and 2 subsection 3, paragraphs “b”
15 and “c”, as applicable, unless the county meets its revenue
16responsibilities as allocated in the budget from other
17available revenue sources. However, for a regional transit
18district that includes a county with a population of less than
19three hundred thousand, the amount of the regional transit
20district levy that is the responsibility of such participating
21county shall be deducted from the maximum rate amount of taxes
22authorized to be levied by the county pursuant to section
23331.423, subsection 1 3, paragraph “b”.
24 Sec. 3. Section 29C.17, subsection 2, paragraph a, Code
252019, is amended to read as follows:
26a. A countywide special supplemental levy pursuant to
27section 331.424, subsection 1.
28 Sec. 4. Section 123.38, subsection 2, paragraph b, Code
292019, is amended to read as follows:
30b. For purposes of this subsection, any portion of license
31or permit fees used for the purposes authorized in section
32331.424, subsection 1, paragraph “a”, subparagraphs (1) and
33(2), Code 2019, and in section 331.424A, shall not be deemed
34received either by the division or by a local authority.
35 Sec. 5. Section 218.99, Code 2019, is amended to read as
-1-1follows:
2218.99 Counties to be notified of patients’ personal
3accounts.
4The administrator in control of a state institution shall
5direct the business manager of each institution under the
6administrator’s jurisdiction which is mentioned in section
7331.424, subsection 1, paragraph “a”, subparagraphs (1) and
8(2), and for which services are paid under section 331.424A,
9to quarterly inform the county of residence of any patient or
10resident who has an amount in excess of two hundred dollars on
11account in the patients’ personal deposit fund and the amount
12on deposit. The administrators shall direct the business
13manager to further notify the county of residence at least
14fifteen days before the release of funds in excess of two
15hundred dollars or upon the death of the patient or resident.
16If the patient or resident has no residency in this state or
17the person’s residency is unknown, notice shall be made to the
18director of human services and the administrator in control of
19the institution involved.
20 Sec. 6. Section 331.263, subsection 2, Code 2019, is amended
21to read as follows:
222. The governing body of the community commonwealth
23shall have the authority to levy county taxes and shall
24have the authority to levy city taxes to the extent the
25city tax levy authority is transferred by the charter to
26the community commonwealth. A city participating in the
27community commonwealth shall transfer a portion of the
28city’s tax levy authorized under section 384.1 or 384.12,
29whichever is applicable, to the governing body of the community
30commonwealth. The maximum rates amount of taxes authorized to
31be levied under sections section 384.1 and the maximum amount
32of taxes authorized to be levied under section384.12 by a city
33participating in the community commonwealth shall be reduced
34by an amount equal to the rates of the same or similar taxes
35levied in the city by the governing body of the community
-2-1commonwealth.
2 Sec. 7. Section 331.301, subsection 12, Code 2019, is
3amended to read as follows:
412. The board of supervisors may credit funds to a reserve
5for the purposes authorized by subsection 11 of this section;
6section 331.424, subsection 1, paragraph “a”, subparagraph
7(5); and section 331.441, subsection 2, paragraph “b”. Moneys
8credited to the reserve, and interest earned on such moneys,
9shall remain in the reserve until expended for purposes
10authorized by subsection 11 of this section; section 331.424,
11subsection 1, paragraph “a”, subparagraph (5); or section
12331.441, subsection 2, paragraph “b”.
13 Sec. 8. Section 331.421, subsections 1 and 10, Code 2019,
14are amended by striking the subsections.
15 Sec. 9. Section 331.421, Code 2019, is amended by adding the
16following new subsection:
17 NEW SUBSECTION. 7A. “Item” means, in accordance
18with protests under chapter 24, a budgeted expenditure,
19appropriation, or cash reserve from a fund for a service area,
20program, program element, or purpose.
