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Senate Study Bill 1125 - IntroducedA Bill ForAn Act 1relating to state and local revenue and finances by
2modifying sales and use taxes, the charitable conservation
3contribution tax credit available against individual and
4corporate income taxes, the water service tax, property
5taxes, transit funding, and local option taxes, crediting
6moneys to the natural resources and outdoor recreation trust
7fund, making appropriations, and including effective date,
8retroactive applicability, and applicability provisions.
9BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2SALES AND USE TAX RATES AND DISTRIBUTION
3 Section 1. Section 423.2, subsection 1, unnumbered
4paragraph 1, Code 2023, is amended to read as follows:
5There is imposed a tax of six percent at the rate specified
6in subsection 12 upon the sales price of all sales of tangible
7personal property, sold at retail in the state to consumers or
8users except as otherwise provided in this subchapter.
9 Sec. 2. Section 423.2, subsections 2 and 3, Code 2023, are
10amended to read as follows:
112. A tax of six percent at the rate specified in subsection
1212 is imposed upon the sales price of the sale or furnishing
13of gas, electricity, water, heat, pay television service, and
14communication service, including the sales price from such
15sales by any municipal corporation or joint water utility
16furnishing gas, electricity, water, heat, pay television
17service, and communication service to the public in its
18proprietary capacity, except as otherwise provided in this
19subchapter, when sold at retail in the state to consumers or
20users.
213. A tax of six percent at the rate specified in subsection
2212 is imposed upon the sales price of all sales of tickets
23or admissions to places of amusement, fairs, and athletic
24events except those of elementary and secondary educational
25institutions. A tax of six percent at the rate specified in
26subsection 12 is imposed on the sales price of an entry fee or
27like charge imposed solely for the privilege of participating
28in an activity at a place of amusement, fair, or athletic event
29unless the sales price of tickets or admissions charges for
30observing the same activity are taxable under this subchapter.
31A tax of six percent at the rate specified in subsection 12
32 is imposed upon that part of private club membership fees or
33charges paid for the privilege of participating in any athletic
34sports provided club members.
35 Sec. 3. Section 423.2, subsection 4, paragraph a, Code 2023,
-1-1is amended to read as follows:
2a. A tax of six percent at the rate specified in subsection
312 is imposed upon the sales price derived from the operation
4of all forms of amusement devices and games of skill, games of
5chance, raffles, and bingo games as defined in chapter 99B, and
6card game tournaments conducted under section 99B.27, that are
7operated or conducted within the state, the tax to be collected
8from the operator in the same manner as for the collection of
9taxes upon the sales price of tickets or admission as provided
10in this section. Nothing in this subsection shall legalize any
11games of skill or chance or slot-operated devices which are now
12prohibited by law.
13 Sec. 4. Section 423.2, subsection 5, Code 2023, is amended
14to read as follows:
155. There is imposed a tax of six percent at the rate
16specified in subsection 12 upon the sales price from the
17furnishing of services as defined in section 423.1.
18 Sec. 5. Section 423.2, subsection 7, paragraph a,
19unnumbered paragraph 1, Code 2023, is amended to read as
20follows:
21A tax of six percent at the rate specified in subsection 12
22 is imposed upon the sales price from the sales, furnishing, or
23service of solid waste collection and disposal service.
24 Sec. 6. Section 423.2, subsection 8, paragraph a, Code 2023,
25is amended to read as follows:
26a. A tax of six percent at the rate specified in subsection
2712 is imposed on the sales price from sales of bundled
28transactions. For the purposes of this subsection, a “bundled
29transaction” is the retail sale of two or more distinct and
30identifiable products, except real property and services to
31real property, which are sold for one nonitemized price. A
32“bundled transaction” does not include the sale of any products
33in which the sales price varies, or is negotiable, based on
34the selection by the purchaser of the products included in the
35transaction.
-2-1 Sec. 7. Section 423.2, subsection 9, Code 2023, is amended
2to read as follows:
39. A tax of six percent at the rate specified in
4subsection 12 is imposed upon the sales price from any mobile
5telecommunications service, including all paging services,
6that this state is allowed to tax pursuant to the provisions
7of the federal Mobile Telecommunications Sourcing Act, Pub.
8L. No.106-252, 4 U.S.C. §116 et seq. For purposes of this
9subsection, taxes on mobile telecommunications service, as
10defined under the federal Mobile Telecommunications Sourcing
11Act that are deemed to be provided by the customer’s home
12service provider, shall be paid to the taxing jurisdiction
13whose territorial limits encompass the customer’s place of
14primary use, regardless of where the mobile telecommunications
15service originates, terminates, or passes through and
16shall in all other respects be taxed in conformity with
17the federal Mobile Telecommunications Sourcing Act. All
18other provisions of the federal Mobile Telecommunications
19Sourcing Act are adopted by the state of Iowa and incorporated
20into this subsection by reference. With respect to mobile
21telecommunications service under the federal Mobile
22Telecommunications Sourcing Act, the director shall, if
23requested, enter into agreements consistent with the provisions
24of the federal Act.
25 Sec. 8. Section 423.2, subsection 10, paragraph a, Code
262023, is amended to read as follows:
27a. A tax of six percent at the rate specified in subsection
2812 is imposed on the sales price of specified digital products
29sold at retail in the state. The tax applies whether the
30purchaser obtains permanent use or less than permanent use of
31the specified digital product, whether the sale is conditioned
32or not conditioned upon continued payment from the purchaser,
33and whether the sale is on a subscription basis or is not on a
34subscription basis.
35 Sec. 9. Section 423.2, subsection 12, Code 2023, is amended
-3-1by striking the subsection and inserting in lieu thereof the
2following:
312. a. For the period beginning January 1, 2025, through
4December 31, 2050, the sales tax rate is seven percent.
5b. Beginning January 1, 2051, the sales tax rate is six
6percent.
7 Sec. 10. Section 423.2A, subsection 2, paragraphs a, b, and
8c, Code 2023, are amended to read as follows:
9a. (1) Transfer For the period beginning January 1,
102025, through December 31, 2027, transfer twenty-eight
11one-hundred-fortieths of the revenues collected under deposited
12into the general fund of the state under subsection 1 to the
13appropriate county accounts under chapter 423B for the counties
14from which the tax was collected.
15(2) For the period beginning January 1, 2028, through
16December 31, 2028, transfer twenty-seven one-hundred-fortieths
17of the revenues deposited into the general fund of the state
18under subsection 1 to the appropriate county accounts under
19chapter 423B for the counties from which the tax was collected.
20(3) For the period beginning January 1, 2029, through
21December 31, 2029, transfer twenty-six one-hundred-fortieths of
22the revenues deposited into the general fund of the state under
23subsection 1 to the appropriate county accounts under chapter
24423B for the counties from which the tax was collected.
25(4) For the period beginning January 1, 2030, through
26December 31, 2050, transfer twenty-five one-hundred-fortieths
27of the revenues deposited into the general fund of the state
28under subsection 1 to the appropriate county accounts under
29chapter 423B for the counties from which the tax was collected.
30(5) Beginning January 1, 2051, transfer five twenty-fourths
31of the revenues deposited into the general fund of the state
32under subsection 1 to the appropriate county accounts under
33chapter 423B for the counties from which the tax was collected.
34b. Transfer from the remaining revenues the amounts required
35under Article VII, section 10, of the Constitution of the State
-4-1of Iowa to the natural resources and outdoor recreation trust
2fund created in section 461.31, if applicable.
3c. Transfer one-sixth of from the remaining revenues an
4amount equal to one-seventh of the revenues deposited into the
5general fund of the state under subsection 1 to the secure an
6advanced vision for education fund created in section 423F.2.
7This paragraph “c” is repealed January 1, 2051.
8 Sec. 11. Section 423.5, subsection 1, unnumbered paragraph
91, Code 2023, is amended to read as follows:
10Except as provided in paragraph “b”, an excise tax at the
11rate of six percent specified in subsection 4 of the purchase
12price or installed purchase price is imposed on the following:
13 Sec. 12. Section 423.5, subsection 4, Code 2023, is amended
14by striking the subsection and inserting in lieu thereof the
15following:
164. a. For the period beginning January 1, 2025, through
17December 31, 2050, the use tax rate is seven percent.
18b. Beginning January 1, 2051, the use tax rate is six
19percent.
20 Sec. 13. Section 423.43, subsection 1, paragraph b, Code
212023, is amended by striking the paragraph and inserting in
22lieu thereof the following:
23b. Subsequent to the deposit into the general fund of
24the state the department shall do the following in the order
25prescribed:
26(1) (a) For the period beginning January 1, 2025, through
27December 31, 2043, transfer one-seventh of such revenues to the
28local use tax supplement fund, under section 423B.1A.
29(b) For the period beginning January 1, 2044, through
30December 31, 2050, transfer one-seventh of such revenues to the
31appropriate county accounts under chapter 423B for the counties
32from which the tax was paid.
33(c) Beginning January 1, 2051, transfer one-sixth of such
34revenues to the appropriate county accounts under chapter 423B
35for the counties from which the tax was paid.
-5- 1(2) Transfer one-sixth of such remaining revenues to the
2secure an advanced vision for education fund created in section
3423F.2. This subparagraph is repealed January 1, 2051.
4 Sec. 14. EFFECTIVE DATE. This division of this Act takes
5effect January 1, 2025.
6DIVISION II
7WATER SERVICE TAX
8 Sec. 15. Section 423G.3, Code 2023, is amended to read as
9follows:
10423G.3 Water service tax.
11An excise tax at the a rate of six percent equal to the rate
12being imposed under section 423.2, subsection 12, is imposed on
13the sales price from the sale or furnishing by a water utility
14of a water service in the state to consumers or users.
15 Sec. 16. Section 423G.6, subsection 2, Code 2023, is amended
16by striking the subsection.
17 Sec. 17. REPEAL. Chapter 423G.7, Code 2023, is repealed.
18 Sec. 18. EFFECTIVE DATE. This division of this Act takes
19effect January 1, 2025.
20DIVISION III
21LOCAL OPTION TAXES
22 Sec. 19. Section 15J.7, subsection 2, Code 2023, is amended
23to read as follows:
242. In addition to the moneys received pursuant to section
2515J.6, a municipality may deposit in the reinvestment project
26fund any other moneys lawfully at the municipality’s disposal,
27including but not limited to local sales and services tax
28receipts collected revenues received under chapter 423B if such
29use is a purpose authorized for the municipality under chapter
30423B.
31 Sec. 20. Section 28A.17, Code 2023, is amended to read as
32follows:
3328A.17 Local sales and services tax.
341. If an authority is established as provided in section
3528A.6 and after approval of a referendum by a simple majority
-6-1of votes cast in each metropolitan area in favor of the sales
2and services tax, the governing board of a county in this state
3within a metropolitan area which is part of the authority shall
4impose, at the request of the authority, a local sales and
5services tax at the rate of one-fourth of one percent on the
6sales price taxed by this state under section 423.2, within
7the metropolitan area located in this state. The referendum
8shall be called by resolution of the board and shall be held
9as provided in section 28A.6 to the extent applicable. The
10ballot proposition shall contain a statement as to the specific
11purpose or purposes for which the revenues shall be expended
12and the date of expiration of the tax. The local sales and
13services tax shall be imposed on the same basis, with the same
14exceptions, and following the same administrative procedures as
15provided for a county under sections 423B.5 and 423B.6, Code
162023. The amount of the sale, for the purposes of determining
17the amount of the local sales and services tax under this
18section, does not include the amount of any local sales and
19services tax imposed under sections 423B.5 and 423B.6, Code
202023.
212. The treasurer of state shall credit the local sales
22and services tax receipts and interest and penalties to the
23authority’s account. Moneys in this account shall be remitted
24quarterly to the authority. The proceeds of the tax imposed
25under this section shall be used only for the construction,
26reconstruction, or repair of metropolitan facilities as
27specified in the referendum. The local sales and services tax
28imposed under this section may be suspended for not less than
29a fiscal quarter or more than one year by action of the board.
30The suspension may be renewed or continued by the board, but
31the board shall act on the suspension at least annually.
32The local sales and services tax may also be repealed by a
33petition and favorable referendum following the procedures and
34requirements of sections 28A.5 and 28A.6 as applicable. The
35board shall give the department of revenue at least forty days’
-7-1notice of the repeal, suspension, or reinstatement of the tax
2and the effective dates for imposition, suspension, or repeal
3of the tax shall be as provided in section 423B.6, Code 2023.
43. A local sales and services tax authorized under this
5section shall not be imposed or collected on or after January
61, 2025.
7 Sec. 21. Section 76.4, Code 2023, is amended to read as
8follows:
976.4 Permissive application of funds.
10Whenever the governing authority of such political
11subdivision shall have on hand funds derived from any other
12source than taxation which may be appropriated to the payment
13either of interest or principal, or both principal and interest
14of such bonds, such funds may be so appropriated and used
15and the levy for the payment of the bonds correspondingly
16reduced. This section shall not restrict the authority of a
17political subdivision to apply sales and services tax receipts
18collected received pursuant to chapter 423B for such purpose.
19Notwithstanding section 423F.3, a school district may apply tax
20receipts received pursuant to chapter 423F for the purposes of
21this section.
22 Sec. 22. Section 99B.1, subsection 23, Code 2023, is amended
23to read as follows:
2423. “Net receipts” means gross receipts less amounts awarded
25as prizes and less state and local sales tax paid upon the
26gross receipts.
27 Sec. 23. Section 99B.14, subsection 1, Code 2023, is amended
28to read as follows:
291. A licensed qualified organization shall certify
30that the receipts from all charitable gambling conducted
31by the organization under this chapter, less reasonable
32expenses, charges, fees, taxes, and deductions, either will
33be distributed as prizes to participants or will be dedicated
34and distributed for educational, civic, public, charitable,
35patriotic, or religious uses. Reasonable expenses, charges,
-8-1fees, taxes other than the state and local sales tax, and
2deductions allowed by the department shall not exceed forty
3percent of net receipts.
4 Sec. 24. Section 99G.4, subsection 2, Code 2023, is amended
5to read as follows:
62. The income and property of the authority shall be exempt
7from all state and local taxes, and the sale of lottery tickets
8and shares issued and sold by the authority and its retail
9licensees shall be exempt from all state and local sales taxes.
10 Sec. 25. Section 99G.30A, subsection 2, paragraph a, Code
112023, is amended to read as follows:
12a. The director of revenue shall administer the monitor
13vending machine excise tax as nearly as possible in conjunction
14with the administration of state sales tax laws. The director
15shall provide appropriate forms or provide appropriate entries
16on the regular state tax forms for reporting local sales and
17services tax liability.
18 Sec. 26. Section 279.63, subsection 2, paragraph a, Code
192023, is amended to read as follows:
20a. All property tax levies, and income surtaxes, and local
21option sales taxes in place in the school district, listed by
22type of levy, rate, amount, duration, and notification of the
23maximum rate and amount limitations permitted by statute.
24 Sec. 27. Section 321.40, subsection 5, Code 2023, is amended
25by striking the subsection.
26 Sec. 28. Section 321.130, Code 2023, is amended to read as
27follows:
28321.130 Fees in lieu of taxes.
29The registration fees imposed by this chapter upon private
30passenger motor vehicles or semitrailers are in lieu of all
31state and local taxes, except local vehicle taxes, to which
32motor vehicles or semitrailers are subject.
33 Sec. 29. Section 418.13, subsection 2, Code 2023, is amended
34to read as follows:
352. In addition to the moneys received pursuant to section
-9-1418.10 or 418.12, a governmental entity may deposit in the
2flood project fund any other moneys lawfully received by the
3governmental entity, including but not limited to local sales
4and services tax receipts collected amounts received under
5chapter 423B.
6 Sec. 30. Section 421.26, Code 2023, is amended to read as
7follows:
8421.26 Personal liability for tax due.
9If a licensee or other person under section 452A.65, a
10retailer or purchaser under chapter 423A, 423B, 423C, 423D, or
11423E, or section 423.14, 423.14A, 423.29, 423.31, or 423.33,
12or a user under section 423.34, or a permit holder or licensee
13under section 453A.13, 453A.16, or 453A.44 fails to pay a tax
14under those sections when due, an officer of a corporation
15or association, notwithstanding section 489.304, a member or
16manager of a limited liability company, or a partner of a
17partnership, having control or supervision of or the authority
18for remitting the tax payments and having a substantial legal
19or equitable interest in the ownership of the corporation,
20association, limited liability company, or partnership, who has
21intentionally failed to pay the tax is personally liable for
22the payment of the tax, interest, and penalty due and unpaid.
23However, this section shall not apply to taxes on accounts
24receivable. The dissolution of a corporation, association,
25limited liability company, or partnership shall not discharge a
26person’s liability for failure to remit the tax due.
27 Sec. 31. Section 421.28, Code 2023, is amended to read as
28follows:
29421.28 Exceptions to successor liability.
30The immediate successor to a licensee’s or retailer’s
31business or stock of goods under chapter 423A or 423B, or
32section 423.33 or 452A.65, is not personally liable for
33the amount of delinquent tax, interest, or penalty due and
34unpaid if the immediate successor shows that the purchase of
35the business or stock of goods was made in good faith that
-10-1no delinquent tax, interest, or penalty was due and unpaid.
2For purposes of this section the immediate successor shows
3good faith by evidence that the department had provided
4the immediate successor with a certified statement that
5no delinquent tax, interest, or penalty is unpaid, or that
6the immediate successor had taken in good faith a certified
7statement from the licensee, retailer, or seller that no
8delinquent tax, interest, or penalty is unpaid. When requested
9to do so by a person with whom the licensee or retailer is
10negotiating the sale of the business or stock of goods, the
11director of revenue shall, upon being satisfied that such
12a situation exists, inform that person as to the amount of
13unpaid delinquent tax, interest, or penalty due by the licensee
14or the retailer. The giving of the information under this
15circumstance is not a violation of section 422.20, 422.72, or
16452A.63.
17 Sec. 32. Section 421.60, subsection 2, paragraph m,
18subparagraphs (1) and (2), Code 2023, are amended to read as
19follows:
20(1) The director may abate unpaid state sales and use
21taxes and local sales and services taxes owed by a retailer
22in the event that the retailer failed to collect tax from the
23purchaser as a result of erroneous written advice issued by
24the department that was specially directed to the retailer
25by the department and the retailer is unable to collect the
26tax, interest, or penalties from the purchaser. Before the
27tax, interest, and penalties shall be abated on the basis of
28erroneous written advice, the retailer must present a copy of
29the retailer’s request for written advice to the department and
30a copy of the department’s reply. The department shall not
31maintain a position against the retailer that is inconsistent
32with the erroneous written advice, except on the basis of
33subsequent written advice sent by the department to that
34retailer, or a change in state or federal law, a reported
35court case to the contrary, a contrary rule adopted by the
-11-1department, a change in material facts or circumstances
2relating to the retailer, or the retailer’s misrepresentation
3or incomplete or inadequate representation of material facts
4and circumstances in requesting the written advice.
5(2) (a) The director shall abate the unpaid state sales
6and use taxes and any local sales and services taxes owed by a
7retailer where the retailer failed to collect the tax from the
8purchaser on the charges paid for access to on-line computer
9services as a result of erroneous written advice issued by the
10department regarding the taxability of charges paid for access
11to on-line computer services. To qualify for the abatement
12under this subparagraph, the erroneous written advice shall
13have been issued by the department prior to July 1, 1999, and
14shall have been specially directed to the retailer by the
15department.
16(b) If an abatement of unpaid state sales and use taxes and
17any local sales and services taxes is granted to the retailer
18by the director pursuant to this subparagraph, the department
19is precluded from collecting from the purchaser any unpaid
20state sales and use taxes and any local sales and services
21taxes which were abated.
22 Sec. 33. Section 422.72, subsection 6, paragraph a, Code
232023, is amended to read as follows:
24a. The department may enter into a written informational
25exchange agreement for tax administration purposes with a city
26or county which is entitled to receive funds due to a local
27hotel and motel tax or a local sales and services tax. The
28written informational exchange agreement shall designate no
29more than two paid city or county employees that have access to
30actual return information relating to that city’s or county’s
31receipts from a local hotel and motel tax or a local sales and
32services tax.
33 Sec. 34. Section 423.4, subsection 2, paragraph d, Code
342023, is amended by striking the paragraph.
35 Sec. 35. Section 423.4, subsection 5, paragraph f, Code
-12-12023, is amended to read as follows:
2f. Notwithstanding the state sales tax imposed in section
3423.2, a rebate issued pursuant to this subsection shall not
4exceed an amount equal to five percent of the sales price
5of the tangible personal property or services furnished to
6purchasers at the automobile racetrack facility. Any local
7option taxes paid and collected shall not be subject to rebate
8under this subsection.
9 Sec. 36. Section 423.4, subsection 7, paragraph f, Code
102023, is amended to read as follows:
11f. The refund in this subsection applies only to state
12sales and use tax paid and does not apply to local option
13sales and services taxes imposed pursuant to chapter 423B.
14 Notwithstanding the state sales tax imposed in section 423.2,
15a refund issued pursuant to this section shall not exceed
16an amount equal to five percent of the sales price of the
17fuel used to create heat, power, and steam for processing
18or generating electrical current or from the sale price
19of electricity consumed by computers, machinery, or other
20equipment for operation of the data center business facility.
21 Sec. 37. Section 423.4, subsection 8, paragraph g, Code
222023, is amended to read as follows:
23g. The refund in this subsection applies only to state
24sales and use tax paid and does not apply to local option
25sales and services taxes imposed pursuant to chapter 423B.
26 Notwithstanding the state sales tax imposed in section 423.2,
27a refund issued pursuant to this section shall not exceed an
28amount equal to five percent of the sales price of the items
29listed in paragraph “a”, subparagraphs (1), (2), and (3).
30 Sec. 38. Section 423.14A, subsection 2, Code 2023, is
31amended to read as follows:
322. In addition to and not in lieu of any application of
33this chapter to sellers who are retailers and sellers who are
34retailers maintaining a place of business in this state, any
35person described in subsection 3, or the person’s agents,
-13-1shall be considered a retailer in this state and a retailer
2maintaining a place of business in this state for purposes of
3this chapter on or after January 1, 2019, and shall be subject
4to all requirements of this chapter imposed on retailers and
5retailers maintaining a place of business in this state,
6including but not limited to the requirement to collect and
7remit sales and use taxes pursuant to sections 423.14 and
8423.29, and local option taxes under chapter 423B.
9 Sec. 39. Section 423.33, subsection 1, paragraph c, Code
102023, is amended to read as follows:
11c. If the retailer fails to collect sales tax at the time
12of the transaction, the retailer shall thereafter remit the
13applicable sales tax, or the purchaser thereafter shall remit
14the applicable use tax. If the purchaser remits all applicable
15use tax, the retailer remains liable for any local sales and
16services tax under chapter 423B that the retailer failed to
17collect.
18 Sec. 40. Section 423.34A, unnumbered paragraph 1, Code
192023, is amended to read as follows:
20A purchaser is relieved of liability for payment of state
21sales or use tax, for payment of any local option sales tax,
22 for payment of interest, or for payment of any penalty for
23nonpayment of tax which nonpayment is not fraudulent, willful,
24or intentional, under the following circumstances:
25 Sec. 41. Section 423.36, subsection 9, paragraph a, Code
262023, is amended to read as follows:
27a. Except as provided in paragraph “b”, purchasers, users,
28and consumers of tangible personal property, specified digital
29products, or enumerated services taxed pursuant to subchapter
30II or III of this chapter or chapter 423B may be authorized,
31pursuant to rules adopted by the director, to remit tax owed
32directly to the department instead of the tax being collected
33and paid by the seller. To qualify for a direct pay tax permit,
34the purchaser, user, or consumer must accrue a tax liability
35of more than four thousand dollars in tax under subchapters
-14-1II and III in a semimonthly period and make deposits and file
2returns pursuant to section 423.31. This authority shall not
3be granted or exercised except upon application to the director
4and then only after issuance by the director of a direct pay
5tax permit.
6 Sec. 42. Section 423B.1, Code 2023, is amended by striking
7the section and inserting in lieu thereof the following:
8423B.1 Use of revenues deposited in the local sales and use
9tax fund — revenue purpose statement.
101. a. Revenues credited to and deposited in each county’s
11account within the local sales and use tax fund shall be
12expended by each recipient county and city as required by the
13revenue purpose statement, subject to the requirements of
14section 423B.7, subsection 7, and approved under this section
15for the city or for the county for the unincorporated areas of
16the county, or as required by subsection 3.
17b. A revenue purpose statement for the use of local option
18sales and services tax revenue under this chapter approved at
19election prior to January 1, 2025, and in effect on or set
20to take effect on or after January 1, 2025, and the use of
21revenues received under this chapter for purposes authorized
22under section 423B.10 for ordinances in effect and approved
23before January 1, 2025, shall continue in effect for revenues
24received under this chapter until the expiration of the revenue
25purpose statement or ordinance, if applicable, or until the
26county board of supervisors or city council, as applicable,
27adopts a new revenue purpose statement under subsection 2 or
28repeals or amends the ordinance for the use of revenues under
29section 423B.10.
302. The board of supervisors of each county and the city
31council of each city may adopt by resolution a revenue purpose
32statement for the expenditure of funds received under this
33chapter.
343. Each city and county without a valid revenue purpose
35statement shall expend the revenues received for the following
-15-1purposes in the order prescribed in this subsection, except
2that the payment of bonds for which the revenues have been
3pledged shall be paid first:
4a. Reduction of the county’s basic levies under section
5331.423 or reduction of the city general fund levy under
6section 384.1, as applicable.
7b. Reduction of any debt service levy of the county or city,
8as applicable.
9c. Reduction of the city’s additional taxes levied under
10section 384.12 or the county’s supplemental levies under
11section 331.424, as applicable.
12d. Reduction of any other property tax levy of the county
13or city, as applicable.
14 Sec. 43. NEW SECTION. 423B.1A Local use tax supplement
15fund.
161. A local use tax supplement fund is created in the state
17treasury under the control of the department of revenue. The
18fund shall consist of all moneys transferred under section
19423.43, subsection 1, paragraph “b”, subparagraph (1),
20subparagraph division (a), and moneys appropriated to the fund.
212. Moneys in the local use tax supplement fund are annually
22appropriated to the department of revenue and shall be used for
23supplement payments to cities and counties under this section.
243. For each year during the period beginning January 1,
252025, through December 31, 2043, each city or county for the
26unincorporated portion of the county, shall receive a local
27use tax supplement payment equal to the difference, but not
28less than zero between the amount of revenue received by the
29city or county under section 423B.7, Code 2023, for the period
30beginning January 1, 2024, and ending December 31, 2024, minus
31the amount that would have been received by that city or county
32for that period if all cities and the county were eligible for
33distributions of such revenues under section 423B.7, Code 2023.
34If moneys in the fund are insufficient to pay all supplement
35amounts for the year, the director of revenue shall prorate the
-16-1payment of the supplement payments and shall notify the cities
2and counties of the pro rata percentage.
34. The supplement payment calculated under subsection 3
4shall be paid to each city or county for the unincorporated
5area of the county and shall be combined with and be used in the
6same manner and be subject to the same requirements as moneys
7received by the city or county under section 423B.7 for that
8year.
95. Notwithstanding section 12C.7, subsection 2, interest or
10earnings on moneys deposited in the local use tax supplement
11fund shall be credited to the local use tax supplement fund.
12Notwithstanding section 8.33, moneys credited to the local use
13tax supplement fund shall not revert at the close of a fiscal
14year.
156. This section is repealed January 1, 2044. Moneys in the
16fund upon the repeal of this section shall be transferred to
17the appropriate county accounts under section 423B.7 for the
18counties from which the tax was paid.
19 Sec. 44. Section 423B.7, subsection 1, Code 2023, is amended
20to read as follows:
211. a. Except as provided in paragraphs paragraph “b” and
22“c”, the director shall credit the local sales and services tax
23receipts and interest and penalties from a county-imposed tax
24 as specified in section 423.2A, subsection 2, paragraph “a”,
25including any interest and penalties, to the county’s account
26in the local sales and services use tax fund for the county in
27 from which the tax was collected. The director shall credit
28the use tax receipts as specified in section 423.43, subsection
291, paragraph “b”, subparagraph (1), subparagraph divisions (b)
30and (c), including any interest and penalties, to the county’s
31account in the local sales and use tax fund for the county
32from which the use tax was paid.If the director is unable to
33determine from which county any of the receipts were collected
34or paid, as applicable, those receipts shall be allocated among
35the possible counties based on allocation rules adopted by the
-17-1director.
2b. The director shall credit the designated amount of the
3increase in local sales and services tax receipts, as computed
4in section 423B.10, collected in an urban renewal area of an
5eligible city that has adopted an ordinance pursuant to section
6423B.10, subsection 2, into a special city account in the local
7sales and services use tax fund.
8c. The director shall credit the local sales and services
9tax receipts and interest and penalties from a city-imposed tax
10under section 423B.1, subsection 2, to the city’s account in
11the local sales and services tax fund.
