SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON BOLKCOM) A BILL FOR D TLSB 6143XC (13) 84 md/sc R A 1 An Act relating to state and local taxation by providing for 2 an increase in the amount of the earned income tax credit, 3 establishing and modifying property assessment limitations, 4 modifying the assessment and taxation of telecommunications 5 company property, establishing property tax credits for 6 certain commercial, industrial, and railway property, 7 establishing a multiresidential property classification, 8 providing penalties, making appropriations, and including 9 effective date, retroactive applicability, and other 10 applicability provisions. 11 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: F T S.F. _____ A 2012-01-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 DIVISION I EARNED INCOME TAX CREDIT Section 1. Section 422.12B, subsection 1, Code 2011, is amended to read as follows: 1. The taxes imposed under this division less the credits allowed under section 422.12 shall be reduced by an earned income credit equal to seven fifteen percent of the federal earned income credit provided in section 32 of the Internal Revenue Code. Any credit in excess of the tax liability is refundable. Sec. 2. RETROACTIVE APPLICABILITY. This division of this Act applies retroactively to January 1, 2012, for tax years beginning on or after that date. DIVISION II PROPERTY TAX ASSESSMENT LIMITATIONS Sec. 3. Section 441.21, subsection 4, Code Supplement 2011, is amended to read as follows: 4. For valuations established as of January 1, 1979, the percentage of actual value at which agricultural and residential property shall be assessed shall be the quotient of the dividend and divisor as defined in this section. The dividend for each class of property shall be the dividend as determined for each class of property for valuations established as of January 1, 1978, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978, plus six percent of the amount so determined. However, if the difference between the dividend so determined for either class of property and the dividend for that class of property for valuations established as of January 1, 1978, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding D R A F T -1- LSB 6143XC (13) 84 md/sc 1/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978, is less than six percent, the 1979 dividend for the other class of property shall be the dividend as determined for that class of property for valuations established as of January 1, 1978, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978, plus a percentage of the amount so determined which is equal to the percentage by which the dividend as determined for the other class of property for valuations established as of January 1, 1978, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978, is increased in arriving at the 1979 dividend for the other class of property. The divisor for each class of property shall be the total actual value of all such property in the state in the preceding year, as reported by the assessors on the abstracts of assessment submitted for 1978, plus the amount of value added to said total actual value by the revaluation of existing properties in 1979 as equalized by the director of revenue pursuant to section 441.49. The director shall utilize information reported on abstracts of assessment submitted pursuant to section 441.45 in determining such percentage. For valuations established as of January 1, 1980, and each assessment year thereafter beginning before January 1, 2013, the percentage of actual value as equalized by the director of revenue as provided in section 441.49 at which agricultural and residential property shall be assessed shall be calculated in accordance with the methods provided herein including the limitation of D R A F T -2- LSB 6143XC (13) 84 md/sc 2/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 increases in agricultural and residential assessed values to the percentage increase of the other class of property if the other class increases less than the allowable limit adjusted to include the applicable and current values as equalized by the director of revenue, except that any references to six percent in this subsection shall be four percent. For valuations established as of January 1, 2013, and each assessment year thereafter, the percentage of actual value as equalized by the director of revenue as provided in section 441.49 at which agricultural and residential property shall be assessed shall be calculated in accordance with the methods provided herein including the limitation of increases in agricultural and residential assessed values to the percentage increase of the other class of property if the other class increases less than the allowable limit adjusted to include the applicable and current values as equalized by the director of revenue, except that any references to six percent in this subsection shall be three percent. However, for valuations established for the assessment year beginning January 1, 2013, and each assessment year thereafter, if the percentage of actual value at which residential property shall be assessed, as calculated in accordance with the methods provided herein, exceeds sixty percent or is less than fifty percent the director of revenue shall decrease the percentage to sixty percent or increase the percentage to fifty percent, as applicable. For purposes of determining valuations in assessment years beginning on or after January 1, 2014, the percentage for the prior year as determined under this subsection before any increase or decrease by the director of revenue, if necessary, shall be the percentage used in calculating the dividend for that assessment year. Sec. 4. SAVINGS PROVISION. This division of this Act, pursuant to section 4.13, does not affect the operation of, or prohibit the application of, prior provisions of section 441.21, or rules adopted under chapter 17A to administer prior D R A F T -3- LSB 6143XC (13) 84 md/sc 3/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 provisions of section 441.21, for assessment years beginning before January 1, 2013, and for duties, powers, protests, appeals, proceedings, actions, or remedies attributable to an assessment year beginning before January 1, 2013. Sec. 5. APPLICABILITY. This division of this Act applies to assessment years beginning on or after January 1, 2013. DIVISION III TELECOMMUNICATIONS PROPERTY TAX Sec. 6. Section 427A.1, subsection 1, paragraph h, Code 2011, is amended to read as follows: h. Property assessed by the department of revenue pursuant to sections 428.24 to 428.29, or chapters 433, 434, 437, 437A, and 438. Sec. 7. Section 433.4, Code 2011, is amended to read as follows: 433.4 Assessment. 1. The director of revenue shall on or before October 31 each year, proceed to find the actual value of the property of these companies in this state used by the companies in the transaction of telegraph and telephone business, taking into consideration the information obtained from the statements required, and any further information the director can obtain, using the same as a means for determining the actual cash value of the property of these companies within this state. The director shall also take into consideration the valuation of all property of these companies, including franchises and the use of the property in connection with lines outside the state, and making these deductions as may be necessary on account of extra value of property outside the state as compared with the value of property in the state, in order that the actual cash value of the property of the company within this state may be ascertained. The assessment shall include all property of every kind and character whatsoever, real, personal, or mixed, used by the companies in the transaction of telegraph and telephone business; and the The property so included in D R A F T -4- LSB 6143XC (13) 84 md/sc 4/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 the assessment shall not be taxed in any other manner than as provided in this chapter. 2. a. Except as provided in paragraph "c", for assessment years beginning on or after January 1, 2013, a company's property, excluding the property identified in paragraph "b" as exempt from taxation, shall be subject to assessment and taxation under this chapter by the director of revenue in the same manner as property assessed and taxed as commercial property under chapters 427, 427A, 427B, 428, and 441. b. All of the following is exempt from taxation and shall not be assessed for taxation under this chapter: (1) Central office equipment. (2) Qualified telephone company property. However, qualified telephone company property shall be valued and included in the company's assessment for the assessment years, and to the extent specified, in paragraph "c". c. For assessment years beginning on or after January 1, 2013, the director of revenue shall include as part of the actual value determined under paragraph "a" for the applicable assessment year, the following: (1) For the assessment year beginning January 1, 2013, an amount equal to the actual value of the company's qualified telephone company property that exceeds four million dollars. (2) For the assessment year beginning January 1, 2014, an amount equal to the actual value of the company's qualified telephone company property that exceeds eight million dollars. (3) For the assessment year beginning January 1, 2015, an amount equal to the actual value of the company's qualified telephone company property that exceeds twelve million dollars. (4) For the assessment year beginning January 1, 2016, an amount equal to the actual value of the company's qualified telephone company property that exceeds sixteen million dollars. (5) For the assessment year beginning January 1, 2017, and each assessment year thereafter, an amount equal to the actual D R A F T -5- LSB 6143XC (13) 84 md/sc 5/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 value of the company's qualified telephone company property that exceeds twenty million dollars. Sec. 8. Section 433.12, Code 2011, is amended by adding the following new subsections: NEW SUBSECTION. 1A. As used in this chapter, "central office equipment" means motor vehicles, aircraft, tools and other work equipment, furniture, office equipment, general purpose computers, central office switching equipment, nondigital switching equipment, digital electronic switching equipment, operator systems, central office transmission equipment, radio systems, circuit equipment, information origination/termination equipment, station apparatus, customer premises wiring, large private branch exchanges, public telephone terminal equipment, and other terminal equipment, within the meaning of the telecommunications companies account provisions of 47 C.F.R. pt. 32, in effect on the effective date of this division of this Act. NEW SUBSECTION. 