Bill Text: IA HF2373 | 2017-2018 | 87th General Assembly | Introduced

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Bill Title: A bill for an act relating to property taxation by modifying provisions relating to assessment and exemption of certain property, modifying provisions relating to property assessment appeals, and providing for the reimbursement of certain appeal costs.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2018-02-19 - Subcommittee: Vander Linden, Jacoby and Windschitl. H.J. 307. [HF2373 Detail]

Download: Iowa-2017-HF2373-Introduced.html

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House File 2373 - Introduced




                                 HOUSE FILE       
                                 BY  HALL

                                      A BILL FOR

  1 An Act relating to property taxation by modifying provisions
  2    relating to assessment and exemption of certain property,
  3    modifying provisions relating to property assessment
  4    appeals, and providing for the reimbursement of certain
  5    appeal costs.
  6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
    TLSB 6071YH (3) 87
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PAG LIN



  1  1    Section 1.  Section 427.1, subsection 21A, Code 2018, is
  1  2 amended to read as follows:
  1  3    21A.  Dwelling unit property owned by community housing
  1  4 development organization.
  1  5    a.  Dwelling unit property owned and managed by a community
  1  6 housing development organization, as recognized by the state
  1  7 of Iowa and the federal government pursuant to criteria
  1  8 for community housing development organization designation
  1  9 contained in the HOME program of the federal National
  1 10 Affordable Housing Act of 1990, if the organization is also a
  1 11 nonprofit organization exempt from federal income tax under
  1 12 section 501(c)(3) of the Internal Revenue Code and owns and
  1 13 manages more than one hundred fifty dwelling units that are
  1 14 located in a city with a population of more than one hundred
  1 15 ten thousand.
  1 16    b.  For assessment years beginning on or after January
  1 17 1, 2019, dwelling unit property that is constructed or
  1 18 substantially rehabilitated on or after July 1, 2018, is
  1 19 eligible for the exemption under this subsection if such
  1 20 property is owned, managed, or controlled by a community
  1 21 housing development organization that is a nonprofit
  1 22 organization exempt from federal income tax under section
  1 23 501(c)(3) of the Internal Revenue Code, that meets the
  1 24 community housing development organization designation
  1 25 criteria contained in the HOME program of the federal National
  1 26 Affordable Housing Act of 1990, and that owns and manages
  1 27 more than one hundred fifty dwelling units. The exemption
  1 28 authorized under this paragraph shall be allowed for each
  1 29 eligible property unless specifically disapproved by resolution
  1 30 of the city council for property located in a city or by
  1 31 resolution of the board of supervisors for property located in
  1 32 the unincorporated area of a county.
  1 33    c.  For the 2005 and 2006 assessment years beginning January
  1 34 1, 2005, and January 1, 2006, an application is not required
  1 35 to be filed to receive the exemption. For the assessment year
  2  1 beginning January 1, 2007, and subsequent assessment years,
  2  2 an application for exemption must be filed with the assessing
  2  3 authority not later than February 1 of the assessment year for
  2  4 which the exemption is sought. Upon the filing and allowance
  2  5 of the claim, the claim shall be allowed on the property for
  2  6 successive years without further filing as long as the property
  2  7 continues to qualify for the exemption.
  2  8    Sec. 2.  Section 428.4, subsection 1, Code 2018, is amended
  2  9 to read as follows:
  2 10    1.  Property shall be assessed for taxation each year.
  2 11 Real estate shall be listed and assessed in 1981 and every
  2 12 two years thereafter. The assessment of real estate shall
  2 13 be the value of the real estate as of January 1 of the year
  2 14 of the assessment. The year 1981 and each odd=numbered year
  2 15 thereafter shall be a reassessment year. In any even=numbered
  2 16  year, after the year in which an assessment has been made
  2 17 of all the real estate in an assessing jurisdiction, the
  2 18 assessor shall value and assess or revalue and reassess, as
