Notice of Intended Action

Application of two-tier assessment limitation, 71.29

Untitled document

ARC 6429C

REVENUE DEPARTMENT[701]

Notice of Intended Action

Proposing rule making related to the application of assessment limitations by county auditors

and providing an opportunity for public comment

The Revenue Department hereby proposes to amend Chapter 71, "Assessment Practices and Equalization," Iowa Administrative Code.

Legal Authority for Rule Making

This rule making is proposed under the authority provided in Iowa Code sections 421.14, 421.17(1), 421.17(4) and 441.21(9).

State or Federal Law Implemented

This rule making implements, in whole or in part, 2022 Iowa Acts, House File 2552, division XI.

Purpose and Summary

This proposed rule making addresses the application of the first of two assessment limitation tiers for commercial, industrial, and railway property assessed under Iowa Code chapter 434. 2022 Iowa Acts, House File 2552, division XI, repeals the Business Property Tax Credit under Iowa Code chapter 426C on July 1, 2024, and creates a two-tier assessment limitation for properties classified as commercial, industrial, and railway property assessed under Iowa Code chapter 434 for assessment years beginning on or after January 1, 2022. The first tier of assessment limitation provides that the first $150,000 of value for properties classified as commercial, industrial, and railway property assessed under Iowa Code chapter 434 shall receive the assessment limitation percentage applicable to residential property. For the second tier, any value in excess of $150,000 for commercial, industrial, and railway properties assessed under Iowa Code chapter 434 shall receive a 90 percent assessment limitation.

This proposed rule making requires county auditors to apply the first tier of the assessment limitation proportionately by percentage of total value among the parcels for property units that are comprised of multiple parcels.

Citations in the rule to Iowa Code section 441.21 reflect that section as amended by 2022 Iowa Acts, House File 2552, sections 36 and 37.

Fiscal Impact

This rule making has no fiscal impact to the State of Iowa.

Jobs Impact

After analysis and review of this rule making, no impact on jobs has been found.

Waivers

Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A).

Public Comment

Any interested person may submit written or oral comments concerning this proposed rule making. Written or oral comments in response to this rule making must be received by the Department no later than 4:30 p.m.on August 16, 2022. Comments should be directed to:

Nick Behlke

Iowa Department of Revenue

Hoover State Office Building

P.O. Box 10457

Des Moines, Iowa 50306

Phone: 515.336.9025

Email: nick.behlke@iowa.gov

Public Hearing

If requested, a public hearing at which persons may present their views orally or in writing will be held as follows:

August 16, 2022

1 to 2 p.m.

Via video/conference call

Persons who wish to participate in the video/conference call should contact Nick Behlke before 4:30 p.m.on August 15, 2022, to facilitate an orderly hearing. A video link or conference call number will be provided to participants prior to the hearing.

Persons who wish to make oral comments at the public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rule making.

Any persons who intend to attend the public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs.

Review by Administrative Rules Review Committee

The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee's meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).

The following rule-making action is proposed:

Adopt the following new rule 701—71.29(441):

701—71.29(441) Application of two-tier assessment limitation.

71.29(1) Following receipt of the certification of assessment limitations described in Iowa Code section 441.21(9), the county auditor shall determine the assessed values of property by applying the assessment limitations as required under Iowa Code section 441.21(9).

71.29(2) When a property unit of commercial property, industrial property, or property valued by the department pursuant to Iowa Code chapter 434 is comprised of more than one parcel, the county auditor shall apply the assessment limitations described in Iowa Code sections 441.21(5)"b"(2)(a) and 441.21(5)"c"(2)(a), as applicable, to each parcel within the property unit by dividing 150,000 by the value of the entire property unit and multiplying the quotient by the value of each parcel within the property unit. Any remaining value of each parcel within the property unit shall receive the assessment limitations described in Iowa Code sections 441.21(5)"b"(2)(b) and 441.21(5)"c"(2)(b), as applicable. The assessment limitations shall be applied as whole numbers.

