Bill Summary – FastDemocracy

Senate File 365 - Introduced
                                  SENATE FILE 365
                                  BY COMMITTEE ON WAYS AND MEANS
                                  (SUCCESSOR TO SSB 1085)
                            A BILL FOR
An Act relating to property tax classifications, assessment
  limitations, and administration, and including effective
  date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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    Section 1. Section 404.2, subsection 2, paragraph f, Code
 2021, is amended to read as follows:
    f. A statement specifying whether the revitalization is
 applicable to none, some, or all of the property assessed as
 residential, multiresidential, agricultural, commercial, or
 industrial property within the designated area or a combination
 thereof and whether the revitalization is for rehabilitation
 and additions to existing buildings or new construction or
 both. If revitalization is made applicable only to some
 property within an assessment classification, the definition of
 that subset of eligible property must be by uniform criteria
 which further some planning objective identified in the plan.
 The city shall state how long it is estimated that the area
 shall remain a designated revitalization area which time
 shall be longer than one year from the date of designation
 and shall state any plan by the city to issue revenue bonds
 for revitalization projects within the area. For a county,
 a revitalization area shall include only property which
 will be used as industrial property, commercial property,
 multiresidential property, or residential property. However, a
 county shall not provide a tax exemption under this chapter to
 commercial property, multiresidential property, or residential
 property which is located within the limits of a city.
    Sec. 2. Section 404.3, subsection 4, paragraph a, Code 2021,
 is amended by striking the paragraph and inserting in lieu
 thereof the following:
    a. All qualified real estate assessed as residential
 property is eligible to receive a one hundred percent exemption
 from taxation on the actual value added by the improvements.
    Sec. 3. Section 441.21, subsection 2, Code 2021, is amended
 to read as follows:
    2. In the event market value of the property being assessed
 cannot be readily established in the foregoing manner, then
 the assessor may determine the value of the property using the
 other uniform and recognized appraisal methods including its
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 productive and earning capacity, if any, industrial conditions,
 its cost, physical and functional depreciation and obsolescence
 and replacement cost, and all other factors which would assist
 in determining the fair and reasonable market value of the
 property but the actual value shall not be determined by use
 of only one such factor. The following shall not be taken into
 consideration: Special value or use value of the property to
 its present owner, and the goodwill or value of a business
 which uses the property as distinguished from the value of
 the property as property. In addition, for assessment years
 beginning on or after January 1, 2018, and unless otherwise
 required for property valued by the department of revenue
 pursuant to chapters 428, 433, 437, and 438, the assessor
 shall not take into consideration and shall not request from
 any person sales or receipts data, expense data, balance
 sheets, bank account information, or other data related to
 the financial condition of a business operating in whole or
 in part on the property if the property is both classified as
 commercial or industrial property and owned and used by the
 owner of the business. However, in assessing property that
 is rented or leased to low-income individuals and families
 as authorized by section 42 of the Internal Revenue Code,
 as amended, and which section limits the amount that the
 individual or family pays for the rental or lease of units
 in the property, the assessor shall, unless the owner elects
 to withdraw the property from the assessment procedures for
 section 42 property, use the productive and earning capacity
 from the actual rents received as a method of appraisal and
 shall take into account the extent to which that use and
 limitation reduces the market value of the property. The
 assessor shall not consider any tax credit equity or other
 subsidized financing as income provided to the property in
 determining the assessed value. The property owner shall
 notify the assessor when property is withdrawn from section 42
 eligibility under the Internal Revenue Code or if the owner
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 elects to withdraw the property from the assessment procedures
 for section 42 property under this subsection. The property
 shall not be subject to section 42 assessment procedures
 for the assessment year for which section 42 eligibility is
 withdrawn or an election is made. This notification must
 be provided to the assessor no later than March 1 of the
 assessment year or the owner will be subject to a penalty of
 five hundred dollars for that assessment year. The penalty
 shall be collected at the same time and in the same manner
 as regular property taxes. An election to withdraw from the
 assessment procedures for section 42 property is irrevocable.