3. As used in this chapter, "qualified telephone company property" means poles, aerial cable, underground cable, buried cable, submarine and deep sea cable, intrabuilding network cable, aerial wire, and conduit systems within the meaning of the telecommunications companies account provisions of 47 C.F.R. pt. 32, in effect on the effective date of this division of this Act. Sec. 9. Section 441.21, subsection 5, Code Supplement 2011, is amended to read as follows: 5. For valuations established as of January 1, 1979, commercial property and industrial property, excluding properties referred to in section 427A.1, subsection 8, shall be assessed as a percentage of the actual value of each class of property. The percentage shall be determined for each class of property by the director of revenue for the state in accordance with the provisions of this section. For valuations established as of January 1, 1979, the percentage shall be the quotient of the dividend and divisor as defined in this D R A F T -6- LSB 6143XC (13) 84 md/sc 6/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 section. The dividend for each class of property shall be the total actual valuation for each class of property established for 1978, plus six percent of the amount so determined. The divisor for each class of property shall be the valuation for each class of property established for 1978, as reported by the assessors on the abstracts of assessment for 1978, plus the amount of value added to the total actual value by the revaluation of existing properties in 1979 as equalized by the director of revenue pursuant to section 441.49. For valuations established as of January 1, 1979, property valued by the department of revenue pursuant to chapters 428, 433, 437, and 438 shall be considered as one class of property and shall be assessed as a percentage of its actual value. The percentage shall be determined by the director of revenue in accordance with the provisions of this section. For valuations established as of January 1, 1979, the percentage shall be the quotient of the dividend and divisor as defined in this section. The dividend shall be the total actual valuation established for 1978 by the department of revenue, plus ten percent of the amount so determined. The divisor for property valued by the department of revenue pursuant to chapters 428, 433, 437, and 438 shall be the valuation established for 1978, plus the amount of value added to the total actual value by the revaluation of the property by the department of revenue as of January 1, 1979. For valuations established as of January 1, 1980, commercial property and industrial property, excluding properties referred to in section 427A.1, subsection 8, shall be assessed at a percentage of the actual value of each class of property. The percentage shall be determined for each class of property by the director of revenue for the state in accordance with the provisions of this section. For valuations established as of January 1, 1980, the percentage shall be the quotient of the dividend and divisor as defined in this section. The dividend for each class of property shall be the dividend as determined for each class of property for D R A F T -7- LSB 6143XC (13) 84 md/sc 7/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 valuations established as of January 1, 1979, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1979, plus four percent of the amount so determined. The divisor for each class of property shall be the total actual value of all such property in 1979, as equalized by the director of revenue pursuant to section 441.49, plus the amount of value added to the total actual value by the revaluation of existing properties in 1980. The director shall utilize information reported on the abstracts of assessment submitted pursuant to section 441.45 in determining such percentage. For valuations established as of January 1, 1980, property valued by the department of revenue pursuant to chapters 428, 433, 437, and 438 shall be assessed at a percentage of its actual value. The percentage shall be determined by the director of revenue in accordance with the provisions of this section. For valuations established as of January 1, 1980, the percentage shall be the quotient of the dividend and divisor as defined in this section. The dividend shall be the total actual valuation established for 1979 by the department of revenue, plus eight percent of the amount so determined. The divisor for property valued by the department of revenue pursuant to chapters 428, 433, 437, and 438 shall be the valuation established for 1979, plus the amount of value added to the total actual value by the revaluation of the property by the department of revenue as of January 1, 1980. For valuations established as of January 1, 1981, and each year thereafter, the percentage of actual value as equalized by the director of revenue as provided in section 441.49 at which commercial property and industrial property, excluding properties referred to in section 427A.1, subsection 8, shall be assessed shall be calculated in accordance with the methods provided herein, except that any references to six percent D R A F T -8- LSB 6143XC (13) 84 md/sc 8/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 in this subsection shall be four percent. For valuations established as of January 1, 1981, and each year thereafter, the percentage of actual value at which property valued by the department of revenue pursuant to chapters 428, 433, 437, and 438 shall be assessed shall be calculated in accordance with the methods provided herein, except that any references to ten percent in this subsection shall be eight percent. For assessment years beginning on or after January 1, 2013, the percentage of actual value at which property valued by the department of revenue pursuant to chapters 428, 433, 437, and 438 shall be assessed shall be calculated using property valuations for the applicable assessment years that include the total value of property exempt from taxation under section 433.4, subsection 2, paragraph "b", notwithstanding section 433.4, subsection 2, paragraph "c". Beginning with valuations established as of January 1, 1979, and each year thereafter, property valued by the department of revenue pursuant to chapter 434 shall also be assessed at a percentage of its actual value which percentage shall be equal to the percentage determined by the director of revenue for commercial property, industrial property, or property valued by the department of revenue pursuant to chapters 428, 433, 437, and 438, whichever is lowest. Sec. 10. Section 476.1D, subsection 10, Code Supplement 2011, is amended by striking the subsection. Sec. 11. PROPERTY TAXATION OF TELECOMMUNICATIONS COMPANIES ---- REPORT. The department of revenue, in consultation with the department of management, representatives of the telecommunications industry, and other interested stakeholders, shall study the current system of assessing telecommunications property and levying property tax against telecommunications companies and make recommendations for changes. The department of revenue shall prepare and file a report detailing recommendations for changes to the current system of assessing telecommunications property and levying property tax against D R A F T -9- LSB 6143XC (13) 84 md/sc 9/ 44 S.F. _____ A 2012-07-01 A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 telecommunications companies. The report shall be filed by the department of revenue with the chairpersons and ranking members of the ways and means committees of the senate and the house of representatives and with the legislative services agency by January 11, 2013. Sec. 12. SAVINGS PROVISION. This division of this Act, pursuant to section 4.13, does not affect the operation of, or prohibit the application of, prior provisions of chapter 433, or rules adopted under chapter 17A to administer prior provisions of chapter 433, for assessment years beginning before January 1, 2013, and for duties, powers, protests, appeals, proceedings, actions, or remedies attributable to an assessment year beginning before January 1, 2013. Sec. 13. EFFECTIVE DATE. 1. Except as provided in subsection 2, this division of this Act takes effect July 1, 2012. 2. The section of this division of this Act amending section 476.1D takes effect July 1, 2016. Sec. 14. APPLICABILITY. 1. Except as provided in subsection 2, this division of this Act applies to assessment years beginning on or after January 1, 2013. 2. The section of this division of this Act amending section 476.1D applies to assessment years beginning on or after January 1, 2017. DIVISION IV BUSINESS PROPERTY TAX CREDIT Sec. 15. Section 331.512, Code 2011, is amended by adding the following new subsection: NEW SUBSECTION. 13A. Carry out duties relating to the business property tax credit as provided in chapter 426C. Sec. 16. Section 331.559, Code 2011, is amended by adding the following new subsection: NEW SUBSECTION. 14A. Carry out duties relating to the business property tax credit as provided in chapter 426C. D R A F T -10- LSB 6143XC (13) 84 md/sc 10/ 44 S.F. _____ A 2012-07-01 A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Sec. 17. NEW SECTION. 426C.1 Definitions. For the purposes of this chapter, unless the context otherwise requires: 1. "Contiguous parcels" means any of the following: a. Parcels that share a common boundary. b. Parcels within the same building or structure regardless of whether the parcels share a common boundary. c. Permanent improvements to the land that are situated on one or more parcels of land that are assessed and taxed separately from the permanent improvements if the parcels of land upon which the permanent improvements are situated share a common boundary. 2. "Department" means the department of revenue. 3. "Fund" means the business property tax credit fund created in section 426C.2. 4. "Parcel" means as defined in section 445.1. 5. "Property unit" means contiguous parcels all of which are located within the same county, with the same property tax classification, are owned by the same person, and are operated by that person for a common use and purpose. Sec. 18. NEW SECTION. 426C.2 Business property tax credit fund ---- appropriation. 1. A business property tax credit fund is created in the state treasury under the authority of the department. For the fiscal year beginning July 1, 2013, there is appropriated from the general fund of the state to the department to be credited to the fund, the sum of twenty-five million dollars to be used for business property tax credits authorized in this chapter. For the fiscal year beginning July 1, 2014, and each fiscal year thereafter, there is appropriated from the general fund of the state to the department to be credited to the fund an amount equal to the total amount appropriated by the general assembly to the fund in the previous fiscal year. In addition, the sum of twenty-five million dollars shall be added to the appropriation in each fiscal year beginning on or after July D R A F T -11- LSB 6143XC (13) 84 md/sc 11/ 44 S.F. _____ A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 1, 2014, if the revenue estimating conference certifies during its final meeting of the calendar year ending prior to the beginning of the fiscal year that the total amount of general fund revenues collected during the fiscal year ending during such calendar year was at least one hundred three percent of the total amount of general fund revenues collected during the previous fiscal year. However, the total appropriation to the fund shall not exceed one hundred twenty-five million dollars for any one fiscal year. 2. Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys deposited in the fund shall be credited to the fund. Moneys in the fund are not subject to the provisions of section 8.33 and shall not be transferred, used, obligated, appropriated, or otherwise encumbered except as provided in this chapter. Sec. 19. NEW SECTION. 426C.3 Claims for credit. 1. Each person who wishes to claim the credit allowed under this chapter shall obtain the appropriate forms from the assessor and file the claim with the assessor. The director of revenue shall prescribe suitable forms and instructions for such claims, and make such forms and instructions available to the assessors. 2. a. Claims for the business property tax credit shall be filed not later than March 15 preceding the fiscal year during which the taxes for which the credit is claimed are due and payable. b. A claim filed after the deadline for filing claims shall be considered as a claim for the following year. 3. Upon the filing of a claim and allowance of the credit, the credit shall be allowed on the parcel or property unit for successive years without further filing as long as the parcel or property unit satisfies the requirements for the credit. If the parcel or property unit ceases to qualify for the credit under this chapter, the owner shall provide written notice to the assessor by the date for filing claims specified in D R A F T -12- LSB 6143XC (13) 84 md/sc 12/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 subsection 2 following the date on which the parcel or property unit ceases to qualify for the credit. 4. When all or a portion of a parcel or property unit that is allowed a credit under this chapter is sold, transferred, or ownership otherwise changes, the buyer, transferee, or new owner who wishes to receive the credit shall refile the claim for credit. In addition, when a portion of a parcel or property unit that is allowed a credit under this chapter is sold, transferred, or ownership otherwise changes, the owner of the portion of the parcel or property unit for which ownership did not change shall refile the claim for credit. 5. The assessor shall remit the claims for credit to the county auditor with the assessor's recommendation for allowance or disallowance. If the assessor recommends disallowance of a claim, the assessor shall submit the reasons for the recommendation, in writing, to the county auditor. The county auditor shall forward the claims to the board of supervisors. The board shall allow or disallow the claims. 6. For each claim and allowance of a credit for a property unit, the county auditor shall calculate the average of all consolidated levy rates applicable to the several parcels within the property unit. All claims for credit which have been allowed by the board of supervisors, the actual value of such parcels and property units applicable to the fiscal year for which the credit is claimed that are subject to assessment and taxation prior to imposition of any applicable assessment limitation, the consolidated levy rates for such parcels and the average consolidated levy rates for such property units applicable to the fiscal year for which the credit is claimed, and the taxing districts in which the parcel or property unit is located, shall be certified on or before June 30, in each year, by the county auditor to the department. 7. The assessor shall maintain a permanent file of current business property tax credits. The assessor shall file a notice of transfer of property for which a credit has been D R A F T -13- LSB 6143XC (13) 84 md/sc 13/ 44 S.F. _____ D R A F T A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 allowed when notice is received from the office of the county recorder, from the person who sold or transferred the property, or from the personal representative of a deceased property owner. The county recorder shall give notice to the assessor of each transfer of title filed in the recorder's office. The notice from the county recorder shall describe the property transferred, the name of the person transferring title to the property, and the name of the person to whom title to the property has been transferred. Sec. 20. NEW SECTION. 426C.4 Eligibility and amount of credit. 1. Each parcel classified and taxed as commercial property, industrial property, or railway property under chapter 434 is eligible for a credit under this chapter. A person may claim and receive one credit under this chapter for each eligible parcel unless the parcel is part of a property unit. A person may only claim and receive one credit under this chapter for each property unit. A credit approved for a property unit shall be allocated to the several parcels within the property unit in the proportion that each parcel's total amount of property taxes due and payable bears to the total amount of property taxes due and payable on the property unit. Only property units comprised of property assessed as commercial property, industrial property, or railway property under chapter 434 are eligible for a credit under this chapter. However, property that is rented or leased to low-income individuals and families as authorized by section 42 of the Internal Revenue Code, as amended, and that is subject to assessment procedures relating to section 42 property under section 441.21, subsection 2, for the applicable assessment year, shall not be eligible to receive a credit under this chapter or be part of a property unit that receives a credit under this chapter. 2. Using the actual value of each parcel or property unit and the consolidated levy rate for each parcel or the average LSB 6143XC (13) 84 md/sc -14- 14/ 44 S.F. _____ A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 consolidated levy rate for each property unit, as certified by the county auditor to the department under section 426C.3, subsection 6, the department shall calculate, for each fiscal year, an initial amount of actual value for use in determining the amount of the credit for each such parcel or property unit so as to provide the maximum possible credit according to the credit formula and limitations under subsection 3, and to provide a total dollar amount of credits against the taxes due and payable in the fiscal year equal to ninety-eight percent of the moneys in the fund following the deposit of the appropriation for the fiscal year. 3. a. The amount of the credit for each parcel or property unit for which a claim for credit under this chapter has been approved shall be calculated under paragraph "b" using the lesser of the initial amount of actual value determined by the department under subsection 2, and the actual value of the parcel or property unit as certified by the county auditor under section 426C.3, subsection 6. b. The amount of the credit for each parcel or property unit for which a claim for credit under this chapter has been approved shall be equal to the amount of actual value determined under paragraph "a" multiplied by the difference between the assessment limitation percentage applicable to the parcel or property unit under section 441.21, subsection 5, and the assessment limitation percentage applicable to residential property under section 441.21, subsection 4, divided by one thousand dollars, and then multiplied by the consolidated levy rate or average consolidated levy rate for one thousand dollars of taxable value applicable to the parcel or property unit for the fiscal year for which the credit is claimed as certified by the county auditor under section 426C.3, subsection 6. Sec. 21. NEW SECTION. 426C.5 Payment to counties. 1. Annually the department shall certify to the county auditor of each county the amounts of the business property tax credits allowed in the county. Each county auditor shall D R A F T -15- LSB 6143XC (13) 84 md/sc 15/ 44 S.F. _____ A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 then enter the credits against the tax levied on each eligible parcel or property unit in the county, designating on the tax lists the credit as being from the fund. Each taxing district shall receive its share of the business property tax credit allowed on each eligible parcel or property unit in such taxing district, in the proportion that the levy made by such taxing district upon the parcel or property unit bears to the total levy upon the parcel or property unit by all taxing districts imposing a property tax in such taxing district. However, the several taxing districts shall not draw the moneys so credited until after the semiannual allocations have been received by the county treasurer, as provided in this section. Each county treasurer shall show on each tax receipt the amount of credit received from the fund. 2. The director of the department of administrative services shall issue warrants on the fund payable to the county treasurers of the several counties of the state under this chapter. 3. The amount due each county shall be paid in two payments on November 15 and March 15 of each fiscal year, drawn upon warrants payable to the respective county treasurers. The two payments shall be as nearly equal as possible. Sec. 22. NEW SECTION. 426C.6 Appeals. 1. If the board of supervisors disallows a claim for credit under section 426C.3, subsection 5, the board of supervisors shall send written notice, by mail, to the claimant at the claimant's last known address. The notice shall state the reasons for disallowing the claim for the credit. The board of supervisors is not required to send notice that a claim for credit is disallowed if the claimant voluntarily withdraws the claim. Any person whose claim is denied under the provisions of this chapter may appeal from the action of the board of supervisors to the district court of the county in which the parcel or property unit is located by giving written notice of such appeal to the county auditor within twenty days from D R A F T -16- LSB 6143XC (13) 84 md/sc 16/ 44 S.F. _____ A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 the date of mailing of notice of such action by the board of supervisors. 2. If any claim for credit has been denied by the board of supervisors, and such action is subsequently reversed on appeal, the credit shall be allowed on the applicable parcel or property unit, and the director of revenue, the county auditor, and the county treasurer shall provide the credit and change their books and records accordingly. In the event the appealing taxpayer has paid one or both of the installments of the tax payable in the year or years in question, remittance shall be made to such taxpayer of the amount of such credit. The amount of such credit awarded on appeal shall be allocated and paid from the balance remaining in the fund. Sec. 23. NEW SECTION. 