Bill Text: IA HF651 | 2017-2018 | 87th General Assembly | Introduced

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Bill Title: A bill for an act relating to property tax assessments, composition of conference boards, and property assessment protests and appeals, and including applicability provisions. (Formerly HSB 197.)

Spectrum: Committee Bill

Status: (Introduced - Dead) 2018-01-08 - Rereferred to Ways and Means. H.J. 20. [HF651 Detail]

Download: Iowa-2017-HF651-Introduced.html

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House File 651 - Introduced




                                 HOUSE FILE       
                                 BY  COMMITTEE ON WAYS AND
                                     MEANS

                                 (SUCCESSOR TO HSB 197)

                                      A BILL FOR

  1 An Act relating to property tax assessments, composition of
  2    conference boards, and property assessment protests and
  3    appeals, and including applicability provisions.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
    TLSB 2693HV (2) 87
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PAG LIN



  1  1                           DIVISION I
  1  2        PROPERTY ASSESSMENT APPEAL BOARD AND APPEAL COSTS
  1  3    Section 1.  Section 441.37A, subsection 1, paragraph a, Code
  1  4 2017, is amended to read as follows:
  1  5    a.  For the assessment year beginning January 1, 2007, and
  1  6 all subsequent assessment years beginning before January 1,
  1  7 2021, appeals may be taken from the action of the board of
  1  8 review with reference to protests of assessment, valuation, or
  1  9 application of an equalization order to the property assessment
  1 10 appeal board created in section 421.1A.  However, a property
  1 11 owner or aggrieved taxpayer or an appellant described in
  1 12 section 441.42 may bypass the property assessment appeal board
  1 13 and appeal the decision of the local board of review to the
  1 14 district court pursuant to section 441.38.
  1 15    Sec. 2.  Section 441.37A, subsection 3, paragraph b, Code
  1 16 2017, is amended to read as follows:
  1 17    b.  The decision of the board shall be considered the
  1 18 final agency action for purposes of further appeal, except as
  1 19 otherwise provided in section 441.49. The decision shall be
  1 20 final unless appealed to district court as provided in section
  1 21 441.38. The levy of taxes on any assessment appealed to the
  1 22 board shall not be delayed by any proceeding before the board,
  1 23 and if the assessment appealed from is reduced by the decision
  1 24 of the board, any taxes levied upon that portion of the
  1 25 assessment reduced shall be abated or, if already paid, shall
  1 26 be refunded. If the subject of an appeal is the application
  1 27 of an equalization order, the property assessment appeal board
  1 28 shall not order a reduction in assessment greater than the
  1 29 amount that the assessment was increased due to application
  1 30 of the equalization order. Each party to the appeal shall be
  1 31 responsible for the costs of the appeal incurred by that party.
  1 32 However, for assessment years beginning on or after January 1,
  1 33 2018, if the property assessment appeal board decides in favor
  1 34 of the property owner or aggrieved taxpayer and the amount of
  1 35 the assessment appealed from is reduced by the decision of
  2  1 the board, the office of assessor shall be responsible for a
  2  2 percentage of the property owner's or aggrieved taxpayer's
  2  3 reasonable costs incurred equal to the percentage by which the
  2  4 assessment is reduced by the board payable from the assessment
  2  5 expense fund authorized by section 441.16. For purposes of
  2  6 this section, costs include but are not limited to legal fees,
  2  7 appraisal fees, and witness fees. The responsibility for the
  2  8 payment of a percentage of the property owner's or aggrieved
  2  9 taxpayer's reasonable costs by the office of assessor shall not
  2 10 apply to the first appeal to the board for which the assessment
  2 11 is reduced for the assessment year beginning January 1, 2018,
  2 12 or the first such reduction for a subsequent assessment year if
  2 13 no such reduction is ordered by the board for the assessment
  2 14 year beginning January 1, 2018.
  2 15    Sec. 3.  Section 441.40, Code 2017, is amended to read as
  2 16 follows:
  2 17    441.40  Costs, fees, and expenses apportioned.
