Bill Text: IA SF480 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A bill for an act authorizing a city or county to provide a property tax exemption for value added by improvements to residential property that is a public nuisance. (Formerly SF 25 and SF 278.)
Spectrum: Committee Bill
Status: (Engrossed - Dead) 2015-03-27 - Read first time, referred to Ways & Means. H.J. 722. [SF480 Detail]
Download: Iowa-2015-SF480-Introduced.html
Senate File 480 - Introduced SENATE FILE BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 278) (SUCCESSOR TO SF 25) A BILL FOR 1 An Act authorizing a city or county to provide a property tax 2 exemption for value added by improvements to residential 3 property that is a public nuisance. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 1492SZ (2) 86 md/sc PAG LIN 1 1 Section 1. Section 364.19, Code 2015, is amended to read as 1 2 follows: 1 3 364.19 Contracts to provide services to tax=exempt property. 1 4 A city council or county board of supervisors may enter into 1 5 a contract with a person whose property is totally or partially 1 6 exempt from taxation under chapter 404, chapter 404B, section 1 7 427.1,orsection 427B.1, or section 427B.10, for the city or 1 8 county to provide specified services to that person including 1 9 but not limited to police protection, fire protection, 1 10 street maintenance, and waste collection. The contract shall 1 11 terminate as of the date previously exempt property becomes 1 12 subject to taxation. 1 13 Sec. 2. NEW SECTION. 427B.10 Residential nuisance property 1 14 == value added exemption from tax. 1 15 1. A city council or a county board of supervisors may 1 16 provide by ordinance for an exemption from property taxation 1 17 of the actual value added by improvements made to residential 1 18 property if the property is a public nuisance prior to the 1 19 improvements. A city council may provide for an exemption to 1 20 such property located within the boundaries of the city and the 1 21 county board of supervisors may provide for an exemption to 1 22 such property located outside the boundaries of a city. 1 23 2. All property described in subsection 1 for which an 1 24 exemption has been approved by ordinance is eligible to receive 1 25 a one hundred percent exemption from taxation on the actual 1 26 value added by the improvements. The exemption is for a 1 27 period of ten years beginning not later than the first year 1 28 in which all improvements described in the application are 1 29 first assessed for taxation. A property tax exemption under 1 30 this section shall not be granted if the property for which 1 31 the exemption is claimed has received any other property tax 1 32 exemption authorized by law for the actual value added to the 1 33 property. 1 34 3. a. The ordinance providing for the exemption may 1 35 designate a length of time of less than ten years that the 2 1 exemption shall be available and may designate an exemption 2 2 percentage or schedule of percentages that is less than one 2 3 hundred percent. 2 4 b. The city council or the board of supervisors may, as part 2 5 of the resolution approving an exemption application, specify 2 6 an exemption duration or exemption percentage that is different 2 7 than that designated in the ordinance. However, the different 2 8 duration or percentage specified in the resolution shall not 2 9 exceed that which is provided for in the ordinance. 2 10 4. a. An application shall be filed for each new exemption 2 11 claimed. The first application for an exemption shall be filed 2 12 by the owner of the property with the governing body of the 2 13 city or county in which the property is located by February 2 14 1 of the assessment year for which the exemption is first 2 15 claimed, but not later than the year in which all improvements 2 16 included in the application are first assessed for taxation. 2 17 b. The application shall, at a minimum, contain the nature 2 18 of the improvements, the cost of the improvements, a list of 2 19 all other federal, state, or local government tax credits, 2 20 exemptions, grants, forgivable loans, or other forms of 2 21 financial assistance received by or applied for by the owner 2 22 for completion of the improvements, and the estimated or actual 2 23 date of completion of the improvements. 2 24 c. An owner may submit an application for an exemption 2 25 under this section to the governing body of the city or 2 26 county to receive prior approval for eligibility for a tax 2 27 exemption. Such prior approval shall not entitle the owner 2 28 to exemption from taxation until the improvements have been 2 29 completed, a physical review of the property has been conducted 2 30 by the assessor pursuant to subsection 5, and the assessor has 2 31 determined that the actual value of the property has increased 2 32 as a result of the improvements. 2 33 d. Approval of an exemption application shall be by 2 34 resolution of the governing body of the city or county. 2 35 e. If an application for an exemption is not approved, the 3 1 owner may submit an amended application for the governing body 3 2 to approve or reject. 