Iowa Legislature: SF587

Senate File 587 - IntroducedA Bill ForAn Act 1relating to state and local government financing,
2programs, and operations, by modifying provisions relating
3to mental health and disability services funding, school
4district funding, commercial and industrial property tax
5replacement payments, and other specified tax provisions,
6making appropriations, providing penalties, and including
7effective date and applicability provisions.
8BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2MENTAL HEALTH FUNDING
3   Section 1.  Section 123.38, subsection 2, paragraph b, Code
42021, is amended to read as follows:
   5b.  For purposes of this subsection, any portion of license
6or permit fees used for the purposes authorized in section
7331.424, subsection 1, paragraph “a”, subparagraphs (1) and
8(2), and in section 331.424A, shall not be deemed received
9either by the division or by a local authority.
10   Sec. 2.  Section 218.99, Code 2021, is amended to read as
11follows:
   12218.99  Counties to be notified of patients’ personal
13accounts.
   14The administrator in control of a state institution shall
15direct the business manager of each institution under the
16administrator’s jurisdiction which is mentioned in section
17331.424, subsection 1, paragraph “a”, subparagraphs (1) and
18(2), and for which services are paid under section 331.424A
19by the county of residence or a mental health and disability
20services region, to quarterly inform the county of residence
21of any patient or resident who has an amount in excess of two
22hundred dollars on account in the patients’ personal deposit
23fund and the amount on deposit. The administrators shall
24direct the business manager to further notify the county of
25residence at least fifteen days before the release of funds in
26excess of two hundred dollars or upon the death of the patient
27or resident. If the patient or resident has no residency in
28this state or the person’s residency is unknown, notice shall
29be made to the director of human services and the administrator
30in control of the institution involved.
31   Sec. 3.  Section 225.24, Code 2021, is amended to read as
32follows:
   33225.24  Collection of preliminary expense.
   34Unless a committed private patient or those legally
35responsible for the patient’s support offer to settle the
-1-1amount of the claims, the regional administrator for the
2person’s county of residence shall collect, by action if
3necessary, the amount of all claims for per diem and expenses
4that have been approved by the regional administrator for the
5county and paid by the regional administrator as provided under
6section 225.21. Any amount collected shall be credited to the
7county mental health and disabilities disability services fund
8 region combined account created in accordance with section
9331.424A 331.391.
10   Sec. 4.  Section 249N.8, subsection 1, Code 2021, is amended
11to read as follows:
   121.  Biennially, a report of the results of a review, by
13county and region, of mental health services previously funded
14through taxes levied by counties pursuant to section 331.424A,
15Code 2021, or funds administered by a mental health and
16disability services region that are funded during the reporting
17period under the Iowa health and wellness plan.
18   Sec. 5.  Section 331.389, subsection 1, paragraph b, Code
192021, is amended to read as follows:
   20b.  If a county has been exempted prior to July 1, 2014, from
21the requirement to enter into a regional service system, the
22county and the county’s board of supervisors shall fulfill all
23requirements and be eligible as a region under this chapter and
24chapter chapters 222, 225, 225C, 226, 227, 229, and 230 for a
25regional service system, regional service system management
26plan, regional governing board, and regional administrator,
27and any other provisions applicable to a region of counties
28providing local mental health and disability services.
29Additionally, a county exempted under this subsection shall be
30considered a region for purposes of chapter 426B.
31   Sec. 6.  Section 331.389, subsection 5, paragraph a,
32subparagraph (2), Code 2021, is amended to read as follows:
   33(2)  Reduce the amount of the annual state funding provided
34for the regional service system or exempted county, including
35amounts received under section 426B.3 or from the risk pool
-2-1under section 426B.6, not to exceed fifteen percent of the
2amount.
3   Sec. 7.  Section 331.391, subsection 1, Code 2021, is amended
4to read as follows:
   51.  The funding under the control of the governing board
6shall be maintained in a combined account, in separate county
7accounts that are under the control of the governing board, or
8pursuant to other arrangements authorized by law that limit the
9administrative burden of such control while facilitating public
10scrutiny of financial processes. A county exempted under
11section 331.389, subsection 1, shall maintain a county mental
12health and disability services fund for the deposit of funding
13received under section 426B.3 or from the risk pool under
14section 426B.6 and appropriations specifically authorized to be
15made from the county mental health and disability services fund
16shall not be made from any other fund of the county. A county
17mental health and disability services fund established by an
18exempt county, to the extent feasible, shall be considered to
19be the same as a region combined account and shall be subject
20to the same requirements as a region’s combined account.
21   Sec. 8.  Section 331.391, subsection 4, paragraphs a and b,
22Code 2021, are amended to read as follows:
   23a.  If a region is meeting the financial obligations for
24implementation of its regional service system management plan
25for a fiscal year and residual funding is anticipated, the
26regional administrator shall may reserve an adequate amount of
27unobligated and unencumbered funds for cash flow of expenditure
28obligations in the next fiscal year.
   29b.  Each region shall certify to the department of management
30 human services on or before December 1, 2022 2021, and each
31December 1 thereafter, the amount of the region’s cash flow
32amount in the combined account that is attributable to each
33county within the region based upon each county’s proportionate
34amount of funding and contributions to the region or other
35methodology specified in the regional governance agreement
-3-1or certify the cash flow amount for each separate county
2account that is under the control of the governing board at the
3conclusion of the most recently completed fiscal year.
4   Sec. 9.  Section 331.391, subsection 4, paragraph c, Code
52021, is amended by striking the paragraph.
6   Sec. 10.  Section 331.392, subsection 4, paragraph a, Code
72021, is amended to read as follows:
   8a.  Methods for pooling, management, and expenditure of the
9funding under the control of the regional administrator. If
10the agreement does not provide for pooling of the participating
11county moneys in a single fund, the agreement shall specify how
12the participating county moneys will be subject to the control
13of the regional administrator.
14   Sec. 11.  Section 331.393, subsection 10, Code 2021, is
15amended to read as follows:
   1610.  The director’s approval of a regional plan shall not be
17construed to constitute certification of the respective county
18budgets or of the region’s budget.
19   Sec. 12.  Section 331.394, subsection 4, Code 2021, is
20amended to read as follows:
   214.  If a county of residence is part of a mental health and
22disability services region that has agreed to pool funding and
23liability for services, the The responsibilities of the county
24under law regarding such mental health and disability services
25shall be performed on behalf of the county by the regional
26administrator. The county of residence or the county’s mental
27health and disability services region, as applicable, is
28responsible for paying the public costs of the mental health
29and disability services that are not covered by the medical
30assistance program under chapter 249A and are provided in
31accordance with the region’s approved service management plan
32to persons who are residents of the county or region.
33   Sec. 13.  Section 331.424A, subsection 1, paragraph b, Code
342021, is amended by striking the paragraph.
35   Sec. 14.  Section 331.424A, subsection 3, Code 2021, is
-4-1amended to read as follows:
   23.  a.  County revenues from taxes and other sources
3designated by a county for mental health and disabilities
4services shall be credited to the county mental health and
5disabilities services fund which shall be created by the
6county. The Until the required transfer of funds under
7paragraph “b”, the board shall make appropriations from the fund
8for payment of services provided under the regional service
9system management plan approved pursuant to section 331.393.
10The For fiscal years beginning before July 1, 2022, the county
11may pay for the services in cooperation with other counties
12by pooling appropriations from the county services fund with
13appropriations from the county services fund of other counties
14through the county’s regional administrator, or through another
15arrangement specified in the regional governance agreement
16entered into by the county under section 331.392.
   17b.  Notwithstanding section 331.432, subsection 3, upon
18conclusion of the fiscal year beginning July 1, 2021, except
19for an exempt county under section 331.391, subsection 1,
20the county treasurer shall transfer the remaining balance of
21the county’s county services fund created under paragraph
22“a”, including all unobligated and unencumbered funds, to the
23county’s region to which the county belongs in the fiscal year
24beginning July 1, 2022, for deposit in the region’s combined
25account under section 331.391.
26   Sec. 15.  Section 331.424A, subsection 4, paragraph a, Code
272021, is amended to read as follows:
   28a.  An amount of unobligated and unencumbered funds, as
29specified in the regional governance agreement entered into
30by the county under section 331.392, shall, for fiscal years
31beginning before July 1, 2022, be reserved in the county
32services fund to address cash flow obligations in the next
33fiscal year, subject to the limitations of this subsection.
34   Sec. 16.  Section 331.424A, subsection 4, paragraphs c and d,
35Code 2021, are amended by striking the paragraphs.
-5-1   Sec. 17.  Section 331.424A, subsections 5, 6, and 9, Code
22021, are amended to read as follows:
   35.  Receipts from the state or federal government for fiscal
4years beginning before July 1, 2022, for the mental health
5and disability services administered or paid for by a county
6shall be credited to the county services fund, including moneys
7distributed to the county from the department of human services
8and moneys allocated under chapter 426B.
   96.  For each fiscal year beginning before July 1, 2022, the
10county shall certify a levy for payment of services. For each
11such fiscal year, county revenues from taxes imposed by the
12county credited to the county services fund shall not exceed an
13amount equal to the county budgeted amount for the fiscal year.
14A levy certified under this section is not subject to the
15appeal provisions of section 331.426or to any other provision
16in law authorizing a county to exceed, increase, or appeal a
17property tax levy limit.
   189.  a.  For the fiscal year beginning July 1, 2017, and
19each subsequent fiscal year beginning before July 1, 2022, the
20county budgeted amount determined for each county shall be the
21amount necessary to meet the county’s financial obligations for
22the payment of services provided under the regional service
23system management plan approved pursuant to section 331.393,
24not to exceed an amount equal to the product of the regional
25per capita expenditure target amount twenty-one dollars and
26fourteen cents multiplied by the county’s population, and, for
27fiscal years beginning on or after July 1, 2023, reduced by
28the amount of the county’s cash flow reduction amount for the
29fiscal year calculated under subsection 4, if applicable.
   30b.  If a county officially joins a different region, the
31county’s budgeted amount for a fiscal year beginning before
32July 1, 2022, shall be the amount necessary to meet the
33county’s financial obligations for payment of services provided
34under the new region’s regional service system management plan
35approved pursuant to section 331.393, not to exceed an amount
-6-1equal to the product of the new region’s regional per capita
2expenditure target amount twenty-one dollars and fourteen cents
3 multiplied by the county’s population, and, for fiscal years
4beginning on or after July 1, 2023, reduced by the amount of
5the county’s cash flow reduction amount for the fiscal year
6calculated under subsection 4, if applicable.
7   Sec. 18.  Section 331.424A, Code 2021, is amended by adding
8the following new subsection:
9   NEW SUBSECTION.  10.  This section is repealed July 1, 2022.
10   Sec. 19.  Section 331.432, subsection 3, Code 2021, is
11amended by striking the subsection and inserting in lieu
12thereof the following:
   133.  Payments or transfers of moneys from any fund of the
14county to a mental health and disability services region’s
15combined account under section 331.391 are prohibited.
