Senate File 550 - Introduced SENATE FILE 550 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 1125) A BILL FOR An Act relating to state and local revenue and finances by 1 modifying sales and use taxes, the charitable conservation 2 contribution tax credit available against individual and 3 corporate income taxes, the water service tax, property 4 taxes, transit funding, and local option taxes, crediting 5 moneys to the natural resources and outdoor recreation 6 trust fund, modifying allocations of road use tax fund 7 moneys, making appropriations, and including effective date, 8 retroactive applicability, and applicability provisions. 9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 10 TLSB 1461SV (4) 90 md/jh
S.F. 550 DIVISION I 1 SALES AND USE TAX RATES AND DISTRIBUTION 2 Section 1. Section 423.2, subsection 1, unnumbered 3 paragraph 1, Code 2023, is amended to read as follows: 4 There is imposed a tax of six percent at the rate specified 5 in subsection 12 upon the sales price of all sales of tangible 6 personal property, sold at retail in the state to consumers or 7 users except as otherwise provided in this subchapter . 8 Sec. 2. Section 423.2, subsections 2 and 3, Code 2023, are 9 amended to read as follows: 10 2. A tax of six percent at the rate specified in subsection 11 12 is imposed upon the sales price of the sale or furnishing 12 of gas, electricity, water, heat, pay television service, and 13 communication service, including the sales price from such 14 sales by any municipal corporation or joint water utility 15 furnishing gas, electricity, water, heat, pay television 16 service, and communication service to the public in its 17 proprietary capacity, except as otherwise provided in this 18 subchapter , when sold at retail in the state to consumers or 19 users. 20 3. A tax of six percent at the rate specified in subsection 21 12 is imposed upon the sales price of all sales of tickets 22 or admissions to places of amusement, fairs, and athletic 23 events except those of elementary and secondary educational 24 institutions. A tax of six percent at the rate specified in 25 subsection 12 is imposed on the sales price of an entry fee or 26 like charge imposed solely for the privilege of participating 27 in an activity at a place of amusement, fair, or athletic event 28 unless the sales price of tickets or admissions charges for 29 observing the same activity are taxable under this subchapter . 30 A tax of six percent at the rate specified in subsection 12 31 is imposed upon that part of private club membership fees or 32 charges paid for the privilege of participating in any athletic 33 sports provided club members. 34 Sec. 3. Section 423.2, subsection 4, paragraph a, Code 2023, 35 -1- LSB 1461SV (4) 90 md/jh 1/ 91
S.F. 550 is amended to read as follows: 1 a. A tax of six percent at the rate specified in subsection 2 12 is imposed upon the sales price derived from the operation 3 of all forms of amusement devices and games of skill, games of 4 chance, raffles, and bingo games as defined in chapter 99B , and 5 card game tournaments conducted under section 99B.27 , that are 6 operated or conducted within the state, the tax to be collected 7 from the operator in the same manner as for the collection of 8 taxes upon the sales price of tickets or admission as provided 9 in this section . Nothing in this subsection shall legalize any 10 games of skill or chance or slot-operated devices which are now 11 prohibited by law. 12 Sec. 4. Section 423.2, subsection 5, Code 2023, is amended 13 to read as follows: 14 5. There is imposed a tax of six percent at the rate 15 specified in subsection 12 upon the sales price from the 16 furnishing of services as defined in section 423.1 . 17 Sec. 5. Section 423.2, subsection 7, paragraph a, 18 unnumbered paragraph 1, Code 2023, is amended to read as 19 follows: 20 A tax of six percent at the rate specified in subsection 12 21 is imposed upon the sales price from the sales, furnishing, or 22 service of solid waste collection and disposal service. 23 Sec. 6. Section 423.2, subsection 8, paragraph a, Code 2023, 24 is amended to read as follows: 25 a. A tax of six percent at the rate specified in subsection 26 12 is imposed on the sales price from sales of bundled 27 transactions. For the purposes of this subsection , a bundled 28 transaction is the retail sale of two or more distinct and 29 identifiable products, except real property and services to 30 real property, which are sold for one nonitemized price. A 31 bundled transaction does not include the sale of any products 32 in which the sales price varies, or is negotiable, based on 33 the selection by the purchaser of the products included in the 34 transaction. 35 -2- LSB 1461SV (4) 90 md/jh 2/ 91
S.F. 550 Sec. 7. Section 423.2, subsection 9, Code 2023, is amended 1 to read as follows: 2 9. A tax of six percent at the rate specified in 3 subsection 12 is imposed upon the sales price from any mobile 4 telecommunications service, including all paging services, 5 that this state is allowed to tax pursuant to the provisions 6 of the federal Mobile Telecommunications Sourcing Act, Pub. 7 L. No. 106-252, 4 U.S.C. 116 et seq. For purposes of this 8 subsection , taxes on mobile telecommunications service, as 9 defined under the federal Mobile Telecommunications Sourcing 10 Act that are deemed to be provided by the customers home 11 service provider, shall be paid to the taxing jurisdiction 12 whose territorial limits encompass the customers place of 13 primary use, regardless of where the mobile telecommunications 14 service originates, terminates, or passes through and 15 shall in all other respects be taxed in conformity with 16 the federal Mobile Telecommunications Sourcing Act. All 17 other provisions of the federal Mobile Telecommunications 18 Sourcing Act are adopted by the state of Iowa and incorporated 19 into this subsection by reference. With respect to mobile 20 telecommunications service under the federal Mobile 21 Telecommunications Sourcing Act, the director shall, if 22 requested, enter into agreements consistent with the provisions 23 of the federal Act. 24 Sec. 8. Section 423.2, subsection 10, paragraph a, Code 25 2023, is amended to read as follows: 26 a. A tax of six percent at the rate specified in subsection 27 12 is imposed on the sales price of specified digital products 28 sold at retail in the state. The tax applies whether the 29 purchaser obtains permanent use or less than permanent use of 30 the specified digital product, whether the sale is conditioned 31 or not conditioned upon continued payment from the purchaser, 32 and whether the sale is on a subscription basis or is not on a 33 subscription basis. 34 Sec. 9. Section 423.2, subsection 12, Code 2023, is amended 35 -3- LSB 1461SV (4) 90 md/jh 3/ 91
S.F. 550 by striking the subsection and inserting in lieu thereof the 1 following: 2 12. a. For the period beginning January 1, 2025, through 3 December 31, 2050, the sales tax rate is seven percent. 4 b. Beginning January 1, 2051, the sales tax rate is six 5 percent. 6 Sec. 10. Section 423.2A, subsection 2, paragraphs a, b, and 7 c, Code 2023, are amended to read as follows: 8 a. (1) Transfer For the period beginning January 1, 9 2025, through December 31, 2027, transfer twenty-eight 10 one-hundred-fortieths of the revenues collected under deposited 11 into the general fund of the state under subsection 1 to the 12 appropriate county accounts under chapter 423B for the counties 13 from which the tax was collected . 14 (2) For the period beginning January 1, 2028, through 15 December 31, 2028, transfer twenty-seven one-hundred-fortieths 16 of the revenues deposited into the general fund of the state 17 under subsection 1 to the appropriate county accounts under 18 chapter 423B for the counties from which the tax was collected. 19 (3) For the period beginning January 1, 2029, through 20 December 31, 2029, transfer twenty-six one-hundred-fortieths of 21 the revenues deposited into the general fund of the state under 22 subsection 1 to the appropriate county accounts under chapter 23 423B for the counties from which the tax was collected. 24 (4) For the period beginning January 1, 2030, through 25 December 31, 2050, transfer twenty-five one-hundred-fortieths 26 of the revenues deposited into the general fund of the state 27 under subsection 1 to the appropriate county accounts under 28 chapter 423B for the counties from which the tax was collected. 29 (5) Beginning January 1, 2051, transfer five twenty-fourths 30 of the revenues deposited into the general fund of the state 31 under subsection 1 to the appropriate county accounts under 32 chapter 423B for the counties from which the tax was collected. 33 b. Transfer from the remaining revenues the amounts required 34 under Article VII, section 10, of the Constitution of the State 35 -4- LSB 1461SV (4) 90 md/jh 4/ 91
S.F. 550 of Iowa to the natural resources and outdoor recreation trust 1 fund created in section 461.31 , if applicable . 2 c. Transfer one-sixth of from the remaining revenues an 3 amount equal to one-seventh of the revenues deposited into the 4 general fund of the state under subsection 1 to the secure an 5 advanced vision for education fund created in section 423F.2 . 6 This paragraph c is repealed January 1, 2051. 7 Sec. 11. Section 423.5, subsection 1, unnumbered paragraph 8 1, Code 2023, is amended to read as follows: 9 Except as provided in paragraph b , an excise tax at the 10 rate of six percent specified in subsection 4 of the purchase 11 price or installed purchase price is imposed on the following: 12 Sec. 12. Section 423.5, subsection 4, Code 2023, is amended 13 by striking the subsection and inserting in lieu thereof the 14 following: 15 4. a. For the period beginning January 1, 2025, through 16 December 31, 2050, the use tax rate is seven percent. 17 b. Beginning January 1, 2051, the use tax rate is six 18 percent. 19 Sec. 13. Section 423.43, subsection 1, paragraph b, Code 20 2023, is amended by striking the paragraph and inserting in 21 lieu thereof the following: 22 b. Subsequent to the deposit into the general fund of 23 the state the department shall do the following in the order 24 prescribed: 25 (1) (a) For the period beginning January 1, 2025, through 26 December 31, 2043, transfer one-seventh of such revenues to the 27 local use tax supplement fund, under section 423B.1A. 28 (b) For the period beginning January 1, 2044, through 29 December 31, 2050, transfer one-seventh of such revenues to the 30 appropriate county accounts under chapter 423B for the counties 31 from which the tax was paid. 32 (c) Beginning January 1, 2051, transfer one-sixth of such 33 revenues to the appropriate county accounts under chapter 423B 34 for the counties from which the tax was paid. 35 -5- LSB 1461SV (4) 90 md/jh 5/ 91
S.F. 550 (2) Transfer one-sixth of such remaining revenues to the 1 secure an advanced vision for education fund created in section 2 423F.2. This subparagraph is repealed January 1, 2051. 3 Sec. 14. EFFECTIVE DATE. This division of this Act takes 4 effect January 1, 2025. 5 DIVISION II 6 WATER SERVICE TAX 7 Sec. 15. Section 423G.3, Code 2023, is amended to read as 8 follows: 9 423G.3 Water service tax. 10 An excise tax at the a rate of six percent equal to the rate 11 being imposed under section 423.2, subsection 12, is imposed on 12 the sales price from the sale or furnishing by a water utility 13 of a water service in the state to consumers or users. 14 Sec. 16. Section 423G.6, subsection 2, Code 2023, is amended 15 by striking the subsection. 16 Sec. 17. REPEAL. Section 423G.7, Code 2023, is repealed. 17 Sec. 18. EFFECTIVE DATE. This division of this Act takes 18 effect January 1, 2025. 19 DIVISION III 20 LOCAL OPTION TAXES 21 Sec. 19. Section 15J.7, subsection 2, Code 2023, is amended 22 to read as follows: 23 2. In addition to the moneys received pursuant to section 24 15J.6 , a municipality may deposit in the reinvestment project 25 fund any other moneys lawfully at the municipalitys disposal, 26 including but not limited to local sales and services tax 27 receipts collected revenues received under chapter 423B if such 28 use is a purpose authorized for the municipality under chapter 29 423B . 30 Sec. 20. Section 28A.17, Code 2023, is amended to read as 31 follows: 32 28A.17 Local sales and services tax. 33 1. If an authority is established as provided in section 34 28A.6 and after approval of a referendum by a simple majority 35 -6- LSB 1461SV (4) 90 md/jh 6/ 91
S.F. 550 of votes cast in each metropolitan area in favor of the sales 1 and services tax, the governing board of a county in this state 2 within a metropolitan area which is part of the authority shall 3 impose, at the request of the authority, a local sales and 4 services tax at the rate of one-fourth of one percent on the 5 sales price taxed by this state under section 423.2 , within 6 the metropolitan area located in this state. The referendum 7 shall be called by resolution of the board and shall be held 8 as provided in section 28A.6 to the extent applicable. The 9 ballot proposition shall contain a statement as to the specific 10 purpose or purposes for which the revenues shall be expended 11 and the date of expiration of the tax. The local sales and 12 services tax shall be imposed on the same basis, with the same 13 exceptions, and following the same administrative procedures as 14 provided for a county under sections 423B.5 and 423B.6 , Code 15 2023 . The amount of the sale, for the purposes of determining 16 the amount of the local sales and services tax under this 17 section , does not include the amount of any local sales and 18 services tax imposed under sections 423B.5 and 423B.6 , Code 19 2023 . 20 2. The treasurer of state shall credit the local sales 21 and services tax receipts and interest and penalties to the 22 authoritys account. Moneys in this account shall be remitted 23 quarterly to the authority. The proceeds of the tax imposed 24 under this section shall be used only for the construction, 25 reconstruction, or repair of metropolitan facilities as 26 specified in the referendum. The local sales and services tax 27 imposed under this section may be suspended for not less than 28 a fiscal quarter or more than one year by action of the board. 29 The suspension may be renewed or continued by the board, but 30 the board shall act on the suspension at least annually. 31 The local sales and services tax may also be repealed by a 32 petition and favorable referendum following the procedures and 33 requirements of sections 28A.5 and 28A.6 as applicable. The 34 board shall give the department of revenue at least forty days 35 -7- LSB 1461SV (4) 90 md/jh 7/ 91
S.F. 550 notice of the repeal, suspension, or reinstatement of the tax 1 and the effective dates for imposition, suspension, or repeal 2 of the tax shall be as provided in section 423B.6 , Code 2023 . 3 3. A local sales and services tax authorized under this 4 section shall not be imposed or collected on or after January 5 1, 2025. 6 Sec. 21. Section 76.4, Code 2023, is amended to read as 7 follows: 8 76.4 Permissive application of funds. 9 Whenever the governing authority of such political 10 subdivision shall have on hand funds derived from any other 11 source than taxation which may be appropriated to the payment 12 either of interest or principal, or both principal and interest 13 of such bonds, such funds may be so appropriated and used 14 and the levy for the payment of the bonds correspondingly 15 reduced. This section shall not restrict the authority of a 16 political subdivision to apply sales and services tax receipts 17 collected received pursuant to chapter 423B for such purpose. 18 Notwithstanding section 423F.3 , a school district may apply tax 19 receipts received pursuant to chapter 423F for the purposes of 20 this section . 21 Sec. 22. Section 99B.1, subsection 23, Code 2023, is amended 22 to read as follows: 23 23. Net receipts means gross receipts less amounts awarded 24 as prizes and less state and local sales tax paid upon the 25 gross receipts. 26 Sec. 23. Section 99B.14, subsection 1, Code 2023, is amended 27 to read as follows: 28 1. A licensed qualified organization shall certify 29 that the receipts from all charitable gambling conducted 30 by the organization under this chapter , less reasonable 31 expenses, charges, fees, taxes, and deductions, either will 32 be distributed as prizes to participants or will be dedicated 33 and distributed for educational, civic, public, charitable, 34 patriotic, or religious uses. Reasonable expenses, charges, 35 -8- LSB 1461SV (4) 90 md/jh 8/ 91
S.F. 550 fees, taxes other than the state and local sales tax, and 1 deductions allowed by the department shall not exceed forty 2 percent of net receipts. 3 Sec. 24. Section 99G.4, subsection 2, Code 2023, is amended 4 to read as follows: 5 2. The income and property of the authority shall be exempt 6 from all state and local taxes, and the sale of lottery tickets 7 and shares issued and sold by the authority and its retail 8 licensees shall be exempt from all state and local sales taxes. 9 Sec. 25. Section 99G.30A, subsection 2, paragraph a, Code 10 2023, is amended to read as follows: 11 a. The director of revenue shall administer the monitor 12 vending machine excise tax as nearly as possible in conjunction 13 with the administration of state sales tax laws. The director 14 shall provide appropriate forms or provide appropriate entries 15 on the regular state tax forms for reporting local sales and 16 services tax liability. 17 Sec. 26. Section 279.63, subsection 2, paragraph a, Code 18 2023, is amended to read as follows: 19 a. All property tax levies , and income surtaxes , and local 20 option sales taxes in place in the school district, listed by 21 type of levy, rate, amount, duration, and notification of the 22 maximum rate and amount limitations permitted by statute. 23 Sec. 27. Section 321.40, subsection 5, Code 2023, is amended 24 by striking the subsection. 25 Sec. 28. Section 321.130, Code 2023, is amended to read as 26 follows: 27 321.130 Fees in lieu of taxes. 28 The registration fees imposed by this chapter upon private 29 passenger motor vehicles or semitrailers are in lieu of all 30 state and local taxes , except local vehicle taxes, to which 31 motor vehicles or semitrailers are subject. 32 Sec. 29. Section 418.13, subsection 2, Code 2023, is amended 33 to read as follows: 34 2. In addition to the moneys received pursuant to section 35 -9- LSB 1461SV (4) 90 md/jh 9/ 91
S.F. 550 418.10 or 418.12 , a governmental entity may deposit in the 1 flood project fund any other moneys lawfully received by the 2 governmental entity, including but not limited to local sales 3 and services tax receipts collected amounts received under 4 chapter 423B . 5 Sec. 30. Section 421.26, Code 2023, is amended to read as 6 follows: 7 421.26 Personal liability for tax due. 8 If a licensee or other person under section 452A.65 , a 9 retailer or purchaser under chapter 423A , 423B , 423C , 423D , or 10 423E , or section 423.14 , 423.14A , 423.29 , 423.31 , or 423.33 , 11 or a user under section 423.34 , or a permit holder or licensee 12 under section 453A.13 , 453A.16 , or 453A.44 fails to pay a tax 13 under those sections when due, an officer of a corporation 14 or association, notwithstanding section 489.304 , a member or 15 manager of a limited liability company, or a partner of a 16 partnership, having control or supervision of or the authority 17 for remitting the tax payments and having a substantial legal 18 or equitable interest in the ownership of the corporation, 19 association, limited liability company, or partnership, who has 20 intentionally failed to pay the tax is personally liable for 21 the payment of the tax, interest, and penalty due and unpaid. 22 However, this section shall not apply to taxes on accounts 23 receivable. The dissolution of a corporation, association, 24 limited liability company, or partnership shall not discharge a 25 persons liability for failure to remit the tax due. 26 Sec. 31. Section 421.28, Code 2023, is amended to read as 27 follows: 28 421.28 Exceptions to successor liability. 29 The immediate successor to a licensees or retailers 30 business or stock of goods under chapter 423A or 423B , or 31 section 423.33 or 452A.65 , is not personally liable for 32 the amount of delinquent tax, interest, or penalty due and 33 unpaid if the immediate successor shows that the purchase of 34 the business or stock of goods was made in good faith that 35 -10- LSB 1461SV (4) 90 md/jh 10/ 91
S.F. 550 no delinquent tax, interest, or penalty was due and unpaid. 1 For purposes of this section the immediate successor shows 2 good faith by evidence that the department had provided 3 the immediate successor with a certified statement that 4 no delinquent tax, interest, or penalty is unpaid, or that 5 the immediate successor had taken in good faith a certified 6 statement from the licensee, retailer, or seller that no 7 delinquent tax, interest, or penalty is unpaid. When requested 8 to do so by a person with whom the licensee or retailer is 9 negotiating the sale of the business or stock of goods, the 10 director of revenue shall, upon being satisfied that such 11 a situation exists, inform that person as to the amount of 12 unpaid delinquent tax, interest, or penalty due by the licensee 13 or the retailer. The giving of the information under this 14 circumstance is not a violation of section 422.20 , 422.72 , or 15 452A.63 . 16 Sec. 32. Section 421.60, subsection 2, paragraph m, 17 subparagraphs (1) and (2), Code 2023, are amended to read as 18 follows: 19 (1) The director may abate unpaid state sales and use 20 taxes and local sales and services taxes owed by a retailer 21 in the event that the retailer failed to collect tax from the 22 purchaser as a result of erroneous written advice issued by 23 the department that was specially directed to the retailer 24 by the department and the retailer is unable to collect the 25 tax, interest, or penalties from the purchaser. Before the 26 tax, interest, and penalties shall be abated on the basis of 27 erroneous written advice, the retailer must present a copy of 28 the retailers request for written advice to the department and 29 a copy of the departments reply. The department shall not 30 maintain a position against the retailer that is inconsistent 31 with the erroneous written advice, except on the basis of 32 subsequent written advice sent by the department to that 33 retailer, or a change in state or federal law, a reported 34 court case to the contrary, a contrary rule adopted by the 35 -11- LSB 1461SV (4) 90 md/jh 11/ 91