12 Sec. 45. Section 423B.7, subsections 2, 3, and 4, Code 2023,
13are amended to read as follows:
142. The director of revenue by the last day of each
15month shall transfer to each city or county where the local
16option tax is imposed the amount of tax moneys remitted to
17the department attributable to each city or county from the
18preceding month.
193. Seventy-five percent of each county’s account shall be
20remitted on the basis of the county’s population residing in
21the unincorporated area where the tax was imposed and those the
22 incorporated areas where the tax was imposed as follows:
23a. To the board of supervisors a pro rata share based upon
24the percentage of the above population of the county residing
25in the unincorporated area of the county where the tax was
26imposed according to the most recent certified federal census.
27b. To each city in the county where the tax was imposed
28 a pro rata share based upon the percentage of the city’s
29population residing in the county to the above population of
30the county according to the most recent certified federal
31census.
32c. If a subsequent certified census exists which modifies
33that most recent certified federal census for a participating
34 jurisdiction under paragraphs “a” and “b”, the computations
35under paragraphs “a” and “b” shall utilize the subsequent
-18-1certified census in the distribution formula under rules
2established by the director of revenue.
34. Twenty-five percent of each county’s account shall
4be remitted based on the sum of property tax dollars levied
5by the board of supervisors if the tax was imposed in the
6unincorporated areas and by each city in the county where the
7tax was imposed during the three-year period beginning July 1,
81982, and ending June 30, 1985, as follows:
9a. To the board of supervisors a pro rata share based upon
10the percentage of the total property tax dollars levied by the
11board of supervisors during the above three-year period.
12b. To each city council where the tax was imposed a pro rata
13share based upon the percentage of property tax dollars levied
14by the city during the above three-year period of the above
15total property tax dollars levied by the board of supervisors
16and each city where the tax was imposed during the above
17three-year period.
18 Sec. 46. Section 423B.7, subsection 5, Code 2023, is amended
19by striking the subsection.
20 Sec. 47. Section 423B.7, subsections 6 and 7, Code 2023, are
21amended to read as follows:
226. From each special city account under subsection 1,
23paragraph “b”, the sales and services tax revenues shall be
24remitted to the city council for deposit in the special fund
25created in section 403.19, subsection 2, to be used by the city
26as provided in section 423B.10. The distribution from the
27special city account is not subject to the distribution formula
28provided in subsections 3, and 4, and 5.
297. a. Subject to the requirement of paragraph “b” and the
30requirements under section 423B.1, subsection 3, local sales
31and services tax moneys amounts received by a city or county
32under this chapter may be expended for any lawful purpose of
33the city or county, including but not limited to expenses
34related to providing emergency medical services within the
35applicable city or county.
-19- 1b. Each city located in whole or in part in a qualified
2county and each qualified county for the unincorporated area
3for which the imposition of the local sales and services tax
4in the city or portion thereof or the unincorporated area, as
5applicable, was revenue purpose statement approved at election
6 on or after January 1, 2019 2025, shall require the use of
7 not less than fifty percent of the moneys received from the
8qualified county’s account in the local sales and services
9tax fund applicable county under this chapter for property
10tax relief. However, for a county with a population of four
11hundred thousand or more, a revenue purpose statement governing
12the use of revenues for the unincorporated area of the county
13approved on or after January 1, 2025, shall require the use of
14seventy-five percent of the moneys received by the county under
15this chapter for property tax relief.
16c. For purposes of this subsection, property tax relief
17includes payments under a chapter 28E agreement for purposes of
18a regional transit district if such payments are used to reduce
19the regional transit district levy under section 28M.5. For a
20city located in whole or in part in a county with a population
21of four hundred thousand or more, the use of revenues received
22under this chapter for the purposes of this paragraph shall
23not exceed ten percent of the amount received and for a county
24with a population of four hundred thousand or more, for the
25unincorporated area, shall not exceed twenty-five percent of
26the amount received under this chapter.
27 Sec. 48. Section 423B.9, subsection 1, paragraphs b and c,
28Code 2023, are amended to read as follows:
29b. “Designated portion” means the portion of the local
30option sales and services tax revenues received under this
31chapter which is authorized to be expended for one or a
32combination of purposes under an adopted public measure.
33c. “Secondary recipient” means a political subdivision of
34the state which is to receive revenues amounts from a local
35option sales and services tax revenues under this chapter
-20-1 over a period of years pursuant to the terms of a chapter 28E
2agreement with one or more cities or counties.
3 Sec. 49. Section 423B.9, subsections 2 and 3, Code 2023, are
4amended to read as follows:
52. An issuer of public bonds which is a recipient of
6revenues from a local option sales and services tax imposed
7 pursuant to this chapter may issue bonds in anticipation of
8the collection of one or more designated portions of the
9local option sales and services tax such revenues and may
10pledge irrevocably an amount of the revenue derived from the
11designated portions for each of the years the bonds remain
12outstanding to the payment of the bonds. Bonds may be issued
13only for one or more of the purposes set forth on the ballot
14proposition concerning the imposition of the local option sales
15and services tax in the revenue purpose statement, except bonds
16shall not be issued which are payable from that portion of tax
17revenues designated for property tax relief. The bonds may be
18issued in accordance with the procedures set forth in either
19subsection 3 or 4.
203. The governing body of an issuer may authorize the
21issuance of bonds which are payable from the designated portion
22of the revenues of the local option sales and services tax
23 received under this chapter, and not from property tax, by
24following the authorization procedures set forth for cities
25in section 384.83. Bonds may be issued for the purpose of
26refunding outstanding and previously issued bonds under this
27subsection without otherwise complying with the provisions of
28this subsection.
29 Sec. 50. Section 423B.9, subsection 4, paragraph b, Code
302023, is amended to read as follows:
31b. The provisions of chapter 76 apply to the bonds payable
32as provided in this subsection, except that the mandatory levy
33to be assessed pursuant to section 76.2 shall be at a rate
34to generate an amount which together with the receipts from
35the pledged designated portion of the local option sales and
-21-1services tax revenues received under this chapter is sufficient
2to pay the interest and principal on the bonds. All amounts
3collected as a result of the levy assessed pursuant to section
476.2 and paid out in the first instance for bond principal
5and interest shall be repaid to the bond issuer which levied
6the tax from the first available designated portion of local
7option sales and services tax collections revenues received
8under this chapter in excess of the requirement for the payment
9of the principal and interest of the bonds and when repaid
10shall be applied in reduction of property taxes. The amount
11of bonds which may be issued under section 76.3 shall be the
12amount which could be retired from the actual collections of
13the designated portions of the local option sales and services
14tax revenues received under this chapter for the last four
15calendar quarters, as certified by the director of revenue.
16The amount of tax revenues pledged jointly by other cities or
17counties may be considered for the purpose of determining the
18amount of bonds which may be issued. If the local option sales
19and services tax has been in effect revenues have been received
20under this chapter for less than four calendar quarters, the
21tax collected revenues received within the shorter period may
22be adjusted to project the collections amount of the designated
23portion for the full year for the purpose of determining the
24amount of the bonds which may be issued. The provisions of
25this section constitute separate authorization for the issuance
26of bonds and shall prevail in the event of conflict with
27any other provision of the Code limiting the amount of bonds
28which may be issued or the source of payment of the bonds.
29Bonds issued under this section shall not limit or restrict
30the authority of the bond issuer to issue bonds under other
31provisions of the Code.
32 Sec. 51. Section 423B.9, subsection 5, Code 2023, is amended
33to read as follows:
345. A city or county, jointly with one or more other
35political subdivisions as provided in chapter 28E, may pledge
-22-1irrevocably any amount derived from the designated portions
2of the revenues of the local option sales and services tax
3 received under this chapter to the support or payment of bonds
4of an issuer, issued for one or more purposes set forth on
5the ballot proposition concerning the imposition of the local
6option sales and services tax in the revenue purpose statement
7 or a political subdivision may apply the proceeds of its bonds
8to the support of any such purpose.
9 Sec. 52. Section 423B.10, subsection 1, paragraph b, Code
102023, is amended to read as follows:
11b. “Eligible city” means a city in which a local sales and
12services tax imposed by the county applies or a city described
13in section 423B.1, subsection 2, paragraph “a”, and in which an
14urban renewal area has been designated.
15 Sec. 53. Section 423B.10, subsections 2, 3, 5, and 6, Code
162023, are amended to read as follows:
172. a. Upon approval by the board of supervisors of each
18applicable county pursuant to paragraph “b”, an eligible city
19may by ordinance of the city council provide for the use of a
20designated amount of the increased local sales and services
21tax revenues collected received under this chapter which are
22attributable to retail establishments in an urban renewal
23area to fund urban renewal projects located in the area. The
24designated amount may be all or a portion of such increased
25revenues.
26b. A city shall not adopt an ordinance under paragraph
27“a” unless the board of supervisors of each county where the
28urban renewal area from which such local sales and services
29tax revenues are to be collected and used to fund urban
30renewal projects is located first adopts a resolution approving
31the collection and use of such local sales and services tax
32revenues.
333. To determine the revenue increase for purposes of
34subsection 2, revenue amounts shall be calculated by the
35department of revenue as follows:
-23- 1a. Determine the amount of local sales and services tax
2revenue collected and attributable to a one percent sales and
3services tax from retail establishments located in the area
4comprising the urban renewal area during the base year.
5b. Determine the current year one percent sales and services
6tax revenue amount for each fiscal year following the base year
7in the manner specified in paragraph “a”.
8c. The excess of the amount determined in paragraph “b” over
9the base year revenue amount determined in paragraph “a” is the
10increase in the local sales and services tax revenues of which
11the designated amount is to be deposited in the special city
12account created in section 423B.7, subsection 6.
135. In addition to the moneys received pursuant to the
14ordinance authorized under subsection 2, an eligible city
15may deposit any other local sales and services tax revenues
16received by it the city pursuant to the distribution formula in
17section 423B.7, subsections 3, 4, and 5, to the special fund
18described in section 403.19, subsection 2.
196. For purposes of this section, the eligible city shall
20assist the department of revenue in identifying retail
21establishments in the urban renewal area that are collecting
22the local sales and services tax. This process shall be
23ongoing until the ordinance is repealed.
24 Sec. 54. REPEAL. Sections 423B.2, 423B.3, 423B.4, 423B.5,
25423B.6, and 423B.8, Code 2023, are repealed.
26 Sec. 55. EFFECTIVE DATE. This division of this Act takes
27effect January 1, 2025.
28DIVISION IV
29Homestead property tax credit
30 Sec. 56. Section 2.48, subsection 3, paragraph f,
31subparagraph (1), Code 2023, is amended to read as follows:
32(1) The homestead tax exemption and credit under chapter
33425.
34 Sec. 57. Section 25B.7, subsection 2, paragraph a, Code
352023, is amended by striking the paragraph.
-24-1 Sec. 58. Section 100.18, subsection 2, paragraph b, Code
22023, is amended to read as follows:
3b. The rules shall require the installation of smoke
4detectors in existing single-family rental units and
5multiple-unit residential buildings. Existing single-family
6dwelling units shall be equipped with approved smoke detectors.
7A person who files for a homestead tax exemption and credit
8pursuant to chapter 425 shall certify that the single-family
9dwelling unit for which the credit is filed has a smoke
10detector installed in compliance with this section, or that one
11will be installed within thirty days of the date the filing
12for the credit is made. The state fire marshal shall adopt
13rules and establish appropriate procedures to administer this
14subsection.
15 Sec. 59. Section 100.18, subsection 3, paragraph b, Code
162023, is amended to read as follows:
17b. The rules shall require the installation of carbon
18monoxide alarms in existing single-family rental units and
19multiple-unit residential buildings that have a fuel-fired
20heater or appliance, a fireplace, or an attached garage.
21Existing single-family dwellings that have a fuel-fired heater
22or appliance, a fireplace, or an attached garage shall be
23equipped with approved carbon monoxide alarms. For purposes
24of this paragraph, “approved carbon monoxide alarm” means a
25carbon monoxide alarm that meets the standards established by
26the underwriters’ laboratories or is approved by the state fire
27marshal as established by rule under subsection 5. A person
28who files for a homestead tax exemption and credit pursuant
29to chapter 425 shall certify that the single-family dwelling
30for which the credit is filed and that has a fuel-fired heater
31or appliance, a fireplace, or an attached garage, has carbon
32monoxide alarms installed in compliance with this section,
33or that such alarms will be installed within thirty days of
34the date the filing for the credit is made. The state fire
35marshal shall adopt rules and establish appropriate procedures
-25-1to administer this subsection.
2 Sec. 60. Section 103.22, subsection 7, Code 2023, is amended
3to read as follows:
47. Prohibit an owner of property from performing work on the
5owner’s principal residence, if such residence is an existing
6dwelling rather than new construction and is not an apartment
7that is attached to any other apartment or building, as those
8terms are defined in section 499B.2, and is not larger than a
9single-family dwelling, or require such owner to be licensed
10under this chapter. In order to qualify for inapplicability
11pursuant to this subsection, a residence shall qualify for the
12homestead tax exemption and credit.
13 Sec. 61. Section 105.11, subsection 3, Code 2023, is amended
14to read as follows:
153. Prohibit an owner of property from performing work on the
16owner’s principal residence, if such residence is an existing
17dwelling rather than new construction and is not larger than a
18single-family dwelling, or farm property, excluding commercial
19or industrial installations or installations in public use
20buildings or facilities, or require such owner to be licensed
21under this chapter. In order to qualify for inapplicability
22pursuant to this subsection, a residence shall qualify for the
23homestead tax exemption and credit.
24 Sec. 62. Section 216.12, subsection 1, paragraph e, Code
252023, is amended to read as follows:
26e. The rental or leasing of a housing accommodation in a
27building which contains housing accommodations for not more
28than four families living independently of each other, if the
29owner resides in one of the housing accommodations for which
30the owner qualifies for the homestead tax exemption and credit
31under section 425.1.
32 Sec. 63. Section 321.1, subsection 6C, Code 2023, is amended
33to read as follows:
346C. “Bona fide residence” or “bona fide address” means the
35current street or highway address of an individual’s residence.
-26-1The bona fide residence of a person with more than one dwelling
2is the dwelling for which the person claims a homestead tax
3exemption and credit under chapter 425, if applicable. The
4bona fide residence of a homeless person is a primary nighttime
5residence meeting one of the criteria listed in section 48A.2,
6subsection 3.
7 Sec. 64. Section 321.1A, subsection 1, paragraph a, Code
82023, is amended to read as follows:
9a. The person has filed for a homestead tax exemption and
10credit on property in this state.
11 Sec. 65. Section 331.401, subsection 1, paragraphs e and f,
12Code 2023, are amended to read as follows:
13e. Adopt resolutions authorizing the county assessor
14to provide forms for homestead tax exemption and credit
15 claimants as provided in section 425.2 and military service tax
16exemptions as provided in section 426A.14.
17f. Examine and allow or disallow claims for homestead tax
18 exemption and credit in accordance with section 425.3 and
19claims for military service tax exemption in accordance with
20chapter 426A. The board, by a single resolution, may allow or
21disallow the exemptions recommended by the assessor.
22 Sec. 66. Section 331.512, subsection 3, Code 2023, is
23amended to read as follows:
243. Carry out duties relating to the homestead tax exemption
25and credit and agricultural land tax credit as provided in
26chapters 425 and 426.
27 Sec. 67. Section 331.559, subsection 12, Code 2023, is
28amended to read as follows:
2912. Carry out duties relating to the administration of
30the homestead tax exemption and credit and other credits as
31provided in sections 425.4, 425.5, 425.7, 425.9, 425.10, and
32425.25.
33 Sec. 68. Section 404.3, subsection 1, Code 2023, is amended
34to read as follows:
351. All qualified real estate assessed as residential
-27-1property is eligible to receive an exemption from taxation
2based on the actual value added by the improvements. The
3exemption is for a period of ten years. The amount of the
4exemption is equal to a percent of the actual value added by
5the improvements, determined as follows: One hundred fifteen
6percent of the value added by the improvements. However, the
7amount of the actual value added by the improvements which
8shall be used to compute the exemption shall not exceed twenty
9thousand dollars and the granting of the exemption shall not
10result in the actual value of the qualified real estate being
11reduced below the actual value on which the homestead credit
12 exemption is computed under section 425.1.
13 Sec. 69. Section 425.1, subsection 1, paragraph a, Code
142023, is amended to read as follows:
15a. A homestead credit fund is created. There For fiscal
16years beginning before July 1, 2028, there is appropriated
17annually from the general fund of the state to the department
18of revenue to be credited to the homestead credit fund, an
19amount sufficient to implement this subchapter.
20 Sec. 70. Section 425.1, subsection 1, Code 2023, is amended
21by adding the following new paragraph:
22 NEW PARAGRAPH. c. All moneys in the homestead credit fund
23at the end of the fiscal year beginning July 1, 2028, shall be
24transferred by the department of revenue for deposit in the
25general fund of the state.
26 Sec. 71. Section 425.1, subsections 2, 4, and 5, Code 2023,
27are amended to read as follows:
282. a. For fiscal years beginning before July 1, 2028, the
29moneys in the homestead credit fund shall be apportioned each
30year so as to give a credit against the tax on each eligible
31homestead in the state, but not more than the amount under
32paragraph “b”.
33b. (1) The For assessment years beginning before July
341, 2025, the homestead credit fund shall be apportioned each
35year so as to give a credit against the tax on each eligible
-28-1homestead in the state in an amount equal to the actual levy on
2the first four thousand eight hundred fifty dollars of actual
3value for each homestead.
4(2) For property taxes due and payable in the fiscal year
5beginning July 1, 2025, the homestead credit fund shall be
6apportioned each year so as to give a credit against the tax
7on each eligible homestead in the state in an amount equal
8to the actual levy on the first three thousand six hundred
9forty dollars of actual value for each homestead exempted under
10section 425.1A.
11(3) For property taxes due and payable in the fiscal year
12beginning July 1, 2026, the homestead credit fund shall be
13apportioned each year so as to give a credit against the tax
14on each eligible homestead in the state in an amount equal to
15the actual levy on the first two thousand four hundred thirty
16dollars of actual value for each homestead exempted under
17section 425.1A.
18(4) For property taxes due and payable in the fiscal year
19beginning July 1, 2027, the homestead credit fund shall be
20apportioned each year so as to give a credit against the tax
21on each eligible homestead in the state in an amount equal to
22the actual levy on the first one thousand two hundred twenty
23dollars of actual value for each homestead exempted under
24section 425.1A.
254. Annually For fiscal years beginning before July 1, 2028,
26annually the department of revenue shall certify to the county
27auditor of each county the credit and its amount in dollars.
28Each county auditor shall then enter the credit against the
29tax levied on each eligible homestead in each county payable
30during the ensuing year, designating on the tax lists the
31credit as being from the homestead credit fund, and credit
32shall then be given to the several taxing districts in which
33eligible homesteads are located in an amount equal to the
34credits allowed on the taxes of the homesteads. The amount of
35credits shall be apportioned by each county treasurer to the
-29-1several taxing districts as provided by law, in the same manner
2as though the amount of the credit had been paid by the owners
3of the homesteads. However, the several taxing districts shall
4not draw the funds so credited until after the semiannual
5allocations have been received by the county treasurer, as
6provided in this subchapter. Each county treasurer shall show
7on each tax receipt the amount of credit received from the
8homestead credit fund.
95. If For property taxes due and payable in fiscal years
10beginning before July 1, 2028, if the homestead tax credit
11computed under this section is less than sixty-two dollars
12and fifty cents, the amount of homestead tax credit on that
13eligible homestead shall be sixty-two dollars and fifty cents
14subject to the limitation imposed in this section.
15 Sec. 72. NEW SECTION. 425.1A Homestead tax exemption.
16The following exemptions from taxation shall be allowed:
171. For the assessment year beginning January 1, 2024, the
18eligible homestead, not to exceed two thousand five hundred
19dollars in actual value.
202. For the assessment year beginning January 1, 2025, the
21eligible homestead, not to exceed five thousand dollars in
22actual value.
233. For the assessment year beginning January 1, 2026, the
24eligible homestead, not to exceed seven thousand five hundred
25dollars in actual value.
264. For the assessment year beginning January 1, 2027, and
27each succeeding assessment year, the eligible homestead, not to
28exceed ten thousand dollars in actual value.
29 Sec. 73. Section 425.2, subsections 1, 2, 4, and 5, Code
302023, are amended to read as follows:
311. A person who wishes to qualify for the homestead
32exemption and credit allowed under this subchapter shall
33obtain the appropriate forms for filing for the exemption and
34 credit from the assessor. The person claiming the exemption
35and credit shall file a verified statement and designation of
-30-1homestead with the assessor for the year for which the person
2is first claiming the exemption and credit. The claim shall be
3filed not later than July 1 of the year for which the person is
4claiming the exemption and credit. A claim filed after July 1
5of the year for which the person is claiming the exemption and
6 credit shall be considered as a claim filed for the following
7year.
82. Upon the filing and allowance of the claim, the claim
9shall be allowed on that homestead for successive years without
10further filing as long as the property is legally or equitably
11owned and used as a homestead by that person or that person’s
12spouse on July 1 of each of those successive years, and the
13owner of the property being claimed as a homestead declares
14residency in Iowa for purposes of income taxation, and the
15property is occupied by that person or that person’s spouse
16for at least six months in each of those calendar years in
17which the fiscal year begins. When the property is sold or
18transferred, the buyer or transferee who wishes to qualify
19shall refile for the exemption and credit. However, when the
20property is transferred as part of a distribution made pursuant
21to chapter 598, the transferee who is the spouse retaining
22ownership of the property is not required to refile for the
23exemption and credit. Property divided pursuant to chapter 598
24shall not be modified following the division of the property.
25An owner who ceases to use a property for a homestead or
26intends not to use it as a homestead for at least six months in
27a calendar year shall provide written notice to the assessor
28by July 1 following the date on which the use is changed. A
29person who sells or transfers a homestead or the personal
30representative of a deceased person who had a homestead at the
31time of death, shall provide written notice to the assessor
32that the property is no longer the homestead of the former
33claimant.
344. Any person sixty-five years of age or older or any person
35who is disabled may request, in writing, from the appropriate
-31-1assessor forms for filing for homestead tax exemption and
2 credit. Any person sixty-five years of age or older or who is
3disabled may complete the form, which shall include a statement
4of homestead, and mail or return it to the appropriate
5assessor. The signature of the claimant on the statement shall
6be considered the claimant’s acknowledgment that all statements
7and facts entered on the form are correct to the best of the
8claimant’s knowledge.
95. Upon adoption of a resolution by the county board of
10supervisors, any person may request, in writing, from the
11appropriate assessor forms for the filing for homestead tax
12exemption and credit. The person may complete the form, which
13shall include a statement of homestead, and mail or return it
14to the appropriate assessor. The signature of the claimant on
15the statement of homestead shall be considered the claimant’s
16acknowledgment that all statements and facts entered on the
17form are correct to the best of the claimant’s knowledge.
18 Sec. 74. Section 425.3, subsection 4, Code 2023, is amended
19to read as follows:
204. The county auditor shall forward the claims to the board
21of supervisors. The board shall allow or disallow the claims.
22If the board disallows a claim, it shall send written notice,
23by mail, to the claimant at the claimant’s last known address.
24The notice shall state the reasons for disallowing the claim
25for the credit. The board is not required to send notice that
26a claim is disallowed if the claimant voluntarily withdraws the
27claim.
28 Sec. 75. Section 425.4, Code 2023, is amended to read as
29follows:
30425.4 Certification to treasurer.
31All claims which have been allowed by the board of
32supervisors shall be certified on or before August 1, in each
33year, by the county auditor to the county treasurer, which
34certificates shall list the total amount of dollars, listed by
35taxing district in the county, due for homestead tax exemptions
-32-1and credits claimed and allowed. The county treasurer shall
2forthwith then certify to the department of revenue the total
3amount of dollars, listed by taxing district in the county, due
4for homestead tax exemptions and credits claimed and allowed.
5 Sec. 76. Section 425.6, Code 2023, is amended to read as
6follows:
7425.6 Waiver by neglect.
8If a person fails to file a claim or to have a claim on file
9with the assessor for the credits provided in this subchapter,
10the person is deemed to have waived the homestead exemption
11and credit for the year in which the person failed to file the
12claim or to have a claim on file with the assessor.
13 Sec. 77. Section 425.7, subsection 3, Code 2023, is amended
14to read as follows:
153. a. If the department of revenue determines that a claim
16for homestead exemption and credit has been allowed by the
17board of supervisors which is not justifiable under the law
18and not substantiated by proper facts, the department may, at
19any time within thirty-six months from July 1 of the year in
20which the claim is allowed, set aside the allowance. Notice
21of the disallowance shall be given to the county auditor of
22the county in which the claim has been improperly granted and
23a written notice of the disallowance shall also be addressed
24to the claimant at the claimant’s last known address. The
25claimant or board of supervisors may appeal to the director
26of revenue within thirty days from the date of the notice of
27disallowance. The director shall grant a hearing and if, upon
28the hearing, the director determines that the disallowance was
29incorrect, the director shall set aside the disallowance. The
30director shall notify the claimant and the board of supervisors
31of the result of the hearing. The claimant or the board of
32supervisors may seek judicial review of the action of the
33director of revenue in accordance with chapter 17A.
34b. If a claim is disallowed by the department of revenue
35and not appealed to the director of revenue or appealed to
-33-1the director of revenue and thereafter upheld upon final
2resolution, including any judicial review, any amounts of
3exemptions allowed and credits allowed and paid from the
4homestead credit fund including the penalty, if any, become a
5lien upon the property on which the exemption and credit was
6originally granted, if still in the hands of the claimant,
7and not in the hands of a bona fide purchaser, and any amount
8so erroneously paid including the penalty, if any, shall be
9collected by the county treasurer in the same manner as other
10taxes and the collections shall be returned to the department
11of revenue and credited to the homestead credit fund. The
12director of revenue may institute legal proceedings against a
13homestead credit claimant for the collection of payments made
14on disallowed credits and the penalty, if any. If a person
15makes a false claim or affidavit with fraudulent intent to
16obtain the homestead exemption and credit, the person is guilty
17of a fraudulent practice and the claim shall be disallowed in
18full. If the credit has been paid, the amount of the credit
19plus a penalty equal to twenty-five percent of the amount of
20credit plus interest, at the rate in effect under section
21421.7, from the time of payment shall be collected by the
22county treasurer in the same manner as other property taxes,
23penalty, and interest are collected and when collected shall
24be paid to the director of revenue. If a homestead exemption
25and credit is disallowed and the claimant failed to give
26written notice to the assessor as required by section 425.2
27when the property ceased to be used as a homestead by the
28claimant, a civil penalty equal to five percent of the amount
29of the disallowed exemption or credit is assessed against the
30claimant.
31 Sec. 78. Section 425.8, subsection 1, Code 2023, is amended
32to read as follows:
331. The director of revenue shall prescribe the form
34for the making of a verified statement and designation of
35homestead, the form for the supporting affidavits required
-34-1herein, and such other forms as may be necessary for the proper
2administration of this subchapter. Whenever necessary, the
3department of revenue shall forward to the county auditors of
4the several counties in the state the prescribed sample forms,
5and the county auditors shall furnish blank forms prepared
6in accordance therewith with the assessment rolls, books,
7and supplies delivered to the assessors. The department of
8revenue shall prescribe and the county auditors shall provide
9on the forms for claiming the homestead exemption and credit a
10statement to the effect that the owner realizes that the owner
11must give written notice to the assessor when the owner changes
12the use of the property.
13 Sec. 79. Section 425.9, subsections 2, 3, and 4, Code 2023,
14are amended to read as follows:
152. If any claim for exemption and credit made hereunder
16 has been denied by the board of supervisors, and such action
17is subsequently reversed on appeal, the exemption and credit
18shall be allowed on the homestead involved in said appeal, and
19the director of revenue, the county auditor, and the county
20treasurer shall make such exemption and credit and change their
21books and records accordingly.
223. In the event the appealing taxpayer has paid one or both
23of the installments of the tax payable in the year or years in
24question on such homestead valuation, remittance shall be made
25to such taxpayer of the amount of such credit or exemption.
264. The amount of such credit shall be allocated and paid
27from the surplus redeposited in the homestead credit fund
28provided for in subsection 1. The amount of such exemption not
29covered by the credit shall be allowed as a credit on future
30taxes due and payable.
31 Sec. 80. Section 425.10, Code 2023, is amended to read as
32follows:
33425.10 Reversal of allowed claim.
34In the event any claim is allowed, and subsequently reversed
35on appeal, any exemption and credit made under the claim
-35-1shall be void. The amount of the erroneous exemption and
2 credit shall be charged against the property in question, and
3the director of revenue, the county auditor, and the county
4treasurer are authorized and directed to correct their books
5and records accordingly. The amount of the erroneous credit,
6when collected, shall be returned by the county treasurer to
7the homestead credit fund to be reallocated the following year
8as provided in this subchapter.