 Property that is withdrawn from the assessment procedures
 for section 42 property shall be classified and assessed as
 multiresidential residential property unless the property
 otherwise fails to meet the requirements of subsection 13 14.
 Upon adoption of uniform rules by the department of revenue
 or succeeding authority covering assessments and valuations
 of such properties, the valuation on such properties shall be
 determined in accordance with such rules and in accordance with
 forms and guidelines contained in the real property appraisal
 manual prepared by the department as updated from time to time
 for assessment purposes to assure uniformity, but such rules,
 forms, and guidelines shall not be inconsistent with or change
 the foregoing means of determining the actual, market, taxable
 and assessed values.
    Sec. 4. Section 441.21, subsection 8, paragraph b, Code
 2021, is amended to read as follows:
    b. Notwithstanding paragraph “a”, any construction or
 installation of a solar energy system on property classified
 as agricultural, residential, commercial, multiresidential, or
 industrial property shall not increase the actual, assessed,
 and taxable values of the property for five full assessment
 years.
    Sec. 5. Section 441.21, subsections 9 and 10, Code 2021, are
 amended to read as follows:
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    9. Not later than November 1, 1979, and November 1 of each
 subsequent year, the director shall certify to the county
 auditor of each county the percentages of actual value at
 which residential property, agricultural property, commercial
 property, industrial property, multiresidential property,
 property valued by the department of revenue pursuant to
 chapter 434, and property valued by the department of revenue
 pursuant to chapters 428, 433, 437, and 438 in each assessing
 jurisdiction in the county shall be assessed for taxation. The
 county auditor shall proceed to determine the assessed values
 of agricultural property, residential property, commercial
 property, industrial property, multiresidential property,
 property valued by the department of revenue pursuant to
 chapter 434, and property valued by the department of revenue
 pursuant to chapters 428, 433, 437, and 438 by applying such
 percentages to the current actual value of such property,
 as reported to the county auditor by the assessor, and the
 assessed values so determined shall be the taxable values of
 such properties upon which the levy shall be made.
    10. The percentage of actual value computed by the
 department of revenue for agricultural property, residential
 property, commercial property, industrial property,
 multiresidential property, property valued by the department
 of revenue pursuant to chapter 434, and property valued by the
 department of revenue pursuant to chapters 428, 433, 437, and
 438 and used to determine assessed values of those classes
 of property does not constitute a rule as defined in section
 17A.2, subsection 11.
    Sec. 6. Section 441.21, subsection 13, paragraphs a, b, and
 c, Code 2021, are amended to read as follows:
    a. (1) For the assessment year beginning January 1, 2015,
 mobile home parks, manufactured home communities, land-leased
 communities, assisted living facilities, property primarily
 used or intended for human habitation containing three or more
 separate dwelling units, and that portion of a building that is
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 used or intended for human habitation and a proportionate share
 of the land upon which the building is situated, regardless of
 the number of dwelling units located in the building, if the
 use for human habitation is not the primary use of the building
 and such building is not otherwise classified as residential
 property, shall be valued as a separate class of property
 known as multiresidential property and, excluding properties
 referred to in section 427A.1, subsection 9, shall be assessed
 at a percentage of its actual value, as determined in this
 subsection.
    (2) Beginning with valuations established on or after
 January 1, 2016, but before January 1, 2022, all of the
 following shall be valued as a separate class of property
 known as multiresidential property and, excluding properties
 referred to in section 427A.1, subsection 9, shall be assessed
 at a percentage of its actual value, as determined in this
 subsection:
    (a) (1) Mobile home parks.
    (b) (2) Manufactured home communities.
    (c) (3) Land-leased communities.
    (d) (4) Assisted living facilities.
    (e) (5) A parcel primarily used or intended for human
 habitation containing three or more separate dwelling units.
 If a portion of such a parcel is used or intended for a purpose
 that, if the primary use, would be classified as commercial
 property or industrial property, each such portion, including
 a proportionate share of the land included in the parcel, if
 applicable, shall be assigned the appropriate classification
 pursuant to paragraph “c”.