  2 18    The clerk of the court shall likewise certify to the county
  2 19 treasurer the costs assessed by the court on any appeal from a
  2 20 board of review to the district court, in all cases where said
  2 21 costs are taxed against the board of review or any taxing body.
  2 22 For assessment years beginning on or after January 1, 2018, if
  2 23 the district court decides in favor of the property owner or
  2 24 aggrieved taxpayer and the amount of the assessment appealed
  2 25 from is reduced by the decision of the district court, the
  2 26 board of review or applicable taxing body shall be responsible
  2 27 for the payment of a percentage of the property owner's or
  2 28 taxpayer's reasonable costs incurred equal to the percentage
  2 29 by which the assessment is reduced by the district court.  For
  2 30 purposes of this section, costs include but are not limited
  2 31 to legal fees, appraisal fees, and witness fees. Thereupon
  2 32 the county treasurer shall compute and apportion the said
  2 33 costs between the various taxing bodies participating in the
  2 34 proceeds of the collection of the taxes involved in any such
  2 35 appeal, and said treasurer shall so compute and apportion the
  3  1 various amounts which said taxing bodies are required to pay in
  3  2 proportion to the amount of taxes each of said taxing bodies is
  3  3 entitled to receive from the whole amount of taxes involved in
  3  4 each of such appeals. The said county treasurer shall deduct
  3  5 from the proceeds of all general taxes collected the amount of
  3  6 costs so computed and apportioned by the treasurer from the
  3  7 moneys due to each taxing body from general taxes collected.
  3  8 The amount so deducted shall be certified to each taxing body
  3  9 in lieu of moneys collected. Said county treasurer shall pay
  3 10 to the clerk of the district court the amount of said costs so
  3 11 computed, apportioned and collected by the treasurer in all
  3 12 cases now on file or hereafter filed in which said costs have
  3 13 not been paid.
  3 14    Sec. 4.  REPEAL.  2005 Iowa Acts, chapter 150, section 134,
  3 15 as amended by 2013 Iowa Acts, chapter 123, section 62, and 2015
  3 16 Iowa Acts, chapter 109, section 1, is repealed.
  3 17                           DIVISION II
  3 18               PROTEST AND APPEAL BURDEN OF PROOF
  3 19    Sec. 5.  Section 441.21, subsection 3, paragraph b, Code
  3 20 2017, is amended to read as follows:
  3 21    b.  (1)  The For assessment years beginning before January
  3 22 1, 2018, the burden of proof shall be upon any complainant
  3 23 attacking such valuation as excessive, inadequate, inequitable,
  3 24 or capricious; however. However, in protest or appeal
  3 25 proceedings when the complainant offers competent evidence by
  3 26 at least two disinterested witnesses that the market value of
  3 27 the property is less than the market value determined by the
  3 28 assessor, the burden of proof thereafter shall be upon the
  3 29 officials or persons seeking to uphold such valuation to be
  3 30 assessed.
  3 31    (2)  For assessment years beginning on or after January 1,
  3 32 2018, when a valuation is attacked by a complainant, the burden
  3 33 of proof shall be upon the office of assessor to demonstrate
  3 34 that such valuation is not excessive, inadequate, inequitable,
  3 35 or capricious.
  4  1                          DIVISION III
  4  2                        CONFERENCE BOARDS
  4  3    Sec. 6.  Section 39.21, Code 2017, is amended by adding the
  4  4 following new subsection:
  4  5    NEW SUBSECTION.  5.  Public members of a conference board as
  4  6 provided in section 441.2.
  4  7    Sec. 7.  Section 49.41, subsection 4, Code 2017, is amended
  4  8 to read as follows:
  4  9    4.  For purposes of township office and city and county
  4 10 conference board public membership, "nomination papers" as used
  4 11 in this section means the affidavit of candidacy required in
  4 12 section 45.3.
  4 13    Sec. 8.  Section 441.2, Code 2017, is amended to read as
  4 14 follows:
  4 15    441.2  Conference board.
  4 16    1.  a.  In each county and each city having an assessor there
  4 17 shall be established a conference board.