426C.7 Audit ---- denial. 1. If on the audit of a credit provided under this chapter, the director of revenue determines the amount of the credit to have been incorrectly calculated or that the credit is not allowable, the director shall recalculate the credit and notify the taxpayer and the county auditor of the recalculation or denial and the reasons for it. The director shall not adjust a credit after three years from October 31 of the year in which the claim for the credit was filed. If the credit has been paid, the director shall give notification to the taxpayer, the county treasurer, and the applicable assessor of the recalculation or denial of the credit and the county treasurer shall proceed to collect the tax owed in the same manner as other property taxes due and payable are collected, if the parcel or property unit for which the credit was allowed is still owned by the taxpayer. If the parcel or property unit for which the credit was allowed is not owned by the taxpayer, the amount may be recovered from the taxpayer by assessment in the same manner that income taxes are assessed under sections 422.26 and 422.30. The amount of such erroneous credit, when collected, shall be deposited in the fund. 2. The taxpayer or board of supervisors may appeal any D R A F T -17- LSB 6143XC (13) 84 md/sc 17/ 44 S.F. _____ A 2012-07-01 A 2012-07-01 A 2012-07-01 A 2012-07-01 A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 decision of the director of revenue to the state board of tax review pursuant to section 421.1, subsection 5. The taxpayer, the board of supervisors, or the director of revenue may seek judicial review of the action of the state board of tax review in accordance with chapter 17A. Sec. 24. NEW SECTION. 426C.8 False claim ---- penalty. A person who makes a false claim for the purpose of obtaining a credit provided for in this chapter or who knowingly receives the credit without being legally entitled to it is guilty of a fraudulent practice. The claim for a credit of such a person shall be disallowed and if the credit has been paid the amount shall be recovered in the manner provided in section 426C.7. In such cases, the director of revenue shall send a notice of disallowance of the credit. Sec. 25. NEW SECTION. 426C.9 Rules. The director of revenue shall prescribe forms, instructions, and rules pursuant to chapter 17A, as necessary, to carry out the purposes of this chapter. Sec. 26. IMPLEMENTATION. Notwithstanding the deadline for filing claims established in section 426C.3, for a credit against property taxes due and payable during the fiscal year beginning July 1, 2013, the claim for the credit shall be filed not later than January 15, 2013. Sec. 27. APPLICABILITY. This division of this Act applies to property taxes due and payable in fiscal years beginning on or after July 1, 2013. DIVISION V ENTERPRISE PROPERTY TAX CREDIT Sec. 28. Section 331.512, Code 2011, is amended by adding the following new subsection: NEW SUBSECTION. 13B. Carry out duties relating to the enterprise property tax credit as provided in chapter 426D. Sec. 29. Section 331.559, Code 2011, is amended by adding the following new subsection: NEW SUBSECTION. 14B. Carry out duties relating to the D R A F T -18- LSB 6143XC (13) 84 md/sc 18/ 44 S.F. _____ A 2012-07-01 A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 enterprise property tax credit as provided in chapter 426D. Sec. 30. NEW SECTION. 426D.1 Definitions. For the purposes of this chapter, unless the context otherwise requires: 1. "Department" means the department of revenue. 2. "Fund" means the enterprise property tax credit fund created in section 426D.2. 3. "Parcel" means as defined in section 445.1. Sec. 31. NEW SECTION. 426D.2 Enterprise property tax credit fund ---- appropriation. 1. An enterprise property tax credit fund is created in the state treasury under the authority of the department. For the fiscal year beginning July 1, 2013, there is appropriated from the general fund of the state to the department to be credited to the fund, the sum of twenty-five million dollars to be used for enterprise property tax credits authorized in this chapter. For the fiscal year beginning July 1, 2014, and each fiscal year thereafter, there is appropriated from the general fund of the state to the department to be credited to the fund an amount equal to the total amount appropriated by the general assembly to the fund in the previous fiscal year. In addition, the sum of twenty-five million dollars shall be added to the appropriation in each fiscal year beginning on or after July 1, 2014, if the revenue estimating conference certifies during its final meeting of the calendar year ending prior to the beginning of the fiscal year that the total amount of general fund revenues collected during the fiscal year ending during such calendar year was at least one hundred three percent of the total amount of general fund revenues collected during the previous fiscal year. However, the total appropriation to the fund shall not exceed one hundred twenty-five million dollars for any one fiscal year. 2. Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys deposited in the fund shall be credited to the fund. Moneys in the fund are not subject to the provisions D R A F T -19- LSB 6143XC (13) 84 md/sc 19/ 44 S.F. _____ A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 of section 8.33 and shall not be transferred, used, obligated, appropriated, or otherwise encumbered except as provided in this chapter. Sec. 32. NEW SECTION. 426D.3 Claims for credit. 1. Each person who wishes to claim the credit allowed under this chapter shall obtain the appropriate forms from the assessor and file the claim with the assessor. The director of revenue shall prescribe suitable forms and instructions for such claims, and make such forms and instructions available to the assessors. 2. a. Claims for the enterprise property tax credit shall be filed not later than March 15 preceding the fiscal year during which the taxes for which the credit is claimed are due and payable. b. A claim filed after the deadline for filing claims shall be considered as a claim for the following year. 3. Upon the filing of a claim and allowance of the credit, the credit shall be allowed on the parcel for successive years without further filing as long as the parcel satisfies the requirements for the credit. If the parcel ceases to qualify for the credit under this chapter, the owner shall provide written notice to the assessor by the date for filing claims specified in subsection 2 following the date on which the parcel ceases to qualify for the credit. 4. When all or a portion of a parcel that is allowed a credit under this chapter is sold, transferred, or ownership otherwise changes, the buyer, transferee, or new owner who wishes to receive the credit shall refile the claim for credit. In addition, when a portion of a parcel that is allowed a credit under this chapter is sold, transferred, or ownership otherwise changes, the owner of the portion of the parcel for which ownership did not change shall refile the claim for credit. 5. The assessor shall remit the claims for credit to the county auditor with the assessor's recommendation for allowance D R A F T -20- LSB 6143XC (13) 84 md/sc 20/ 44 S.F. _____ A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 or disallowance. If the assessor recommends disallowance of a claim, the assessor shall submit the reasons for the recommendation, in writing, to the county auditor. The county auditor shall forward the claims to the board of supervisors. The board shall allow or disallow the claims. 6. All claims for credit which have been allowed by the board of supervisors, the assessed value of such parcels applicable to the fiscal year for which the credit is claimed, the consolidated levy rates for one thousand dollars of taxable value for such parcels applicable to the fiscal year for which the credit is claimed, and the taxing districts in which the parcel is located, shall be certified on or before June 30, in each year, by the county auditor to the department. 7. The assessor shall maintain a permanent file of current enterprise property tax credits. The assessor shall file a notice of transfer of property for which a credit has been allowed when notice is received from the office of the county recorder, from the person who sold or transferred the property, or from the personal representative of a deceased property owner. The county recorder shall give notice to the assessor of each transfer of title filed in the recorder's office. The notice from the county recorder shall describe the property transferred, the name of the person transferring title to the property, and the name of the person to whom title to the property has been transferred. Sec. 33. NEW SECTION. 426D.4 Eligibility and amount of credit. 1. Each parcel classified and taxed as commercial property, industrial property, or railway property under chapter 434 is eligible for a credit under this chapter. A person may claim and receive one credit under this chapter for each eligible parcel. Property that is rented or leased to low-income individuals and families as authorized by section 42 of the Internal Revenue Code, as amended, and that is subject to assessment procedures relating to section 42 property under D R A F T -21- LSB 6143XC (13) 84 md/sc 21/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 section 441.21, subsection 2, for the applicable assessment year, shall not be eligible to receive a credit under this chapter. 2. a. The department shall calculate, for each fiscal year, an enterprise property tax credit percentage for use in determining the amount of the credit for each such parcel under subsection 3. b. (1) The department shall calculate for each eligible parcel the product of the assessed value of the parcel multiplied by the consolidated levy rate for one thousand dollars of taxable value as certified under section 426D.3, subsection 6, and then divide that product by one thousand dollars. For each eligible parcel that, in addition to the credit under this chapter, receives a business property tax credit under chapter 426C or is part of a property unit that receives a business property tax credit under chapter 426C, the assessed value used in this subparagraph (1) and used in calculating the amount of the credit under subsection 3 shall be adjusted as follows: (a) For a parcel that is not part of a property unit receiving a business property tax credit under chapter 426C for the same fiscal year, the assessed value shall be reduced by the amount of actual value specified under section 426C.4, subsection 3, paragraph "a", for use in calculating the amount of the parcel's business property tax credit. (b) For a parcel that is part of a property unit receiving a business property tax credit under chapter 426C for the same fiscal year, the assessed value shall be reduced by that portion of the amount of value used in calculating the property unit's business property tax credit under section 426C.4, subsection 3, paragraph "b", in the same proportion that the parcel's actual value bears to the actual value of the property unit, as those values are certified in section 426C.3, subsection 6. (2) The department shall then calculate the sum of all such D R A F T -22- LSB 6143XC (13) 84 md/sc 22/ 44 S.F. _____ A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 amounts calculated under subparagraph (1) for all eligible parcels. c. The enterprise property tax credit percentage shall be equal to ninety-eight percent of the moneys in the fund, following the deposit of the appropriation for the fiscal year, divided by the amount calculated under paragraph "b", subparagraph (2). 