16   Sec. 20.  Section 347.7, subsection 1, paragraph c, Code
172021, is amended by striking the paragraph.
18   Sec. 21.  Section 426B.1, subsection 2, Code 2021, is amended
19to read as follows:
   202.  Moneys shall be distributed from the property tax relief
21fund to counties for the mental health and disability regional
22service system for mental health and disabilities services, in
23accordance with the appropriations made to the fund and other
24statutory requirements.
25   Sec. 22.  Section 426B.2, Code 2021, is amended to read as
26follows:
   27426B.2  Property tax relief fund payments.
   28The director of human services shall draw warrants on the
29property tax relief fund, payable to the county treasurer
30 regional administrator in the amount due to a county mental
31health and disability services region in accordance with
32statutory requirements, and mail the warrants to the county
33auditors regional administrator in July and January of each
34year.
35   Sec. 23.  NEW SECTION.  426B.3  Mental health and disability
-7-1services regional supplement fund.
   21.  A mental health and disability services regional
3supplement fund is created in the office of the treasurer of
4state under the authority of the department of human services.
5The fund shall be separate from the general fund of the state
6and the balance in the fund shall not be considered part of
7the balance of the general fund of the state. Moneys in the
8fund include appropriations made to the fund and other moneys
9deposited into the fund. Moneys in the fund shall be used
10solely for purposes of making regional supplement payments
11under this section.
   122.  For each fiscal year beginning on or after July 1, 2021,
13there is appropriated from the general fund of the state to the
14mental health and disability services regional supplement fund
15an amount necessary to make all regional supplement payments
16under this section for that fiscal year.
   173.  For each fiscal year beginning on or after July 1, 2021,
18the moneys available in a fiscal year in the mental health and
19disability services state supplement fund are appropriated to
20the department of human services and shall be distributed to
21each mental health and disability services region, as defined
22in section 426B.6, on a per capita basis calculated under
23subsection 4 using each region’s population, as defined in
24section 426B.6, for that fiscal year.
   254.  The amount of each region’s regional supplement payment
26shall be determined as follows:
   27a.  For the fiscal year beginning July 1, 2021, an amount
28equal to the product of fifteen dollars and eighty-six cents
29multiplied by the sum of the region’s population for the fiscal
30year.
   31b.  For the fiscal year beginning July 1, 2022, an amount
32equal to the product of thirty-eight dollars multiplied by the
33sum of the region’s population for the fiscal year.
   34c.  For the fiscal year beginning July 1, 2023, an amount
35equal to the product of forty dollars multiplied by the sum of
-8-1the region’s population for the fiscal year.
   2d.  For the fiscal year beginning July 1, 2024, an amount
3equal to the product of forty-two dollars multiplied by the sum
4of the region’s population for the fiscal year.
   5e.  (1)  For the fiscal year beginning July 1, 2025, and each
6succeeding fiscal year, an amount equal to the product of the
7sum of the region’s population for the fiscal year multiplied
8by the sum of the dollar amount used to calculate the regional
9supplement payments under this subsection for the immediately
10preceding fiscal year plus the regional supplement growth
11factor for the fiscal year.
   12(2)  For purposes of this paragraph, “regional supplement
13growth factor” for a fiscal year is an amount equal to the
14product of the dollar amount used to calculate the regional
15supplement payments under this subsection for the immediately
16preceding fiscal year multiplied by the percent increase, if
17any, in the amount of sales tax revenue deposited into the
18general fund of the state under section 423.2A, subsection
191, paragraph “a”, less the transfers required under section
20423.2A, subsection 2, between the fiscal year beginning three
21years prior to the applicable fiscal year and the fiscal year
22beginning two years prior to the applicable year, but not to
23exceed one and one-half percent.
   245.  Regional supplement payments received by a region
25shall be deposited in the region’s combined account under
26section 331.391 and used solely for providing mental health
27and disability services under the regional service system
28management plan.
   296.  Regional supplement payments from the mental health
30and disability services regional supplement fund shall be
31paid in quarterly installments to the appropriate regional
32administrator in July, October, January, and April of each
33fiscal year.
   347.  a.  For the fiscal year beginning July 1, 2021, each
35mental health and disability services region for which the
-9-1amount certified during the fiscal year under section 331.391,
2subsection 4, paragraph “b”, exceeds forty percent of the
3proposed gross expenditures of the region for the fiscal year,
4the remaining quarterly payments of the region’s regional
5supplement payment shall be reduced by an amount equal to the
6amount by which the region’s amount certified under section
7331.391, subsection 4, paragraph “b”, exceeds forty percent of
8the proposed gross expenditures of the region for the fiscal
9year, but the amount of the reduction shall not exceed the
10total amount of the region’s regional supplement payment for
11the fiscal year. If the region’s remaining quarterly payments
12are insufficient to effectuate the required reductions under
13this paragraph, the region is required to pay to the department
14of human services any amount for which the reduction in
15quarterly payments could not be made. The amount of reductions
16to quarterly payments and amounts paid to the department under
17this paragraph shall be transferred and credited to the risk
18pool under section 426B.6.
   19b.  For the fiscal year beginning July 1, 2022, each mental
20health and disability services region for which the amount
21certified during the fiscal year under section 331.391,
22subsection 4, paragraph “b”, exceeds twenty percent of the
23proposed gross expenditures of the region for the fiscal year,
24the remaining quarterly payments of the region’s regional
25supplement payment shall be reduced by an amount equal to the
26amount by which the region’s amount certified under section
27331.391, subsection 4, paragraph “b”, exceeds twenty percent of
28the proposed gross expenditures of the region for the fiscal
29year, but the amount of the reduction shall not exceed the
30total amount of the region’s regional supplement payment for
31the fiscal year. If the region’s remaining quarterly payments
32are insufficient to effectuate the required reductions under
33this paragraph, the region is required to pay to the department
34of human services any amount for which the reduction in
35quarterly payments could not be made. The amount of reductions
-10-1to quarterly payments and amounts paid to the department under
2this paragraph shall be transferred and credited to the risk
3pool under section 426B.6.
   4c.  For the fiscal year beginning July 1, 2023, and each
5succeeding fiscal year, each mental health and disability
6services region for which an amount greater than zero is
7certified during the fiscal year under section 331.391,
8subsection 4, paragraph “b”, the remaining quarterly payments
9of the region’s regional supplement payment shall be reduced by
10an amount equal to the amount certified under section 331.391,
11subsection 4, paragraph “b”, but the amount of the reduction
12shall not exceed the total amount of the region’s regional
13supplement payment for the fiscal year. If the region’s
14remaining quarterly payments are insufficient to effectuate
15the required reductions under this paragraph, the region is
16required to pay to the department of human services any amount
17for which the reduction in quarterly payments could not be
18made. The amount of reductions to quarterly payments and
19amounts paid to the department under this paragraph shall be
20transferred and credited to the risk pool under section 426B.6.
21   Sec. 24.  Section 426B.4, Code 2021, is amended to read as
22follows:
   23426B.4  Rules.
   24The mental health and disability services commission shall
25consult with county representatives regional administrators
26 and the director of human services in prescribing forms and
27adopting rules pursuant to chapter 17A to administer this
28chapter.
29   Sec. 25.  NEW SECTION.  426B.6  Risk pool.
   301.  For the purposes of this chapter, unless the context
31otherwise requires:
   32a.  “Mental health and disability services region” means
33a mental health and disability services region formed in
34accordance with section 331.389.
   35b.  “Population” means, as of July 1 of the fiscal year
-11-1preceding the fiscal year in which the population figure is
2applied, the county population shown by the latest preceding
3certified federal census or the latest applicable population
4estimate issued by the United States census bureau, whichever
5is most recent.
   6c.  “Regional administrator” means the regional administrator
7of a mental health and disability services region, as defined
8in section 331.388.
   92.  A risk pool is created in the property tax relief fund
10under section 426B.1. The pool shall consist of the moneys
11appropriated or credited to the pool by law, including amounts
12credited to the risk pool under section 426B.3, subsection 7.
13For fiscal years beginning on or after July 1, 2021, there is
14appropriated from the general fund of the state to the risk
15pool the following amounts to be used for the purposes of this
16section:
   17a.  For the fiscal year beginning July 1, 2021, nine million
18nine hundred sixty thousand five hundred ninety dollars.
   19b.  For the fiscal year beginning July 1, 2022, five million
20one hundred seven thousand three hundred forty dollars.
   21c.  (1)  For each fiscal year beginning on or after July 1,
222025, an amount equal to the risk pool growth factor multiplied
23by the ending balance of the risk pool at the conclusion of
24the fiscal year ending June 30 immediately preceding the
25application deadline under subsection 4 for the fiscal year for
26which the appropriation is made.
   27(2)  For purposes of this paragraph, the “risk pool growth
28factor” for each fiscal year is the percent increase, if any, in
29the amount of sales tax revenue deposited into the general fund
30of the state under section 423.2A, subsection 1, paragraph “a”,
31less the transfers required under section 423.2A, subsection
322, between the fiscal year beginning three years prior to the
33applicable fiscal year and the fiscal year beginning two years
34prior to the applicable year, minus one and one-half percent,
35and the risk pool growth factor for any fiscal year shall not
-12-1exceed three and one-half percent.
   23.  A risk pool board is created. The board shall consist of
3two county supervisors, two county auditors, a member of the
4mental health and disability services commission who is not a
5member of a county board of supervisors, a member of the county
6finance committee created in chapter 333A who is not an elected
7official, a representative of a provider of mental health or
8developmental disabilities services selected from nominees
9submitted by the Iowa association of community providers,
10and two staff members of regional administrators of county
11mental health and disability services regions, all appointed
12by the governor, and one member appointed by the director of
13human services. All members appointed by the governor shall
14be subject to confirmation by the senate. Members shall serve
15for three-year terms. A vacancy shall be filled in the same
16manner as the original appointment. Expenses and other costs
17of the risk pool board members representing counties shall be
18paid by the county of origin. Expenses and other costs of risk
19pool board members who do not represent counties shall be paid
20by the department of human services. Staff assistance to the
21board shall be provided by the department of human services.
22Actuarial expenses and other direct administrative costs shall
23be charged to the pool.
   244.  To receive assistance from the risk pool, a regional
25administrator must apply to the risk pool board on or before
26October 31 preceding the fiscal year for which assistance is
27requested. The purpose of the assistance shall be to provide
28financial support for services provided by the regional
29administrator’s mental health and disability services region.
30The risk pool board shall make its final decisions on or
31before December 15 regarding acceptance or rejection of the
32applications for assistance and the total amount accepted shall
33be considered obligated.
   345.  Basic eligibility for risk pool assistance requires that
35a mental health and disability services region meet all of the
-13-1following conditions:
   2a.  The mental health and disability services region is in
3compliance with the regional service system management plan
4requirements of section 331.393.
   5b.  (1)  For applications for assistance for the fiscal year
6beginning July 1, 2021, and the fiscal year beginning July 1,
72022, in the fiscal year that commenced two years prior to the
8fiscal year of application for assistance, the ending balance,
9under generally accepted accounting principles, of the mental
10health and disability services region’s combined services funds
11was equal to or less than the ending balance threshold under
12subparagraph (2) for the fiscal year for which assistance is
13requested.