9 Sec. 81. Section 425.11, subsection 1, paragraph d,
10subparagraph (1), unnumbered paragraph 1, Code 2023, is amended
11to read as follows:
12The homestead includes the dwelling house which the owner,
13in good faith, is occupying as a home on July 1 of the year for
14which the exemption and credit is claimed and occupies as a
15home for at least six months during the calendar year in which
16the fiscal year begins, except as otherwise provided.
17 Sec. 82. Section 425.11, subsection 1, paragraph d,
18subparagraph (3), Code 2023, is amended to read as follows:
19(3) It must not embrace more than one dwelling house, but
20where a homestead has more than one dwelling house situated
21thereon, the exemption and credit provided for in this
22subchapter shall apply to the home and buildings used by the
23owner, but shall not apply to any other dwelling house and
24buildings appurtenant.
25 Sec. 83. Section 425.11, subsection 1, paragraph e, Code
262023, is amended to read as follows:
27e. “Owner” means the person who holds the fee simple
28title to the homestead, and in addition shall mean the person
29occupying as a surviving spouse or the person occupying under
30a contract of purchase which contract has been recorded in
31the office of the county recorder of the county in which the
32property is located; or the person occupying the homestead
33under devise or by operation of the inheritance laws where
34the whole interest passes or where the divided interest is
35shared only by persons related or formerly related to each
-36-1other by blood, marriage or adoption; or the person occupying
2the homestead is a shareholder of a family farm corporation
3that owns the property; or the person occupying the homestead
4under a deed which conveys a divided interest where the divided
5interest is shared only by persons related or formerly related
6to each other by blood, marriage or adoption; or where the
7person occupying the homestead holds a life estate with the
8reversion interest held by a nonprofit corporation organized
9under chapter 504, provided that the holder of the life estate
10is liable for and pays property tax on the homestead; or where
11the person occupying the homestead holds an interest in a
12horizontal property regime under chapter 499B, regardless
13of whether the underlying land committed to the horizontal
14property regime is in fee or as a leasehold interest, provided
15that the holder of the interest in the horizontal property
16regime is liable for and pays property tax on the homestead;
17or where the person occupying the homestead is a member of a
18community land trust as defined in 42 U.S.C. §12773, regardless
19of whether the underlying land is in fee or as a leasehold
20interest, provided that the member of the community land trust
21is occupying the homestead and is liable for and pays property
22tax on the homestead. For the purpose of this subchapter,
23the word “owner” shall be construed to mean a bona fide owner
24and not one for the purpose only of availing the person of
25the benefits of this subchapter. In order to qualify for the
26homestead tax exemption and credit, evidence of ownership shall
27be on file in the office of the clerk of the district court
28or recorded in the office of the county recorder at the time
29the owner files with the assessor a verified statement of the
30homestead claimed by the owner as provided in section 425.2.
31 Sec. 84. Section 425.12, Code 2023, is amended to read as
32follows:
33425.12 Indian land.
34Each forty acres of land, or fraction thereof, occupied by
35a member or members of the Sac and Fox Indians in Tama county,
-37-1which land is held in trust by the secretary of the interior of
2the United States for said Indians, shall be given a homestead
3tax exemption and credit within the meaning and under the
4provisions of this subchapter. Application for such homestead
5tax exemption and credit shall be made to the county auditor of
6Tama county and may be made by a representative of the tribal
7council.
8 Sec. 85. Section 425.13, Code 2023, is amended to read as
9follows:
10425.13 Conspiracy to defraud.
11If any two or more persons conspire and confederate together
12with fraudulent intent to obtain the exemption and credit
13provided for under the terms of this subchapter by making a
14false deed, or a false contract of purchase, they are guilty of
15a fraudulent practice.
16 Sec. 86. Section 425.15, subsection 1, unnumbered paragraph
171, Code 2023, is amended to read as follows:
18If the owner of a homestead allowed a an exemption and credit
19under this subchapter is any of the following, the exemption
20shall be the total actual value of the homestead and, for
21fiscal years for which credits are paid, the credit allowed
22on the homestead from the homestead credit fund shall be the
23entire amount of the tax levied on the homestead:
24 Sec. 87. Section 425.15, subsections 2, 3, and 4, Code 2023,
25are amended to read as follows:
262. a. For an owner described in subsection 1, paragraph
27“a”, “b”, or “c”, the exemption and credit allowed shall be
28continued to the estate of an owner who is deceased or the
29surviving spouse and any child, as defined in section 234.1,
30who are the beneficiaries of a deceased owner, so long as the
31surviving spouse remains unmarried.
32b. An individual described in subsection 1, paragraph
33“d”, is no longer eligible for the exemption and credit upon
34termination of dependency and indemnity compensation under 38
35U.S.C. §1301 et seq.
-38- 13. An owner or a beneficiary of an owner who elects to
2secure the exemption and credit provided in this section is not
3eligible for any other real property tax exemption provided by
4law for veterans of military service.
54. If an owner acquires a different homestead, the exemption
6and credit allowed under this section may be claimed on the new
7homestead unless the owner fails to meet the other requirements
8of this section.
9 Sec. 88. Section 425.15, subsection 5, paragraph a, Code
102023, is amended to read as follows:
11a. Except as provided in paragraph “b”, the list of the
12names and addresses of individuals allowed a an exemption
13and credit under this section and maintained by the county
14recorder, county treasurer, county assessor, city assessor, or
15other government body is confidential information and shall
16not be disseminated to any person unless otherwise ordered by
17a court or released by the lawful custodian of the records
18pursuant to state or federal law. The county recorder, county
19treasurer, county assessor, city assessor, or other government
20body responsible for maintaining the names and addresses of
21individuals allowed a an exemption and credit under this
22section may display such exemption and credit on individual
23paper records and individual electronic records, including
24display on an internet site.
25 Sec. 89. Section 425.17, subsection 8, Code 2023, is amended
26to read as follows:
278. “Property taxes due” means property taxes including any
28special assessments, but exclusive of delinquent interest and
29charges for services, due on a claimant’s homestead in this
30state, but includes only property taxes for which the claimant
31is liable and which will actually be paid by the claimant.
32However, if the claimant is a person whose property taxes have
33been suspended under sections 427.8 and 427.9, “property taxes
34due” means property taxes including any special assessments,
35but exclusive of delinquent interest and charges for services,
-39-1due on a claimant’s homestead in this state, but includes only
2property taxes for which the claimant is liable and which
3would have to be paid by the claimant if the payment of the
4taxes has not been suspended pursuant to sections 427.8 and
5427.9. “Property taxes due” shall be computed with no deduction
6for any credit under this subchapter or for any homestead
7exemption or credit allowed under section 425.1. Each claim
8shall be based upon the taxes due during the fiscal year next
9following the base year. If a homestead is owned by two or
10more persons as joint tenants or tenants in common, and one or
11more persons are not members of claimant’s household, “property
12taxes due” is that part of property taxes due on the homestead
13which equals the ownership percentage of the claimant and the
14claimant’s household. The county treasurer shall include with
15the tax receipt a statement that if the owner of the property
16is eighteen years of age or over, the person may be eligible
17for the credit allowed under this subchapter. If a homestead
18is an integral part of a farm, the claimant may use the total
19property taxes due for the larger unit. If a homestead is an
20integral part of a multidwelling or multipurpose building the
21property taxes due for the purpose of this subsection shall be
22prorated to reflect the portion which the value of the property
23that the household occupies as its homestead is to the value
24of the entire structure. For purposes of this subsection,
25“unit” refers to that parcel of property covered by a single tax
26statement of which the homestead is a part.
27 Sec. 90. Section 425.23, subsection 2, Code 2023, is amended
28to read as follows:
292. The actual credit for property taxes due shall be
30determined by subtracting from the tentative credit the amount
31of the tax reduction resulting from the homestead exemption
32and credit under section sections 425.1 which is allowed
33as a credit and 425.1A against property taxes due in the
34fiscal year next following the base year by the claimant or
35any person of the claimant’s household. If the subtraction
-40-1produces a negative amount, there shall be no credit but
2no refund shall be required. The actual reimbursement for
3rent constituting property taxes paid shall be equal to the
4tentative reimbursement.
5 Sec. 91. Section 435.26, subsection 1, paragraph a, Code
62023, is amended to read as follows:
7a. A mobile home or manufactured home which is located
8outside a manufactured home community or mobile home park shall
9be converted to real estate by being placed on a permanent
10foundation and shall be assessed for real estate taxes. A
11home, after conversion to real estate, is eligible for the
12homestead tax exemption and credit and the military service tax
13exemption as provided in sections 425.2 and 426A.11. A taxable
14mobile home or manufactured home which is located outside
15of a manufactured home community or mobile home park as of
16January 1, 1995, is also exempt from the permanent foundation
17requirements of this chapter until the home is relocated.
18 Sec. 92. Section 435.26A, subsection 3, Code 2023, is
19amended to read as follows:
203. After the surrender of a manufactured home’s certificate
21of title under this section, the manufactured home shall
22continue to be taxed under section 435.22 and is not eligible
23for the homestead tax exemption and credit or the military
24service tax exemption and credit. A foreclosure action on a
25manufactured home whose title has been surrendered under this
26section shall be conducted as a real estate foreclosure. A tax
27lien and its priority shall remain the same on a manufactured
28home after its certificate of title has been surrendered.
29 Sec. 93. Section 483A.24, subsection 19, Code 2023, is
30amended to read as follows:
3119. Upon payment of a fee established by rules adopted
32pursuant to section 483A.1 for a lifetime trout fishing
33license, the department shall issue a lifetime trout fishing
34license to a person who is at least sixty-five years of age or
35to a person who qualifies for the disabled veteran homestead
-41- 1exemption and credit under section 425.15. The department
2shall prepare an application to be used by a person requesting
3a lifetime trout fishing license under this subsection.
4 Sec. 94. Section 499A.14, Code 2023, is amended to read as
5follows:
6499A.14 Taxation.
7The real estate shall be taxed in the name of the
8cooperative, and each member of the cooperative shall pay
9that member’s proportionate share of the tax in accordance
10with the proration formula set forth in the bylaws, and each
11member occupying an apartment as a residence shall receive
12that member’s proportionate homestead tax exemption and credit
13and each veteran of the military services of the United States
14identified as such under the laws of the state of Iowa or the
15United States shall receive as a credit that member’s veterans
16tax benefit as prescribed by the laws of the state of Iowa.
17 Sec. 95. EXISTING HOMESTEAD CLAIMS. Homestead credit
18claims approved under chapter 425, subchapter I, prior to and
19valid on the effective date of this division of this Act shall
20result in a homestead exemption under chapter 425, subchapter
21I, as enacted in this division of this Act, without further
22filing by the claimant.
23 Sec. 96. IMPLEMENTATION. Section 25B.7, subsection 1,
24shall not apply to the property tax exemption provided in this
25division of this Act.
26 Sec. 97. APPLICABILITY. This division of this Act applies
27to assessment years beginning on or after January 1, 2024.
28DIVISION V
29ELDERLY PROPERTY TAX CREDIT
30 Sec. 98. Section 425.17, subsection 2, paragraph a,
31subparagraph (3), Code 2023, is amended to read as follows:
32(3) A person filing a claim for credit under this subchapter
33who has attained the age of seventy years on or before December
3431 of the base year, who has a household income of less than two
35 three hundred fifty percent of the federal poverty level, as
-42-1defined by the most recently revised poverty income guidelines
2published by the United States department of health and human
3services, and is domiciled in this state at the time the claim
4is filed or at the time of the person’s death in the case of a
5claim filed by the executor or administrator of the claimant’s
6estate.
7 Sec. 99. Section 425.23, subsection 1, paragraph c,
8subparagraph (2), Code 2023, is amended to read as follows:
9(2) The difference between the actual amount of net
10 property taxes due on the homestead during the fiscal year next
11following the base year minus the actual amount of net property
12taxes due on the homestead during the first fiscal year for
13which the claimant filed a claim for a credit calculated under
14this paragraph “c” and for which the property taxes due on the
15homestead were calculated on an assessed valuation that was
16not a partial assessment and if the claimant has filed for the
17credit calculated under this paragraph “c” for each of the
18subsequent fiscal years after the first credit claimed.
19 Sec. 100. Section 425.23, subsection 2, Code 2023, is
20amended to read as follows:
212. a. The Except as provided in paragraph “b”, the
22 actual credit for property taxes due shall be determined
23by subtracting from the tentative credit the amount of the
24homestead credit under section 425.1 which is allowed as a
25credit against property taxes due in the fiscal year next
26following the base year by the claimant or any person of
27the claimant’s household. If the subtraction produces a
28negative amount, there shall be no credit but no refund shall
29be required. The actual reimbursement for rent constituting
30property taxes paid shall be equal to the tentative
31reimbursement.
32b. If the claimant’s tentative credit is the amount
33determined under subsection 1, paragraph “c”, subparagraph (2),
34the actual credit amount shall be equal to the tentative credit
35amount.
-43-1 Sec. 101. EFFECTIVE DATE. The following, being deemed of
2immediate importance, take effect upon enactment:
31. The section of this division of this Act amending section
4423.23, subsection 1, paragraph “c”, subparagraph (2).
52. The section of this division of this Act amending section
6423.23, subsection 2.
7 Sec. 102. RETROACTIVE APPLICABILITY. The following apply
8retroactively to claims under chapter 425, subchapter II, filed
9on or after January 1, 2022:
101. The section of this division of this Act amending section
11423.25, subsection 1, paragraph “c”, subparagraph (2).
122. The section of this division of this Act amending section
13423.23, subsection 2.
14 Sec. 103. APPLICABILITY. The section of this division
15of this Act amending section 425.17, subsection 2, paragraph
16“a”, subparagraph (3), applies to claims under chapter 425,
17subchapter II, filed on or after January 1, 2024.
18DIVISION VI
19MILITARY SERVICE PROPERTY TAX EXEMPTION AND CREDIT
20 Sec. 104. Section 25B.7, subsection 2, paragraph c, Code
212023, is amended by striking the paragraph.
22 Sec. 105. Section 426A.1A, Code 2023, is amended to read as
23follows:
24426A.1A Appropriation.
25There For each fiscal year beginning before July 1, 2026,
26there is appropriated from the general fund of the state the
27amounts necessary to fund the credits provided under this
28chapter.
29 Sec. 106. Section 426A.2, Code 2023, is amended to read as
30follows:
31426A.2 Military service tax credit.
32The For each fiscal year beginning before July 1, 2026, the
33 moneys appropriated under section 426A.1A shall be apportioned
34each year so as to replace all or a portion of the tax which
35would be due on property eligible for military service tax
-44-1exemption in the state, if the property were subject to
2taxation, the amount of the credit to be not more than six
3dollars and ninety-two cents per thousand dollars of assessed
4value of property, not to exceed nine hundred forty-five
5dollars, which would be subject to the tax, except for the
6military service tax exemption.
7 Sec. 107. Section 426A.11, subsections 1 and 2, Code 2023,
8are amended to read as follows:
91. The property, not to exceed two thousand seven hundred
10seventy-eight dollars in taxable value for assessment years
11beginning before January 1, 2024, of any veteran, as defined in
12section 35.1, of World War I.
132. a. The property, not to exceed one thousand eight
14hundred fifty-two dollars in taxable value for assessment years
15beginning before January 1, 2024, of an honorably separated,
16retired, furloughed to a reserve, placed on inactive status,
17or discharged veteran, as defined in section 35.1, subsection
182, paragraph “a” or “b”.
19b. The property, not to exceed two thousand fifty-five
20dollars in taxable value for the assessment year beginning
21January 1, 2024, of an honorably separated, retired, furloughed
22to a reserve, placed on inactive status, or discharged veteran,
23as defined in section 35.1, subsection 2, paragraph “a” or “b”.
24c. The property, not to exceed four thousand dollars in
25taxable value for assessment years beginning on or after
26January 1, 2025, of an honorably separated, retired, furloughed
27to a reserve, placed on inactive status, or discharged veteran,
28as defined in section 35.1, subsection 2, paragraph “a” or “b”.
29 Sec. 108. IMPLEMENTATION. Section 25B.7, subsection 1,
30shall not apply to the property tax exemption provided in this
31Act.
32 Sec. 109. APPLICABILITY. This division of this Act applies
33to assessment years beginning on or after January 1, 2024.
34DIVISION VII
35PROPERTY TAX ASSESSMENT LIMITATIONS
-45-1 Sec. 110. Section 441.21, subsections 5, 9, and 10, Code
22023, are amended to read as follows:
35. a. (1) For valuations established as of January 1,
41979, property valued by the department of revenue pursuant
5to chapters 428, 433, and 437, and 438 shall be considered as
6one class of property and shall be assessed as a percentage
7of its actual value. The percentage shall be determined by
8the director of revenue in accordance with the provisions of
9this section. For valuations established as of January 1,
101979, the percentage shall be the quotient of the dividend and
11divisor as defined in this section. The dividend shall be the
12total actual valuation established for 1978 by the department
13of revenue, plus ten percent of the amount so determined.
14The divisor for property valued by the department of revenue
15pursuant to chapters 428, 433, and 437, and 438 shall be the
16valuation established for 1978, plus the amount of value added
17to the total actual value by the revaluation of the property
18by the department of revenue as of January 1, 1979. For
19valuations established as of January 1, 1980, property valued
20by the department of revenue pursuant to chapters 428, 433, and
21 437, and 438 shall be assessed at a percentage of its actual
22value. The percentage shall be determined by the director of
23revenue in accordance with the provisions of this section. For
24valuations established as of January 1, 1980, the percentage
25shall be the quotient of the dividend and divisor as defined in
26this section. The dividend shall be the total actual valuation
27established for 1979 by the department of revenue, plus eight
28percent of the amount so determined. The divisor for property
29valued by the department of revenue pursuant to chapters 428,
30433, and 437, and 438 shall be the valuation established for
311979, plus the amount of value added to the total actual
32value by the revaluation of the property by the department of
33revenue as of January 1, 1980. For valuations established
34as of January 1, 1981, and each year thereafter beginning
35before January 1, 2025, the percentage of actual value at
-46-1which property valued by the department of revenue pursuant to
2chapters 428, 433, and 437, and 438 shall be assessed shall
3be calculated in accordance with the methods provided herein,
4except that any references to ten percent in this subsection
5shall be eight percent. For valuations established on or after
6January 1, 2013, property valued by the department of revenue
7pursuant to chapter 434 shall be assessed at a portion of its
8actual value determined in the same manner at which property
9assessed as commercial property is assessed under paragraph “b”
10 for the same assessment year. For valuations established for
11the assessment year beginning January 1, 2025, the percentage
12of actual value at which property valued by the department of
13revenue pursuant to chapter 438 shall be assessed shall be
14ninety-five percent. For valuations established for assessment
15years beginning on or after January 1, 2026, the percentage
16of actual value at which property valued by the department of
17revenue pursuant to chapter 438 shall be assessed shall be
18ninety percent.
19(2) (a) For valuations established for the assessment year
20beginning January 1, 2025, the percentage of actual value at
21which property valued by the department of revenue pursuant to
22chapters 428 and 437 shall be assessed shall be ninety-seven
23and one-half percent.
24(b) For valuations established for the assessment year
25beginning January 1, 2026, the percentage of actual value at
26which property valued by the department of revenue pursuant to
27chapters 428 and 437 shall be assessed shall be ninety-five
28percent.
29(c) For valuations established for the assessment year
30beginning January 1, 2027, the percentage of actual value at
31which property valued by the department of revenue pursuant to
32chapters 428 and 437 shall be assessed shall be ninety-two and
33one-half percent.
34(d) For valuations established for the assessment year
35beginning January 1, 2028, and each assessment year thereafter,
-47-1the percentage of actual value at which property valued by the
2department of revenue pursuant to chapters 428 and 437 shall be
3assessed shall be ninety percent.
4b. For valuations established on or after January 1, 2013,
5commercial property, excluding properties referred to in
6section 427A.1, subsection 9, shall be assessed at a portion
7of its actual value, as determined in this paragraph “b”. For
8valuations established on or after January 1, 2013, property
9valued by the department of revenue pursuant to chapter 434
10shall be assessed at a portion of its actual value determined
11in the same manner at which property assessed as commercial
12property is assessed for the same assessment year.
13(1) For valuations established for the assessment year
14beginning January 1, 2013, the percentage of actual value
15as equalized by the department of revenue as provided in
16section 441.49 at which commercial property shall be assessed
17shall be ninety-five percent. For valuations established
18for the assessment year beginning January 1, 2014, and each
19assessment year thereafter beginning before January 1, 2022,
20the percentage of actual value as equalized by the department
21of revenue as provided in section 441.49 at which commercial
22property shall be assessed shall be ninety percent.
23(2) For valuations established for the assessment year
24beginning January 1, 2022, and each assessment year thereafter,
25the portion of actual value at which each property unit of
26commercial property shall be assessed shall be the sum of the
27following:
28(a) An amount equal to the product of the assessment
29limitation percentage applicable to residential property under
30subsection 4 for that assessment year multiplied by the actual
31value of the property that exceeds zero dollars but does not
32exceed one hundred fifty thousand dollars.
33(b) (i) An For the assessment years beginning January 1,
342022, January 1, 2023, and January 1, 2024, an amount equal
35to ninety percent of the actual value of the property for
-48-1that assessment year that exceeds one hundred fifty thousand
2dollars.
3(ii) For the assessment year beginning January 1, 2025,
4an amount equal to eighty-five percent of the actual value of
5the property for that assessment year that exceeds one hundred
6fifty thousand dollars.
7(iii) For the assessment year beginning January 1, 2026,
8and each assessment year thereafter, an amount equal to eighty
9percent of the actual value of the property for that assessment
10year that exceeds one hundred fifty thousand dollars.
11c. For valuations established on or after January 1, 2013,
12industrial property, excluding properties referred to in
13section 427A.1, subsection 9, shall be assessed at a portion of
14its actual value, as determined in this paragraph “c”.
15(1) For valuations established for the assessment year
16beginning January 1, 2013, the percentage of actual value
17as equalized by the department of revenue as provided in
18section 441.49 at which industrial property shall be assessed
19shall be ninety-five percent. For valuations established
20for the assessment year beginning January 1, 2014, and each
21assessment year thereafter beginning before January 1, 2022,
22the percentage of actual value as equalized by the department
23of revenue as provided in section 441.49 at which industrial
24property shall be assessed shall be ninety percent.
25(2) For valuations established for the assessment year
26beginning January 1, 2022, and each assessment year thereafter,
27the portion of actual value at which each property unit of
28industrial property shall be assessed shall be the sum of the
29following:
30(a) An amount equal to the product of the assessment
31limitation percentage applicable to residential property under
32subsection 4 for that assessment year multiplied by the actual
33value of the property that exceeds zero dollars but does not
34exceed one hundred fifty thousand dollars.
35(b) (i) An For the assessment years beginning January 1,
-49-12022, January 1, 2023, and January 1, 2024, an amount equal
2to ninety percent of the actual value of the property for
3that assessment year that exceeds one hundred fifty thousand
4dollars.
5(ii) For the assessment year beginning January 1, 2025,
6an amount equal to eighty-five percent of the actual value of
7the property for that assessment year that exceeds one hundred
8fifty thousand dollars.
9(iii) For the assessment year beginning January 1, 2026,
10and each assessment year thereafter, an amount equal to eighty
11percent of the actual value of the property for that assessment
12year that exceeds one hundred fifty thousand dollars.
13d. For valuations established for the assessment year
14beginning January 1, 2019, and each assessment year thereafter,
15the percentages or portions of actual value at which property
16is assessed, as determined under this subsection, shall not be
17applied to the value of wind energy conversion property valued
18under section 427B.26 the construction of which is approved by
19the Iowa utilities board on or after July 1, 2018.
20e. (1) For each fiscal year beginning on or after July 1,
212023, there is appropriated from the general fund of the state
22to the department of revenue the sum of one hundred twenty-five
23million dollars to be used for payments under this paragraph
24calculated as a result of the assessment limitations imposed
25under paragraph “b”, subparagraph (2), subparagraph division
26(a), and paragraph “c”, subparagraph (2), subparagraph division
27(a).
28(2) For fiscal years beginning on or after July 1, 2023,
29each county treasurer shall be paid by the department of
30revenue an amount calculated under subparagraph (4). If an
31amount appropriated for the fiscal year is insufficient to make
32all payments as calculated under subparagraph (4), the director
33of revenue shall prorate the payments to the county treasurers
34and shall notify the county auditors of the pro rata percentage
35on or before September 30.
-50- 1(3) On or before July 1 of each fiscal year, the assessor
2shall report to the county auditor that portion of the total
3actual value of all commercial property and industrial property
4in the county that is subject to the assessment limitations
5imposed under paragraph “b”, subparagraph (2), subparagraph
6division (a), and paragraph “c”, subparagraph (2), subparagraph
7division (a), for the assessment year used to calculate the
8taxes due and payable in that fiscal year.
9(4) On or before September 1 of each fiscal year, the county
10auditor shall prepare a statement, based on the report received
11in subparagraph (3) and information transmitted to the county
12auditor under chapter 434, listing for each taxing district in
13the county:
14(a) The product of the portion of the total actual value
15of all commercial property, industrial property, and property
16valued by the department under chapter 434 in the county
17that is subject to the assessment limitations imposed under
18paragraph “b”, subparagraph (2), subparagraph division (a),
19and paragraph “c”, subparagraph (2), subparagraph division
20(a), for the applicable assessment year used to calculate
21taxes which are due and payable in the applicable fiscal year
22multiplied by the difference, stated as a percentage, between
23ninety percent the percentage under paragraph “b”, subparagraph
24(2), subparagraph division (b), for the applicable assessment
25year and the assessment limitation percentage applicable to
26residential property under subsection 4 for the applicable
27assessment year.
28(b) The tax levy rate per one thousand dollars of assessed
29value for each taxing district for the applicable fiscal year.
30(c) The amount of the payment for each county is equal to
31the amount determined pursuant to subparagraph division (a),
32multiplied by the tax rate specified in subparagraph division
33(b), and then divided by one thousand dollars.
34(5) The county auditor shall certify and forward one copy of
35the statement described in subparagraph (4) to the department
-51-1of revenue not later than September 1 of each fiscal year.
2(6) The amounts determined under this paragraph shall
3be paid by the department to the county treasurers in equal
4installments in September and March of each year. The county
5treasurer shall apportion the payments among the eligible
6taxing districts in the county and the amounts received by each
7taxing authority shall be treated the same as property taxes
8paid.
9f. For the purposes of this subsection, unless the context
10otherwise requires:
11(1) “Contiguous parcels” means any of the following:
12(a) Parcels that share a common boundary.
13(b) Parcels within the same building or structure
14regardless of whether the parcels share a common boundary.
15(c) Permanent improvements to the land that are situated
16on one or more parcels of land that are assessed and taxed
17separately from the permanent improvements if the parcels of
18land upon which the permanent improvements are situated share
19a common boundary.
20(2) “Parcel” means the same as defined in section 445.1.
21“Parcel” also means that portion of a parcel assigned a
22classification of commercial property or industrial property
23pursuant to section 441.21, subsection 14, paragraph “b”.
24(3) “Property unit” means a parcel or contiguous parcels
25all of which are located within the same county, with the same
26property tax classification, are owned by the same person, and
27are operated by that person for a common use and purpose.
289. Not later than November 1, 1979, and November 1 of each
29subsequent year, the director shall certify to the county
30auditor of each county the percentages of actual value at
31which residential property, agricultural property, commercial
32property, industrial property, property valued by the
33department of revenue pursuant to chapter 434, property valued
34by the department pursuant to chapter 438, and property valued
35by the department of revenue pursuant to chapters 428, 433,
-52- 1and 437, and 438 in each assessing jurisdiction in the county
2shall be assessed for taxation, including for assessment years
3beginning on or after January 1, 2022, the percentages used to
4apply the assessment limitations under subsection 5, paragraphs
5“b” and “c”. The county auditor shall proceed to determine the
6assessed values of agricultural property, residential property,
7commercial property, industrial property, property valued by
8the department of revenue pursuant to chapter 434, property
9valued by the department pursuant to chapter 438, and property
10valued by the department of revenue pursuant to chapters 428,
11433, and 437, and 438 by applying such percentages to the
12current actual value of such property, as reported to the
13county auditor by the assessor, and the assessed values so
14determined shall be the taxable values of such properties upon
15which the levy shall be made.
1610. The percentages of actual value computed by the
17department of revenue for agricultural property, residential
18property, commercial property, industrial property, property
19valued by the department of revenue pursuant to chapter 434,
20property valued by the department pursuant to chapter 438,
21 and property valued by the department of revenue pursuant to
22chapters 428, 433, and 437, and 438, including for assessment
23years beginning on or after January 1, 2022, the percentages
24used to apply the assessment limitations under subsection 5,
25paragraphs “b” and “c”, and used to determine assessed values of
26those classes of property do not constitute a rule as defined
27in section 17A.2, subsection 11.
28 Sec. 111. EFFECTIVE DATE. This division of this Act takes
29effect July 1, 2024.
