SF 587 — A bill for an act relating to state and local government financing, programs, and operations, by modifying provisions relating to mental health and disability services funding, school district funding, commercial and industrial property tax replacement payments, and other specified tax provisions, making appropriations, providing penalties, and including effective date and applicability provisions. (Formerly SSB 1253.)

Section 426B.1, subsection 2, Code 2021, is amended toSF read587 as(4) follows:89 -7- md/jh/mb 7/49 S.F.

587 to read as follows:

22.21.

23.22.

426B.3 Mental health and disability LSBservices 2179SVregional (3)supplement 89fund. -7- md/jh 7/53 S.F.

587 services regional supplement fund.

For each fiscal year beginning on or after July 1, 2021, the moneys available in a fiscal year in the mental health and disabilitySF services587 state(4) supplement89 fund-8- aremd/jh/mb appropriated8/49 toS.F. the department of human services and shall be distributed to each mental health and disability services region, as defined in section 426B.6, on a per capita basis calculated under subsection 4 using each region’s population, as defined in section 426B.6, for that fiscal year.

587 disability services state supplement fund are appropriated to the department of human services and shall be distributed to each mental health and disability services region, as defined in section 426B.6, on a per capita basis calculated under subsection 4 using each region’s population, as defined in section 426B.6, for that fiscal year.

For the fiscal year beginning July 1, 2023, an amount equal to the product of forty dollars multiplied by the sum of LSBthe 2179SVregion’s (3)population 89for -8-the md/jhfiscal 8/53year. S.F.

587 the region’s population for the fiscal year.

(2) For purposes of this paragraph, “regional supplement growth factor” for a fiscal year is an amount equal to the product of the dollar amount used to calculate the regional supplement payments under this subsection for the immediately preceding fiscal year multiplied by the percent increase, if any, in the amount of sales tax revenue deposited into the general fund of the state under section 423.2A, subsection 1,SF paragraph587 “a”,(4) less89 the-9- transfersmd/jh/mb required9/49 underS.F. section 423.2A, subsection 2, between the fiscal year beginning three years prior to the applicable fiscal year and the fiscal year beginning two years prior to the applicable year, but not to exceed one and one-half percent.

587 1, paragraph “a”, less the transfers required under section 423.2A, subsection 2, between the fiscal year beginning three years prior to the applicable fiscal year and the fiscal year beginning two years prior to the applicable year, but not to exceed one and one-half percent.

For the fiscal year beginning July 1, 2021, each mental health and disability services region for which the LSBamount 2179SVcertified (3)during 89the -9-fiscal md/jhyear 9/53under S.F.section 331.391, subsection 4, paragraph “b”, exceeds forty percent of the actual expenditures of the region for the fiscal year preceding the fiscal year in progress, the remaining quarterly payments of the region’s regional supplement payment shall be reduced by an amount equal to the amount by which the region’s amount certified under section 331.391, subsection 4, paragraph “b”, exceeds forty percent of the actual expenditures of the region for the fiscal year preceding the fiscal year in progress, but the amount of the reduction shall not exceed the total amount of the region’s regional supplement payment for the fiscal year.

587 amount certified during the fiscal year under section 331.391, subsection 4, paragraph “b”, exceeds forty percent of the proposed gross expenditures of the region for the fiscal year, the remaining quarterly payments of the region’s regional supplement payment shall be reduced by an amount equal to the amount by which the region’s amount certified under section 331.391, subsection 4, paragraph “b”, exceeds forty percent of the proposed gross expenditures of the region for the fiscal year, but the amount of the reduction shall not exceed the total amount of the region’s regional supplement payment for the fiscal year.

The amount of reductions to quarterly payments and amounts paid to the department under this paragraph shall be transferred and credited to the risk poolSF under587 section(4) 426B.6.89 -10- md/jh/mb 10/49 S.F.

587 pool under section 426B.6.

For the fiscal year beginning July 1, 2022, each mental health and disability services region for which the amount certified during the fiscal year under section 331.391, subsection 4, paragraph “b”, exceeds twenty percent of the proposedactual gross expenditures of the region for the fiscal year,year preceding the fiscal year in progress, the remaining quarterly payments of the region’s regional supplement payment shall be reduced by an amount equal to the amount by which the region’s amount certified under section 331.391, subsection 4, paragraph “b”, exceeds twenty percent of the proposedactual gross expenditures of the region for the fiscal year,year preceding the fiscal year in progress, but the amount of the reduction shall not exceed the total amount of the region’s regional supplement payment for the fiscal year.