   14(2)  For purposes of this paragraph “b”, “ending balance
15threshold” means the following:
   16(a)  For applications for assistance for the fiscal year
17beginning July 1, 2021, forty percent of the actual gross
18expenditures of the mental health and disability services
19region for the fiscal year that commenced two years prior to
20the fiscal year of application for assistance.
   21(b)  For applications for assistance for the fiscal year
22beginning July 1, 2022, twenty percent of the actual gross
23expenditures of the mental health and disability services
24region for the fiscal year that commenced two years prior to
25the fiscal year of application for assistance.
   266.  The board shall review the fiscal year-end financial
27records for all mental health and disability services regions
28that are granted risk pool assistance. If the board determines
29a mental health and disability services region’s actual need
30for risk pool assistance was less than the amount of risk pool
31assistance granted to the mental health and disability services
32region, the mental health and disability services region
33shall refund the difference between the amount of assistance
34granted and the actual need. The mental health and disability
35services region shall submit the refund within thirty days of
-14-1receiving notice from the board. Refunds shall be credited
2to the risk pool. The mental health and disability services
3commission shall adopt rules pursuant to chapter 17A providing
4criteria for the purposes of this subsection and as necessary
5to implement the other provisions of this section.
   67.  The board shall determine application requirements to
7ensure prudent use of risk pool assistance. The board may
8accept or reject an application for assistance in whole or in
9part. The decision of the board is final.
   108.  The total amount of risk pool assistance shall be limited
11to the amount available in the risk pool for a fiscal year. Any
12unobligated balance in the risk pool at the close of a fiscal
13year shall remain in the risk pool for distribution in the
14succeeding fiscal year.
   159.  Risk pool assistance shall only be made available to
16address one or more of the following circumstances:
   17a.  Continuing support for mandated services.
   18b.  Avoiding the need for reduction or elimination of
19critical services when the reduction or elimination places
20consumers’ health or safety at risk.
   21c.  Avoiding the need for reduction or elimination of a
22mobile crisis team or other critical emergency services when
23the reduction or elimination places the public’s health or
24safety at risk.
   25d.  Avoiding the need for reduction or elimination of the
26services or other support provided to entire populations of
27consumers with disabilities.
   28e.  Avoiding the need for reduction or elimination of
29services or other support that maintain consumers in a
30community setting or that would create a risk that the
31consumers would be placed in more restrictive, higher cost
32settings.
   3310.  Subject to the amount available and obligated from the
34risk pool for a fiscal year, the department of human services
35shall annually calculate the amount of moneys due to eligible
-15-1mental health and disability services regions in accordance
2with the board’s decisions and that amount is appropriated from
3the risk pool to the department for payment of the moneys due.
4The department shall authorize the issuance of warrants payable
5to the mental health and disability services regions for the
6amounts due and the warrants shall be issued on or before
7January 1.
   811.  On or before March 1 and September 1 of each fiscal
9year, the department of human services shall provide the risk
10pool board with a report of the financial condition of each
11funding source administered by the board. The report shall
12include but is not limited to an itemization of the funding
13source’s balances, types and amount of revenues credited, and
14payees and payment amounts for the expenditures made from the
15funding source during the reporting period.
   1612.  If the board has made its decisions but has determined
17that there are otherwise qualifying requests for risk pool
18assistance that are beyond the amount available in the risk
19pool fund for a fiscal year, the board shall compile a list of
20such requests and the supporting information for the requests.
21The list and information shall be submitted to the mental
22health and disability services commission, the department of
23human services, and the general assembly.
24   Sec. 26.  ADJUSTMENT TO PROPERTY TAXES CERTIFIED UNDER
25SECTION 331.424A — FY 2021-2022.  If this division of this
26Act takes effect after March 31, 2021, for each county for
27which the amount of taxes certified for levy for the purposes
28of section 331.424A for the fiscal year beginning July 1,
292021, exceeds the product of the population of the county as
30determined under section 331.424A, subsection 1, paragraph
31“e”, multiplied by twenty-one dollars and fourteen cents,
32the department of management shall reduce the amount of such
33taxes certified for levy to an amount not to exceed the
34product of the population of the county as determined under
35section 331.424A, subsection 1, paragraph “e”, multiplied by
-16-1twenty-one dollars and fourteen cents and shall revise the rate
2of taxation as necessary to raise the reduced amount. The
3department of management shall report the reduction in the
4certified taxes and the revised rate of taxation to the county
5auditors by June 15, 2021.
6   Sec. 27.  IMPLEMENTATION OF RISK POOL UNDER SECTION 426B.6
7— EMERGENCY RULEMAKING.
   81.  In order to timely implement the provisions of this
9division of this Act establishing the risk pool for mental
10health and disability services regions for the fiscal year
11beginning July 1, 2021, and the fiscal year beginning July
121, 2022, the director of human services shall, subject to
13the membership requirements of section 426B.6, subsection 3,
14appoint temporary members of the risk pool board to review
15and approve risk pool assistance applications and establish
16alternative application deadlines and expedited application
17review and approval timelines.
   182.  The department of human services may adopt
19administrative rules under section 17A.4, subsection 3, and
20section 17A.5, subsection 2, paragraph “b”, to implement
21provisions of this division of this Act and the rules shall
22become effective immediately upon filing or on a later
23effective date specified in the rules, unless the effective
24date of the rules is delayed or the applicability of the rules
25is suspended by the administrative rules review committee. Any
26rules adopted in accordance with this section shall not take
27effect before the rules are reviewed by the administrative
28rules review committee. The delay authority provided to the
29administrative rules review committee under section 17A.8,
30subsection 9, shall be applicable to a delay imposed under this
31section, notwithstanding a provision in that section making it
32inapplicable to section 17A.5, subsection 2, paragraph “b”.
33Any rules adopted in accordance with the provisions of this
34section shall also be published as a notice of intended action
35as provided in section 17A.4.
-17-1   Sec. 28.  EFFECTIVE DATE.  Except as provided in this
2division of this Act, this division of this Act, being deemed
3of immediate importance, takes effect upon enactment.
4   Sec. 29.  EFFECTIVE DATE.  The following take effect July 1,
52022:
   61.  The section of this division of this Act amending section
7331.432, subsection 3.
   82.  The section of this division of this Act amending section
9347.7, subsection 1, paragraph “c”.
10DIVISION II
11COMMERCIAL AND INDUSTRIAL PROPERTY TAX REPLACEMENT PAYMENTS
12   Sec. 30.  Section 2.48, subsection 3, paragraph f,
13subparagraph (6), Code 2021, is amended by striking the
14subparagraph.
15   Sec. 31.  Section 331.512, subsection 15, Code 2021, is
16amended by striking the subsection.
17   Sec. 32.  Section 331.559, subsection 27, Code 2021, is
18amended by striking the subsection.
19   Sec. 33.  Section 441.21A, subsection 1, paragraph a, Code
202021, is amended to read as follows:
   21a.  For each fiscal year beginning on or after July 1, 2014,
22but before July 1, 2027, there is appropriated from the general
23fund of the state to the department of revenue an amount
24necessary for the payment of all commercial and industrial
25property tax replacement claims under this section for the
26fiscal year. However, for a the fiscal year years beginning
27on or after July 1, 2017, July 1, 2018, July 1, 2019, July 1,
282020, and July 1, 2021, the total amount of moneys appropriated
29from the general fund of the state to the department of revenue
30for the payment of commercial and industrial property tax
31replacement claims in that each fiscal year shall not exceed
32the total amount of money necessary to pay all commercial and
33industrial property tax replacement claims for the fiscal year
34beginning July 1, 2016.
35   Sec. 34.  Section 441.21A, subsections 2 and 3, Code 2021,
-18-1are amended to read as follows:
   22.  a.  Beginning with the For each fiscal year beginning
3on or after July 1, 2014, but before July 1, 2022, each county
4treasurer shall be paid by the department of revenue an
5amount equal to the amount of the commercial and industrial
6property tax replacement claims in the county, as calculated
7in subsection 4. If an amount appropriated for a the fiscal
8year beginning on July 1, 2017, July 1, 2018, July 1, 2019,
9July 1, 2020, or July 1, 2021, is insufficient to pay all
10replacement claims for the fiscal year, the director of revenue
11shall prorate the payment of replacement claims to the county
12treasurers and shall notify the county auditors of the pro rata
13percentage on or before September 30.
   14b.  For each fiscal year beginning on or after July 1, 2022,
15but before July 1, 2027, each taxing authority shall be paid by
16the department of revenue an amount equal to the amount of the
17commercial and industrial property tax replacement claim for
18the taxing authority, as calculated in subsection 4A.
   193.  a.  On or before July 1 of each fiscal year beginning on
20or after July 1, 2014, but before July 1, 2022, the assessor
21shall report to the county auditor the total actual value of
22all commercial property and industrial property in the county
23that is subject to assessment and taxation for the assessment
24year used to calculate the taxes due and payable in that fiscal
25year.
   26b.  On or before July 1, 2022, the department of revenue, in
27consultation with the department of management, shall calculate
28for each taxing authority in this state that is a city or a
29county all of the following:
   30(1)  The total assessed value as of January 1, 2012, of
31all taxable property located in the taxing authority that is
32subject to assessment and taxation used to calculate taxes
33which are due and payable in the fiscal year beginning July 1,
342013, excluding property subject to the statewide property tax
35imposed under section 437A.18 or 437B.14.
-19-   1(2)  The total assessed value as of January 1, 2019, of
2all taxable property located in the taxing authority that is
3subject to assessment and taxation used to calculate taxes
4which are due and payable in the fiscal year beginning July 1,
52020, excluding property subject to the statewide property tax
6imposed under section 437A.18 or 437B.14.
7   Sec. 35.  Section 441.21A, subsection 4, unnumbered
8paragraph 1, Code 2021, is amended to read as follows:
   9On or before a date established by rule of the department
10of revenue of each fiscal year beginning on or after July
111, 2014, but before July 1, 2022, the county auditor shall
12prepare a statement, based upon the report received pursuant to
13subsection 3, paragraph “a”, listing for each taxing district
14in the county:
15   Sec. 36.  Section 441.21A, Code 2021, is amended by adding
16the following new subsection:
17   NEW SUBSECTION.  4A.  a.  As used in this subsection, unless
18the context clearly requires otherwise:
   19(1)  “Qualified taxing authority” means any of the following:
   20(a)  A taxing authority that is not a city or a county.
   21(b)  A taxing authority that is a city or county for which
22the amount determined under subsection 3, paragraph “b”,
23subparagraph (2), is less than one hundred thirty-one and
24fourteen hundredths percent of the amount determined under
25subsection 3, paragraph “b”, subparagraph (1).
   26(2)  “Taxing authority” means a city, county, community
27college, or other governmental entity or political subdivision
28in this state authorized to certify a levy on property located
29within such authority, but does not include a school district.