3. The amount of the credit for each parcel for which a claim for credit under this chapter has been approved shall be equal to the parcel's assessed value as certified by the county auditor under section 426D.3, subsection 6, and adjusted under subsection 2, paragraph "b", subparagraph (1), as applicable, multiplied by the percentage calculated under subsection 2, paragraph "c", divided by one thousand dollars, and then multiplied by the consolidated levy rate for one thousand dollars of taxable value applicable to the parcel for the fiscal year for which the credit is claimed as certified by the county auditor under section 426D.3, subsection 6. Sec. 34. NEW SECTION. 426D.5 Payment to counties. 1. Annually the department shall certify to the county auditor of each county the amounts of the enterprise property tax credits allowed in the county. Each county auditor shall then enter the credits against the tax levied on each eligible parcel in the county, designating on the tax lists the credit as being from the fund. Each taxing district shall receive its share of the enterprise property tax credit allowed on each eligible parcel in such taxing district, in the proportion that the levy made by such taxing district upon the parcel bears to the total levy upon the parcel by all taxing districts imposing a property tax in such taxing district. However, the several taxing districts shall not draw the moneys so credited until after the semiannual allocations have been received by the county treasurer, as provided in this section. Each county treasurer shall show on each tax receipt the amount of credit received from the fund. D R A F T -23- LSB 6143XC (13) 84 md/sc 23/ 44 S.F. _____ A 2012-07-01 A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 2. The director of the department of administrative services shall issue warrants on the fund payable to the county treasurers of the several counties of the state under this chapter. 3. The amount due each county shall be paid in two payments on November 15 and March 15 of each fiscal year, drawn upon warrants payable to the respective county treasurers. The two payments shall be as nearly equal as possible. Sec. 35. NEW SECTION. 426D.6 Appeals. 1. If the board of supervisors disallows a claim for credit under section 426D.3, subsection 5, the board of supervisors shall send written notice, by mail, to the claimant at the claimant's last known address. The notice shall state the reasons for disallowing the claim for the credit. The board of supervisors is not required to send notice that a claim for credit is disallowed if the claimant voluntarily withdraws the claim. Any person whose claim is denied under the provisions of this chapter may appeal from the action of the board of supervisors to the district court of the county in which the parcel is located by giving written notice of such appeal to the county auditor within twenty days from the date of mailing of notice of such action by the board of supervisors. 2. If any claim for credit has been denied by the board of supervisors, and such action is subsequently reversed on appeal, the credit shall be allowed on the applicable parcel, and the director of revenue, the county auditor, and the county treasurer shall provide the credit and change their books and records accordingly. In the event the appealing taxpayer has paid one or both of the installments of the tax payable in the year or years in question, remittance shall be made to such taxpayer of the amount of such credit. The amount of such credit awarded on appeal shall be allocated and paid from the balance remaining in the fund. Sec. 36. NEW SECTION. 426D.7 Audit ---- denial. 1. If on the audit of a credit provided under this chapter, D R A F T -24- LSB 6143XC (13) 84 md/sc 24/ 44 S.F. _____ A 2012-07-01 A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 the director of revenue determines the amount of the credit to have been incorrectly calculated or that the credit is not allowable, the director shall recalculate the credit and notify the taxpayer and the county auditor of the recalculation or denial and the reasons for it. The director shall not adjust a credit after three years from October 31 of the year in which the claim for the credit was filed. If the credit has been paid, the director shall give notification to the taxpayer, the county treasurer, and the applicable assessor of the recalculation or denial of the credit and the county treasurer shall proceed to collect the tax owed in the same manner as other property taxes due and payable are collected, if the parcel for which the credit was allowed is still owned by the taxpayer. If the parcel for which the credit was allowed is not owned by the taxpayer, the amount may be recovered from the taxpayer by assessment in the same manner that income taxes are assessed under sections 422.26 and 422.30. The amount of such erroneous credit, when collected, shall be deposited in the fund. 2. The taxpayer or board of supervisors may appeal any decision of the director of revenue to the state board of tax review pursuant to section 421.1, subsection 5. The taxpayer, the board of supervisors, or the director of revenue may seek judicial review of the action of the state board of tax review in accordance with chapter 17A. Sec. 37. NEW SECTION. 426D.8 False claim ---- penalty. A person who makes a false claim for the purpose of obtaining a credit provided for in this chapter or who knowingly receives the credit without being legally entitled to it is guilty of a fraudulent practice. The claim for a credit of such a person shall be disallowed and if the credit has been paid the amount shall be recovered in the manner provided in section 426D.7. In such cases, the director of revenue shall send a notice of disallowance of the credit. Sec. 38. NEW SECTION. 426D.9 Rules. D R A F T -25- LSB 6143XC (13) 84 md/sc 25/ 44 S.F. _____ A 2012-07-01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 The director of revenue shall prescribe forms, instructions, and rules pursuant to chapter 17A, as necessary, to carry out the purposes of this chapter. Sec. 39. IMPLEMENTATION. Notwithstanding the deadline for filing claims established in section 426D.3, for a credit against property taxes due and payable during the fiscal year beginning July 1, 2013, the claim for the credit shall be filed not later than January 15, 2013. Sec. 40. APPLICABILITY. This division of this Act applies to property taxes due and payable in fiscal years beginning on or after July 1, 2013. DIVISION VI MULTIRESIDENTIAL PROPERTY CLASSIFICATION Sec. 41. Section 404.2, subsection 2, paragraph f, Code 2011, is amended to read as follows: f. A statement specifying whether the revitalization is applicable to none, some, or all of the property assessed as residential, multiresidential, agricultural, commercial, or industrial property within the designated area or a combination thereof and whether the revitalization is for rehabilitation and additions to existing buildings or new construction or both. If revitalization is made applicable only to some property within an assessment classification, the definition of that subset of eligible property must be by uniform criteria which further some planning objective identified in the plan. The city shall state how long it is estimated that the area shall remain a designated revitalization area which time shall be longer than one year from the date of designation and shall state any plan by the city to issue revenue bonds for revitalization projects within the area. For a county, a revitalization area shall include only property which will be used as industrial property, commercial property, commercial property consisting of three or more separate living quarters with at least seventy-five percent of the space used for residential purposes, multiresidential property, or residential D R A F T -26- LSB 6143XC (13) 84 md/sc 26/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 property. However, a county shall not provide a tax exemption under this chapter to commercial property, commercial property consisting of three or more separate living quarters with at least seventy-five percent of the space used for residential purposes, multiresidential property, or residential property which is located within the limits of a city. Sec. 42. Section 404.3, subsection 4, Code 2011, is amended to read as follows: 4. All qualified real estate assessed as residential property, assessed as multiresidential property, or assessed as commercial property, if the commercial property consists of three or more separate living quarters with at least seventy-five percent of the space used for residential purposes, is eligible to receive a one hundred percent exemption from taxation on the actual value added by the improvements. The exemption is for a period of ten years. Sec. 43. Section 441.21, Code Supplement 2011, is amended by adding the following new subsection: NEW SUBSECTION. 