The amount of reductions LSBto 2179SVquarterly (3)payments 89and -10-amounts md/jhpaid 10/53to S.F.the department under this paragraph shall be transferred and credited to the risk pool under section 426B.6.

587 to quarterly payments and amounts paid to the department under this paragraph shall be transferred and credited to the risk pool under section 426B.6.

For the fiscal year beginning July 1, 2023, and each succeeding fiscal year, each mental health and disability services region for which anthe amount greater than zero is certified during the fiscal year under section 331.391, subsection 4, paragraph “b”, exceeds five percent of the actual expenditures of the region for the fiscal year preceding the fiscal year in progress, the remaining quarterly payments of the region’s regional supplement payment shall be reduced by an amount equal to the amount by which the region’s amount certified under section 331.391, subsection 4, paragraph “b”, exceeds five percent of the actual expenditures of the region for the fiscal year preceding the fiscal year in progress, but the amount of the reduction shall not exceed the total amount of the region’s regionalSF supplement587 payment(4) for89 the-11- fiscalmd/jh/mb year.11/49 S.F.

587 regional supplement payment for the fiscal year.

24.23.

25.24.

“Population” means, as of July 1 of the fiscal year LSBpreceding 2179SVthe (3)fiscal 89year -11-in md/jhwhich 11/53the S.F.population figure is applied, the county population shown by the latest preceding certified federal census or the latest applicable population estimate issued by the United States census bureau, whichever is most recent.

587 preceding the fiscal year in which the population figure is applied, the county population shown by the latest preceding certified federal census or the latest applicable population estimate issued by the United States census bureau, whichever is most recent.

The pool shall consist of the moneys appropriated or credited to the pool by law, including amounts creditedSF to587 the(4) risk89 pool-12- undermd/jh/mb section12/49 426B.3,S.F. subsection 7.

587 credited to the risk pool under section 426B.3, subsection 7.

(2) For purposes of this paragraph, the “risk pool growth factor” for each fiscal year is the percent increase, if any, in the amount of sales tax revenue deposited into the general fund of the state under section 423.2A, subsection 1, paragraph “a”, less the transfers required under section 423.2A, subsection 2, between the fiscal year beginning three years prior to the applicable fiscal year and the fiscal year beginning two years prior to the applicable year, minus one and one-half percent, and the risk pool growth factor for any fiscal year shall not LSBexceed 2179SVthree (3)and 89one-half -12-percent. md/jh 12/53 S.F.

587 exceed three and one-half percent.

The board shall consist of two countymental supervisors,health and disability services region governing board members, two countymental auditors,health and disability services region fiscal officers or agents, a member of the mental health and disability services commission who is not a governing board member or chief operating officer of a countymental boardhealth ofand supervisors,disability services region, a member of the county finance committee created in chapter 333A who is not an elected official, a representative of a provider of mental health or developmental disabilities services selected from nominees submittedSF by587 the(4) Iowa89 association-13- ofmd/jh/mb community13/49 providers,S.F. and two staff members of regional administrators of county mental health and disability services regions, all appointed by the governor, and one member appointed by the director of human services.

587 submitted by the Iowa association of community providers, a representative of a provider of mental health developmental disabilities services selected from nominees submitted by the Iowa behavioral health association, one member of the children’s behavioral health system state board who is not a governing board member or chief operating officer of a mental health and disability services region, and two chief operating officers of mental health and disability services regions, all appointed by the governor, and one member appointed by the director of human services.

Expenses and other costs of the risk pool board members representing counties shall be paid by the countythe ofregion origin.to which the member’s county belongs.

BasicIn addition to application and assistance requirements under subsections 6, 7, and 9, basic eligibility for risk pool assistance requires that a mental health and disability services region meet all of the LSBfollowing 2179SVconditions: (3) 89 -13- md/jh 13/53 S.F.

SF 587 following(4) conditions:89 -14- md/jh/mb 14/49 S.F.

587 a.

