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House Study Bill 61 - IntroducedA Bill ForAn Act 1relating to the assessment and valuation of property
2rented or leased to certain low-income individuals and
3families and including effective date and retroactive
4applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 441.21, subsection 2, Code 2023, is
2amended to read as follows:
32. In the event market value of the property being assessed
4cannot be readily established in the foregoing manner, then
5the assessor may determine the value of the property using the
6other uniform and recognized appraisal methods including its
7productive and earning capacity, if any, industrial conditions,
8its cost, physical and functional depreciation and obsolescence
9and replacement cost, and all other factors which would assist
10in determining the fair and reasonable market value of the
11property but the actual value shall not be determined by use
12of only one such factor. The following shall not be taken into
13consideration: Special value or use value of the property to
14its present owner, and the goodwill or value of a business
15which uses the property as distinguished from the value of
16the property as property. In addition, for assessment years
17beginning on or after January 1, 2018, and unless otherwise
18required for property valued by the department of revenue
19pursuant to chapters 428, 433, 437, and 438, the assessor
20shall not take into consideration and shall not request from
21any person sales or receipts data, expense data, balance
22sheets, bank account information, or other data related to
23the financial condition of a business operating in whole or
24in part on the property if the property is both classified as
25commercial or industrial property and owned and used by the
26owner of the business. However, in assessing property that
27is rented or leased to low-income individuals and families
28as authorized by section 42 of the Internal Revenue Code,
29as amended, and which section limits the amount that the
30individual or family pays for the rental or lease of units
31in the property, the assessor shall, unless the owner elects
32to withdraw the property from the assessment procedures for
33section 42 property, use the productive and earning capacity
34from the actual rents received as a method of appraisal,
35including consideration of productive and earning capacity
-1-1and rents received for years prior to the property being
2subject to assessment procedures for section 42 property as
3if the property was residential property, and shall take into
4account the extent to which that use and limitation reduces
5the market value of the property. The assessor shall not
6consider any tax credit equity or other subsidized financing
7as income provided to the property in determining the assessed
8value. The property owner shall notify the assessor when
9property is withdrawn from section 42 eligibility under the
10Internal Revenue Code or if the owner elects to withdraw the
11property from the assessment procedures for section 42 property
12under this subsection. The property shall not be subject to
13section 42 assessment procedures for the assessment year for
14which section 42 eligibility is withdrawn or an election is
15made. This notification must be provided to the assessor no
16later than March 1 of the assessment year or the owner will
17be subject to a penalty of five hundred dollars for that
18assessment year. The penalty shall be collected at the same
19time and in the same manner as regular property taxes. An
20election to withdraw from the assessment procedures for section
2142 property is irrevocable. Property that is withdrawn from
22the assessment procedures for section 42 property shall be
23classified and assessed as residential property unless the
24property otherwise fails to meet the requirements of subsection
2514. Upon adoption of uniform rules by the department of
26revenue or succeeding authority covering assessments and
27valuations of such properties, the valuation on such properties
28shall be determined in accordance with such rules and in
29accordance with forms and guidelines contained in the real
30property appraisal manual prepared by the department as updated
31from time to time for assessment purposes to assure uniformity,
32but such rules, forms, and guidelines shall not be inconsistent
33with or change the foregoing means of determining the actual,
34market, taxable and assessed values.
35 Sec. 2. Section 441.21, subsection 14, paragraph c, Code
-2-12023, is amended to read as follows:
2c. Property that is rented or leased to low-income
3individuals and families as authorized by section 42 of the
4Internal Revenue Code, and that has not been withdrawn from
5section 42 assessment procedures under subsection 2 of this
6section, or a hotel, motel, inn, or other building where rooms
7or dwelling units are usually rented for less than one month
8 shall not be classified as residential property under this
9subsection and are subject to assessment under subsection 2.
10 Sec. 3. Section 441.21, subsection 14, Code 2023, is amended
11by adding the following new paragraph:
12 NEW PARAGRAPH. 0d. Property that is a hotel, motel, inn, or
13other building where rooms or dwelling units are usually rented
14for less than one month shall not be classified as residential
15property under this subsection.
16 Sec. 4. EFFECTIVE DATE. This Act, being deemed of immediate
17importance, takes effect upon enactment.
18 Sec. 5. RETROACTIVE APPLICABILITY. This Act applies
19retroactively to assessment years beginning on or after January
201, 2022.
21EXPLANATION
22The inclusion of this explanation does not constitute agreement with
23the explanation’s substance by the members of the general assembly.
24Under Code section 441.21(2), in assessing property that
25is rented or leased to low-income individuals and families as
26authorized by section 42 of the Internal Revenue Code, unless
27the owner elects to withdraw the property from the assessment
28procedures for section 42 property, the assessor shall use
29the productive and earning capacity from the actual rents
30received as a method of appraisal and shall take into account
31the extent to which that use and limitation reduces the market
32value of the property. This bill provides that consideration
33of such productive and earning capacity and rents received
34for years prior to the property being subject to assessment
35procedures for section 42 property shall be as if the property
-3-1was residential property. The bill also makes corresponding
2changes to other provisions relating to property subject to
3such assessment procedures.
4The bill takes effect upon enactment and applies
5retroactively to assessment years beginning on or after January
61, 2022.