4A. a. (1) Beginning with valuations established on or after January 1, 2013, all of the following, if not otherwise classified as residential property, shall be, subject to the declaration filing requirements of paragraph "b", valued as a separate class of property known as multiresidential property and, excluding properties referred to in section 427A.1, subsection 8, shall be assessed at a percentage of its actual value, as determined in this subsection: (a) Parcels upon which property used for human habitation and owned by a person other than the owner of the parcel is placed, subject to a lease or other agreement with a duration exceeding one month or more. (b) Assisted living facilities. (c) That portion of a building that is used for human habitation and a proportionate share of the land upon which the building is situated, if the land is part of the same parcel as D R A F T -27- LSB 6143XC (13) 84 md/sc 27/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 the building, even if the use for human habitation is not the primary use of the building, and regardless of the number of dwelling units located in the building. (2) For valuations established for the assessment year beginning January 1, 2013, the percentage of actual value as equalized by the director of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be ninety-four percent. For valuations established for the assessment year beginning January 1, 2014, the percentage of actual value as equalized by the director of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be eighty-eight percent. For valuations established for the assessment year beginning January 1, 2015, the percentage of actual value as equalized by the director of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be eighty-two percent. For valuations established for the assessment year beginning January 1, 2016, the percentage of actual value as equalized by the director of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be seventy-six percent. For valuations established for the assessment year beginning January 1, 2017, the percentage of actual value as equalized by the director of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be seventy percent. For valuations established for the assessment year beginning January 1, 2018, the percentage of actual value as equalized by the director of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be sixty-four percent. For valuations established for the assessment year beginning January 1, 2019, and each assessment year thereafter, the percentage of actual value as equalized by the director of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be equal to the percentage of actual value at which property assessed as residential property D R A F T -28- LSB 6143XC (13) 84 md/sc 28/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 is assessed under subsection 4 for the same assessment year. b. For assessment years beginning on or after January 1, 2013, but before January 1, 2019, the owner of property described in paragraph "a", subparagraph (1), and not excluded under paragraph "c", may file a declaration with the assessor on or before January 15 of the assessment year, requesting that such property be classified as multiresidential property. If the property described in the declaration meets the requirements of paragraph "a", subparagraph (1), and is not excluded under paragraph "c", the assessor shall approve the request in the declaration and classify such property as multiresidential property. If an assessor rejects a declaration request, the property owner may protest such decision to the local board of review under section 441.37, subsection 1, paragraph "a", subparagraph (3). Once approved, a declaration request is irrevocable by the property owner and such property shall be classified as multiresidential property for subsequent assessment years so long as the property meets the requirements of this subsection. For assessment years beginning on or after January 1, 2013, but before January 1, 2019, property described in paragraph "a", subparagraph (1), and not excluded under paragraph "c", shall not be classified and valued as multiresidential property unless a declaration filed by the owner has been approved by the assessor. For assessment years beginning on or after January 1, 2019, property described in paragraph "a", subparagraph (1), and not excluded under paragraph "c", shall be classified and valued by the assessor as multiresidential property regardless of whether a declaration was previously filed for the property under this paragraph. c. In no case, however, shall a hotel, motel, inn, or other building where rooms or dwelling units are usually rented for less than one month be classified as multiresidential property under this subsection. In addition, property that is rented or leased to low-income individuals and families as authorized D R A F T -29- LSB 6143XC (13) 84 md/sc 29/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 by section 42 of the Internal Revenue Code, as amended, and that is subject to assessment procedures relating to section 42 property under section 441.21, subsection 2, for the applicable assessment year, shall not be classified as multiresidential property. d. As used in this subsection: (1) "Assisted living facility" means property for providing assisted living as defined in section 231C.2. (2) "Dwelling unit" means an apartment, group of rooms, or single room which is occupied as separate living quarters or, if vacant, is intended for occupancy as separate living quarters, in which a tenant can live and sleep separately from any other persons in the building. Sec. 44. Section 441.21, subsection 8, paragraph b, Code Supplement 2011, is amended to read as follows: b. Notwithstanding paragraph "a", any construction or installation of a solar energy system on property classified as agricultural, residential, commercial, multiresidential, or industrial property shall not increase the actual, assessed, and taxable values of the property for five full assessment years. Sec. 45. Section 441.21, subsections 9 and 10, Code Supplement 2011, are amended to read as follows: 9. Not later than November 1, 1979, and November 1 of each subsequent year, the director shall certify to the county auditor of each county the percentages of actual value at which residential property, agricultural property, commercial property, industrial property, multiresidential property, and property valued by the department of revenue pursuant to chapters 428, 433, 434, 437, and 438 in each assessing jurisdiction in the county shall be assessed for taxation. The county auditor shall proceed to determine the assessed values of agricultural property, residential property, commercial property, industrial property, multiresidential property, and property valued by the department of revenue pursuant D R A F T -30- LSB 6143XC (13) 84 md/sc 30/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 to chapters 428, 433, 434, 437, and 438 by applying such percentages to the current actual value of such property, as reported to the county auditor by the assessor, and the assessed values so determined shall be the taxable values of such properties upon which the levy shall be made. 10. The percentage of actual value computed by the director for agricultural property, residential property, commercial property, industrial property, multiresidential property, and property valued by the department of revenue pursuant to chapters 428, 433, 434, 437, and 438 and used to determine assessed values of those classes of property does not constitute a rule as defined in section 17A.2, subsection 11. Sec. 46. Section 558.46, subsection 5, Code 2011, is amended to read as follows: 5. For the purposes of this section, "residential property" includes commercial property and multiresidential property as defined in section 441.21, consisting of three or more separate living quarters with at least seventy-five percent of the space used for residential purposes. Sec. 47. APPLICABILITY. This division of this Act applies to assessment years beginning on or after January 1, 2013. EXPLANATION This bill relates to state and local taxation by providing for an increase in the amount of the earned income tax credit, establishing and modifying property assessment limitations, modifying the assessment and taxation of telecommunications company property, establishing property tax credits for certain commercial, industrial, and railway property, and establishing a multiresidential property classification. Division I of the bill increases the amount of the state earned income tax credit. Currently, the credit is equal to 7 percent of the amount of a taxpayer's federal earned income tax credit. The bill increases the amount of the credit to 15 percent. Division I of the bill applies retroactively to January 1, D R A F T -31- LSB 6143XC (13) 84 md/sc 31/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 2012, for tax years beginning on or after that date. Division II of the bill changes the property tax assessment limitation percentage for residential property and agricultural property from 4 percent to 3 percent for assessment years beginning on or after January 1, 2013. The bill provides, however, that for valuations established for the assessment year beginning January 1, 2013, and each assessment year thereafter, if the percentage of actual value at which residential property shall be assessed, as calculated in accordance with the assessment limitation provisions, exceeds 60 percent or is less than 50 percent, the director of revenue shall decrease the percentage to 60 percent or increase the percentage to 50 percent, as applicable. Division II, pursuant to Code section 4.13, does not affect the application of prior provisions of Code section 441.21 to assessment years beginning before January 1, 2013. Division II of the bill applies to assessment years beginning on or after January 1, 2013. Division III of the bill relates to the manner in which the property of telecommunications companies is assessed and taxed. The assessment provisions of current Code section 433.4 provide that in ascertaining the actual value of telecommunications company property the director of revenue shall include all property of every kind and character whatsoever, real, personal, or mixed, used by the company in the transaction of telegraph and telephone business. Division III of the bill strikes the provisions that included all kinds and character of property in the determination of actual value of a company's property. Instead, the bill provides that for assessment years beginning on or after January 1, 2013, a company's property, excluding central office equipment and qualified telephone company property, both as defined in the bill, shall be subject to assessment and taxation under Code chapter 433 by the director of revenue in the same manner as property assessed and taxed D R A F T -32- LSB 6143XC (13) 84 md/sc 32/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 as commercial property. The bill provides, however, that for assessment years beginning on or after January 1, 2013, the director of revenue shall include as part of the actual value so determined for that assessment year a specified amount of actual value of the company's qualified telephone company property. Division III of the bill also modifies the provision relating to the calculation of the assessment limitation for property valued by the department of revenue pursuant to Code chapters 428, 433, 437, and 438 by specifying that for assessment years beginning on or after January 1, 2013, such assessment limitation shall be calculated using property valuations for the applicable assessment years that include the total value of specified telecommunications company property exempted from taxation under new Code section 433.4(2)(b). Division III of the bill strikes a provision in Code section 476.1D that allowed certain specified long-distance telephone company property to be assessed for taxation as commercial property by the local assessor. Division III establishes a study to be facilitated by the department of revenue, in consultation with applicable stakeholders, regarding property tax on telecommunications companies. The