House Study Bill 224 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON KAUFMANN) A BILL FOR An Act relating to property taxation for commercial child 1 care centers and facilities and including effective date, 2 applicability, and retroactive applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2193YC (2) 90 md/jh
H.F. _____ Section 1. Section 441.21, subsection 5, paragraph b, 1 subparagraph (2), unnumbered paragraph 1, Code 2023, is amended 2 to read as follows: 3 For Except for property subject to subparagraph (3), for 4 valuations established for the assessment year beginning 5 January 1, 2022, and each assessment year thereafter, the 6 portion of actual value at which each property unit of 7 commercial property shall be assessed shall be the sum of the 8 following: 9 Sec. 2. Section 441.21, subsection 5, paragraph b, Code 10 2023, is amended by adding the following new subparagraph: 11 NEW SUBPARAGRAPH . (3) (a) For valuations established 12 for the assessment year beginning January 1, 2023, and each 13 assessment year thereafter, the portion of actual value at 14 which each portion of a property unit of commercial property 15 that is primarily used as a child care center or child care 16 facility, as defined in section 237A.1, and for which an 17 application has been allowed under this subparagraph, shall be 18 assessed at an amount equal to the product of the assessment 19 limitation percentage applicable to residential property under 20 subsection 4 for that assessment year multiplied by the actual 21 value of the property. 22 (b) A person who wishes to qualify for the assessment 23 limitation under this subparagraph shall file an application 24 with the assessor not later than July 1 of the assessment 25 year for which the person is first requesting the assessment 26 limitation on forms provided by the department of revenue. 27 The application shall describe the property and its location 28 and include other information required by the department of 29 revenue. The application shall be accompanied by a copy 30 of the license to operate as a child care center or child 31 care facility issued by the department of health and human 32 services or other proof of eligibility set forth in rule by the 33 department of revenue. Upon allowance of the application, the 34 assessment limitation shall be applied to the portion of the 35 -1- LSB 2193YC (2) 90 md/jh 1/ 6
H.F. _____ property unit of commercial property that is primarily used as 1 a child care center or child care facility for successive years 2 without further filing as long as the portion of the property 3 unit continues to be classified as commercial property and is 4 used for the purposes specified in the application. 5 (c) Not later than July 6 of each year, the assessor shall 6 remit the applications for the assessment limitation to the 7 county auditor with the assessors recommendation for allowance 8 or disallowance. If the assessor recommends disallowance, the 9 assessor shall submit the reasons for the recommendation, in 10 writing, to the county auditor. 11 (d) Not later than July 15 of each year, the county auditor 12 shall forward the applications for the assessment limitation 13 to the board of supervisors. The board shall determine the 14 eligibility for each application on or before September 1 of 15 each year. If the board disallows a claim, it shall send 16 written notice, by mail, to the applicant at the applicants 17 last-known address. The notice shall state the reasons for 18 disallowing the application and shall state the applicants 19 right to appeal the boards action to the district court under 20 subparagraph division (f). 21 (e) All applications that have been allowed by the board of 22 supervisors shall be certified on or before October 1, in each 23 year, by the board of supervisors to the county auditor. 24 (f) Within thirty days following the date of the notice of 25 disallowance under subparagraph division (d), the applicant may 26 appeal the disallowance to the district court of the county in 27 which the property is situated. 28 (g) If the person ceases to use the property as a child 29 care center or child care facility, the person shall provide 30 written notice to the assessor by July 1 following the date on 31 which the use has changed. If, at any time within thirty-six 32 months following the date that an application is allowed, 33 the board determines that the person received an assessment 34 limitation under this subparagraph that the person is not 35 -2- LSB 2193YC (2) 90 md/jh 2/ 6
H.F. _____ entitled to, the treasurer shall collect from the person the 1 amount of additional tax that would have been assessed on the 2 property if the property received the assessment limitations 3 under subparagraph (2), and the amount shall become a lien 4 on the property that received the assessment limitation and 5 shall be collected by the county treasurer in the same manner 6 as other taxes. Prior to the boards determination that a 7 person received an assessment limitation that the person is 8 not entitled to, the board shall notify the person by mail and 9 conduct a hearing. 10 (h) The assessor shall retain a permanent file of current 11 applications made under this subparagraph. The county recorder 12 shall give notice to the assessor of each transfer of title 13 filed in the recorders office. The notice from the county 14 recorder shall describe the property transferred, the name of 15 the person transferring title to the property, and the name of 16 the person to whom title to the property has been transferred. 