(1) ForIn applications for assistance for the fiscal year beginning July 1, 2021, and the fiscal year beginning July 1, 2022, in the fiscal year that commenced two years prior to the fiscal year of application for assistance, the ending balance, under generally accepted accounting principles, of the mental health and disability services region’s combined services funds was equal to or less than the ending balance threshold under subparagraph (2) for the fiscal year for which assistance is requested.

(a) For applications for assistance for the fiscal year beginning July 1, 2021, forty percent of the actual gross expenditures of the mental health and disability services region for the fiscal year that commenced two years prior to the fiscal year of application for assistance.

(b) For applications for assistance for the fiscal year beginning July 1, 2022, twenty percent of the actual gross expenditures of the mental health and disability services region for the fiscal year that commenced two years prior to the fiscal year of application for assistance.

(c) For applications for assistance for fiscal years beginning on or after July 1, 2023, five percent of the actual expenditures of the mental health and disability services region for the fiscal year that commenced two years prior to the fiscal year of application for assistance.

If the board determines a mental health and disability services region’s actual need for risk pool assistance was less than the amount of risk pool assistance granted to the mental health and disability services region, the mental health and disability services region shall refund the difference between the amount of assistance grantedSF and587 the(4) actual89 need.-15- md/jh/mb 15/49 S.F.

The587 mentalgranted health and disability services region shall submit the refundactual withinneed. thirty days of LSB 2179SV (3) 89 -14- md/jh 14/53 S.F.

587The mental health and disability services region shall submit the refund within thirty days of receiving notice from the board.

Continuing support for mandatedcore services.

Avoiding the need for reduction or elimination of critical services when the reduction or elimination places consumers’an individual’s health or safety at risk.

Avoiding the need for reduction or elimination of acore mobile crisis team or other critical emergency services when the reduction or elimination places the public’s health or safety at risk.

Avoiding the need for reduction or elimination of the services or other support providedthat tomaintain entirean populationsindividual ofin consumersa withcommunity disabilities.setting or that would create a risk that the individuals needing services and supports would be placed in more restrictive, higher cost settings.

e.

Avoiding the need for reduction or elimination of services or other support that maintain consumers in a community setting or that would create a risk that the consumers would be placed in more restrictive, higher cost settings.

Subject to the amount available and obligated from the risk pool for a fiscal year, the department of human services shall annually calculate the amount of moneys due to eligible LSBmental 2179SVhealth (3)and disability services regions in accordance with the board’s decisions and that amount is appropriated from SF 587 (4) 89 -15--16- md/jhmd/jh/mb 15/5316/49 S.F.

587 mental health and disability services regions in accordance with the board’s decisions and that amount is appropriated from the risk pool to the department for payment of the moneys due.

The list and information shall be submitted to the mental health and disability services commission, the children’s behavioral health system state board, the department of human services, and the general assembly.

26.25.

If this division of this Act takes effect after March 31, 2021, for each county for which the amount of taxes certified for levy for the purposes of section 331.424A for the fiscal year beginning July 1, 2021, exceeds the product of the population of the county as determined under section 331.424A, subsection 1, paragraph “e”, multiplied by twenty-one dollars and fourteen cents, the department of management shall reduce the amount of such taxes certified for levy to an amount not to exceed the product of the population of the county as determined under section 331.424A, subsection 1, paragraph “e”, multiplied by LSBtwenty-one 2179SVdollars (3)and fourteen cents and shall revise the rate SF 587 (4) 89 -16--17- md/jhmd/jh/mb 16/5317/49 S.F.

587 twenty-one dollars and fourteen cents and shall revise the rate of taxation as necessary to raise the reduced amount.

27.26.

LSB 2179SV (3) 89 -17- md/jh 17/53 S.F.

587 Sec.

28.

EFFECTIVE DATE.

Except as provided in this division of this Act, this division of this Act, being deemed of immediate importance, takes effect upon enactment.

29.27.

TheThis followingdivision takeof effectthis JulyAct, 1,being 2022:SF 587 (4) 89 -18- md/jh/mb 18/49 S.F.

1.587 deemed of immediate importance, takes effect upon enactment.

The section of this division of this Act amending section 331.432, subsection 3.

2.

The section of this division of this Act amending section 347.7, subsection 1, paragraph “c”.

30.28.