   30b.  For fiscal years beginning on or after July 1, 2022,
31but before July 1, 2027, the amount of each taxing authority’s
32replacement claim is as follows:
   33(1)  If the taxing authority is a qualified taxing authority:
   34(a)  For the fiscal year beginning July 1, 2022, five-sixths
35of the amount received by the taxing authority under this
-20-1section for the fiscal year beginning July 1, 2021.
   2(b)  For the fiscal year beginning July 1, 2023, four-sixths
3of the amount received by the taxing authority under this
4section for the fiscal year beginning July 1, 2021.
   5(c)  For the fiscal year beginning July 1, 2024, three-sixths
6of the amount received by the taxing authority under this
7section for the fiscal year beginning July 1, 2021.
   8(d)  For the fiscal year beginning July 1, 2025, two-sixths
9of the amount received by the taxing authority under this
10section for the fiscal year beginning July 1, 2021.
   11(e)  For the fiscal year beginning July 1, 2026, one-sixth of
12the amount received by the taxing authority under this section
13for the fiscal year beginning July 1, 2021.
   14(2)  If the taxing authority is not a qualified taxing
15authority:
   16(a)  For the fiscal year beginning July 1, 2022,
17three-fourths of the amount received by the taxing authority
18under this section for the fiscal year beginning July 1, 2021.
   19(b)  For the fiscal year beginning July 1, 2023, two-fourths
20of the amount received by the taxing authority under this
21section for the fiscal year beginning July 1, 2021.
   22(c)  For the fiscal year beginning July 1, 2024, one-fourth
23of the amount received by the taxing authority under this
24section for the fiscal year beginning July 1, 2021.
   25(d)  For the fiscal year beginning July 1, 2025, and each
26succeeding fiscal year beginning before July 1, 2027, zero.
   27(3)  The department of revenue shall consult with the
28department of management to calculate the amount received by
29each taxing authority in this state as the result of commercial
30and industrial property tax replacement claims paid for the
31fiscal year beginning July 1, 2021.
32   Sec. 37.  Section 441.21A, subsection 5, Code 2021, is
33amended to read as follows:
   345.  For purposes of computing replacement amounts under
35this section for fiscal years beginning on or after July 1,
-21-12014, but before July 1, 2022, that portion of an urban renewal
2area defined as the sum of the assessed valuations defined in
3section 403.19, subsections 1 and 2, shall be considered a
4taxing district.
5   Sec. 38.  Section 441.21A, subsection 6, paragraph a, Code
62021, is amended to read as follows:
   7a.  The For fiscal years beginning on or after July 1, 2014,
8but before July 1, 2022, the county auditor shall certify
9and forward one copy of the statement to the department of
10revenue not later than a date of each year established by the
11department of revenue by rule.
12   Sec. 39.  Section 441.21A, subsection 6, Code 2021, is
13amended by adding the following new paragraph:
14   NEW PARAGRAPH.  f.  This subsection shall apply to the
15apportionment of replacement claim amounts for fiscal years
16beginning on or after July 1, 2014, but before July 1, 2022.
17   Sec. 40.  Section 441.21A, Code 2021, is amended by adding
18the following new subsections:
19   NEW SUBSECTION.  7.  a.  For fiscal years beginning on
20or after July 1, 2022, but before July 1, 2027, each taxing
21authority’s replacement claim calculated under subsection 4A
22shall be paid to the taxing authority in equal installments in
23September and March of each year.
   24b.  The taxing authority’s replacement claim shall be
25apportioned and credited by the governing body of the taxing
26authority among the taxing authority’s tax levies in the same
27proportion that each property tax levy bears to the total of
28all property tax levies imposed by the taxing authority for the
29fiscal year for which the payment is received.
   30c.  Of the amounts allocated and credited to each property
31tax levy that is subject to division under section 403.19,
32the total amount paid into the fund for the taxing authority
33as taxes by or for the taxing authority into which all other
34property taxes are paid and the special fund of the applicable
35municipality under section 403.19, subsection 2, shall be an
-22-1amount of the replacement claim that is proportionate to the
2amount of the total sum of the assessed value of the taxable
3commercial and industrial property in the urban renewal area as
4a share of total assessed value of all taxable property in the
5taxing authority and shall be apportioned as follows:
   6(1)  To the fund for the taxing authority as taxes by or for
7the taxing authority into which all other property taxes are
8paid, an amount proportionate to the amount of actual value of
9the commercial and industrial property in the urban renewal
10area as determined in section 403.19, subsection 1, that was
11subtracted pursuant to section 403.20, as it bears to the
12total amount of actual value of the commercial and industrial
13property in the urban renewal area that was subtracted pursuant
14to section 403.20 for the assessment year for property taxes
15due and payable in the fiscal year for which the replacement
16claim is computed.
   17(2)  (a)  To the special fund of the applicable municipality
18under section 403.19, subsection 2, the remaining amount, if
19any.
   20(b)  The amount allocated under subparagraph division (a)
21shall not exceed the amount equal to the amount certified to
22the county auditor under section 403.19 for the fiscal year in
23which the claim is paid, after deduction of the amount of other
24revenues committed for payment on that amount for the fiscal
25year. The amount not allocated as a result of the operation of
26this subparagraph division (b) shall be allocated to and paid
27into the fund for the taxing authority as taxes by or for the
28taxing authority in the manner provided in subparagraph (1).
29   NEW SUBSECTION.  8.  This section is repealed July 1, 2027.
30   Sec. 41.  EFFECTIVE DATE.  The following take effect July 1,
312027:
   321.  The section of this division of this Act amending section
33331.512.
   342.  The section of this division of this Act amending section
35331.559.
-23-1DIVISION III
2SCHOOL FOUNDATION PERCENTAGE
3   Sec. 42.  Section 257.1, subsection 2, paragraph b, Code
42021, is amended to read as follows:
   5b.  For the budget year commencing July 1, 1999, and for
6each succeeding budget year beginning before July 1, 2022,
7 the regular program foundation base per pupil is eighty-seven
8and five-tenths percent of the regular program state cost per
9pupil. For the budget year commencing July 1, 2022, and for
10each succeeding budget year, the regular program foundation
11base per pupil is eighty-eight and four-tenths percent of the
12regular program state cost per pupil. For the budget year
13commencing July 1, 1991, and for each succeeding budget year
14the special education support services foundation base is
15seventy-nine percent of the special education support services
16state cost per pupil. The combined foundation base is the sum
17of the regular program foundation base, the special education
18support services foundation base, the total teacher salary
19supplement district cost, the total professional development
20supplement district cost, the total early intervention
21supplement district cost, the total teacher leadership
22supplement district cost, the total area education agency
23teacher salary supplement district cost, and the total area
24education agency professional development supplement district
25cost.
26   Sec. 43.  Section 257.3, subsection 1, paragraph d, Code
272021, is amended by striking the paragraph.
28   Sec. 44.  EFFECTIVE DATE.  The section of this division of
29this Act amending section 257.3, subsection 1, paragraph “d”,
30takes effect July 1, 2022.
31DIVISION IV
32PUBLIC EDUCATION AND RECREATION TAX LEVY
33   Sec. 45.  Section 276.10, subsection 1, Code 2021, is amended
34to read as follows:
   351.  The board of directors of a local school district
-24-1may establish a community education program for schools in
2the district and provide for the general supervision of the
3program. Financial support for the program shall may be
4provided from funds raised pursuant to chapter 300 received by
5the school district under chapter 423F and from any private
6funds and any federal funds made available for the purpose of
7implementing this chapter. The program which recognizes that
8the schools belong to the people and which shall be centered
9in the schools may include but shall not be limited to the use
10of the school facilities day and night, year round including
11weekends and regular school vacation periods for educational,
12recreational, cultural, and other community services and
13programs for all age, ethnic, and socioeconomic groups residing
14in the community.
15   Sec. 46.  Section 278.1, subsection 1, paragraph e, Code
162021, is amended to read as follows:
   17e.  Direct the transfer of any surplus in the debt service
18fund, physical plant and equipment levy fund, or other capital
19project funds, or public education and recreation levy fund to
20the general fund.
21   Sec. 47.  Section 298A.6, Code 2021, is amended to read as
22follows:
   23298A.6  Public education and recreation levy fund.
   24The public education and recreation levy fund is a special
25revenue fund. A public education and recreation levy fund
26must be established in any school corporation which levies
27 levied the tax authorized under section 300.2, Code 2021, or
28which receives received revenue from a chapter 28E agreement
29authorized under section 300.1, Code 2021. Moneys available in
30the fund at the conclusion of the fiscal year beginning July 1,
312021, and ending June 30, 2022, shall be expended by the school
32corporation for the purposes authorized under chapter 300, Code
332021.
34   Sec. 48.  Section 423F.3, subsection 1, paragraph c, Code
352021, is amended by striking the paragraph.
-25-1   Sec. 49.  Section 423F.5, subsection 1, Code 2021, is amended
2to read as follows:
   31.  A school district shall include as part of its financial
4audit for the budget year beginning July 1, 2007, and for
5each subsequent budget year the amount received during the
6year pursuant to chapter 423E or this chapter, as applicable.
7In addition, the financial audit shall include the amount
8of bond levies, and physical plant and equipment levy, and
9public educational and recreational levy reduced as a result
10of the moneys received under chapter 423E or this chapter,
11as applicable. The amount of the reductions shall be stated
12in terms of dollars and cents per one thousand dollars of
13valuation and in total amount of property tax dollars. Also
14included shall be an accounting of the amount of moneys
15received which were spent for infrastructure purposes pursuant
16to chapter 423E or this chapter, as applicable.
17   Sec. 50.  REPEAL.  Sections 276.11 and 276.12, Code 2021,
18are repealed.
19   Sec. 51.  REPEAL.  Chapter 300, Code 2021, is repealed.
20   Sec. 52.  EFFECTIVE DATE.  This division of this Act takes
21effect July 1, 2022.
22   Sec. 53.  APPLICABILITY.  This division of this Act applies
23to fiscal years beginning on or after July 1, 2022.
24DIVISION V
25ELDERLY PROPERTY TAX CREDIT
26   Sec. 54.  Section 25B.7, subsection 2, paragraph b, Code
272021, is amended to read as follows:
   28b.  Low-income property tax credit and elderly and disabled
29property tax credit pursuant to sections 425.16 through 425.40,
30subject to the limitation of 425.39, subsection 2.
31   Sec. 55.  Section 425.1, subsection 1, paragraph a, Code
322021, is amended to read as follows:
   33a.  A homestead credit fund is created. There is
34appropriated annually from the general fund of the state to
35the department of revenue to be credited to the homestead
-26-1credit fund, an amount sufficient to implement this chapter
2 subchapter.