30DIVISION VIII
31NATURAL RESOURCES AND OUTDOOR RECREATION TRUST FUND
32 Sec. 112. Section 461.32, subsection 2, paragraph a, Code
332023, is amended to read as follows:
34a. The establishment, restoration, or enhancement, and
35management of state parks, state preserves, state forests,
-53-1wildlife areas, wildlife habitats, native prairies, and
2wetlands.
3 Sec. 113. Section 461.32, subsection 2, Code 2023, is
4amended by adding the following new paragraphs:
5 NEW PARAGRAPH. g. The construction, maintenance, or
6expansion of roads on state-owned land under the jurisdiction
7of the department of natural resources.
8 NEW PARAGRAPH. h. Salaries and employee benefits paid to
9support conservation officer, park ranger, or park manager
10positions within the department of natural resources.
11 Sec. 114. Section 461.33, subsection 2, paragraph a, Code
122023, is amended to read as follows:
13a. (1) Soil conservation and watershed protection,
14including by supporting the division of soil conservation
15and water quality within the department of agriculture and
16land stewardship and soil and water conservation district
17commissioners. The department may provide for the installation
18 establishment of conservation practices, management practices
19to control soil erosion on row cropped land, and watershed
20protection improvements as provided in chapters 161A, 161C,
21461A, and 466.
22(2) Each fiscal year, at least ten percent of the moneys
23allocated to the account shall be used to support the planting
24and maintenance of cover crops as provided in section 161A.73.
25 Sec. 115. EFFECTIVE DATE. This division of this Act takes
26effect January 1, 2025.
27DIVISION IX
28CHARITABLE CONSERVATION CONTRIBUTION TAX CREDIT
29 Sec. 116. Section 2.48, subsection 3, paragraph e,
30subparagraph (6), Code 2023, is amended by striking the
31subparagraph.
32 Sec. 117. Section 422.11W, Code 2023, is amended by adding
33the following new subsection:
34 NEW SUBSECTION. 5. Commencing with tax years beginning
35on or after January 1, 2025, a charitable conservation
-54-1contribution tax credit shall not be claimed against taxes as
2provided in this section, except for tax credits claimed for
3qualified real property interests conveyed prior to January 1,
42025.
5 Sec. 118. Section 422.33, subsection 25, Code 2023, is
6amended by striking the subsection and inserting in lieu
7thereof the following:
825. The taxes imposed under this subchapter shall be reduced
9by a charitable conservation contribution tax credit as allowed
10under section 422.11W for each tax year the taxpayer has
11credit, in excess of tax liability, for qualified real property
12interests conveyed prior to January 1, 2025.
13 Sec. 119. PRESERVATION OF EXISTING RIGHTS. This division
14of this Act is not intended to and shall not limit, modify, or
15otherwise adversely affect any amount of tax credit issued,
16awarded, or allowed prior to January 1, 2025, nor shall it
17limit, modify, or otherwise adversely affect a taxpayer’s right
18to claim or redeem a tax credit issued, awarded, or allowed
19prior to January 1, 2025, including but not limited to any tax
20credit carryforward amount.
21 Sec. 120. EFFECTIVE DATE. This division of this Act takes
22effect January 1, 2025.
23 Sec. 121. APPLICABILITY. This division of this Act applies
24to tax years beginning on or after January 1, 2025.
25DIVISION X
26Property tax benefits and incentives
27 Sec. 122. NEW SECTION. 404.3C Assessment agreements —
28commercial property.
291. For revitalization areas established under this chapter
30on or after the effective date of this division of this Act
31and for first-year exemption applications for property located
32in a revitalization area in existence on the effective date
33of this division of this Act filed on or after the effective
34date of this division of this Act, commercial property shall
35not receive a tax exemption under this chapter unless the city
-55-1or county, as applicable, and the owner of the qualified real
2estate enter into a written assessment agreement specifying a
3minimum actual value until a specified termination date for the
4duration of the exemption period.
52. a. The assessment agreement shall be presented to the
6appropriate assessor. The assessor shall review the plans and
7specifications for the improvements to be made to the property
8and if the minimum actual value contained in the assessment
9agreement appears to be reasonable, the assessor shall execute
10the following certification upon the agreement:
11 The undersigned assessor, being legally responsible for the
12assessment of the above described property upon completion of
13the improvements to be made on it, certifies that the actual
14value assigned to that land and improvements upon completion
15shall not be less than $.........
16b. The assessment agreement with the certification of
17the assessor and a copy of this subsection shall be filed in
18the office of the county recorder of the county where the
19property is located. Upon completion of the improvements,
20the assessor shall value the property as required by law,
21except that the actual value shall not be less than the minimum
22actual value contained in the assessment agreement. This
23subsection does not prohibit the assessor from assigning a
24higher actual value to the property or prohibit the owner
25from seeking administrative or legal remedies to reduce the
26actual value assigned except that the actual value shall not
27be reduced below the minimum actual value contained in the
28assessment agreement. An assessor, county auditor, board of
29review, director of revenue, or court of this state shall not
30reduce or order the reduction of the actual value below the
31minimum actual value in the agreement during the term of the
32agreement regardless of the actual value which may result from
33the incomplete construction of improvements, destruction or
34diminution by any cause, insured or uninsured, except in the
35case of acquisition or reacquisition of the property by a
-56-1public entity. Recording of an assessment agreement complying
2with this subsection constitutes notice of the assessment
3agreement to a subsequent purchaser or encumbrancer of the land
4or any part of it, whether voluntary or involuntary, and is
5binding upon a subsequent purchaser or encumbrancer.
6 Sec. 123. NEW SECTION. 404.3D Exemptions for residential
7property.
8For revitalization areas established under this chapter on
9or after the effective date of this division of this Act and
10for first-year exemption applications for property located in a
11revitalization area in existence on the effective date of this
12division of this Act filed on or after the effective date of
13this division of this Act, an exemption otherwise authorized
14under this chapter shall not be authorized for or approved by a
15city or county, as applicable, for property that is residential
16property.
17 Sec. 124. EFFECTIVE DATE. This division of this Act takes
18effect July 1, 2024.
19DIVISION XI
20TAX INCREMENT FINANCING
21 Sec. 125. Section 403.19, subsection 2, paragraph a, Code
222023, is amended to read as follows:
23a. That portion of the taxes each year in excess of such
24amount shall be allocated to and when collected be paid into
25a special fund of the municipality to pay the principal of
26and interest on loans, moneys advanced to, or indebtedness,
27whether funded, refunded, assumed, or otherwise, including
28bonds issued under the authority of section 403.9, subsection
291, incurred by the municipality to finance or refinance, in
30whole or in part, an urban renewal project within the area,
31and to provide assistance for low and moderate income family
32housing as provided in section 403.22. However, except
33as provided in paragraph “b”, taxes for the regular and
34voter-approved physical plant and equipment levy of a school
35district imposed pursuant to section 298.2 and taxes for the
-57-1instructional support program of a school district imposed
2pursuant to section 257.19, taxes for the payment of bonds
3and interest of each taxing district, and taxes imposed under
4section 346.27, subsection 22, related to joint county-city
5buildings shall be collected against all taxable property
6within the taxing district without limitation by the provisions
7of this subsection. Additionally, for property taxes due and
8payable in fiscal years beginning on or after July 1, 2025,
9if the portion of the urban renewal area that is subject to a
10division of revenue under this section contains wind energy
11conversion property that is subject to special valuation under
12section 427B.26, foundation property taxes of a school district
13imposed under section 257.3 shall be collected against all
14taxable property within that portion of the urban renewal area
15without limitation by the provisions of this subsection and
16when collected be paid into the fund of the school district
17into which all other property taxes are paid.
18DIVISION XII
19transit funding
20 Sec. 126. Section 364.2, subsection 4, paragraph f,
21subparagraph (1), subparagraph division (b), Code 2023, is
22amended to read as follows:
23(b) For franchise fees assessed and collected during fiscal
24years beginning on or after July 1, 2013 2024, but before
25July 1, 2030, by a city that is the subject of a judgment,
26court-approved settlement, or court-approved compromise
27providing for payment of restitution, a refund, or a return
28described in section 384.3A, subsection 3, paragraph “j” with
29a population exceeding two hundred thousand, the rate of the
30franchise fee shall not exceed seven and one-half percent
31of gross revenues generated from sales of the franchisee in
32the city, and franchise fee amounts assessed and collected
33during such fiscal years in excess of five percent of gross
34revenues generated from sales shall be used solely for the
35purpose specified in section 384.3A, subsection 3, paragraph
-58-1“j”. A city may assess and collect a franchise fee in excess
2of five percent of gross revenues generated from the sales
3of the franchisee pursuant to this subparagraph division (b)
4for a period not to exceed seven consecutive fiscal years
5once the franchise fee is first imposed at a rate in excess
6of five percent. An ordinance increasing the franchise fee
7rate to greater than five percent pursuant to this subparagraph
8division (b) shall not become effective unless approved at
9an election. After passage of the ordinance, the council
10shall submit the proposal at a special election held on a date
11specified in section 39.2, subsection 4, paragraph “b”. If a
12majority of those voting on the proposal approves the proposal,
13the city may proceed as proposed. The complete text of the
14ordinance shall be included on the ballot and the full text
15of the ordinance posted for the voters pursuant to section
1652.25. All absentee voters shall receive the full text of the
17ordinance along with the absentee ballot. This subparagraph
18division (b) is repealed July 1, 2030.
19 Sec. 127. Section 384.3A, subsection 3, paragraph j, Code
202023, is amended to read as follows:
21j. For franchise fees assessed and collected by a city in
22excess of five percent of gross revenues generated from sales
23of the franchisee within the city pursuant to section 364.2,
24subsection 4, paragraph “f”, subparagraph (1), subparagraph
25division (b), during fiscal years beginning on or after July 1,
262013 2024, but before July 1, 2030, the adjustment, renewal,
27or extension of any part or all of the legal indebtedness of
28a city, whether evidenced by bonds, warrants, court-approved
29settlements, court-approved compromises, or judgments, or the
30funding or refunding of the same, if such legal indebtedness
31relates to restitution, a refund, or a return ordered by a
32court of competent jurisdiction for franchise fees assessed
33and collected by the city before June 20, 2013 solely for the
34reduction of property tax levies that support the operation and
35maintenance of a municipal transit system or a regional transit
-59-1district. This paragraph “j” is repealed July 1, 2030.
2 Sec. 128. EFFECTIVE DATE. This division of this Act takes
3effect July 1, 2024.
4EXPLANATION
5The inclusion of this explanation does not constitute agreement with
6the explanation’s substance by the members of the general assembly.
7This bill relates to state and local revenue and finances.
8DIVISION I — SALES AND USE TAX RATES AND DISTRIBUTION. An
9amendment to the Iowa Constitution was ratified on November 2,
102010, which created a natural resources and outdoor recreation
11trust fund (fund) and dedicated a portion of state revenues to
12the fund for the purposes of protecting and enhancing water
13quality and natural areas in the state including parks, trails,
14and fish and wildlife habitat, and conserving agricultural
15soils in the state (Article VII, section 10). The fund is
16codified in Code section 461.31. Pursuant to the amendment,
17the amount credited to the fund will be equal to the amount
18generated by an increase in the state sales tax rate occurring
19after the effective date of the constitutional amendment, but
20shall not exceed the amount that a state sales tax rate of
210.375 percent would generate. The state sales tax rate has not
22been increased since the effective date of the constitutional
23amendment, so no amounts have been credited to the fund. The
24bill increases the sales tax rate and the use tax rate from 6
25percent to 7 percent beginning January 1, 2025. In lieu of the
26local option and sales services tax revenue repealed in another
27division of the bill, the bill transfers a specified amount of
28the state sales and use tax revenues collected to the local
29sales and use tax fund established under Code chapter 423B,
30for allocation and expenditure in a manner similar to that
31which was provided for local sales and services tax revenues.
32However, as provided in another division of the bill, amounts
33resulting from the increase in the use tax for the period
34beginning January 1, 2025, through December 31, 2043, are
35deposited in the local use tax supplement fund to be used
-60-1for purposes of that fund. The amount of sales tax revenues
2transferred to the local sales and use tax fund under Code
3chapter 423B for the period beginning January 1, 2025, through
4December 31, 2027, is an amount equating to a tax of 1.4
5percent. The amount transferred is then reduced each year by
6an amount equating to a 0.05 percent tax until January 1, 2030.
7The amount of sales tax revenues transferred to the local sales
8and use tax fund under Code chapter 423B beginning January 1,
92030, is an amount equating to a tax of 1.25 percent. The bill,
10as the result of Article VII, section 10, of the Constitution
11of the State of Iowa, also amends the transfer of sales tax
12revenues to the secure an advanced vision for education fund in
13Code section 423.2A(2).
14DIVISION II — WATER SERVICE TAX. The bill changes the water
15service tax on the furnishing of water to consumers so that the
16rate is equal to the rate of the sales tax that is being imposed
17under Code chapter 423.
18Currently, one-half of the moneys collected from the water
19service tax are deposited into the general fund of the state
20and one-half of the moneys are deposited into the water quality
21financial assistance fund created in Code section 16.134A.
22 The bill strikes the provision requiring one-half of the
23water service tax moneys be deposited into the water quality
24financial assistance fund and requires all moneys generated
25from the water service tax be deposited into the general fund
26of the state.
27The bill also strikes the future repeal of the water service
28excise tax.
29The division takes effect January 1, 2025.
30DIVISION III — LOCAL OPTION TAXES. Code chapter 423B
31authorizes, following approval at election, the imposition of
32a local option sales and services tax at a rate not to exceed
33one percent to be administered similarly to the state sales
34and services tax and authorizes the imposition of a local
35vehicle tax. The bill strikes the authorization for the local
-61-1vehicle tax and also strikes the authorization to impose the
2local option sales and services tax under Code chapter 423B,
3but instead authorizes cities and counties to expend specified
4state sales and use tax revenues that are deposited in the
5local sales and use tax fund following the increase of the
6state sales and use taxes rates in previous sections of the
7bill.
8Under the bill, sales and services tax revenue credited to
9and deposited in each county’s account within the local sales
10and use tax fund must be expended by each recipient county
11and city as required by the jurisdiction’s revenue purpose
12statement, including a revenue purpose statement approved at
13election prior to January 1, 2025, and in effect on or set to
14take effect on or after January 1, 2025, for the use of local
15option sales and use tax revenue previously collected under
16Code chapter 423B, or be used to reduce specified property tax
17levies.
18The bill also modifies the requirements and permissible uses
19of funds received under Code chapter 423B. The bill specifies
20that for a county with a population of 400,000 or more, a
21revenue purpose statement governing the use of revenues for the
22unincorporated area of the county approved on or after January
231, 2025, shall require the use of 75 percent of such moneys
24for property tax relief. Additionally, the bill provides that
25property tax relief includes payments under a Code chapter
2628E agreement for purposes of a regional transit district if
27such payments are used to reduce the regional transit district
28levy. For a city located in whole or in part in a county with
29a population of 400,000 or more, the use of revenues received
30under Code chapter 423B for such regional transit district
31purposes shall not exceed 10 percent of the amount received
32and for a county with a population of 400,000 or more, for the
33unincorporated area, shall not exceed 25 percent.
34The board of supervisors of each county and the city
35council of each city may adopt by resolution a revenue purpose
-62-1statement for the expenditure of funds received under Code
2chapter 423B.
3The revenues transferred to the local sales and use tax fund
4continue to be allocated to the specific county account for
5the county in which the tax was collected. Additionally, all
6cities and counties are eligible to receive the allocation of
7revenues, not just those that had previously approved the local
8option tax.
9As provided in another division of the bill, specified
10amounts of use tax revenue is transferred to the local use
11tax supplement fund, as created in the bill. Moneys in the
12local use tax supplement fund are annually appropriated to the
13department of revenue to be used for supplement payments to
14cities and counties. For each year during the period beginning
15January 1, 2025, through December 31, 2043, each city or county
16for the unincorporated portion of the county shall receive a
17local use tax supplement payment equal to the difference, but
18not less than zero, between the amount of revenue received
19by the city or county under Code section 423B.7, Code 2023,
20for the period beginning January 1, 2024, and ending December
2131, 2024, minus the amount that would have been received by
22that city or county for that period if all cities and the
23county were eligible for distributions of such revenues under
24Code section 423B.7, Code 2023. If moneys in the fund are
25insufficient to pay all supplement amounts for the year, the
26director of revenue shall prorate the payment of the supplement
27payments. The supplement payment is required to be combined
28with and be used in the same manner and be subject to the same
29requirements as moneys received by the city or county under
30Code section 423B.7 for that year. The bill establishes a
31future repeal of the Code section establishing the supplement
32payments on January 1, 2044. Moneys in the fund upon the
33repeal shall be transferred to the appropriate county accounts
34for the counties from which the tax was paid.
35Code section 423B.10 allows a city in which a local sales
-63-1and services tax is imposed to, by ordinance and following
2approval of the board of supervisors, to provide for the use
3of a designated amount of increased local option sales and
4services tax revenue for urban renewal purposes. The bill
5modifies provisions governing this authorization to provide for
6the use of a specified amount of the applicable increased state
7sales tax revenues deposited in the local sales and use tax
8fund in lieu of the increased local option sales and services
9tax revenue. The bill allows city ordinances providing for the
10use of certain local option sales and services tax revenues for
11urban renewal purposes in effect on January 1, 2025, to remain
12in effect until expiration, amendment, or repeal.
13The bill also eliminates the authority to impose a local
14sales and services tax under the quad cities interstate
15metropolitan authority compact under Code chapter 28A beginning
16on January 1, 2025.
17The division takes effect January 1, 2025.
18DIVISION IV — HOMESTEAD PROPERTY TAX CREDIT. Code chapter
19425 establishes a homestead property tax credit in an amount
20equal to the property tax levy on the first $4,850 of actual
21value. The homestead credit is paid for from the homestead
22credit fund under Code section 425.1 for which there is an
23annual appropriation for an amount sufficient to implement the
24credit.
25The bill reduces the amount of the homestead credit over a
26period beginning with the fiscal year beginning July 1, 2025,
27until the credit is ended in the fiscal year beginning July
281, 2028, at which time the remaining moneys in the homestead
29credit fund are transferred for deposit in the general fund
30of the state. During the same period, the bill establishes
31a homestead property tax exemption. For the assessment year
32beginning January 1, 2024, the exemption amount is $2,500. For
33the assessment year beginning January 1, 2025, the exemption
34amount is $5,000. For the assessment year beginning January 1,
352026, the exemption amount is $7,500. For the assessment year
-64-1beginning January 1, 2027, and each succeeding assessment year,
2the exemption amount is $10,000.
3Code section 25B.7 provides that if a state appropriation
4made to fund a credit or exemption is not sufficient to fully
5fund the credit or exemption, the political subdivision shall
6be required to extend to the taxpayer only that portion of the
7credit or exemption estimated by the department of revenue to
8be funded by the state appropriation. The requirement for
9fully funding and the consequences of not fully funding under
10Code section 25B.7 applies to the homestead credit under Code
11chapter 425. The bill strikes the portion of Code section
1225B.7 that makes the requirement for fully funding and the
13consequences of not fully funding applicable to the homestead
14property tax credit and provides that the general requirement
15of Code section 25B.7 for property tax credits and exemptions
16on or after January 1, 1997, does not apply to the homestead
17property tax exemption established in the bill.
18The bill makes corresponding changes to various other
19provisions of the Code relating to and referencing the
20homestead property tax credit.
21The bill provides that homestead credit claims approved
22prior to and valid on the effective date of the division shall
23result in a homestead tax exemption under Code chapter 425,
24subchapter I, as enacted in the division, without further
25filing by the claimant.
26Division IV applies to assessment years beginning on or
27after January 1, 2024.
28DIVISION V — ELDERLY PROPERTY TAX CREDIT. Code section
29425.17, in part, establishes eligibility criteria for the
30elderly property tax credit. One such category of eligibility
31is a person who has attained the age of 70 years on or before
32December 31 of the base year, who has a household income of
33less than 250 percent of the federal poverty level. The bill
34changes that income threshold to 300 percent of the federal
35poverty level for credit claims filed on or after January 1,
-65-12024.
2The bill also amends Code section 423.23 to modify part of
3the calculation for the elderly property tax credit to account
4for the homestead credit for the property under Code section
5425.1. The portions of the division amending Code section
6423.23 take effect upon enactment and apply retroactively to
7claims for the credit filed on or after January 1, 2022.
8DIVISION VI — MILITARY SERVICE PROPERTY TAX EXEMPTION AND
9CREDIT. Division VII relates to the military service property
10tax exemption and credit. Under current law, veterans of World
11War I are entitled to a property tax exemption of $2,778 in
12taxable value and honorably discharged veterans who served
13during other specific time periods are entitled to a property
14tax exemption of $1,852 in taxable value. The bill increases
15the exemption amount for all eligible veterans to $2,055 for
16the assessment year beginning January 1, 2024, and to $4,000
17for assessment years beginning on or after January 1, 2025.
18Under current law, the state provides funding to local
19governments for the military service property tax exemption
20and credit up to $6.92 per $1,000 of assessed value of the
21exempt property. The bill reduces the amount of the credit for
22the fiscal year beginning July 1, 2025, to $6.92 per $1,000
23of assessed value of the exempt property, but not to exceed
24$945 of assessed value and eliminates funding for the credit
25starting with the fiscal year beginning July 1, 2026.
26Code section 25B.7 provides that if a state appropriation
27made to fund a credit or exemption is not sufficient to fully
28fund the credit or exemption, the political subdivision shall
29be required to extend to the taxpayer only that portion of the
30credit or exemption estimated by the department of revenue to
31be funded by the state appropriation. The requirement for
32fully funding and the consequences of not fully funding under
33Code section 25B.7 applies to the military service property
34tax credit and exemption to the extent of $6.92 per $1,000
35of assessed value of the exempt property. The bill strikes
-66-1the portion of Code section 25B.7 that makes the requirement
2for fully funding and the consequences of not fully funding
3applicable to the military service property tax credit and
4exemption and provides that the general requirement of Code
5section 25B.7 for property tax credits and exemptions on or
6after January 1, 1997, does not apply to the military property
7tax exemption established in the bill.
8The division applies to assessment years beginning on or
9after January 1, 2024.
10DIVISION VII — PROPERTY TAX ASSESSMENT LIMITATIONS. Code
11section 441.21 establishes assessment limitations for various
12classifications of property. The bill reduces the percentage
13of actual value at which property valued by the department
14of revenue pursuant to Code chapter 438 (pipelines) shall
15be assessed by 5 percent each year from 100 percent for the
16assessment year beginning January 1, 2024, to 90 percent for
17assessment years beginning on or after January 1, 2025.
18The bill also reduces the percentage of actual value at
19which the portion of commercial, industrial, and railway
20properties that exceeds $150,000 is assessed by 5 percent each
21year from 90 percent for the assessment year beginning January
221, 2024, to 80 percent for assessment years beginning on or
23after January 1, 2026. Accordingly, the bill makes a change
24to the payments made to local governments under Code section
25441.21(5)(e) that are in part calculated using the assessment
26limitation applied to commercial and industrial property.
272018 Iowa Acts, chapter 1158, changed the assessment of
28telephone and telegraph company property under Code chapter
29433. Code chapter 433 applies to the assessment and taxation
30of telephone and telegraph company property for assessment
31years beginning before January 1, 2022. Starting with the
32assessment year beginning January 1, 2022, such property is
33assessed locally in the same manner as commercial property.
34References to Code chapter 433 are not included in the
35applicable Code section as amended in the bill for assessment
-67-1years beginning on or after January 1, 2025.
2This division of the bill takes effect July 1, 2024.
3DIVISION VIII — NATURAL RESOURCES AND OUTDOOR RECREATION
4TRUST FUND. The bill amends provisions in Code chapter 461
5which would implement an amendment to the Constitution of the
6State of Iowa as ratified on November 2, 2010, as directed in
7the Iowa Constitution (see Code section 461.3; and Article VII,
8section 10 of the codified Iowa Constitution).
9CONSTITUTIONAL AMENDMENT. The amendment dedicates a
10portion of state revenue annually generated from the state’s
11sales tax to protect and enhance water quality and natural
12areas in this state, including parks, trails, and fish and
13wildlife habitats, and conserve agricultural soils in this
14state. The amendment creates a natural resources and outdoor
15recreation trust fund (fund) within the state treasury. The
16fund is credited with an amount equal to the amount annually
17generated by a sales tax rate of three-eighths of 1 percent.
18However, no revenue is credited to the fund until the tax rate
19existing on the effective date of the amendment is increased.
20After the effective date of any such increase, which another
21division of the bill provides, the fund will be credited with
22an amount equal to the amount generated by the increase up to
23the three-eighths of 1 percent limit.
24BILL’S PROVISIONS. Code chapter 461 creates the statutory
25version of the fund and provides for the distributions of
26revenue from the fund to various accounts used to support
27various initiatives to be carried out by state agencies
28including the department of natural resources (DNR) and
29department of agriculture and land stewardship (DALS).
30 Twenty-three percent of moneys credited to the fund are
31allocated to a natural resources account administered by DNR
32to support initiatives related to state lands, wildlife,
33recreation, natural habitat, rivers and streams, and education.
34The bill provides that moneys in the account are to be used
35(1) for the construction, maintenance, or expansion of roads
-68-1on state-owned land under DNR’s jurisdiction, and (2) to
2support salaries and benefits paid to conservation officers,
3park rangers, or park managers (amended Code section 461.32).
4Twenty percent of moneys credited to the fund are allocated
5to the soil conservation and water protection account to
6support soil conservation practices, the conservation of
7highly erodible land, and soil conservation or crop management
8practices used in biomass production. The bill expressly
9provides that for each fiscal year, at least 10 percent of
10moneys in the account must be used to support the planting and
11maintenance of cover crops by landowners (amended Code section
12461.33; referring to voluntary cost-share projects administered
13under Code section 161A.73).
14EFFECTIVE DATE. The division of the bill takes effect
15January 1, 2025.
16DIVISION IX — CHARITABLE CONSERVATION CONTRIBUTION
17TAX CREDIT. The bill prohibits a charitable conservation
18contribution tax credit from being claimed against the
19individual or corporate income tax, except for qualified real
20property interests conveyed prior to January 1, 2025. The bill
21allows the credit in excess of tax liability to carry forward
22for qualified real property interests conveyed prior to January
231, 2025. The bill preserves existing rights and is intended to
24not limit, modify, or otherwise adversely affect any amount of
25the tax credit issued, awarded, or allowed prior to the repeal
26date of any tax credit. The division takes effect January 1,
272025, and applies to tax years beginning on or after that date.
28DIVISION X — PROPERTY TAX BENEFITS AND INCENTIVES. The bill
29amends Code chapter 404 (urban revitalization areas) to provide
30that for revitalization areas established on or after the
31effective date of the division and for first-year property tax
32exemption applications for property located in a revitalization
33area in existence on the effective date of the division filed
34on or after the effective date of the division, commercial
35property shall not receive a tax exemption under Code chapter
-69-1404 unless the city or county, as applicable, and the owner
2of the qualified real estate enter into a written assessment
3agreement specifying a minimum actual value until a specified
4termination date for the duration of the exemption period.
5The bill also establishes limitations on exemptions for
6residential property within revitalization areas. For
7revitalization areas established on or after the effective date
8of the division and for first-year exemption applications for
9property located in a revitalization area in existence on the
10effective date of the division filed on or after the effective
11date of the division, an exemption otherwise authorized under
12Code chapter 404 shall not be authorized for or approved by a
13city or county, as applicable, for property that is residential
14property.
15Division X of the bill takes effect July 1, 2024.
16DIVISION XI — TAX INCREMENT FINANCING. Code section 403.19
17authorizes municipalities to provide by ordinance for the
18division of property tax revenue (tax increment financing)
19collected against property located within an urban renewal
20area. The bill provides that for property taxes due and
21payable in fiscal years beginning on or after July 1, 2025,
22if the portion of the urban renewal area that is subject
23to a division of property tax revenue contains wind energy
24conversion property that is subject to special valuation under
25Code section 427B.26, foundation property taxes of a school
26district imposed under Code section 257.3 in that portion of
27the urban renewal area shall not be subject to the division of
28property tax revenue and shall instead be paid to the school
29district.
30DIVISION XII — TRANSIT FUNDING. Cities may grant various
31types of franchises for specified services under Code section
32362.4 and may generally impose a franchise fee based upon
33a percentage of gross revenues generated from sales of the
34franchisee within the city not to exceed 5 percent. An
35exception allowing for a franchise fee up to 7.5 percent exists
-70-1in specified circumstances for a period of fiscal years ending
2July 1, 2030, if approved at election. The bill strikes
3the provisions providing for that exception and establishes
4conditions under which a city with a population that exceeds
5200,000 may impose a franchise fee of up to 7.5 percent for
6fiscal years beginning on or after July 1, 2024. The bill
7requires that franchise fee amounts collected during such
8fiscal years in excess of 5 percent of gross revenues generated
9from sales shall be used solely for the reduction of property
10tax levies used to support the operation and maintenance of a
11municipal transit system or a regional transit district.