department of revenue will study the current system of assessing property and levying property tax for telecommunications companies. A report detailing any recommended changes will be filed with the chairperson and ranking members of the ways and means committees of the senate and the house of representatives and with the legislative services agency by January 11, 2013. Except for the section of division III of the bill amending Code section 476.1D, division III of the bill takes effect July 1, 2012, and applies to assessment years beginning on or after January 1, 2013. The section of division III of the bill amending Code section 476.1D takes effect July 1, 2016, and applies to assessment years beginning on or after January 1, D R A F T -33- LSB 6143XC (13) 84 md/sc 33/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 2017. Division III, pursuant to Code section 4.13, does not affect the application of Code chapter 433 to assessment years beginning before January 1, 2013. Division IV of the bill creates a business property tax credit under new Code chapter 426C for property taxes due and payable in fiscal years beginning on or after July 1, 2013. Division IV of the bill establishes a business property tax credit fund. For the fiscal year beginning July 1, 2013, the bill appropriates from the general fund of the state to the department of revenue for deposit in the fund, $25 million. For the fiscal year beginning July 1, 2014, and each fiscal year thereafter, the bill appropriates from the general fund of the state to the department of revenue for deposit in the fund an amount equal to the total amount appropriated by the general assembly to the fund in the previous fiscal year. In addition, for fiscal years beginning on or after July 1, 2014, the bill appropriates an additional $25 million to the fund if the revenue estimating conference certifies that the total amount of general fund revenues has grown by at least 3 percent as compared to the previous fiscal year. The bill provides, however, that the total appropriation to the fund shall not exceed $125 million in any one fiscal year. Under the bill, interest or earnings on moneys deposited in the fund are credited to the fund, moneys in the fund are not subject to the provisions of Code section 8.33, and moneys in the fund shall not be transferred, used, obligated, appropriated, or otherwise encumbered except as provided in new Code chapter 426C. Division IV of the bill provides that each person who wishes to claim a business property tax credit shall obtain the appropriate forms from the assessor and file the claim with the assessor. The director of revenue is required to prescribe suitable forms and instructions for such claims, and make such forms and instructions available to the assessors. The assessor is required to remit the claims for credit to the D R A F T -34- LSB 6143XC (13) 84 md/sc 34/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 county auditor with the assessor's recommendation for allowance or disallowance. If the assessor recommends disallowance of a claim, the assessor shall submit the reasons for the recommendation, in writing, to the county auditor. The county auditor then forwards the claims to the board of supervisors. The board is required to allow or disallow the claims. If the board of supervisors disallows a claim for a credit, the board of supervisors is required to send written notice, by mail, to the claimant and the notice must state the reasons for disallowing the claim for the credit. Any person whose claim for credit is denied may appeal from the action of the board of supervisors to the district court of the county in which the parcel or property unit is located. Claims for the business property tax credit must be filed not later than March 15 preceding the fiscal year during which the property taxes for which the credit is claimed are due and payable. However, the deadline for filing claims against property taxes due and payable in the fiscal year beginning July 1, 2013, is January 15, 2013. Upon the filing of a claim and allowance of a business property tax credit, the credit is allowed on the parcel or property unit for successive years without further filing as long as the parcel or property unit satisfies the requirements for the credit. The owner is required to provide written notice to the assessor when the parcel or property unit ceases to qualify for the credit. The bill requires the assessor to maintain a permanent file of current credits and also specifies certain requirements for parcel or property unit owners, assessors, and county recorders when all or a portion of such parcels or property units are sold, transferred, or ownership otherwise changes. Under division IV of the bill, each parcel classified and taxed as commercial property, industrial property, or railway property under Code chapter 434, is eligible for a business property tax credit. A person may claim and receive one D R A F T -35- LSB 6143XC (13) 84 md/sc 35/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 credit for each eligible parcel unless the parcel is part of a property unit. The bill defines "property unit" to mean contiguous parcels located within the same county, with the same property tax classification, owned by the same person, and operated by that person for a common use and purpose. A person may only claim and receive one tax credit for each property unit. A credit approved for a property unit is allocated to the several parcels within the property unit in the proportion that each parcel's property tax liability bears to the total property tax liability for the property unit. Only those property units comprised of commercial property, industrial property, or railway property under Code chapter 434 are eligible for a credit. Division IV provides that property that is rented or leased to low-income individuals and families as authorized by section 42 of the Internal Revenue Code, and that is subject to section 42 assessment procedures for the applicable assessment year is not eligible for a business property tax credit under new Code chapter 426C. Division IV of the bill provides that all claims for credit which have been allowed, the actual value of the applicable parcels and property units that are subject to assessment and taxation, the consolidated levy rates or average consolidated levy rates for such parcels and property units applicable to the fiscal year for which the credit is claimed, and the taxing districts in which each parcel or property unit is located, shall be certified on or before June 30, in each year, by the county auditor to the department of revenue. Division IV of the bill provides that using the actual value of and the consolidated levy rate or average consolidated levy rate for each parcel or property unit, as certified by the county auditor, the department is required to calculate, for each fiscal year, an initial amount of actual value for use in determining the amount of the credit for each approved parcel or property unit so as to provide the maximum possible credit D R A F T -36- LSB 6143XC (13) 84 md/sc 36/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 according to the credit formula and limitations in the bill, and to provide a total dollar amount of credits in the fiscal year equal to 98 percent of the moneys in the business property tax credit fund following the deposit of the appropriation for the fiscal year. The credit for each parcel or property unit for which a claim for a business property tax credit has been approved is calculated using the lesser of the initial amount of actual value determined by the department for the fiscal year and the actual value of the parcel or property unit as certified to the department of revenue. The amount of the credit for each parcel or property unit is then calculated by multiplying the lesser amount of actual value, so determined, by the difference between the assessment limitation percentage applicable to the parcel or property unit under Code section 441.21(5) (commercial, industrial, and railway property tax rollback) and the assessment limitation percentage applicable to residential property under Code section 441.21(4) (residential property tax rollback), divided by $1,000, and then multiplied by the consolidated levy rate or average consolidated levy rate for $1,000 of taxable value applicable to the parcel or property unit for the fiscal year for which the credit is claimed. Division IV of the bill specifies the procedures for the payment of the amount of the business property tax credits to the county treasurers and the resulting apportionment to the applicable taxing districts. The division also specifies the requirements and procedures for an appeal of a denial of a claim for credit, specifies the requirements and procedures for an audit of a business property tax credit allowed, and specifies requirements relating to the collection of property taxes due as the result of an incorrectly calculated or improperly approved credit. Division IV of the bill provides that a person who makes a false claim for the purpose of obtaining a business property tax credit or who knowingly receives the credit without being D R A F T -37- LSB 6143XC (13) 84 md/sc 37/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 legally entitled to it is guilty of a fraudulent practice and is subject to a criminal penalty. Division IV of the bill requires the director of revenue to prescribe forms, instructions, and rules pursuant to Code chapter 17A, as necessary, to carry out the purposes of new Code chapter 426C. Division IV of the bill applies to property taxes due and payable in fiscal years beginning on or after July 1, 2013. Division V of the bill creates an enterprise property tax credit under new Code chapter 426D for property taxes due and payable in fiscal years beginning on or after July 1, 2013. Division V of the bill establishes an enterprise property tax credit fund. For the fiscal year beginning July 1, 2013, the bill appropriates from the general fund of the state to the department of revenue for deposit in the fund, $25 million. For the fiscal year beginning July 1, 2014, and each fiscal year thereafter, the bill appropriates from the general fund of the state to the department of revenue for deposit in the fund an amount equal to the total amount appropriated by the general assembly to the fund in the previous fiscal year. In addition, for fiscal years beginning on or after July 1, 2014, the bill appropriates an additional $25 million to the fund if the revenue estimating conference certifies that the total amount of general fund revenues has grown by at least 3 percent as compared to the previous fiscal year. The division provides, however, that the total appropriation to the fund shall not exceed $125 million in any one fiscal year. Under the division, interest or earnings on moneys deposited in the fund are credited to the fund, moneys in the fund are not subject to the provisions of Code section 8.33, and moneys in the fund shall not