S.F. 550 department, a change in material facts or circumstances 1 relating to the retailer, or the retailers misrepresentation 2 or incomplete or inadequate representation of material facts 3 and circumstances in requesting the written advice. 4 (2) (a) The director shall abate the unpaid state sales 5 and use taxes and any local sales and services taxes owed by a 6 retailer where the retailer failed to collect the tax from the 7 purchaser on the charges paid for access to on-line computer 8 services as a result of erroneous written advice issued by the 9 department regarding the taxability of charges paid for access 10 to on-line computer services. To qualify for the abatement 11 under this subparagraph, the erroneous written advice shall 12 have been issued by the department prior to July 1, 1999, and 13 shall have been specially directed to the retailer by the 14 department. 15 (b) If an abatement of unpaid state sales and use taxes and 16 any local sales and services taxes is granted to the retailer 17 by the director pursuant to this subparagraph, the department 18 is precluded from collecting from the purchaser any unpaid 19 state sales and use taxes and any local sales and services 20 taxes which were abated. 21 Sec. 33. Section 422.72, subsection 6, paragraph a, Code 22 2023, is amended to read as follows: 23 a. The department may enter into a written informational 24 exchange agreement for tax administration purposes with a city 25 or county which is entitled to receive funds due to a local 26 hotel and motel tax or a local sales and services tax . The 27 written informational exchange agreement shall designate no 28 more than two paid city or county employees that have access to 29 actual return information relating to that citys or countys 30 receipts from a local hotel and motel tax or a local sales and 31 services tax . 32 Sec. 34. Section 423.4, subsection 2, paragraph d, Code 33 2023, is amended by striking the paragraph. 34 Sec. 35. Section 423.4, subsection 5, paragraph f, Code 35 -12- LSB 1461SV (4) 90 md/jh 12/ 91
S.F. 550 2023, is amended to read as follows: 1 f. Notwithstanding the state sales tax imposed in section 2 423.2 , a rebate issued pursuant to this subsection shall not 3 exceed an amount equal to five percent of the sales price 4 of the tangible personal property or services furnished to 5 purchasers at the automobile racetrack facility. Any local 6 option taxes paid and collected shall not be subject to rebate 7 under this subsection . 8 Sec. 36. Section 423.4, subsection 7, paragraph f, Code 9 2023, is amended to read as follows: 10 f. The refund in this subsection applies only to state 11 sales and use tax paid and does not apply to local option 12 sales and services taxes imposed pursuant to chapter 423B . 13 Notwithstanding the state sales tax imposed in section 423.2 , 14 a refund issued pursuant to this section shall not exceed 15 an amount equal to five percent of the sales price of the 16 fuel used to create heat, power, and steam for processing 17 or generating electrical current or from the sale price 18 of electricity consumed by computers, machinery, or other 19 equipment for operation of the data center business facility. 20 Sec. 37. Section 423.4, subsection 8, paragraph g, Code 21 2023, is amended to read as follows: 22 g. The refund in this subsection applies only to state 23 sales and use tax paid and does not apply to local option 24 sales and services taxes imposed pursuant to chapter 423B . 25 Notwithstanding the state sales tax imposed in section 423.2 , 26 a refund issued pursuant to this section shall not exceed an 27 amount equal to five percent of the sales price of the items 28 listed in paragraph a , subparagraphs (1), (2), and (3). 29 Sec. 38. Section 423.14A, subsection 2, Code 2023, is 30 amended to read as follows: 31 2. In addition to and not in lieu of any application of 32 this chapter to sellers who are retailers and sellers who are 33 retailers maintaining a place of business in this state, any 34 person described in subsection 3 , or the persons agents, 35 -13- LSB 1461SV (4) 90 md/jh 13/ 91
S.F. 550 shall be considered a retailer in this state and a retailer 1 maintaining a place of business in this state for purposes of 2 this chapter on or after January 1, 2019, and shall be subject 3 to all requirements of this chapter imposed on retailers and 4 retailers maintaining a place of business in this state, 5 including but not limited to the requirement to collect and 6 remit sales and use taxes pursuant to sections 423.14 and 7 423.29 , and local option taxes under chapter 423B . 8 Sec. 39. Section 423.33, subsection 1, paragraph c, Code 9 2023, is amended to read as follows: 10 c. If the retailer fails to collect sales tax at the time 11 of the transaction, the retailer shall thereafter remit the 12 applicable sales tax, or the purchaser thereafter shall remit 13 the applicable use tax. If the purchaser remits all applicable 14 use tax, the retailer remains liable for any local sales and 15 services tax under chapter 423B that the retailer failed to 16 collect. 17 Sec. 40. Section 423.34A, unnumbered paragraph 1, Code 18 2023, is amended to read as follows: 19 A purchaser is relieved of liability for payment of state 20 sales or use tax, for payment of any local option sales tax, 21 for payment of interest, or for payment of any penalty for 22 nonpayment of tax which nonpayment is not fraudulent, willful, 23 or intentional, under the following circumstances: 24 Sec. 41. Section 423.36, subsection 9, paragraph a, Code 25 2023, is amended to read as follows: 26 a. Except as provided in paragraph b , purchasers, users, 27 and consumers of tangible personal property, specified digital 28 products, or enumerated services taxed pursuant to subchapter 29 II or III of this chapter or chapter 423B may be authorized, 30 pursuant to rules adopted by the director, to remit tax owed 31 directly to the department instead of the tax being collected 32 and paid by the seller. To qualify for a direct pay tax permit, 33 the purchaser, user, or consumer must accrue a tax liability 34 of more than four thousand dollars in tax under subchapters 35 -14- LSB 1461SV (4) 90 md/jh 14/ 91
S.F. 550 II and III in a semimonthly period and make deposits and file 1 returns pursuant to section 423.31 . This authority shall not 2 be granted or exercised except upon application to the director 3 and then only after issuance by the director of a direct pay 4 tax permit. 5 Sec. 42. Section 423B.1, Code 2023, is amended by striking 6 the section and inserting in lieu thereof the following: 7 423B.1 Use of revenues deposited in the local sales and use 8 tax fund revenue purpose statement. 9 1. a. Revenues credited to and deposited in each countys 10 account within the local sales and use tax fund shall be 11 expended by each recipient county and city as required by the 12 revenue purpose statement, subject to the requirements of 13 section 423B.7, subsection 7, and approved under this section 14 for the city or for the county for the unincorporated areas of 15 the county, or as required by subsection 3. 16 b. A revenue purpose statement for the use of local option 17 sales and services tax revenue under this chapter approved at 18 election prior to January 1, 2025, and in effect on or set 19 to take effect on or after January 1, 2025, and the use of 20 revenues received under this chapter for purposes authorized 21 under section 423B.10 for ordinances in effect and approved 22 before January 1, 2025, shall continue in effect for revenues 23 received under this chapter until the expiration of the revenue 24 purpose statement or ordinance, if applicable, or until the 25 county board of supervisors or city council, as applicable, 26 adopts a new revenue purpose statement under subsection 2 or 27 repeals or amends the ordinance for the use of revenues under 28 section 423B.10. 29 2. The board of supervisors of each county and the city 30 council of each city may adopt by resolution a revenue purpose 31 statement for the expenditure of funds received under this 32 chapter. 33 3. Each city and county without a valid revenue purpose 34 statement shall expend the revenues received for the following 35 -15- LSB 1461SV (4) 90 md/jh 15/ 91
S.F. 550 purposes in the order prescribed in this subsection, except 1 that the payment of bonds for which the revenues have been 2 pledged shall be paid first: 3 a. Reduction of the countys basic levies under section 4 331.423 or reduction of the city general fund levy under 5 section 384.1, as applicable. 6 b. Reduction of any debt service levy of the county or city, 7 as applicable. 8 c. Reduction of the citys additional taxes levied under 9 section 384.12 or the countys supplemental levies under 10 section 331.424, as applicable. 11 d. Reduction of any other property tax levy of the county 12 or city, as applicable. 13 Sec. 43. NEW SECTION . 423B.1A Local use tax supplement 14 fund. 15 1. A local use tax supplement fund is created in the state 16 treasury under the control of the department of revenue. The 17 fund shall consist of all moneys transferred under section 18 423.43, subsection 1, paragraph b , subparagraph (1), 19 subparagraph division (a), and moneys appropriated to the fund. 20 2. Moneys in the local use tax supplement fund are annually 21 appropriated to the department of revenue and shall be used for 22 supplement payments to cities and counties under this section. 23 3. For each year during the period beginning January 1, 24 2025, through December 31, 2043, each city or county for the 25 unincorporated portion of the county, shall receive a local 26 use tax supplement payment equal to the difference, but not 27 less than zero between the amount of revenue received by the 28 city or county under section 423B.7, Code 2023, for the period 29 beginning January 1, 2024, and ending December 31, 2024, minus 30 the amount that would have been received by that city or county 31 for that period if all cities and the county were eligible for 32 distributions of such revenues under section 423B.7, Code 2023. 33 If moneys in the fund are insufficient to pay all supplement 34 amounts for the year, the director of revenue shall prorate the 35 -16- LSB 1461SV (4) 90 md/jh 16/ 91
S.F. 550 payment of the supplement payments and shall notify the cities 1 and counties of the pro rata percentage. 2 4. The supplement payment calculated under subsection 3 3 shall be paid to each city or county for the unincorporated 4 area of the county and shall be combined with and be used in the 5 same manner and be subject to the same requirements as moneys 6 received by the city or county under section 423B.7 for that 7 year. 8 5. Notwithstanding section 12C.7, subsection 2, interest or 9 earnings on moneys deposited in the local use tax supplement 10 fund shall be credited to the local use tax supplement fund. 11 Notwithstanding section 8.33, moneys credited to the local use 12 tax supplement fund shall not revert at the close of a fiscal 13 year. 14 6. This section is repealed January 1, 2044. Moneys in the 15 fund upon the repeal of this section shall be transferred to 16 the appropriate county accounts under section 423B.7 for the 17 counties from which the tax was paid. 18 Sec. 44. Section 423B.7, subsection 1, Code 2023, is amended 19 to read as follows: 20 1. a. Except as provided in paragraphs paragraph b and 21 c , the director shall credit the local sales and services tax 22 receipts and interest and penalties from a county-imposed tax 23 as specified in section 423.2A, subsection 2, paragraph a , 24 including any interest and penalties, to the countys account 25 in the local sales and services use tax fund for the county in 26 from which the tax was collected. The director shall credit 27 the use tax receipts as specified in section 423.43, subsection 28 1, paragraph b , subparagraph (1), subparagraph divisions (b) 29 and (c), including any interest and penalties, to the countys 30 account in the local sales and use tax fund for the county 31 from which the use tax was paid. If the director is unable to 32 determine from which county any of the receipts were collected 33 or paid, as applicable , those receipts shall be allocated among 34 the possible counties based on allocation rules adopted by the 35 -17- LSB 1461SV (4) 90 md/jh 17/ 91
S.F. 550 director. 1 b. The director shall credit the designated amount of the 2 increase in local sales and services tax receipts, as computed 3 in section 423B.10 , collected in an urban renewal area of an 4 eligible city that has adopted an ordinance pursuant to section 5 423B.10, subsection 2 , into a special city account in the local 6 sales and services use tax fund. 7 c. The director shall credit the local sales and services 8 tax receipts and interest and penalties from a city-imposed tax 9 under section 423B.1, subsection 2 , to the citys account in 10 the local sales and services tax fund. 11 Sec. 45. Section 423B.7, subsections 2, 3, and 4, Code 2023, 12 are amended to read as follows: 13 2. The director of revenue by the last day of each 14 month shall transfer to each city or county where the local 15 option tax is imposed the amount of tax moneys remitted to 16 the department attributable to each city or county from the 17 preceding month. 18 3. Seventy-five percent of each countys account shall be 19 remitted on the basis of the countys population residing in 20 the unincorporated area where the tax was imposed and those the 21 incorporated areas where the tax was imposed as follows: 22 a. To the board of supervisors a pro rata share based upon 23 the percentage of the above population of the county residing 24 in the unincorporated area of the county where the tax was 25 imposed according to the most recent certified federal census. 26 b. To each city in the county where the tax was imposed 27 a pro rata share based upon the percentage of the citys 28 population residing in the county to the above population of 29 the county according to the most recent certified federal 30 census. 31 c. If a subsequent certified census exists which modifies 32 that most recent certified federal census for a participating 33 jurisdiction under paragraphs a and b , the computations 34 under paragraphs a and b shall utilize the subsequent 35 -18- LSB 1461SV (4) 90 md/jh 18/ 91
S.F. 550 certified census in the distribution formula under rules 1 established by the director of revenue. 2 4. Twenty-five percent of each countys account shall 3 be remitted based on the sum of property tax dollars levied 4 by the board of supervisors if the tax was imposed in the 5 unincorporated areas and by each city in the county where the 6 tax was imposed during the three-year period beginning July 1, 7 1982, and ending June 30, 1985, as follows: 8 a. To the board of supervisors a pro rata share based upon 9 the percentage of the total property tax dollars levied by the 10 board of supervisors during the above three-year period. 11 b. To each city council where the tax was imposed a pro rata 12 share based upon the percentage of property tax dollars levied 13 by the city during the above three-year period of the above 14 total property tax dollars levied by the board of supervisors 15 and each city where the tax was imposed during the above 16 three-year period. 17 Sec. 46. Section 423B.7, subsection 5, Code 2023, is amended 18 by striking the subsection. 19 Sec. 47. Section 423B.7, subsections 6 and 7, Code 2023, are 20 amended to read as follows: 21 6. From each special city account under subsection 1, 22 paragraph b , the sales and services tax revenues shall be 23 remitted to the city council for deposit in the special fund 24 created in section 403.19, subsection 2 , to be used by the city 25 as provided in section 423B.10 . The distribution from the 26 special city account is not subject to the distribution formula 27 provided in subsections 3 , and 4 , and 5 . 28 7. a. Subject to the requirement of paragraph b and the 29 requirements under section 423B.1, subsection 3 , local sales 30 and services tax moneys amounts received by a city or county 31 under this chapter may be expended for any lawful purpose of 32 the city or county, including but not limited to expenses 33 related to providing emergency medical services within the 34 applicable city or county. 35 -19- LSB 1461SV (4) 90 md/jh 19/ 91
S.F. 550 b. Each city located in whole or in part in a qualified 1 county and each qualified county for the unincorporated area 2 for which the imposition of the local sales and services tax 3 in the city or portion thereof or the unincorporated area, as 4 applicable, was revenue purpose statement approved at election 5 on or after January 1, 2019 2025 , shall require the use of 6 not less than fifty percent of the moneys received from the 7 qualified countys account in the local sales and services 8 tax fund applicable county under this chapter for property 9 tax relief. However, for a county with a population of four 10 hundred thousand or more, a revenue purpose statement governing 11 the use of revenues for the unincorporated area of the county 12 approved on or after January 1, 2025, shall require the use of 13 seventy-five percent of the moneys received by the county under 14 this chapter for property tax relief. 15 c. For purposes of this subsection, property tax relief 16 includes payments under a chapter 28E agreement for purposes of 17 a regional transit district if such payments are used to reduce 18 the regional transit district levy under section 28M.5. For a 19 city located in whole or in part in a county with a population 20 of four hundred thousand or more, the use of revenues received 21 under this chapter for the purposes of this paragraph shall 22 not exceed ten percent of the amount received and for a county 23 with a population of four hundred thousand or more, for the 24 unincorporated area, shall not exceed twenty-five percent of 25 the amount received under this chapter. 26 Sec. 48. Section 423B.9, subsection 1, paragraphs b and c, 27 Code 2023, are amended to read as follows: 28 b. Designated portion means the portion of the local 29 option sales and services tax revenues received under this 30 chapter which is authorized to be expended for one or a 31 combination of purposes under an adopted public measure. 32 c. Secondary recipient means a political subdivision of 33 the state which is to receive revenues amounts from a local 34 option sales and services tax revenues under this chapter 35 -20- LSB 1461SV (4) 90 md/jh 20/ 91
S.F. 550 over a period of years pursuant to the terms of a chapter 28E 1 agreement with one or more cities or counties. 2 Sec. 49. Section 423B.9, subsections 2 and 3, Code 2023, are 3 amended to read as follows: 4 2. An issuer of public bonds which is a recipient of 5 revenues from a local option sales and services tax imposed 6 pursuant to this chapter may issue bonds in anticipation of 7 the collection of one or more designated portions of the 8 local option sales and services tax such revenues and may 9 pledge irrevocably an amount of the revenue derived from the 10 designated portions for each of the years the bonds remain 11 outstanding to the payment of the bonds. Bonds may be issued 12 only for one or more of the purposes set forth on the ballot 13 proposition concerning the imposition of the local option sales 14 and services tax in the revenue purpose statement , except bonds 15 shall not be issued which are payable from that portion of tax 16 revenues designated for property tax relief. The bonds may be 17 issued in accordance with the procedures set forth in either 18 subsection 3 or 4 . 19 3. The governing body of an issuer may authorize the 20 issuance of bonds which are payable from the designated portion 21 of the revenues of the local option sales and services tax 22 received under this chapter , and not from property tax, by 23 following the authorization procedures set forth for cities 24 in section 384.83 . Bonds may be issued for the purpose of 25 refunding outstanding and previously issued bonds under this 26 subsection without otherwise complying with the provisions of 27 this subsection . 28 Sec. 50. Section 423B.9, subsection 4, paragraph b, Code 29 2023, is amended to read as follows: 30 b. The provisions of chapter 76 apply to the bonds payable 31 as provided in this subsection , except that the mandatory levy 32 to be assessed pursuant to section 76.2 shall be at a rate 33 to generate an amount which together with the receipts from 34 the pledged designated portion of the local option sales and 35 -21- LSB 1461SV (4) 90 md/jh 21/ 91
S.F. 550 services tax revenues received under this chapter is sufficient 1 to pay the interest and principal on the bonds. All amounts 2 collected as a result of the levy assessed pursuant to section 3 76.2 and paid out in the first instance for bond principal 4 and interest shall be repaid to the bond issuer which levied 5 the tax from the first available designated portion of local 6 option sales and services tax collections revenues received 7 under this chapter in excess of the requirement for the payment 8 of the principal and interest of the bonds and when repaid 9 shall be applied in reduction of property taxes. The amount 10 of bonds which may be issued under section 76.3 shall be the 11 amount which could be retired from the actual collections of 12 the designated portions of the local option sales and services 13 tax revenues received under this chapter for the last four 14 calendar quarters, as certified by the director of revenue. 15 The amount of tax revenues pledged jointly by other cities or 16 counties may be considered for the purpose of determining the 17 amount of bonds which may be issued. If the local option sales 18 and services tax has been in effect revenues have been received 19 under this chapter for less than four calendar quarters, the 20 tax collected revenues received within the shorter period may 21 be adjusted to project the collections amount of the designated 22 portion for the full year for the purpose of determining the 23 amount of the bonds which may be issued. The provisions of 24 this section constitute separate authorization for the issuance 25 of bonds and shall prevail in the event of conflict with 26 any other provision of the Code limiting the amount of bonds 27 which may be issued or the source of payment of the bonds. 28 Bonds issued under this section shall not limit or restrict 29 the authority of the bond issuer to issue bonds under other 30 provisions of the Code. 31 Sec. 51. Section 423B.9, subsection 5, Code 2023, is amended 32 to read as follows: 33 5. A city or county, jointly with one or more other 34 political subdivisions as provided in chapter 28E , may pledge 35 -22- LSB 1461SV (4) 90 md/jh 22/ 91