21 Sec. 10. Section 331.422, unnumbered paragraph 1, Code
222019, is amended to read as follows:
23Subject to this section and sections 331.423 through 331.426
24 331.424C or as otherwise provided by state law, the board of
25each county shall certify property taxes annually at its March
26session to be levied for county purposes as follows:
27 Sec. 11. Section 331.423, Code 2019, is amended by striking
28the section and inserting in lieu thereof the following:
29331.423 Property tax dollars — maximums.
301. Annually, the board shall determine separate property
31tax levy limits to pay for general county services and rural
32county services in accordance with this section. The property
33tax levies separately certified for general county services and
34rural county services under section 331.434 shall not raise
35property tax dollars that exceed the amount determined under
-3-1this section.
22. For purposes of this section, unless the context
3otherwise requires:
4a. “Annual growth factor” means an index, expressed as
5a percentage, determined by the department of management by
6January 1 of the calendar year in which the budget year begins.
7In determining the annual growth factor, the department shall
8calculate the percentage change in the median family income
9in midwest census region between the two most recent calendar
10years for which information is available. The department shall
11then add that percentage change to one hundred percent. In no
12case, however, shall the annual growth factor be less than one
13hundred percent.
14b. “Boundary adjustment” means annexation, severance,
15incorporation, or discontinuance as those terms are defined in
16section 368.1.
17c. “Budget year” is the fiscal year beginning during the
18calendar year in which a budget is certified.
19d. “Current fiscal year” is the fiscal year ending during
20the calendar year in which a budget is certified.
21e. “Net new valuation taxes” means the amount of property
22tax dollars equal to the current fiscal year’s levy rate in
23the county for general county services or for rural county
24services, as applicable, multiplied by the increase from the
25current fiscal year to the budget year in taxable valuation due
26to the following:
27(1) Net new construction, excluding all incremental
28valuation that is released in any one year from either a
29division of revenue under section 260E.4 or an urban renewal
30area for which taxes were being divided under section 403.19 if
31the property for the valuation being released remains subject
32to the division of revenue under section 260E.4 or remains part
33of the urban renewal area that is subject to a division of
34revenue under section 403.19.
35(2) Additions or improvements to existing structures.
-4- 1(3) Remodeling of existing structures for which a building
2permit is required.
3(4) Net boundary adjustment.
4(5) A municipality no longer dividing tax revenues in an
5urban renewal area as provided in section 403.19 or a community
6college no longer dividing revenues as provided in section
7260E.4.
8(6) That portion of taxable property located in an urban
9revitalization area on which an exemption was allowed and such
10exemption has expired.
113. a. For the fiscal year beginning July 1, 2020, and
12subsequent fiscal years, the maximum amount of property tax
13dollars which may be certified for levy by a county for general
14county services and rural county services shall be the maximum
15property tax dollars calculated under paragraphs “b” and “c”,
16respectively.
17b. The maximum property tax dollars that may be levied for
18general county services is an amount equal to the sum of the
19following:
20(1) The annual growth factor times the current fiscal year’s
21maximum property tax dollars for general county services.
22(2) The amount of net new valuation taxes in the county.
23c. The maximum property tax dollars that may be levied for
24rural county services is an amount equal to the sum of the
25following:
26(1) The annual growth factor times the current fiscal year’s
27maximum property tax dollars for rural county services.
28(2) The amount of net new valuation taxes in the
29unincorporated area of the county.
304. a. For purposes of calculating maximum property tax
31dollars for general county services for the fiscal year
32beginning July 1, 2020, only, the term “current fiscal year’s
33maximum property tax dollars” shall mean the total amount of
34property tax dollars certified by the county for general county
35services for the fiscal year beginning July 1, 2019.
-5- 1b. For purposes of calculating maximum property tax dollars
2for rural county services for the fiscal year beginning July
31, 2020, only, the term “current fiscal year’s maximum property
4tax dollars” shall mean the total amount of property tax dollars
5certified by the county for rural county services for the
6fiscal year beginning July 1, 2019.