3   Sec. 56.  Section 425.17, subsection 2, Code 2021, is amended
4to read as follows:
   52.  a.  “Claimant” means either any of the following:
   6(1)  A person filing a claim for credit or reimbursement
7 under this subchapter who has attained the age of sixty-five
8years but who has not attained the age of seventy years on
9or before December 31 of the base year or, a person filing a
10claim for credit or reimbursement under this subchapter who
11is totally disabled and was totally disabled on or before
12December 31 of the base year, or a person filing a claim for
13reimbursement under this subchapter who has attained the age of
14sixty-five years on or before December 31 of the base year and
15who is domiciled in this state at the time the claim is filed or
16at the time of the person’s death in the case of a claim filed
17by the executor or administrator of the claimant’s estate.
   18(2)  A person filing a claim for credit or reimbursement
19under this subchapter who has attained the age of twenty-three
20years on or before December 31 of the base year or was a head
21of household on December 31 of the base year, as defined in
22the Internal Revenue Code, but has not attained the age or
23disability status described in this paragraph “a”, subparagraph
24(1) or the age status and eligibility criteria of subparagraph
25(3), and is domiciled in this state at the time the claim is
26filed or at the time of the person’s death in the case of a
27claim filed by the executor or administrator of the claimant’s
28estate, and was not claimed as a dependent on any other
29person’s tax return for the base year.
   30(3)  A person filing a claim for credit under this subchapter
31who has attained the age of seventy years on or before December
3231 of the base year, who has a household income of less than
33two hundred fifty percent of the federal poverty level, as
34defined by the most recently revised poverty income guidelines
35published by the United States department of health and human
-27-1services, and is domiciled in this state at the time the claim
2is filed or at the time of the person’s death in the case of a
3claim filed by the executor or administrator of the claimant’s
4estate.
   5b.  “Claimant” under paragraph “a”, subparagraph (1) or(2),
6 includes a vendee in possession under a contract for deed and
7may include one or more joint tenants or tenants in common.
8In the case of a claim for rent constituting property taxes
9paid, the claimant shall have rented the property during any
10part of the base year. In the case of a claim for property
11taxes due, the claimant shall have occupied the property during
12any part of the fiscal year beginning July 1 of the base year.
13If a homestead is occupied by two or more persons, and more
14than one person is able to qualify as a claimant, the persons
15may each file a claim based upon each person’s income and rent
16constituting property taxes paid or property taxes due.
17   Sec. 57.  Section 425.23, subsection 1, paragraph a,
18unnumbered paragraph 1, Code 2021, is amended to read as
19follows:
   20The tentative credit or reimbursement for a claimant
21described in section 425.17, subsection 2, paragraph “a”,
22subparagraphs subparagraph (1) and (2), if no appropriation is
23made to the fund created in section 425.40 shall be determined
24in accordance with the following schedule:
25   Sec. 58.  Section 425.23, subsection 1, Code 2021, is amended
26by adding the following new paragraph:
27   NEW PARAGRAPH.  c.  The tentative credit for a claimant
28described in section 425.17, subsection 2, paragraph “a”,
29subparagraph (3), shall be the greater of the following:
   30(1)  The amount of the credit under the schedule specified
31in paragraph “a” of this subsection as if the claimant was a
32claimant as defined in section 425.17, subsection 2, paragraph
33“a”, subparagraph (1), filing for a credit under paragraph “a”
34of this subsection.
   35(2)  The difference between the actual amount of property
-28-1taxes due on the homestead during the fiscal year next
2following the base year minus the actual amount of property
3taxes due on the homestead during the first fiscal year for
4which the claimant filed a claim for a credit calculated under
5this paragraph “c” and for which the property taxes due on the
6homestead were calculated on an assessed valuation that was
7not a partial assessment and if the claimant has filed for the
8credit calculated under this paragraph “c” for each of the
9subsequent fiscal years after the first credit claimed.
10   Sec. 59.  Section 425.23, subsection 4, paragraph a, Code
112021, is amended to read as follows:
   12a.  For the base year beginning in the 1999 calendar year
13and for each subsequent base year, the dollar amounts set
14forth in subsections subsection 1, paragraphs “a” and “b”, and
15subsection 3 shall be multiplied by the cumulative adjustment
16factor for that base year. “Cumulative adjustment factor” means
17the product of the annual adjustment factor for the 1998 base
18year and all annual adjustment factors for subsequent base
19years. The cumulative adjustment factor applies to the base
20year beginning in the calendar year for which the latest annual
21adjustment factor has been determined.
22   Sec. 60.  Section 425.24, Code 2021, is amended to read as
23follows:
   24425.24  Maximum property tax for purpose of credit or
25reimbursement.
   26In For claimants under section 425.17, subsection 2,
27paragraph “a”, subparagraphs (1) and (2), and for the
28calculation under section 425.23, subsection 1, paragraph “c”,
29subparagraph (1), in any case in which property taxes due or
30rent constituting property taxes paid for any household exceeds
31one thousand dollars, the amount of property taxes due or rent
32constituting property taxes paid shall be deemed to have been
33one thousand dollars for purposes of this subchapter.
34   Sec. 61.  Section 425.39, Code 2021, is amended to read as
35follows:
-29-   1425.39  Fund created — appropriation — priority.
   21.  The elderly and disabled property tax credit and
3reimbursement fund is created. There is appropriated annually
4from the general fund of the state to the department of revenue
5to be credited to the elderly and disabled property tax credit
6and reimbursement fund, from funds not otherwise appropriated,
7an amount sufficient to implement this subchapter for claimants
8described in section 425.17, subsection 2, paragraph “a”,
9subparagraph subparagraphs (1) and (3), subject to subsection
102.
   112.  Regardless of the amount of the credit determined under
12section 425.23, subsection 1, paragraph “c”, the amount paid by
13the director of revenue to each county treasurer for credits
14for claimants described under section 425.17, subsection 2,
15paragraph “a”, subparagraph (3), shall not exceed the amount
16calculated for the claimant under section 425.23, subsection 1,
17paragraph “c”, subparagraph (1), and section 25B.7, subsection
181, shall not apply to the amount of the credit in excess of the
19amount paid by the director of revenue.
20   Sec. 62.  APPLICABILITY.  This division of this Act applies
21to claims under chapter 425, subchapter II, filed on or after
22January 1, 2022.
23DIVISION VI
24FUTURE TAX CHANGES
25   Sec. 63.  2018 Iowa Acts, chapter 1161, section 133, is
26amended by striking the section and inserting in lieu thereof
27the following:
   28SEC. 133.  EFFECTIVE DATE.  This division of this Act takes
29effect January 1, 2023.
30DIVISION VII
31charitable conservation contribution tax credit
32   Sec. 64.  Section 2.48, subsection 3, paragraph e,
33subparagraph (6), Code 2021, is amended by striking the
34subparagraph.
35   Sec. 65.  Section 422.33, subsection 25, Code 2021, is
-30-1amended by striking the subsection.
2   Sec. 66.  REPEAL.  Section 422.11W, Code 2021, is repealed.
3   Sec. 67.  APPLICABILITY.  This division of this Act applies
4to conveyances made on or after July 1, 2021.
5DIVISION VIII
6forest reservations
7   Sec. 68.  Section 427C.1, Code 2021, is amended to read as
8follows:
   9427C.1  Tax exemption.
   101.  Any person who establishes a forest or The owner of a
11 fruit-tree reservation as provided in this chapter shall be
12entitled to the tax exemption provided by law.
   132.  a.  The owner of a forest reservation as provided in this
14chapter shall be entitled to the tax exemption provided by law
15for assessment years beginning on or after January 1, 2022,
16if, subject to the schedule for reapplication adopted under
17subsection 3, the owner is actively engaged in the operation or
18management of the forest reservation.
   19b.  The natural resource commission shall adopt rules
20pursuant to chapter 17A to interpret the requirement of
21paragraph “a” that the owner of a forest reservation be
22actively engaged in the operation or management of the forest
23reservation, including but not limited to standards for
24wildlife control practices, invasive species control measures,
25conservation measures, and forest practices. The minimum
26requirements for being considered actively engaged in the
27operation or management of the forest reservation established
28by the natural resource commission shall be based on the
29conservation goals for the property as stated by the owner
30in the exemption application, the use of the property by the
31owner, and the characteristics of the property, including the
32pervasiveness of wildlife populations and invasive species
33populations on the property and the impact of such populations
34on the forest reservation and surrounding properties.
   35c.  (1)  For each forest reservation application filed after
-31-1February 1, 2021, but on or before February 1, 2022, the owner
2must file by February 1, 2022, with the department of natural
3resources, evidence that the owner meets the requirement for
4active engagement in the operation or management of the forest
5reservation.
   6(2)  The department of natural resources shall prepare and
7make available a form to assist owners in complying with the
8requirement of subparagraph (1).
   93.  The department of revenue, in consultation with the
10department of natural resources, shall by rule establish five
11regions within the state. Forest reservation exemptions
12for which the application was filed on or before February
131, 2021, shall terminate as provided in this subsection
14and the owners of such forest reservations must reapply for
15the exemption under this chapter. In order to efficiently
16process applications, the five regions shall be established
17to include approximately an equal number of acres of forest
18reservations in each region. For forest reservations subject
19to this subsection, the requirement for the owner to be
20actively engaged in the operation or management of the forest
21reservation shall not apply until the owner reapplies for the
22forest reservation exemption.
   23a.  Exemptions for forest reservations in the first region
24shall end at the conclusion of the assessment year beginning
25January 1, 2021, and in order to continue receiving the
26exemption for the five-year period specified in section 427C.3,
27beginning with the assessment year beginning January 1, 2022,
28each owner must reapply on or before February 1, 2022.
   29b.  Exemptions for forest reservations in the second region
30shall end at the conclusion of the assessment year beginning
31January 1, 2022, and in order to continue receiving the
32exemption for the five-year period specified in section 427C.3,
33beginning with the assessment year beginning January 1, 2023,
34each owner must reapply on or before February 1, 2023.
   35c.  Exemptions for forest reservations in the third region
-32-1shall end at the conclusion of the assessment year beginning
2January 1, 2023, and in order to continue receiving the
3exemption for the five-year period specified in section 427C.3,
4beginning with the assessment year beginning January 1, 2024,
5each owner must reapply on or before February 1, 2024.
   6d.  Exemptions for forest reservations in the fourth region
7shall end at the conclusion of the assessment year beginning
8January 1, 2024, and in order to continue receiving the
9exemption for the five-year period specified in section 427C.3,
10beginning with the assessment year beginning January 1, 2025,
11each owner must reapply on or before February 1, 2025.
   12e.  Exemptions for forest reservations in the fifth region
13shall end at the conclusion of the assessment year beginning
14January 1, 2025, and in order to continue receiving the
15exemption for the five-year period specified in section 427C.3,
16beginning with the assessment year beginning January 1, 2026,
17each owner must reapply on or before February 1, 2026.
18   Sec. 69.  Section 427C.3, Code 2021, is amended to read as
19follows:
   20427C.3  Forest reservation — duration of exemption.
   211.  A forest reservation shall contain not less than two
22hundred growing forest trees on each acre. If the area
23selected is a forest containing the required number of growing
24forest trees, it shall be accepted as a forest reservation
25under this chapter for a period of five years provided
26application is made or on file on or before February 1 of the
27exemption year. If any buildings are standing on an area
28selected as a forest reservation under this section or a
29fruit-tree reservation under section 427C.7, one acre of that
30area shall be excluded from the tax exemption. However, the
31exclusion of that acre shall not affect the area’s meeting the
32acreage requirement of section 427C.2.
