Senate File 598 - Introduced SENATE FILE 598 BY COMMITTEE ON LOCAL GOVERNMENT (SUCCESSOR TO SSB 1180) 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 2625SV (3) 91 jm/md
S.F. 598 Section 1. Section 441.72, Code 2025, is amended to read as 1 follows: 2 441.72 Assessment of platted lots and development property . 3 1. Except as provided in subsection 2 , when a subdivision 4 plat is recorded pursuant to chapter 354 , the individual lots 5 within the subdivision plat shall continue to be classified 6 and assessed for taxation in the manner the property was prior 7 to the recording of the plat and the individual lots shall not 8 be assessed in excess of the total assessment of the land as 9 acreage or unimproved property . The assessor shall not change 10 the classification or assessment of the individual lots for 11 five years after the recording of the plat or until the lot is 12 actually improved with permanent construction, whichever occurs 13 first. When an individual lot has been improved with permanent 14 construction, the lot shall be assessed for taxation purposes 15 as provided in chapter 428 and this chapter . 16 2. For subdivision plats recorded pursuant to chapter 17 354 on or after January 1, 2004, but before January 1, 2011, 18 the individual lots within the subdivision plat shall not 19 be assessed in excess of the total assessment of the land 20 as acreage or unimproved property for eight years after the 21 recording of the plat or until the lot is actually improved 22 with permanent construction, whichever occurs first. When an 23 individual lot has been improved with permanent construction, 24 the lot shall be assessed for taxation purposes as provided in 25 chapter 428 and this chapter . 26 a. Unless the owner elects to withdraw the property from the 27 classification and assessment provisions of this subsection, 28 property acquired for development on or after January 1, 2020, 29 or property owned for development upon which development 30 activities occur on or after January 1, 2020, shall continue 31 to be classified and assessed for taxation in the manner the 32 property was prior to the acquisition or commencement of 33 development activities. The assessor shall not change the 34 classification or assessment of the property or a lot on the 35 -1- LSB 2625SV (3) 91 jm/md 1/ 4
S.F. 598 property while development is occurring until the property or 1 lot is improved with a new permanent structure or is sold. 2 Upon the occurrence of one or more such events, the property 3 or lot shall be assessed for taxation purposes as provided in 4 chapter 428 and this chapter. 5 b. If the owner of property described in paragraph a 6 elects to withdraw the property from the provisions of 7 paragraph a , the owner shall notify the assessor. The 8 notification must be provided to the assessor no later than 9 March 1 of the assessment year for which the owner elects to 10 withdraw the property. The property or lot that has been 11 withdrawn shall be subject to subsection 1, if applicable. 12 c. As used in this subsection, development means any of 13 the following: 14 (1) A reconstruction or alteration of the size or material 15 change in the external appearance of an existing structure on 16 a lot. 17 (2) A change in the intensity of the use of lots or a change 18 in zoning, including an increase in the number of dwelling 19 units in an existing structure, or further subdividing the 20 lots to increase the number of dwelling units, commercial 21 structures, manufacturing establishments, or offices. 22 (3) Clearing the lots in anticipation of construction. 23 (4) Depositing fill dirt on the lots in anticipation of 24 construction. 25 (5) Installing streets and public utilities on the lots. 26 3. This section does not apply to special assessment levies. 27 Sec. 2. REPEAL. Section 405.1, Code 2025, is repealed. 28 Sec. 3. IMPLEMENTATION. Nothing in this Act shall be 29 construed to require the refund or modification of property 30 taxes that are attributable to assessment years beginning 31 before January 1, 2025, or the adjustment of property 32 assessments for assessment years beginning before January 1, 33 2025. 34 Sec. 4. EFFECTIVE DATE. This Act, being deemed of immediate 35 -2- LSB 2625SV (3) 91 jm/md 2/ 4
S.F. 598 importance, takes effect upon enactment. 1 Sec. 5. RETROACTIVE APPLICABILITY. This Act applies 2 retroactively to assessment years beginning on or after January 3 1, 2025. 4 EXPLANATION 5 The inclusion of this explanation does not constitute agreement with 6 the explanations substance by the members of the general assembly. 7 This bill repeals Code section 405.1, which authorizes a 8 county board of supervisors to adopt an ordinance providing 9 that property acquired and subdivided for development of 10 housing shall continue to be assessed for taxation in the 11 manner that it was prior to the acquisition for housing until 12 the lot is sold for construction or occupancy of housing or 13 five years from the date of subdivision, whichever is shorter. 14 Code section 405.1 also authorizes time extensions of certain 15 ordinances that affect the assessment of property subdivided 16 for development of housing and authorizes the time extensions 17 of certain ordinances by counties and by cities in the portion 18 of the applicable area located in the incorporated area of 19 the city. Additionally, the Code section authorizes cities 20 and counties to adopt, amend, or extend such ordinances and 21 provides that property acquired and subdivided for development 22 of housing shall continue to be assessed for taxation and taxed 23 in the manner it was prior to its acquisition for housing until 24 the lot is sold for construction or occupancy of housing. 25 Code section 441.72 provides that a platted lot for which 26 a subdivision plat was recorded is assessed for property tax 27 purposes as acreage or unimproved property for five years or 28 until the lot is actually improved with permanent construction, 29 whichever occurs first. However, for subdivision plats 30 recorded on or after January 1, 2004, but before January 1, 31 2011, the time limit is eight years. 32 The bill modifies Code section 441.72(1) relating to the 33 five-year limitation by specifying when a subdivision plat 34 is recorded, the individual lots within the subdivision plat 35 -3- LSB 2625SV (3) 91 jm/md 3/ 4
S.F. 598 shall continue to be classified and assessed for taxation in 1 the manner the property was prior to the recording of the 2 plat for five years or until the lot is actually improved 3 with permanent construction, whichever occurs first. The 4 bill strikes portions of Code section 441.72(2) relating to 5 the eight-year limitation. The bill provides that, unless 6 the owner elects to withdraw the property from the provisions 7 established in the bill, for property acquired for development 8 on or after January 1, 2020, or property owned for development 9 upon which development activities occur on or after January 10 1, 2020, such property shall continue to be classified and 11 assessed for taxation in the same manner as the property 12 was prior to the acquisition or commencement of development 13 activities, the assessor shall not change the classification 14 and assessment of the property or a lot on the property while 15 development is occurring until the property or lot is improved 16 with a new permanent structure or is sold. The bill allows 17 owners of such property to withdraw the property from this 18 new provision. If such an election is made, the property is 19 subject to the assessment and classification provisions in Code 20 section 441.71(1), as amended in the bill. 21 The bill defines development to include reconstruction, 22 zoning changes, clearing lots, depositing fill dirt, and 23 installing streets and public utilities on the lots. 24 The bill specifies nothing shall be construed to require the 25 refund or modification of property taxes that are attributable 26 to assessment years beginning before January 1, 2025, or 27 the adjustment of property assessments for assessment years 28 beginning before January 1, 2025. 29 The bill takes effect upon enactment and applies 30 retroactively to assessment years beginning on or after January 31 1, 2025. 32 -4- LSB 2625SV (3) 91 jm/md 4/ 4