75. Property taxes certified for mental health and
8disabilities services in section 331.424A, the emergency
9services fund in section 331.424C, the debt service fund in
10section 331.430, any capital projects fund established by the
11county for deposit of bond, loan, or note proceeds, and any
12temporary increase approved pursuant to section 331.424, are
13not included in the maximum amount of property tax dollars that
14may be certified for a budget year under subsection 3.
156. The department of management, in consultation with the
16county finance committee, shall adopt rules to administer this
17section. The department shall prescribe forms to be used by
18counties when making calculations required by this section.
19 Sec. 12. NEW SECTION. 331.423A Ending fund balance.
201. a. Budgeted ending fund balances for a budget year
21in excess of twenty-five percent of budgeted expenditures in
22either the general fund or rural services fund for that budget
23year shall be explicitly reserved or designated for a specific
24purpose.
25b. A county is encouraged, but not required, to reduce
26budgeted, unreserved, or undesignated ending fund balances for
27the budget year to an amount equal to approximately twenty-five
28percent of budgeted expenditures and transfers from the general
29fund and rural services fund for that budget year unless a
30decision is certified by the state appeal board ordering a
31reduction in the ending fund balance of any of those funds.
32c. In a protest to the county budget under section 331.436,
33the county shall have the burden of proving that the budgeted
34balances in excess of twenty-five percent are reasonably likely
35to be appropriated for the explicitly reserved or designated
-6-1specific purpose. The excess budgeted balance for the specific
2purpose shall be considered an increase in an item in the
3budget for purposes of section 24.28.
42. a. For a county that has, as of June 30, 2019, reduced
5its actual ending fund balance to less than twenty-five
6percent of actual expenditures, additional property taxes may
7be computed and levied as provided in this subsection. The
8additional property tax levy amount is an amount not to exceed
9twenty-five percent of actual expenditures from the general
10fund and rural services fund for the fiscal year beginning July
111, 2018, minus the combined ending fund balances for those
12funds for that year.
13b. The amount of the additional property taxes shall be
14apportioned between the general fund and the rural services
15fund. However, the amount apportioned for general county
16services and for rural county services shall not exceed for
17each fund twenty-five percent of actual expenditures for the
18fiscal year beginning July 1, 2018.
19c. All or a portion of additional property tax dollars
20may be levied for the purpose of increasing cash reserves
21for general county services and rural county services in the
22budget year. The additional property tax dollars authorized
23under this subsection but not levied may be carried forward as
24unused ending fund balance taxing authority until and for the
25fiscal year beginning July 1, 2025. The amount carried forward
26shall not exceed twenty-five percent of the maximum amount of
27property tax dollars available in the current fiscal year.
28Additionally, property taxes that are levied as unused ending
29fund balance taxing authority under this subsection may be the
30subject of a protest under section 331.436, and the amount
31will be considered an increase in an item in the budget for
32purposes of section 24.28. The amount of additional property
33taxes levied under this subsection shall not be included in the
34computation of the maximum amount of property tax dollars which
35may be certified and levied under section 331.423.
-7-1 Sec. 13. Section 331.424, Code 2019, is amended by striking
2the section and inserting in lieu thereof the following:
3331.424 Authority to levy beyond maximum property tax
4dollars.
51. a. The board may annually certify additions to the
6maximum amount of property tax dollars to be levied if the
7board publishes the notice of the proposed action, including a
8statement of the amount and purpose of the proposed additions,
9and the time and place of a public meeting at which the board
10proposes to take action on the proposal. At the meeting,
11the board shall receive oral or written objections from any
12resident or property owner of the county. After all objections
13have been received and considered, the board may, following
14twenty days after the meeting and subject to paragraph “b”, take
15action on the proposal or abandon the proposal.
16b. If at any time within twenty days after the meeting under
17paragraph “a”, a petition is filed with the county auditor
18signed by eligible electors of the county equal in number to
19the lesser of two thousand or twenty percent of the persons
20in the county who voted for the office of president of the
21United States at the last preceding general election that
22had such office on the ballot, asking that the question of
23levying an additional amount be submitted to the registered
24voters of the county, the board shall either by resolution
25declare the proposal to be abandoned or shall direct the county
26commissioner of elections to call a special election upon the
27question.