17 The assessor shall file a notice of transfer of property for 18 which an application is filed when notice is received from the 19 office of the county recorder. 20 (i) The department shall adopt rules to implement and 21 administer this subparagraph. 22 Sec. 3. Section 441.21, subsection 5, paragraph e, 23 subparagraphs (1) and (3), Code 2023, are amended to read as 24 follows: 25 (1) For each fiscal year beginning on or after July 1, 2023, 26 there is appropriated from the general fund of the state to 27 the department of revenue the sum of one hundred twenty-five 28 million dollars to be used for payments under this paragraph 29 calculated as a result of the assessment limitations imposed 30 under paragraph b , subparagraph (2), subparagraph division 31 (a) ; , and paragraph c , subparagraph (2), subparagraph 32 division (a) ; and paragraph b , subparagraph (3), for the 33 portion of actual value of each property unit subject to the 34 assessment limitation under paragraph b , subparagraph (3), 35 -3- LSB 2193YC (2) 90 md/jh 3/ 6
H.F. _____ that is less than or equal to one hundred fifty thousand 1 dollars . 2 (3) On or before July 1 of each fiscal year, the assessor 3 shall report to the county auditor that portion of the total 4 actual value of all commercial property and industrial property 5 in the county that is subject to the assessment limitations 6 imposed under paragraph b , subparagraph (2), subparagraph 7 division (a) ; , and paragraph c , subparagraph (2), 8 subparagraph division (a) , ; and paragraph b , subparagraph 9 (3), for the portion of actual value of each property unit 10 subject to the assessment limitation under paragraph b , 11 subparagraph (3), that is less than or equal to one hundred 12 fifty thousand dollars, for the assessment year used to 13 calculate the taxes due and payable in that fiscal year. 14 Sec. 4. Section 441.21, subsection 5, paragraph e, 15 subparagraph (4), subparagraph division (a), Code 2023, is 16 amended to read as follows: 17 (a) The product of the portion of the total actual value 18 of all commercial property, industrial property, and property 19 valued by the department under chapter 434 in the county 20 that is subject to the assessment limitations imposed under 21 paragraph b , subparagraph (2), subparagraph division (a) ; , 22 and paragraph c , subparagraph (2), subparagraph division 23 (a) , ; and paragraph b , subparagraph (3), for the portion of 24 actual value of each property unit subject to the assessment 25 limitation under paragraph b , subparagraph (3), that is less 26 than or equal to one hundred fifty thousand dollars, for the 27 applicable assessment year used to calculate taxes which are 28 due and payable in the applicable fiscal year multiplied by the 29 difference, stated as a percentage, between ninety percent and 30 the assessment limitation percentage applicable to residential 31 property under subsection 4 for the applicable assessment year. 32 Sec. 5. EFFECTIVE DATE. This Act, being deemed of immediate 33 importance, takes effect upon enactment. 34 Sec. 6. RETROACTIVE APPLICABILITY. The following apply 35 -4- LSB 2193YC (2) 90 md/jh 4/ 6
H.F. _____ retroactively to assessment years beginning on or after January 1 1, 2023: 2 1. The section of this Act amending section 441.21, 3 subsection 5, paragraph b, subparagraph (2), unnumbered 4 paragraph 1. 5 2. The section of this Act enacting section 441.21, 6 subsection 5, paragraph b, subparagraph (3). 7 Sec. 7. APPLICABILITY. The following apply July 1, 2024, 8 for payments under section 441.21, subsection 5, paragraph e, 9 for fiscal years beginning on or after that date: 10 1. The section of this Act amending section 441.21, 11 subsection 5, paragraph e, subparagraphs (1) and (3). 12 2. The section of this Act amending section 441.21, 13 subsection 5, paragraph e, subparagraph (4), subparagraph 14 division (a). 15 EXPLANATION 16 The inclusion of this explanation does not constitute agreement with 17 the explanations substance by the members of the general assembly. 18 This bill relates to property taxation for commercial 19 child care centers and facilities. Code section 441.21(5) 20 determines the amount of actual value of commercial property 21 that is subject to property tax. The amount is the sum of 22 the residential assessment limitation to the portion of 23 the propertys value that does not exceed $150,000 plus 90 24 percent of the propertys value in excess of $150,000. The 25 bill excludes property primarily used as a child care center 26 or child care facility from that determination and instead 27 specifies that for assessment years beginning on or after 28 January 1, 2023, the amount of actual value of such properties 29 that is subject to property tax and for which an application 30 has been allowed is equal to the product of the assessment 31 limitation percentage applicable to residential property 32 multiplied by the actual value of the property. 33 The bill establishes an application and approval procedure 34 for the assessment limitation and amends provisions relating to 35 -5- LSB 2193YC (2) 90 md/jh 5/ 6
H.F. _____ the calculation of payments to local governments as the result 1 of the application of certain assessment limitations under Code 2 section 441.21(5)(e). 3 The bill takes effect upon enactment, applies retroactively 4 to assessment years beginning on or after January 1, 2023, and 5 applies to payments to local governments under Code section 6 441.21(5)(e) for fiscal years beginning on or after July 1, 7 2024. 8 -6- LSB 2193YC (2) 90 md/jh 6/ 6