12The division of the bill takes effect July 1, 2024.
-71-md/jh
2modifying sales and use taxes, the charitable conservation
3contribution tax credit available against individual and
4corporate income taxes, the water service tax, property
5taxes, transit funding, and local option taxes, crediting
6moneys to the natural resources and outdoor recreation trust
7fund, making appropriations, and including effective date,
8retroactive applicability, and applicability provisions.
9BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2SALES AND USE TAX RATES AND DISTRIBUTION
3 Section 1. Section 423.2, subsection 1, unnumbered
4paragraph 1, Code 2023, is amended to read as follows:
5There is imposed a tax of six percent at the rate specified
6in subsection 12 upon the sales price of all sales of tangible
7personal property, sold at retail in the state to consumers or
8users except as otherwise provided in this subchapter.
9 Sec. 2. Section 423.2, subsections 2 and 3, Code 2023, are
10amended to read as follows:
112. A tax of six percent at the rate specified in subsection
1212 is imposed upon the sales price of the sale or furnishing
13of gas, electricity, water, heat, pay television service, and
14communication service, including the sales price from such
15sales by any municipal corporation or joint water utility
16furnishing gas, electricity, water, heat, pay television
17service, and communication service to the public in its
18proprietary capacity, except as otherwise provided in this
19subchapter, when sold at retail in the state to consumers or
20users.
213. A tax of six percent at the rate specified in subsection
2212 is imposed upon the sales price of all sales of tickets
23or admissions to places of amusement, fairs, and athletic
24events except those of elementary and secondary educational
25institutions. A tax of six percent at the rate specified in
26subsection 12 is imposed on the sales price of an entry fee or
27like charge imposed solely for the privilege of participating
28in an activity at a place of amusement, fair, or athletic event
29unless the sales price of tickets or admissions charges for
30observing the same activity are taxable under this subchapter.
31A tax of six percent at the rate specified in subsection 12
32 is imposed upon that part of private club membership fees or
33charges paid for the privilege of participating in any athletic
34sports provided club members.
35 Sec. 3. Section 423.2, subsection 4, paragraph a, Code 2023,
-1-1is amended to read as follows:
2a. A tax of six percent at the rate specified in subsection
312 is imposed upon the sales price derived from the operation
4of all forms of amusement devices and games of skill, games of
5chance, raffles, and bingo games as defined in chapter 99B, and
6card game tournaments conducted under section 99B.27, that are
7operated or conducted within the state, the tax to be collected
8from the operator in the same manner as for the collection of
9taxes upon the sales price of tickets or admission as provided
10in this section. Nothing in this subsection shall legalize any
11games of skill or chance or slot-operated devices which are now
12prohibited by law.
13 Sec. 4. Section 423.2, subsection 5, Code 2023, is amended
14to read as follows:
155. There is imposed a tax of six percent at the rate
16specified in subsection 12 upon the sales price from the
17furnishing of services as defined in section 423.1.
18 Sec. 5. Section 423.2, subsection 7, paragraph a,
19unnumbered paragraph 1, Code 2023, is amended to read as
20follows:
21A tax of six percent at the rate specified in subsection 12
22 is imposed upon the sales price from the sales, furnishing, or
23service of solid waste collection and disposal service.
24 Sec. 6. Section 423.2, subsection 8, paragraph a, Code 2023,
25is amended to read as follows:
26a. A tax of six percent at the rate specified in subsection
2712 is imposed on the sales price from sales of bundled
28transactions. For the purposes of this subsection, a “bundled
29transaction” is the retail sale of two or more distinct and
30identifiable products, except real property and services to
31real property, which are sold for one nonitemized price. A
32“bundled transaction” does not include the sale of any products
33in which the sales price varies, or is negotiable, based on
34the selection by the purchaser of the products included in the
35transaction.
-2-1 Sec. 7. Section 423.2, subsection 9, Code 2023, is amended
2to read as follows:
39. A tax of six percent at the rate specified in
4subsection 12 is imposed upon the sales price from any mobile
5telecommunications service, including all paging services,
6that this state is allowed to tax pursuant to the provisions
7of the federal Mobile Telecommunications Sourcing Act, Pub.
8L. No.106-252, 4 U.S.C. §116 et seq. For purposes of this
9subsection, taxes on mobile telecommunications service, as
10defined under the federal Mobile Telecommunications Sourcing
11Act that are deemed to be provided by the customer’s home
12service provider, shall be paid to the taxing jurisdiction
13whose territorial limits encompass the customer’s place of
14primary use, regardless of where the mobile telecommunications
15service originates, terminates, or passes through and
16shall in all other respects be taxed in conformity with
17the federal Mobile Telecommunications Sourcing Act. All
18other provisions of the federal Mobile Telecommunications
19Sourcing Act are adopted by the state of Iowa and incorporated
20into this subsection by reference. With respect to mobile
21telecommunications service under the federal Mobile
22Telecommunications Sourcing Act, the director shall, if
23requested, enter into agreements consistent with the provisions
24of the federal Act.
25 Sec. 8. Section 423.2, subsection 10, paragraph a, Code
262023, is amended to read as follows:
27a. A tax of six percent at the rate specified in subsection
2812 is imposed on the sales price of specified digital products
29sold at retail in the state. The tax applies whether the
30purchaser obtains permanent use or less than permanent use of
31the specified digital product, whether the sale is conditioned
32or not conditioned upon continued payment from the purchaser,
33and whether the sale is on a subscription basis or is not on a
34subscription basis.
35 Sec. 9. Section 423.2, subsection 12, Code 2023, is amended
-3-1by striking the subsection and inserting in lieu thereof the
2following:
312. a. For the period beginning January 1, 2025, through
4December 31, 2050, the sales tax rate is seven percent.
5b. Beginning January 1, 2051, the sales tax rate is six
6percent.
7 Sec. 10. Section 423.2A, subsection 2, paragraphs a, b, and
8c, Code 2023, are amended to read as follows:
9a. (1) Transfer For the period beginning January 1,
102025, through December 31, 2027, transfer twenty-eight
11one-hundred-fortieths of the revenues collected under deposited
12into the general fund of the state under subsection 1 to the
13appropriate county accounts under chapter 423B for the counties
14from which the tax was collected.
15(2) For the period beginning January 1, 2028, through
16December 31, 2028, transfer twenty-seven one-hundred-fortieths
17of the revenues deposited into the general fund of the state
18under subsection 1 to the appropriate county accounts under
19chapter 423B for the counties from which the tax was collected.
20(3) For the period beginning January 1, 2029, through
21December 31, 2029, transfer twenty-six one-hundred-fortieths of
22the revenues deposited into the general fund of the state under
23subsection 1 to the appropriate county accounts under chapter
24423B for the counties from which the tax was collected.
25(4) For the period beginning January 1, 2030, through
26December 31, 2050, transfer twenty-five one-hundred-fortieths
27of the revenues deposited into the general fund of the state
28under subsection 1 to the appropriate county accounts under
29chapter 423B for the counties from which the tax was collected.
30(5) Beginning January 1, 2051, transfer five twenty-fourths
31of the revenues deposited into the general fund of the state
32under subsection 1 to the appropriate county accounts under
33chapter 423B for the counties from which the tax was collected.
34b. Transfer from the remaining revenues the amounts required
35under Article VII, section 10, of the Constitution of the State
-4-1of Iowa to the natural resources and outdoor recreation trust
2fund created in section 461.31, if applicable.
3c. Transfer one-sixth of from the remaining revenues an
4amount equal to one-seventh of the revenues deposited into the
5general fund of the state under subsection 1 to the secure an
6advanced vision for education fund created in section 423F.2.
7This paragraph “c” is repealed January 1, 2051.
8 Sec. 11. Section 423.5, subsection 1, unnumbered paragraph
91, Code 2023, is amended to read as follows:
10Except as provided in paragraph “b”, an excise tax at the
11rate of six percent specified in subsection 4 of the purchase
12price or installed purchase price is imposed on the following:
13 Sec. 12. Section 423.5, subsection 4, Code 2023, is amended
14by striking the subsection and inserting in lieu thereof the
15following:
164. a. For the period beginning January 1, 2025, through
17December 31, 2050, the use tax rate is seven percent.
18b. Beginning January 1, 2051, the use tax rate is six
19percent.
20 Sec. 13. Section 423.43, subsection 1, paragraph b, Code
212023, is amended by striking the paragraph and inserting in
22lieu thereof the following:
23b. Subsequent to the deposit into the general fund of
24the state the department shall do the following in the order
25prescribed:
26(1) (a) For the period beginning January 1, 2025, through
27December 31, 2043, transfer one-seventh of such revenues to the
28local use tax supplement fund, under section 423B.1A.
29(b) For the period beginning January 1, 2044, through
30December 31, 2050, transfer one-seventh of such revenues to the
31appropriate county accounts under chapter 423B for the counties
32from which the tax was paid.
33(c) Beginning January 1, 2051, transfer one-sixth of such
34revenues to the appropriate county accounts under chapter 423B
35for the counties from which the tax was paid.
-5- 1(2) Transfer one-sixth of such remaining revenues to the
2secure an advanced vision for education fund created in section
3423F.2. This subparagraph is repealed January 1, 2051.
4 Sec. 14. EFFECTIVE DATE. This division of this Act takes
5effect January 1, 2025.
6DIVISION II
7WATER SERVICE TAX
8 Sec. 15. Section 423G.3, Code 2023, is amended to read as
9follows:
10423G.3 Water service tax.
11An excise tax at the a rate of six percent equal to the rate
12being imposed under section 423.2, subsection 12, is imposed on
13the sales price from the sale or furnishing by a water utility
14of a water service in the state to consumers or users.
15 Sec. 16. Section 423G.6, subsection 2, Code 2023, is amended
16by striking the subsection.
17 Sec. 17. REPEAL. Chapter 423G.7, Code 2023, is repealed.
18 Sec. 18. EFFECTIVE DATE. This division of this Act takes
19effect January 1, 2025.
20DIVISION III
21LOCAL OPTION TAXES
22 Sec. 19. Section 15J.7, subsection 2, Code 2023, is amended
23to read as follows:
242. In addition to the moneys received pursuant to section
2515J.6, a municipality may deposit in the reinvestment project
26fund any other moneys lawfully at the municipality’s disposal,
27including but not limited to local sales and services tax
28receipts collected revenues received under chapter 423B if such
29use is a purpose authorized for the municipality under chapter
30423B.
31 Sec. 20. Section 28A.17, Code 2023, is amended to read as
32follows:
3328A.17 Local sales and services tax.
341. If an authority is established as provided in section
3528A.6 and after approval of a referendum by a simple majority
-6-1of votes cast in each metropolitan area in favor of the sales
2and services tax, the governing board of a county in this state
3within a metropolitan area which is part of the authority shall
4impose, at the request of the authority, a local sales and
5services tax at the rate of one-fourth of one percent on the
6sales price taxed by this state under section 423.2, within
7the metropolitan area located in this state. The referendum
8shall be called by resolution of the board and shall be held
9as provided in section 28A.6 to the extent applicable. The
10ballot proposition shall contain a statement as to the specific
11purpose or purposes for which the revenues shall be expended
12and the date of expiration of the tax. The local sales and
13services tax shall be imposed on the same basis, with the same
14exceptions, and following the same administrative procedures as
15provided for a county under sections 423B.5 and 423B.6, Code
162023. The amount of the sale, for the purposes of determining
17the amount of the local sales and services tax under this
18section, does not include the amount of any local sales and
19services tax imposed under sections 423B.5 and 423B.6, Code
202023.
212. The treasurer of state shall credit the local sales
22and services tax receipts and interest and penalties to the
23authority’s account. Moneys in this account shall be remitted
24quarterly to the authority. The proceeds of the tax imposed
25under this section shall be used only for the construction,
26reconstruction, or repair of metropolitan facilities as
27specified in the referendum. The local sales and services tax
28imposed under this section may be suspended for not less than
29a fiscal quarter or more than one year by action of the board.
30The suspension may be renewed or continued by the board, but
31the board shall act on the suspension at least annually.
32The local sales and services tax may also be repealed by a
33petition and favorable referendum following the procedures and
34requirements of sections 28A.5 and 28A.6 as applicable. The
35board shall give the department of revenue at least forty days’
-7-1notice of the repeal, suspension, or reinstatement of the tax
2and the effective dates for imposition, suspension, or repeal
3of the tax shall be as provided in section 423B.6, Code 2023.
43. A local sales and services tax authorized under this
5section shall not be imposed or collected on or after January
61, 2025.
7 Sec. 21. Section 76.4, Code 2023, is amended to read as
8follows:
976.4 Permissive application of funds.
10Whenever the governing authority of such political
11subdivision shall have on hand funds derived from any other
12source than taxation which may be appropriated to the payment
13either of interest or principal, or both principal and interest
14of such bonds, such funds may be so appropriated and used
15and the levy for the payment of the bonds correspondingly
16reduced. This section shall not restrict the authority of a
17political subdivision to apply sales and services tax receipts
18collected received pursuant to chapter 423B for such purpose.
19Notwithstanding section 423F.3, a school district may apply tax
20receipts received pursuant to chapter 423F for the purposes of
21this section.
22 Sec. 22. Section 99B.1, subsection 23, Code 2023, is amended
23to read as follows:
2423. “Net receipts” means gross receipts less amounts awarded
25as prizes and less state and local sales tax paid upon the
26gross receipts.
27 Sec. 23. Section 99B.14, subsection 1, Code 2023, is amended
28to read as follows:
291. A licensed qualified organization shall certify
30that the receipts from all charitable gambling conducted
31by the organization under this chapter, less reasonable
32expenses, charges, fees, taxes, and deductions, either will
33be distributed as prizes to participants or will be dedicated
34and distributed for educational, civic, public, charitable,
35patriotic, or religious uses. Reasonable expenses, charges,
-8-1fees, taxes other than the state and local sales tax, and
2deductions allowed by the department shall not exceed forty
3percent of net receipts.
4 Sec. 24. Section 99G.4, subsection 2, Code 2023, is amended
5to read as follows:
62. The income and property of the authority shall be exempt
7from all state and local taxes, and the sale of lottery tickets
8and shares issued and sold by the authority and its retail
9licensees shall be exempt from all state and local sales taxes.
10 Sec. 25. Section 99G.30A, subsection 2, paragraph a, Code
112023, is amended to read as follows:
12a. The director of revenue shall administer the monitor
13vending machine excise tax as nearly as possible in conjunction
14with the administration of state sales tax laws. The director
15shall provide appropriate forms or provide appropriate entries
16on the regular state tax forms for reporting local sales and
17services tax liability.
18 Sec. 26. Section 279.63, subsection 2, paragraph a, Code
192023, is amended to read as follows:
20a. All property tax levies, and income surtaxes, and local
21option sales taxes in place in the school district, listed by
22type of levy, rate, amount, duration, and notification of the
23maximum rate and amount limitations permitted by statute.
24 Sec. 27. Section 321.40, subsection 5, Code 2023, is amended
25by striking the subsection.
26 Sec. 28. Section 321.130, Code 2023, is amended to read as
27follows:
28321.130 Fees in lieu of taxes.
29The registration fees imposed by this chapter upon private
30passenger motor vehicles or semitrailers are in lieu of all
31state and local taxes, except local vehicle taxes, to which
32motor vehicles or semitrailers are subject.
33 Sec. 29. Section 418.13, subsection 2, Code 2023, is amended
34to read as follows:
352. In addition to the moneys received pursuant to section
-9-1418.10 or 418.12, a governmental entity may deposit in the
2flood project fund any other moneys lawfully received by the
3governmental entity, including but not limited to local sales
4and services tax receipts collected amounts received under
5chapter 423B.
6 Sec. 30. Section 421.26, Code 2023, is amended to read as
7follows:
8421.26 Personal liability for tax due.
9If a licensee or other person under section 452A.65, a
10retailer or purchaser under chapter 423A, 423B, 423C, 423D, or
11423E, or section 423.14, 423.14A, 423.29, 423.31, or 423.33,
12or a user under section 423.34, or a permit holder or licensee
13under section 453A.13, 453A.16, or 453A.44 fails to pay a tax
14under those sections when due, an officer of a corporation
15or association, notwithstanding section 489.304, a member or
16manager of a limited liability company, or a partner of a
17partnership, having control or supervision of or the authority
18for remitting the tax payments and having a substantial legal
19or equitable interest in the ownership of the corporation,
20association, limited liability company, or partnership, who has
21intentionally failed to pay the tax is personally liable for
22the payment of the tax, interest, and penalty due and unpaid.
23However, this section shall not apply to taxes on accounts
24receivable. The dissolution of a corporation, association,
25limited liability company, or partnership shall not discharge a
26person’s liability for failure to remit the tax due.
27 Sec. 31. Section 421.28, Code 2023, is amended to read as
28follows:
29421.28 Exceptions to successor liability.
30The immediate successor to a licensee’s or retailer’s
31business or stock of goods under chapter 423A or 423B, or
32section 423.33 or 452A.65, is not personally liable for
33the amount of delinquent tax, interest, or penalty due and
34unpaid if the immediate successor shows that the purchase of
35the business or stock of goods was made in good faith that
-10-1no delinquent tax, interest, or penalty was due and unpaid.
2For purposes of this section the immediate successor shows
3good faith by evidence that the department had provided
4the immediate successor with a certified statement that
5no delinquent tax, interest, or penalty is unpaid, or that
6the immediate successor had taken in good faith a certified
7statement from the licensee, retailer, or seller that no
8delinquent tax, interest, or penalty is unpaid. When requested
9to do so by a person with whom the licensee or retailer is
10negotiating the sale of the business or stock of goods, the
11director of revenue shall, upon being satisfied that such
12a situation exists, inform that person as to the amount of
13unpaid delinquent tax, interest, or penalty due by the licensee
14or the retailer. The giving of the information under this
15circumstance is not a violation of section 422.20, 422.72, or
16452A.63.
17 Sec. 32. Section 421.60, subsection 2, paragraph m,
18subparagraphs (1) and (2), Code 2023, are amended to read as
19follows:
20(1) The director may abate unpaid state sales and use
21taxes and local sales and services taxes owed by a retailer
22in the event that the retailer failed to collect tax from the
23purchaser as a result of erroneous written advice issued by
24the department that was specially directed to the retailer
25by the department and the retailer is unable to collect the
26tax, interest, or penalties from the purchaser. Before the
27tax, interest, and penalties shall be abated on the basis of
28erroneous written advice, the retailer must present a copy of
29the retailer’s request for written advice to the department and
30a copy of the department’s reply. The department shall not
31maintain a position against the retailer that is inconsistent
32with the erroneous written advice, except on the basis of
33subsequent written advice sent by the department to that
34retailer, or a change in state or federal law, a reported
35court case to the contrary, a contrary rule adopted by the
-11-1department, a change in material facts or circumstances
2relating to the retailer, or the retailer’s misrepresentation
3or incomplete or inadequate representation of material facts
4and circumstances in requesting the written advice.
5(2) (a) The director shall abate the unpaid state sales
6and use taxes and any local sales and services taxes owed by a
7retailer where the retailer failed to collect the tax from the
8purchaser on the charges paid for access to on-line computer
9services as a result of erroneous written advice issued by the
10department regarding the taxability of charges paid for access
11to on-line computer services. To qualify for the abatement
12under this subparagraph, the erroneous written advice shall
13have been issued by the department prior to July 1, 1999, and
14shall have been specially directed to the retailer by the
15department.
16(b) If an abatement of unpaid state sales and use taxes and
17any local sales and services taxes is granted to the retailer
18by the director pursuant to this subparagraph, the department
19is precluded from collecting from the purchaser any unpaid
20state sales and use taxes and any local sales and services
21taxes which were abated.
22 Sec. 33. Section 422.72, subsection 6, paragraph a, Code
232023, is amended to read as follows:
24a. The department may enter into a written informational
25exchange agreement for tax administration purposes with a city
26or county which is entitled to receive funds due to a local
27hotel and motel tax or a local sales and services tax. The
28written informational exchange agreement shall designate no
29more than two paid city or county employees that have access to
30actual return information relating to that city’s or county’s
31receipts from a local hotel and motel tax or a local sales and
32services tax.
33 Sec. 34. Section 423.4, subsection 2, paragraph d, Code
342023, is amended by striking the paragraph.
35 Sec. 35. Section 423.4, subsection 5, paragraph f, Code
-12-12023, is amended to read as follows:
2f. Notwithstanding the state sales tax imposed in section
3423.2, a rebate issued pursuant to this subsection shall not
4exceed an amount equal to five percent of the sales price
5of the tangible personal property or services furnished to
6purchasers at the automobile racetrack facility. Any local
7option taxes paid and collected shall not be subject to rebate
8under this subsection.
9 Sec. 36. Section 423.4, subsection 7, paragraph f, Code
102023, is amended to read as follows:
11f. The refund in this subsection applies only to state
12sales and use tax paid and does not apply to local option
13sales and services taxes imposed pursuant to chapter 423B.
14 Notwithstanding the state sales tax imposed in section 423.2,
15a refund issued pursuant to this section shall not exceed
16an amount equal to five percent of the sales price of the
17fuel used to create heat, power, and steam for processing
18or generating electrical current or from the sale price
19of electricity consumed by computers, machinery, or other
20equipment for operation of the data center business facility.
21 Sec. 37. Section 423.4, subsection 8, paragraph g, Code
222023, is amended to read as follows:
23g. The refund in this subsection applies only to state
24sales and use tax paid and does not apply to local option
25sales and services taxes imposed pursuant to chapter 423B.
26 Notwithstanding the state sales tax imposed in section 423.2,
27a refund issued pursuant to this section shall not exceed an
28amount equal to five percent of the sales price of the items
29listed in paragraph “a”, subparagraphs (1), (2), and (3).
30 Sec. 38. Section 423.14A, subsection 2, Code 2023, is
31amended to read as follows:
322. In addition to and not in lieu of any application of
33this chapter to sellers who are retailers and sellers who are
34retailers maintaining a place of business in this state, any
35person described in subsection 3, or the person’s agents,
-13-1shall be considered a retailer in this state and a retailer
2maintaining a place of business in this state for purposes of
3this chapter on or after January 1, 2019, and shall be subject
4to all requirements of this chapter imposed on retailers and
5retailers maintaining a place of business in this state,
6including but not limited to the requirement to collect and
7remit sales and use taxes pursuant to sections 423.14 and
8423.29, and local option taxes under chapter 423B.
9 Sec. 39. Section 423.33, subsection 1, paragraph c, Code
102023, is amended to read as follows:
11c. If the retailer fails to collect sales tax at the time
12of the transaction, the retailer shall thereafter remit the
13applicable sales tax, or the purchaser thereafter shall remit
14the applicable use tax. If the purchaser remits all applicable
15use tax, the retailer remains liable for any local sales and
16services tax under chapter 423B that the retailer failed to
17collect.
18 Sec. 40. Section 423.34A, unnumbered paragraph 1, Code
192023, is amended to read as follows:
20A purchaser is relieved of liability for payment of state
21sales or use tax, for payment of any local option sales tax,
22 for payment of interest, or for payment of any penalty for
23nonpayment of tax which nonpayment is not fraudulent, willful,
24or intentional, under the following circumstances:
25 Sec. 41. Section 423.36, subsection 9, paragraph a, Code
262023, is amended to read as follows:
27a. Except as provided in paragraph “b”, purchasers, users,
28and consumers of tangible personal property, specified digital
29products, or enumerated services taxed pursuant to subchapter
30II or III of this chapter or chapter 423B may be authorized,
31pursuant to rules adopted by the director, to remit tax owed
32directly to the department instead of the tax being collected
33and paid by the seller. To qualify for a direct pay tax permit,
34the purchaser, user, or consumer must accrue a tax liability
35of more than four thousand dollars in tax under subchapters
-14-1II and III in a semimonthly period and make deposits and file
2returns pursuant to section 423.31. This authority shall not
3be granted or exercised except upon application to the director
4and then only after issuance by the director of a direct pay
5tax permit.
6 Sec. 42. Section 423B.1, Code 2023, is amended by striking
7the section and inserting in lieu thereof the following:
8423B.1 Use of revenues deposited in the local sales and use
9tax fund — revenue purpose statement.
101. a. Revenues credited to and deposited in each county’s
11account within the local sales and use tax fund shall be
12expended by each recipient county and city as required by the
13revenue purpose statement, subject to the requirements of
14section 423B.7, subsection 7, and approved under this section
15for the city or for the county for the unincorporated areas of
16the county, or as required by subsection 3.
17b. A revenue purpose statement for the use of local option
18sales and services tax revenue under this chapter approved at
19election prior to January 1, 2025, and in effect on or set
20to take effect on or after January 1, 2025, and the use of
21revenues received under this chapter for purposes authorized
22under section 423B.10 for ordinances in effect and approved
23before January 1, 2025, shall continue in effect for revenues
24received under this chapter until the expiration of the revenue
25purpose statement or ordinance, if applicable, or until the
26county board of supervisors or city council, as applicable,
27adopts a new revenue purpose statement under subsection 2 or
28repeals or amends the ordinance for the use of revenues under
29section 423B.10.
302. The board of supervisors of each county and the city
31council of each city may adopt by resolution a revenue purpose
32statement for the expenditure of funds received under this
33chapter.
343. Each city and county without a valid revenue purpose
35statement shall expend the revenues received for the following
-15-1purposes in the order prescribed in this subsection, except
2that the payment of bonds for which the revenues have been
3pledged shall be paid first:
4a. Reduction of the county’s basic levies under section
5331.423 or reduction of the city general fund levy under
6section 384.1, as applicable.
7b. Reduction of any debt service levy of the county or city,
8as applicable.
9c. Reduction of the city’s additional taxes levied under
10section 384.12 or the county’s supplemental levies under
11section 331.424, as applicable.
12d. Reduction of any other property tax levy of the county
13or city, as applicable.
14 Sec. 43. NEW SECTION. 423B.1A Local use tax supplement
15fund.
161. A local use tax supplement fund is created in the state
17treasury under the control of the department of revenue. The
18fund shall consist of all moneys transferred under section
19423.43, subsection 1, paragraph “b”, subparagraph (1),
20subparagraph division (a), and moneys appropriated to the fund.
212. Moneys in the local use tax supplement fund are annually
22appropriated to the department of revenue and shall be used for
23supplement payments to cities and counties under this section.
243. For each year during the period beginning January 1,
252025, through December 31, 2043, each city or county for the
26unincorporated portion of the county, shall receive a local
27use tax supplement payment equal to the difference, but not
28less than zero between the amount of revenue received by the
29city or county under section 423B.7, Code 2023, for the period
30beginning January 1, 2024, and ending December 31, 2024, minus
31the amount that would have been received by that city or county
32for that period if all cities and the county were eligible for
33distributions of such revenues under section 423B.7, Code 2023.
34If moneys in the fund are insufficient to pay all supplement
35amounts for the year, the director of revenue shall prorate the
-16-1payment of the supplement payments and shall notify the cities
2and counties of the pro rata percentage.
34. The supplement payment calculated under subsection 3
4shall be paid to each city or county for the unincorporated
5area of the county and shall be combined with and be used in the
6same manner and be subject to the same requirements as moneys
7received by the city or county under section 423B.7 for that
8year.
95. Notwithstanding section 12C.7, subsection 2, interest or
10earnings on moneys deposited in the local use tax supplement
11fund shall be credited to the local use tax supplement fund.
12Notwithstanding section 8.33, moneys credited to the local use
13tax supplement fund shall not revert at the close of a fiscal
14year.
156. This section is repealed January 1, 2044. Moneys in the
16fund upon the repeal of this section shall be transferred to
17the appropriate county accounts under section 423B.7 for the
18counties from which the tax was paid.
19 Sec. 44. Section 423B.7, subsection 1, Code 2023, is amended
20to read as follows:
211. a. Except as provided in paragraphs paragraph “b” and
22“c”, the director shall credit the local sales and services tax
23receipts and interest and penalties from a county-imposed tax
24 as specified in section 423.2A, subsection 2, paragraph “a”,
25including any interest and penalties, to the county’s account
26in the local sales and services use tax fund for the county in
27 from which the tax was collected. The director shall credit
28the use tax receipts as specified in section 423.43, subsection
291, paragraph “b”, subparagraph (1), subparagraph divisions (b)
30and (c), including any interest and penalties, to the county’s
31account in the local sales and use tax fund for the county
32from which the use tax was paid.If the director is unable to
33determine from which county any of the receipts were collected
34or paid, as applicable, those receipts shall be allocated among
35the possible counties based on allocation rules adopted by the
-17-1director.
2b. The director shall credit the designated amount of the
3increase in local sales and services tax receipts, as computed
4in section 423B.10, collected in an urban renewal area of an
5eligible city that has adopted an ordinance pursuant to section
6423B.10, subsection 2, into a special city account in the local
7sales and services use tax fund.
8c. The director shall credit the local sales and services
9tax receipts and interest and penalties from a city-imposed tax
10under section 423B.1, subsection 2, to the city’s account in
11the local sales and services tax fund.
