Bill Text: IA SF2420 | 2017-2018 | 87th General Assembly | Introduced

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Bill Title: A bill for an act relating to commercial and industrial property tax replacement claims. (Formerly SF 2081.)

Spectrum: Committee Bill

Status: (Introduced - Dead) 2018-05-04 - NOBA: Senate Full Approps [SF2420 Detail]

Download: Iowa-2017-SF2420-Introduced.html

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Senate File 2420 - Introduced




                                 SENATE FILE       
                                 BY  COMMITTEE ON
                                     APPROPRIATIONS

                                 (SUCCESSOR TO SF 2081)

                                      A BILL FOR

  1 An Act relating to commercial and industrial property tax
  2    replacement claims.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
    TLSB 5738SV (2) 87
    md/jh

PAG LIN



  1  1    Section 1.  Section 2.48, subsection 3, paragraph f,
  1  2 subparagraph (6), Code 2018, is amended by striking the
  1  3 subparagraph.
  1  4    Sec. 2.  Section 257.3, subsection 1, paragraph d, Code 2018,
  1  5 is amended to read as follows:
  1  6    d.  The amount paid to each school district for the
  1  7 commercial and industrial property tax replacement claim under
  1  8 section 441.21A shall be regarded as property tax. The For
  1  9 fiscal years beginning on or after July 1, 2014, but before
  1 10 July 1, 2019, the portion of the payment which is foundation
  1 11 property tax shall be determined by applying the foundation
  1 12 property tax rate to the amount computed under section 441.21A,
  1 13 subsection 4, paragraph "a", and such amount shall be prorated
  1 14 pursuant to section 441.21A, subsection 2, if applicable.
  1 15 For fiscal years beginning on or after July 1, 2019, but
  1 16 before July 1, 2025, the portion of the payment which is
  1 17 foundation property tax shall be determined as the result of
  1 18 the apportionment required under section 441.21A, subsection 7.
  1 19    Sec. 3.  Section 441.21A, subsection 1, paragraph a, Code
  1 20 2018, is amended to read as follows:
  1 21    a.  For each fiscal year beginning on or after July 1, 2014,
  1 22 but before July 1, 2025, there is appropriated from the general
  1 23 fund of the state to the department of revenue an amount
  1 24 necessary for the payment of all commercial and industrial
  1 25 property tax replacement claims under this section for the
  1 26 fiscal year. However, for a the fiscal year beginning on or
  1 27 after July 1, 2017, and for the fiscal year beginning July 1,
  1 28 2018, the total amount of moneys appropriated from the general
  1 29 fund of the state to the department of revenue for the payment
  1 30 of commercial and industrial property tax replacement claims
  1 31 in that each fiscal year shall not exceed the total amount of
  1 32 money necessary to pay all commercial and industrial property
  1 33 tax replacement claims for the fiscal year beginning July 1,
  1 34 2016.
  1 35    Sec. 4.  Section 441.21A, subsections 2 and 3, Code 2018, are
  2  1 amended to read as follows:
  2  2    2.  a.  Beginning with the For each fiscal year beginning
  2  3 on or after July 1, 2014, but before July 1, 2019, each county
  2  4 treasurer shall be paid by the department of revenue an
  2  5 amount equal to the amount of the commercial and industrial
  2  6 property tax replacement claims in the county, as calculated in
  2  7 subsection 4. If an amount appropriated for a the fiscal year
  2  8 beginning on July 1, 2017, or July 1, 2018, is insufficient to
  2  9 pay all replacement claims for the fiscal year, the director of
  2 10 revenue shall prorate the payment of replacement claims to the
  2 11 county treasurers and shall notify the county auditors of the
  2 12 pro rata percentage on or before September 30.
  2 13    b.  For each fiscal year beginning on or after July 1, 2019,
  2 14 but before July 1, 2025, each taxing authority shall be paid by
  2 15 the department of revenue an amount equal to the amount of the
  2 16 commercial and industrial property tax replacement claim for
  2 17 the taxing authority, as calculated in subsection 4A.
  2 18    3.  a.  On or before July 1 of each fiscal year beginning on
  2 19 or after July 1, 2014, but before July 1, 2019, the assessor
  2 20 shall report to the county auditor the total actual value of