  4 18    b.  In counties the conference board shall consist of
  4 19 the mayors of all incorporated cities in the county whose
  4 20 property is assessed by the county assessor, one representative
  4 21 from the board of directors of each high school district of
  4 22 the county, who is a resident of the county, said board of
  4 23 directors appointing said representative for a one=year term
  4 24 and notifying the clerk of the conference board as to their
  4 25 representative, and members of the board of supervisors, and
  4 26 four public members.  The four public members shall be elected
  4 27 by the voters of the county within the assessing jurisdiction,
  4 28 at the general election in the manner provided in paragraph
  4 29 "d". Each public member seat on the conference board shall be
  4 30 held by an individual who owns or holds an interest in taxable
  4 31 property located in the assessing jurisdiction of the county
  4 32 that is classified as residential, agricultural, commercial, or
  4 33 industrial property.  Each of the four property classifications
  4 34 shall be assigned to one of the four public member seats and
  4 35 designated as such on the ballot unless one or more of the
  5  1 property classifications is not present within the assessing
  5  2 jurisdiction.  If a property classification is not present
  5  3 within the assessing jurisdiction, that public member seat
  5  4 shall not be assigned a classification, shall not be designated
  5  5 on the ballot as being limited to a property classification,
  5  6 and may be occupied by an individual owning or having an
  5  7 interest in any property classification that is present within
  5  8 the assessing jurisdiction.
  5  9    c.  In cities having an assessor the conference board shall
  5 10 consist of the members of the city council, school board, and
  5 11  county board of supervisors, and four public members.  The four
  5 12 public members shall be elected by the voters of the city at
  5 13 the regular city election in the manner provided in paragraph
  5 14 "d". Each public member seat on the conference board shall be
  5 15 held by an individual who owns or holds an interest in taxable
  5 16 property located in the city that is classified as residential,
  5 17 agricultural, commercial, or industrial property.  Each of
  5 18 the four property classifications shall be assigned to one of
  5 19 the four public member seats and designated as such on the
  5 20 ballot unless one or more of the property classifications is
  5 21 not present within the city.  If a property classification is
  5 22 not present within the city, that public member seat shall not
  5 23 be assigned a classification, shall not be designated on the
  5 24 ballot as being limited to a property classification, and may
  5 25 be occupied by an individual owning or having an interest in
  5 26 any property classification that is present within the city.
  5 27    d.  The election of the four public members of a conference
  5 28 board shall take place at the election specified in paragraphs
  5 29 "b" and "c" on ballots which shall not reflect a nominee's
  5 30 political affiliation. A person seeking election as a public
  5 31 member of a conference board shall file an affidavit of
  5 32 candidacy with the county commissioner of elections pursuant to
  5 33 section 45.3.  A plurality is sufficient to elect the public
  5 34 members of a conference board. The four public members shall
  5 35 each be elected for a four=year term and may be reelected for
  6  1 additional four=year terms. A vacancy among the public member
  6  2 seats prior to the expiration of a term shall be filled by
  6  3 appointment by the remaining public members of the conference
  6  4 board.  The appointment shall be for the period until the next
  6  5 pending election as defined in section 69.12, and shall be made
  6  6 within forty days after the vacancy occurs.
  6  7    2.  In the counties the chairperson of the board of
  6  8 supervisors shall act as chairperson of the conference board,
  6  9 and in cities having an assessor the mayor of the city council
  6 10 shall act as chairperson of the conference board.
  6 11    3.  In any action taken by the conference board, the mayors
  6 12 of all incorporated cities in the county whose property is
  6 13 assessed by the county assessor shall constitute one voting
  6 14 unit, the members of the city board of education or one
  6 15 representative from the board of directors of each high school
  6 16 district of the county shall constitute one voting unit, the
  6 17 members of the city council shall constitute one voting unit,
  6 18 and the county board of supervisors shall constitute one voting
  6 19 unit, and the four public members shall each constitute a
  6 20 separate voting unit, each unit having a single vote and no
  6 21 action shall be valid except by the vote of not less than two
  6 22  four out of the three seven units. The majority vote of the
  6 23 members present of each unit shall determine the vote of the
  6 24 unit.
  6 25    4.  The assessor shall be clerk of the conference board.