Example A: Parcels 1, 2, and 3 comprise one property unit of commercial, industrial, or railway property valued at $300,000 total.

Parcel 1 is assessed at $100,000.

Parcel 2 is assessed at $100,000.

Parcel 3 is assessed at $100,000.

The first $50,000 of value of each parcel receives the assessment limitation applicable to residential property. The additional value of each parcel receives the applicable assessment limitation for commercial, industrial, or railway property assessed under Iowa Code chapter 434 described in Iowa Code sections 441.21(5)"b"(2)(b) and 441.21(5)"c"(2)(b).

Example B: Parcels 1, 2, 3, and 4 comprise one property unit of commercial, industrial, or railway property valued at $850,000 total.

Parcel 1 is assessed at $500,000.

Parcel 2 is assessed at $200,000.

Parcel 3 is assessed at $100,000.

Parcel 4 is assessed at $50,000.

The first $88,235 of value of Parcel 1 receives the assessment limitation applicable to residential property. The additional value of the parcel receives the applicable assessment limitation for commercial, industrial, or railway property assessed under Iowa Code chapter 434 described in Iowa Code sections 441.21(5)"b"(2)(b) and 441.21(5)"c"(2)(b).

The first $35,294 of value of Parcel 2 receives the assessment limitation applicable to residential property. The additional value of the parcel receives the applicable assessment limitation for commercial, industrial, or railway property assessed under Iowa Code chapter 434 described in Iowa Code sections 441.21(5)"b"(2)(b) and 441.21(5)"c"(2)(b).

The first $17,647 of value of Parcel 3 receives the assessment limitation applicable to residential property. The additional value of the parcel receives the applicable assessment limitation for commercial, industrial, or railway property assessed under Iowa Code chapter 434 described in Iowa Code sections 441.21(5)"b"(2)(b) and 441.21(5)"c"(2)(b).

The first $8,824 of value of Parcel 4 receives the assessment limitation applicable to residential property. The additional value of the parcel receives the applicable assessment limitation for commercial, industrial, or railway property assessed under Iowa Code chapter 434 described in Iowa Code sections 441.21(5)"b"(2)(b) and 441.21(5)"c"(2)(b).

Example C: Parcels 1 and 2 comprise one property unit of commercial, industrial, or railway property valued at $500,000 total.

Parcel 1 is assessed at $400,000.

Parcel 2 is assessed at $100,000.

The first $120,000 of value of Parcel 1 receives the assessment limitation applicable to residential property. The additional value of the parcel receives the applicable assessment limitation for commercial, industrial, or railway property assessed under Iowa Code chapter 434 described in Iowa Code sections 441.21(5)"b"(2)(b) and 441.21(5)"c"(2)(b).

The first $30,000 of value of Parcel 2 receives the assessment limitation applicable to residential property. The additional value of the parcel receives the applicable assessment limitation for commercial, industrial, or railway property assessed under Iowa Code chapter 434 described in Iowa Code sections 441.21(5)"b"(2)(b) and 441.21(5)"c"(2)(b).

This rule is intended to implement Iowa Code sections 441.21(5) and 441.21(9) as amended by 2022 Iowa Acts, House File 2552.

Revenue Department

Closed For Comments

This notice is now closed for comments. Collection of comments closed on 8/16/2022.

Official Document

  • Application of two-tier assessment limitation, 71.29
  • Published on 7/27/2022
  • 39 Views , 0 Comments
  • Notice of Intended Action

The official published PDF of this document is available from the Iowa General Assembly’s Administrative Rules page.

View Official PDF

View the Iowa Administrative Bulletin for 7/27/2022.

View Bulletin

Administrative Rule References

The following administrative rule references were added to this document. You may click a reference to view related notices.

Rule 701-71.29

Iowa Code References

The following Iowa code references were added to this document. You may click a reference to view related notices.

Iowa Code 434 Iowa Code 441.21(5) Iowa Code 441.21(9)

Keywords

The following keywords and tags were added to this document. You may click a keyword to view related notices.

Application of two-tier assessment limitation
Click To Comment