282. The special election, if called, is subject to the
29following:
30a. The board must give at least thirty-two days’ notice to
31the county commissioner of elections that the special election
32is to be held. In no case, however, shall a notice be given to
33the county commissioner of elections after December 31 for an
34election on a proposition to exceed the statutory limits during
35the fiscal year beginning in the next calendar year.
-8- 1b. The proposition submitted to voters may propose authority
2for the board to certify additions to the maximum amount
3of property tax dollars for up to two fiscal years. The
4proposition is approved if it receives a favorable majority of
5the votes cast on the proposition.
6c. The proposition to be submitted shall be substantially
7in the following form:
8Vote “yes” or “no” on the following:
9Shall the county of levy for an additional $each
10year for years beginning July 1, , in excess of the
11statutory limits otherwise applicable for the (general county
12services or rural services) fund?
13d. The canvass shall be held beginning at 1:00 p.m.on
14the second day which is not a holiday following the special
15election.
16e. Notice of the special election shall be published at
17least once in a newspaper as specified in section 331.305 prior
18to the date of the special election. The notice shall appear
19as early as practicable after the board has voted to submit
20a proposition to the voters to levy additional property tax
21dollars.
223. Registered voters in the county may vote on the
23proposition to increase property taxes for the general fund
24in excess of the statutory limit. Registered voters residing
25outside the corporate limits of a city within the county may
26vote on the proposition to increase property taxes for the
27rural services fund in excess of the statutory limit.
284. The amount of additional property tax dollars certified
29under this section shall not be included in the computation
30of the maximum amount of property tax dollars which may be
31certified and levied under section 331.423.
32 Sec. 14. Section 331.424A, subsection 6, Code 2019, is
33amended to read as follows:
346. For each fiscal year, the county shall certify a levy
35for payment of services. For each fiscal year, county revenues
-9-1from taxes imposed by the county credited to the county
2services fund shall not exceed an amount equal to the county
3budgeted amount for the fiscal year. A levy certified under
4this section is not subject to the appeal provisions of section
5331.426or to any other provision in law authorizing a county
6to exceed, increase, or appeal a property tax levy limit.
7 Sec. 15. Section 331.427, subsection 3, paragraph l, Code
82019, is amended to read as follows:
9l. Services listed in section 331.424, subsection 1, Code
102019, and section 331.554.
11 Sec. 16. Section 331.428, subsection 2, paragraph d, Code
122019, is amended to read as follows:
13d. Services listed under section 331.424, subsection 2, Code
142019.
15 Sec. 17. Section 331.429, subsection 1, paragraphs a and b,
16Code 2019, are amended to read as follows:
17a. Transfers from the general fund not to exceed in any year
18the dollar equivalent of a tax of sixteen and seven-eighths
19cents per thousand dollars of assessed value on all taxable
20property in the county multiplied by the ratio of current
21taxes actually collected and apportioned for the general basic
22 county services levy to the total general basic county services
23 levy for the current year, and an amount equivalent to the
24moneys derived by the general fund from military service tax
25credits under chapter 426A, manufactured or mobile home taxes
26under section 435.22, and delinquent taxes for prior years
27collected and apportioned to the general basic county services
28 fund in the current year, multiplied by the ratio of sixteen
29and seven-eighths cents to three dollars and fifty cents.
30The limit on transfers in this paragraph applies only to
31property tax revenue and is not a limit on transfers of revenue
32generated from sources other than property taxes.
33b. Transfers from the rural services fund not to exceed in
34any year the dollar equivalent of a tax of three dollars and
35three-eighths cents per thousand dollars of assessed value on
-10-1all taxable property not located within the corporate limits
2of a city in the county multiplied by the ratio of current
3taxes actually collected and apportioned for the rural county
4 services basic levy to the total rural county services basic
5 levy for the current year and an amount equivalent to the
6moneys derived by the rural services fund from military service
7tax credits under chapter 426A, manufactured or mobile home
8taxes under section 435.22, and delinquent taxes for prior
9years collected and apportioned to the rural county services
10basic fund in the current year, multiplied by the ratio of
11three dollars and three-eighths cents to three dollars and
12ninety-five cents. The limit on transfers in this paragraph
13applies only to property tax revenue and is not a limit on
14transfers of revenue generated from sources other than property
15taxes.