12 Sec. 45. Section 423B.7, subsections 2, 3, and 4, Code 2023,
13are amended to read as follows:
142. The director of revenue by the last day of each
15month shall transfer to each city or county where the local
16option tax is imposed the amount of tax moneys remitted to
17the department attributable to each city or county from the
18preceding month.
193. Seventy-five percent of each county’s account shall be
20remitted on the basis of the county’s population residing in
21the unincorporated area where the tax was imposed and those the
22 incorporated areas where the tax was imposed as follows:
23a. To the board of supervisors a pro rata share based upon
24the percentage of the above population of the county residing
25in the unincorporated area of the county where the tax was
26imposed according to the most recent certified federal census.
27b. To each city in the county where the tax was imposed
28 a pro rata share based upon the percentage of the city’s
29population residing in the county to the above population of
30the county according to the most recent certified federal
31census.
32c. If a subsequent certified census exists which modifies
33that most recent certified federal census for a participating
34 jurisdiction under paragraphs “a” and “b”, the computations
35under paragraphs “a” and “b” shall utilize the subsequent
-18-1certified census in the distribution formula under rules
2established by the director of revenue.
34. Twenty-five percent of each county’s account shall
4be remitted based on the sum of property tax dollars levied
5by the board of supervisors if the tax was imposed in the
6unincorporated areas and by each city in the county where the
7tax was imposed during the three-year period beginning July 1,
81982, and ending June 30, 1985, as follows:
9a. To the board of supervisors a pro rata share based upon
10the percentage of the total property tax dollars levied by the
11board of supervisors during the above three-year period.
12b. To each city council where the tax was imposed a pro rata
13share based upon the percentage of property tax dollars levied
14by the city during the above three-year period of the above
15total property tax dollars levied by the board of supervisors
16and each city where the tax was imposed during the above
17three-year period.
18 Sec. 46. Section 423B.7, subsection 5, Code 2023, is amended
19by striking the subsection.
20 Sec. 47. Section 423B.7, subsections 6 and 7, Code 2023, are
21amended to read as follows:
226. From each special city account under subsection 1,
23paragraph “b”, the sales and services tax revenues shall be
24remitted to the city council for deposit in the special fund
25created in section 403.19, subsection 2, to be used by the city
26as provided in section 423B.10. The distribution from the
27special city account is not subject to the distribution formula
28provided in subsections 3, and 4, and 5.
297. a. Subject to the requirement of paragraph “b” and the
30requirements under section 423B.1, subsection 3, local sales
31and services tax moneys amounts received by a city or county
32under this chapter may be expended for any lawful purpose of
33the city or county, including but not limited to expenses
34related to providing emergency medical services within the
35applicable city or county.
-19- 1b. Each city located in whole or in part in a qualified
2county and each qualified county for the unincorporated area
3for which the imposition of the local sales and services tax
4in the city or portion thereof or the unincorporated area, as
5applicable, was revenue purpose statement approved at election
6 on or after January 1, 2019 2025, shall require the use of
7 not less than fifty percent of the moneys received from the
8qualified county’s account in the local sales and services
9tax fund applicable county under this chapter for property
10tax relief. However, for a county with a population of four
11hundred thousand or more, a revenue purpose statement governing
12the use of revenues for the unincorporated area of the county
13approved on or after January 1, 2025, shall require the use of
14seventy-five percent of the moneys received by the county under
15this chapter for property tax relief.
16c. For purposes of this subsection, property tax relief
17includes payments under a chapter 28E agreement for purposes of
18a regional transit district if such payments are used to reduce
19the regional transit district levy under section 28M.5. For a
20city located in whole or in part in a county with a population
21of four hundred thousand or more, the use of revenues received
22under this chapter for the purposes of this paragraph shall
23not exceed ten percent of the amount received and for a county
24with a population of four hundred thousand or more, for the
25unincorporated area, shall not exceed twenty-five percent of
26the amount received under this chapter.
27 Sec. 48. Section 423B.9, subsection 1, paragraphs b and c,
28Code 2023, are amended to read as follows:
29b. “Designated portion” means the portion of the local
30option sales and services tax revenues received under this
31chapter which is authorized to be expended for one or a
32combination of purposes under an adopted public measure.
33c. “Secondary recipient” means a political subdivision of
34the state which is to receive revenues amounts from a local
35option sales and services tax revenues under this chapter
-20-1 over a period of years pursuant to the terms of a chapter 28E
2agreement with one or more cities or counties.
3 Sec. 49. Section 423B.9, subsections 2 and 3, Code 2023, are
4amended to read as follows:
52. An issuer of public bonds which is a recipient of
6revenues from a local option sales and services tax imposed
7 pursuant to this chapter may issue bonds in anticipation of
8the collection of one or more designated portions of the
9local option sales and services tax such revenues and may
10pledge irrevocably an amount of the revenue derived from the
11designated portions for each of the years the bonds remain
12outstanding to the payment of the bonds. Bonds may be issued
13only for one or more of the purposes set forth on the ballot
14proposition concerning the imposition of the local option sales
15and services tax in the revenue purpose statement, except bonds
16shall not be issued which are payable from that portion of tax
17revenues designated for property tax relief. The bonds may be
18issued in accordance with the procedures set forth in either
19subsection 3 or 4.
203. The governing body of an issuer may authorize the
21issuance of bonds which are payable from the designated portion
22of the revenues of the local option sales and services tax
23 received under this chapter, and not from property tax, by
24following the authorization procedures set forth for cities
25in section 384.83. Bonds may be issued for the purpose of
26refunding outstanding and previously issued bonds under this
27subsection without otherwise complying with the provisions of
28this subsection.
29 Sec. 50. Section 423B.9, subsection 4, paragraph b, Code
302023, is amended to read as follows:
31b. The provisions of chapter 76 apply to the bonds payable
32as provided in this subsection, except that the mandatory levy
33to be assessed pursuant to section 76.2 shall be at a rate
34to generate an amount which together with the receipts from
35the pledged designated portion of the local option sales and
-21-1services tax revenues received under this chapter is sufficient
2to pay the interest and principal on the bonds. All amounts
3collected as a result of the levy assessed pursuant to section
476.2 and paid out in the first instance for bond principal
5and interest shall be repaid to the bond issuer which levied
6the tax from the first available designated portion of local
7option sales and services tax collections revenues received
8under this chapter in excess of the requirement for the payment
9of the principal and interest of the bonds and when repaid
10shall be applied in reduction of property taxes. The amount
11of bonds which may be issued under section 76.3 shall be the
12amount which could be retired from the actual collections of
13the designated portions of the local option sales and services
14tax revenues received under this chapter for the last four
15calendar quarters, as certified by the director of revenue.
16The amount of tax revenues pledged jointly by other cities or
17counties may be considered for the purpose of determining the
18amount of bonds which may be issued. If the local option sales
19and services tax has been in effect revenues have been received
20under this chapter for less than four calendar quarters, the
21tax collected revenues received within the shorter period may
22be adjusted to project the collections amount of the designated
23portion for the full year for the purpose of determining the
24amount of the bonds which may be issued. The provisions of
25this section constitute separate authorization for the issuance
26of bonds and shall prevail in the event of conflict with
27any other provision of the Code limiting the amount of bonds
28which may be issued or the source of payment of the bonds.
29Bonds issued under this section shall not limit or restrict
30the authority of the bond issuer to issue bonds under other
31provisions of the Code.
32 Sec. 51. Section 423B.9, subsection 5, Code 2023, is amended
33to read as follows:
345. A city or county, jointly with one or more other
35political subdivisions as provided in chapter 28E, may pledge
-22-1irrevocably any amount derived from the designated portions
2of the revenues of the local option sales and services tax
3 received under this chapter to the support or payment of bonds
4of an issuer, issued for one or more purposes set forth on
5the ballot proposition concerning the imposition of the local
6option sales and services tax in the revenue purpose statement
7 or a political subdivision may apply the proceeds of its bonds
8to the support of any such purpose.
9 Sec. 52. Section 423B.10, subsection 1, paragraph b, Code
102023, is amended to read as follows:
11b. “Eligible city” means a city in which a local sales and
12services tax imposed by the county applies or a city described
13in section 423B.1, subsection 2, paragraph “a”, and in which an
14urban renewal area has been designated.
15 Sec. 53. Section 423B.10, subsections 2, 3, 5, and 6, Code
162023, are amended to read as follows:
172. a. Upon approval by the board of supervisors of each
18applicable county pursuant to paragraph “b”, an eligible city
19may by ordinance of the city council provide for the use of a
20designated amount of the increased local sales and services
21tax revenues collected received under this chapter which are
22attributable to retail establishments in an urban renewal
23area to fund urban renewal projects located in the area. The
24designated amount may be all or a portion of such increased
25revenues.
26b. A city shall not adopt an ordinance under paragraph
27“a” unless the board of supervisors of each county where the
28urban renewal area from which such local sales and services
29tax revenues are to be collected and used to fund urban
30renewal projects is located first adopts a resolution approving
31the collection and use of such local sales and services tax
32revenues.
333. To determine the revenue increase for purposes of
34subsection 2, revenue amounts shall be calculated by the
35department of revenue as follows:
-23- 1a. Determine the amount of local sales and services tax
2revenue collected and attributable to a one percent sales and
3services tax from retail establishments located in the area
4comprising the urban renewal area during the base year.
5b. Determine the current year one percent sales and services
6tax revenue amount for each fiscal year following the base year
7in the manner specified in paragraph “a”.
8c. The excess of the amount determined in paragraph “b” over
9the base year revenue amount determined in paragraph “a” is the
10increase in the local sales and services tax revenues of which
11the designated amount is to be deposited in the special city
12account created in section 423B.7, subsection 6.
135. In addition to the moneys received pursuant to the
14ordinance authorized under subsection 2, an eligible city
15may deposit any other local sales and services tax revenues
16received by it the city pursuant to the distribution formula in
17section 423B.7, subsections 3, 4, and 5, to the special fund
18described in section 403.19, subsection 2.
196. For purposes of this section, the eligible city shall
20assist the department of revenue in identifying retail
21establishments in the urban renewal area that are collecting
22the local sales and services tax. This process shall be
23ongoing until the ordinance is repealed.
24 Sec. 54. REPEAL. Sections 423B.2, 423B.3, 423B.4, 423B.5,
25423B.6, and 423B.8, Code 2023, are repealed.
26 Sec. 55. EFFECTIVE DATE. This division of this Act takes
27effect January 1, 2025.
28DIVISION IV
29Homestead property tax credit
30 Sec. 56. Section 2.48, subsection 3, paragraph f,
31subparagraph (1), Code 2023, is amended to read as follows:
32(1) The homestead tax exemption and credit under chapter
33425.
34 Sec. 57. Section 25B.7, subsection 2, paragraph a, Code
352023, is amended by striking the paragraph.
-24-1 Sec. 58. Section 100.18, subsection 2, paragraph b, Code
22023, is amended to read as follows:
3b. The rules shall require the installation of smoke
4detectors in existing single-family rental units and
5multiple-unit residential buildings. Existing single-family
6dwelling units shall be equipped with approved smoke detectors.
7A person who files for a homestead tax exemption and credit
8pursuant to chapter 425 shall certify that the single-family
9dwelling unit for which the credit is filed has a smoke
10detector installed in compliance with this section, or that one
11will be installed within thirty days of the date the filing
12for the credit is made. The state fire marshal shall adopt
13rules and establish appropriate procedures to administer this
14subsection.
15 Sec. 59. Section 100.18, subsection 3, paragraph b, Code
162023, is amended to read as follows:
17b. The rules shall require the installation of carbon
18monoxide alarms in existing single-family rental units and
19multiple-unit residential buildings that have a fuel-fired
20heater or appliance, a fireplace, or an attached garage.
21Existing single-family dwellings that have a fuel-fired heater
22or appliance, a fireplace, or an attached garage shall be
23equipped with approved carbon monoxide alarms. For purposes
24of this paragraph, “approved carbon monoxide alarm” means a
25carbon monoxide alarm that meets the standards established by
26the underwriters’ laboratories or is approved by the state fire
27marshal as established by rule under subsection 5. A person
28who files for a homestead tax exemption and credit pursuant
29to chapter 425 shall certify that the single-family dwelling
30for which the credit is filed and that has a fuel-fired heater
31or appliance, a fireplace, or an attached garage, has carbon
32monoxide alarms installed in compliance with this section,
33or that such alarms will be installed within thirty days of
34the date the filing for the credit is made. The state fire
35marshal shall adopt rules and establish appropriate procedures
-25-1to administer this subsection.
2 Sec. 60. Section 103.22, subsection 7, Code 2023, is amended
3to read as follows:
47. Prohibit an owner of property from performing work on the
5owner’s principal residence, if such residence is an existing
6dwelling rather than new construction and is not an apartment
7that is attached to any other apartment or building, as those
8terms are defined in section 499B.2, and is not larger than a
9single-family dwelling, or require such owner to be licensed
10under this chapter. In order to qualify for inapplicability
11pursuant to this subsection, a residence shall qualify for the
12homestead tax exemption and credit.
13 Sec. 61. Section 105.11, subsection 3, Code 2023, is amended
14to read as follows:
153. Prohibit an owner of property from performing work on the
16owner’s principal residence, if such residence is an existing
17dwelling rather than new construction and is not larger than a
18single-family dwelling, or farm property, excluding commercial
19or industrial installations or installations in public use
20buildings or facilities, or require such owner to be licensed
21under this chapter. In order to qualify for inapplicability
22pursuant to this subsection, a residence shall qualify for the
23homestead tax exemption and credit.
24 Sec. 62. Section 216.12, subsection 1, paragraph e, Code
252023, is amended to read as follows:
26e. The rental or leasing of a housing accommodation in a
27building which contains housing accommodations for not more
28than four families living independently of each other, if the
29owner resides in one of the housing accommodations for which
30the owner qualifies for the homestead tax exemption and credit
31under section 425.1.
32 Sec. 63. Section 321.1, subsection 6C, Code 2023, is amended
33to read as follows:
346C. “Bona fide residence” or “bona fide address” means the
35current street or highway address of an individual’s residence.
-26-1The bona fide residence of a person with more than one dwelling
2is the dwelling for which the person claims a homestead tax
3exemption and credit under chapter 425, if applicable. The
4bona fide residence of a homeless person is a primary nighttime
5residence meeting one of the criteria listed in section 48A.2,
6subsection 3.
7 Sec. 64. Section 321.1A, subsection 1, paragraph a, Code
82023, is amended to read as follows:
9a. The person has filed for a homestead tax exemption and
10credit on property in this state.
11 Sec. 65. Section 331.401, subsection 1, paragraphs e and f,
12Code 2023, are amended to read as follows:
13e. Adopt resolutions authorizing the county assessor
14to provide forms for homestead tax exemption and credit
15 claimants as provided in section 425.2 and military service tax
16exemptions as provided in section 426A.14.
17f. Examine and allow or disallow claims for homestead tax
18 exemption and credit in accordance with section 425.3 and
19claims for military service tax exemption in accordance with
20chapter 426A. The board, by a single resolution, may allow or
21disallow the exemptions recommended by the assessor.
22 Sec. 66. Section 331.512, subsection 3, Code 2023, is
23amended to read as follows:
243. Carry out duties relating to the homestead tax exemption
25and credit and agricultural land tax credit as provided in
26chapters 425 and 426.
27 Sec. 67. Section 331.559, subsection 12, Code 2023, is
28amended to read as follows:
2912. Carry out duties relating to the administration of
30the homestead tax exemption and credit and other credits as
31provided in sections 425.4, 425.5, 425.7, 425.9, 425.10, and
32425.25.
33 Sec. 68. Section 404.3, subsection 1, Code 2023, is amended
34to read as follows:
351. All qualified real estate assessed as residential
-27-1property is eligible to receive an exemption from taxation
2based on the actual value added by the improvements. The
3exemption is for a period of ten years. The amount of the
4exemption is equal to a percent of the actual value added by
5the improvements, determined as follows: One hundred fifteen
6percent of the value added by the improvements. However, the
7amount of the actual value added by the improvements which
8shall be used to compute the exemption shall not exceed twenty
9thousand dollars and the granting of the exemption shall not
10result in the actual value of the qualified real estate being
11reduced below the actual value on which the homestead credit
12 exemption is computed under section 425.1.
13 Sec. 69. Section 425.1, subsection 1, paragraph a, Code
142023, is amended to read as follows:
15a. A homestead credit fund is created. There For fiscal
16years beginning before July 1, 2028, there is appropriated
17annually from the general fund of the state to the department
18of revenue to be credited to the homestead credit fund, an
19amount sufficient to implement this subchapter.
20 Sec. 70. Section 425.1, subsection 1, Code 2023, is amended
21by adding the following new paragraph:
22 NEW PARAGRAPH. c. All moneys in the homestead credit fund
23at the end of the fiscal year beginning July 1, 2028, shall be
24transferred by the department of revenue for deposit in the
25general fund of the state.
26 Sec. 71. Section 425.1, subsections 2, 4, and 5, Code 2023,
27are amended to read as follows:
282. a. For fiscal years beginning before July 1, 2028, the
29moneys in the homestead credit fund shall be apportioned each
30year so as to give a credit against the tax on each eligible
31homestead in the state, but not more than the amount under
32paragraph “b”.
33b. (1) The For assessment years beginning before July
341, 2025, the homestead credit fund shall be apportioned each
35year so as to give a credit against the tax on each eligible
-28-1homestead in the state in an amount equal to the actual levy on
2the first four thousand eight hundred fifty dollars of actual
3value for each homestead.
4(2) For property taxes due and payable in the fiscal year
5beginning July 1, 2025, the homestead credit fund shall be
6apportioned each year so as to give a credit against the tax
7on each eligible homestead in the state in an amount equal
8to the actual levy on the first three thousand six hundred
9forty dollars of actual value for each homestead exempted under
10section 425.1A.
11(3) For property taxes due and payable in the fiscal year
12beginning July 1, 2026, the homestead credit fund shall be
13apportioned each year so as to give a credit against the tax
14on each eligible homestead in the state in an amount equal to
15the actual levy on the first two thousand four hundred thirty
16dollars of actual value for each homestead exempted under
17section 425.1A.
18(4) For property taxes due and payable in the fiscal year
19beginning July 1, 2027, the homestead credit fund shall be
20apportioned each year so as to give a credit against the tax
21on each eligible homestead in the state in an amount equal to
22the actual levy on the first one thousand two hundred twenty
23dollars of actual value for each homestead exempted under
24section 425.1A.
254. Annually For fiscal years beginning before July 1, 2028,
26annually the department of revenue shall certify to the county
27auditor of each county the credit and its amount in dollars.
28Each county auditor shall then enter the credit against the
29tax levied on each eligible homestead in each county payable
30during the ensuing year, designating on the tax lists the
31credit as being from the homestead credit fund, and credit
32shall then be given to the several taxing districts in which
33eligible homesteads are located in an amount equal to the
34credits allowed on the taxes of the homesteads. The amount of
35credits shall be apportioned by each county treasurer to the
-29-1several taxing districts as provided by law, in the same manner
2as though the amount of the credit had been paid by the owners
3of the homesteads. However, the several taxing districts shall
4not draw the funds so credited until after the semiannual
5allocations have been received by the county treasurer, as
6provided in this subchapter. Each county treasurer shall show
7on each tax receipt the amount of credit received from the
8homestead credit fund.
95. If For property taxes due and payable in fiscal years
10beginning before July 1, 2028, if the homestead tax credit
11computed under this section is less than sixty-two dollars
12and fifty cents, the amount of homestead tax credit on that
13eligible homestead shall be sixty-two dollars and fifty cents
14subject to the limitation imposed in this section.
15 Sec. 72. NEW SECTION. 425.1A Homestead tax exemption.
16The following exemptions from taxation shall be allowed:
171. For the assessment year beginning January 1, 2024, the
18eligible homestead, not to exceed two thousand five hundred
19dollars in actual value.
202. For the assessment year beginning January 1, 2025, the
21eligible homestead, not to exceed five thousand dollars in
22actual value.
233. For the assessment year beginning January 1, 2026, the
24eligible homestead, not to exceed seven thousand five hundred
25dollars in actual value.
264. For the assessment year beginning January 1, 2027, and
27each succeeding assessment year, the eligible homestead, not to
28exceed ten thousand dollars in actual value.
29 Sec. 73. Section 425.2, subsections 1, 2, 4, and 5, Code
302023, are amended to read as follows:
311. A person who wishes to qualify for the homestead
32exemption and credit allowed under this subchapter shall
33obtain the appropriate forms for filing for the exemption and
34 credit from the assessor. The person claiming the exemption
35and credit shall file a verified statement and designation of
-30-1homestead with the assessor for the year for which the person
2is first claiming the exemption and credit. The claim shall be
3filed not later than July 1 of the year for which the person is
4claiming the exemption and credit. A claim filed after July 1
5of the year for which the person is claiming the exemption and
6 credit shall be considered as a claim filed for the following
7year.
82. Upon the filing and allowance of the claim, the claim
9shall be allowed on that homestead for successive years without
10further filing as long as the property is legally or equitably
11owned and used as a homestead by that person or that person’s
12spouse on July 1 of each of those successive years, and the
13owner of the property being claimed as a homestead declares
14residency in Iowa for purposes of income taxation, and the
15property is occupied by that person or that person’s spouse
16for at least six months in each of those calendar years in
17which the fiscal year begins. When the property is sold or
18transferred, the buyer or transferee who wishes to qualify
19shall refile for the exemption and credit. However, when the
20property is transferred as part of a distribution made pursuant
21to chapter 598, the transferee who is the spouse retaining
22ownership of the property is not required to refile for the
23exemption and credit. Property divided pursuant to chapter 598
24shall not be modified following the division of the property.
25An owner who ceases to use a property for a homestead or
26intends not to use it as a homestead for at least six months in
27a calendar year shall provide written notice to the assessor
28by July 1 following the date on which the use is changed. A
29person who sells or transfers a homestead or the personal
30representative of a deceased person who had a homestead at the
31time of death, shall provide written notice to the assessor
32that the property is no longer the homestead of the former
33claimant.
344. Any person sixty-five years of age or older or any person
35who is disabled may request, in writing, from the appropriate
-31-1assessor forms for filing for homestead tax exemption and
2 credit. Any person sixty-five years of age or older or who is
3disabled may complete the form, which shall include a statement
4of homestead, and mail or return it to the appropriate
5assessor. The signature of the claimant on the statement shall
6be considered the claimant’s acknowledgment that all statements
7and facts entered on the form are correct to the best of the
8claimant’s knowledge.
95. Upon adoption of a resolution by the county board of
10supervisors, any person may request, in writing, from the
11appropriate assessor forms for the filing for homestead tax
12exemption and credit. The person may complete the form, which
13shall include a statement of homestead, and mail or return it
14to the appropriate assessor. The signature of the claimant on
15the statement of homestead shall be considered the claimant’s
16acknowledgment that all statements and facts entered on the
17form are correct to the best of the claimant’s knowledge.
18 Sec. 74. Section 425.3, subsection 4, Code 2023, is amended
19to read as follows:
204. The county auditor shall forward the claims to the board
21of supervisors. The board shall allow or disallow the claims.
22If the board disallows a claim, it shall send written notice,
23by mail, to the claimant at the claimant’s last known address.
24The notice shall state the reasons for disallowing the claim
25for the credit. The board is not required to send notice that
26a claim is disallowed if the claimant voluntarily withdraws the
27claim.
28 Sec. 75. Section 425.4, Code 2023, is amended to read as
29follows:
30425.4 Certification to treasurer.
31All claims which have been allowed by the board of
32supervisors shall be certified on or before August 1, in each
33year, by the county auditor to the county treasurer, which
34certificates shall list the total amount of dollars, listed by
35taxing district in the county, due for homestead tax exemptions
-32-1and credits claimed and allowed. The county treasurer shall
2forthwith then certify to the department of revenue the total
3amount of dollars, listed by taxing district in the county, due
4for homestead tax exemptions and credits claimed and allowed.
5 Sec. 76. Section 425.6, Code 2023, is amended to read as
6follows:
7425.6 Waiver by neglect.
8If a person fails to file a claim or to have a claim on file
9with the assessor for the credits provided in this subchapter,
10the person is deemed to have waived the homestead exemption
11and credit for the year in which the person failed to file the
12claim or to have a claim on file with the assessor.
13 Sec. 77. Section 425.7, subsection 3, Code 2023, is amended
14to read as follows:
153. a. If the department of revenue determines that a claim
16for homestead exemption and credit has been allowed by the
17board of supervisors which is not justifiable under the law
18and not substantiated by proper facts, the department may, at
19any time within thirty-six months from July 1 of the year in
20which the claim is allowed, set aside the allowance. Notice
21of the disallowance shall be given to the county auditor of
22the county in which the claim has been improperly granted and
23a written notice of the disallowance shall also be addressed
24to the claimant at the claimant’s last known address. The
25claimant or board of supervisors may appeal to the director
26of revenue within thirty days from the date of the notice of
27disallowance. The director shall grant a hearing and if, upon
28the hearing, the director determines that the disallowance was
29incorrect, the director shall set aside the disallowance. The
30director shall notify the claimant and the board of supervisors
31of the result of the hearing. The claimant or the board of
32supervisors may seek judicial review of the action of the
33director of revenue in accordance with chapter 17A.
34b. If a claim is disallowed by the department of revenue
35and not appealed to the director of revenue or appealed to
-33-1the director of revenue and thereafter upheld upon final
2resolution, including any judicial review, any amounts of
3exemptions allowed and credits allowed and paid from the
4homestead credit fund including the penalty, if any, become a
5lien upon the property on which the exemption and credit was
6originally granted, if still in the hands of the claimant,
7and not in the hands of a bona fide purchaser, and any amount
8so erroneously paid including the penalty, if any, shall be
9collected by the county treasurer in the same manner as other
10taxes and the collections shall be returned to the department
11of revenue and credited to the homestead credit fund. The
12director of revenue may institute legal proceedings against a
13homestead credit claimant for the collection of payments made
14on disallowed credits and the penalty, if any. If a person
15makes a false claim or affidavit with fraudulent intent to
16obtain the homestead exemption and credit, the person is guilty
17of a fraudulent practice and the claim shall be disallowed in
18full. If the credit has been paid, the amount of the credit
19plus a penalty equal to twenty-five percent of the amount of
20credit plus interest, at the rate in effect under section
21421.7, from the time of payment shall be collected by the
22county treasurer in the same manner as other property taxes,
23penalty, and interest are collected and when collected shall
24be paid to the director of revenue. If a homestead exemption
25and credit is disallowed and the claimant failed to give
26written notice to the assessor as required by section 425.2
27when the property ceased to be used as a homestead by the
28claimant, a civil penalty equal to five percent of the amount
29of the disallowed exemption or credit is assessed against the
30claimant.
31 Sec. 78. Section 425.8, subsection 1, Code 2023, is amended
32to read as follows:
331. The director of revenue shall prescribe the form
34for the making of a verified statement and designation of
35homestead, the form for the supporting affidavits required
-34-1herein, and such other forms as may be necessary for the proper
2administration of this subchapter. Whenever necessary, the
3department of revenue shall forward to the county auditors of
4the several counties in the state the prescribed sample forms,
5and the county auditors shall furnish blank forms prepared
6in accordance therewith with the assessment rolls, books,
7and supplies delivered to the assessors. The department of
8revenue shall prescribe and the county auditors shall provide
9on the forms for claiming the homestead exemption and credit a
10statement to the effect that the owner realizes that the owner
11must give written notice to the assessor when the owner changes
12the use of the property.
13 Sec. 79. Section 425.9, subsections 2, 3, and 4, Code 2023,
14are amended to read as follows:
152. If any claim for exemption and credit made hereunder
16 has been denied by the board of supervisors, and such action
17is subsequently reversed on appeal, the exemption and credit
18shall be allowed on the homestead involved in said appeal, and
19the director of revenue, the county auditor, and the county
20treasurer shall make such exemption and credit and change their
21books and records accordingly.
223. In the event the appealing taxpayer has paid one or both
23of the installments of the tax payable in the year or years in
24question on such homestead valuation, remittance shall be made
25to such taxpayer of the amount of such credit or exemption.
264. The amount of such credit shall be allocated and paid
27from the surplus redeposited in the homestead credit fund
28provided for in subsection 1. The amount of such exemption not
29covered by the credit shall be allowed as a credit on future
30taxes due and payable.
31 Sec. 80. Section 425.10, Code 2023, is amended to read as
32follows:
33425.10 Reversal of allowed claim.
34In the event any claim is allowed, and subsequently reversed
35on appeal, any exemption and credit made under the claim
-35-1shall be void. The amount of the erroneous exemption and
2 credit shall be charged against the property in question, and
3the director of revenue, the county auditor, and the county
4treasurer are authorized and directed to correct their books
5and records accordingly. The amount of the erroneous credit,
6when collected, shall be returned by the county treasurer to
7the homestead credit fund to be reallocated the following year
8as provided in this subchapter.