    (f) (6) For a parcel that is primarily used or intended for
 use as commercial property or industrial property, that portion
 of the parcel that is used or intended for human habitation,
 regardless of the number of dwelling units contained on the
 parcel, including a proportionate share of the land included
 in the parcel, if applicable. The portion of such a parcel
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 used or intended for use as commercial property or industrial
 property, including a proportionate share of the land included
 in the parcel, if applicable, shall be assigned the appropriate
 classification pursuant to paragraph “c”.
    b. For valuations established for the assessment year
 beginning January 1, 2015, the percentage of actual value as
 equalized by the department of revenue as provided in section
 441.49 at which multiresidential property shall be assessed
 shall be the greater of eighty-six and twenty-five hundredths
 percent or the percentage of actual value determined by the
 department of revenue at which property assessed as residential
 property is assessed for the same assessment year under
 subsection 4. For valuations established for the assessment
 year beginning January 1, 2016, the percentage of actual
 value as equalized by the department of revenue as provided
 in section 441.49 at which multiresidential property shall be
 assessed shall be the greater of eighty-two and five-tenths
 percent or the percentage of actual value determined by the
 department of revenue at which property assessed as residential
 property is assessed for the same assessment year under
 subsection 4. For valuations established for the assessment
 year beginning January 1, 2017, the percentage of actual
 value as equalized by the department of revenue as provided
 in section 441.49 at which multiresidential property shall be
 assessed shall be the greater of seventy-eight and seventy-five
 hundredths percent or the percentage of actual value determined
 by the department of revenue at which property assessed as
 residential property is assessed for the same assessment
 year under subsection 4. For valuations established for the
 assessment year beginning January 1, 2018, the percentage of
 actual value as equalized by the department of revenue as
 provided in section 441.49 at which multiresidential property
 shall be assessed shall be the greater of seventy-five percent
 or the percentage of actual value determined by the department
 of revenue at which property assessed as residential property
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 is assessed for the same assessment year under subsection 4.
 For valuations established for the assessment year beginning
 January 1, 2019, the percentage of actual value as equalized
 by the department of revenue as provided in section 441.49 at
 which multiresidential property shall be assessed shall be the
 greater of seventy-one and twenty-five hundredths percent or
 the percentage of actual value determined by the department
 of revenue at which property assessed as residential property
 is assessed for the same assessment year under subsection 4.
 For valuations established for the assessment year beginning
 January 1, 2020, the percentage of actual value as equalized
 by the department of revenue as provided in section 441.49
 at which multiresidential property shall be assessed shall
 be the greater of sixty-seven and five-tenths percent or the
 percentage of actual value determined by the department of
 revenue at which property assessed as residential property
 is assessed for the same assessment year under subsection 4.
 For valuations established for the assessment year beginning
 January 1, 2021, the percentage of actual value as equalized
 by the department of revenue as provided in section 441.49 at
 which multiresidential property shall be assessed shall be the
 greater of sixty-three and seventy-five hundredths percent or
 the percentage of actual value determined by the department
 of revenue at which property assessed as residential property
 is assessed for the same assessment year under subsection 4.
 For valuations established for the assessment year beginning
 January 1, 2022, and each assessment year thereafter, the
 percentage of actual value as equalized by the department of
 revenue as provided in section 441.49 at which multiresidential
 property shall be assessed shall be equal to the percentage of
 actual value determined by the department of revenue at which
 property assessed as residential property is assessed under
 subsection 4 for the same assessment year.
    c. (1) For the assessment year beginning January 1,
 2015, for parcels that, in part, satisfy the requirements for
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 classification as multiresidential property, the assessor
 shall assign to that portion of the parcel the classification
 of multiresidential property and to such other portions of
 the parcel the property classification for which such other
 portions qualify.
    (2) Beginning with valuations established on or after
 January 1, 2016, but before January 1, 2022, for parcels for
 which a portion of the parcel satisfies the requirements
 for classification as multiresidential property pursuant
 to paragraph “a”, subparagraph (2), subparagraph division
 (e) or (f) (5) or (6), the assessor shall assign to that
 portion of the parcel the classification of multiresidential
 property and to such other portions of the parcel the property
 classification for which such other portions qualify.
    Sec. 7. Section 441.21, Code 2021, is amended by adding the
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