  2 19 the case may require, any individual real estate parcel that
  2 20 the assessor finds was incorrectly valued or assessed for more
  2 21 than the value authorized by law, or was not listed, valued,
  2 22 and assessed, in the assessment year immediately preceding,
  2 23 also any real estate the assessor finds has changed in value
  2 24 subsequent to January 1 of the preceding real estate assessment
  2 25 year in accordance with subsection 3. However, a percentage
  2 26 increase on a class of property shall not be made in a year
  2 27 not subject to an equalization order unless ordered by the
  2 28 department of revenue, and any such increase must apply to
  2 29 all property within the class. A percentage increase for an
  2 30 even=numbered year shall be applied to all property within the
  2 31 class and shall not be applied only to a subset of the class
  2 32 unless approved by the department of revenue.  The assessor
  2 33 shall determine the actual value and compute the taxable value
  2 34 thereof as of January 1 of the year of the revaluation and
  2 35 reassessment of all real estate. The assessment shall be
  3  1 completed as specified in section 441.28, but no reduction or
  3  2 increase in actual value shall be made for prior years. If an
  3  3 assessor makes a change in the valuation of the real estate as
  3  4 provided for, sections 441.23, 441.37, 441.37A, 441.37B, and
  3  5 441.38 apply.
  3  6    Sec. 3.  Section 441.21, subsection 3, Code 2018, is amended
  3  7 to read as follows:
  3  8    3.  a.  "Actual value", "taxable value", or "assessed value"
  3  9 as used in other sections of the Code in relation to assessment
  3 10 of property for taxation shall mean the valuations as
  3 11 determined by this section; however. However, other provisions
  3 12 of the Code providing special methods or formulas for assessing
  3 13 or valuing specified property shall remain in effect, but this
  3 14 section shall be applicable to the extent consistent with such
  3 15 provisions. The assessor and department of revenue shall
  3 16 disclose at the written request of the taxpayer all information
  3 17 in any formula or method used to determine the actual value of
  3 18 the taxpayer's property.
  3 19    b.  (1)  For assessment years beginning before January
  3 20 1, 2018, the burden of proof shall be upon any complainant
  3 21 attacking such valuation as excessive, inadequate, inequitable,
  3 22 or capricious. However, in protest or appeal proceedings when
  3 23 the complainant offers competent evidence by at least two
  3 24 disinterested witnesses that the market value of the property
  3 25 is less than the market value determined by the assessor, the
  3 26 burden of proof thereafter shall be upon the officials or
  3 27 persons seeking to uphold such valuation to be assessed.
  3 28    (2)  For the assessment years year beginning on or after
  3 29  January 1, 2018, the burden of proof shall be upon any
  3 30 complainant attacking such valuation as excessive, inadequate,
  3 31 inequitable, or capricious. However, in protest or appeal
  3 32 proceedings when the complainant offers competent evidence
  3 33 that the market value of the property is different than the
  3 34 market value determined by the assessor, the burden of proof
  3 35 thereafter shall be upon the officials or persons seeking to
  4  1 uphold such valuation to be assessed.
  4  2    (3)  For assessment years beginning on or after January 1,
  4  3 2019, when a valuation is attacked by a complainant, the burden
  4  4 of proof shall be upon the office of assessor to demonstrate
  4  5 that such valuation is not excessive, inadequate, inequitable,
  4  6 or capricious.
  4  7    (3)  (4)  If the classification of a property has been
  4  8 previously adjudicated by the property assessment appeal board
  4  9 or a court as part of an appeal under this chapter, there
  4 10 is a presumption that the classification of the property has
  4 11 not changed for each of the four subsequent assessment years,
  4 12 unless a subsequent such adjudication of the classification of
  4 13 the property has occurred, and the burden of demonstrating a
  4 14 change in use shall be upon the person asserting a change to
  4 15 the property's classification.
  4 16    Sec. 4.  Section 441.37A, subsection 3, paragraph e, Code
  4 17 2018, is amended to read as follows:
  4 18    e.  Each Except as provided in section 441.40A, each party
  4 19 to the appeal shall be responsible for the costs of the appeal
