HOUSE REPUBLICAN STAFF ANALYSIS
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Bill:
Committee:
Date:
Floor Manager:
Staff:
Senate File 295 – Conference Report
Ways and Means
May 16, 2013
Rep. Sands
Dustin Blythe (1-3452)
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Conference Committee Report for SF 295 – Property Tax
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Summary of Action
The House Ways and Means committee passed HSB 150 on March 19, 2013 with a vote of 14-11.
The House Appropriations Committee passed HF 609/HSB 150 on March 26, 2013 with a vote of 14-10
The Senate approved SF 295 on April 15th, with a vote of 29-21.
The House amended SF 295 on April 17, 2013 with a vote of 54-45.
Sent to Conference Committee on April 29th, 2013.
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Division I—Business Property Tax Credit (Based on Senate Democrats plan)
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Creates a Business Property Tax Credit for property taxes due and payable in fiscal year 2015.
$50 million is appropriated in fiscal year 2015 to the Business Property Tax Credit Fund
$100 million is appropriated in fiscal year 2016
$125 million is appropriated in fiscal year 2017
$125 million every year thereafter
Each person who wishes to file a claim will obtain a form from the County Assessor. The form does not
have to be filed again until the property is sold or transferred.
The state will use the money appropriated into the Business Property Tax Credit Fund to reimburse local
governments the amount of credits issued.
When fully phased in, at least $145,000 of property value on every business would be equal to the
residential rollback.
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Division II —Property Tax Assessment Limitation and Replacement (Based on House Republican plans)
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Assessment growth limitation moves from 4% to 3% on Ag and residential immediately.
Commercial and Industrial will assessed at 95% of valuation starting January 1, 2013; at 90% starting
January 1, 2014; and is frozen at 90% thereafter.
The State will appropriate money for replacement of the lost revenue. Payments will be made by IDR to
county treasurers:
o FY 15 $78.8 million (includes multi-residential)
o FY 16 $162.8 million (includes multi-residential)
o FY 17 $154.1 million (does not include multi-residential and capped at this level going forward)
Division III—Multi-residential Property Classification
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Creates a new property classification: Multi-residential
Multi-residential will include apartments, nursing homes, assisted living facilities , and certain other rental
property
The existing classifications are Residential, Agricultural, Commercial, Industrial
Multi-residential properties will eventually equal the residential rollback after 10 years.
Total fiscal impact to local governments is $85.3 million when fully phased in.
o Assessment Year 2013 95%
o Assessment Year 2014 90%
o Assessment Year 2015 86%
o Assessment Year 2016 82%
o Assessment Year 2017 78%
o Assessment Year 2018 75%
o Assessment Year 2019 71%
o Assessment year 2020 67%
o Assessment year 2021 63%
o Assessment year 2022 and thereafter: Residential rate
Division IV —Telecommunications Property
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Determining the taxable value of each company stays the same
Each telephone company will receive a partial exemption from taxation on the value of the company’s
property. This is phased in, with half in assessment year 2013 (FY 15), and the remainder being added in
assessment year 2014 (FY 16)
Department of Revenue is directed to complete a comprehensive study of the telecommunications
industry and report recommendations for change to the General Assembly
Assessed value
$0-$20M
$20-$55M
$55-$500M
>$500M
Exemption
40%
35%
25%
20%
Total fiscal impact to local governments is $16 million when fully phased in.
Division V – Iowa Taxpayers Trust Fund Tax Credit
 Each year, beginning July 1, 2014, the balance of the Taxpayers Trust Fund exceeds $30 million a tax credit
will be issued to Iowa taxpayers
 The tax credit will be issued to Iowans with a tax liability
 $60 million is the maximum amount that can flow into the taxpayer trust fund each year
 $60 million equals a $27 credit per filer. $120 million would equal $54
Division VI -Property Assessment Appeal Board
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Largely HF 621 with some changes
Five year sunset – July 1, 2018, lower salaries, adding another appraiser to the board (replacing the finance
profession with state and local tax policy experience, allowing for a speedier hearing process.
Division VII—Earned Income Tax Credit
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Increases the Earned Income Tax Credit from 7% to 14% in tax year 2013; 15% in tax year 2014
The credit remains refundable.
The increase is effective retroactively to January 1, 2013.
Fiscal impact: $30.8 million in FY 14 , increasing to $34.5 in FY 15
Total Impact of the Property Tax Proposal to the General Fund
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This includes Commercial/Industrial Reimbursement appropriation to local governments, the funding of
the Senate’s business tax credit, and the increase in the state’s school aid appropriation
FY 15 $136.0 million
FY 16 $277.7 million
FY 17 $304.0 million
FY 18 $312.3 million
FY 19 $321.5 million
FY 20 $331.3 million
FY 21 $324.5 million
FY 22 $354.3 million
FY 23 $367.7 million
FY 24 $383.6 million
Net Revenue Reductions in Growth to Local Governments (after the backfill appropriations)
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FY 15 $7.6 million
FY 16 $15.3 million
FY 17 $25.9 million
FY 18 $38.3 million
FY 19 $53.2 million
FY 20 $70.8 million
FY 21 $95.7 million
FY 22 $116.9 million
FY 23 $139.7 million
FY 24 $177.7 million