16 Sec. 18. Section 331.434, unnumbered paragraph 1, Code
172019, is amended to read as follows:
18Annually, the board of each county, subject to section
19331.403, subsection 4, sections 331.423 through 331.426
20 331.424C, and other applicable state law, shall prepare and
21adopt a budget, certify taxes, and provide appropriations as
22follows:
23 Sec. 19. Section 331.435, unnumbered paragraph 1, Code
242019, is amended to read as follows:
25The board may amend the adopted county budget, subject to
26sections 331.423 through 331.426 331.424C and other applicable
27state law, to permit increases in any class of proposed
28expenditures contained in the budget summary published under
29section 331.434, subsection 3.
30 Sec. 20. Section 373.10, Code 2019, is amended to read as
31follows:
32373.10 Taxing authority.
33The metropolitan council shall have the authority to
34levy city taxes to the extent the city tax levy authority
35is transferred by the charter to the metropolitan council.
-11-1A member city shall transfer a portion of the city’s tax
2levy authorized under section 384.1 or 384.12, whichever is
3applicable, to the metropolitan council. The maximum rates
4 amount of taxes authorized to be levied under sections section
5 384.1 and the taxes authorized to be levied under section
6 384.12 by a member city shall be reduced by an amount equal to
7the rates of the same or similar taxes levied in the city by the
8metropolitan council.
9 Sec. 21. Section 384.1, Code 2019, is amended by striking
10the section and inserting in lieu thereof the following:
11384.1 Property tax dollars — maximum.
121. A city shall certify taxes to be levied by the city
13on all taxable property within the city limits, for all city
14government purposes. Annually, the city council may certify
15a basic levy for city government purposes, subject to the
16limitation on property tax dollars provided in this section.
172. For purposes of this section, unless the context
18otherwise requires:
19a. “Annual growth factor” means an index, expressed as
20a percentage, determined by the department of management by
21January 1 of the calendar year in which the budget year begins.
22In determining the annual growth factor, the department shall
23calculate the percentage change in the median family income
24in midwest census region between the two most recent calendar
25years for which information is available. The department shall
26then add that percentage change to one hundred percent. In no
27case, however, shall the annual growth factor be less than one
28hundred percent.
29b. “Boundary adjustment” means annexation, severance,
30incorporation, or discontinuance as those terms are defined in
31section 368.1.
32c. “Budget year” is the fiscal year beginning during the
33calendar year in which a budget is certified.
34d. “Current fiscal year” is the fiscal year ending during
35the calendar year in which a budget is certified.
-12- 1e. “Net new valuation taxes” means the amount of property
2tax dollars equal to the current fiscal year’s levy rate in the
3city for the general fund multiplied by the increase from the
4current fiscal year to the budget year in taxable valuation due
5to the following:
6(1) Net new construction, excluding all incremental
7valuation that is released in any one year from either a
8division of revenue under section 260E.4 or an urban renewal
9area for which taxes were being divided under section 403.19 if
10the property for the valuation being released remains subject
11to the division of revenue under section 260E.4 or remains part
12of the urban renewal area that is subject to a division of
13revenue under section 403.19.
14(2) Additions or improvements to existing structures.
15(3) Remodeling of existing structures for which a building
16permit is required.
17(4) Net boundary adjustment.
18(5) A municipality no longer dividing tax revenues in an
19urban renewal area as provided in section 403.19 or a community
20college no longer dividing revenues as provided in section
21260E.4.
22(6) That portion of taxable property located in an urban
23revitalization area on which an exemption was allowed and such
24exemption has expired.