9 Sec. 81. Section 425.11, subsection 1, paragraph d,
10subparagraph (1), unnumbered paragraph 1, Code 2023, is amended
11to read as follows:
12The homestead includes the dwelling house which the owner,
13in good faith, is occupying as a home on July 1 of the year for
14which the exemption and credit is claimed and occupies as a
15home for at least six months during the calendar year in which
16the fiscal year begins, except as otherwise provided.
17 Sec. 82. Section 425.11, subsection 1, paragraph d,
18subparagraph (3), Code 2023, is amended to read as follows:
19(3) It must not embrace more than one dwelling house, but
20where a homestead has more than one dwelling house situated
21thereon, the exemption and credit provided for in this
22subchapter shall apply to the home and buildings used by the
23owner, but shall not apply to any other dwelling house and
24buildings appurtenant.
25 Sec. 83. Section 425.11, subsection 1, paragraph e, Code
262023, is amended to read as follows:
27e. “Owner” means the person who holds the fee simple
28title to the homestead, and in addition shall mean the person
29occupying as a surviving spouse or the person occupying under
30a contract of purchase which contract has been recorded in
31the office of the county recorder of the county in which the
32property is located; or the person occupying the homestead
33under devise or by operation of the inheritance laws where
34the whole interest passes or where the divided interest is
35shared only by persons related or formerly related to each
-36-1other by blood, marriage or adoption; or the person occupying
2the homestead is a shareholder of a family farm corporation
3that owns the property; or the person occupying the homestead
4under a deed which conveys a divided interest where the divided
5interest is shared only by persons related or formerly related
6to each other by blood, marriage or adoption; or where the
7person occupying the homestead holds a life estate with the
8reversion interest held by a nonprofit corporation organized
9under chapter 504, provided that the holder of the life estate
10is liable for and pays property tax on the homestead; or where
11the person occupying the homestead holds an interest in a
12horizontal property regime under chapter 499B, regardless
13of whether the underlying land committed to the horizontal
14property regime is in fee or as a leasehold interest, provided
15that the holder of the interest in the horizontal property
16regime is liable for and pays property tax on the homestead;
17or where the person occupying the homestead is a member of a
18community land trust as defined in 42 U.S.C. §12773, regardless
19of whether the underlying land is in fee or as a leasehold
20interest, provided that the member of the community land trust
21is occupying the homestead and is liable for and pays property
22tax on the homestead. For the purpose of this subchapter,
23the word “owner” shall be construed to mean a bona fide owner
24and not one for the purpose only of availing the person of
25the benefits of this subchapter. In order to qualify for the
26homestead tax exemption and credit, evidence of ownership shall
27be on file in the office of the clerk of the district court
28or recorded in the office of the county recorder at the time
29the owner files with the assessor a verified statement of the
30homestead claimed by the owner as provided in section 425.2.
31 Sec. 84. Section 425.12, Code 2023, is amended to read as
32follows:
33425.12 Indian land.
34Each forty acres of land, or fraction thereof, occupied by
35a member or members of the Sac and Fox Indians in Tama county,
-37-1which land is held in trust by the secretary of the interior of
2the United States for said Indians, shall be given a homestead
3tax exemption and credit within the meaning and under the
4provisions of this subchapter. Application for such homestead
5tax exemption and credit shall be made to the county auditor of
6Tama county and may be made by a representative of the tribal
7council.
8 Sec. 85. Section 425.13, Code 2023, is amended to read as
9follows:
10425.13 Conspiracy to defraud.
11If any two or more persons conspire and confederate together
12with fraudulent intent to obtain the exemption and credit
13provided for under the terms of this subchapter by making a
14false deed, or a false contract of purchase, they are guilty of
15a fraudulent practice.
16 Sec. 86. Section 425.15, subsection 1, unnumbered paragraph
171, Code 2023, is amended to read as follows:
18If the owner of a homestead allowed a an exemption and credit
19under this subchapter is any of the following, the exemption
20shall be the total actual value of the homestead and, for
21fiscal years for which credits are paid, the credit allowed
22on the homestead from the homestead credit fund shall be the
23entire amount of the tax levied on the homestead:
24 Sec. 87. Section 425.15, subsections 2, 3, and 4, Code 2023,
25are amended to read as follows:
262. a. For an owner described in subsection 1, paragraph
27“a”, “b”, or “c”, the exemption and credit allowed shall be
28continued to the estate of an owner who is deceased or the
29surviving spouse and any child, as defined in section 234.1,
30who are the beneficiaries of a deceased owner, so long as the
31surviving spouse remains unmarried.
32b. An individual described in subsection 1, paragraph
33“d”, is no longer eligible for the exemption and credit upon
34termination of dependency and indemnity compensation under 38
35U.S.C. §1301 et seq.
-38- 13. An owner or a beneficiary of an owner who elects to
2secure the exemption and credit provided in this section is not
3eligible for any other real property tax exemption provided by
4law for veterans of military service.
54. If an owner acquires a different homestead, the exemption
6and credit allowed under this section may be claimed on the new
7homestead unless the owner fails to meet the other requirements
8of this section.
9 Sec. 88. Section 425.15, subsection 5, paragraph a, Code
102023, is amended to read as follows:
11a. Except as provided in paragraph “b”, the list of the
12names and addresses of individuals allowed a an exemption
13and credit under this section and maintained by the county
14recorder, county treasurer, county assessor, city assessor, or
15other government body is confidential information and shall
16not be disseminated to any person unless otherwise ordered by
17a court or released by the lawful custodian of the records
18pursuant to state or federal law. The county recorder, county
19treasurer, county assessor, city assessor, or other government
20body responsible for maintaining the names and addresses of
21individuals allowed a an exemption and credit under this
22section may display such exemption and credit on individual
23paper records and individual electronic records, including
24display on an internet site.
25 Sec. 89. Section 425.17, subsection 8, Code 2023, is amended
26to read as follows:
278. “Property taxes due” means property taxes including any
28special assessments, but exclusive of delinquent interest and
29charges for services, due on a claimant’s homestead in this
30state, but includes only property taxes for which the claimant
31is liable and which will actually be paid by the claimant.
32However, if the claimant is a person whose property taxes have
33been suspended under sections 427.8 and 427.9, “property taxes
34due” means property taxes including any special assessments,
35but exclusive of delinquent interest and charges for services,
-39-1due on a claimant’s homestead in this state, but includes only
2property taxes for which the claimant is liable and which
3would have to be paid by the claimant if the payment of the
4taxes has not been suspended pursuant to sections 427.8 and
5427.9. “Property taxes due” shall be computed with no deduction
6for any credit under this subchapter or for any homestead
7exemption or credit allowed under section 425.1. Each claim
8shall be based upon the taxes due during the fiscal year next
9following the base year. If a homestead is owned by two or
10more persons as joint tenants or tenants in common, and one or
11more persons are not members of claimant’s household, “property
12taxes due” is that part of property taxes due on the homestead
13which equals the ownership percentage of the claimant and the
14claimant’s household. The county treasurer shall include with
15the tax receipt a statement that if the owner of the property
16is eighteen years of age or over, the person may be eligible
17for the credit allowed under this subchapter. If a homestead
18is an integral part of a farm, the claimant may use the total
19property taxes due for the larger unit. If a homestead is an
20integral part of a multidwelling or multipurpose building the
21property taxes due for the purpose of this subsection shall be
22prorated to reflect the portion which the value of the property
23that the household occupies as its homestead is to the value
24of the entire structure. For purposes of this subsection,
25“unit” refers to that parcel of property covered by a single tax
26statement of which the homestead is a part.
27 Sec. 90. Section 425.23, subsection 2, Code 2023, is amended
28to read as follows:
292. The actual credit for property taxes due shall be
30determined by subtracting from the tentative credit the amount
31of the tax reduction resulting from the homestead exemption
32and credit under section sections 425.1 which is allowed
33as a credit and 425.1A against property taxes due in the
34fiscal year next following the base year by the claimant or
35any person of the claimant’s household. If the subtraction
-40-1produces a negative amount, there shall be no credit but
2no refund shall be required. The actual reimbursement for
3rent constituting property taxes paid shall be equal to the
4tentative reimbursement.
5 Sec. 91. Section 435.26, subsection 1, paragraph a, Code
62023, is amended to read as follows:
7a. A mobile home or manufactured home which is located
8outside a manufactured home community or mobile home park shall
9be converted to real estate by being placed on a permanent
10foundation and shall be assessed for real estate taxes. A
11home, after conversion to real estate, is eligible for the
12homestead tax exemption and credit and the military service tax
13exemption as provided in sections 425.2 and 426A.11. A taxable
14mobile home or manufactured home which is located outside
15of a manufactured home community or mobile home park as of
16January 1, 1995, is also exempt from the permanent foundation
17requirements of this chapter until the home is relocated.
18 Sec. 92. Section 435.26A, subsection 3, Code 2023, is
19amended to read as follows:
203. After the surrender of a manufactured home’s certificate
21of title under this section, the manufactured home shall
22continue to be taxed under section 435.22 and is not eligible
23for the homestead tax exemption and credit or the military
24service tax exemption and credit. A foreclosure action on a
25manufactured home whose title has been surrendered under this
26section shall be conducted as a real estate foreclosure. A tax
27lien and its priority shall remain the same on a manufactured
28home after its certificate of title has been surrendered.
29 Sec. 93. Section 483A.24, subsection 19, Code 2023, is
30amended to read as follows:
3119. Upon payment of a fee established by rules adopted
32pursuant to section 483A.1 for a lifetime trout fishing
33license, the department shall issue a lifetime trout fishing
34license to a person who is at least sixty-five years of age or
35to a person who qualifies for the disabled veteran homestead
-41- 1exemption and credit under section 425.15. The department
2shall prepare an application to be used by a person requesting
3a lifetime trout fishing license under this subsection.
4 Sec. 94. Section 499A.14, Code 2023, is amended to read as
5follows:
6499A.14 Taxation.
7The real estate shall be taxed in the name of the
8cooperative, and each member of the cooperative shall pay
9that member’s proportionate share of the tax in accordance
10with the proration formula set forth in the bylaws, and each
11member occupying an apartment as a residence shall receive
12that member’s proportionate homestead tax exemption and credit
13and each veteran of the military services of the United States
14identified as such under the laws of the state of Iowa or the
15United States shall receive as a credit that member’s veterans
16tax benefit as prescribed by the laws of the state of Iowa.
17 Sec. 95. EXISTING HOMESTEAD CLAIMS. Homestead credit
18claims approved under chapter 425, subchapter I, prior to and
19valid on the effective date of this division of this Act shall
20result in a homestead exemption under chapter 425, subchapter
21I, as enacted in this division of this Act, without further
22filing by the claimant.
23 Sec. 96. IMPLEMENTATION. Section 25B.7, subsection 1,
24shall not apply to the property tax exemption provided in this
25division of this Act.
26 Sec. 97. APPLICABILITY. This division of this Act applies
27to assessment years beginning on or after January 1, 2024.
28DIVISION V
29ELDERLY PROPERTY TAX CREDIT
30 Sec. 98. Section 425.17, subsection 2, paragraph a,
31subparagraph (3), Code 2023, is amended to read as follows:
32(3) A person filing a claim for credit under this subchapter
33who has attained the age of seventy years on or before December
3431 of the base year, who has a household income of less than two
35 three hundred fifty percent of the federal poverty level, as
-42-1defined by the most recently revised poverty income guidelines
2published by the United States department of health and human
3services, and is domiciled in this state at the time the claim
4is filed or at the time of the person’s death in the case of a
5claim filed by the executor or administrator of the claimant’s
6estate.
7 Sec. 99. Section 425.23, subsection 1, paragraph c,
8subparagraph (2), Code 2023, is amended to read as follows:
9(2) The difference between the actual amount of net
10 property taxes due on the homestead during the fiscal year next
11following the base year minus the actual amount of net property
12taxes due on the homestead during the first fiscal year for
13which the claimant filed a claim for a credit calculated under
14this paragraph “c” and for which the property taxes due on the
15homestead were calculated on an assessed valuation that was
16not a partial assessment and if the claimant has filed for the
17credit calculated under this paragraph “c” for each of the
18subsequent fiscal years after the first credit claimed.
19 Sec. 100. Section 425.23, subsection 2, Code 2023, is
20amended to read as follows:
212. a. The Except as provided in paragraph “b”, the
22 actual credit for property taxes due shall be determined
23by subtracting from the tentative credit the amount of the
24homestead credit under section 425.1 which is allowed as a
25credit against property taxes due in the fiscal year next
26following the base year by the claimant or any person of
27the claimant’s household. If the subtraction produces a
28negative amount, there shall be no credit but no refund shall
29be required. The actual reimbursement for rent constituting
30property taxes paid shall be equal to the tentative
31reimbursement.
32b. If the claimant’s tentative credit is the amount
33determined under subsection 1, paragraph “c”, subparagraph (2),
34the actual credit amount shall be equal to the tentative credit
35amount.
-43-1 Sec. 101. EFFECTIVE DATE. The following, being deemed of
2immediate importance, take effect upon enactment:
31. The section of this division of this Act amending section
4423.23, subsection 1, paragraph “c”, subparagraph (2).
52. The section of this division of this Act amending section
6423.23, subsection 2.
7 Sec. 102. RETROACTIVE APPLICABILITY. The following apply
8retroactively to claims under chapter 425, subchapter II, filed
9on or after January 1, 2022:
101. The section of this division of this Act amending section
11423.25, subsection 1, paragraph “c”, subparagraph (2).
122. The section of this division of this Act amending section
13423.23, subsection 2.
14 Sec. 103. APPLICABILITY. The section of this division
15of this Act amending section 425.17, subsection 2, paragraph
16“a”, subparagraph (3), applies to claims under chapter 425,
17subchapter II, filed on or after January 1, 2024.
18DIVISION VI
19MILITARY SERVICE PROPERTY TAX EXEMPTION AND CREDIT
20 Sec. 104. Section 25B.7, subsection 2, paragraph c, Code
212023, is amended by striking the paragraph.
22 Sec. 105. Section 426A.1A, Code 2023, is amended to read as
23follows:
24426A.1A Appropriation.
25There For each fiscal year beginning before July 1, 2026,
26there is appropriated from the general fund of the state the
27amounts necessary to fund the credits provided under this
28chapter.
29 Sec. 106. Section 426A.2, Code 2023, is amended to read as
30follows:
31426A.2 Military service tax credit.
32The For each fiscal year beginning before July 1, 2026, the
33 moneys appropriated under section 426A.1A shall be apportioned
34each year so as to replace all or a portion of the tax which
35would be due on property eligible for military service tax
-44-1exemption in the state, if the property were subject to
2taxation, the amount of the credit to be not more than six
3dollars and ninety-two cents per thousand dollars of assessed
4value of property, not to exceed nine hundred forty-five
5dollars, which would be subject to the tax, except for the
6military service tax exemption.
7 Sec. 107. Section 426A.11, subsections 1 and 2, Code 2023,
8are amended to read as follows:
91. The property, not to exceed two thousand seven hundred
10seventy-eight dollars in taxable value for assessment years
11beginning before January 1, 2024, of any veteran, as defined in
12section 35.1, of World War I.
132. a. The property, not to exceed one thousand eight
14hundred fifty-two dollars in taxable value for assessment years
15beginning before January 1, 2024, of an honorably separated,
16retired, furloughed to a reserve, placed on inactive status,
17or discharged veteran, as defined in section 35.1, subsection
182, paragraph “a” or “b”.
19b. The property, not to exceed two thousand fifty-five
20dollars in taxable value for the assessment year beginning
21January 1, 2024, of an honorably separated, retired, furloughed
22to a reserve, placed on inactive status, or discharged veteran,
23as defined in section 35.1, subsection 2, paragraph “a” or “b”.
24c. The property, not to exceed four thousand dollars in
25taxable value for assessment years beginning on or after
26January 1, 2025, of an honorably separated, retired, furloughed
27to a reserve, placed on inactive status, or discharged veteran,
28as defined in section 35.1, subsection 2, paragraph “a” or “b”.
29 Sec. 108. IMPLEMENTATION. Section 25B.7, subsection 1,
30shall not apply to the property tax exemption provided in this
31Act.
32 Sec. 109. APPLICABILITY. This division of this Act applies
33to assessment years beginning on or after January 1, 2024.
34DIVISION VII
35PROPERTY TAX ASSESSMENT LIMITATIONS
-45-1 Sec. 110. Section 441.21, subsections 5, 9, and 10, Code
22023, are amended to read as follows:
35. a. (1) For valuations established as of January 1,
41979, property valued by the department of revenue pursuant
5to chapters 428, 433, and 437, and 438 shall be considered as
6one class of property and shall be assessed as a percentage
7of its actual value. The percentage shall be determined by
8the director of revenue in accordance with the provisions of
9this section. For valuations established as of January 1,
101979, the percentage shall be the quotient of the dividend and
11divisor as defined in this section. The dividend shall be the
12total actual valuation established for 1978 by the department
13of revenue, plus ten percent of the amount so determined.
14The divisor for property valued by the department of revenue
15pursuant to chapters 428, 433, and 437, and 438 shall be the
16valuation established for 1978, plus the amount of value added
17to the total actual value by the revaluation of the property
18by the department of revenue as of January 1, 1979. For
19valuations established as of January 1, 1980, property valued
20by the department of revenue pursuant to chapters 428, 433, and
21 437, and 438 shall be assessed at a percentage of its actual
22value. The percentage shall be determined by the director of
23revenue in accordance with the provisions of this section. For
24valuations established as of January 1, 1980, the percentage
25shall be the quotient of the dividend and divisor as defined in
26this section. The dividend shall be the total actual valuation
27established for 1979 by the department of revenue, plus eight
28percent of the amount so determined. The divisor for property
29valued by the department of revenue pursuant to chapters 428,
30433, and 437, and 438 shall be the valuation established for
311979, plus the amount of value added to the total actual
32value by the revaluation of the property by the department of
33revenue as of January 1, 1980. For valuations established
34as of January 1, 1981, and each year thereafter beginning
35before January 1, 2025, the percentage of actual value at
-46-1which property valued by the department of revenue pursuant to
2chapters 428, 433, and 437, and 438 shall be assessed shall
3be calculated in accordance with the methods provided herein,
4except that any references to ten percent in this subsection
5shall be eight percent. For valuations established on or after
6January 1, 2013, property valued by the department of revenue
7pursuant to chapter 434 shall be assessed at a portion of its
8actual value determined in the same manner at which property
9assessed as commercial property is assessed under paragraph “b”
10 for the same assessment year. For valuations established for
11the assessment year beginning January 1, 2025, the percentage
12of actual value at which property valued by the department of
13revenue pursuant to chapter 438 shall be assessed shall be
14ninety-five percent. For valuations established for assessment
15years beginning on or after January 1, 2026, the percentage
16of actual value at which property valued by the department of
17revenue pursuant to chapter 438 shall be assessed shall be
18ninety percent.
19(2) (a) For valuations established for the assessment year
20beginning January 1, 2025, the percentage of actual value at
21which property valued by the department of revenue pursuant to
22chapters 428 and 437 shall be assessed shall be ninety-seven
23and one-half percent.
24(b) For valuations established for the assessment year
25beginning January 1, 2026, the percentage of actual value at
26which property valued by the department of revenue pursuant to
27chapters 428 and 437 shall be assessed shall be ninety-five
28percent.
29(c) For valuations established for the assessment year
30beginning January 1, 2027, the percentage of actual value at
31which property valued by the department of revenue pursuant to
32chapters 428 and 437 shall be assessed shall be ninety-two and
33one-half percent.
34(d) For valuations established for the assessment year
35beginning January 1, 2028, and each assessment year thereafter,
-47-1the percentage of actual value at which property valued by the
2department of revenue pursuant to chapters 428 and 437 shall be
3assessed shall be ninety percent.
4b. For valuations established on or after January 1, 2013,
5commercial property, excluding properties referred to in
6section 427A.1, subsection 9, shall be assessed at a portion
7of its actual value, as determined in this paragraph “b”. For
8valuations established on or after January 1, 2013, property
9valued by the department of revenue pursuant to chapter 434
10shall be assessed at a portion of its actual value determined
11in the same manner at which property assessed as commercial
12property is assessed for the same assessment year.
13(1) For valuations established for the assessment year
14beginning January 1, 2013, the percentage of actual value
15as equalized by the department of revenue as provided in
16section 441.49 at which commercial property shall be assessed
17shall be ninety-five percent. For valuations established
18for the assessment year beginning January 1, 2014, and each
19assessment year thereafter beginning before January 1, 2022,
20the percentage of actual value as equalized by the department
21of revenue as provided in section 441.49 at which commercial
22property shall be assessed shall be ninety percent.
23(2) For valuations established for the assessment year
24beginning January 1, 2022, and each assessment year thereafter,
25the portion of actual value at which each property unit of
26commercial property shall be assessed shall be the sum of the
27following:
28(a) An amount equal to the product of the assessment
29limitation percentage applicable to residential property under
30subsection 4 for that assessment year multiplied by the actual
31value of the property that exceeds zero dollars but does not
32exceed one hundred fifty thousand dollars.
33(b) (i) An For the assessment years beginning January 1,
342022, January 1, 2023, and January 1, 2024, an amount equal
35to ninety percent of the actual value of the property for
-48-1that assessment year that exceeds one hundred fifty thousand
2dollars.
3(ii) For the assessment year beginning January 1, 2025,
4an amount equal to eighty-five percent of the actual value of
5the property for that assessment year that exceeds one hundred
6fifty thousand dollars.
7(iii) For the assessment year beginning January 1, 2026,
8and each assessment year thereafter, an amount equal to eighty
9percent of the actual value of the property for that assessment
10year that exceeds one hundred fifty thousand dollars.
11c. For valuations established on or after January 1, 2013,
12industrial property, excluding properties referred to in
13section 427A.1, subsection 9, shall be assessed at a portion of
14its actual value, as determined in this paragraph “c”.
15(1) For valuations established for the assessment year
16beginning January 1, 2013, the percentage of actual value
17as equalized by the department of revenue as provided in
18section 441.49 at which industrial property shall be assessed
19shall be ninety-five percent. For valuations established
20for the assessment year beginning January 1, 2014, and each
21assessment year thereafter beginning before January 1, 2022,
22the percentage of actual value as equalized by the department
23of revenue as provided in section 441.49 at which industrial
24property shall be assessed shall be ninety percent.
25(2) For valuations established for the assessment year
26beginning January 1, 2022, and each assessment year thereafter,
27the portion of actual value at which each property unit of
28industrial property shall be assessed shall be the sum of the
29following:
30(a) An amount equal to the product of the assessment
31limitation percentage applicable to residential property under
32subsection 4 for that assessment year multiplied by the actual
33value of the property that exceeds zero dollars but does not
34exceed one hundred fifty thousand dollars.
35(b) (i) An For the assessment years beginning January 1,
-49-12022, January 1, 2023, and January 1, 2024, an amount equal
2to ninety percent of the actual value of the property for
3that assessment year that exceeds one hundred fifty thousand
4dollars.
5(ii) For the assessment year beginning January 1, 2025,
6an amount equal to eighty-five percent of the actual value of
7the property for that assessment year that exceeds one hundred
8fifty thousand dollars.
9(iii) For the assessment year beginning January 1, 2026,
10and each assessment year thereafter, an amount equal to eighty
11percent of the actual value of the property for that assessment
12year that exceeds one hundred fifty thousand dollars.
13d. For valuations established for the assessment year
14beginning January 1, 2019, and each assessment year thereafter,
15the percentages or portions of actual value at which property
16is assessed, as determined under this subsection, shall not be
17applied to the value of wind energy conversion property valued
18under section 427B.26 the construction of which is approved by
19the Iowa utilities board on or after July 1, 2018.
20e. (1) For each fiscal year beginning on or after July 1,
212023, there is appropriated from the general fund of the state
22to the department of revenue the sum of one hundred twenty-five
23million dollars to be used for payments under this paragraph
24calculated as a result of the assessment limitations imposed
25under paragraph “b”, subparagraph (2), subparagraph division
26(a), and paragraph “c”, subparagraph (2), subparagraph division
27(a).
28(2) For fiscal years beginning on or after July 1, 2023,
29each county treasurer shall be paid by the department of
30revenue an amount calculated under subparagraph (4). If an
31amount appropriated for the fiscal year is insufficient to make
32all payments as calculated under subparagraph (4), the director
33of revenue shall prorate the payments to the county treasurers
34and shall notify the county auditors of the pro rata percentage
35on or before September 30.
-50- 1(3) On or before July 1 of each fiscal year, the assessor
2shall report to the county auditor that portion of the total
3actual value of all commercial property and industrial property
4in the county that is subject to the assessment limitations
5imposed under paragraph “b”, subparagraph (2), subparagraph
6division (a), and paragraph “c”, subparagraph (2), subparagraph
7division (a), for the assessment year used to calculate the
8taxes due and payable in that fiscal year.
9(4) On or before September 1 of each fiscal year, the county
10auditor shall prepare a statement, based on the report received
11in subparagraph (3) and information transmitted to the county
12auditor under chapter 434, listing for each taxing district in
13the county:
14(a) The product of the portion of the total actual value
15of all commercial property, industrial property, and property
16valued by the department under chapter 434 in the county
17that is subject to the assessment limitations imposed under
18paragraph “b”, subparagraph (2), subparagraph division (a),
19and paragraph “c”, subparagraph (2), subparagraph division
20(a), for the applicable assessment year used to calculate
21taxes which are due and payable in the applicable fiscal year
22multiplied by the difference, stated as a percentage, between
23ninety percent the percentage under paragraph “b”, subparagraph
24(2), subparagraph division (b), for the applicable assessment
25year and the assessment limitation percentage applicable to
26residential property under subsection 4 for the applicable
27assessment year.
28(b) The tax levy rate per one thousand dollars of assessed
29value for each taxing district for the applicable fiscal year.
30(c) The amount of the payment for each county is equal to
31the amount determined pursuant to subparagraph division (a),
32multiplied by the tax rate specified in subparagraph division
33(b), and then divided by one thousand dollars.
34(5) The county auditor shall certify and forward one copy of
35the statement described in subparagraph (4) to the department
-51-1of revenue not later than September 1 of each fiscal year.
2(6) The amounts determined under this paragraph shall
3be paid by the department to the county treasurers in equal
4installments in September and March of each year. The county
5treasurer shall apportion the payments among the eligible
6taxing districts in the county and the amounts received by each
7taxing authority shall be treated the same as property taxes
8paid.
9f. For the purposes of this subsection, unless the context
10otherwise requires:
11(1) “Contiguous parcels” means any of the following:
12(a) Parcels that share a common boundary.
13(b) Parcels within the same building or structure
14regardless of whether the parcels share a common boundary.
15(c) Permanent improvements to the land that are situated
16on one or more parcels of land that are assessed and taxed
17separately from the permanent improvements if the parcels of
18land upon which the permanent improvements are situated share
19a common boundary.
20(2) “Parcel” means the same as defined in section 445.1.
21“Parcel” also means that portion of a parcel assigned a
22classification of commercial property or industrial property
23pursuant to section 441.21, subsection 14, paragraph “b”.
24(3) “Property unit” means a parcel or contiguous parcels
25all of which are located within the same county, with the same
26property tax classification, are owned by the same person, and
27are operated by that person for a common use and purpose.
289. Not later than November 1, 1979, and November 1 of each
29subsequent year, the director shall certify to the county
30auditor of each county the percentages of actual value at
31which residential property, agricultural property, commercial
32property, industrial property, property valued by the
33department of revenue pursuant to chapter 434, property valued
34by the department pursuant to chapter 438, and property valued
35by the department of revenue pursuant to chapters 428, 433,
-52- 1and 437, and 438 in each assessing jurisdiction in the county
2shall be assessed for taxation, including for assessment years
3beginning on or after January 1, 2022, the percentages used to
4apply the assessment limitations under subsection 5, paragraphs
5“b” and “c”. The county auditor shall proceed to determine the
6assessed values of agricultural property, residential property,
7commercial property, industrial property, property valued by
8the department of revenue pursuant to chapter 434, property
9valued by the department pursuant to chapter 438, and property
10valued by the department of revenue pursuant to chapters 428,
11433, and 437, and 438 by applying such percentages to the
12current actual value of such property, as reported to the
13county auditor by the assessor, and the assessed values so
14determined shall be the taxable values of such properties upon
15which the levy shall be made.
1610. The percentages of actual value computed by the
17department of revenue for agricultural property, residential
18property, commercial property, industrial property, property
19valued by the department of revenue pursuant to chapter 434,
20property valued by the department pursuant to chapter 438,
21 and property valued by the department of revenue pursuant to
22chapters 428, 433, and 437, and 438, including for assessment
23years beginning on or after January 1, 2022, the percentages
24used to apply the assessment limitations under subsection 5,
25paragraphs “b” and “c”, and used to determine assessed values of
26those classes of property do not constitute a rule as defined
27in section 17A.2, subsection 11.
28 Sec. 111. EFFECTIVE DATE. This division of this Act takes
29effect July 1, 2024.