  2 21 all commercial property and industrial property in the county
  2 22 that is subject to assessment and taxation for the assessment
  2 23 year used to calculate the taxes due and payable in that fiscal
  2 24 year.
  2 25    b.  On or before July 1, 2019, the department of revenue, in
  2 26 consultation with the department of management, shall calculate
  2 27 for each taxing authority in this state, the following:
  2 28    (1)  The total assessed value as of January 1, 2012, of
  2 29 all taxable property located in the taxing authority that is
  2 30 subject to assessment and taxation used to calculate taxes
  2 31 which are due and payable in the fiscal year beginning July 1,
  2 32 2013, excluding property subject to the statewide property tax
  2 33 imposed under section 437A.18 or 437B.14.
  2 34    (2)  The total assessed value as of January 1, 2017, of
  2 35 all taxable property located in the taxing authority that is
  3  1 subject to assessment and taxation used to calculate taxes
  3  2 which are due and payable in the fiscal year beginning July 1,
  3  3 2018, excluding property subject to the statewide property tax
  3  4 imposed under section 437A.18 or 437B.14.
  3  5    Sec. 5.  Section 441.21A, subsection 4, unnumbered paragraph
  3  6 1, Code 2018, is amended to read as follows:
  3  7    On or before a date established by rule of the department
  3  8 of revenue of each fiscal year beginning on or after July
  3  9 1, 2014, but before July 1, 2019, the county auditor shall
  3 10 prepare a statement, based upon the report received pursuant to
  3 11 subsection 3, paragraph "a", listing for each taxing district
  3 12 in the county:
  3 13    Sec. 6.  Section 441.21A, Code 2018, is amended by adding the
  3 14 following new subsection:
  3 15    NEW SUBSECTION.  4A.  a.  As used in this section, unless the
  3 16 context clearly requires otherwise:
  3 17    (1)  "Qualified taxing authority" means a taxing authority
  3 18 for which the amount determined under subsection 3, paragraph
  3 19 "b", subparagraph (2), is less than one hundred nineteen and
  3 20 fifty=one hundredths percent of the amount determined under
  3 21 subsection 3, paragraph "b", subparagraph (1).
  3 22    (2)  "Taxing authority" means a city, county, community
  3 23 college, school district, or other governmental entity or
  3 24 political subdivision in this state authorized to certify a
  3 25 levy on property located within such authority.
  3 26    b.  For fiscal years beginning on or after July 1, 2019,
  3 27 but before July 1, 2025, the amount of each taxing authority's
  3 28 property tax replacement payment is as follows:
  3 29    (1)  If the taxing authority is a qualified taxing authority:
  3 30    (a)  For the fiscal year beginning July 1, 2019, six=sevenths
  3 31 of the amount received by the taxing authority under this
  3 32 section for the fiscal year beginning July 1, 2018.
  3 33    (b)  For the fiscal year beginning July 1, 2020,
  3 34 five=sevenths of the amount received by the taxing authority
  3 35 under this section for the fiscal year beginning July 1, 2018.
  4  1    (c)  For the fiscal year beginning July 1, 2021,
  4  2 four=sevenths of the amount received by the taxing authority
  4  3 under this section for the fiscal year beginning July 1, 2018.
  4  4    (d)  For the fiscal year beginning July 1, 2022,
  4  5 three=sevenths of the amount received by the taxing authority
  4  6 under this section for the fiscal year beginning July 1, 2018.
  4  7    (e)  For the fiscal year beginning July 1, 2023, two=sevenths
  4  8 of the amount received by the taxing authority under this
  4  9 section for the fiscal year beginning July 1, 2018.
  4 10    (f)  For the fiscal year beginning July 1, 2024, one=seventh
  4 11 of the amount received by the taxing authority under this
  4 12 section for the fiscal year beginning July 1, 2018.
  4 13    (2)  If the taxing authority is not a qualified taxing
  4 14 authority:
  4 15    (a)  For the fiscal year beginning July 1, 2019,
  4 16 three=fourths of the amount received by the taxing authority
  4 17 under this section for the fiscal year beginning July 1, 2018.
  4 18    (b)  For the fiscal year beginning July 1, 2020, one=half of
  4 19 the amount received by the taxing authority under this section
  4 20 for the fiscal year beginning July 1, 2018.