  6 26                           DIVISION IV
  6 27                   PROPERTY ASSESSMENT CHANGES
  6 28    Sec. 9.  Section 428.4, subsection 1, Code 2017, is amended
  6 29 to read as follows:
  6 30    1.  Property shall be assessed for taxation each year.
  6 31 Real estate shall be listed and assessed in 1981 and every
  6 32 two years thereafter. The assessment of real estate shall
  6 33 be the value of the real estate as of January 1 of the year
  6 34 of the assessment. The year 1981 and each odd=numbered year
  6 35 thereafter shall be a reassessment year. In any even=numbered
  7  1  year, after the year in which an assessment has been made
  7  2 of all the real estate in an assessing jurisdiction, the
  7  3 assessor shall value and assess or revalue and reassess, as
  7  4 the case may require, any individual real estate parcel that
  7  5 the assessor finds was incorrectly valued or assessed for more
  7  6 than the value authorized by law, or was not listed, valued,
  7  7 and assessed, in the assessment year immediately preceding,
  7  8 also any real estate the assessor finds has changed in value
  7  9 subsequent to January 1 of the preceding real estate assessment
  7 10 year in accordance with subsection 3. However, a percentage
  7 11 increase on a class of property shall not be made in a year
  7 12 not subject to an equalization order unless ordered by the
  7 13 department of revenue, and any such increase must apply to
  7 14 all property within the class.  A percentage increase for an
  7 15 even=numbered year shall be applied to all property within the
  7 16 class and shall not be applied only to a subset of the class
  7 17 unless approved by the department of revenue. The assessor
  7 18 shall determine the actual value and compute the taxable value
  7 19 thereof as of January 1 of the year of the revaluation and
  7 20 reassessment of all real estate. The assessment shall be
  7 21 completed as specified in section 441.28, but no reduction or
  7 22 increase in actual value shall be made for prior years. If an
  7 23 assessor makes a change in the valuation of the real estate as
  7 24 provided for, sections 441.23, 441.37, 441.37A, 441.38, and
  7 25 441.39 apply.
  7 26    Sec. 10.  Section 441.30, subsections 1 and 2, Code 2017, are
  7 27 amended to read as follows:
  7 28    1.  Any property owner or aggrieved taxpayer who is
  7 29 dissatisfied with the owner's or taxpayer's assessment may
  7 30 contact the assessor by telephone or in writing by paper
  7 31 or electronic medium on or after April 2, to and including
  7 32 April 25, of the year of the assessment to inquire about the
  7 33 specifics and accuracy of the assessment. Such an inquiry may
  7 34 also include a request for an informal review of the assessment
  7 35 by the assessor under one or more of the grounds for protest
  8  1 authorized under section 441.37 for the same assessment year.
  8  2    2.  In response to an inquiry under subsection 1, if the
  8  3 assessor, following an informal review, determines that the
  8  4 assessment was incorrect under one or more of the grounds for
  8  5 protest authorized under section 441.37 for the same assessment
  8  6 year, the assessor may, on or before April 25, recommend that
  8  7 the property owner or aggrieved taxpayer file a protest with
  8  8 the local board of review and may file a recommendation with
  8  9 the local board of review related to the informal review, or
  8 10 may enter into a signed written agreement with the property
  8 11 owner or aggrieved taxpayer authorizing the assessor to correct
  8 12 or modify the assessment according to the agreement of the
  8 13 parties.
  8 14    Sec. 11.  Section 441.37, subsection 1, paragraph a,
  8 15 subparagraph (1), Code 2017, is amended to read as follows:
  8 16    (1)  For odd=numbered assessment years and for even=numbered
  8 17 assessment years for property that was reassessed in such
  8 18 even=numbered assessment year:
  8 19    (a)  (1)  That said assessment is not equitable as compared
  8 20 with assessments of other like property in the taxing district.
  8 21 When this ground is relied upon as the basis of a protest the
  8 22 legal description and assessments of a representative number of
  8 23 comparable properties, as described by the aggrieved taxpayer
  8 24 shall be listed on the protest, otherwise said protest shall
  8 25 not be considered on this ground.