be transferred, used, obligated, appropriated, or otherwise encumbered except as provided in new Code chapter 426D. Division V of the bill provides that each person who wishes to claim an enterprise property tax credit shall obtain the D R A F T -38- LSB 6143XC (13) 84 md/sc 38/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 appropriate forms from the assessor and file the claim with the assessor. The director of revenue is required to prescribe suitable forms and instructions for such claims, and make such forms and instructions available to the assessors. The assessor is required to remit the claims for credit to the county auditor with the assessor's recommendation for allowance or disallowance. If the assessor recommends disallowance of a claim, the assessor shall submit the reasons for the recommendation, in writing, to the county auditor. The county auditor then forwards the claims to the board of supervisors. The board is required to allow or disallow the claims. If the board of supervisors disallows a claim for a credit, the board of supervisors is required to send written notice, by mail, to the claimant and the notice must state the reasons for disallowing the claim for the credit. Any person whose claim for credit is denied may appeal from the action of the board of supervisors to the district court of the county in which the parcel is located. Claims for the enterprise property tax credit must be filed not later than March 15 preceding the fiscal year during which the property taxes for which the credit is claimed are due and payable. However, the deadline for filing claims against property taxes due and payable in the fiscal year beginning July 1, 2013, is January 15, 2013. Upon the filing of a claim and allowance of an enterprise property tax credit, the credit is allowed on the parcel for successive years without further filing as long as the parcel satisfies the requirements for the credit. The owner is required to provide written notice to the assessor when the parcel ceases to qualify for the credit. The division requires the assessor to maintain a permanent file of current credits and also specifies certain requirements for parcel owners, assessors, and county recorders when all or a portion of such parcels are sold, transferred, or ownership otherwise changes. Under division V of the bill, each parcel classified and D R A F T -39- LSB 6143XC (13) 84 md/sc 39/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 taxed as commercial property, industrial property, or railway property under Code chapter 434 is eligible for an enterprise property tax credit. A person may claim and receive one credit for each eligible parcel. Division V provides that property that is rented or leased to low-income individuals or families under section 42 of the Internal Revenue Code, and that is subject to section 42 assessment procedures for the applicable assessment year is not eligible for an enterprise property tax credit under new Code chapter 426D. Division V of the bill provides that all claims for credit which have been allowed, the assessed value of the applicable parcels, the consolidated levy rates for such parcels applicable to the fiscal year for which the credit is claimed, and the taxing districts in which each parcel is located, shall be certified on or before June 30, in each year, by the county auditor to the department of revenue. Division V of the bill requires the department of revenue to calculate, for each fiscal year, an enterprise property tax credit percentage for use in determining the amount of the credit for each eligible parcel. The department first must calculate for each eligible parcel the product of the assessed value of the parcel multiplied by the consolidated levy rate per $1,000 of taxable value as certified under Code section 426D.3, and then divide that product by $1,000. The department then must calculate the sum of all such amounts calculated for all eligible parcels. The enterprise property tax credit percentage shall be equal to 98 percent of the moneys in the enterprise property tax credit fund, following the deposit of the appropriation for the fiscal year, divided by the sum of the amounts determined for each eligible parcel. Division V of the bill provides that the amount of the credit for each eligible parcel shall be equal to the parcel's assessed value as certified by the county auditor multiplied by the enterprise property tax credit percentage, divided by D R A F T -40- LSB 6143XC (13) 84 md/sc 40/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 $1,000, and then multiplied by the consolidated levy rate per $1,000 of taxable value applicable to the parcel. The bill provides for the adjustment of the assessed value of parcels used in calculating the enterprise property tax credit percentage and the amount of enterprise property tax credit for those parcels also receiving a business property tax credit for the same fiscal year. Division V of the bill specifies the procedures for the payment of the amount of the enterprise property tax credits to the county treasurers and the resulting apportionment to the applicable taxing districts. The bill also specifies the requirements and procedures for an appeal of a denial of a claim for credit, specifies the requirements and procedures for an audit of an enterprise property tax credit allowed, and specifies requirements relating to the collection of property taxes due as the result of an incorrectly calculated or improperly approved credit. Division V of the bill provides that a person who makes a false claim for the purpose of obtaining an enterprise property tax credit or who knowingly receives the credit without being legally entitled to it is guilty of a fraudulent practice and is subject to a criminal penalty. Division V of the bill requires the director of revenue to prescribe forms, instructions, and rules pursuant to Code chapter 17A, as necessary, to carry out the purposes of new Code chapter 426D. Division V of the bill applies to property taxes due and payable in fiscal years beginning on or after July 1, 2013. Division VI of the bill provides that beginning with valuations established for property tax purposes on or after January 1, 2013, all of the following if not otherwise classified as residential property, shall, subject to the declaration filing requirements of the bill, be valued as a separate class of property known as multiresidential property: (1) Parcels upon which property used for human habitation D R A F T -41- LSB 6143XC (13) 84 md/sc 41/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 and owned by a person other than the owner of the parcel is placed, subject to a lease or other agreement with a duration exceeding one month or more; (2) Assisted living facilities; and (3) That portion of a building that is used for human habitation and a proportionate share of the land upon which the building or structure is situated, if the land is part of the same parcel as the building, even if the use for human habitation is not the primary use of the building or structure, and regardless of the number of dwelling units located in the building. For valuations established for the assessment year beginning January 1, 2013, the percentage of actual value at which multiresidential property shall be assessed shall be 94 percent. For valuations established for the assessment year beginning January 1, 2014, the percentage of actual value at which multiresidential property shall be assessed shall be 88 percent. For valuations established for the assessment year beginning January 1, 2015, the percentage of actual value at which multiresidential property shall be assessed shall be 82 percent. For valuations established for the assessment year beginning January 1, 2016, the percentage of actual value at which multiresidential property shall be assessed shall be 76 percent. For valuations established for the assessment year beginning January 1, 2017, the percentage of actual value at which multiresidential property shall be assessed shall be 70 percent. For valuations established for the assessment year beginning January 1, 2018, the percentage of actual value at which multiresidential property shall be assessed shall be 64 percent. For valuations established for the assessment year beginning January 1, 2019, and each assessment year thereafter, the percentage of actual value at which multiresidential property shall be assessed shall be equal to the percentage of actual value at which property assessed as residential property is assessed for the same assessment year. The bill provides, however, that a hotel, motel, inn, or other building where rooms or dwelling units are usually rented for less D R A F T -42- LSB 6143XC (13) 84 md/sc 42/ 44 S.F. _____ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 than one month shall not be classified as multiresidential property. The bill also provides that property that is rented or leased to low-income individuals and families as authorized by section 42 of the Internal Revenue Code, as amended, and that is subject to section 42 assessment procedures under Code section 441.21(2), shall not be classified as multiresidential property. For assessment years beginning on or after January 1, 2013, but before January 1, 2019, the owner of property meeting the requirements for the multiresidential property classification may file a declaration with the assessor on or before January 15 of the assessment year, requesting that such property be classified as multiresidential property. If the property meets the requirements for multiresidential property, the assessor shall approve the request in the declaration and classify such property as multiresidential property. If an assessor rejects a declaration request, the property owner may protest such decision to the local board of review. Once approved, a declaration request is irrevocable by the property owner and such property shall be classified as multiresidential property for subsequent future assessment years so long as the property meets the requirements for multiresidential property. For assessment years beginning on or after January 1, 2013, but before January 1, 2019, property that meets the requirements for multiresidential property shall not be classified and valued as multiresidential property unless a declaration filed by the owner has been approved by the assessor. For assessment years beginning on or after January 1, 2019, property meeting the requirements of multiresidential property shall be classified and valued by the assessor as multiresidential property regardless of whether a declaration was previously filed for the property. Division VI of the bill makes changes to Iowa Code chapters 404, 441, and 558 to correspond to the establishment of the multiresidential property classification for property tax D R A F T -43- LSB 6143XC (13) 84 md/sc 43/ 44 S.F. _____ 1 purposes. 2 Division VI of the bill applies to assessment years 3 beginning on or after January 1, 2013. D LSB 6143XC (13) 84 md/sc R A F -4444/ 44 T