253. a. For the fiscal year beginning July 1, 2020, and
26subsequent fiscal years, the maximum amount of property
27tax dollars which may be certified for levy by a city for
28the general fund shall be the maximum property tax dollars
29calculated under paragraph “b”.
30b. The maximum property tax dollars that may be levied for
31deposit in the general fund is an amount equal to the sum of the
32following:
33(1) The annual growth factor times the current fiscal year’s
34maximum property tax dollars for the general fund.
35(2) The amount of net new valuation taxes in the city.
-13- 14. For purposes of calculating maximum property tax dollars
2for the city general fund for the fiscal year beginning July
31, 2020, only, the term “current fiscal year’s maximum property
4tax dollars” shall mean the total amount of property tax dollars
5certified by the city for the city’s general fund for the
6fiscal year beginning July 1, 2019.
75. Property taxes certified for deposit in the debt service
8fund in section 384.4, trust and agency funds in section
9384.6, capital improvements reserve fund in section 384.7,
10the emergency fund in section 384.8, any capital projects
11fund established by the city for deposit of bond, loan, or
12note proceeds, any temporary increase approved pursuant to
13section 384.12A, property taxes collected from a voted levy in
14section 384.12, and property taxes levied under section 384.12,
15subsection 17, are not counted against the maximum amount of
16property tax dollars that may be certified for a fiscal year
17under subsection 3.
186. Notwithstanding the maximum amount of taxes a city
19may certify for levy, the tax levied by a city on tracts of
20land and improvements on the tracts of land used and assessed
21for agricultural or horticultural purposes shall not exceed
22three dollars and three-eighths cents per thousand dollars
23of assessed value in any year. Improvements located on such
24tracts of land and not used for agricultural or horticultural
25purposes and all residential dwellings are subject to the same
26rate of tax levied by the city on all other taxable property
27within the city.
287. The department of management, in consultation with the
29city finance committee, shall adopt rules to administer this
30section. The department shall prescribe forms to be used by
31cities when making calculations required by this section.
32 Sec. 22. NEW SECTION. 384.1A Ending fund balance.
331. a. Budgeted ending fund balances for a budget year in
34excess of twenty-five percent of budgeted expenditures from the
35general fund for that budget year shall be explicitly reserved
-14-1or designated for a specific purpose.
2b. A city is encouraged, but not required, to reduce
3budgeted, unreserved, or undesignated ending fund balances for
4the budget year to an amount equal to approximately twenty-five
5percent of budgeted expenditures and transfers from the general
6fund for that budget year unless a decision is certified by
7the state appeal board ordering a reduction in the ending fund
8balance of the fund.
9c. In a protest to the city budget under section 384.19,
10the city shall have the burden of proving that the budgeted
11balances in excess of twenty-five percent are reasonably likely
12to be appropriated for the explicitly reserved or designated
13specific purpose. The excess budgeted balance for the specific
14purpose shall be considered an increase in an item in the
15budget for purposes of section 24.28.
162. a. For a city that has, as of June 30, 2019, reduced its
17ending fund balance to less than twenty-five percent of actual
18expenditures, additional property taxes may be computed and
19levied as provided in this subsection. The additional property
20tax levy amount is an amount not to exceed the difference
21between twenty-five percent of actual expenditures for city
22government purposes for the fiscal year beginning July 1, 2018,
23minus the ending fund balance for that year.
24b. All or a portion of additional property tax dollars
25may be levied for the purpose of increasing cash reserves for
26city government purposes in the budget year. The additional
27property tax dollars authorized under this subsection but not
28levied may be carried forward as unused ending fund balance
29taxing authority until and for the fiscal year beginning
30July 1, 2025. The amount carried forward shall not exceed
31twenty-five percent of the maximum amount of property tax
32dollars available in the current fiscal year. Additionally,
33property taxes that are levied as unused ending fund balance
34taxing authority under this subsection may be the subject of a
35protest under section 384.19, and the amount will be considered
-15-1an increase in an item in the budget for purposes of section
224.28. The amount of additional property tax dollars levied
3under this subsection shall not be included in the computation
4of the maximum amount of property tax dollars which may be
5certified and levied under section 384.1.