   332.  For forest reservation exemption applications filed on
34or after February 2, 2021, but on or before February 1, 2022,
35the five-year period provided under subsection 1 begins with
-33-1the assessment year beginning January 1, 2022, unless the owner
2fails to satisfy the requirement of section 427C.1, subsection
32, paragraph “c”.
4   Sec. 70.  Section 427C.7, Code 2021, is amended to read as
5follows:
   6427C.7  Fruit-tree reservation — duration of exemption.
   7A fruit-tree reservation shall contain on each acre,
8at least forty apple trees, or seventy other fruit trees,
9growing under proper care and annually pruned and sprayed.
10A reservation may be claimed as a fruit-tree reservation,
11under this chapter, for a period of eight years after planting
12provided application is made or on file on or before February
131 of the exemption year. If any buildings are standing on an
14area selected as a fruit-tree reservation under this section,
15one acre of that area shall be excluded from the tax exemption.
16However, the exclusion of that acre shall not affect the area’s
17meeting the acreage requirement of section 427C.2.
18   Sec. 71.  Section 427C.10, Code 2021, is amended to read as
19follows:
   20427C.10  Restraint of livestock and limitation on use.
   211.  Cattle, horses, mules, sheep, goats, ostriches, rheas,
22emus, and swine shall not be permitted upon a fruit-tree or
23forest forest or fruit-tree reservation.
   242.   a.  Fruit-tree and forest Forest and fruit-tree
25 reservations shall not be used for economic gain other than the
26gain from raising fruit or forest trees.
   27b.  The prohibition under paragraph “a” includes but is not
28limited to leases or charges for persons who enter or go on the
29reservation for the recreational use thereof or for hunting.
30   Sec. 72.  Section 427C.12, Code 2021, is amended to read as
31follows:
   32427C.12  Application — inspection — continuation of
33exemption — recapture of tax.
   341.  It shall be the duty of the assessor to secure the facts
35relative to fruit-tree and forest reservations by taking the
-34-1sworn statement, or affirmation, of the owner or owners making
2application under this chapter; and to make special report to
3the county auditor of all reservations made in the county under
4the provisions of this chapter.
   52.   a.  The board of supervisors shall designate the county
6conservation board or the assessor who shall inspect the area
7for which an application is filed for a fruit-tree or forest
8 reservation tax exemption before the application is accepted.
   9b.  The department of natural resources shall review the
10application for a forest reservation tax exemption before the
11application is accepted.
   12c.  Use of The department of natural resources shall use
13 aerial photographs may be substituted for on-site inspection
14when appropriate provided by the county assessor to determine
15if the application meets the criteria established by the
16natural resource commission to be a forest reservation.
   173.  The application can only be accepted if it meets the
18criteria established by the natural resource commission to
19be a fruit-tree or forest reservation department of natural
20resources may conduct an on-site review if necessary to verify
21the eligibility of a forest reservation application.
   224.  Once the application has been accepted, the area shall
23continue to receive the tax exemption during each year of the
24applicable exemption period under section 427C.3 or 427C.7
25 in which the area is maintained as a fruit-tree or forest or
26fruit-tree reservation without the owner having to refile. If
27the property is sold or transferred, the seller shall notify
28the buyer that all, or part of, the property is in fruit-tree
29or forest reservation and subject to the recapture tax
30provisions of this section. The tax exemption shall continue
31to be granted for the remainder of the eight-year exemption
32 period for fruit-tree reservation and for the following years
33for forest reservation under section 427C.3 or 427C.7, or until
34the property no longer qualifies as a fruit-tree or forest or
35fruit-tree reservation.
-35-   15.   a.  The An area that is a fruit-tree reservation may
2be inspected each year by the county conservation board or
3the assessor to determine if the area is maintained as a
4fruit-tree or forest reservation. An area that is a forest
5reservation may be inspected each year by the department of
6natural resources to determine if the area is maintained as
7forest reservation. If the area is not maintained or is used
8for economic gain other than as a fruit-tree reservation during
9any year of the eight-year exemption period and any year of
10the following five years following the exemption period, if
11the property is no longer receiving an exemption under this
12chapter, or as a forest reservation during any year for which
13 of the exemption is granted period and any of the five years
14following those exemption years the exemption period, if
15the property is no longer receiving an exemption under this
16chapter, the assessor shall assess the property for taxation
17at its fair market value as of January 1 of that year and
18in addition the area shall be subject to a recapture tax.
19However, the area shall not be subject to the recapture tax if
20the owner, including one possessing under a contract of sale,
21and the owner’s direct antecedents or descendants have owned
22the area for more than ten years.
   23b.  The recapture tax shall be computed by multiplying the
24consolidated levy for each of those years, if any, of the five
25preceding years for which the area received the exemption for
26fruit-tree or forest reservation times the assessed value of
27the area that would have been taxed but for the tax exemption.
28This tax shall be entered against the property on the tax list
29for the current year and shall constitute a lien against the
30property in the same manner as a lien for property taxes. The
31tax when collected shall be apportioned in the manner provided
32for the apportionment of the property taxes for the applicable
33tax year.
   346.  Upon expiration of the applicable exemption period, the
35owner of a forest or fruit-tree reservation may reapply for
-36-1an exemption under this chapter if the property meets all the
2criteria for the exemption under this chapter.
3   Sec. 73.  Section 441.22, Code 2021, is amended to read as
4follows:
   5441.22  Forest and fruit-tree reservations.
   6Forest and fruit-tree reservations fulfilling the conditions
7of sections 427C.1 to 427C.13 chapter 427C shall be exempt from
8taxation to the extent authorized in that chapter. In all
9other cases where trees are planted upon any tract of land,
10without regard to area, for forest, fruit, shade, or ornamental
11purposes, or for windbreaks, the assessor shall not increase
12the valuation of the property because of such improvements.
13   Sec. 74.  SAVINGS PROVISION.  This division of this Act,
14pursuant to section 4.13, does not affect the operation of,
15or prohibit the application of, prior provisions of chapter
16427C or section 441.22, or rules adopted under chapter 17A to
17administer prior provisions of chapter 427C or section 441.22,
18for assessment years beginning before January 1, 2022, and for
19duties, powers, protests, appeals, proceedings, actions, or
20remedies attributable to an assessment year beginning before
21January 1, 2022.
22   Sec. 75.  EFFECTIVE DATE.  This division of this Act, being
23deemed of immediate importance, takes effect upon enactment.
24   Sec. 76.  APPLICABILITY.  This division of this Act applies
25to assessment years beginning on or after January 1, 2022.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
   29This bill relates to state and local government financing,
30programs, and operations by modifying provisions relating to
31school district funding, mental health and disability services
32funding, commercial and industrial property tax replacement
33payments, and other specified tax provisions.
   34DIVISION I — MENTAL HEALTH FUNDING. Division I of the bill
35relates to mental health and disability services funding.
-37-   1The bill creates a mental health and disability services
2regional supplement fund under the authority of the department
3of human services. For each fiscal year beginning on or after
4July 1, 2021, the bill appropriates from the general fund of
5the state to the mental health and disability services regional
6supplement fund an amount necessary to make all regional
7supplement payments for that fiscal year. The moneys available
8in a fiscal year in the mental health and disability services
9state supplement fund are appropriated to the department of
10human services for distribution to each mental health and
11disability services region on a per capita basis calculated
12using each region’s population for that fiscal year. The
13amount of each region’s regional supplement payment is as
14follows: (1) for the fiscal year beginning July 1, 2021, an
15amount equal to the product of $15.86 multiplied by the sum of
16the region’s population for the fiscal year; (2) for the fiscal
17year beginning July 1, 2022, an amount equal to the product of
18$38 multiplied by the sum of the region’s population for the
19fiscal year; (3) for the fiscal year beginning July 1, 2023,
20an amount equal to the product of $40 multiplied by the sum of
21the region’s population for the fiscal year; (4) for the fiscal
22year beginning July 1, 2024, an amount equal to the product of
23$42 multiplied by the sum of the region’s population for the
24fiscal year; and (5) for each fiscal year beginning on or after
25July 1, 2025, an amount equal to the product of the sum of the
26region’s population for the fiscal year multiplied by the sum
27of the dollar amount used to calculate the regional supplement
28payments for the immediately preceding fiscal year plus the
29regional supplement growth factor for the fiscal year. The
30bill defines “regional supplement growth factor” for a fiscal
31year to be an amount equal to the product of the dollar amount
32used to calculate the regional supplement payments for the
33immediately preceding fiscal year multiplied by the percent
34increase, if any, in the amount of sales tax revenue deposited
35into the general fund of the state between the fiscal year
-38-1beginning three years prior to the applicable fiscal year and
2the fiscal year beginning two years prior to the applicable
3year, but not to exceed 1.5 percent.
   4Regional supplement payments received by a region are
5paid in quarterly installments and shall be deposited in the
6region’s combined account under Code section 331.391 and used
7solely for providing mental health and disability services
8under the regional service system management plan.
   9Under the bill, for the fiscal years beginning July 1, 2021,
10and July 1, 2022, each mental health and disability services
11region for which the region’s cash flow amount certified
12during the fiscal year exceeds a specified percentage of the
13proposed gross expenditures of the region for the fiscal year,
14the remaining quarterly payments of the region’s regional
15supplement payment are reduced by an amount equal to the amount
16by which the region’s cash flow amount certified exceeds the
17specified percentage of the proposed gross expenditures of the
18region for the fiscal year, but the reduction amount shall not
19exceed the total amount of the region’s regional supplement
20payment for the fiscal year. If the region’s remaining
21quarterly payments are insufficient to effectuate the required
22reductions, the region is required to pay to the department of
23human services any amount for which the reduction in quarterly
24payments could not be made.
   25For the fiscal year beginning July 1, 2023, and each
26succeeding fiscal year, each mental health and disability
27services region for which a cash flow amount is certified
28during the fiscal year, the remaining quarterly payments of the
29region’s regional supplement payment shall be reduced by an
30amount equal to the amount certified, but the reduction amount
31shall not exceed the total amount of the region’s regional
32supplement payment for the fiscal year. If the region’s
33remaining quarterly payments are insufficient to effectuate
34the required reductions, the region is required to pay to the
35department of human services any amount for which the reduction
-39-1in quarterly payments could not be made.
   2The amount of reductions to quarterly payments and amounts
3paid to the department of human services as the result of a
4region’s certified cash flow amounts shall be transferred and
5credited to the risk pool created in the bill under new Code
6section 426B.6.
   7The bill also establishes a risk pool in the property tax
8relief fund under Code section 426B.1 to provide additional
9funding to mental health and disability services regions
10meeting certain eligibility criteria. The risk pool consists
11of moneys appropriated or credited to the risk pool by law.