  4 20 incurred by that party.
  4 21    Sec. 5.  NEW SECTION.  441.40A  Reimbursement of owner or
  4 22 taxpayer reasonable costs.
  4 23    1.  a.  If the amount of a property's assessment following
  4 24 disposition of all protests or appeals for an assessment year
  4 25 is less than the amount of the assessment specified on the
  4 26 assessment roll provided to the owner or taxpayer under section
  4 27 441.26, the office of assessor shall reimburse a percentage of
  4 28 the property owner's or aggrieved taxpayer's reasonable costs
  4 29 incurred in all such protests or appeals, excluding those costs
  4 30 apportioned to the board of review or a taxing body pursuant to
  4 31 section 441.40, if any, equal to the percentage by which the
  4 32 assessment is reduced.
  4 33    b.  The property owner or aggrieved taxpayer may request
  4 34 reimbursement from the office of assessor for such reasonable
  4 35 costs on a form prescribed by the department of revenue. Upon
  5  1 receipt of a reimbursement request under this section, such
  5  2 reimbursement amounts shall be paid from the assessment expense
  5  3 fund under section 441.16.
  5  4    2.  For purposes of this section, costs include but are not
  5  5 limited to legal fees, appraisal fees, and witness fees.
  5  6    3.  The requirement to reimburse a percentage of a property
  5  7 owner's or aggrieved taxpayer's reasonable costs shall not
  5  8 apply to costs incurred by the property owner or aggrieved
  5  9 taxpayer for the first assessment year beginning on or after
  5 10 January 1, 2019, for which the owner or taxpayer protests or
  5 11 appeals the assessment of the property and a reduction in the
  5 12 assessment occurs as provided in subsection 1.
  5 13    Sec. 6.  Section 441.41, Code 2018, is amended to read as
  5 14 follows:
  5 15    441.41  Legal counsel.
  5 16    In the case of cities having an assessor, the city legal
  5 17 department shall represent the assessor and board of review
  5 18 in all litigation dealing with assessments. In the case of
  5 19 counties, the county attorney shall represent the assessor and
  5 20 board of review in all litigation dealing with assessments.
  5 21 Any taxing district interested in the taxes received from such
  5 22 assessments may be represented by an attorney and shall be
  5 23 required to appear by attorney upon written request of the
  5 24 assessor to the presiding officer of any such taxing district.
  5 25 The Subject to review and approval by the city legal department
  5 26 or the county attorney, as applicable, the conference board may
  5 27 employ special counsel to assist the city legal department or
  5 28 county attorney as the case may be, including employing special
  5 29 counsel if the city legal department or county attorney is
  5 30 disqualified because of a conflict of interest.
  5 31    Sec. 7.  IMPLEMENTATION.  Section 25B.7 shall not apply to
  5 32 the amendment to section 427.1, subsection 21A, in this Act.
  5 33                           EXPLANATION
  5 34 The inclusion of this explanation does not constitute agreement with
  5 35 the explanation's substance by the members of the general assembly.
  6  1 This bill relates to property taxation by modifying
  6  2 provisions relating to assessment and exemption of certain
  6  3 property, modifying provisions relating to property assessment
  6  4 appeals, and providing for the reimbursement of certain appeal
  6  5 costs.
  6  6    Current law provides an exemption from property taxation
  6  7 for dwelling unit property owned and managed by a nonprofit
  6  8 community housing development organization if the organization
  6  9 owns and manages more than 150 dwelling units located in a city
  6 10 with a population of more than 110,000. The bill authorizes a
  6 11 similar property tax exemption for assessment years beginning
  6 12 on or after January 1, 2019, for dwelling unit property that
  6 13 is constructed or substantially rehabilitated on or after July
  6 14 1, 2018, if the property is owned, managed, or controlled
  6 15 by a community housing development organization that owns
  6 16 and manages more than 150 dwelling units. The exemption
  6 17 established in the bill does not include a city population
  6 18 requirement and provides that the exemption is allowed for
  6 19 each eligible property unless specifically disapproved by the
  6 20 city if located in a city or the county if located in the