6 Sec. 23. Section 384.12, subsection 19, Code 2019, is
7amended by striking the subsection.
8 Sec. 24. NEW SECTION. 384.12A Authority to levy beyond
9maximum property tax dollars.
101. a. The city council may annually certify additions
11to the maximum amount of property tax dollars to be levied
12if the city council publishes notice of the proposed action,
13including a statement of the amount and purpose of the proposed
14additions, and the time and place of a public meeting at which
15the city council proposes to take action on the proposal.
16At the meeting, the council shall receive oral or written
17objections from any resident or property owner of the city.
18After all objections have been received and considered, the
19council may, following twenty days after the meeting and
20subject to paragraph “b”, take action on the proposal or abandon
21the proposal.
22b. If, at any time within twenty days after the meeting
23under paragraph “a”, a petition is filed with the city clerk
24signed by eligible electors of the city equal in number to the
25lesser of two thousand or twenty percent of the persons in the
26city who voted for the office of president of the United States
27at the last preceding general election that had such office on
28the ballot, asking that the question of levying an additional
29amount be submitted to the registered voters of the city, the
30city council shall either by resolution declare the proposal
31to be abandoned or shall direct the county commissioner of
32elections to call a special election upon the question.
332. The special election, if called, is subject to the
34following:
35a. The city council must give at least thirty-two days’
-16-1notice to the county commissioner of elections that the special
2election is to be held. In no case, however, shall a notice be
3given to the county commissioner of elections after December 31
4for an election on a proposition to exceed the statutory limits
5during the fiscal year beginning in the next calendar year.
6b. The proposition submitted to voters may propose authority
7for the city council to certify additions to the maximum amount
8of property tax dollars for up to two fiscal years. The
9proposition is approved if it receives a favorable majority of
10the votes cast on the proposition.
11c. The proposition to be submitted shall be substantially
12in the following form:
13Vote “yes” or “no” on the following:
14Shall the city of levy for an additional $each
15year for years beginning next July 1, , in excess of
16the statutory limits otherwise applicable for the city general
17fund?
18d. The canvass shall be held beginning at 1:00 p.m.on
19the second day which is not a holiday following the special
20election.
21e. Notice of the special election shall be published at
22least once in a newspaper as specified in section 362.3 prior
23to the date of the special election. The notice shall appear
24as early as practicable after the city council has voted to
25submit a proposition to the voters to levy additional property
26tax dollars.
273. The amount of additional property tax dollars certified
28under this section shall not be included in the computation
29of the maximum amount of property tax dollars which may be
30certified and levied under section 384.1.
31 Sec. 25. Section 384.19, Code 2019, is amended by adding the
32following new subsection:
33 NEW SUBSECTION. 5. For purposes of a tax protest filed
34under this section and in accordance with the provisions of
35chapter 24, “item” means a budgeted expenditure, appropriation,
-17-1or cash reserve from a fund for a service area, program,
2program element, or purpose.
3 Sec. 26. Section 386.8, Code 2019, is amended to read as
4follows:
5386.8 Operation tax.
6A city may establish a self-supported improvement district
7operation fund, and may certify taxes not to exceed the
8rate limitation as established in the ordinance creating the
9district, or any amendment thereto, each year to be levied
10for the fund against all of the property in the district,
11for the purpose of paying the administrative expenses of
12the district, which may include but are not limited to
13administrative personnel salaries, a separate administrative
14office, planning costs including consultation fees, engineering
15fees, architectural fees, and legal fees and all other expenses
16reasonably associated with the administration of the district
17and the fulfilling of the purposes of the district. The taxes
18levied for this fund may also be used for the purpose of paying
19maintenance expenses of improvements or self-liquidating
20improvements for a specified length of time with one or more
21options to renew if such is clearly stated in the petition
22which requests the council to authorize construction of the
23improvement or self-liquidating improvement, whether or not
24such petition is combined with the petition requesting creation
25of a district. Parcels of property which are assessed as
26residential property for property tax purposes are exempt from
27the tax levied under this section except residential properties
28within a duly designated historic district. A tax levied under
29this section is not subject to the levy limitation in section
30384.1.