S.F. 550 irrevocably any amount derived from the designated portions 1 of the revenues of the local option sales and services tax 2 received under this chapter to the support or payment of bonds 3 of an issuer, issued for one or more purposes set forth on 4 the ballot proposition concerning the imposition of the local 5 option sales and services tax in the revenue purpose statement 6 or a political subdivision may apply the proceeds of its bonds 7 to the support of any such purpose. 8 Sec. 52. Section 423B.10, subsection 1, paragraph b, Code 9 2023, is amended to read as follows: 10 b. Eligible city means a city in which a local sales and 11 services tax imposed by the county applies or a city described 12 in section 423B.1, subsection 2 , paragraph a , and in which an 13 urban renewal area has been designated. 14 Sec. 53. Section 423B.10, subsections 2, 3, 5, and 6, Code 15 2023, are amended to read as follows: 16 2. a. Upon approval by the board of supervisors of each 17 applicable county pursuant to paragraph b , an eligible city 18 may by ordinance of the city council provide for the use of a 19 designated amount of the increased local sales and services 20 tax revenues collected received under this chapter which are 21 attributable to retail establishments in an urban renewal 22 area to fund urban renewal projects located in the area. The 23 designated amount may be all or a portion of such increased 24 revenues. 25 b. A city shall not adopt an ordinance under paragraph 26 a unless the board of supervisors of each county where the 27 urban renewal area from which such local sales and services 28 tax revenues are to be collected and used to fund urban 29 renewal projects is located first adopts a resolution approving 30 the collection and use of such local sales and services tax 31 revenues. 32 3. To determine the revenue increase for purposes of 33 subsection 2 , revenue amounts shall be calculated by the 34 department of revenue as follows: 35 -23- LSB 1461SV (4) 90 md/jh 23/ 91
S.F. 550 a. Determine the amount of local sales and services tax 1 revenue collected and attributable to a one percent sales and 2 services tax from retail establishments located in the area 3 comprising the urban renewal area during the base year. 4 b. Determine the current year one percent sales and services 5 tax revenue amount for each fiscal year following the base year 6 in the manner specified in paragraph a . 7 c. The excess of the amount determined in paragraph b over 8 the base year revenue amount determined in paragraph a is the 9 increase in the local sales and services tax revenues of which 10 the designated amount is to be deposited in the special city 11 account created in section 423B.7, subsection 6 . 12 5. In addition to the moneys received pursuant to the 13 ordinance authorized under subsection 2 , an eligible city 14 may deposit any other local sales and services tax revenues 15 received by it the city pursuant to the distribution formula in 16 section 423B.7, subsections 3, 4, and 5 , to the special fund 17 described in section 403.19, subsection 2 . 18 6. For purposes of this section , the eligible city shall 19 assist the department of revenue in identifying retail 20 establishments in the urban renewal area that are collecting 21 the local sales and services tax. This process shall be 22 ongoing until the ordinance is repealed. 23 Sec. 54. REPEAL. Sections 423B.2, 423B.3, 423B.4, 423B.5, 24 423B.6, and 423B.8, Code 2023, are repealed. 25 Sec. 55. EFFECTIVE DATE. This division of this Act takes 26 effect January 1, 2025. 27 DIVISION IV 28 HOMESTEAD PROPERTY TAX CREDIT 29 Sec. 56. Section 2.48, subsection 3, paragraph f, 30 subparagraph (1), Code 2023, is amended to read as follows: 31 (1) The homestead tax exemption and credit under chapter 32 425 . 33 Sec. 57. Section 25B.7, subsection 2, paragraph a, Code 34 2023, is amended by striking the paragraph. 35 -24- LSB 1461SV (4) 90 md/jh 24/ 91
S.F. 550 Sec. 58. Section 100.18, subsection 2, paragraph b, Code 1 2023, is amended to read as follows: 2 b. The rules shall require the installation of smoke 3 detectors in existing single-family rental units and 4 multiple-unit residential buildings. Existing single-family 5 dwelling units shall be equipped with approved smoke detectors. 6 A person who files for a homestead tax exemption and credit 7 pursuant to chapter 425 shall certify that the single-family 8 dwelling unit for which the credit is filed has a smoke 9 detector installed in compliance with this section , or that one 10 will be installed within thirty days of the date the filing 11 for the credit is made. The state fire marshal shall adopt 12 rules and establish appropriate procedures to administer this 13 subsection . 14 Sec. 59. Section 100.18, subsection 3, paragraph b, Code 15 2023, is amended to read as follows: 16 b. The rules shall require the installation of carbon 17 monoxide alarms in existing single-family rental units and 18 multiple-unit residential buildings that have a fuel-fired 19 heater or appliance, a fireplace, or an attached garage. 20 Existing single-family dwellings that have a fuel-fired heater 21 or appliance, a fireplace, or an attached garage shall be 22 equipped with approved carbon monoxide alarms. For purposes 23 of this paragraph, approved carbon monoxide alarm means a 24 carbon monoxide alarm that meets the standards established by 25 the underwriters laboratories or is approved by the state fire 26 marshal as established by rule under subsection 5 . A person 27 who files for a homestead tax exemption and credit pursuant 28 to chapter 425 shall certify that the single-family dwelling 29 for which the credit is filed and that has a fuel-fired heater 30 or appliance, a fireplace, or an attached garage, has carbon 31 monoxide alarms installed in compliance with this section , 32 or that such alarms will be installed within thirty days of 33 the date the filing for the credit is made. The state fire 34 marshal shall adopt rules and establish appropriate procedures 35 -25- LSB 1461SV (4) 90 md/jh 25/ 91
S.F. 550 to administer this subsection . 1 Sec. 60. Section 103.22, subsection 7, Code 2023, is amended 2 to read as follows: 3 7. Prohibit an owner of property from performing work on the 4 owners principal residence, if such residence is an existing 5 dwelling rather than new construction and is not an apartment 6 that is attached to any other apartment or building, as those 7 terms are defined in section 499B.2 , and is not larger than a 8 single-family dwelling, or require such owner to be licensed 9 under this chapter . In order to qualify for inapplicability 10 pursuant to this subsection , a residence shall qualify for the 11 homestead tax exemption and credit . 12 Sec. 61. Section 105.11, subsection 3, Code 2023, is amended 13 to read as follows: 14 3. Prohibit an owner of property from performing work on the 15 owners principal residence, if such residence is an existing 16 dwelling rather than new construction and is not larger than a 17 single-family dwelling, or farm property, excluding commercial 18 or industrial installations or installations in public use 19 buildings or facilities, or require such owner to be licensed 20 under this chapter . In order to qualify for inapplicability 21 pursuant to this subsection , a residence shall qualify for the 22 homestead tax exemption and credit . 23 Sec. 62. Section 216.12, subsection 1, paragraph e, Code 24 2023, is amended to read as follows: 25 e. The rental or leasing of a housing accommodation in a 26 building which contains housing accommodations for not more 27 than four families living independently of each other, if the 28 owner resides in one of the housing accommodations for which 29 the owner qualifies for the homestead tax exemption and credit 30 under section 425.1 . 31 Sec. 63. Section 321.1, subsection 6C, Code 2023, is amended 32 to read as follows: 33 6C. Bona fide residence or bona fide address means the 34 current street or highway address of an individuals residence. 35 -26- LSB 1461SV (4) 90 md/jh 26/ 91
S.F. 550 The bona fide residence of a person with more than one dwelling 1 is the dwelling for which the person claims a homestead tax 2 exemption and credit under chapter 425 , if applicable. The 3 bona fide residence of a homeless person is a primary nighttime 4 residence meeting one of the criteria listed in section 48A.2, 5 subsection 3 . 6 Sec. 64. Section 321.1A, subsection 1, paragraph a, Code 7 2023, is amended to read as follows: 8 a. The person has filed for a homestead tax exemption and 9 credit on property in this state. 10 Sec. 65. Section 331.401, subsection 1, paragraphs e and f, 11 Code 2023, are amended to read as follows: 12 e. Adopt resolutions authorizing the county assessor 13 to provide forms for homestead tax exemption and credit 14 claimants as provided in section 425.2 and military service tax 15 exemptions as provided in section 426A.14 . 16 f. Examine and allow or disallow claims for homestead tax 17 exemption and credit in accordance with section 425.3 and 18 claims for military service tax exemption in accordance with 19 chapter 426A . The board, by a single resolution, may allow or 20 disallow the exemptions recommended by the assessor. 21 Sec. 66. Section 331.512, subsection 3, Code 2023, is 22 amended to read as follows: 23 3. Carry out duties relating to the homestead tax exemption 24 and credit and agricultural land tax credit as provided in 25 chapters 425 and 426 . 26 Sec. 67. Section 331.559, subsection 12, Code 2023, is 27 amended to read as follows: 28 12. Carry out duties relating to the administration of 29 the homestead tax exemption and credit and other credits as 30 provided in sections 425.4 , 425.5 , 425.7 , 425.9 , 425.10 , and 31 425.25 . 32 Sec. 68. Section 404.3, subsection 1, Code 2023, is amended 33 to read as follows: 34 1. All qualified real estate assessed as residential 35 -27- LSB 1461SV (4) 90 md/jh 27/ 91
S.F. 550 property is eligible to receive an exemption from taxation 1 based on the actual value added by the improvements. The 2 exemption is for a period of ten years. The amount of the 3 exemption is equal to a percent of the actual value added by 4 the improvements, determined as follows: One hundred fifteen 5 percent of the value added by the improvements. However, the 6 amount of the actual value added by the improvements which 7 shall be used to compute the exemption shall not exceed twenty 8 thousand dollars and the granting of the exemption shall not 9 result in the actual value of the qualified real estate being 10 reduced below the actual value on which the homestead credit 11 exemption is computed under section 425.1 . 12 Sec. 69. Section 425.1, subsection 1, paragraph a, Code 13 2023, is amended to read as follows: 14 a. A homestead credit fund is created. There For fiscal 15 years beginning before July 1, 2028, there is appropriated 16 annually from the general fund of the state to the department 17 of revenue to be credited to the homestead credit fund, an 18 amount sufficient to implement this subchapter . 19 Sec. 70. Section 425.1, subsection 1, Code 2023, is amended 20 by adding the following new paragraph: 21 NEW PARAGRAPH . c. All moneys in the homestead credit fund 22 at the end of the fiscal year beginning July 1, 2028, shall be 23 transferred by the department of revenue for deposit in the 24 general fund of the state. 25 Sec. 71. Section 425.1, subsections 2, 4, and 5, Code 2023, 26 are amended to read as follows: 27 2. a. For fiscal years beginning before July 1, 2028, the 28 moneys in the homestead credit fund shall be apportioned each 29 year so as to give a credit against the tax on each eligible 30 homestead in the state, but not more than the amount under 31 paragraph b . 32 b. (1) The For assessment years beginning before July 33 1, 2025, the homestead credit fund shall be apportioned each 34 year so as to give a credit against the tax on each eligible 35 -28- LSB 1461SV (4) 90 md/jh 28/ 91
S.F. 550 homestead in the state in an amount equal to the actual levy on 1 the first four thousand eight hundred fifty dollars of actual 2 value for each homestead. 3 (2) For property taxes due and payable in the fiscal year 4 beginning July 1, 2025, the homestead credit fund shall be 5 apportioned each year so as to give a credit against the tax 6 on each eligible homestead in the state in an amount equal 7 to the actual levy on the first three thousand six hundred 8 forty dollars of actual value for each homestead exempted under 9 section 425.1A. 10 (3) For property taxes due and payable in the fiscal year 11 beginning July 1, 2026, the homestead credit fund shall be 12 apportioned each year so as to give a credit against the tax 13 on each eligible homestead in the state in an amount equal to 14 the actual levy on the first two thousand four hundred thirty 15 dollars of actual value for each homestead exempted under 16 section 425.1A. 17 (4) For property taxes due and payable in the fiscal year 18 beginning July 1, 2027, the homestead credit fund shall be 19 apportioned each year so as to give a credit against the tax 20 on each eligible homestead in the state in an amount equal to 21 the actual levy on the first one thousand two hundred twenty 22 dollars of actual value for each homestead exempted under 23 section 425.1A. 24 4. Annually For fiscal years beginning before July 1, 2028, 25 annually the department of revenue shall certify to the county 26 auditor of each county the credit and its amount in dollars. 27 Each county auditor shall then enter the credit against the 28 tax levied on each eligible homestead in each county payable 29 during the ensuing year, designating on the tax lists the 30 credit as being from the homestead credit fund, and credit 31 shall then be given to the several taxing districts in which 32 eligible homesteads are located in an amount equal to the 33 credits allowed on the taxes of the homesteads. The amount of 34 credits shall be apportioned by each county treasurer to the 35 -29- LSB 1461SV (4) 90 md/jh 29/ 91
S.F. 550 several taxing districts as provided by law, in the same manner 1 as though the amount of the credit had been paid by the owners 2 of the homesteads. However, the several taxing districts shall 3 not draw the funds so credited until after the semiannual 4 allocations have been received by the county treasurer, as 5 provided in this subchapter . Each county treasurer shall show 6 on each tax receipt the amount of credit received from the 7 homestead credit fund. 8 5. If For property taxes due and payable in fiscal years 9 beginning before July 1, 2028, if the homestead tax credit 10 computed under this section is less than sixty-two dollars 11 and fifty cents, the amount of homestead tax credit on that 12 eligible homestead shall be sixty-two dollars and fifty cents 13 subject to the limitation imposed in this section . 14 Sec. 72. NEW SECTION . 425.1A Homestead tax exemption. 15 The following exemptions from taxation shall be allowed: 16 1. a. Except as provided in paragraph b , for the 17 assessment year beginning January 1, 2024, the eligible 18 homestead, not to exceed two thousand five hundred dollars in 19 taxable value. 20 b. If the owner of the homestead has attained the age of 21 sixty-five years by January 1 of the assessment year, the 22 eligible homestead, not to exceed four thousand one hundred 23 twenty-five dollars in taxable value. 24 2. a. Except as provided in paragraph b , for the 25 assessment year beginning January 1, 2025, the eligible 26 homestead, not to exceed five thousand dollars in taxable 27 value. 28 b. If the owner of the homestead has attained the age of 29 sixty-five years by January 1 of the assessment year, the 30 eligible homestead, not to exceed eight thousand two hundred 31 fifty dollars in taxable value. 32 3. a. Except as provided in paragraph b , for the 33 assessment year beginning January 1, 2026, the eligible 34 homestead, not to exceed seven thousand five hundred dollars 35 -30- LSB 1461SV (4) 90 md/jh 30/ 91
S.F. 550 in taxable value. 1 b. If the owner of the homestead has attained the age of 2 sixty-five years by January 1 of the assessment year, the 3 eligible homestead, not to exceed twelve thousand three hundred 4 seventy-five dollars in taxable value. 5 4. a. Except as provided in paragraph b , for the 6 assessment year beginning January 1, 2027, and each succeeding 7 assessment year, the eligible homestead, not to exceed ten 8 thousand dollars in taxable value. 9 b. If the owner of the homestead has attained the age of 10 sixty-five years by January 1 of the assessment year, the 11 eligible homestead, not to exceed sixteen thousand five hundred 12 dollars in taxable value. 13 Sec. 73. Section 425.2, subsections 1, 2, 4, and 5, Code 14 2023, are amended to read as follows: 15 1. A person who wishes to qualify for the homestead 16 exemption and credit allowed under this subchapter shall 17 obtain the appropriate forms for filing for the exemption and 18 credit from the assessor. The person claiming the exemption 19 and credit shall file a verified statement and designation of 20 homestead with the assessor for the year for which the person 21 is first claiming the exemption and credit. The claim shall be 22 filed not later than July 1 of the year for which the person is 23 claiming the exemption and credit. A claim filed after July 1 24 of the year for which the person is claiming the exemption and 25 credit shall be considered as a claim filed for the following 26 year. 27 2. Upon the filing and allowance of the claim, the claim 28 shall be allowed on that homestead for successive years without 29 further filing as long as the property is legally or equitably 30 owned and used as a homestead by that person or that persons 31 spouse on July 1 of each of those successive years, and the 32 owner of the property being claimed as a homestead declares 33 residency in Iowa for purposes of income taxation, and the 34 property is occupied by that person or that persons spouse 35 -31- LSB 1461SV (4) 90 md/jh 31/ 91
S.F. 550 for at least six months in each of those calendar years in 1 which the fiscal year begins. When the property is sold or 2 transferred, the buyer or transferee who wishes to qualify 3 shall refile for the exemption and credit. However, when the 4 property is transferred as part of a distribution made pursuant 5 to chapter 598 , the transferee who is the spouse retaining 6 ownership of the property is not required to refile for the 7 exemption and credit. Property divided pursuant to chapter 598 8 shall not be modified following the division of the property. 9 An owner who ceases to use a property for a homestead or 10 intends not to use it as a homestead for at least six months in 11 a calendar year shall provide written notice to the assessor 12 by July 1 following the date on which the use is changed. A 13 person who sells or transfers a homestead or the personal 14 representative of a deceased person who had a homestead at the 15 time of death, shall provide written notice to the assessor 16 that the property is no longer the homestead of the former 17 claimant. 18 4. Any person sixty-five years of age or older or any person 19 who is disabled may request, in writing, from the appropriate 20 assessor forms for filing for homestead tax exemption and 21 credit. Any person sixty-five years of age or older or who is 22 disabled may complete the form, which shall include a statement 23 of homestead, and mail or return it to the appropriate 24 assessor. The signature of the claimant on the statement shall 25 be considered the claimants acknowledgment that all statements 26 and facts entered on the form are correct to the best of the 27 claimants knowledge. 28 5. Upon adoption of a resolution by the county board of 29 supervisors, any person may request, in writing, from the 30 appropriate assessor forms for the filing for homestead tax 31 exemption and credit. The person may complete the form, which 32 shall include a statement of homestead, and mail or return it 33 to the appropriate assessor. The signature of the claimant on 34 the statement of homestead shall be considered the claimants 35 -32- LSB 1461SV (4) 90 md/jh 32/ 91
S.F. 550 acknowledgment that all statements and facts entered on the 1 form are correct to the best of the claimants knowledge. 2 Sec. 74. Section 425.3, subsection 4, Code 2023, is amended 3 to read as follows: 4 4. The county auditor shall forward the claims to the board 5 of supervisors. The board shall allow or disallow the claims. 6 If the board disallows a claim, it shall send written notice, 7 by mail, to the claimant at the claimants last known address. 8 The notice shall state the reasons for disallowing the claim 9 for the credit . The board is not required to send notice that 10 a claim is disallowed if the claimant voluntarily withdraws the 11 claim. 12 Sec. 75. Section 425.4, Code 2023, is amended to read as 13 follows: 14 425.4 Certification to treasurer. 15 All claims which have been allowed by the board of 16 supervisors shall be certified on or before August 1, in each 17 year, by the county auditor to the county treasurer, which 18 certificates shall list the total amount of dollars, listed by 19 taxing district in the county, due for homestead tax exemptions 20 and credits claimed and allowed. The county treasurer shall 21 forthwith then certify to the department of revenue the total 22 amount of dollars, listed by taxing district in the county, due 23 for homestead tax exemptions and credits claimed and allowed. 24 Sec. 76. Section 425.6, Code 2023, is amended to read as 25 follows: 26 425.6 Waiver by neglect. 27 If a person fails to file a claim or to have a claim on file 28 with the assessor for the credits provided in this subchapter , 29 the person is deemed to have waived the homestead exemption 30 and credit for the year in which the person failed to file the 31 claim or to have a claim on file with the assessor. 32 Sec. 77. Section 425.7, subsection 3, Code 2023, is amended 33 to read as follows: 34 3. a. If the department of revenue determines that a claim 35 -33- LSB 1461SV (4) 90 md/jh 33/ 91
S.F. 550 for homestead exemption and credit has been allowed by the 1 board of supervisors which is not justifiable under the law 2 and not substantiated by proper facts, the department may, at 3 any time within thirty-six months from July 1 of the year in 4 which the claim is allowed, set aside the allowance. Notice 5 of the disallowance shall be given to the county auditor of 6 the county in which the claim has been improperly granted and 7 a written notice of the disallowance shall also be addressed 8 to the claimant at the claimants last known address. The 9 claimant or board of supervisors may appeal to the director 10 of revenue within thirty days from the date of the notice of 11 disallowance. The director shall grant a hearing and if, upon 12 the hearing, the director determines that the disallowance was 13 incorrect, the director shall set aside the disallowance. The 14 director shall notify the claimant and the board of supervisors 15 of the result of the hearing. The claimant or the board of 16 supervisors may seek judicial review of the action of the 17 director of revenue in accordance with chapter 17A . 18 b. If a claim is disallowed by the department of revenue 19 and not appealed to the director of revenue or appealed to 20 the director of revenue and thereafter upheld upon final 21 resolution, including any judicial review, any amounts of 22 exemptions allowed and credits allowed and paid from the 23 homestead credit fund including the penalty, if any, become a 24 lien upon the property on which the exemption and credit was 25 originally granted, if still in the hands of the claimant, 26 and not in the hands of a bona fide purchaser, and any amount 27 so erroneously paid including the penalty, if any, shall be 28 collected by the county treasurer in the same manner as other 29 taxes and the collections shall be returned to the department 30 of revenue and credited to the homestead credit fund. The 31 director of revenue may institute legal proceedings against a 32 homestead credit claimant for the collection of payments made 33 on disallowed credits and the penalty, if any. If a person 34 makes a false claim or affidavit with fraudulent intent to 35 -34- LSB 1461SV (4) 90 md/jh 34/ 91