12The bill appropriates $9,960,590 from the general fund of the
13state to the risk pool for the fiscal year beginning July 1,
142021. The bill appropriates $5,107,340 from the general fund
15of the state to the risk pool for the fiscal year beginning
16July 1, 2022. For each fiscal year beginning on or after July
171, 2025, the bill appropriates an amount equal to the risk pool
18growth factor multiplied by the ending balance of the risk pool
19at the conclusion of a specified fiscal year. The “risk pool
20growth factor” for each fiscal year is the percent increase,
21if any, in the amount of sales tax revenue deposited into the
22general fund of the state between the fiscal year beginning
23three years prior to the applicable fiscal year and the fiscal
24year beginning two years prior to the applicable year, minus
251.5 percent. The risk pool growth factor for any fiscal year
26may not exceed 3.5 percent.
   27The bill establishes the composition of the risk pool board
28created in the bill. Members shall serve for three-year
29terms. Staff assistance to the board shall be provided by the
30department of human services.
   31A regional administrator must apply to the risk pool board
32for assistance from the risk pool on or before October 31.
33The purpose of the assistance shall be to provide financial
34support for services provided by the regional administrator’s
35mental health and disability services region. The board is
-40-1required to determine application requirements to ensure
2prudent use of risk pool assistance. The board may accept or
3reject an application for assistance in whole or in part. The
4decision of the board is final. The total amount of risk pool
5assistance shall be limited to the amount available in the risk
6pool for a fiscal year. Any unobligated balance in the risk
7pool at the close of a fiscal year shall remain in the risk pool
8for distribution in the succeeding fiscal year.
   9Risk pool assistance shall only be made available to
10address one or more of the following circumstances: (1)
11continuing support for mandated services; (2) avoiding the need
12for reduction or elimination of critical services when the
13reduction or elimination places consumers’ health or safety
14at risk; (3) avoiding the need for reduction or elimination
15of a mobile crisis team or other critical emergency services
16when the reduction or elimination places the public’s health
17or safety at risk; (4) avoiding the need for reduction or
18elimination of the services or other support provided to entire
19populations of consumers with disabilities; and (5) avoiding
20the need for reduction or elimination of services or other
21support that maintain consumers in a community setting or that
22would create a risk that the consumers would be placed in more
23restrictive, higher cost settings.
   24The risk pool board shall make its final decisions on or
25before December 15 regarding acceptance or rejection of the
26applications for assistance and the total amount accepted
27shall be considered obligated. The bill establishes basic
28eligibility for risk pool assistance, including requirements
29that the mental health and disability services region is in
30compliance with the regional service system management plan
31requirements and that the region meets specified ending balance
32thresholds for certain fiscal years. The ending balance
33thresholds are a specified percentage of the actual gross
34expenditures of the mental health and disability services
35region for a specific fiscal year. The percentage for the
-41-1fiscal year beginning July 1, 2021, is 40 percent. The
2percentage for the fiscal year beginning July 1, 2022, is 20
3percent.
   4Current Code section 331.424A authorizes each county to
5certify a property tax levy for payment of mental health and
6disability services within the mental health and disability
7services regional system. To coincide with the appropriation
8and payment of mental health and disability services regional
9supplement payments directly to the regions or to exempted
10counties, the bill ends the authority for such a property tax
11levy starting with the fiscal year beginning July 1, 2022.
12Additionally, upon conclusion of the fiscal year beginning July
131, 2021, the county treasurer shall transfer the remaining
14balance of the county’s county services fund to the county’s
15region to which the county belongs in the fiscal year beginning
16July 1, 2022, for deposit in the region’s combined account
17under Code section 331.391. Effective July 1, 2022, the bill
18prohibits a county from transferring any funds of the county to
19the combined account of a mental health and disability services
20region.
   21If the bill takes effect after March 31, 2021, for each
22county for which the amount of taxes certified for levy for the
23purposes of Code section 331.424A for the fiscal year beginning
24July 1, 2021, exceeds the product of the population of the
25county multiplied by $21.14, the department of management shall
26reduce the amount of such taxes certified for levy to an amount
27not to exceed the product of the population of the county
28multiplied by $21.14 and shall revise the rate of taxation
29as necessary to raise the reduced amount. The department of
30management is required to report the reduction in the certified
31taxes and the revised rate of taxation to the county auditors
32by June 15, 2021.
   33In order to timely implement the provisions of the bill
34establishing the risk pool for mental health and disability
35services regions for the fiscal year beginning July 1, 2021,
-42-1and the fiscal year beginning July 1, 2022, the director
2of human services is required, subject to the membership
3requirements in the bill, to appoint temporary members of the
4risk pool board to review and approve risk pool assistance
5applications and establish alternative application deadlines
6and expedited application review and approval timelines.
   7The bill provides that the department of human services may
8adopt emergency rules to implement the provisions of division
9I of the bill.
   10Except as provided in division I of the bill, division I of
11the bill takes effect upon enactment.
   12DIVISION II — PROPERTY TAX REPLACEMENT PAYMENTS. Current
13Code section 441.21A establishes and appropriates amounts from
14the general fund of the state for commercial and industrial
15property tax replacement claims. Such claims are calculated
16by the department of revenue based on the difference between
17the actual value and assessed value of all commercial and
18industrial property in each taxing district in the state.
19Current law appropriates an amount necessary for the payment
20of all commercial and industrial property tax replacement
21claims for each fiscal year beginning on or after July 1,
222014, subject to a maximum total appropriation for fiscal
23years beginning on or after July 1, 2017, of the total
24amount necessary for the payment of replacement claims in the
25fiscal year beginning July 1, 2016. The bill eliminates the
26appropriation for fiscal years beginning on or after July 1,
272027, and specifies that the maximum total appropriation for
28the fiscal years beginning on or after July 1, 2022, but before
29July 1, 2027, shall not exceed the total amount necessary for
30the payment of replacement claims in the fiscal year.
   31The bill modifies the methodology for calculating and
32apportioning commercial and industrial property tax replacement
33claims for fiscal years beginning on or after July 1, 2022,
34but before July 1, 2027. The bill requires such claims to be
35calculated based on and paid to taxing authorities, as defined
-43-1in the bill, instead of taxing districts as is required under
2current law. The amount of each taxing authority’s replacement
3claim is determined based on specified fractions of the amount
4received by the taxing authority under Code section 441.21A for
5the fiscal year beginning July 1, 2021, as calculated by the
6department of revenue in consultation with the department of
7management, and whether the taxing authority is a qualified
8taxing authority. The specified fractions are reduced over
9the period of fiscal years beginning July 1, 2022, and ending
10June 30, 2027, in the case of a qualified taxing authority, and
11ending June 30, 2025, in the case of a taxing authority that
12is not a qualified taxing authority. Under the bill, a taxing
13authority that is eligible to continue to receive commercial
14and industrial property tax replacement payments includes a
15city, county, community college, or other governmental entity
16or political subdivision in this state authorized to certify a
17levy on property located within such authority, but does not
18include a school district. A qualified taxing authority is
19either a taxing authority that is not a city or a county or a
20taxing authority that is a city or a county in which the total
21assessed value as of January 1, 2019, of specified taxable
22property located in the taxing authority is less than 131.14
23percent of the total assessed value as of January 1, 2012, of
24specified taxable property located in the taxing authority.
   25The bill requires each taxing authority’s property tax
26replacement claim payment for fiscal years beginning on or
27after July 1, 2022, but before July 1, 2027, to be apportioned
28and credited by the governing body of the taxing authority
29among the taxing authority’s tax levies in the same proportion
30that each property tax levy bears to the total of all property
31tax levies imposed by the taxing authority for the fiscal year
32for which the payment is received. The bill also establishes
33requirements for the apportionment of amounts allocated to
34property tax levies that are subject to a division of taxes
35under Code section 403.19 (tax increment financing).
-44-   1Under current law, the legislative tax expenditure committee
2established under Code section 2.48 is required to review
3the commercial and industrial property tax replacement claim
4expenditures. The bill eliminates that required periodic
5review.
   6DIVISION III — SCHOOL FOUNDATION PERCENTAGE. For
7purposes of calculating state foundation aid received by
8school districts under Code chapter 257, the regular program
9foundation base per pupil is 87.5 percent of the regular
10program state cost per pupil. The bill increases that
11percentage to 88.4 percent for school budget years beginning on
12or after July 1, 2022.
   13The section of division III amending Code section
14257.3(1)(d) takes effect July 1, 2022.
   15DIVISION IV — PUBLIC EDUCATION AND RECREATIONAL TAX LEVY.
16 Code chapter 300 authorizes the imposition of a voter-approved
17property tax levy for the establishment and maintenance
18of public recreation places and playgrounds, and necessary
19accommodations for the recreation places and playgrounds, in
20the public school buildings and grounds of the district. Code
21chapter 300 also authorizes each school board to cooperate
22with public or private agencies having custody and management
23of public parks or buildings or grounds open to the public
24for the supervision and instruction necessary to carry on
25public educational and recreational activities in the parks,
26buildings, and grounds located within the district. Such
27activities may be supported by imposition of a voter-approved
28property tax levy not to exceed $0.13 and one-half cents per
29$1,000 of assessed value. The property tax levy under Code
30chapter 300 also provides financial support to community
31education programs established under Code chapter 276,
32which provide educational, recreational, cultural, and other
33community services and programs.
   34Division IV of the bill repeals Code chapter 300 and makes
35corresponding amendments to other provisions of law effective
-45-1July 1, 2022, and applies to fiscal years beginning on or
2after July 1, 2022. The bill provides that financial support
3for a community education program under Code chapter 276 may
4be provided from funds received by the school district under
5Code chapter 423F. By operation of the definition of “school
6infrastructure” under Code section 423F.3(6)(a)(1), moneys
7received by a school district from the secure an advanced
8vision for education fund may continue to be utilized for
9activities previously provided for under Code chapter 300 and
10Code chapter 276.
   11Division IV also provides that moneys available in the
12public education and recreation levy fund at the conclusion
13of the fiscal year beginning July 1, 2021, and ending June
1430, 2022, shall be expended by the school corporation for the
15purposes authorized under chapter 300, Code 2021.
   16DIVISION V — ELDERLY PROPERTY TAX CREDIT. Division V of the
17bill modifies the eligibility for and the calculation of the
18amount of the property tax credit for persons ages 70 and older
19under Code chapter 425, subchapter II.
   20Under the bill, a person filing a claim for the property tax
21credit who is at least 70 years of age and who has a household
22income of less than 250 percent of the federal poverty level
23is eligible to receive a credit against property taxes due on
24the claimant’s homestead. For such a claimant, the tentative
25credit amount is equal to the greater of the following: (1)
26the amount of the credit as calculated under the schedule
27of credit amounts specified in Code section 425.23(1)(a) as
28if the claimant was an eligible claimant for a credit under
29that provision; and (2) the difference between the actual
30amount of property taxes due on the homestead during the
31applicable fiscal year minus the actual amount of property
32taxes due on the homestead based on a full assessment during
33the first fiscal year for which the claimant filed for a credit
34calculated under the bill and if the claimant has filed for the
35credit for each of the subsequent fiscal years after the first
-46-1credit claimed.