  8 26    (b)  (2)  That the property is assessed for more than the
  8 27 value authorized by law. When this ground is relied upon, the
  8 28 protesting party shall state the specific amount which the
  8 29 protesting party believes the property to be overassessed, and
  8 30 the amount which the party considers to be its actual value and
  8 31 fair assessment.
  8 32    (c)  (3)  That the property is not assessable, is exempt
  8 33 from taxes, or is misclassified and stating the reasons for the
  8 34 protest.
  8 35    (d)  (4)  That there is an error in the assessment and state
  9  1 the specific alleged error.  When this ground is relied upon,
  9  2 the error may include but is not limited to listing errors,
  9  3 clerical or mathematical errors, or other errors that result
  9  4 in an error in the assessment.
  9  5    (e)  (5)  That there is fraud in the assessment which shall
  9  6 be specifically stated.
  9  7    Sec. 12.  Section 441.37, subsection 1, paragraph a,
  9  8 subparagraph (2), Code 2017, is amended by striking the
  9  9 subparagraph.
  9 10    Sec. 13.  Section 441.41, Code 2017, is amended to read as
  9 11 follows:
  9 12    441.41  Legal counsel.
  9 13    In the case of cities having an assessor, the city legal
  9 14 department shall represent the assessor and board of review
  9 15 in all litigation dealing with assessments. In the case of
  9 16 counties, the county attorney shall represent the assessor and
  9 17 board of review in all litigation dealing with assessments.
  9 18 Any taxing body interested in the taxes received from such
  9 19 assessments may be represented by an attorney and shall be
  9 20 required to appear by attorney upon written request of the
  9 21 assessor to the presiding officer of any such taxing body. The
  9 22  Subject to review and approval by the city legal department or
  9 23 the county attorney, as applicable, the conference board may
  9 24 employ special counsel to assist the city legal department or
  9 25 county attorney as the case may be, including employing special
  9 26 counsel if the city legal department or county attorney is
  9 27 disqualified because of a conflict of interest.
  9 28    Sec. 14.  APPLICABILITY.  This division of this Act applies
  9 29 to assessment years beginning on or after January 1, 2018.
  9 30                           EXPLANATION
  9 31 The inclusion of this explanation does not constitute agreement with
  9 32 the explanation's substance by the members of the general assembly.
  9 33    This bill relates to property tax assessments, composition
  9 34 of conference boards, and property tax protests and appeals.
  9 35    In 2005, the property assessment appeal board was
 10  1 established.  The legislation establishing the property
 10  2 assessment appeal board included a future repeal of the board
 10  3 effective July 1, 2013.  This future repeal provision was
 10  4 amended in 2013 to extend the date of the repeal to July 1,
 10  5 2018. In 2015, the future repeal provision was again extended
 10  6 from July 1, 2018, to July 1, 2021.
 10  7    Division I of the bill repeals the property assessment
 10  8 appeal board's future repeal provisions, including the 2013 and
 10  9 2015 amendments to those provisions. The bill also strikes a
 10 10 limitation in Code section 441.37A regarding the assessment
 10 11 years for which the property assessment appeal board may hear
 10 12 appeals.
 10 13    For appeals to the property assessment appeal board for
 10 14 assessment years beginning on or after January 1, 2018,
 10 15 the bill provides that if the board decides in favor of the
 10 16 property owner or taxpayer and the assessment is reduced,
 10 17 the office of assessor is responsible for a percentage of
 10 18 the reasonable costs of the appeal incurred by the owner or
 10 19 taxpayer that is equal to the percentage reduction in the
 10 20 assessment payable from the assessment expense fund. The bill
 10 21 also provides that the responsibility for the payment of a
 10 22 percentage of the property owner's or aggrieved taxpayer's
 10 23 reasonable costs by the office of assessor shall not apply
 10 24 to the first appeal to the property assessment appeal board
 10 25 for which the assessment is reduced for the assessment year
 10 26 beginning January 1, 2018, or the first such reduction for a
 10 27 subsequent assessment year if no such reduction is ordered by
 10 28 the board for the assessment year beginning January 1, 2018.
 10 29 The bill also establishes similar provisions for the reasonable
 10 30 costs of the owner or taxpayer related to an appeal to district
 10 31 court for assessment years beginning on or after January 1,
 10 32 2018.