S.F. 550 obtain the homestead exemption and credit, the person is guilty 1 of a fraudulent practice and the claim shall be disallowed in 2 full. If the credit has been paid, the amount of the credit 3 plus a penalty equal to twenty-five percent of the amount of 4 credit plus interest, at the rate in effect under section 5 421.7 , from the time of payment shall be collected by the 6 county treasurer in the same manner as other property taxes, 7 penalty, and interest are collected and when collected shall 8 be paid to the director of revenue. If a homestead exemption 9 and credit is disallowed and the claimant failed to give 10 written notice to the assessor as required by section 425.2 11 when the property ceased to be used as a homestead by the 12 claimant, a civil penalty equal to five percent of the amount 13 of the disallowed exemption or credit is assessed against the 14 claimant. 15 Sec. 78. Section 425.8, subsection 1, Code 2023, is amended 16 to read as follows: 17 1. The director of revenue shall prescribe the form 18 for the making of a verified statement and designation of 19 homestead, the form for the supporting affidavits required 20 herein, and such other forms as may be necessary for the proper 21 administration of this subchapter . Whenever necessary, the 22 department of revenue shall forward to the county auditors of 23 the several counties in the state the prescribed sample forms, 24 and the county auditors shall furnish blank forms prepared 25 in accordance therewith with the assessment rolls, books, 26 and supplies delivered to the assessors. The department of 27 revenue shall prescribe and the county auditors shall provide 28 on the forms for claiming the homestead exemption and credit a 29 statement to the effect that the owner realizes that the owner 30 must give written notice to the assessor when the owner changes 31 the use of the property. 32 Sec. 79. Section 425.9, subsections 2, 3, and 4, Code 2023, 33 are amended to read as follows: 34 2. If any claim for exemption and credit made hereunder 35 -35- LSB 1461SV (4) 90 md/jh 35/ 91
S.F. 550 has been denied by the board of supervisors, and such action 1 is subsequently reversed on appeal, the exemption and credit 2 shall be allowed on the homestead involved in said appeal, and 3 the director of revenue, the county auditor, and the county 4 treasurer shall make such exemption and credit and change their 5 books and records accordingly. 6 3. In the event the appealing taxpayer has paid one or both 7 of the installments of the tax payable in the year or years in 8 question on such homestead valuation, remittance shall be made 9 to such taxpayer of the amount of such credit or exemption . 10 4. The amount of such credit shall be allocated and paid 11 from the surplus redeposited in the homestead credit fund 12 provided for in subsection 1 . The amount of such exemption not 13 covered by the credit shall be allowed as a credit on future 14 taxes due and payable. 15 Sec. 80. Section 425.10, Code 2023, is amended to read as 16 follows: 17 425.10 Reversal of allowed claim. 18 In the event any claim is allowed, and subsequently reversed 19 on appeal, any exemption and credit made under the claim 20 shall be void. The amount of the erroneous exemption and 21 credit shall be charged against the property in question, and 22 the director of revenue, the county auditor, and the county 23 treasurer are authorized and directed to correct their books 24 and records accordingly. The amount of the erroneous credit, 25 when collected, shall be returned by the county treasurer to 26 the homestead credit fund to be reallocated the following year 27 as provided in this subchapter . 28 Sec. 81. Section 425.11, subsection 1, paragraph d, 29 subparagraph (1), unnumbered paragraph 1, Code 2023, is amended 30 to read as follows: 31 The homestead includes the dwelling house which the owner, 32 in good faith, is occupying as a home on July 1 of the year for 33 which the exemption and credit is claimed and occupies as a 34 home for at least six months during the calendar year in which 35 -36- LSB 1461SV (4) 90 md/jh 36/ 91
S.F. 550 the fiscal year begins, except as otherwise provided. 1 Sec. 82. Section 425.11, subsection 1, paragraph d, 2 subparagraph (3), Code 2023, is amended to read as follows: 3 (3) It must not embrace more than one dwelling house, but 4 where a homestead has more than one dwelling house situated 5 thereon, the exemption and credit provided for in this 6 subchapter shall apply to the home and buildings used by the 7 owner, but shall not apply to any other dwelling house and 8 buildings appurtenant. 9 Sec. 83. Section 425.11, subsection 1, paragraph e, Code 10 2023, is amended to read as follows: 11 e. Owner means the person who holds the fee simple 12 title to the homestead, and in addition shall mean the person 13 occupying as a surviving spouse or the person occupying under 14 a contract of purchase which contract has been recorded in 15 the office of the county recorder of the county in which the 16 property is located; or the person occupying the homestead 17 under devise or by operation of the inheritance laws where 18 the whole interest passes or where the divided interest is 19 shared only by persons related or formerly related to each 20 other by blood, marriage or adoption; or the person occupying 21 the homestead is a shareholder of a family farm corporation 22 that owns the property; or the person occupying the homestead 23 under a deed which conveys a divided interest where the divided 24 interest is shared only by persons related or formerly related 25 to each other by blood, marriage or adoption; or where the 26 person occupying the homestead holds a life estate with the 27 reversion interest held by a nonprofit corporation organized 28 under chapter 504 , provided that the holder of the life estate 29 is liable for and pays property tax on the homestead; or where 30 the person occupying the homestead holds an interest in a 31 horizontal property regime under chapter 499B , regardless 32 of whether the underlying land committed to the horizontal 33 property regime is in fee or as a leasehold interest, provided 34 that the holder of the interest in the horizontal property 35 -37- LSB 1461SV (4) 90 md/jh 37/ 91
S.F. 550 regime is liable for and pays property tax on the homestead; 1 or where the person occupying the homestead is a member of a 2 community land trust as defined in 42 U.S.C. 12773, regardless 3 of whether the underlying land is in fee or as a leasehold 4 interest, provided that the member of the community land trust 5 is occupying the homestead and is liable for and pays property 6 tax on the homestead. For the purpose of this subchapter , 7 the word owner shall be construed to mean a bona fide owner 8 and not one for the purpose only of availing the person of 9 the benefits of this subchapter . In order to qualify for the 10 homestead tax exemption and credit, evidence of ownership shall 11 be on file in the office of the clerk of the district court 12 or recorded in the office of the county recorder at the time 13 the owner files with the assessor a verified statement of the 14 homestead claimed by the owner as provided in section 425.2 . 15 Sec. 84. Section 425.12, Code 2023, is amended to read as 16 follows: 17 425.12 Indian land. 18 Each forty acres of land, or fraction thereof, occupied by 19 a member or members of the Sac and Fox Indians in Tama county, 20 which land is held in trust by the secretary of the interior of 21 the United States for said Indians, shall be given a homestead 22 tax exemption and credit within the meaning and under the 23 provisions of this subchapter . Application for such homestead 24 tax exemption and credit shall be made to the county auditor of 25 Tama county and may be made by a representative of the tribal 26 council. 27 Sec. 85. Section 425.13, Code 2023, is amended to read as 28 follows: 29 425.13 Conspiracy to defraud. 30 If any two or more persons conspire and confederate together 31 with fraudulent intent to obtain the exemption and credit 32 provided for under the terms of this subchapter by making a 33 false deed, or a false contract of purchase, they are guilty of 34 a fraudulent practice. 35 -38- LSB 1461SV (4) 90 md/jh 38/ 91
S.F. 550 Sec. 86. Section 425.15, subsection 1, unnumbered paragraph 1 1, Code 2023, is amended to read as follows: 2 If the owner of a homestead allowed a an exemption and credit 3 under this subchapter is any of the following, the exemption 4 shall be the total actual value of the homestead and, for 5 fiscal years for which credits are paid, the credit allowed 6 on the homestead from the homestead credit fund shall be the 7 entire amount of the tax levied on the homestead: 8 Sec. 87. Section 425.15, subsections 2, 3, and 4, Code 2023, 9 are amended to read as follows: 10 2. a. For an owner described in subsection 1 , paragraph 11 a , b , or c , the exemption and credit allowed shall be 12 continued to the estate of an owner who is deceased or the 13 surviving spouse and any child, as defined in section 234.1 , 14 who are the beneficiaries of a deceased owner, so long as the 15 surviving spouse remains unmarried. 16 b. An individual described in subsection 1 , paragraph 17 d , is no longer eligible for the exemption and credit upon 18 termination of dependency and indemnity compensation under 38 19 U.S.C. 1301 et seq. 20 3. An owner or a beneficiary of an owner who elects to 21 secure the exemption and credit provided in this section is not 22 eligible for any other real property tax exemption provided by 23 law for veterans of military service. 24 4. If an owner acquires a different homestead, the exemption 25 and credit allowed under this section may be claimed on the new 26 homestead unless the owner fails to meet the other requirements 27 of this section . 28 Sec. 88. Section 425.15, subsection 5, paragraph a, Code 29 2023, is amended to read as follows: 30 a. Except as provided in paragraph b , the list of the 31 names and addresses of individuals allowed a an exemption 32 and credit under this section and maintained by the county 33 recorder, county treasurer, county assessor, city assessor, or 34 other government body is confidential information and shall 35 -39- LSB 1461SV (4) 90 md/jh 39/ 91
S.F. 550 not be disseminated to any person unless otherwise ordered by 1 a court or released by the lawful custodian of the records 2 pursuant to state or federal law. The county recorder, county 3 treasurer, county assessor, city assessor, or other government 4 body responsible for maintaining the names and addresses of 5 individuals allowed a an exemption and credit under this 6 section may display such exemption and credit on individual 7 paper records and individual electronic records, including 8 display on an internet site. 9 Sec. 89. Section 425.16, subsection 1, Code 2023, is amended 10 to read as follows: 11 1. In addition to the homestead tax credit allowed under 12 section 425.1, subsections 1 through 4 , and the homestead 13 exemption under section 425.lA, persons who own or rent their 14 homesteads and who meet the qualifications provided in this 15 subchapter are eligible for a property tax credit for property 16 taxes due or reimbursement of rent constituting property taxes 17 paid. 18 Sec. 90. Section 425.17, subsection 8, Code 2023, is amended 19 to read as follows: 20 8. Property taxes due means property taxes including any 21 special assessments, but exclusive of delinquent interest and 22 charges for services, due on a claimants homestead in this 23 state, but includes only property taxes for which the claimant 24 is liable and which will actually be paid by the claimant. 25 However, if the claimant is a person whose property taxes have 26 been suspended under sections 427.8 and 427.9 , property taxes 27 due means property taxes including any special assessments, 28 but exclusive of delinquent interest and charges for services, 29 due on a claimants homestead in this state, but includes only 30 property taxes for which the claimant is liable and which 31 would have to be paid by the claimant if the payment of the 32 taxes has not been suspended pursuant to sections 427.8 and 33 427.9 . Property taxes due shall be computed with no deduction 34 for any credit under this subchapter or for any homestead 35 -40- LSB 1461SV (4) 90 md/jh 40/ 91
S.F. 550 exemption or credit allowed under section 425.1 . Each claim 1 shall be based upon the taxes due during the fiscal year next 2 following the base year. If a homestead is owned by two or 3 more persons as joint tenants or tenants in common, and one or 4 more persons are not members of claimants household, property 5 taxes due is that part of property taxes due on the homestead 6 which equals the ownership percentage of the claimant and the 7 claimants household. The county treasurer shall include with 8 the tax receipt a statement that if the owner of the property 9 is eighteen years of age or over, the person may be eligible 10 for the credit allowed under this subchapter . If a homestead 11 is an integral part of a farm, the claimant may use the total 12 property taxes due for the larger unit. If a homestead is an 13 integral part of a multidwelling or multipurpose building the 14 property taxes due for the purpose of this subsection shall be 15 prorated to reflect the portion which the value of the property 16 that the household occupies as its homestead is to the value 17 of the entire structure. For purposes of this subsection , 18 unit refers to that parcel of property covered by a single tax 19 statement of which the homestead is a part. 20 Sec. 91. Section 435.26, subsection 1, paragraph a, Code 21 2023, is amended to read as follows: 22 a. A mobile home or manufactured home which is located 23 outside a manufactured home community or mobile home park shall 24 be converted to real estate by being placed on a permanent 25 foundation and shall be assessed for real estate taxes. A 26 home, after conversion to real estate, is eligible for the 27 homestead tax exemption and credit and the military service tax 28 exemption as provided in sections 425.2 and 426A.11 . A taxable 29 mobile home or manufactured home which is located outside 30 of a manufactured home community or mobile home park as of 31 January 1, 1995, is also exempt from the permanent foundation 32 requirements of this chapter until the home is relocated. 33 Sec. 92. Section 435.26A, subsection 3, Code 2023, is 34 amended to read as follows: 35 -41- LSB 1461SV (4) 90 md/jh 41/ 91
S.F. 550 3. After the surrender of a manufactured homes certificate 1 of title under this section , the manufactured home shall 2 continue to be taxed under section 435.22 and is not eligible 3 for the homestead tax exemption and credit or the military 4 service tax exemption and credit . A foreclosure action on a 5 manufactured home whose title has been surrendered under this 6 section shall be conducted as a real estate foreclosure. A tax 7 lien and its priority shall remain the same on a manufactured 8 home after its certificate of title has been surrendered. 9 Sec. 93. Section 483A.24, subsection 19, Code 2023, is 10 amended to read as follows: 11 19. Upon payment of a fee established by rules adopted 12 pursuant to section 483A.1 for a lifetime trout fishing 13 license, the department shall issue a lifetime trout fishing 14 license to a person who is at least sixty-five years of age or 15 to a person who qualifies for the disabled veteran homestead 16 exemption and credit under section 425.15 . The department 17 shall prepare an application to be used by a person requesting 18 a lifetime trout fishing license under this subsection . 19 Sec. 94. Section 499A.14, Code 2023, is amended to read as 20 follows: 21 499A.14 Taxation. 22 The real estate shall be taxed in the name of the 23 cooperative, and each member of the cooperative shall pay 24 that members proportionate share of the tax in accordance 25 with the proration formula set forth in the bylaws, and each 26 member occupying an apartment as a residence shall receive 27 that members proportionate homestead tax exemption and credit 28 and each veteran of the military services of the United States 29 identified as such under the laws of the state of Iowa or the 30 United States shall receive as a credit that members veterans 31 tax benefit as prescribed by the laws of the state of Iowa. 32 Sec. 95. EXISTING HOMESTEAD CLAIMS. Homestead credit 33 claims approved under chapter 425, subchapter I, prior to and 34 valid on the effective date of this division of this Act shall 35 -42- LSB 1461SV (4) 90 md/jh 42/ 91
S.F. 550 result in a homestead exemption under chapter 425, subchapter 1 I, as enacted in this division of this Act, without further 2 filing by the claimant. 3 Sec. 96. IMPLEMENTATION. Section 25B.7, subsection 1, 4 shall not apply to the property tax exemption provided in this 5 division of this Act. 6 Sec. 97. APPLICABILITY. This division of this Act applies 7 to assessment years beginning on or after January 1, 2024. 8 DIVISION V 9 ELDERLY PROPERTY TAX CREDIT 10 Sec. 98. Section 425.23, subsection 1, paragraph c, 11 subparagraph (2), Code 2023, is amended to read as follows: 12 (2) The difference between the actual amount of net 13 property taxes due on the homestead during the fiscal year next 14 following the base year minus the actual amount of net property 15 taxes due on the homestead during the first fiscal year for 16 which the claimant filed a claim for a credit calculated under 17 this paragraph c and for which the property taxes due on the 18 homestead were calculated on an assessed valuation that was 19 not a partial assessment and if the claimant has filed for the 20 credit calculated under this paragraph c for each of the 21 subsequent fiscal years after the first credit claimed. 22 Sec. 99. Section 425.23, subsection 2, Code 2023, is amended 23 to read as follows: 24 2. a. The Except as provided in paragraph b , the 25 actual credit for property taxes due shall be determined 26 by subtracting from the tentative credit the amount of the 27 homestead credit under section 425.1 which is allowed as a 28 credit against property taxes due in the fiscal year next 29 following the base year by the claimant or any person of 30 the claimants household. If the subtraction produces a 31 negative amount, there shall be no credit but no refund shall 32 be required. The actual reimbursement for rent constituting 33 property taxes paid shall be equal to the tentative 34 reimbursement. 35 -43- LSB 1461SV (4) 90 md/jh 43/ 91
S.F. 550 b. If the claimants tentative credit is the amount 1 determined under subsection 1, paragraph c , subparagraph (2), 2 the actual credit amount shall be equal to the tentative credit 3 amount. 4 Sec. 100. EFFECTIVE DATE. This division of this Act, being 5 deemed of immediate importance, takes effect upon enactment. 6 Sec. 101. RETROACTIVE APPLICABILITY. This division of 7 this Act applies retroactively to claims under chapter 425, 8 subchapter II, filed on or after January 1, 2022. 9 DIVISION VI 10 MILITARY SERVICE PROPERTY TAX EXEMPTION AND CREDIT 11 Sec. 102. Section 25B.7, subsection 2, paragraph c, Code 12 2023, is amended by striking the paragraph. 13 Sec. 103. Section 426A.1A, Code 2023, is amended to read as 14 follows: 15 426A.1A Appropriation. 16 There For each fiscal year beginning before July 1, 2026, 17 there is appropriated from the general fund of the state the 18 amounts necessary to fund the credits provided under this 19 chapter . 20 Sec. 104. Section 426A.2, Code 2023, is amended to read as 21 follows: 22 426A.2 Military service tax credit. 23 The For each fiscal year beginning before July 1, 2026, the 24 moneys appropriated under section 426A.1A shall be apportioned 25 each year so as to replace all or a portion of the tax which 26 would be due on property eligible for military service tax 27 exemption in the state, if the property were subject to 28 taxation, the amount of the credit to be not more than six 29 dollars and ninety-two cents per thousand dollars of assessed 30 value of property , not to exceed nine hundred forty-five 31 dollars, which would be subject to the tax, except for the 32 military service tax exemption. 33 Sec. 105. Section 426A.11, subsections 1 and 2, Code 2023, 34 are amended to read as follows: 35 -44- LSB 1461SV (4) 90 md/jh 44/ 91
S.F. 550 1. The property, not to exceed two thousand seven hundred 1 seventy-eight dollars in taxable value for assessment years 2 beginning before January 1, 2024 , of any veteran, as defined in 3 section 35.1 , of World War I. 4 2. a. The property, not to exceed one thousand eight 5 hundred fifty-two dollars in taxable value for assessment years 6 beginning before January 1, 2024 , of an honorably separated, 7 retired, furloughed to a reserve, placed on inactive status, 8 or discharged veteran, as defined in section 35.1, subsection 9 2 , paragraph a or b . 10 b. The property, not to exceed two thousand fifty-five 11 dollars in taxable value for the assessment year beginning 12 January 1, 2024, of an honorably separated, retired, furloughed 13 to a reserve, placed on inactive status, or discharged veteran, 14 as defined in section 35.1, subsection 2, paragraph a or b . 15 c. The property, not to exceed four thousand dollars in 16 taxable value for assessment years beginning on or after 17 January 1, 2025, of an honorably separated, retired, furloughed 18 to a reserve, placed on inactive status, or discharged veteran, 19 as defined in section 35.1, subsection 2, paragraph a or b . 20 Sec. 106. IMPLEMENTATION. Section 25B.7, subsection 1, 21 shall not apply to the property tax exemption provided in this 22 Act. 23 Sec. 107. APPLICABILITY. This division of this Act applies 24 to assessment years beginning on or after January 1, 2024. 25 DIVISION VII 26 PROPERTY TAX ASSESSMENT LIMITATIONS 27 Sec. 108. Section 441.21, subsections 5, 9, and 10, Code 28 2023, are amended to read as follows: 29 5. a. (1) For valuations established as of January 1, 30 1979, property valued by the department of revenue pursuant 31 to chapters 428 , 433 , and 437 , and 438 shall be considered as 32 one class of property and shall be assessed as a percentage 33 of its actual value. The percentage shall be determined by 34 the director of revenue in accordance with the provisions of 35 -45- LSB 1461SV (4) 90 md/jh 45/ 91