  6 21 unincorporated area of a county.
  6 22    The bill modifies provisions relating to even=numbered
  6 23 assessment years by providing that the assessor shall value
  6 24 and assess or revalue and reassess, as the case may require,
  6 25 any individual real estate parcel that the assessor finds was
  6 26 assessed for more than the value authorized by law or was not
  6 27 listed in the assessment year immediately preceding, and any
  6 28 real estate the assessor finds has changed in value subsequent
  6 29 to January 1 of the preceding real estate assessment year
  6 30 based on buildings erected, improvements made, or buildings or
  6 31 improvements removed in a year after the assessment. The bill
  6 32 also provides that a percentage increase for an even=numbered
  6 33 assessment year shall be applied to all property within the
  6 34 class and shall not be applied only to a subset of the class
  6 35 unless approved by the department of revenue.
  7  1 Current Code section 441.21(3) specifies a burden of proof
  7  2 for taxpayer protests or appeals of property assessments made
  7  3 by local assessors.  The current standard for assessment years
  7  4 beginning on or after January 1, 2018, is that the burden of
  7  5 proof shall be upon any complainant attacking such valuation as
  7  6 excessive, inadequate, inequitable, or capricious. However,
  7  7 in protest or appeal proceedings when the complainant offers
  7  8 competent evidence that the market value of the property is
  7  9 different than the market value determined by the assessor,
  7 10 the burden of proof thereafter shall be upon the officials or
  7 11 persons seeking to uphold such valuation to be assessed.
  7 12    The bill provides that for assessment years beginning on
  7 13 or after January 1, 2019, when a valuation is attacked by a
  7 14 complainant, the burden of proof shall be upon the office of
  7 15 assessor to demonstrate that such valuation is not excessive,
  7 16 inadequate, inequitable, or capricious.
  7 17    Under current law generally, each party to a property tax
  7 18 appeal is responsible for the costs of the appeal incurred
  7 19 by that party.  The bill provides that if the amount of a
  7 20 property's assessment following disposition of all protests
  7 21 or appeals for an assessment year is less than the amount of
  7 22 the assessment specified on the assessment roll, the office of
  7 23 assessor shall reimburse a percentage of the property owner's
  7 24 or aggrieved taxpayer's reasonable costs incurred in all such
  7 25 protests or appeals, excluding those costs apportioned to the
  7 26 board of review or a taxing body pursuant to Code section
  7 27 441.40, if any, equal to the percentage by which the assessment
  7 28 is reduced.  The reimbursement amounts required under the
  7 29 bill are paid from the assessment expense fund under Code
  7 30 section 441.16. However, the bill's requirement to reimburse
  7 31 a percentage of a property owner's or aggrieved taxpayer's
  7 32 reasonable costs shall not apply to costs incurred by the
  7 33 property owner or aggrieved taxpayer for the first assessment
  7 34 year beginning on or after January 1, 2019, for which the owner
  7 35 or taxpayer protests or appeals the assessment of the property
  8  1 and a reduction in the assessment occurs.
  8  2    Current Code section 441.41 authorizes the conference board
  8  3 to employ special counsel to assist the city legal department
  8  4 or the county attorney in litigation dealing with assessments.
  8  5 The bill provides that such authority is subject to review and
  8  6 approval by the city legal department or the county attorney,
  8  7 as applicable, and includes situations where the city legal
  8  8 department or county attorney is disqualified because of a
  8  9 conflict of interest.
  8 10    The bill makes inapplicable Code section 25B.7 to the
  8 11 section of the bill amending Code section 427.1(21A).  Code
  8 12 section 25B.7 provides that for a property tax credit or
  8 13 exemption enacted on or after January 1, 1997, if a state
  8 14 appropriation made to fund the credit or exemption is not
  8 15 sufficient to fully fund the credit or exemption, the political
  8 16 subdivision shall be required to extend to the taxpayer only
  8 17 that portion of the credit or exemption estimated by the
  8 18 department of revenue to be funded by the state appropriation.
       LSB 6071YH (3) 87
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