31.29.

32.30.

33.31.

34.32.

Section 441.21A, subsections 2 and 3, Code 2021, LSBare 2179SVamended (3)to 89read -18-as md/jhfollows: 18/53 S.F.

587 are amended to read as follows:

If an amount appropriated for a the fiscal year beginning on July 1, 2017, July 1, 2018, July 1, 2019, JulySF 1,587 2020,(4) or89 July-19- 1,md/jh/mb 2021,19/49 isS.F. insufficient to pay all replacement claims for the fiscal year, the director of revenue shall prorate the payment of replacement claims to the county treasurers and shall notify the county auditors of the pro rata percentage on or before September 30.

587 July 1, 2020, or July 1, 2021, is insufficient to pay all replacement claims for the fiscal year , the director of revenue shall prorate the payment of replacement claims to the county treasurers and shall notify the county auditors of the pro rata percentage on or before September 30.

For each fiscal year beginning on or after July 1, 2022, but before July 1, 2027, each taxingcounty authoritytreasurer shall be paid by the department of revenue an amount equal to the amountsum of the commercial and industrial property tax replacement claimclaims for theall taxing authority,authorities, or portion thereof, located in the county, as calculated in subsection 4A.

The county treasurer shall pay to each taxing authority the taxing authority’s commercial and industrial property tax replacement claim, or portion thereof, as calculated in subsection 4A.

On or before July 1, 2022, the department of revenue,management inshall consultationcalculate withand report to the department of management,revenue shall calculate for each taxing authority in this state that is a city or a county all of the following:

LSB(2) 2179SVThe (3)total assessed value as of January 1, 2019, of all taxable property located in the taxing authority that is subject to assessment and taxation used to calculate taxes which are due and payable in the fiscal year beginning July 1, SF 587 (4) 89 -19--20- md/jhmd/jh/mb 19/5320/49 S.F.

587 (2) The total assessed value as of January 1, 2019, of all taxable property located in the taxing authority that is subject to assessment and taxation used to calculate taxes which are due and payable in the fiscal year beginning July 1, 2020, excluding property subject to the statewide property tax imposed under section 437A.18 or 437B.14.

35.33.

36.34.

(b) A taxing authority that is a city or county for which the amount determined under subsection 3, paragraph “b”, subparagraph (2), is less than one hundred thirty-one and fourteentwenty-four hundredths percent of the amount determined under subsection 3, paragraph “b”, subparagraph (1).

(a) For the fiscal year beginning July 1, 2022, five-sixths of the amount received by the taxing authority under this LSBsection 2179SVfor (3)the 89fiscal -20-year md/jhbeginning 20/53July S.F.1, 2021.

587 section for the fiscal year beginning July 1, 2021.

(c)SF For587 the(4) fiscal89 year-21- beginningmd/jh/mb July21/49 1,S.F. 2024, three-sixths of the amount received by the taxing authority under this section for the fiscal year beginning July 1, 2021.

587 (c) For the fiscal year beginning July 1, 2024, three-sixths of the amount received by the taxing authority under this section for the fiscal year beginning July 1, 2021.

(3) The department of revenuemanagement shall consultcalculate withand report to the department of managementrevenue to calculate the amount received by each taxing authority in this state as the result of commercial and industrial property tax replacement claims paid for the fiscal year beginning July 1, 2021.2021, and the portion of the amount attributable to each county where the taxing authority is located, if applicable.

37.35.

For purposes of computing replacement amounts under this section for fiscal years beginning on or after July 1, LSB2014, 2179SVbut (3)before July 1, 2022, that portion of an urban renewal area defined as the sum of the assessed valuations defined in SF 587 (4) 89 -21--22- md/jhmd/jh/mb 21/5322/49 S.F.

587 2014, but before July 1, 2022, that portion of an urban renewal area defined as the sum of the assessed valuations defined in section 403.19, subsections 1 and 2, shall be considered a taxing district.

38.36.

39.37.

40.38.

For fiscal years beginning on or after July 1, 2022, but before July 1, 2027, each taxing authority’s replacement claim calculated under subsection 4A4A, or portion thereof, shall be paid to the taxingappropriate authoritycounty treasurer, as provided in subsection 2, paragraph “b”, in equal installments in September and March of each year.