30DIVISION VIII
31NATURAL RESOURCES AND OUTDOOR RECREATION TRUST FUND
32 Sec. 112. Section 461.32, subsection 2, paragraph a, Code
332023, is amended to read as follows:
34a. The establishment, restoration, or enhancement, and
35management of state parks, state preserves, state forests,
-53-1wildlife areas, wildlife habitats, native prairies, and
2wetlands.
3 Sec. 113. Section 461.32, subsection 2, Code 2023, is
4amended by adding the following new paragraphs:
5 NEW PARAGRAPH. g. The construction, maintenance, or
6expansion of roads on state-owned land under the jurisdiction
7of the department of natural resources.
8 NEW PARAGRAPH. h. Salaries and employee benefits paid to
9support conservation officer, park ranger, or park manager
10positions within the department of natural resources.
11 Sec. 114. Section 461.33, subsection 2, paragraph a, Code
122023, is amended to read as follows:
13a. (1) Soil conservation and watershed protection,
14including by supporting the division of soil conservation
15and water quality within the department of agriculture and
16land stewardship and soil and water conservation district
17commissioners. The department may provide for the installation
18 establishment of conservation practices, management practices
19to control soil erosion on row cropped land, and watershed
20protection improvements as provided in chapters 161A, 161C,
21461A, and 466.
22(2) Each fiscal year, at least ten percent of the moneys
23allocated to the account shall be used to support the planting
24and maintenance of cover crops as provided in section 161A.73.
25 Sec. 115. EFFECTIVE DATE. This division of this Act takes
26effect January 1, 2025.
27DIVISION IX
28CHARITABLE CONSERVATION CONTRIBUTION TAX CREDIT
29 Sec. 116. Section 2.48, subsection 3, paragraph e,
30subparagraph (6), Code 2023, is amended by striking the
31subparagraph.
32 Sec. 117. Section 422.11W, Code 2023, is amended by adding
33the following new subsection:
34 NEW SUBSECTION. 5. Commencing with tax years beginning
35on or after January 1, 2025, a charitable conservation
-54-1contribution tax credit shall not be claimed against taxes as
2provided in this section, except for tax credits claimed for
3qualified real property interests conveyed prior to January 1,
42025.
5 Sec. 118. Section 422.33, subsection 25, Code 2023, is
6amended by striking the subsection and inserting in lieu
7thereof the following:
825. The taxes imposed under this subchapter shall be reduced
9by a charitable conservation contribution tax credit as allowed
10under section 422.11W for each tax year the taxpayer has
11credit, in excess of tax liability, for qualified real property
12interests conveyed prior to January 1, 2025.
13 Sec. 119. PRESERVATION OF EXISTING RIGHTS. This division
14of this Act is not intended to and shall not limit, modify, or
15otherwise adversely affect any amount of tax credit issued,
16awarded, or allowed prior to January 1, 2025, nor shall it
17limit, modify, or otherwise adversely affect a taxpayer’s right
18to claim or redeem a tax credit issued, awarded, or allowed
19prior to January 1, 2025, including but not limited to any tax
20credit carryforward amount.
21 Sec. 120. EFFECTIVE DATE. This division of this Act takes
22effect January 1, 2025.
23 Sec. 121. APPLICABILITY. This division of this Act applies
24to tax years beginning on or after January 1, 2025.
25DIVISION X
26Property tax benefits and incentives
27 Sec. 122. NEW SECTION. 404.3C Assessment agreements —
28commercial property.
291. For revitalization areas established under this chapter
30on or after the effective date of this division of this Act
31and for first-year exemption applications for property located
32in a revitalization area in existence on the effective date
33of this division of this Act filed on or after the effective
34date of this division of this Act, commercial property shall
35not receive a tax exemption under this chapter unless the city
-55-1or county, as applicable, and the owner of the qualified real
2estate enter into a written assessment agreement specifying a
3minimum actual value until a specified termination date for the
4duration of the exemption period.
52. a. The assessment agreement shall be presented to the
6appropriate assessor. The assessor shall review the plans and
7specifications for the improvements to be made to the property
8and if the minimum actual value contained in the assessment
9agreement appears to be reasonable, the assessor shall execute
10the following certification upon the agreement:
11 The undersigned assessor, being legally responsible for the
12assessment of the above described property upon completion of
13the improvements to be made on it, certifies that the actual
14value assigned to that land and improvements upon completion
15shall not be less than $.........
16b. The assessment agreement with the certification of
17the assessor and a copy of this subsection shall be filed in
18the office of the county recorder of the county where the
19property is located. Upon completion of the improvements,
20the assessor shall value the property as required by law,
21except that the actual value shall not be less than the minimum
22actual value contained in the assessment agreement. This
23subsection does not prohibit the assessor from assigning a
24higher actual value to the property or prohibit the owner
25from seeking administrative or legal remedies to reduce the
26actual value assigned except that the actual value shall not
27be reduced below the minimum actual value contained in the
28assessment agreement. An assessor, county auditor, board of
29review, director of revenue, or court of this state shall not
30reduce or order the reduction of the actual value below the
31minimum actual value in the agreement during the term of the
32agreement regardless of the actual value which may result from
33the incomplete construction of improvements, destruction or
34diminution by any cause, insured or uninsured, except in the
35case of acquisition or reacquisition of the property by a
-56-1public entity. Recording of an assessment agreement complying
2with this subsection constitutes notice of the assessment
3agreement to a subsequent purchaser or encumbrancer of the land
4or any part of it, whether voluntary or involuntary, and is
5binding upon a subsequent purchaser or encumbrancer.
6 Sec. 123. NEW SECTION. 404.3D Exemptions for residential
7property.
8For revitalization areas established under this chapter on
9or after the effective date of this division of this Act and
10for first-year exemption applications for property located in a
11revitalization area in existence on the effective date of this
12division of this Act filed on or after the effective date of
13this division of this Act, an exemption otherwise authorized
14under this chapter shall not be authorized for or approved by a
15city or county, as applicable, for property that is residential
16property.
17 Sec. 124. EFFECTIVE DATE. This division of this Act takes
18effect July 1, 2024.
19DIVISION XI
20TAX INCREMENT FINANCING
21 Sec. 125. Section 403.19, subsection 2, paragraph a, Code
222023, is amended to read as follows:
23a. That portion of the taxes each year in excess of such
24amount shall be allocated to and when collected be paid into
25a special fund of the municipality to pay the principal of
26and interest on loans, moneys advanced to, or indebtedness,
27whether funded, refunded, assumed, or otherwise, including
28bonds issued under the authority of section 403.9, subsection
291, incurred by the municipality to finance or refinance, in
30whole or in part, an urban renewal project within the area,
31and to provide assistance for low and moderate income family
32housing as provided in section 403.22. However, except
33as provided in paragraph “b”, taxes for the regular and
34voter-approved physical plant and equipment levy of a school
35district imposed pursuant to section 298.2 and taxes for the
-57-1instructional support program of a school district imposed
2pursuant to section 257.19, taxes for the payment of bonds
3and interest of each taxing district, and taxes imposed under
4section 346.27, subsection 22, related to joint county-city
5buildings shall be collected against all taxable property
6within the taxing district without limitation by the provisions
7of this subsection. Additionally, for property taxes due and
8payable in fiscal years beginning on or after July 1, 2025,
9if the portion of the urban renewal area that is subject to a
10division of revenue under this section contains wind energy
11conversion property that is subject to special valuation under
12section 427B.26, foundation property taxes of a school district
13imposed under section 257.3 shall be collected against all
14taxable property within that portion of the urban renewal area
15without limitation by the provisions of this subsection and
16when collected be paid into the fund of the school district
17into which all other property taxes are paid.
18DIVISION XII
19transit funding
20 Sec. 126. Section 364.2, subsection 4, paragraph f,
21subparagraph (1), subparagraph division (b), Code 2023, is
22amended to read as follows:
23(b) For franchise fees assessed and collected during fiscal
24years beginning on or after July 1, 2013 2024, but before
25July 1, 2030, by a city that is the subject of a judgment,
26court-approved settlement, or court-approved compromise
27providing for payment of restitution, a refund, or a return
28described in section 384.3A, subsection 3, paragraph “j” with
29a population exceeding two hundred thousand, the rate of the
30franchise fee shall not exceed seven and one-half percent
31of gross revenues generated from sales of the franchisee in
32the city, and franchise fee amounts assessed and collected
33during such fiscal years in excess of five percent of gross
34revenues generated from sales shall be used solely for the
35purpose specified in section 384.3A, subsection 3, paragraph
-58-1“j”. A city may assess and collect a franchise fee in excess
2of five percent of gross revenues generated from the sales
3of the franchisee pursuant to this subparagraph division (b)
4for a period not to exceed seven consecutive fiscal years
5once the franchise fee is first imposed at a rate in excess
6of five percent. An ordinance increasing the franchise fee
7rate to greater than five percent pursuant to this subparagraph
8division (b) shall not become effective unless approved at
9an election. After passage of the ordinance, the council
10shall submit the proposal at a special election held on a date
11specified in section 39.2, subsection 4, paragraph “b”. If a
12majority of those voting on the proposal approves the proposal,
13the city may proceed as proposed. The complete text of the
14ordinance shall be included on the ballot and the full text
15of the ordinance posted for the voters pursuant to section
1652.25. All absentee voters shall receive the full text of the
17ordinance along with the absentee ballot. This subparagraph
18division (b) is repealed July 1, 2030.
19 Sec. 127. Section 384.3A, subsection 3, paragraph j, Code
202023, is amended to read as follows:
21j. For franchise fees assessed and collected by a city in
22excess of five percent of gross revenues generated from sales
23of the franchisee within the city pursuant to section 364.2,
24subsection 4, paragraph “f”, subparagraph (1), subparagraph
25division (b), during fiscal years beginning on or after July 1,
262013 2024, but before July 1, 2030, the adjustment, renewal,
27or extension of any part or all of the legal indebtedness of
28a city, whether evidenced by bonds, warrants, court-approved
29settlements, court-approved compromises, or judgments, or the
30funding or refunding of the same, if such legal indebtedness
31relates to restitution, a refund, or a return ordered by a
32court of competent jurisdiction for franchise fees assessed
33and collected by the city before June 20, 2013 solely for the
34reduction of property tax levies that support the operation and
35maintenance of a municipal transit system or a regional transit
-59-1district. This paragraph “j” is repealed July 1, 2030.
2 Sec. 128. EFFECTIVE DATE. This division of this Act takes
3effect July 1, 2024.
4EXPLANATION
5The inclusion of this explanation does not constitute agreement with
6the explanation’s substance by the members of the general assembly.
7This bill relates to state and local revenue and finances.
8DIVISION I — SALES AND USE TAX RATES AND DISTRIBUTION. An
9amendment to the Iowa Constitution was ratified on November 2,
102010, which created a natural resources and outdoor recreation
11trust fund (fund) and dedicated a portion of state revenues to
12the fund for the purposes of protecting and enhancing water
13quality and natural areas in the state including parks, trails,
14and fish and wildlife habitat, and conserving agricultural
15soils in the state (Article VII, section 10). The fund is
16codified in Code section 461.31. Pursuant to the amendment,
17the amount credited to the fund will be equal to the amount
18generated by an increase in the state sales tax rate occurring
19after the effective date of the constitutional amendment, but
20shall not exceed the amount that a state sales tax rate of
210.375 percent would generate. The state sales tax rate has not
22been increased since the effective date of the constitutional
23amendment, so no amounts have been credited to the fund. The
24bill increases the sales tax rate and the use tax rate from 6
25percent to 7 percent beginning January 1, 2025. In lieu of the
26local option and sales services tax revenue repealed in another
27division of the bill, the bill transfers a specified amount of
28the state sales and use tax revenues collected to the local
29sales and use tax fund established under Code chapter 423B,
30for allocation and expenditure in a manner similar to that
31which was provided for local sales and services tax revenues.
32However, as provided in another division of the bill, amounts
33resulting from the increase in the use tax for the period
34beginning January 1, 2025, through December 31, 2043, are
35deposited in the local use tax supplement fund to be used
-60-1for purposes of that fund. The amount of sales tax revenues
2transferred to the local sales and use tax fund under Code
3chapter 423B for the period beginning January 1, 2025, through
4December 31, 2027, is an amount equating to a tax of 1.4
5percent. The amount transferred is then reduced each year by
6an amount equating to a 0.05 percent tax until January 1, 2030.
7The amount of sales tax revenues transferred to the local sales
8and use tax fund under Code chapter 423B beginning January 1,
92030, is an amount equating to a tax of 1.25 percent. The bill,
10as the result of Article VII, section 10, of the Constitution
11of the State of Iowa, also amends the transfer of sales tax
12revenues to the secure an advanced vision for education fund in
13Code section 423.2A(2).
14DIVISION II — WATER SERVICE TAX. The bill changes the water
15service tax on the furnishing of water to consumers so that the
16rate is equal to the rate of the sales tax that is being imposed
17under Code chapter 423.
18Currently, one-half of the moneys collected from the water
19service tax are deposited into the general fund of the state
20and one-half of the moneys are deposited into the water quality
21financial assistance fund created in Code section 16.134A.
22 The bill strikes the provision requiring one-half of the
23water service tax moneys be deposited into the water quality
24financial assistance fund and requires all moneys generated
25from the water service tax be deposited into the general fund
26of the state.
27The bill also strikes the future repeal of the water service
28excise tax.
29The division takes effect January 1, 2025.
30DIVISION III — LOCAL OPTION TAXES. Code chapter 423B
31authorizes, following approval at election, the imposition of
32a local option sales and services tax at a rate not to exceed
33one percent to be administered similarly to the state sales
34and services tax and authorizes the imposition of a local
35vehicle tax. The bill strikes the authorization for the local
-61-1vehicle tax and also strikes the authorization to impose the
2local option sales and services tax under Code chapter 423B,
3but instead authorizes cities and counties to expend specified
4state sales and use tax revenues that are deposited in the
5local sales and use tax fund following the increase of the
6state sales and use taxes rates in previous sections of the
7bill.
8Under the bill, sales and services tax revenue credited to
9and deposited in each county’s account within the local sales
10and use tax fund must be expended by each recipient county
11and city as required by the jurisdiction’s revenue purpose
12statement, including a revenue purpose statement approved at
13election prior to January 1, 2025, and in effect on or set to
14take effect on or after January 1, 2025, for the use of local
15option sales and use tax revenue previously collected under
16Code chapter 423B, or be used to reduce specified property tax
17levies.
18The bill also modifies the requirements and permissible uses
19of funds received under Code chapter 423B. The bill specifies
20that for a county with a population of 400,000 or more, a
21revenue purpose statement governing the use of revenues for the
22unincorporated area of the county approved on or after January
231, 2025, shall require the use of 75 percent of such moneys
24for property tax relief. Additionally, the bill provides that
25property tax relief includes payments under a Code chapter
2628E agreement for purposes of a regional transit district if
27such payments are used to reduce the regional transit district
28levy. For a city located in whole or in part in a county with
29a population of 400,000 or more, the use of revenues received
30under Code chapter 423B for such regional transit district
31purposes shall not exceed 10 percent of the amount received
32and for a county with a population of 400,000 or more, for the
33unincorporated area, shall not exceed 25 percent.
34The board of supervisors of each county and the city
35council of each city may adopt by resolution a revenue purpose
-62-1statement for the expenditure of funds received under Code
2chapter 423B.
3The revenues transferred to the local sales and use tax fund
4continue to be allocated to the specific county account for
5the county in which the tax was collected. Additionally, all
6cities and counties are eligible to receive the allocation of
7revenues, not just those that had previously approved the local
8option tax.
9As provided in another division of the bill, specified
10amounts of use tax revenue is transferred to the local use
11tax supplement fund, as created in the bill. Moneys in the
12local use tax supplement fund are annually appropriated to the
13department of revenue to be used for supplement payments to
14cities and counties. For each year during the period beginning
15January 1, 2025, through December 31, 2043, each city or county
16for the unincorporated portion of the county shall receive a
17local use tax supplement payment equal to the difference, but
18not less than zero, between the amount of revenue received
19by the city or county under Code section 423B.7, Code 2023,
20for the period beginning January 1, 2024, and ending December
2131, 2024, minus the amount that would have been received by
22that city or county for that period if all cities and the
23county were eligible for distributions of such revenues under
24Code section 423B.7, Code 2023. If moneys in the fund are
25insufficient to pay all supplement amounts for the year, the
26director of revenue shall prorate the payment of the supplement
27payments. The supplement payment is required to be combined
28with and be used in the same manner and be subject to the same
29requirements as moneys received by the city or county under
30Code section 423B.7 for that year. The bill establishes a
31future repeal of the Code section establishing the supplement
32payments on January 1, 2044. Moneys in the fund upon the
33repeal shall be transferred to the appropriate county accounts
34for the counties from which the tax was paid.
35Code section 423B.10 allows a city in which a local sales
-63-1and services tax is imposed to, by ordinance and following
2approval of the board of supervisors, to provide for the use
3of a designated amount of increased local option sales and
4services tax revenue for urban renewal purposes. The bill
5modifies provisions governing this authorization to provide for
6the use of a specified amount of the applicable increased state
7sales tax revenues deposited in the local sales and use tax
8fund in lieu of the increased local option sales and services
9tax revenue. The bill allows city ordinances providing for the
10use of certain local option sales and services tax revenues for
11urban renewal purposes in effect on January 1, 2025, to remain
12in effect until expiration, amendment, or repeal.
13The bill also eliminates the authority to impose a local
14sales and services tax under the quad cities interstate
15metropolitan authority compact under Code chapter 28A beginning
16on January 1, 2025.
17The division takes effect January 1, 2025.
18DIVISION IV — HOMESTEAD PROPERTY TAX CREDIT. Code chapter
19425 establishes a homestead property tax credit in an amount
20equal to the property tax levy on the first $4,850 of actual
21value. The homestead credit is paid for from the homestead
22credit fund under Code section 425.1 for which there is an
23annual appropriation for an amount sufficient to implement the
24credit.
25The bill reduces the amount of the homestead credit over a
26period beginning with the fiscal year beginning July 1, 2025,
27until the credit is ended in the fiscal year beginning July
281, 2028, at which time the remaining moneys in the homestead
29credit fund are transferred for deposit in the general fund
30of the state. During the same period, the bill establishes
31a homestead property tax exemption. For the assessment year
32beginning January 1, 2024, the exemption amount is $2,500. For
33the assessment year beginning January 1, 2025, the exemption
34amount is $5,000. For the assessment year beginning January 1,
352026, the exemption amount is $7,500. For the assessment year
-64-1beginning January 1, 2027, and each succeeding assessment year,
2the exemption amount is $10,000.
3Code section 25B.7 provides that if a state appropriation
4made to fund a credit or exemption is not sufficient to fully
5fund the credit or exemption, the political subdivision shall
6be required to extend to the taxpayer only that portion of the
7credit or exemption estimated by the department of revenue to
8be funded by the state appropriation. The requirement for
9fully funding and the consequences of not fully funding under
10Code section 25B.7 applies to the homestead credit under Code
11chapter 425. The bill strikes the portion of Code section
1225B.7 that makes the requirement for fully funding and the
13consequences of not fully funding applicable to the homestead
14property tax credit and provides that the general requirement
15of Code section 25B.7 for property tax credits and exemptions
16on or after January 1, 1997, does not apply to the homestead
17property tax exemption established in the bill.
18The bill makes corresponding changes to various other
19provisions of the Code relating to and referencing the
20homestead property tax credit.
21The bill provides that homestead credit claims approved
22prior to and valid on the effective date of the division shall
23result in a homestead tax exemption under Code chapter 425,
24subchapter I, as enacted in the division, without further
25filing by the claimant.
26Division IV applies to assessment years beginning on or
27after January 1, 2024.
28DIVISION V — ELDERLY PROPERTY TAX CREDIT. Code section
29425.17, in part, establishes eligibility criteria for the
30elderly property tax credit. One such category of eligibility
31is a person who has attained the age of 70 years on or before
32December 31 of the base year, who has a household income of
33less than 250 percent of the federal poverty level. The bill
34changes that income threshold to 300 percent of the federal
35poverty level for credit claims filed on or after January 1,
-65-12024.
2The bill also amends Code section 423.23 to modify part of
3the calculation for the elderly property tax credit to account
4for the homestead credit for the property under Code section
5425.1. The portions of the division amending Code section
6423.23 take effect upon enactment and apply retroactively to
7claims for the credit filed on or after January 1, 2022.
8DIVISION VI — MILITARY SERVICE PROPERTY TAX EXEMPTION AND
9CREDIT. Division VII relates to the military service property
10tax exemption and credit. Under current law, veterans of World
11War I are entitled to a property tax exemption of $2,778 in
12taxable value and honorably discharged veterans who served
13during other specific time periods are entitled to a property
14tax exemption of $1,852 in taxable value. The bill increases
15the exemption amount for all eligible veterans to $2,055 for
16the assessment year beginning January 1, 2024, and to $4,000
17for assessment years beginning on or after January 1, 2025.
18Under current law, the state provides funding to local
19governments for the military service property tax exemption
20and credit up to $6.92 per $1,000 of assessed value of the
21exempt property. The bill reduces the amount of the credit for
22the fiscal year beginning July 1, 2025, to $6.92 per $1,000
23of assessed value of the exempt property, but not to exceed
24$945 of assessed value and eliminates funding for the credit
25starting with the fiscal year beginning July 1, 2026.
26Code section 25B.7 provides that if a state appropriation
27made to fund a credit or exemption is not sufficient to fully
28fund the credit or exemption, the political subdivision shall
29be required to extend to the taxpayer only that portion of the
30credit or exemption estimated by the department of revenue to
31be funded by the state appropriation. The requirement for
32fully funding and the consequences of not fully funding under
33Code section 25B.7 applies to the military service property
34tax credit and exemption to the extent of $6.92 per $1,000
35of assessed value of the exempt property. The bill strikes
-66-1the portion of Code section 25B.7 that makes the requirement
2for fully funding and the consequences of not fully funding
3applicable to the military service property tax credit and
4exemption and provides that the general requirement of Code
5section 25B.7 for property tax credits and exemptions on or
6after January 1, 1997, does not apply to the military property
7tax exemption established in the bill.
8The division applies to assessment years beginning on or
9after January 1, 2024.
10DIVISION VII — PROPERTY TAX ASSESSMENT LIMITATIONS. Code
11section 441.21 establishes assessment limitations for various
12classifications of property. The bill reduces the percentage
13of actual value at which property valued by the department
14of revenue pursuant to Code chapter 438 (pipelines) shall
15be assessed by 5 percent each year from 100 percent for the
16assessment year beginning January 1, 2024, to 90 percent for
17assessment years beginning on or after January 1, 2025.
18The bill also reduces the percentage of actual value at
19which the portion of commercial, industrial, and railway
20properties that exceeds $150,000 is assessed by 5 percent each
21year from 90 percent for the assessment year beginning January
221, 2024, to 80 percent for assessment years beginning on or
23after January 1, 2026. Accordingly, the bill makes a change
24to the payments made to local governments under Code section
25441.21(5)(e) that are in part calculated using the assessment
26limitation applied to commercial and industrial property.
272018 Iowa Acts, chapter 1158, changed the assessment of
28telephone and telegraph company property under Code chapter
29433. Code chapter 433 applies to the assessment and taxation
30of telephone and telegraph company property for assessment
31years beginning before January 1, 2022. Starting with the
32assessment year beginning January 1, 2022, such property is
33assessed locally in the same manner as commercial property.
34References to Code chapter 433 are not included in the
35applicable Code section as amended in the bill for assessment
-67-1years beginning on or after January 1, 2025.
2This division of the bill takes effect July 1, 2024.
3DIVISION VIII — NATURAL RESOURCES AND OUTDOOR RECREATION
4TRUST FUND. The bill amends provisions in Code chapter 461
5which would implement an amendment to the Constitution of the
6State of Iowa as ratified on November 2, 2010, as directed in
7the Iowa Constitution (see Code section 461.3; and Article VII,
8section 10 of the codified Iowa Constitution).
9CONSTITUTIONAL AMENDMENT. The amendment dedicates a
10portion of state revenue annually generated from the state’s
11sales tax to protect and enhance water quality and natural
12areas in this state, including parks, trails, and fish and
13wildlife habitats, and conserve agricultural soils in this
14state. The amendment creates a natural resources and outdoor
15recreation trust fund (fund) within the state treasury. The
16fund is credited with an amount equal to the amount annually
17generated by a sales tax rate of three-eighths of 1 percent.
18However, no revenue is credited to the fund until the tax rate
19existing on the effective date of the amendment is increased.
20After the effective date of any such increase, which another
21division of the bill provides, the fund will be credited with
22an amount equal to the amount generated by the increase up to
23the three-eighths of 1 percent limit.
24BILL’S PROVISIONS. Code chapter 461 creates the statutory
25version of the fund and provides for the distributions of
26revenue from the fund to various accounts used to support
27various initiatives to be carried out by state agencies
28including the department of natural resources (DNR) and
29department of agriculture and land stewardship (DALS).
30 Twenty-three percent of moneys credited to the fund are
31allocated to a natural resources account administered by DNR
32to support initiatives related to state lands, wildlife,
33recreation, natural habitat, rivers and streams, and education.
34The bill provides that moneys in the account are to be used
35(1) for the construction, maintenance, or expansion of roads
-68-1on state-owned land under DNR’s jurisdiction, and (2) to
2support salaries and benefits paid to conservation officers,
3park rangers, or park managers (amended Code section 461.32).
4Twenty percent of moneys credited to the fund are allocated
5to the soil conservation and water protection account to
6support soil conservation practices, the conservation of
7highly erodible land, and soil conservation or crop management
8practices used in biomass production. The bill expressly
9provides that for each fiscal year, at least 10 percent of
10moneys in the account must be used to support the planting and
11maintenance of cover crops by landowners (amended Code section
12461.33; referring to voluntary cost-share projects administered
13under Code section 161A.73).
14EFFECTIVE DATE. The division of the bill takes effect
15January 1, 2025.
16DIVISION IX — CHARITABLE CONSERVATION CONTRIBUTION
17TAX CREDIT. The bill prohibits a charitable conservation
18contribution tax credit from being claimed against the
19individual or corporate income tax, except for qualified real
20property interests conveyed prior to January 1, 2025. The bill
21allows the credit in excess of tax liability to carry forward
22for qualified real property interests conveyed prior to January
231, 2025. The bill preserves existing rights and is intended to
24not limit, modify, or otherwise adversely affect any amount of
25the tax credit issued, awarded, or allowed prior to the repeal
26date of any tax credit. The division takes effect January 1,
272025, and applies to tax years beginning on or after that date.
28DIVISION X — PROPERTY TAX BENEFITS AND INCENTIVES. The bill
29amends Code chapter 404 (urban revitalization areas) to provide
30that for revitalization areas established on or after the
31effective date of the division and for first-year property tax
32exemption applications for property located in a revitalization
33area in existence on the effective date of the division filed
34on or after the effective date of the division, commercial
35property shall not receive a tax exemption under Code chapter
-69-1404 unless the city or county, as applicable, and the owner
2of the qualified real estate enter into a written assessment
3agreement specifying a minimum actual value until a specified
4termination date for the duration of the exemption period.
5The bill also establishes limitations on exemptions for
6residential property within revitalization areas. For
7revitalization areas established on or after the effective date
8of the division and for first-year exemption applications for
9property located in a revitalization area in existence on the
10effective date of the division filed on or after the effective
11date of the division, an exemption otherwise authorized under
12Code chapter 404 shall not be authorized for or approved by a
13city or county, as applicable, for property that is residential
14property.
15Division X of the bill takes effect July 1, 2024.
16DIVISION XI — TAX INCREMENT FINANCING. Code section 403.19
17authorizes municipalities to provide by ordinance for the
18division of property tax revenue (tax increment financing)
19collected against property located within an urban renewal
20area. The bill provides that for property taxes due and
21payable in fiscal years beginning on or after July 1, 2025,
22if the portion of the urban renewal area that is subject
23to a division of property tax revenue contains wind energy
24conversion property that is subject to special valuation under
25Code section 427B.26, foundation property taxes of a school
26district imposed under Code section 257.3 in that portion of
27the urban renewal area shall not be subject to the division of
28property tax revenue and shall instead be paid to the school
29district.
30DIVISION XII — TRANSIT FUNDING. Cities may grant various
31types of franchises for specified services under Code section
32362.4 and may generally impose a franchise fee based upon
33a percentage of gross revenues generated from sales of the
34franchisee within the city not to exceed 5 percent. An
35exception allowing for a franchise fee up to 7.5 percent exists
-70-1in specified circumstances for a period of fiscal years ending
2July 1, 2030, if approved at election. The bill strikes
3the provisions providing for that exception and establishes
4conditions under which a city with a population that exceeds
5200,000 may impose a franchise fee of up to 7.5 percent for
6fiscal years beginning on or after July 1, 2024. The bill
7requires that franchise fee amounts collected during such
8fiscal years in excess of 5 percent of gross revenues generated
9from sales shall be used solely for the reduction of property
10tax levies used to support the operation and maintenance of a
11municipal transit system or a regional transit district.
12The division of the bill takes effect July 1, 2024.
-71-md/jh