  4 21    (c)  For the fiscal year beginning July 1, 2021, one=fourth
  4 22 of the amount received by the taxing authority under this
  4 23 section for the fiscal year beginning July 1, 2018.
  4 24    (d)  For the fiscal year beginning July 1, 2022, and each
  4 25 succeeding fiscal year beginning before July 1, 2025, zero.
  4 26    (3)  The department of revenue shall consult with the
  4 27 department of management to calculate the amount received by
  4 28 each taxing authority in this state under this section as the
  4 29 result of commercial and industrial property tax replacement
  4 30 claims paid for the fiscal year beginning July 1, 2018.
  4 31    Sec. 7.  Section 441.21A, subsection 5, Code 2018, is amended
  4 32 to read as follows:
  4 33    5.  For purposes of computing replacement amounts under
  4 34 this section for fiscal years beginning on or after July 1,
  4 35 2014, but before July 1, 2019, that portion of an urban renewal
  5  1 area defined as the sum of the assessed valuations defined in
  5  2 section 403.19, subsections 1 and 2, shall be considered a
  5  3 taxing district.
  5  4    Sec. 8.  Section 441.21A, subsection 6, paragraph a, Code
  5  5 2018, is amended to read as follows:
  5  6    a.  The For fiscal years beginning on or after July 1, 2014,
  5  7 but before July 1, 2019, the county auditor shall certify
  5  8 and forward one copy of the statement to the department of
  5  9 revenue not later than a date of each year established by the
  5 10 department of revenue by rule.
  5 11    Sec. 9.  Section 441.21A, subsection 6, Code 2018, is amended
  5 12 by adding the following new paragraph:
  5 13    NEW PARAGRAPH.  f.  This subsection shall apply to the
  5 14 apportionment of replacement claim amounts for fiscal years
  5 15 beginning on or after July 1, 2014, but before July 1, 2019.
  5 16    Sec. 10.  Section 441.21A, Code 2018, is amended by adding
  5 17 the following new subsection:
  5 18    NEW SUBSECTION.  7.  a.  For fiscal years beginning on
  5 19 or after July 1, 2019, but before July 1, 2025, each taxing
  5 20 authority's property tax replacement claim payment calculated
  5 21 under subsection 4A shall be paid to the taxing authority in
  5 22 equal installments in September and March of each year.
  5 23    b.  The taxing authority's property tax replacement claim
  5 24 payment shall be apportioned and credited by the governing
  5 25 body of the taxing authority among the taxing authority's tax
  5 26 levies in the same proportion that each property tax levy
  5 27 bears to the total of all property tax levies imposed by the
  5 28 taxing authority for the fiscal year for which the payment is
  5 29 received.
  5 30    c.  Of the amounts allocated and credited to each property
  5 31 tax levy that is subject to division under section 403.19,
  5 32 the total amount paid into the fund for the taxing authority
  5 33 as taxes by or for the taxing authority into which all other
  5 34 property taxes are paid and the special fund of the applicable
  5 35 municipality under section 403.19, subsection 2, shall be
  6  1 an amount of the property tax replacement claim that is
  6  2 proportionate to the amount of the total sum of the assessed
  6  3 value of the taxable commercial and industrial property in
  6  4 the urban renewal area as a share of total assessed value
  6  5 of all taxable property in the taxing authority and shall be
  6  6 apportioned as follows:
  6  7    (1)  To the fund for the taxing authority as taxes by or for
  6  8 the taxing authority into which all other property taxes are
  6  9 paid, an amount proportionate to the amount of actual value of
  6 10 the commercial and industrial property in the urban renewal
  6 11 area as determined in section 403.19, subsection 1, that was
  6 12 subtracted pursuant to section 403.20, as it bears to the
  6 13 total amount of actual value of the commercial and industrial
  6 14 property in the urban renewal area that was subtracted pursuant
  6 15 to section 403.20 for the assessment year for property taxes
  6 16 due and payable in the fiscal year for which the replacement
  6 17 claim is computed.
  6 18    (2)  (a)  To the special fund of the applicable municipality
  6 19 under section 403.19, subsection 2, the remaining amount, if
  6 20 any.
  6 21    (b)  The amount allocated under subparagraph division (a)
  6 22 shall not exceed the amount equal to the amount certified to