3 3 5. The local assessor shall review each first=year 3 4 application by making a physical review of the property to 3 5 determine if the improvements made increased the actual value 3 6 of the approved property. If the assessor determines that 3 7 the actual value of that property has increased, the assessor 3 8 shall proceed to determine the actual value of the property 3 9 and certify the valuation to the county auditor at the time 3 10 of transmitting the assessment rolls. If an application for 3 11 exemption is denied as a result of failure to increase the 3 12 value of the property, the owner may, notwithstanding the 3 13 filing deadlines in subsection 4, file a first application in a 3 14 subsequent year when additional improvements are made. After 3 15 the tax exemption is granted, the local assessor shall continue 3 16 to grant the tax exemption, with periodic physical review by 3 17 the assessor, for the time period specified in subsection 2, 3 18 or specified in a different schedule if one has been adopted 3 19 under subsection 3, paragraph "a", or in the resolution of the 3 20 governing body under which the exemption was granted pursuant 3 21 to subsection 3, paragraph "b". 3 22 6. When in the opinion of the city council or the county 3 23 board of supervisors continuation of the exemption granted by 3 24 this section ceases to be of benefit to the city or county, the 3 25 city council or the county board of supervisors may repeal the 3 26 ordinance, but all existing exemptions shall continue until 3 27 their expiration. 3 28 7. For the purposes of this section, unless the context 3 29 otherwise requires: 3 30 a. "Actual value added" means the actual value added as of 3 31 the first year for which the exemption is received. 3 32 b. "Owner" includes a person who is purchasing property 3 33 by installment contract or under a duly executed purchase 3 34 contract. 3 35 c. "Public nuisance" means a building that is a menace to 4 1 the public health, welfare, or safety, or that is structurally 4 2 unsafe, unsanitary, or not provided with adequate safe egress, 4 3 or that constitutes a fire hazard, or is otherwise dangerous to 4 4 human life, or that in relation to the existing use constitutes 4 5 a hazard to the public health, welfare, or safety by reason 4 6 of inadequate maintenance, dilapidation, obsolescence, or 4 7 abandonment. 4 8 Sec. 3. IMPLEMENTATION OF ACT. Section 25B.7 shall not 4 9 apply to the property tax exemption established in this Act. 4 10 EXPLANATION 4 11 The inclusion of this explanation does not constitute agreement with 4 12 the explanation's substance by the members of the general assembly. 4 13 This bill authorizes a city council or a county board of 4 14 supervisors to provide by ordinance for an exemption from 4 15 property taxation of the actual value added to residential 4 16 property by improvements to the property if the property 4 17 is a public nuisance, as defined in the bill, prior to the 4 18 improvements. 4 19 If approved by the governing body of the city or the board of 4 20 supervisors of a county, the property is eligible to receive 4 21 a 100 percent exemption from taxation on the actual value 4 22 added by the improvements. The exemption is for a period of 4 23 10 years beginning not later than the first year in which all 4 24 improvements described in the application are first assessed 4 25 for taxation. The ordinance providing for the exemption from 4 26 tax may designate a length of time of less than 10 years and may 4 27 designate an exemption percentage or schedule of percentages 4 28 that is less than 100 percent. The resolution approving the 4 29 exemption application may also provide for a different period 4 30 of exemption and exemption percentage than what is provided in 4 31 the ordinance, but not exceeding the duration and percentages 4 32 in the ordinance. 4 33 The application for an exemption must be filed by the 4 34 owner of the property with the governing body of the city or 4 35 county in which the property is located by February 1 of the 5 1 assessment year for which the exemption is first claimed, but 5 2 not later than the year in which all improvements included in 5 3 the application are first assessed for taxation. The bill 5 4 authorizes an owner to submit an application for an exemption 5 5 to receive prior approval for eligibility for a tax exemption. 5 6 Such prior approval does not entitle the owner to exemption 5 7 from taxation until the improvements have been completed, a 5 8 physical review of the property has been conducted by the 5 9 assessor, and the assessor has determined that the actual value 5 10 of the property has increased as a result of the improvements. 5 11 The bill requires the application to list all other federal, 5 12 state, or local government tax credits, exemptions, grants, 5 13 forgivable loans, or other forms of financial assistance 5 14 received by or applied for by the owner for completion of the 5 15 improvements. 5 16 The bill requires the assessor to review each first=year 5 17 application by making a physical review of the property, to 5 18 determine if the improvements made increased the actual value 5 19 of the approved property. If an application for exemption 5 20 is denied as a result of failure to increase the value of 5 21 the property, the owner may file a first application in a 5 22 subsequent year when additional improvements are made. After 5 23 the tax exemption is granted, the local assessor shall continue 5 24 to grant the tax exemption, with periodic physical review by 5 25 the assessor, for the time period authorized. 5 26 Code section 25B.7 does not apply to the property tax 5 27 exemption to the bill. Code section 25B.7 provides that for a 5 28 property tax credit or exemption enacted on or after January 5 29 1, 1997, if a state appropriation made to fund the credit 5 30 or exemption is not sufficient to fully fund the credit or 5 31 exemption, the political subdivision is required to extend 5 32 to the taxpayer only that portion of the credit or exemption 5 33 estimated by the department of revenue to be funded by the 5 34 state appropriation. LSB 1492SZ (2) 86 md/sc