S.F. 550 this section . For valuations established as of January 1, 1 1979, the percentage shall be the quotient of the dividend and 2 divisor as defined in this section . The dividend shall be the 3 total actual valuation established for 1978 by the department 4 of revenue, plus ten percent of the amount so determined. 5 The divisor for property valued by the department of revenue 6 pursuant to chapters 428 , 433 , and 437 , and 438 shall be the 7 valuation established for 1978, plus the amount of value added 8 to the total actual value by the revaluation of the property 9 by the department of revenue as of January 1, 1979. For 10 valuations established as of January 1, 1980, property valued 11 by the department of revenue pursuant to chapters 428 , 433 , and 12 437 , and 438 shall be assessed at a percentage of its actual 13 value. The percentage shall be determined by the director of 14 revenue in accordance with the provisions of this section . For 15 valuations established as of January 1, 1980, the percentage 16 shall be the quotient of the dividend and divisor as defined in 17 this section . The dividend shall be the total actual valuation 18 established for 1979 by the department of revenue, plus eight 19 percent of the amount so determined. The divisor for property 20 valued by the department of revenue pursuant to chapters 428 , 21 433 , and 437 , and 438 shall be the valuation established for 22 1979, plus the amount of value added to the total actual 23 value by the revaluation of the property by the department of 24 revenue as of January 1, 1980. For valuations established 25 as of January 1, 1981, and each year thereafter beginning 26 before January 1, 2025 , the percentage of actual value at 27 which property valued by the department of revenue pursuant to 28 chapters 428 , 433 , and 437 , and 438 shall be assessed shall 29 be calculated in accordance with the methods provided herein, 30 except that any references to ten percent in this subsection 31 shall be eight percent. For valuations established on or after 32 January 1, 2013, property valued by the department of revenue 33 pursuant to chapter 434 shall be assessed at a portion of its 34 actual value determined in the same manner at which property 35 -46- LSB 1461SV (4) 90 md/jh 46/ 91
S.F. 550 assessed as commercial property is assessed under paragraph b 1 for the same assessment year. For valuations established for 2 the assessment year beginning January 1, 2025, the percentage 3 of actual value at which property valued by the department of 4 revenue pursuant to chapter 438 shall be assessed shall be 5 ninety-five percent. For valuations established for assessment 6 years beginning on or after January 1, 2026, the percentage 7 of actual value at which property valued by the department of 8 revenue pursuant to chapter 438 shall be assessed shall be 9 ninety percent. 10 (2) (a) For valuations established for the assessment year 11 beginning January 1, 2025, the percentage of actual value at 12 which property valued by the department of revenue pursuant to 13 chapters 428 and 437 shall be assessed shall be ninety-seven 14 and one-half percent. 15 (b) For valuations established for the assessment year 16 beginning January 1, 2026, the percentage of actual value at 17 which property valued by the department of revenue pursuant to 18 chapters 428 and 437 shall be assessed shall be ninety-five 19 percent. 20 (c) For valuations established for the assessment year 21 beginning January 1, 2027, the percentage of actual value at 22 which property valued by the department of revenue pursuant to 23 chapters 428 and 437 shall be assessed shall be ninety-two and 24 one-half percent. 25 (d) For valuations established for the assessment year 26 beginning January 1, 2028, and each assessment year thereafter, 27 the percentage of actual value at which property valued by the 28 department of revenue pursuant to chapters 428 and 437 shall be 29 assessed shall be ninety percent. 30 b. For valuations established on or after January 1, 2013, 31 commercial property, excluding properties referred to in 32 section 427A.1, subsection 9 , shall be assessed at a portion 33 of its actual value, as determined in this paragraph b . For 34 valuations established on or after January 1, 2013, property 35 -47- LSB 1461SV (4) 90 md/jh 47/ 91
S.F. 550 valued by the department of revenue pursuant to chapter 434 1 shall be assessed at a portion of its actual value determined 2 in the same manner at which property assessed as commercial 3 property is assessed for the same assessment year. 4 (1) For valuations established for the assessment year 5 beginning January 1, 2013, the percentage of actual value 6 as equalized by the department of revenue as provided in 7 section 441.49 at which commercial property shall be assessed 8 shall be ninety-five percent. For valuations established 9 for the assessment year beginning January 1, 2014, and each 10 assessment year thereafter beginning before January 1, 2022, 11 the percentage of actual value as equalized by the department 12 of revenue as provided in section 441.49 at which commercial 13 property shall be assessed shall be ninety percent. 14 (2) For valuations established for the assessment year 15 beginning January 1, 2022, and each assessment year thereafter, 16 the portion of actual value at which each property unit of 17 commercial property shall be assessed shall be the sum of the 18 following: 19 (a) An amount equal to the product of the assessment 20 limitation percentage applicable to residential property under 21 subsection 4 for that assessment year multiplied by the actual 22 value of the property that exceeds zero dollars but does not 23 exceed one hundred fifty thousand dollars. 24 (b) (i) An For the assessment years beginning January 1, 25 2022, January 1, 2023, and January 1, 2024, an amount equal 26 to ninety percent of the actual value of the property for 27 that assessment year that exceeds one hundred fifty thousand 28 dollars. 29 (ii) For the assessment year beginning January 1, 2025, 30 an amount equal to eighty-five percent of the actual value of 31 the property for that assessment year that exceeds one hundred 32 fifty thousand dollars. 33 (iii) For the assessment year beginning January 1, 2026, 34 and each assessment year thereafter, an amount equal to eighty 35 -48- LSB 1461SV (4) 90 md/jh 48/ 91
S.F. 550 percent of the actual value of the property for that assessment 1 year that exceeds one hundred fifty thousand dollars. 2 c. For valuations established on or after January 1, 2013, 3 industrial property, excluding properties referred to in 4 section 427A.1, subsection 9 , shall be assessed at a portion of 5 its actual value, as determined in this paragraph c . 6 (1) For valuations established for the assessment year 7 beginning January 1, 2013, the percentage of actual value 8 as equalized by the department of revenue as provided in 9 section 441.49 at which industrial property shall be assessed 10 shall be ninety-five percent. For valuations established 11 for the assessment year beginning January 1, 2014, and each 12 assessment year thereafter beginning before January 1, 2022, 13 the percentage of actual value as equalized by the department 14 of revenue as provided in section 441.49 at which industrial 15 property shall be assessed shall be ninety percent. 16 (2) For valuations established for the assessment year 17 beginning January 1, 2022, and each assessment year thereafter, 18 the portion of actual value at which each property unit of 19 industrial property shall be assessed shall be the sum of the 20 following: 21 (a) An amount equal to the product of the assessment 22 limitation percentage applicable to residential property under 23 subsection 4 for that assessment year multiplied by the actual 24 value of the property that exceeds zero dollars but does not 25 exceed one hundred fifty thousand dollars. 26 (b) (i) An For the assessment years beginning January 1, 27 2022, January 1, 2023, and January 1, 2024, an amount equal 28 to ninety percent of the actual value of the property for 29 that assessment year that exceeds one hundred fifty thousand 30 dollars. 31 (ii) For the assessment year beginning January 1, 2025, 32 an amount equal to eighty-five percent of the actual value of 33 the property for that assessment year that exceeds one hundred 34 fifty thousand dollars. 35 -49- LSB 1461SV (4) 90 md/jh 49/ 91
S.F. 550 (iii) For the assessment year beginning January 1, 2026, 1 and each assessment year thereafter, an amount equal to eighty 2 percent of the actual value of the property for that assessment 3 year that exceeds one hundred fifty thousand dollars. 4 d. For valuations established for the assessment year 5 beginning January 1, 2019, and each assessment year thereafter, 6 the percentages or portions of actual value at which property 7 is assessed, as determined under this subsection , shall not be 8 applied to the value of wind energy conversion property valued 9 under section 427B.26 the construction of which is approved by 10 the Iowa utilities board on or after July 1, 2018. 11 e. (1) For each fiscal year beginning on or after July 1, 12 2023, there is appropriated from the general fund of the state 13 to the department of revenue the sum of one hundred twenty-five 14 million dollars to be used for payments under this paragraph 15 calculated as a result of the assessment limitations imposed 16 under paragraph b , subparagraph (2), subparagraph division 17 (a), and paragraph c , subparagraph (2), subparagraph division 18 (a). 19 (2) For fiscal years beginning on or after July 1, 2023, 20 each county treasurer shall be paid by the department of 21 revenue an amount calculated under subparagraph (4). If an 22 amount appropriated for the fiscal year is insufficient to make 23 all payments as calculated under subparagraph (4), the director 24 of revenue shall prorate the payments to the county treasurers 25 and shall notify the county auditors of the pro rata percentage 26 on or before September 30. 27 (3) On or before July 1 of each fiscal year, the assessor 28 shall report to the county auditor that portion of the total 29 actual value of all commercial property and industrial property 30 in the county that is subject to the assessment limitations 31 imposed under paragraph b , subparagraph (2), subparagraph 32 division (a), and paragraph c , subparagraph (2), subparagraph 33 division (a), for the assessment year used to calculate the 34 taxes due and payable in that fiscal year. 35 -50- LSB 1461SV (4) 90 md/jh 50/ 91
S.F. 550 (4) On or before September 1 of each fiscal year, the county 1 auditor shall prepare a statement, based on the report received 2 in subparagraph (3) and information transmitted to the county 3 auditor under chapter 434 , listing for each taxing district in 4 the county: 5 (a) The product of the portion of the total actual value 6 of all commercial property, industrial property, and property 7 valued by the department under chapter 434 in the county 8 that is subject to the assessment limitations imposed under 9 paragraph b , subparagraph (2), subparagraph division (a), 10 and paragraph c , subparagraph (2), subparagraph division 11 (a), for the applicable assessment year used to calculate 12 taxes which are due and payable in the applicable fiscal year 13 multiplied by the difference, stated as a percentage, between 14 ninety percent the percentage under paragraph b , subparagraph 15 (2), subparagraph division (b), for the applicable assessment 16 year and the assessment limitation percentage applicable to 17 residential property under subsection 4 for the applicable 18 assessment year. 19 (b) The tax levy rate per one thousand dollars of assessed 20 value for each taxing district for the applicable fiscal year. 21 (c) The amount of the payment for each county is equal to 22 the amount determined pursuant to subparagraph division (a), 23 multiplied by the tax rate specified in subparagraph division 24 (b), and then divided by one thousand dollars. 25 (5) The county auditor shall certify and forward one copy of 26 the statement described in subparagraph (4) to the department 27 of revenue not later than September 1 of each fiscal year. 28 (6) The amounts determined under this paragraph shall 29 be paid by the department to the county treasurers in equal 30 installments in September and March of each year. The county 31 treasurer shall apportion the payments among the eligible 32 taxing districts in the county and the amounts received by each 33 taxing authority shall be treated the same as property taxes 34 paid. 35 -51- LSB 1461SV (4) 90 md/jh 51/ 91
S.F. 550 f. For the purposes of this subsection , unless the context 1 otherwise requires: 2 (1) Contiguous parcels means any of the following: 3 (a) Parcels that share a common boundary. 4 (b) Parcels within the same building or structure 5 regardless of whether the parcels share a common boundary. 6 (c) Permanent improvements to the land that are situated 7 on one or more parcels of land that are assessed and taxed 8 separately from the permanent improvements if the parcels of 9 land upon which the permanent improvements are situated share 10 a common boundary. 11 (2) Parcel means the same as defined in section 445.1 . 12 Parcel also means that portion of a parcel assigned a 13 classification of commercial property or industrial property 14 pursuant to section 441.21, subsection 14 , paragraph b . 15 (3) Property unit means a parcel or contiguous parcels 16 all of which are located within the same county, with the same 17 property tax classification, are owned by the same person, and 18 are operated by that person for a common use and purpose. 19 9. Not later than November 1, 1979, and November 1 of each 20 subsequent year, the director shall certify to the county 21 auditor of each county the percentages of actual value at 22 which residential property, agricultural property, commercial 23 property, industrial property, property valued by the 24 department of revenue pursuant to chapter 434 , property valued 25 by the department pursuant to chapter 438, and property valued 26 by the department of revenue pursuant to chapters 428 , 433 , 27 and 437 , and 438 in each assessing jurisdiction in the county 28 shall be assessed for taxation, including for assessment years 29 beginning on or after January 1, 2022, the percentages used to 30 apply the assessment limitations under subsection 5 , paragraphs 31 b and c . The county auditor shall proceed to determine the 32 assessed values of agricultural property, residential property, 33 commercial property, industrial property, property valued by 34 the department of revenue pursuant to chapter 434 , property 35 -52- LSB 1461SV (4) 90 md/jh 52/ 91
S.F. 550 valued by the department pursuant to chapter 438, and property 1 valued by the department of revenue pursuant to chapters 428 , 2 433 , and 437 , and 438 by applying such percentages to the 3 current actual value of such property, as reported to the 4 county auditor by the assessor, and the assessed values so 5 determined shall be the taxable values of such properties upon 6 which the levy shall be made. 7 10. The percentages of actual value computed by the 8 department of revenue for agricultural property, residential 9 property, commercial property, industrial property, property 10 valued by the department of revenue pursuant to chapter 434 , 11 property valued by the department pursuant to chapter 438, 12 and property valued by the department of revenue pursuant to 13 chapters 428 , 433 , and 437 , and 438 , including for assessment 14 years beginning on or after January 1, 2022, the percentages 15 used to apply the assessment limitations under subsection 5 , 16 paragraphs b and c , and used to determine assessed values of 17 those classes of property do not constitute a rule as defined 18 in section 17A.2, subsection 11 . 19 Sec. 109. EFFECTIVE DATE. This division of this Act takes 20 effect July 1, 2024. 21 DIVISION VIII 22 NATURAL RESOURCES AND OUTDOOR RECREATION TRUST FUND 23 Sec. 110. Section 2.45, Code 2023, is amended by adding the 24 following new subsection: 25 NEW SUBSECTION . 6. a. The legislative natural resources 26 and outdoor recreation trust fund review committee which 27 shall be composed of ten members of the general assembly, 28 consisting of five members from each chamber, to be appointed 29 by the legislative council. In appointing the five members 30 of each chamber to the committee, the council shall appoint 31 three members from the majority party and two members from the 32 minority party. 33 b. The legislative natural resources and outdoor recreation 34 trust fund review committee shall have the powers and duties 35 -53- LSB 1461SV (4) 90 md/jh 53/ 91
S.F. 550 described in section 2.49. 1 c. This subsection is repealed December 31, 2051. 2 Sec. 111. NEW SECTION . 2.49 Legislative natural resources 3 and outdoor recreation trust fund review committee. 4 1. The legislative natural resources and outdoor recreation 5 trust fund review committee shall meet during the legislative 6 interim in calendar years 2030, 2040, and 2050. The committee 7 shall consider the most effective ways to manage trust fund 8 moneys to further the purpose of Article VII, section 10, of 9 the Constitution of the State of Iowa. As part of its duties, 10 the committee may consider any of the following: 11 a. The administration of the trust fund, trust accounts, and 12 designated funds as provided in chapter 461. 13 b. The effectiveness of initiatives supported by trust fund 14 moneys as provided in chapter 461. 15 2. The committee shall report to the legislative council 16 the results of its considerations, which may include 17 recommendations and proposed legislation for consideration 18 during the next session of the general assembly. 19 3. This section is repealed December 31, 2051. 20 Sec. 112. Section 8.57, subsection 5, paragraph f, 21 subparagraph (1), subparagraph division (c), Code 2023, is 22 amended by striking the subparagraph division. 23 Sec. 113. Section 8.57, subsection 5, paragraph f, 24 subparagraph (1), subparagraph division (f), Code 2023, is 25 amended to read as follows: 26 (f) For the fiscal year beginning July 1, 2018, and for 27 each fiscal year thereafter, the total moneys in excess of the 28 moneys deposited under this paragraph f in the revenue bonds 29 debt service fund, the revenue bonds federal subsidy holdback 30 fund, the vision Iowa fund, the water quality infrastructure 31 fund, the Iowa skilled worker and job creation fund, and the 32 general fund of the state shall be deposited in the rebuild 33 Iowa infrastructure fund and shall be used as provided in this 34 section , notwithstanding section 8.60 . 35 -54- LSB 1461SV (4) 90 md/jh 54/ 91
S.F. 550 Sec. 114. Section 8.57B, subsection 1, Code 2023, is amended 1 to read as follows: 2 1. a. A water quality infrastructure fund is created within 3 the division of soil conservation and water quality of the 4 department of agriculture and land stewardship. 5 b. The fund shall consist of moneys deposited in the 6 fund pursuant to section 8.57, subsection 5 , paragraph f , 7 subparagraph (1), subparagraph division (c), moneys all of the 8 following: 9 (1) (a) Moneys transferred to the fund pursuant to section 10 423G.6, and 461.33. 11 (b) This subparagraph (1) is repealed December 31, 2051. 12 (2) Moneys transferred or appropriations made to the fund 13 and transfers of interest, earnings, and moneys from other 14 funds as provided by law. 15 Sec. 115. Section 16.134A, subsection 2, paragraph a, 16 subparagraphs (1) and (2), Code 2023, are amended to read as 17 follows: 18 (1) Moneys transferred to the fund pursuant to section 19 423G.6 461.34 . 20 (2) This paragraph a is repealed on January 1, 2040 21 December 31, 2051 . 22 Sec. 116. Section 307.24, subsection 5, paragraphs a, b, c, 23 d, e, f, g, and h, Code 2023, are amended to read as follows: 24 a. For department of natural resources facility roads, 25 forty-five and one-half percent. 26 b. a. For department of human services facility roads, six 27 and one-half twelve percent. 28 c. b. For department of corrections facility roads, five 29 and one-half ten percent. 30 d. c. For national guard facility roads, four seven and 31 one-third percent. 32 e. d. For state board of regents facility roads, thirty 33 fifty-five percent. 34 f. e. For state fair board facility roads, two three and 35 -55- LSB 1461SV (4) 90 md/jh 55/ 91
S.F. 550 two-thirds percent. 1 g. f. For department of administrative services facility 2 roads, one-half one percent. 3 h. g. For department of education facility roads, six 4 eleven percent. 5 Sec. 117. Section 455A.17, Code 2023, is amended by striking 6 the section and inserting in lieu thereof the following: 7 455A.17 Regional meetings. 8 1. Beginning in calendar year 2024, and every four 9 calendar years thereafter, the department shall arrange 10 and conduct regional meetings to identify opportunities for 11 regional resource enhancement and protection, and to review 12 and recommend changes in resource enhancement and protection 13 policies, programs, and funding. The department shall provide 14 outreach and educational services to those attending, which 15 shall include the distribution of information regarding 16 resource enhancement and protection expenditures. The 17 department shall promote attendance of interested persons for 18 each regional meeting. 19 2. The expenses of the department in making the arrangements 20 for and conducting regional meetings and providing outreach and 21 educational services shall be paid from moneys credited to the 22 administration fund created in section 456A.17. 23 Sec. 118. Section 455A.18, subsection 1, Code 2023, is 24 amended to read as follows: 25 1. a. An Iowa resources enhancement and protection fund is 26 created in the office of the treasurer of state. 27 b. The fund consists of all revenues of the following: 28 (1) (a) Moneys allocated from the natural resources and 29 outdoor recreation trust fund as provided in section 461.35. 30 (b) This subparagraph (1) is repealed December 31, 2051. 31 (2) Revenues and all other moneys lawfully credited or 32 transferred to the fund. The director shall certify monthly 33 the portions of the fund that are allocated to the various 34 accounts as provided under section 455A.19 . The director shall 35 -56- LSB 1461SV (4) 90 md/jh 56/ 91