TheAfter payment by the county treasurer to the taxing authority, the taxing authority’s replacement claim shall be apportioned and credited by the governing body of the taxing authority among the taxing authority’s tax levies in the same proportion that each property tax levy bears to the total of all property tax levies imposed by the taxing authority for the fiscal year for which the payment is received.

Of the amounts allocated and credited to each property tax levy that is subject to division under section 403.19, the total amount paid into the fund for the taxing authority as taxes by or for the taxing authority into which all other property taxes are paid and the special fund of the applicable municipality under section 403.19, subsection 2, shall be an LSBSF 2179SV587 (3)(4) 89 -22--23- md/jhmd/jh/mb 22/5323/49 S.F.

41.39.

LSBSF 2179SV587 (3)(4) 89 -23--24- md/jhmd/jh/mb 23/5324/49 S.F.

42.40.

43.41.

44.42.

45.43.

The board of directors of a local school district LSBSF 2179SV587 (3)(4) 89 -24--25- md/jhmd/jh/mb 24/5325/49 S.F.

46.44.

47.45.

Moneys available in the fund at the conclusion of the fiscal year beginning July 1, 2021,2023, and ending June 30, 2022,2024, shall be expended by the school corporation for the purposes authorized under chapter 300, Code 2021.

48.46.

Section 300.2, Code 2021, is amended by adding the following new subsection:

SF 587 (4) 89 -26- md/jh/mb 26/49 S.F.

587 NEW SUBSECTION.

4.

a.

A levy under this chapter shall not be approved by the voters on or after the effective date of this division of this Act.

b.

If the levy has not been discontinued under section 300.3, the authorization to impose the levy under this chapter shall terminate July 1, 2024.

c.

Notwithstanding subsection 2, including a proposition approved at an election held before the effective date of this division of this Act, the rate of a levy imposed by a board of directors under this chapter for the fiscal year beginning July 1, 2023, shall not exceed one-half of the levy rate imposed by the board of directors for the fiscal year beginning July 1, 2022.

Sec.

47.

LSBSec. 2179SV (3) 89 -25- md/jh 25/53 S.F.

58748. Sec.

49.

50.49.

51.50.

51.

EFFECTIVE DATE.

Except as otherwise provided in SF 587 (4) 89 -27- md/jh/mb 27/49 S.F.

587 this division of this Act, this division of this Act takes effect July 1, 2024.

Sec.

ThisThe divisionfollowing, being deemed of thisimmediate Actimportance, takes effect Julyupon 1,enactment: 2022.

The section of this division of this Act enacting section 300.2, subsection 4.

ThisExcept for the section of this division of this Act enacting section 300.2, subsection 4, this division of this Act applies to fiscal years beginning on or after July 1, 2022.2024.

Low-income property tax credit and elderly and disabled property tax credit pursuant to sections 425.16 through 425.40, subject to the limitation of 425.39,41, subsectionparagraph 2“b”. .

Section 425.1, subsection 1, paragraph a, Code 2021, is amended to read as follows:

a.

A homestead credit fund is created.

There is appropriated annually from the general fund of the state to the department of revenue to be credited to the homestead LSB 2179SV (3) 89 -26- md/jh 26/53 S.F.

587 credit fund, an amount sufficient to implement this chapter subchapter .

Sec.

56.

(2) A person filing a claim for credit or reimbursement under this subchapter who has attained the age of twenty-three years on or before December 31 of the base year or was a head ofSF household587 on(4) December89 31-28- ofmd/jh/mb the28/49 baseS.F. year, as defined in the Internal Revenue Code, but has not attained the age or disability status described in this paragraph “a”, subparagraph (1) or the age status and eligibility criteria of subparagraph (3), and is domiciled in this state at the time the claim is filed or at the time of the person’s death in the case of a claim filed by the executor or administrator of the claimant’s estate, and was not claimed as a dependent on any other person’s tax return for the base year.