  6 23 the county auditor under section 403.19 for the fiscal year in
  6 24 which the claim is paid, after deduction of the amount of other
  6 25 revenues committed for payment on that amount for the fiscal
  6 26 year.  The amount not allocated as a result of the operation of
  6 27 this subparagraph division (b) shall be allocated to and paid
  6 28 into the fund for the taxing authority as taxes by or for the
  6 29 taxing authority in the manner provided in subparagraph (1).
  6 30                           EXPLANATION
  6 31 The inclusion of this explanation does not constitute agreement with
  6 32 the explanation's substance by the members of the general assembly.
  6 33    Current Code section 441.21A establishes and appropriates
  6 34 amounts from the general fund of the state for commercial
  6 35 and industrial property tax replacement claims.  Such claims
  7  1 are calculated by the department of revenue based on the
  7  2 difference between the actual value and assessed value of all
  7  3 commercial and industrial property in each taxing district
  7  4 in the state.  Current law appropriates an amount necessary
  7  5 for the payment of all commercial and industrial property tax
  7  6 replacement claims for each fiscal year beginning on or after
  7  7 July 1, 2014, subject to a maximum total appropriation for
  7  8 fiscal years beginning on or after July 1, 2017, of the total
  7  9 amount necessary for the payment of replacement claims in the
  7 10 fiscal year beginning July 1, 2016. This bill eliminates the
  7 11 appropriation for fiscal years beginning on or after July 1,
  7 12 2025, and specifies that the maximum total appropriation for
  7 13 the fiscal year beginning July 1, 2018, shall not exceed the
  7 14 total amount necessary for the payment of replacement claims in
  7 15 the fiscal year beginning July 1, 2016.
  7 16    The bill modifies the methodology for calculating and
  7 17 apportioning commercial and industrial property tax replacement
  7 18 claims for fiscal years beginning on or after July 1, 2019,
  7 19 but before July 1, 2025.  The bill requires such claims to be
  7 20 calculated based on and paid to taxing authorities, as defined
  7 21 in the bill, instead of taxing districts as is required under
  7 22 current law.  The amount of each taxing authority's replacement
  7 23 claim is determined based on specified fractions of the amount
  7 24 received by the taxing authority under Code section 441.21A for
  7 25 the fiscal year beginning July 1, 2018, and whether the taxing
  7 26 authority is a qualified taxing authority.  The specified
  7 27 fractions are reduced over the period of fiscal years beginning
  7 28 July 1, 2019, and ending July 1, 2024, in the case of a
  7 29 qualified taxing authority, and July 1, 2021, in the case of a
  7 30 taxing authority that is not a qualified taxing authority. The
  7 31 appropriation ceases at the end of the fiscal year beginning
  7 32 July 1, 2024.  Under the bill, a qualified taxing authority
  7 33 is a taxing authority in which the total assessed value as
  7 34 of January 1, 2017, of specified taxable property located in
  7 35 the taxing authority is less than 119.51 percent of the total
  8  1 assessed value as of January 1, 2012, of specified taxable
  8  2 property located in the taxing authority.
  8  3    The bill requires each taxing  authority's property tax
  8  4 replacement claim payment for fiscal years beginning on or
  8  5 after July 1, 2019, but before July 1, 2025, to be apportioned
  8  6 and credited by the governing body of the taxing authority
  8  7 among the taxing authority's tax levies in the same proportion
  8  8 that each property tax levy bears to the total of all property
  8  9 tax levies imposed by the taxing authority for the fiscal year
  8 10 for which the payment is received.  The bill also establishes
  8 11 requirements for the apportionment of amounts allocated to
  8 12 property tax levies that are subject to a division of taxes
  8 13 under Code section 403.19 (tax increment financing).
  8 14    Under current law, the legislative tax expenditure committee
  8 15 established under Code section 2.48 is required to review
  8 16 the commercial and industrial property tax replacement claim
  8 17 expenditures.  The bill eliminates that required periodic
  8 18 review.
       LSB 5738SV (2) 87
       md/jh