31 Sec. 27. Section 386.9, Code 2019, is amended to read as
32follows:
33386.9 Capital improvement tax.
34A city may establish a capital improvement fund for a
35district and may certify taxes, not to exceed the rate
-18-1established by the ordinance creating the district, or any
2subsequent amendment thereto, each year to be levied for
3the fund against all of the property in the district, for
4the purpose of accumulating moneys for the financing or
5payment of a part or all of the costs of any improvement or
6self-liquidating improvement. However, parcels of property
7which are assessed as residential property for property tax
8purposes are exempt from the tax levied under this section
9except residential properties within a duly designated historic
10district. A tax levied under this section is not subject to
11the levy limitations in section 384.1 or 384.7.
12 Sec. 28. REPEAL. Sections 331.425 and 331.426, Code 2019,
13are repealed.
14 Sec. 29. APPLICABILITY. This Act applies to fiscal years
15beginning on or after July 1, 2020.
16EXPLANATION
17The inclusion of this explanation does not constitute agreement with
18the explanation’s substance by the members of the general assembly.
19This bill removes the property tax levy rate limitations on
20the general and rural funds for counties and on the general
21fund for cities and substitutes a limitation on the maximum
22amount of property tax dollars that may be certified for
23expenditure by a county or city for those funds for fiscal
24years beginning on or after July 1, 2020. For the fiscal
25year beginning July 1, 2020, and subsequent fiscal years, the
26maximum amount of property tax dollars which may be certified
27for levy shall be an amount equal to the sum of the current
28fiscal year’s total property tax dollars certified by the
29county or city multiplied by the annual growth factor, as
30defined in the bill, and the amount of net new valuation taxes,
31as defined in the bill.
32The bill also allows counties and cities to annually certify
33additions to the maximum amount of property tax dollars to
34be levied following a public meeting, subject to a voter
35referendum, if requested by petition. The bill specifies
-19-1the notice and election requirements for such a referendum
2election. The bill specifies that such additional amounts are
3not to be included in the computation of the maximum amount of
4property tax dollars for future budget years.
5The bill specifies certain requirements for ending fund
6balances for counties and cities. The bill provides that
7budgeted ending fund balances in certain specified funds for a
8budget year in excess of 25 percent of budgeted expenditures
9shall be explicitly reserved or designated for a specific
10purpose.
11Under the bill, counties and cities are encouraged, but
12not required, to reduce budgeted, unreserved, or undesignated
13ending fund balances for the budget year to an amount equal to
14approximately 25 percent of budgeted expenditures and certain
15transfers for that budget year unless a decision is certified
16by the state appeal board ordering a reduction in the ending
17fund balance of any of those funds. The county or city,
18as applicable, has the burden of proving that the budgeted
19balances in excess of 25 percent are reasonably likely to be
20appropriated for the explicitly reserved or designated specific
21purpose.
22The bill also allows for additional property taxes to be
23levied in certain fiscal years for those counties or cities
24that have, as of June 30, 2019, reduced their actual ending
25fund balance to less than 25 percent of actual expenditures.
26Such additional property tax dollars authorized but not levied
27may be carried forward as unused ending fund balance taxing
28authority until and for the fiscal year beginning July 1, 2025.
29However, the amount carried forward shall not exceed 25 percent
30of the maximum amount of property tax dollars available in the
31current fiscal year. The amount of such additional property
32taxes levied shall not, however, be included in the computation
33of the maximum amount of property tax dollars which may be
34certified and levied in future budget years.
35The bill also makes conforming amendments to other
-20-1provisions of the Code.
2The bill applies to fiscal years beginning on or after July
31, 2020.
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