(3)587 Aof personhousehold filingon aDecember claim31 forof creditthe underbase thisyear, subchapteras whodefined in the Internal Revenue Code, but has not attained the age ofor seventydisability yearsstatus ondescribed orin beforethis Decemberparagraph 31“a”, ofsubparagraph the(1) baseor year,the whoage hasstatus aand householdeligibility incomecriteria of lesssubparagraph than(3), twoand hundredis fiftydomiciled percentin ofthis state at the federaltime povertythe level,claim asis definedfiled byor at the mosttime recentlyof revisedthe povertyperson’s incomedeath guidelinesin publishedthe case of a claim filed by the Unitedexecutor Statesor departmentadministrator of healththe claimant’s estate, and humanwas LSBnot 2179SVclaimed (3)as 89a -27-dependent md/jhon 27/53any S.F.other person’s tax return for the base year.

587(3) A person filing a claim for credit under this subchapter who has attained the age of seventy years on or before December 31 of the base year, who has a household income of less than two hundred fifty percent of the federal poverty level, as defined by the most recently revised poverty income guidelines published by the United States department of health and human services, and is domiciled in this state at the time the claim is filed or at the time of the person’s death in the case of a claim filed by the executor or administrator of the claimant’s estate.

57.56.

The tentative credit or reimbursement for a claimant describedSF in587 section(4) 425.17,89 subsection-29- 2,md/jh/mb paragraph29/49 “a”,S.F. subparagraphs subparagraph (1) and (2), if no appropriation is made to the fund created in section 425.40 shall be determined in accordance with the following schedule:

587 described in section 425.17, subsection 2, paragraph “a”, subparagraphs subparagraph (1) and (2), if no appropriation is made to the fund created in section 425.40 shall be determined in accordance with the following schedule:

58.57.

NEW PARAGRAPHPARAGRAPH. .

(2) The difference between the actual amount of property LSBtaxes 2179SVdue (3)on 89the -28-homestead md/jhduring 28/53the S.F.fiscal year next following the base year minus the actual amount of property taxes due on the homestead during the first fiscal year for which the claimant filed a claim for a credit calculated under this paragraph “c” and for which the property taxes due on the homestead were calculated on an assessed valuation that was not a partial assessment and if the claimant has filed for the credit calculated under this paragraph “c” for each of the subsequent fiscal years after the first credit claimed.

587 taxes due on the homestead during the fiscal year next following the base year minus the actual amount of property taxes due on the homestead during the first fiscal year for which the claimant filed a claim for a credit calculated under this paragraph “c” and for which the property taxes due on the homestead were calculated on an assessed valuation that was not a partial assessment and if the claimant has filed for the credit calculated under this paragraph “c” for each of the subsequent fiscal years after the first credit claimed.

59.58.

The cumulative adjustment factor applies to the base year beginning in the calendar year for which the latest annual adjustmentSF factor587 has(4) been89 determined.-30- md/jh/mb 30/49 S.F.

587 adjustment factor has been determined.

60.59.

61.60.

Section 425.39, Codesubsection 2021,1, as amended by 2021 Iowa Acts, House File 368, section 33, is amended to read as follows:

LSB 2179SV (3) 89 -29- md/jh 29/53 S.F.

587 425.39 Fund created —— appropriation —— priority.

Thea. elderly and disabled property tax credit and reimbursement fund is created.

ThereThe is appropriated annually from the general fund of the state to the department of revenue to be credited to the elderly and disabled property tax credit andfund reimbursementis fund,created. from funds not otherwise appropriated, an amount sufficient to implement this subchapter for claimants described in section 425.17, subsection 2, paragraph “a”, subparagraph subparagraphs (1) and (3), subject to subsection 2.

2.There is appropriated annually from the general fund of the state to the department of revenue to be credited to the elderly and disabled property tax credit fund, from funds not otherwise appropriated, an amount sufficient to implement this subchapter for credits for property taxes due for claimants described in section 425.17, subsection 2, paragraph “a”, subparagraph subparagraphs (1) and (3), subject to paragraph “b”.

b.

62.61.

This division of this Act applies toSF claims587 under(4) chapter89 425,-31- subchaptermd/jh/mb II,31/49 filedS.F. on or after January 1, 2022.

587 to claims under chapter 425, subchapter II, filed on or after January 1, 2022.

63.62.

64.63.

65.64.

Section 422.33, subsection 25, Code 2021, is LSBamended 2179SVby (3)striking 89the -30-subsection. md/jh 30/53 S.F.

587 amended by striking the subsection.

66.65.

67.66.

68.67.