S.F. 550 certify before the twentieth of each month the portions of 1 the fund resulting from the previous months receipts to be 2 allocated to the various accounts. 3 Sec. 119. Section 455A.18, subsection 3, paragraph a, Code 4 2023, is amended by striking the paragraph. 5 Sec. 120. Section 455A.18, subsection 3, paragraph b, Code 6 2023, is amended to read as follows: 7 b. Section 8.33 does not apply to moneys appropriated under 8 this subsection credited to the fund . 9 Sec. 121. Section 461.2, Code 2023, is amended to read as 10 follows: 11 461.2 Definitions. 12 As used in this chapter , unless the context otherwise 13 requires: 14 1. Authority means the economic development authority 15 created in section 15.105. 16 2. Department Custodial department means the department 17 of agriculture and land stewardship, the department of 18 management, the department of natural resources, or the 19 department of transportation. 20 3. Designated fund means the water quality infrastructure 21 fund created in section 8.57B, the water quality financial 22 assistance fund created in section 16.134A, or the Iowa 23 resources enhancement and protection fund created in section 24 455A.18. 25 2. 4. Fiscal year means the state fiscal year effective 26 as provided in section 3.12 . 27 3. 5. Initiative includes a program, project, practice, 28 strategy, or plan established or administered by an agency that 29 furthers , or under the supervision or oversight of, a custodial 30 department or the Iowa finance authority, if the initiative is 31 supported in whole or in part by trust fund moneys to further a 32 constitutional purpose as provided in section 461.3 . 33 6. Iowa nutrient reduction strategy means the same as 34 defined in section 455B.171. 35 -57- LSB 1461SV (4) 90 md/jh 57/ 91
S.F. 550 7. Nonpoint source means a source of pollution other than 1 a point source. 2 8. Point source means the same as defined in section 3 455B.171. 4 9. Public use area means a park, preserve, recreation 5 area, forest, water body, or a land or water trail owned or 6 managed by the state or a political subdivision of the state. 7 4. 10. Recreational purpose includes means only hunting , ; 8 trapping , ; angling , ; horseback riding , ; swimming , ; boating , ; 9 camping , ; picnicking , ; hiking , ; biking; recreational shooting; 10 archery; using land or water trails; bird watching , ; nature 11 study , ; water skiing , ; snowmobiling ; , other summer and winter 12 sports, and viewing or enjoying historical, archaeological, 13 scenic, or scientific sites. 14 11. Trust account means the natural resources trust 15 account created in section 461.32, the soil conservation and 16 nonpoint source water protection trust account created in 17 section 461.33, the watershed protection trust account created 18 in section 461.34, the local conservation partnership trust 19 account created in section 461.36, the water and land trails 20 trust account created in section 461.37, or the lake and stream 21 restoration trust account created in section 461.38. 22 5. 12. Trust fund means the natural resources and outdoor 23 recreation trust fund created in section 461.31 . 24 6. 13. Trust fund moneys means moneys originating from 25 credited to the natural resources and outdoor recreation trust 26 fund or moneys allocated from the trust fund, including but not 27 limited to moneys allocated to a trust account or allocated or 28 transferred to a designated fund . 29 14. Water trail means a point-to-point travel system on a 30 navigable water body capable of supporting a floating vessel 31 capable of carrying one or more persons on a recommended route 32 connecting the points. 33 Sec. 122. Section 461.3, Code 2023, is amended to read as 34 follows: 35 -58- LSB 1461SV (4) 90 md/jh 58/ 91
S.F. 550 461.3 Constitutional purpose , and implementation , and 1 revenue . 2 1. This chapter is created for the constitutional purposes 3 of protecting and enhancing water quality and natural areas 4 in this state, including parks, trails, and fish and wildlife 5 habitat, and conserving agricultural soils in this state. 6 2. This chapter is intended to implement Article VII, 7 section 10, of the Constitution of the State of Iowa by 8 establishing the natural resources and outdoor recreation 9 trust fund, accounts in the including trust fund accounts , 10 and appropriating or allocating trust fund moneys to support 11 initiatives specified in subchapter IV . This chapter shall not 12 be construed to require the state to appropriate, allocate, 13 or transfer other moneys to support those initiatives or 14 constitutional purposes. 15 Sec. 123. Section 461.11, subsection 2, Code 2023, is 16 amended to read as follows: 17 2. The heads of each department receiving trust fund moneys 18 the custodial departments and the director of the authority 19 shall regularly meet and whenever practicable collaborate in 20 decision making including by adopting rules providing for 21 the administration of the trust fund and trust accounts , 22 establishing funding priorities, and determining when it is 23 beneficial to provide joint funding of initiatives. 24 Sec. 124. NEW SECTION . 461.20 Information regarding trust 25 fund moneys. 26 1. Each year the department of revenue shall calculate 27 an estimate of the total revenue to be transferred to the 28 trust fund during the following fiscal year as required 29 pursuant to section 423.2A. Not later than May 1 of each 30 year, the department of revenue shall submit the estimate to 31 each custodial department, the authority, and the legislative 32 services agency. 33 2. A custodial department shall at least annually notify the 34 legislative services agency of transfers of trust fund moneys 35 -59- LSB 1461SV (4) 90 md/jh 59/ 91
S.F. 550 from a trust account to another trust account or designated 1 fund as authorized in this chapter. 2 Sec. 125. Section 461.21, Code 2023, is amended to read as 3 follows: 4 461.21 Audit. 5 1. The auditor of state or a certified public accounting 6 firm appointed by the auditor of state shall conduct an annual 7 audit of the trust fund and all trust accounts and transactions 8 of the trust fund and trust accounts in the same manner as 9 provided for departments pursuant to chapter 11, subchapter I . 10 2. The auditor of state or the certified public accounting 11 firm appointed by the auditor as provided in subsection 1 12 shall be paid from trust fund moneys without reducing the 13 percentage of trust fund moneys distributed allocated to the 14 Iowa resources enhancement and protection fund or any one a 15 trust account established or designated fund pursuant to this 16 chapter subchapter IV . 17 Sec. 126. Section 461.22, Code 2023, is amended to read as 18 follows: 19 461.22 Report Trust fund report . 20 The three departments department of management shall jointly 21 prepare and submit to the governor and the general assembly not 22 later than January 15 of each year a complete trust fund report 23 in an electronic format detailing all of the following: 24 1. The receipts and expenditures of the trust fund and its 25 trust accounts, a summary of initiatives supported by trust 26 fund moneys, the results of those expenditures, any performance 27 goals or measurements, and plans for future short-term or 28 long-term expenditures. 29 2. Recommendations An evaluation of the use of trust fund 30 moneys to further progress in achieving the goals of the Iowa 31 nutrient reduction strategy as prepared by the department of 32 agriculture and land stewardship, the department of natural 33 resources, and the college of agriculture and life sciences 34 of the Iowa state university of science and technology. The 35 -60- LSB 1461SV (4) 90 md/jh 60/ 91
S.F. 550 evaluation shall be based on the latest credible findings and 1 recommendations recognized by those entities. The evaluation 2 may include recommendations to the governor and general 3 assembly, including legislation proposed by one or more of the 4 departments entities . 5 Sec. 127. Section 461.23, Code 2023, is amended to read as 6 follows: 7 461.23 Rules. 8 The department of revenue, the department of agriculture and 9 land stewardship, the department of management, the department 10 of natural resources, and the department of transportation , the 11 Iowa finance authority, and the economic development authority 12 shall adopt rules separately or jointly as necessary in order 13 to implement and administer this chapter . 14 Sec. 128. Section 461.24, Code 2023, is amended by striking 15 the section and inserting in lieu thereof the following: 16 461.24 Public listing. 17 The department of management shall publish and maintain a 18 public listing of moneys credited to and allocated from the 19 trust fund, trust fund moneys allocated or transferred from 20 trust accounts, and trust fund moneys allocated or transferred 21 to designated funds to support initiatives. This section does 22 not require the disclosure of information that is confidential 23 as provided by rules adopted pursuant to section 461.23. 24 Sec. 129. NEW SECTION . 461.25 Use of trust fund moneys. 25 1. A custodial department shall not appropriate, allocate, 26 or transfer trust fund moneys except as provided in this 27 chapter. However, this subsection shall not be construed to 28 limit a custodial department from using trust fund moneys with 29 another person, including a custodial department, when engaging 30 in a joint initiative as authorized by law. 31 2. During any fiscal year, a custodial department shall not 32 use more than five percent of trust fund moneys allocated to 33 a trust account to pay for expenses incurred in administering 34 trust fund moneys allocated to that trust account. 35 -61- LSB 1461SV (4) 90 md/jh 61/ 91
S.F. 550 3. In administering the use of trust fund moneys allocated 1 to a trust account, a custodial department shall provide a 2 higher priority to supporting initiatives that further goals of 3 the Iowa nutrient reduction strategy. 4 4. A custodial department shall administer the use of 5 trust fund moneys to support an initiative having primarily 6 a recreational purpose only if such use is in cooperation 7 with the authority. The authority shall review, score, and 8 rank applications to support such initiatives as part of a 9 competitive evaluation process. The scoring criteria must 10 further the economic development policy of the state as 11 provided in chapter 15. 12 5. When making a determination to support competing 13 proposed initiatives relating to a public use area that 14 benefits a locality, a custodial department or the authority 15 shall provide a higher priority to supporting an initiative to 16 improve an existing public use area. 17 6. When making a determination to support a proposed 18 initiative to establish, improve, or expand a land trail, 19 the proposal shall not be approved unless the sponsor of the 20 proposal demonstrates to the custodial department or other 21 entity making the funding decision how the trail is to be 22 maintained by other sources of revenue. 23 7. In administering the use of trust fund moneys allocated 24 to a trust account to support an initiative relating to 25 the management of land, this chapter does not do any of the 26 following: 27 a. Prohibit the farming of the land in a manner that is 28 consistent with the Iowa nutrient reduction strategy. 29 b. Require a separation distance between an animal feeding 30 operation and a public use area that is more restrictive than 31 if the land were not managed pursuant to the initiative. 32 8. Trust fund moneys shall not be used to support any of the 33 following: 34 a. An initiative that establishes, improves, or expands a 35 -62- LSB 1461SV (4) 90 md/jh 62/ 91
S.F. 550 single or multipurpose athletic field, baseball or softball 1 diamond, tennis court, golf course, swimming pool, or other 2 group or organized sport facility. 3 b. The taking of property by exercising the power of eminent 4 domain, including by acquiring property as provided in chapters 5 6A and 6B. 6 Sec. 130. Section 461.31, Code 2023, is amended to read as 7 follows: 8 461.31 Natural resources and outdoor recreation trust fund 9 creation. 10 1. A natural resources and outdoor recreation trust fund 11 is created within the state treasury. The trust fund shall be 12 administered by the department of management. 13 2. a. The trust fund shall be composed comprised of moneys 14 all of the following: 15 (1) Moneys transferred to the trust fund pursuant to section 16 423.2A. 17 (2) Other moneys required to be credited to the trust 18 fund by law and moneys accepted by a custodial department for 19 placement in an account established in this subchapter and the 20 trust fund from any source. 21 b. Trust fund moneys are exclusively appropriated by law 22 to carry out the constitutional purposes provided described in 23 section 461.3 . 24 c. Trust fund moneys shall supplement and not replace 25 moneys appropriated by the general assembly to support the 26 constitutional purposes provided in section 461.3 . 27 d. Trust fund moneys shall only be used to support voluntary 28 initiatives and shall not be used for regulatory efforts, 29 enforcement actions, or litigation. 30 3. In administering a trust fund account, a custodial 31 department may contract, sue and be sued, and authorize payment 32 for costs, fees, commissions, and other reasonable expenses 33 from the trust account. However, a custodial department shall 34 not in any manner directly or indirectly pledge the credit of 35 -63- LSB 1461SV (4) 90 md/jh 63/ 91
S.F. 550 this state. 1 4. a. Except as provided in paragraph b , the treasurer 2 of state shall, each month as directed by the department of 3 management, allocate all trust fund moneys that have been 4 credited to the trust fund, including moneys transferred to the 5 trust fund as provided in section 423.2A, to each trust account 6 and designated fund as provided in this subchapter. 7 b. Notwithstanding sections 461.32 through 461.38, for the 8 fiscal year beginning July 1, 2025, and for each subsequent 9 fiscal year, only that amount as authorized by an Act of 10 the general assembly shall be allocated from the trust fund 11 to a trust account or designated fund as provided in this 12 subchapter. However, if for a fiscal year no Act of the 13 general assembly authorizes trust fund moneys to be allocated 14 from the trust fund, the trust fund moneys shall be allocated 15 from the trust fund to the trust accounts and designated funds 16 as provided in this subchapter by operation of law. 17 5. a. Notwithstanding section 8.33 , any unexpended balance 18 in the trust fund or in an a trust account created within the 19 trust fund at the end of each fiscal year shall be retained in 20 the trust fund or the respective trust account. 21 b. Notwithstanding section 12C.7, subsection 2 , interest or 22 earnings on investments or time deposits of the moneys in the 23 trust fund and its respective trust accounts shall be credited 24 to the trust fund and its respective trust accounts. 25 c. The recapture of awards originating from an a trust 26 account and other repayments to an a trust account shall be 27 retained in that trust account. 28 Sec. 131. Section 461.32, Code 2023, is amended to read as 29 follows: 30 461.32 Natural resources trust account allocations. 31 1. A natural resources trust account is created in the trust 32 fund. Twenty-three The trust account shall be administered by 33 the department of natural resources. 34 2. Eighteen percent of the moneys credited to the trust fund 35 -64- LSB 1461SV (4) 90 md/jh 64/ 91
S.F. 550 shall be allocated to the trust account. 1 2. 3. The trust account shall be used by the department of 2 natural resources to support all of the following initiatives: 3 a. The establishment, restoration, or enhancement , and 4 management of state parks, state preserves, state forests, 5 wildlife areas, wildlife habitats, native prairies, and 6 wetlands. 7 (1) A higher priority shall be provided to supporting 8 initiatives for the maintenance, preservation, or restoration 9 of land and a lower priority shall be provided to supporting 10 initiatives for the purchase or acquisition of land. 11 (2) The department shall utilize an index that includes a 12 comprehensive assessment mechanism to produce a statistically 13 verifiable basis for determining whether to approve or 14 disapprove the purchase or acquisition of the land. The 15 department shall establish index criteria that justifies the 16 lands removal from private ownership and use. 17 b. The construction or improvement of facilities located on 18 land owned or managed by the department. 19 b. c. Wildlife diversity. 20 c. d. Recreational purposes. 21 d. e. Technical assistance and financial incentives 22 provided to private landowners to promote the management of 23 forests, fisheries , recreational areas , wetlands, and wildlife. 24 e. f. The improvement of water trails, rivers , and streams. 25 f. g. Education and outreach that provide instruction 26 regarding natural history and the outdoors. The subjects 27 of such instruction may relate to opportunities involving a 28 recreational purposes purpose , outdoor safety, and or ethics. 29 h. The construction, maintenance, or expansion of roads on 30 state-owned land under the jurisdiction of the department of 31 natural resources. 32 3. The department of natural resources shall to every extent 33 possible consider its comprehensive plan provided in section 34 456A.31 when making funding decisions. 35 -65- LSB 1461SV (4) 90 md/jh 65/ 91
S.F. 550 Sec. 132. Section 461.33, Code 2023, is amended to read as 1 follows: 2 461.33 Soil conservation and nonpoint source water protection 3 trust account allocations. 4 1. A soil conservation and nonpoint source water protection 5 trust account is created in the trust fund. Twenty The trust 6 account shall be administered by the department of agriculture 7 and land stewardship. 8 2. Thirty-four percent of the moneys credited to the trust 9 fund shall be allocated to the trust account. 10 3. Forty-seven percent of trust fund moneys allocated to 11 the trust account shall first be transferred as directed by the 12 department to any or all of the following: 13 a. The water quality infrastructure fund created in section 14 8.57B to support water quality agriculture infrastructure 15 programs created in section 466B.43 in order to reduce nutrient 16 loads from nonpoint sources. 17 b. The water quality financial assistance fund created 18 in section 16.134A to support the water quality urban 19 infrastructure program created in section 466B.44. 20 4. Each fiscal year, at least ten percent of the moneys 21 allocated to the account shall be used to support the planting 22 and maintenance of cover crops as provided in section 161A.73. 23 2. 5. a. The account shall be used by the department of 24 agriculture and land stewardship remaining trust fund moneys 25 allocated to the trust account shall be used by the department 26 to support all of the following initiatives: 27 a. (1) Soil conservation and watershed protection, 28 including by supporting the departments division of 29 soil conservation and water quality within the department 30 of agriculture and land stewardship and soil and water 31 conservation district commissioners. The department and 32 commissioners may provide for the installation establishment 33 of conservation practices , management practices to control 34 soil erosion on row-cropped land, and watershed protection 35 -66- LSB 1461SV (4) 90 md/jh 66/ 91
S.F. 550 improvements as provided in chapters 161A , 161C , 461A , and 466 , 1 and 466B . 2 b. (2) The conservation of highly erodible land. The 3 department of agriculture and land stewardship may execute 4 contracts with private landowners who agree to reserve such 5 land only for uses that prevent erosion in excess of the 6 applicable soil loss limits as established in section 161A.44 . 7 c. (3) Soil conservation or crop management practices 8 used on land producing biomass for biorefineries, including 9 cellulosic ethanol production. 10 3. b. The department of agriculture and land stewardship 11 may use unencumbered or unobligated trust fund moneys allocated 12 to the trust account to provide financial incentives or 13 technical assistance to landowners. 14 6. During a fiscal year, the department may transfer 15 unencumbered or unobligated trust fund moneys allocated to 16 the trust account for use by the department as is provided in 17 subsection 5 to any of the following: 18 a. The water quality infrastructure fund created in section 19 8.57B to support water quality agriculture infrastructure 20 programs created in section 466B.43 in order to reduce nutrient 21 loads from nonpoint sources. 22 b. The water quality financial assistance fund created 23 in section 16.134A to support the water quality urban 24 infrastructure program created in section 466B.44. 25 Sec. 133. Section 461.34, Code 2023, is amended to read as 26 follows: 27 461.34 Watershed protection trust account allocations. 28 1. A watershed protection trust account is created in the 29 trust fund. Fourteen The trust account shall be administered 30 by the department of natural resources. 31 2. Fifteen percent of the moneys credited to the trust fund 32 shall be allocated to the trust account. 33 3. Forty-seven percent of trust fund moneys allocated 34 to the trust account shall first be transferred to the water 35 -67- LSB 1461SV (4) 90 md/jh 67/ 91
S.F. 550 quality financial assistance fund created in section 16.134A 1 for appropriation as provided in that section. 2 2. 4. The account Of the remaining trust fund moneys 3 allocated to the trust account, fifty percent shall be used 4 cooperatively distributed for use by the department of 5 natural resources and the department of agriculture and land 6 stewardship to support all of the following initiatives: 7 a. Water water quality resource projects administered by 8 the department of natural resources to preserve watersheds, 9 including but not limited to all of the following: 10 (1) a. Projects to protect, restore, or enhance water 11 quality in the state through the provision of financial 12 assistance to communities for impairment-based, locally 13 directed watershed projects. The department may use the 14 account trust fund moneys to support the water resource 15 restoration sponsor program as provided in section 455B.199 . 16 (2) b. Regional and community watershed assessment, 17 planning, and prioritization efforts, including as provided in 18 chapter 466B . 19 c. Water quality protection programs provided in section 20 466.7 that relate to any of the following: 21 (1) The administration of geographic information systems 22 for use in developing, monitoring, and displaying local 23 watershed information. 24 (2) An activity to support the collection and analysis of 25 water quality monitoring. 26 (3) Floodplain permitting. 27 (4) Flood protection education to provide information to 28 local officials regarding floodplain management. 29 b. 5. Surface Of the remaining trust fund moneys allocated 30 to the trust account, fifty percent shall be distributed for 31 use by the department of agriculture and land stewardship 32 to support surface water protection projects and practices 33 administered by the department of agriculture and land 34 stewardship or the department of natural resources, as 35 -68- LSB 1461SV (4) 90 md/jh 68/ 91
