House Study Bill 307 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON KAUFMANN) A BILL FOR An Act relating to the assessment of certain development 1 property, and including effective date and retroactive 2 applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2625YC (1) 91 jm/md
H.F. _____ Section 1. Section 441.72, Code 2025, is amended to read as 1 follows: 2 441.72 Assessment of platted lots development property . 3 1. a. Except as provided in subsection 2 , when a 4 subdivision plat is recorded pursuant to chapter 354 , the 5 individual lots within the subdivision plat shall not be 6 assessed in excess of the total assessment of the land as 7 acreage or unimproved property for five years after the 8 recording of the plat or until the lot is actually improved 9 with permanent construction, whichever occurs first. When an 10 individual lot has been improved with permanent construction, 11 the lot shall be assessed for taxation purposes as provided 12 in chapter 428 and this chapter . Property acquired for 13 development on or after January 1, 2020, or property owned 14 for development upon which development activities occur on or 15 after January 1, 2020, shall continue to be classified and 16 assessed for taxation in the manner the property was prior to 17 the acquisition or commencement of development activities. The 18 assessor shall not change the classification or assessment of 19 the property or a lot on the property while development is 20 occurring until the property or lot is improved with a new 21 permanent structure, sold, or five years have elapsed from the 22 date the subdivision plat is recorded pursuant to chapter 354, 23 if applicable. Upon the occurrence of one or more such events, 24 the property or lot shall be assessed for taxation purposes as 25 provided in chapter 428 and this chapter. 26 b. As used in this subsection, development means any of 27 the following: 28 (1) A reconstruction, alteration of the size or material 29 change in the external appearance of an existing structure on 30 a lot. 31 (2) A change in the intensity of the use of lots or a change 32 in zoning, including an increase in the number of dwelling 33 units in an existing structure, or further subdividing the 34 lots to increase the number of dwelling units, commercial 35 -1- LSB 2625YC (1) 91 jm/md 1/ 4
H.F. _____ structures, manufacturing establishments, or offices. 1 (3) Clearing the lots in anticipation of construction. 2 (4) Depositing fill dirt on the lots in anticipation of 3 construction. 4 (5) Installing streets and public utilities on the lots. 5 2. For subdivision plats recorded pursuant to chapter 6 354 on or after January 1, 2004, but before January 1, 2011, 7 the individual lots within the subdivision plat shall not 8 be assessed in excess of the total assessment of the land 9 as acreage or unimproved property for eight years after the 10 recording of the plat or until the lot is actually improved 11 with permanent construction, whichever occurs first. When an 12 individual lot has been improved with permanent construction, 13 the lot shall be assessed for taxation purposes as provided in 14 chapter 428 and this chapter . 15 3. 2. This section does not apply to special assessment 16 levies. 17 Sec. 2. REPEAL. Section 405.1, Code 2025, is repealed. 18 Sec. 3. IMPLEMENTATION. Nothing in this Act shall be 19 construed to require the refund or modification of property 20 taxes that are attributable to assessment years beginning 21 before January 1, 2025, or the adjustment of property 22 assessments for assessment years beginning before January 1, 23 2025. 24 Sec. 4. EFFECTIVE DATE. This Act, being deemed of immediate 25 importance, takes effect upon enactment. 26 Sec. 5. RETROACTIVE APPLICABILITY. This Act applies 27 retroactively to assessment years beginning on or after January 28 1, 2025. 29 EXPLANATION 30 The inclusion of this explanation does not constitute agreement with 31 the explanations substance by the members of the general assembly. 32 This bill repeals Code section 405.1, which authorizes a 33 county board of supervisors to adopt an ordinance providing 34 that property acquired and subdivided for development of 35 -2- LSB 2625YC (1) 91 jm/md 2/ 4
H.F. _____ housing shall continue to be assessed for taxation in the 1 manner that it was prior to the acquisition for housing until 2 the lot is sold for construction or occupancy of housing or 3 five years from the date of subdivision, whichever is shorter. 4 Code section 405.1 also authorizes time extensions of certain 5 ordinances that affect the assessment of property subdivided 6 for development of housing and authorizes the time extensions 7 of certain ordinances by counties and by cities in the portion 8 of the applicable area located in the incorporated area of 9 the city. Additionally, the Code section authorizes cities 10 and counties to adopt, amend, or extend such ordinances and 11 provides that property acquired and subdivided for development 12 of housing shall continue to be assessed for taxation and taxed 13 in the manner it was prior to its acquisition for housing until 14 the lot is sold for construction or occupancy of housing. 15 Code section 441.72 provides that a platted lot for which 16 a subdivision plat was recorded is assessed for property tax 17 purposes as acreage or unimproved property for five years or 18 until the lot is actually improved with permanent construction, 19 whichever occurs first. However, for subdivision plats 20 recorded on or after January 1, 2004, but before January 1, 21 2011, the time limit is eight years. 22 The bill strikes the portions of Code section 441.72 23 relating to the five-year limitation and the eight-year 24 limitation and provides that property acquired for development 25 on or after January 1, 2020, or property owned for development 26 upon which development activities occur on or after January 1, 27 2020, shall continue to be classified and assessed for taxation 28 in the manner the property was prior to the acquisition or 29 commencement of development activities. The bill specifies 30 the assessor shall not change the classification or assessment 31 until the property or lot is improved with a new permanent 32 structure, sold, or five years have elapsed since the 33 subdivision plat was recorded, if applicable. 34 The bill defines development to include reconstruction, 35 -3- LSB 2625YC (1) 91 jm/md 3/ 4
H.F. _____ zoning changes, clearing lots, depositing fill dirt, and 1 installing streets and public utilities on the lots. 2 The bill specifies nothing shall be construed to require the 3 refund or modification of property taxes that are attributable 4 to assessment years beginning before January 1, 2025, or 5 the adjustment of property assessments for assessment years 6 beginning before January 1, 2025. 7 The bill takes effect upon enactment and applies 8 retroactively to assessment years beginning on or after January 9 1, 2025. 10 -4- LSB 2625YC (1) 91 jm/md 4/ 4