The natural resource commission shall adopt rules pursuant to chapter 17A to interpret the requirement of paragraphSF “a”587 that(4) the89 owner-32- ofmd/jh/mb a32/49 forestS.F. reservation be actively engaged in the operation or management of the forest reservation, including but not limited to standards for wildlife control practices, invasive species control measures, conservation measures, and forest practices.

587 paragraph “a” that the owner of a forest reservation be actively engaged in the operation or management of the forest reservation, including but not limited to standards for wildlife control practices, invasive species control measures, conservation measures, and forest practices.

(1) For each forest reservation application filed after LSBFebruary 2179SV1, (3)2021, 89but -31-on md/jhor 31/53before S.F.February 1, 2022, the owner must file by February 1, 2022, with the department of natural resources, evidence that the owner meets the requirement for active engagement in the operation or management of the forest reservation.

587 February 1, 2021, but on or before February 1, 2022, the owner must file by February 1, 2022, with the department of natural resources, evidence that the owner meets the requirement for active engagement in the operation or management of the forest reservation.

For forest reservations subject to this subsection, the requirement for the owner to be actively engaged in the operation or management of the forest reservationSF shall587 not(4) apply89 until-33- themd/jh/mb owner33/49 reappliesS.F. for the forest reservation exemption.

587 reservation shall not apply until the owner reapplies for the forest reservation exemption.

Exemptions for forest reservations in the third region LSBshall 2179SVend (3)at 89the -32-conclusion md/jhof 32/53the S.F.assessment year beginning January 1, 2023, and in order to continue receiving the exemption for the five-year period specified in section 427C.3, beginning with the assessment year beginning January 1, 2024, each owner must reapply on or before February 1, 2024.

587 shall end at the conclusion of the assessment year beginning January 1, 2023, and in order to continue receiving the exemption for the five-year period specified in section 427C.3, beginning with the assessment year beginning January 1, 2024, each owner must reapply on or before February 1, 2024.

69.68.

1.SF 587 (4) 89 -34- md/jh/mb 34/49 S.F.

587 1.

For forest reservation exemption applications filed on or after February 2, 2021, but on or before February 1, 2022, the five-year period provided under subsection 1 begins with LSBthe 2179SVassessment (3)year 89beginning -33-January md/jh1, 33/532022, S.F.unless the owner fails to satisfy the requirement of section 427C.1, subsection 2, paragraph “c”.

587 the assessment year beginning January 1, 2022, unless the owner fails to satisfy the requirement of section 427C.1, subsection 2, paragraph “c”.

70.69.

71.70.

1.SF 587 (4) 89 -35- md/jh/mb 35/49 S.F.

587 1.

72.71.

It shall be the duty of the assessor to secure the facts relative to fruit-tree and forest reservations by taking the LSBsworn 2179SVstatement, (3)or 89affirmation, -34-of md/jhthe 34/53owner S.F.or owners making application under this chapter;

587 sworn statement, or affirmation, of the owner or owners making application under this chapter;

The application can only be accepted if it meets the criteria established by the natural resource commission to be a fruit-tree or forest reservation department of natural resources may conduct an on-site review if necessary to verify theSF eligibility587 of(4) a89 forest-36- reservationmd/jh/mb application36/49 .S.F.

587 the eligibility of a forest reservation application.

LSB5. 2179SV (3) 89 -35- md/jh 35/53 S.F.

587 5.

However, the area shall not be subject to the recapture tax if the owner, including one possessing under a contract of sale, andSF the587 owner’s(4) direct89 antecedents-37- ormd/jh/mb descendants37/49 haveS.F. owned the area for more than ten years.

587 and the owner’s direct antecedents or descendants have owned the area for more than ten years.

Upon expiration of the applicable exemption period, the owner of a forest or fruit-tree reservation may reapply for LSBan 2179SVexemption (3)under 89this -36-chapter md/jhif 36/53the S.F.property meets all the criteria for the exemption under this chapter.

587 an exemption under this chapter if the property meets all the criteria for the exemption under this chapter.

73.72.

Forest and fruit-tree reservations fulfilling the conditions of sections 427C.1 to 427C.13 chapter 427C shall be exempt from taxation to the extent authorized in that chapter.chapter .

74.73.