S.F. 550 described in the Iowa nutrient reduction strategy including but 1 not limited to the installation of permanent vegetation cover, 2 filter strips, grass waterways, edge-of-field practices, and 3 riparian forest buffers; dredging; and bank stabilization. The 4 departments of agriculture and land stewardship and natural 5 resources department may use the account trust fund moneys 6 to support the conservation buffer strip program provided in 7 section 466.4 and the conservation reserve enhancement program 8 as provided in section 466.5 . 9 3. 6. The departments A decision by a department to 10 prioritize initiatives may be based on the priority list of 11 watersheds provided in section 456A.33A . 12 7. During a fiscal year, the department of natural 13 resources or the department of agriculture and land stewardship 14 may transfer unencumbered or unobligated trust fund moneys 15 distributed to the custodial department pursuant to subsection 16 4 or 5 to the water quality financial assistance fund created 17 in section 16.134A. 18 Sec. 134. Section 461.35, Code 2023, is amended to read as 19 follows: 20 461.35 Iowa resources enhancement and protection fund 21 allocation. 22 Thirteen Ten percent of the moneys credited to the trust 23 fund shall be allocated to the Iowa resources enhancement 24 and protection fund created in section 455A.18 for further 25 allocation as provided in section 455A.19 . 26 Sec. 135. Section 461.36, Code 2023, is amended by striking 27 the section and inserting in lieu thereof the following: 28 461.36 Local conservation partnership trust account 29 allocations. 30 1. A local conservation partnership trust account is 31 created in the trust fund. The trust account shall be 32 administered by the department of natural resources. 33 2. Nine percent of the moneys credited to the trust fund 34 shall be allocated to the trust account. 35 -69- LSB 1461SV (4) 90 md/jh 69/ 91
S.F. 550 3. The department shall allocate the trust fund moneys 1 credited to the account to local communities participating 2 in the local conservation partnership program as provided in 3 section 461.36A. 4 Sec. 136. NEW SECTION . 461.36A Local conservation 5 partnership program. 6 1. As used in this section, unless the context otherwise 7 requires: 8 a. Department means the department of natural resources. 9 b. Local community includes a political subdivision or 10 a watershed management authority created pursuant to section 11 466B.22. 12 2. The department shall establish and administer a local 13 conservation partnership program to provide financing to local 14 communities to do any of the following: 15 a. Maintain and improve parks, preserves, wildlife areas, 16 wildlife habitats, native prairies, forests, or wetlands. 17 b. Promote wildlife diversity. 18 c. Further a recreational purpose. 19 d. Improve rivers and streams. 20 e. Sponsor education and outreach programs and projects that 21 provide instruction regarding natural history and the outdoors. 22 The subjects of such instruction may relate to opportunities 23 involving a recreational purpose, outdoor safety, or ethics. 24 The programs and projects may assist Iowa students studying in 25 fields of science, technology, engineering, and mathematics. 26 f. Further any other purpose described in section 350.1. 27 3. As part of a local conservation partnership under the 28 program, two or more local communities may enter into chapter 29 28E agreements, and a local community may cooperate with 30 the federal government or a nongovernmental organization. 31 A nongovernmental organization shall not be eligible to 32 participate in a local community partnership under the program 33 unless the nongovernmental organization submits an application 34 in association with a political subdivision or county 35 -70- LSB 1461SV (4) 90 md/jh 70/ 91
S.F. 550 conservation board and enters into a chapter 28E agreement with 1 the political subdivision or county conservation board. 2 4. a. A local community is not eligible to receive moneys 3 from the department under the program to support a local 4 conservation partnership, unless the local community finances 5 a minimum percentage of the estimated or total cost of the 6 initiative, whichever is less. 7 b. The minimum amount of the cost-share contribution by a 8 local community, as described in paragraph a , shall be as 9 follows: 10 (1) Ten percent for a local community located in a county 11 having a population of fifteen thousand or less. 12 (2) Twenty-five percent for a local community located in a 13 county having a population of more than fifteen thousand but 14 less than one hundred thousand. 15 (3) Seventy-five percent for a local community located in a 16 county having a population of one hundred thousand or more. 17 Sec. 137. Section 461.37, Code 2023, is amended to read as 18 follows: 19 461.37 Trails Water and land trails trust account 20 allocations. 21 1. A water and land trails trust account is created in the 22 trust fund. Ten The trust account shall be administered by the 23 department of transportation. 24 2. Four percent of the moneys credited to the trust fund 25 shall be allocated to the trust account. 26 2. 3. The Of the amount of trust fund moneys allocated 27 to the trust account, fifty percent shall be distributed for 28 use by the department of transportation and the department of 29 natural resources shall use moneys in the account to support 30 initiatives related to the design, establishment, maintenance, 31 improvement, and expansion of land trails. 32 3. 4. The Of the amount of trust fund moneys allocated to 33 the trust account, fifty percent shall be distributed for use 34 by the department of natural resources may use the account to 35 -71- LSB 1461SV (4) 90 md/jh 71/ 91
S.F. 550 support the design, establishment, maintenance, improvement, 1 and expansion of water trails. The department shall provide 2 priority to stream restoration. 3 5. a. During a fiscal year, and pursuant to an agreement 4 between the department of transportation and the department 5 of natural resources, either custodial department that is 6 distributed trust fund moneys for use under this section may 7 transfer unencumbered or unobligated trust fund moneys to the 8 other custodial department for use by the other custodial 9 department as provided in this section. 10 b. During a fiscal year, and pursuant to an agreement 11 between the department of transportation and the department 12 of natural resources, the department of transportation 13 may transfer unencumbered or unobligated trust fund moneys 14 allocated to the trust account and distributed for use by 15 the department of transportation to another trust account 16 administered by the department of natural resources for use by 17 the department of natural resources. 18 Sec. 138. Section 461.38, Code 2023, is amended to read as 19 follows: 20 461.38 Lake and stream restoration trust account 21 allocations. 22 1. A lake and stream restoration trust account is created in 23 the trust fund. Seven The trust account shall be administered 24 by the department of natural resources. 25 2. Ten percent of the moneys credited to the trust fund 26 shall be allocated to the trust account. 27 2. 3. The department of natural resources shall use moneys 28 in allocated to the trust account to support public all of the 29 following: 30 a. Public lake restoration initiatives as follows: 31 a. (1) An initiative shall account for a lakes 32 recreational purpose , and provide for environmental, aesthetic, 33 ecological, and social value. It must improve water quality 34 further a goal of the Iowa nutrient reduction strategy . 35 -72- LSB 1461SV (4) 90 md/jh 72/ 91
S.F. 550 b. (2) The departments A decision by the department to 1 prioritize an initiative may be based on the departments lake 2 restoration plan and report as provided in section 456A.33B and 3 the Iowa nutrient reduction strategy . 4 b. The stabilization and restoration of stream banks. 5 Sec. 139. NEW SECTION . 461.51 Repeal. 6 This chapter is repealed December 31, 2051. 7 Sec. 140. REPEAL. Section 455A.20, Code 2023, is repealed. 8 Sec. 141. CODE EDITOR DIRECTIVE. 9 1. The Code editor is directed to make the following 10 transfers: 11 a. Section 461.36A, as enacted in this division of this Act, 12 to section 455A.31. 13 b. Section 461.35, as amended in this division of this Act, 14 to section 461.41. 15 2. The Code editor shall correct internal references in the 16 Code and in any enacted legislation as necessary due to the 17 enactment of this section. 18 Sec. 142. EFFECTIVE DATE. This division of this Act takes 19 effect January 1, 2025. 20 DIVISION IX 21 CHARITABLE CONSERVATION CONTRIBUTION TAX CREDIT 22 Sec. 143. Section 2.48, subsection 3, paragraph e, 23 subparagraph (6), Code 2023, is amended by striking the 24 subparagraph. 25 Sec. 144. Section 422.11W, Code 2023, is amended by adding 26 the following new subsection: 27 NEW SUBSECTION . 5. Commencing with tax years beginning 28 on or after January 1, 2025, a charitable conservation 29 contribution tax credit shall not be claimed against taxes as 30 provided in this section, except for tax credits claimed for 31 qualified real property interests conveyed prior to January 1, 32 2025. 33 Sec. 145. Section 422.33, subsection 25, Code 2023, is 34 amended by striking the subsection and inserting in lieu 35 -73- LSB 1461SV (4) 90 md/jh 73/ 91
S.F. 550 thereof the following: 1 25. The taxes imposed under this subchapter shall be reduced 2 by a charitable conservation contribution tax credit as allowed 3 under section 422.11W for each tax year the taxpayer has 4 credit, in excess of tax liability, for qualified real property 5 interests conveyed prior to January 1, 2025. 6 Sec. 146. PRESERVATION OF EXISTING RIGHTS. This division 7 of this Act is not intended to and shall not limit, modify, or 8 otherwise adversely affect any amount of tax credit issued, 9 awarded, or allowed prior to January 1, 2025, nor shall it 10 limit, modify, or otherwise adversely affect a taxpayers right 11 to claim or redeem a tax credit issued, awarded, or allowed 12 prior to January 1, 2025, including but not limited to any tax 13 credit carryforward amount. 14 Sec. 147. EFFECTIVE DATE. This division of this Act takes 15 effect January 1, 2025. 16 Sec. 148. APPLICABILITY. This division of this Act applies 17 to tax years beginning on or after January 1, 2025. 18 DIVISION X 19 PROPERTY TAX BENEFITS AND INCENTIVES 20 Sec. 149. NEW SECTION . 404.3C Assessment agreements 21 commercial property. 22 1. For revitalization areas established under this chapter 23 on or after the effective date of this division of this Act 24 and for first-year exemption applications for property located 25 in a revitalization area in existence on the effective date 26 of this division of this Act filed on or after the effective 27 date of this division of this Act, commercial property shall 28 not receive a tax exemption under this chapter unless the city 29 or county, as applicable, and the owner of the qualified real 30 estate enter into a written assessment agreement specifying a 31 minimum actual value until a specified termination date for the 32 duration of the exemption period. 33 2. a. The assessment agreement shall be presented to the 34 appropriate assessor. The assessor shall review the plans and 35 -74- LSB 1461SV (4) 90 md/jh 74/ 91
S.F. 550 specifications for the improvements to be made to the property 1 and if the minimum actual value contained in the assessment 2 agreement appears to be reasonable, the assessor shall execute 3 the following certification upon the agreement: 4 The undersigned assessor, being legally responsible for the 5 assessment of the above described property upon completion of 6 the improvements to be made on it, certifies that the actual 7 value assigned to that land and improvements upon completion 8 shall not be less than $......... 9 b. The assessment agreement with the certification of 10 the assessor and a copy of this subsection shall be filed in 11 the office of the county recorder of the county where the 12 property is located. Upon completion of the improvements, 13 the assessor shall value the property as required by law, 14 except that the actual value shall not be less than the minimum 15 actual value contained in the assessment agreement. This 16 subsection does not prohibit the assessor from assigning a 17 higher actual value to the property or prohibit the owner 18 from seeking administrative or legal remedies to reduce the 19 actual value assigned except that the actual value shall not 20 be reduced below the minimum actual value contained in the 21 assessment agreement. An assessor, county auditor, board of 22 review, director of revenue, or court of this state shall not 23 reduce or order the reduction of the actual value below the 24 minimum actual value in the agreement during the term of the 25 agreement regardless of the actual value which may result from 26 the incomplete construction of improvements, destruction or 27 diminution by any cause, insured or uninsured, except in the 28 case of acquisition or reacquisition of the property by a 29 public entity. Recording of an assessment agreement complying 30 with this subsection constitutes notice of the assessment 31 agreement to a subsequent purchaser or encumbrancer of the land 32 or any part of it, whether voluntary or involuntary, and is 33 binding upon a subsequent purchaser or encumbrancer. 34 Sec. 150. NEW SECTION . 404.3D Exemptions for residential 35 -75- LSB 1461SV (4) 90 md/jh 75/ 91
S.F. 550 property. 1 For revitalization areas established under this chapter on 2 or after the effective date of this division of this Act and 3 for first-year exemption applications for property located in a 4 revitalization area in existence on the effective date of this 5 division of this Act filed on or after the effective date of 6 this division of this Act, an exemption otherwise authorized 7 under this chapter shall not be authorized for or approved by a 8 city or county, as applicable, for property that is residential 9 property. 10 Sec. 151. EFFECTIVE DATE. This division of this Act takes 11 effect July 1, 2024. 12 DIVISION XI 13 TAX INCREMENT FINANCING 14 Sec. 152. Section 403.19, subsection 2, paragraph a, Code 15 2023, is amended to read as follows: 16 a. That portion of the taxes each year in excess of such 17 amount shall be allocated to and when collected be paid into 18 a special fund of the municipality to pay the principal of 19 and interest on loans, moneys advanced to, or indebtedness, 20 whether funded, refunded, assumed, or otherwise, including 21 bonds issued under the authority of section 403.9, subsection 22 1 , incurred by the municipality to finance or refinance, in 23 whole or in part, an urban renewal project within the area, 24 and to provide assistance for low and moderate income family 25 housing as provided in section 403.22 . However, except 26 as provided in paragraph b , taxes for the regular and 27 voter-approved physical plant and equipment levy of a school 28 district imposed pursuant to section 298.2 and taxes for the 29 instructional support program of a school district imposed 30 pursuant to section 257.19 , taxes for the payment of bonds 31 and interest of each taxing district, and taxes imposed under 32 section 346.27, subsection 22 , related to joint county-city 33 buildings shall be collected against all taxable property 34 within the taxing district without limitation by the provisions 35 -76- LSB 1461SV (4) 90 md/jh 76/ 91
S.F. 550 of this subsection . Additionally, for property taxes due and 1 payable in fiscal years beginning on or after July 1, 2025, 2 if the portion of the urban renewal area that is subject to a 3 division of revenue under this section contains wind energy 4 conversion property that is subject to special valuation under 5 section 427B.26, foundation property taxes of a school district 6 imposed under section 257.3 shall be collected against all 7 taxable property within that portion of the urban renewal area 8 without limitation by the provisions of this subsection and 9 when collected be paid into the fund of the school district 10 into which all other property taxes are paid. 11 DIVISION XII 12 TRANSIT FUNDING 13 Sec. 153. Section 364.2, subsection 4, paragraph f, 14 subparagraph (1), subparagraph division (b), Code 2023, is 15 amended to read as follows: 16 (b) For franchise fees assessed and collected during fiscal 17 years beginning on or after July 1, 2013 2024 , but before 18 July 1, 2030, by a city that is the subject of a judgment, 19 court-approved settlement, or court-approved compromise 20 providing for payment of restitution, a refund, or a return 21 described in section 384.3A, subsection 3 , paragraph j with 22 a population exceeding two hundred thousand , the rate of the 23 franchise fee shall not exceed seven and one-half percent 24 of gross revenues generated from sales of the franchisee in 25 the city, and franchise fee amounts assessed and collected 26 during such fiscal years in excess of five percent of gross 27 revenues generated from sales shall be used solely for the 28 purpose specified in section 384.3A, subsection 3 , paragraph 29 j . A city may assess and collect a franchise fee in excess 30 of five percent of gross revenues generated from the sales 31 of the franchisee pursuant to this subparagraph division (b) 32 for a period not to exceed seven consecutive fiscal years 33 once the franchise fee is first imposed at a rate in excess 34 of five percent. An ordinance increasing the franchise fee 35 -77- LSB 1461SV (4) 90 md/jh 77/ 91
S.F. 550 rate to greater than five percent pursuant to this subparagraph 1 division (b) shall not become effective unless approved at 2 an election. After passage of the ordinance, the council 3 shall submit the proposal at a special election held on a date 4 specified in section 39.2, subsection 4 , paragraph b . If a 5 majority of those voting on the proposal approves the proposal, 6 the city may proceed as proposed. The complete text of the 7 ordinance shall be included on the ballot and the full text 8 of the ordinance posted for the voters pursuant to section 9 52.25 . All absentee voters shall receive the full text of the 10 ordinance along with the absentee ballot. This subparagraph 11 division (b) is repealed July 1, 2030. 12 Sec. 154. Section 384.3A, subsection 3, paragraph j, Code 13 2023, is amended to read as follows: 14 j. For franchise fees assessed and collected by a city in 15 excess of five percent of gross revenues generated from sales 16 of the franchisee within the city pursuant to section 364.2, 17 subsection 4 , paragraph f , subparagraph (1), subparagraph 18 division (b), during fiscal years beginning on or after July 1, 19 2013 2024 , but before July 1, 2030, the adjustment, renewal, 20 or extension of any part or all of the legal indebtedness of 21 a city, whether evidenced by bonds, warrants, court-approved 22 settlements, court-approved compromises, or judgments, or the 23 funding or refunding of the same, if such legal indebtedness 24 relates to restitution, a refund, or a return ordered by a 25 court of competent jurisdiction for franchise fees assessed 26 and collected by the city before June 20, 2013 solely for the 27 reduction of property tax levies that support the operation and 28 maintenance of a municipal transit system or a regional transit 29 district or to maintain transportation service levels of a 30 municipal transit system or a regional transit district . This 31 paragraph j is repealed July 1, 2030. 32 Sec. 155. EFFECTIVE DATE. This division of this Act takes 33 effect July 1, 2024. 34 EXPLANATION 35 -78- LSB 1461SV (4) 90 md/jh 78/ 91
S.F. 550 The inclusion of this explanation does not constitute agreement with 1 the explanations substance by the members of the general assembly. 2 This bill relates to state and local revenue and finances. 3 DIVISION I SALES AND USE TAX RATES AND DISTRIBUTION. An 4 amendment to the Iowa Constitution was ratified on November 2, 5 2010, which created a natural resources and outdoor recreation 6 trust fund (fund) and dedicated a portion of state revenues to 7 the fund for the purposes of protecting and enhancing water 8 quality and natural areas in the state including parks, trails, 9 and fish and wildlife habitat, and conserving agricultural 10 soils in the state (Article VII, section 10). The fund is 11 codified in Code section 461.31. Pursuant to the amendment, 12 the amount credited to the fund will be equal to the amount 13 generated by an increase in the state sales tax rate occurring 14 after the effective date of the constitutional amendment, but 15 shall not exceed the amount that a state sales tax rate of 16 0.375 percent would generate. The state sales tax rate has not 17 been increased since the effective date of the constitutional 18 amendment, so no amounts have been credited to the fund. The 19 bill increases the sales tax rate and the use tax rate from 6 20 percent to 7 percent beginning January 1, 2025. In lieu of the 21 local option and sales services tax revenue repealed in another 22 division of the bill, the bill transfers a specified amount of 23 the state sales and use tax revenues collected to the local 24 sales and use tax fund established under Code chapter 423B, 25 for allocation and expenditure in a manner similar to that 26 which was provided for local sales and services tax revenues. 27 However, as provided in another division of the bill, amounts 28 resulting from the increase in the use tax for the period 29 beginning January 1, 2025, through December 31, 2043, are 30 deposited in the local use tax supplement fund to be used 31 for purposes of that fund. The amount of sales tax revenues 32 transferred to the local sales and use tax fund under Code 33 chapter 423B for the period beginning January 1, 2025, through 34 December 31, 2027, is an amount equating to a tax of 1.4 35 -79- LSB 1461SV (4) 90 md/jh 79/ 91
S.F. 550 percent. The amount transferred is then reduced each year by 1 an amount equating to a 0.05 percent tax until January 1, 2030. 2 The amount of sales tax revenues transferred to the local sales 3 and use tax fund under Code chapter 423B beginning January 1, 4 2030, is an amount equating to a tax of 1.25 percent. The bill, 5 as the result of Article VII, section 10, of the Constitution 6 of the State of Iowa, also amends the transfer of sales tax 7 revenues to the secure an advanced vision for education fund in 8 Code section 423.2A(2). 9 DIVISION II WATER SERVICE TAX. The bill changes the water 10 service tax on the furnishing of water to consumers so that the 11 rate is equal to the rate of the sales tax that is being imposed 12 under Code chapter 423. 13 Currently, one-half of the moneys collected from the water 14 service tax are deposited into the general fund of the state 15 and one-half of the moneys are deposited into the water quality 16 financial assistance fund created in Code section 16.134A. 17 The bill strikes the provision requiring one-half of the 18 water service tax moneys be deposited into the water quality 19 financial assistance fund and requires all moneys generated 20 from the water service tax be deposited into the general fund 21 of the state. 22 The bill also strikes the future repeal of the water service 23 excise tax. 24 The division takes effect January 1, 2025. 25 DIVISION III LOCAL OPTION TAXES. Code chapter 423B 26 authorizes, following approval at election, the imposition of 27 a local option sales and services tax at a rate not to exceed 28 one percent to be administered similarly to the state sales 29 and services tax and authorizes the imposition of a local 30 vehicle tax. The bill strikes the authorization for the local 31 vehicle tax and also strikes the authorization to impose the 32 local option sales and services tax under Code chapter 423B, 33 but instead authorizes cities and counties to expend specified 34 state sales and use tax revenues that are deposited in the 35 -80- LSB 1461SV (4) 90 md/jh 80/ 91