   2The bill also modifies the appropriation to the elderly
3and disabled property tax credit and reimbursement fund under
4Code section 425.39, by limiting the amount of the credit to
5be paid by the director of revenue to each county treasurer
6for claimants who have reached 70 years of age and specifies
7that Code section 25B.7(1), which requires the state to fund
8the cost of providing new property tax credits, shall not apply
9to the amount of the credit in excess of the amount paid by the
10director of revenue as determined in the bill.
   11Division V of the bill applies to claims under Code chapter
12425, subchapter II, filed on or after January 1, 2022.
   13DIVISION VI — FUTURE TAX CHANGES. The bill amends 2018 Iowa
14Acts, chapter 1161, section 133 (trigger), by striking the two
15conditions necessary for the trigger to occur, and specifies
16the provisions in 2018 Iowa Acts, chapter 1161, sections
1799-132, take effect January 1, 2023.
   18Currently, the two conditions are necessary for the trigger
19to occur include net general fund revenues for the fiscal year
20ending June 30, 2022, equaling or exceeding $8.3146 billion,
21and also equaling or exceeding 104 percent of the net general
22fund revenues for the fiscal year ending June 30, 2021. If
23these two conditions are not satisfied, current law institutes
24the changes for tax years beginning on or after the January 1
25following the first fiscal year for which the two conditions
26do occur. By striking the “trigger”, the bill sets in motion
27numerous tax changes for tax years beginning on or after
28January 1, 2023, described below.
   29INDIVIDUAL INCOME TAX. The tax changes include reducing the
30number of individual income tax brackets from nine to four, and
31modifying the taxable income amounts and tax rates as follows:
   32Income over:But not over:Tax Rate:
   331)$0$6,0004.40%
   342)$6,000$30,0004.82%
   353)$30,000$75,0005.70%
-47-   14)$75,0006.50%
   2For a married couple filing a joint return, the taxable
3income amounts in each bracket above are doubled. Also, the
4taxable income amounts in each bracket above will be indexed to
5inflation and increased in future tax years, beginning in the
6tax year following the 2023 tax year.
   7INDIVIDUAL INCOME TAX CALCULATION. Under current law, the
8starting point for computing the Iowa individual income tax is
9federal adjusted gross income before the net operating loss
10deduction, which is generally a taxpayer’s gross income minus
11several deductions. From that point, Iowa requires several
12adjustments and then provides taxpayers with a deduction
13for federal income taxes paid, and the option to deduct a
14standard deduction or itemized deductions. The bill changes
15the starting point for computing the individual income tax
16to federal taxable income, which includes all deductions and
17adjustments taken at the federal level in computing tax,
18including a standard deduction or itemized deductions, and the
19qualified business income deduction allowed for certain income
20earned from a pass-through entity. Because the starting point
21changes to federal taxable income, and federal law does not
22provide for the filing status of married filing separately
23on a combined return, the bill repeals that filing status
24option for Iowa tax purposes. Because net operating loss is
25no longer calculated at the state level, the bill requires a
26taxpayer to add back any federal net operating loss deduction
27carried over from a taxable year beginning prior to the 2023
28tax year, but allows taxpayers to deduct any remaining Iowa net
29operating loss from a prior taxable year. The bill repeals the
30individual alternative minimum tax (AMT), allows an individual
31to claim any remaining AMT credit against the individual’s
32regular tax liability for the 2023 tax year, and then repeals
33the AMT credit in the tax year following the 2023 tax year.
34The bill repeals most Iowa-specific deductions, exemptions,
35and adjustments currently available when computing net income
-48-1and taxable income under Iowa law, including the Iowa optional
2standard deduction and all itemized deductions, and the ability
3to deduct federal income taxes, except for a one-year phase
4out in the 2023 tax year for taxes paid, or refunds received,
5that relate to a prior year. The bill maintains the add-back
6for income from securities that are federally exempt but not
7state-exempt, and for bonus depreciation amounts. The bill
8maintains the general pension exclusion and the deduction
9for income from federal securities. The bill maintains the
10deduction for contributions to the Iowa 529 plan, the Iowa ABLE
11plan, a first-time homebuyer savings account, and an individual
12development account. The bill also maintains the deductions
13for military pension income, military active duty pay, social
14security retirement benefits, certain payments received for
15providing unskilled in-home health care, certain amounts
16received from the veterans trust fund, victim compensation
17awards, biodiesel production refunds, certain wages paid
18to individuals with disabilities or individuals previously
19convicted of a felony, certain organ donations, and Segal
20AmeriCorps education award payments. The bill modifies the
21existing deduction for health insurance payments in Code
22section 422.7(29) to make the deduction only applicable to
23taxpayers who are at least 65 years old and who have net
24income below $100,000. The bill also modifies the existing
25capital gain deduction in Code section 422.7(21) to restrict
26the deduction to the sale of real property used in farming
27businesses by permitting the taxpayer to take the deduction
28if either of the following apply: the taxpayer materially
29participated in the farming business for at least 10 years and
30held the real property for at least 10 years; or the taxpayer
31sold the real property to a relative. The bill expands the
32definition of “relative” to include an entity in which a
33relative of the taxpayer has a legal or equitable interest in
34the entity as an owner, member, partner, or beneficiary. The
35bill provides a new deduction for any income of an employee
-49-1resulting from the payment by an employer, whether paid to
2the employee or a lender, of principal or interest on the
3employee’s qualified education loan. The bill also modifies
4the calculation of net income for purposes of the alternate
5tax calculation in Code section 422.5(3) and (3B), and the tax
6return filing thresholds in Code section 422.13, to require
7that any amount of itemized deduction, standard deduction,
8personal exemption deduction, or qualified business income
9deduction that was allowed in computing federal taxable income
10shall be added back.
   11CORPORATE INCOME TAX AND FRANCHISE TAX CALCULATION. Under
12current law, the starting point for calculating the corporate
13income tax and franchise tax is federal taxable income before
14the net operating loss deduction, because net operating loss is
15calculated at the state level. The bill repeals the separate
16calculation of net operating loss at the state level. As a
17result, the bill requires taxpayers to add back any federal
18net operating loss deduction carried over from a taxable year
19beginning prior to the trigger year, but allows taxpayers to
20deduct any remaining Iowa net operating loss from a prior
21taxable year. The bill also repeals most Iowa-specific
22deductions, exemptions, and adjustments currently available
23when computing net income and taxable income under Iowa law.
24The bill maintains the add-back for income from securities
25that are federally exempt but not state exempt, and for bonus
26depreciation amounts. The bill maintains the deductions for
27income from federal securities, for foreign dividend and
28subpart F income, for certain wages paid to individuals with
29disabilities or individuals previously convicted of a felony,
30and for biodiesel production refunds.
   31DIVISION VII — CHARITABLE CONSERVATION CONTRIBUTION TAX
32CREDIT. Division VII of the bill repeals the charitable
33conservation contribution tax credit available against the
34individual and corporate income taxes. Currently, individual
35and corporate income taxes are reduced by an amount equal to 50
-50-1percent of the fair market value of real property located in
2this state that is conveyed unconditionally in perpetuity by
3the taxpayer for conservation purposes. Division VII of the
4bill applies to such conveyances occurring on or after July 1,
52021.
   6DIVISION VIII — FOREST RESERVATIONS. Current Code chapter
7427C authorizes a property tax exemption for certain forest
8reservations and fruit-tree reservations.
   9Except as otherwise provided in the bill, the bill
10provides that for assessment years beginning on or after
11January 1, 2022, a forest reservation is only allowed the
12exemption authorized under Code chapter 427C if the owner is
13actively engaged in the operation or management of the forest
14reservation.
   15Division VIII of the bill grants the natural resource
16commission the authority to adopt rules to interpret the
17provisions of the bill relating to the requirement that the
18owner be actively engaged in the operation or management of the
19forest reservation, including but not limited to standards for
20wildlife control practices, invasive species control measures,
21conservation measures, and forest practices. If interpretive
22rulemaking authority is clearly vested in the discretion of an
23agency by statute, the applicable judicial standard of review
24is whether the rules constitute an irrational, illogical, or
25wholly unjustifiable interpretation of law by the agency (Code
26section 17A.19(10)(l)). If interpretive rulemaking authority
27is not clearly vested in the discretion of an agency, the
28applicable judicial standard of review is whether the rules
29constitute an erroneous interpretation of law (Code section
3017A.19(10)(c)).
   31For each forest reservation application filed after February
321, 2021, but on or before February 1, 2022, the owner must
33file by February 1, 2022, with the department of natural
34resources, evidence that the owner meets the requirement for
35active engagement in the operation or management of the forest
-51-1reservation.
   2Under the bill, the department of revenue, in consultation
3with the department of natural resources, is required to
4establish by rule five regions within the state. Forest
5reservation exemptions for which the application was filed on
6or before February 1, 2021, shall terminate according to the
7schedule provided in the bill for each of the five regions and
8the owners of such forest reservations must reapply for the
9exemption. For forest reservations subject to the termination
10and reapplication schedule, the requirement for the owner to be
11actively engaged in the operation or management of the forest
12reservation shall not apply until the owner reapplies for the
13forest reservation exemption.
   14Except for the forest reservation exemptions subject to
15the region-based reapplication process provided for in the
16bill, the bill limits the period of the exemption for forest
17reservations to five years and provides that the five-year
18exemption period for applications filed on or after February
192, 2021, but on or before February 1, 2022, begins with the
20assessment year beginning January 1, 2022, unless, the owner
21fails to satisfy the requirement in the bill to provide
22evidence of being actively engaged in the operation or
23management of the forest reservation.
   24The bill also specifies that upon expiration of the
25applicable exemption period for forest reservations or
26fruit-tree reservations under Code chapter 427C, the owner may
27reapply for an exemption if the property meets all the criteria
28for the exemption under the Code chapter.
   29The bill requires the department of natural resources to
30review each application for a forest reservation tax exemption
31before the application is accepted. The bill requires the
32department of natural resources to use aerial photographs to
33determine forest reservation eligibility and authorizes an
34on-site review, if necessary. Additionally, an area that is a
35forest reservation may be inspected each year by the department
-52-1of natural resources to determine if the area is maintained as
2forest reservation.
   3The bill specifies that the prohibition on using forest
4or fruit-tree reservations for economic gain other than the
5gain from raising fruit or forest trees includes but is not
6limited to leases or charges for persons who enter or go on the
7reservation for the recreational use thereof or for hunting.
   8Division VIII of the bill does not affect the operation
9of, or prohibit the application of, prior provisions of
10Code chapter 427C or Code section 441.22, or rules adopted
11to administer prior provisions of Code chapter 427C or
12Code section 441.22, for assessment years beginning before
13January 1, 2022, and for duties, powers, protests, appeals,
14proceedings, actions, or remedies attributable to an assessment
15year beginning before January 1, 2022.
   16Division VIII of the bill takes effect upon enactment and
17applies to assessment years beginning on or after January 1,
182022.
-53-md/jh

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