SF 432 – Department of Revenue agency efficiency bill
SF 436 – Historic Tax credits
SF 454 – Telecommunications property taxes
SF 455 – Sales tax exemption for environmental testing services
HF 621 – Property Assessment Appeal Board, timeline for property tax assessment protests
HF 627 – Property tax exemption for county fairgrounds
HF 632 – Algae cultivation property considered agricultural land
HF 644 – Wireless and wire line surcharges to fund E911 emergency communications systems
FLOOR ACTION:
SF 432 is the Department of Revenue’s (DOR) proposed efficiency bill. The bill eliminates unnecessary notice provisions in the Code, and allows DOR to require counties to share geographic information systems (GIS) data with the department. This data will help DOR more efficiently review and administer property assessment and equalization processes. Currently, 94 of the 99 counties have this GIS technology, which includes detailed physical and demographic information of land and parcels. The bill also allows assessor certification to take in locations around the state. Current law requires the test to be administered in Des Moines. On this passage, the Senate adopted a House amendment that extends the period of time for a property owned by a non-profit enterprise to apply for the property tax exemption that they are already eligible for under law. [5/8: 50-0]
SF 436, as amended by the House, changes the “substantial rehabilitation” threshold for a commercial property to qualify for the credits. Currently, a project must have costs equaling at least 50 percent of the assessed value of the property to qualify as a substantial rehabilitation. The bill changes the threshold to $50,000 or 50 percent of the assessed value, so a property can undergo at least $50,000 in renovations and still qualify even if that amount is less than 50 percent of the assessed value of the property. Additionally, the bill raises the threshold for the size of projects that are eligible to qualify for the portion of the tax credits reserved for smaller projects. Currently, project costs must be $500,000 or less to qualify as a small project. The bill would raise the small project size to $750,000 or less. Finally, the bill allows projects that have incurred at least 50 percent of their project costs within 60 months of receiving the credits an additional year to maintain the credits. Currently, a project must be completed within 60 months of when it is awarded credits. The bill extends the timeframe to 72 months for a project that has incurred at least half of the project costs but not finished by the end of 60 months. On this passage, the Senate accepted a House amendment that struck language to raise the cap on the tax credits that may be claimed per year. [5/8: 50-0]
HF 632 provides that property used directly in the cultivation and production of algae for animal feed, nutritionals or biofuel production shall be assessed as agricultural property. The property must be an enclosed pond or land containing a bioreactor. This is designed to provide that the cultivation of algae is an agricultural process and should be taxed as such. This does not apply to the entire production facility, but just the part where the algae are cultivated. [5/7: 50-0]
HF 627 provides that fairgrounds property owned by a county fair shall be exempt from property taxes. This clarifies that the property is exempt even if the property is used for events besides the county fair. [5/7: 50-0]
HF 644 makes changes to wireless and wire line surcharges used to help fund E911 emergency communications systems in the state. Currently, counties use these surcharges along with property tax dollars to fund their E911 systems. Under this bill, the wire line surcharge would be set at a uniform $1 for each county around the state. This has the effect of raising the wire line surcharge for consumers in 13 counties in Iowa. However, the bill also eliminates existing language that allowed counties to adopt wire line surcharges up to $2.50 for E911 services. Counties that will have their wire line surcharges raised under this provision would be able to reduce the share of property taxes they use to fund E911 services in their county. Also under the bill, the statewide wireless E911 surcharge would be raised from $.65 to $1, equalizing it with the wire line surcharge. Along with this increase, wireless carriers would be allowed to recover their costs for administering E911 services from the surcharge. Also, local public service access points would be required to detail how they are using the surcharge money to be eligible to receive funding from the 35 cent increase in wireless surcharges. If they fail to report, they will not be able to collect the funds they would have received from the increase. The bill requires the Department of Homeland Security to conduct an efficiency study of the E911 delivery process in the state and local jurisdictions, and strengthens the reporting and audit language on spending by local PSAPs. [5/8: 39-11 (Anderson, Behn, Bertrand, Chapman, Chelgren, Dix, Schneider, Seng, Smith, Sorenson, Whitver “no”)]
COMMITTEE ACTION:
SF 454 provides a property tax exemption for the value of qualified telecommunications property for the first 75 percent of value, up to a maximum exemption of $25,250,000. The bill also establishes a study of property taxes for companies providing telecommunications services by any means in Iowa, including but not limited to mobile, wireless, landline, voice over internet protocol. The study will examine the current system for assessing taxes on telecommunication property in Iowa and recommend changes. [5/7: short form]
SF 455 exempts the furnishing of environmental testing services from the state’s sales tax. [5/7: short form]
HF 621, as amended by a strike-after amendment adopted in committee, will make changes to the process and timeline for notice and appeal of property valuations by local assessors and the structure of the Property Assessment Appeals Board (PAAB). These changes include:
• Changing PAAB membership to require that two members be attorneys (instead of the current one) and would require the other member to be a certified general real property appraiser. A certified general real property appraiser will have a wider knowledge base on assessment of properties than the current membership requirement, which does not list what type of appraisal certification the member should have. These requirements will take place upon the filling of a vacancy to the board.
• Salaries for PAAB member will be lowered from $137,000 to $90,000. This lowers the personnel costs of the board while still making it attractive to potential candidates. This change is effective July 1, 2013.
• PAAB members will hear cases individually and not as a three-member panel. The amendment also limits the new evidence that can be introduced to the board on appeal to only a new appraisal or the testimony of the appraiser who conducted the appraisal. This restores the importance of the appeal to the board of review, rather than letting appeals essentially skip the local board and move directly to PAAB.
• Provides a two-year extension to the sunset for PAAB. Without legislation, PAAB will cease to exist after June 30, 2013. This amendment changes that date to June 30, 2015.
•Increases the length of time that taxpayers would have to appeal their cases before the local board of review. Currently, taxpayers must appeal to the board of review from April 16 to May 5, with the assessment notices due to taxpayers on April 15. The proposal would have the assessment notice sent out to taxpayers on April 1. The taxpayers would then be allowed to ask the assessor about their assessment until April 7 through an informal review process established in the amendment. The new timeframe for filing appeals with the local board of review would be from April 7 to May 5.
• Clarifies that a taxpayer can appeal their assessment in an even numbered year by showing a decline in market value for their property. Assessments by local governments are done in odd numbered years, but a taxpayer has always had the right to appeal in an even numbered year as well.
• Provides that local assessors can accept assessment appeals by electronic means. [5/7: 9-6, party-line]