S.F. 550 local sales and use tax fund following the increase of the 1 state sales and use taxes rates in previous sections of the 2 bill. 3 Under the bill, sales and services tax revenue credited to 4 and deposited in each countys account within the local sales 5 and use tax fund must be expended by each recipient county 6 and city as required by the jurisdictions revenue purpose 7 statement, including a revenue purpose statement approved at 8 election prior to January 1, 2025, and in effect on or set to 9 take effect on or after January 1, 2025, for the use of local 10 option sales and use tax revenue previously collected under 11 Code chapter 423B, or be used to reduce specified property tax 12 levies. 13 The bill also modifies the requirements and permissible uses 14 of funds received under Code chapter 423B. The bill specifies 15 that for a county with a population of 400,000 or more, a 16 revenue purpose statement governing the use of revenues for the 17 unincorporated area of the county approved on or after January 18 1, 2025, shall require the use of 75 percent of such moneys 19 for property tax relief. Additionally, the bill provides that 20 property tax relief includes payments under a Code chapter 21 28E agreement for purposes of a regional transit district if 22 such payments are used to reduce the regional transit district 23 levy. For a city located in whole or in part in a county with 24 a population of 400,000 or more, the use of revenues received 25 under Code chapter 423B for such regional transit district 26 purposes shall not exceed 10 percent of the amount received 27 and for a county with a population of 400,000 or more, for the 28 unincorporated area, shall not exceed 25 percent. 29 The board of supervisors of each county and the city 30 council of each city may adopt by resolution a revenue purpose 31 statement for the expenditure of funds received under Code 32 chapter 423B. 33 The revenues transferred to the local sales and use tax fund 34 continue to be allocated to the specific county account for 35 -81- LSB 1461SV (4) 90 md/jh 81/ 91
S.F. 550 the county in which the tax was collected. Additionally, all 1 cities and counties are eligible to receive the allocation of 2 revenues, not just those that had previously approved the local 3 option tax. 4 As provided in another division of the bill, specified 5 amounts of use tax revenue is transferred to the local use 6 tax supplement fund, as created in the bill. Moneys in the 7 local use tax supplement fund are annually appropriated to the 8 department of revenue to be used for supplement payments to 9 cities and counties. For each year during the period beginning 10 January 1, 2025, through December 31, 2043, each city or county 11 for the unincorporated portion of the county shall receive a 12 local use tax supplement payment equal to the difference, but 13 not less than zero, between the amount of revenue received 14 by the city or county under Code section 423B.7, Code 2023, 15 for the period beginning January 1, 2024, and ending December 16 31, 2024, minus the amount that would have been received by 17 that city or county for that period if all cities and the 18 county were eligible for distributions of such revenues under 19 Code section 423B.7, Code 2023. If moneys in the fund are 20 insufficient to pay all supplement amounts for the year, the 21 director of revenue shall prorate the payment of the supplement 22 payments. The supplement payment is required to be combined 23 with and be used in the same manner and be subject to the same 24 requirements as moneys received by the city or county under 25 Code section 423B.7 for that year. The bill establishes a 26 future repeal of the Code section establishing the supplement 27 payments on January 1, 2044. Moneys in the fund upon the 28 repeal shall be transferred to the appropriate county accounts 29 for the counties from which the tax was paid. 30 Code section 423B.10 allows a city in which a local sales 31 and services tax is imposed to, by ordinance and following 32 approval of the board of supervisors, to provide for the use 33 of a designated amount of increased local option sales and 34 services tax revenue for urban renewal purposes. The bill 35 -82- LSB 1461SV (4) 90 md/jh 82/ 91
S.F. 550 modifies provisions governing this authorization to provide for 1 the use of a specified amount of the applicable increased state 2 sales tax revenues deposited in the local sales and use tax 3 fund in lieu of the increased local option sales and services 4 tax revenue. The bill allows city ordinances providing for the 5 use of certain local option sales and services tax revenues for 6 urban renewal purposes in effect on January 1, 2025, to remain 7 in effect until expiration, amendment, or repeal. 8 The bill also eliminates the authority to impose a local 9 sales and services tax under the quad cities interstate 10 metropolitan authority compact under Code chapter 28A beginning 11 on January 1, 2025. 12 The division takes effect January 1, 2025. 13 DIVISION IV HOMESTEAD PROPERTY TAX CREDIT. Code chapter 14 425 establishes a homestead property tax credit in an amount 15 equal to the property tax levy on the first $4,850 of actual 16 value. The homestead credit is paid for from the homestead 17 credit fund under Code section 425.1 for which there is an 18 annual appropriation for an amount sufficient to implement the 19 credit. 20 The bill reduces the amount of the homestead credit over a 21 period beginning with the fiscal year beginning July 1, 2025, 22 until the credit is ended in the fiscal year beginning July 23 1, 2028, at which time the remaining moneys in the homestead 24 credit fund are transferred for deposit in the general fund 25 of the state. During the same period, the bill establishes 26 a homestead property tax exemption. For the assessment year 27 beginning January 1, 2024, the exemption amount is $2,500, 28 but $4,125 for owners 65 or older. For the assessment year 29 beginning January 1, 2025, the exemption amount is $5,000, 30 but $8,250 for owners 65 or older. For the assessment year 31 beginning January 1, 2026, the exemption amount is $7,500, 32 but $12,375 for owners 65 or older. For the assessment year 33 beginning January 1, 2027, and each succeeding assessment year, 34 the exemption amount is $10,000, but $16,500 for owners 65 or 35 -83- LSB 1461SV (4) 90 md/jh 83/ 91
S.F. 550 older. 1 Code section 25B.7 provides that if a state appropriation 2 made to fund a credit or exemption is not sufficient to fully 3 fund the credit or exemption, the political subdivision shall 4 be required to extend to the taxpayer only that portion of the 5 credit or exemption estimated by the department of revenue to 6 be funded by the state appropriation. The requirement for 7 fully funding and the consequences of not fully funding under 8 Code section 25B.7 applies to the homestead credit under Code 9 chapter 425. The bill strikes the portion of Code section 10 25B.7 that makes the requirement for fully funding and the 11 consequences of not fully funding applicable to the homestead 12 property tax credit and provides that the general requirement 13 of Code section 25B.7 for property tax credits and exemptions 14 on or after January 1, 1997, does not apply to the homestead 15 property tax exemption established in the bill. 16 The bill makes corresponding changes to various other 17 provisions of the Code relating to and referencing the 18 homestead property tax credit. 19 The bill provides that homestead credit claims approved 20 prior to and valid on the effective date of the division shall 21 result in a homestead tax exemption under Code chapter 425, 22 subchapter I, as enacted in the division, without further 23 filing by the claimant. 24 Division IV applies to assessment years beginning on or 25 after January 1, 2024. 26 DIVISION V ELDERLY PROPERTY TAX CREDIT. The bill amends 27 Code section 423.23 to modify part of the calculation for the 28 elderly property tax credit to account for the homestead credit 29 for the property under Code section 425.1. The division takes 30 effect upon enactment and applies retroactively to claims for 31 the credit filed on or after January 1, 2022. 32 DIVISION VI MILITARY SERVICE PROPERTY TAX EXEMPTION AND 33 CREDIT. Division VII relates to the military service property 34 tax exemption and credit. Under current law, veterans of World 35 -84- LSB 1461SV (4) 90 md/jh 84/ 91
S.F. 550 War I are entitled to a property tax exemption of $2,778 in 1 taxable value and honorably discharged veterans who served 2 during other specific time periods are entitled to a property 3 tax exemption of $1,852 in taxable value. The bill increases 4 the exemption amount for all eligible veterans to $2,055 for 5 the assessment year beginning January 1, 2024, and to $4,000 6 for assessment years beginning on or after January 1, 2025. 7 Under current law, the state provides funding to local 8 governments for the military service property tax exemption 9 and credit up to $6.92 per $1,000 of assessed value of the 10 exempt property. The bill reduces the amount of the credit for 11 the fiscal year beginning July 1, 2025, to $6.92 per $1,000 12 of assessed value of the exempt property, but not to exceed 13 $945 of assessed value and eliminates funding for the credit 14 starting with the fiscal year beginning July 1, 2026. 15 Code section 25B.7 provides that if a state appropriation 16 made to fund a credit or exemption is not sufficient to fully 17 fund the credit or exemption, the political subdivision shall 18 be required to extend to the taxpayer only that portion of the 19 credit or exemption estimated by the department of revenue to 20 be funded by the state appropriation. The requirement for 21 fully funding and the consequences of not fully funding under 22 Code section 25B.7 applies to the military service property 23 tax credit and exemption to the extent of $6.92 per $1,000 24 of assessed value of the exempt property. The bill strikes 25 the portion of Code section 25B.7 that makes the requirement 26 for fully funding and the consequences of not fully funding 27 applicable to the military service property tax credit and 28 exemption and provides that the general requirement of Code 29 section 25B.7 for property tax credits and exemptions on or 30 after January 1, 1997, does not apply to the military property 31 tax exemption established in the bill. 32 The division applies to assessment years beginning on or 33 after January 1, 2024. 34 DIVISION VII PROPERTY TAX ASSESSMENT LIMITATIONS. Code 35 -85- LSB 1461SV (4) 90 md/jh 85/ 91
S.F. 550 section 441.21 establishes assessment limitations for various 1 classifications of property. The bill reduces the percentage 2 of actual value at which property valued by the department 3 of revenue pursuant to Code chapter 438 (pipelines) shall 4 be assessed by 5 percent each year from 100 percent for the 5 assessment year beginning January 1, 2024, to 90 percent for 6 assessment years beginning on or after January 1, 2025. 7 The bill also reduces the percentage of actual value at 8 which the portion of commercial, industrial, and railway 9 properties that exceeds $150,000 is assessed by 5 percent each 10 year from 90 percent for the assessment year beginning January 11 1, 2024, to 80 percent for assessment years beginning on or 12 after January 1, 2026. Accordingly, the bill makes a change 13 to the payments made to local governments under Code section 14 441.21(5)(e) that are in part calculated using the assessment 15 limitation applied to commercial and industrial property. 16 2018 Iowa Acts, chapter 1158, changed the assessment of 17 telephone and telegraph company property under Code chapter 18 433. Code chapter 433 applies to the assessment and taxation 19 of telephone and telegraph company property for assessment 20 years beginning before January 1, 2022. Starting with the 21 assessment year beginning January 1, 2022, such property is 22 assessed locally in the same manner as commercial property. 23 References to Code chapter 433 are not included in the 24 applicable Code section as amended in the bill for assessment 25 years beginning on or after January 1, 2025. 26 This division of the bill takes effect July 1, 2024. 27 DIVISION VIII NATURAL RESOURCES AND OUTDOOR RECREATION 28 TRUST FUND. The bill amends provisions in Code chapter 461 29 (the natural resources and outdoor recreation Act) that is 30 to implement Article VII, section 10, of the Constitution 31 of the State of Iowa when the sales tax is increased. The 32 bill increases the sales tax in division I. The Code chapter 33 establishes the natural resources and outdoor recreation trust 34 fund (trust fund) and associated accounts (renamed trust 35 -86- LSB 1461SV (4) 90 md/jh 86/ 91
S.F. 550 accounts) supported by a portion of state revenue generated 1 by an increase in the states sales tax. The purpose of 2 the constitutional provision is to protect and enhance water 3 quality and natural areas, including parks, trails, and fish 4 and wildlife habitat, and conserve agricultural soils in this 5 state. 6 ALLOCATIONS OF TRUST FUND MONEYS. The bill alters the 7 percentage of moneys to be allocated from the trust fund 8 (trust fund moneys) to its trust accounts, including the 9 natural resources trust account administered by the department 10 of natural resources (DNR), the soil conservation and water 11 protection trust account (renamed the soil conservation and 12 nonpoint source water protection trust account) administered 13 by the department of agriculture and land stewardship (DALS), 14 the watershed protection trust account administered by DNR 15 in cooperation with DALS, the local conservation partnership 16 trust account administered by DNR, the trails trust account 17 (renamed the water and land trails trust account) administered 18 by DOT in cooperation with DNR, and the lake restoration 19 trust account (renamed the lake and stream restoration trust 20 account) administered by DNR. It also reduces the allocations 21 of trust fund moneys to the Iowa resources enhancement and 22 protection (REAP) fund administered by DNR. It transfers 23 trust fund moneys allocated to the renamed soil conservation 24 and nonpoint source water protection trust account and the 25 watershed protection trust account to the water quality 26 infrastructure fund used to support nonpoint water quality 27 programs administered by DALS; and to the water quality 28 financial assistance fund administered by the Iowa finance 29 authority (IFA) to support the wastewater and drinking water 30 treatment financial assistance program (administered by IFA), 31 the water quality financing program (administered by IFA), and 32 the water quality urban infrastructure program (administered by 33 DALS). The bill revises provisions in the local conservation 34 partnership trust account as a program to be administered 35 -87- LSB 1461SV (4) 90 md/jh 87/ 91
S.F. 550 by DNR. The bill provides that trust fund moneys may be 1 transferred from the renamed soil conservation and nonpoint 2 source water protection trust account to the water quality 3 infrastructure fund and from the watershed protection trust 4 account to the water quality financial assistance fund upon 5 direction by the custodial department. The bill eliminates 6 current funding sources, including the annual appropriation 7 to the REAP fund from the general fund which is due to expire 8 on June 30, 2026, and both a tax on the sales price on water 9 service, which another division of the bill repeals, and the 10 use of wagering tax receipts, which would otherwise expire on 11 July 1, 2039. 12 Code section 312.2(2) requires the treasurer of state 13 to allocate from the road use tax fund an amount equal to 14 sixty-five hundredths of one percent of all road use tax funds 15 for the purposes of carrying out Code section 307.24(5). Code 16 section 307.24(5) requires such funds to be used to construct, 17 reconstruct, improve, and maintain state institutional roads 18 and state park roads which are part of the state park, state 19 institution, and other specified state land road systems, and 20 bridges on such roads, roads located on state fairgrounds, 21 and the roads and bridges located on property of community 22 colleges, upon the request of the state board, department, 23 or commission which has jurisdiction over such roads. The 24 bill strikes the statutory allocation of such funding for 25 department of natural resources facility roads and reallocates 26 that portion of the funding to the remaining entities that 27 receive allocations under Code section 307.24(5). The bill 28 authorizes the department of natural resources to use moneys in 29 the natural resources trust account created within the natural 30 resources trust fund under Code section 461.32, as amended 31 in the bill, to support the construction, maintenance, or 32 expansion of roads on state-owned land under the jurisdiction 33 of the department of natural resources. 34 ADMINISTRATION. The bill provides that the legislative 35 -88- LSB 1461SV (4) 90 md/jh 88/ 91
S.F. 550 council is to appoint a committee to review the trust fund and 1 its allocations. The bill requires the economic development 2 authority to be involved in decisions that use trust fund 3 moneys to support initiatives with a recreational purpose. In 4 making decisions to expend trust fund moneys, a higher priority 5 is given to supporting an initiative that furthers a goal of 6 the Iowa nutrient reduction strategy. A higher priority is 7 provided to maintaining or preserving existing public use lands 8 rather than acquiring new land. Several provisions place 9 restrictions upon the use of trust fund moneys for support 10 relating to certain initiatives, including athletic fields or 11 facilities. Trust fund moneys cannot be used to support an 12 exercise of eminent domain powers. 13 REPEAL. Code chapter 461 is repealed December 31, 2051. 14 EFFECTIVE DATE. The division of the bill takes effect 15 January 1, 2025. 16 DIVISION IX CHARITABLE CONSERVATION CONTRIBUTION 17 TAX CREDIT. The bill prohibits a charitable conservation 18 contribution tax credit from being claimed against the 19 individual or corporate income tax, except for qualified real 20 property interests conveyed prior to January 1, 2025. The bill 21 allows the credit in excess of tax liability to carry forward 22 for qualified real property interests conveyed prior to January 23 1, 2025. The bill preserves existing rights and is intended to 24 not limit, modify, or otherwise adversely affect any amount of 25 the tax credit issued, awarded, or allowed prior to the repeal 26 date of any tax credit. The division takes effect January 1, 27 2025, and applies to tax years beginning on or after that date. 28 DIVISION X PROPERTY TAX BENEFITS AND INCENTIVES. The bill 29 amends Code chapter 404 (urban revitalization areas) to provide 30 that for revitalization areas established on or after the 31 effective date of the division and for first-year property tax 32 exemption applications for property located in a revitalization 33 area in existence on the effective date of the division filed 34 on or after the effective date of the division, commercial 35 -89- LSB 1461SV (4) 90 md/jh 89/ 91
S.F. 550 property shall not receive a tax exemption under Code chapter 1 404 unless the city or county, as applicable, and the owner 2 of the qualified real estate enter into a written assessment 3 agreement specifying a minimum actual value until a specified 4 termination date for the duration of the exemption period. 5 The bill also establishes limitations on exemptions for 6 residential property within revitalization areas. For 7 revitalization areas established on or after the effective date 8 of the division and for first-year exemption applications for 9 property located in a revitalization area in existence on the 10 effective date of the division filed on or after the effective 11 date of the division, an exemption otherwise authorized under 12 Code chapter 404 shall not be authorized for or approved by a 13 city or county, as applicable, for property that is residential 14 property. 15 Division X of the bill takes effect July 1, 2024. 16 DIVISION XI TAX INCREMENT FINANCING. Code section 403.19 17 authorizes municipalities to provide by ordinance for the 18 division of property tax revenue (tax increment financing) 19 collected against property located within an urban renewal 20 area. The bill provides that for property taxes due and 21 payable in fiscal years beginning on or after July 1, 2025, 22 if the portion of the urban renewal area that is subject 23 to a division of property tax revenue contains wind energy 24 conversion property that is subject to special valuation under 25 Code section 427B.26, foundation property taxes of a school 26 district imposed under Code section 257.3 in that portion of 27 the urban renewal area shall not be subject to the division of 28 property tax revenue and shall instead be paid to the school 29 district. 30 DIVISION XII TRANSIT FUNDING. Cities may grant various 31 types of franchises for specified services under Code section 32 362.4 and may generally impose a franchise fee based upon 33 a percentage of gross revenues generated from sales of the 34 franchisee within the city not to exceed 5 percent. An 35 -90- LSB 1461SV (4) 90 md/jh 90/ 91
S.F. 550 exception allowing for a franchise fee up to 7.5 percent exists 1 in specified circumstances for a period of fiscal years ending 2 July 1, 2030, if approved at election. The bill strikes 3 the provisions providing for that exception and establishes 4 conditions under which a city with a population that exceeds 5 200,000 may impose a franchise fee of up to 7.5 percent for 6 fiscal years beginning on or after July 1, 2024. The bill 7 requires that franchise fee amounts collected during such 8 fiscal years in excess of 5 percent of gross revenues generated 9 from sales shall be used solely for the reduction of property 10 tax levies used to support the operation and maintenance of a 11 municipal transit system or a regional transit district or to 12 maintain transportation service levels of a municipal transit 13 system or a regional transit district. 14 The division of the bill takes effect July 1, 2024. 15 -91- LSB 1461SV (4) 90 md/jh 91/ 91