 10 33    Current Code section 441.21(3) specifies a burden of proof
 10 34 for taxpayer protests or appeals of property assessments
 10 35 made by local assessors.  The current standard imposes a
 11  1 burden of proof on the complainant attacking the valuation as
 11  2 excessive, inadequate, inequitable, or capricious.  Only after
 11  3 the complainant, at the protest or appeal proceedings, offers
 11  4 competent evidence by at least two disinterested witnesses
 11  5 that the market value of the property is less than the market
 11  6 value determined by the assessor does the burden of proof shift
 11  7 to the officials or persons seeking to uphold the assessor's
 11  8 valuation.
 11  9    Division II of the bill provides that for assessment years
 11 10 beginning on or after January 1, 2018, when a valuation is
 11 11 protested or appealed by a complainant, the burden of proof
 11 12 shall be upon the office of assessor to demonstrate that
 11 13 such valuation is not excessive, inadequate, inequitable, or
 11 14 capricious.
 11 15    Division III of the bill increases the membership of county
 11 16 and city conference boards by requiring the addition of four
 11 17 elected public members. The four public members are elected
 11 18 on a nonpartisan basis by the applicable voters of the county
 11 19 or city at the general election or regular city election,
 11 20 as applicable. The bill provides that a person seeking
 11 21 election as a public member of a conference board must only
 11 22 file an affidavit of candidacy. Each public member seat on
 11 23 the conference board may only be held by an individual who
 11 24 owns or holds an interest in taxable property located in the
 11 25 appropriate jurisdiction that is classified as residential,
 11 26 agricultural, commercial, or industrial property.  Each of
 11 27 the four property classifications is assigned to one of the
 11 28 four public member seats and designated as such on the ballot.
 11 29 The bill provides that a public member seat is not limited by
 11 30 property classification if that property classification is not
 11 31 present within the jurisdiction.  The four public members each
 11 32 serve a four=year term and may be reelected for additional
 11 33 four=year terms. The four public members each constitute a
 11 34 separate voting unit. A vacancy among the public member seats
 11 35 prior to the expiration of a term is filled by appointment by
 12  1 the remaining public members of the conference board. Such an
 12  2 appointment is for the period until the next pending election.
 12  3    By operation of current Code section 441.3, the addition
 12  4 of the four public members to the conference board results in
 12  5 an additional four appointments to the examining board of the
 12  6 applicable assessing jurisdiction.
 12  7    Division IV of the bill modifies provisions relating to
 12  8 even=numbered assessment years by providing that the assessor
 12  9 shall value and assess or revalue and reassess, as the case
 12 10 may require, any individual real estate parcel that the
 12 11 assessor finds was assessed for more than the value authorized
 12 12 by law or was not listed in the assessment year immediately
 12 13 preceding, and any real estate the assessor finds has changed
 12 14 in value subsequent to January 1 of the preceding real estate
 12 15 assessment year based on buildings erected, improvements made,
 12 16 or buildings or improvements removed in a year after the
 12 17 assessment. The bill also provides that a percentage increase
 12 18 for an even=numbered assessment year shall be applied to all
 12 19 property within the class and shall not be applied only to
 12 20 a subset of the class unless approved by the department of
 12 21 revenue.
 12 22    Division IV of the bill also modifies the grounds upon
 12 23 which a property owner or aggrieved taxpayer may protest
 12 24 an assessment under Code section 441.37.  The bill strikes
 12 25 the grounds in current law that are applicable only to
 12 26 even=numbered assessment years and allows those grounds only
 12 27 authorized for odd=numbered assessment years to be asserted in
 12 28 any assessment year.
 12 29    Division IV of the bill applies to assessment years
 12 30 beginning on or after January 1, 2018.
 12 31    Current Code section 441.41 authorizes the conference board
 12 32 to employ special counsel to assist the city legal department
 12 33 or the county attorney in litigation dealing with assessments.
 12 34 The bill provides that such authority is subject to review and
 12 35 approval by the city legal department or the county attorney,
 13  1 as applicable, and includes situations where the city legal
 13  2 department or county attorney is disqualified because of a
 13  3 conflict of interest.
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