-4-md/jh
2rented or leased to certain low-income individuals and
3families and including effective date and retroactive
4applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 441.21, subsection 2, Code 2023, is
2amended to read as follows:
32. In the event market value of the property being assessed
4cannot be readily established in the foregoing manner, then
5the assessor may determine the value of the property using the
6other uniform and recognized appraisal methods including its
7productive and earning capacity, if any, industrial conditions,
8its cost, physical and functional depreciation and obsolescence
9and replacement cost, and all other factors which would assist
10in determining the fair and reasonable market value of the
11property but the actual value shall not be determined by use
12of only one such factor. The following shall not be taken into
13consideration: Special value or use value of the property to
14its present owner, and the goodwill or value of a business
15which uses the property as distinguished from the value of
16the property as property. In addition, for assessment years
17beginning on or after January 1, 2018, and unless otherwise
18required for property valued by the department of revenue
19pursuant to chapters 428, 433, 437, and 438, the assessor
20shall not take into consideration and shall not request from
21any person sales or receipts data, expense data, balance
22sheets, bank account information, or other data related to
23the financial condition of a business operating in whole or
24in part on the property if the property is both classified as
25commercial or industrial property and owned and used by the
26owner of the business. However, in assessing property that
27is rented or leased to low-income individuals and families
28as authorized by section 42 of the Internal Revenue Code,
29as amended, and which section limits the amount that the
30individual or family pays for the rental or lease of units
31in the property, the assessor shall, unless the owner elects
32to withdraw the property from the assessment procedures for
33section 42 property, use the productive and earning capacity
34from the actual rents received as a method of appraisal,
35including consideration of productive and earning capacity
-1-1and rents received for years prior to the property being
2subject to assessment procedures for section 42 property as
3if the property was residential property, and shall take into
4account the extent to which that use and limitation reduces
5the market value of the property. The assessor shall not
6consider any tax credit equity or other subsidized financing
7as income provided to the property in determining the assessed
8value. The property owner shall notify the assessor when
9property is withdrawn from section 42 eligibility under the
10Internal Revenue Code or if the owner elects to withdraw the
11property from the assessment procedures for section 42 property
12under this subsection. The property shall not be subject to
13section 42 assessment procedures for the assessment year for
14which section 42 eligibility is withdrawn or an election is
15made. This notification must be provided to the assessor no
16later than March 1 of the assessment year or the owner will
17be subject to a penalty of five hundred dollars for that
18assessment year. The penalty shall be collected at the same
19time and in the same manner as regular property taxes. An
20election to withdraw from the assessment procedures for section
2142 property is irrevocable. Property that is withdrawn from
22the assessment procedures for section 42 property shall be
23classified and assessed as residential property unless the
24property otherwise fails to meet the requirements of subsection
2514. Upon adoption of uniform rules by the department of
26revenue or succeeding authority covering assessments and
27valuations of such properties, the valuation on such properties
28shall be determined in accordance with such rules and in
29accordance with forms and guidelines contained in the real
30property appraisal manual prepared by the department as updated
31from time to time for assessment purposes to assure uniformity,
32but such rules, forms, and guidelines shall not be inconsistent
33with or change the foregoing means of determining the actual,
34market, taxable and assessed values.
35 Sec. 2. Section 441.21, subsection 14, paragraph c, Code
-2-12023, is amended to read as follows:
2c. Property that is rented or leased to low-income
3individuals and families as authorized by section 42 of the
4Internal Revenue Code, and that has not been withdrawn from
5section 42 assessment procedures under subsection 2 of this
6section, or a hotel, motel, inn, or other building where rooms
7or dwelling units are usually rented for less than one month
8 shall not be classified as residential property under this
9subsection and are subject to assessment under subsection 2.
10 Sec. 3. Section 441.21, subsection 14, Code 2023, is amended
11by adding the following new paragraph:
12 NEW PARAGRAPH. 0d. Property that is a hotel, motel, inn, or
13other building where rooms or dwelling units are usually rented
14for less than one month shall not be classified as residential
15property under this subsection.
16 Sec. 4. EFFECTIVE DATE. This Act, being deemed of immediate
17importance, takes effect upon enactment.
18 Sec. 5. RETROACTIVE APPLICABILITY. This Act applies
19retroactively to assessment years beginning on or after January
201, 2022.
21EXPLANATION
22The inclusion of this explanation does not constitute agreement with
23the explanation’s substance by the members of the general assembly.
24Under Code section 441.21(2), in assessing property that
25is rented or leased to low-income individuals and families as
26authorized by section 42 of the Internal Revenue Code, unless
27the owner elects to withdraw the property from the assessment
28procedures for section 42 property, the assessor shall use
29the productive and earning capacity from the actual rents
30received as a method of appraisal and shall take into account
31the extent to which that use and limitation reduces the market
32value of the property. This bill provides that consideration
33of such productive and earning capacity and rents received
34for years prior to the property being subject to assessment
35procedures for section 42 property shall be as if the property
-3-1was residential property. The bill also makes corresponding
2changes to other provisions relating to property subject to
3such assessment procedures.
4The bill takes effect upon enactment and applies
5retroactively to assessment years beginning on or after January
61, 2022.
-4-md/jh