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 427C or section 441.22, or rules adopted under chapter 17A to administer prior provisions of chapter 427C or section 441.22, for assessment years beginning before January 1, 2022, and for duties, powers, protests, appeals, proceedings, actions, or remedies attributable to an assessment year beginning before JanuarySF 1,587 2022.(4) 89 -38- md/jh/mb 38/49 S.F.

587 January 1, 2022.

75.74.

76.75.

EXPLANATIONDIVISION TheIX inclusionTRANSIT ofFUNDING thisSec. explanation does not constitute agreement with the explanation’s substance by the members of the general assembly.

This76. bill relates to state and local government financing, programs, and operations by modifying provisions relating to school district funding, mental health and disability services funding, commercial and industrial property tax replacement payments, and other specified tax provisions.

DIVISIONSection I28M.3, ——subsection MENTAL1, HEALTHCode FUNDING.2021, is amended to read as follows:

Division1. I of the bill relates to mental health and disability services funding.

LSBA 2179SVregional (3)transit 89district -37-shall md/jhhave 37/53all S.F.the rights, powers, and duties of a county enterprise pursuant to sections 331.462 through 331.469 as they relate to the purpose for which the regional transit district is created, including the authority to issue revenue bonds for the establishment, construction, reconstruction, repair, equipping, remodeling, extension, maintenance, and operation of works, vehicles, and facilities of a regional transit district.

587In Theaddition, billa createsregional atransit mentaldistrict, healthwith andthe disabilityapproval servicesof regionalthe supplementboard fundof undersupervisors, may issue general obligation bonds as an essential county purpose pursuant to chapter 331, subchapter IV, part 3, for the authorityestablishment, construction, reconstruction, repair, equipping, remodeling, extension, maintenance, and operation of theworks, departmentvehicles, and facilities of humana services.regional transit district.

ForSuch eachgeneral fiscalobligation yearbonds beginningare onpayable orfrom after July 1, 2021, the billproperty appropriatestax fromlevy theauthorized generalin fundsection of28M.5 theand statefrom to the mentaltransit healthhotel and disabilitymotel servicestax regionalimposed supplementunder fundsection an423A.4, amountsubsection necessary1, toparagraph make“b”, allif regionalapplicable. supplement payments for that fiscal year.

TheSec. moneys available in a fiscal year in the mental health and disability services state supplement fund are appropriated to the department of human services for distribution to each mental health and disability services region on a per capita basis calculated using each region’s population for that fiscal year.

The77. amount of each region’s regional supplement payment is as follows:

(1)Section for28M.4, thesubsection fiscal3, yearCode beginning July 1, 2021, anis amountamended equal to theread productas offollows: $15.86 multiplied by the sum of the region’s population for the fiscal year;

(2)3. for the fiscal year beginning July 1, 2022, an amount equal to the product of $38 multiplied by the sum of the region’s population for the fiscal year;

(3)A forcommission theshall fiscaladopt yearand beginningcertify July 1, 2023, an amountannual equalbudget to the product of $40 multiplied by the sum of the region’s population for the fiscalregional year;transit district.

(4)A forcommission thein fiscalits yearbudget beginningshall Julyallocate 1,the 2024,revenue anresponsibilities amountof equaleach tocounty and city participating in the productregional oftransit $42district, multipliedsubject byto reductions in the summaximum ofauthorized theproperty region’stax populationlevy forrate theunder fiscalsection year;28M.5, if applicable .

andA (5)commission forshall eachSF fiscal587 year(4) beginning89 on-39- ormd/jh/mb after39/49 JulyS.F. 1, 2025, an amount equal to the product of the sum of the region’s population for the fiscal year multiplied by the sum of the dollar amount used to calculate the regional supplement payments for the immediately preceding fiscal year plus the regional supplement growth factor for the fiscal year.

The587 billbe definesconsidered “regional supplement growth factor” for a fiscalmunicipality year to be an amount equal to the product of the dollar amount used to calculate the regional supplement payments for thepurposes immediately preceding fiscal year multiplied by the percent increase, if any, in the amount of salesadopting taxand revenuecertifying depositeda intobudget thepursuant generalto fundchapter of24. the state between the fiscal year LSB 2179SV (3) 89 -38- md/jh 38/53 S.F.

587Sec. beginning three years prior to the applicable fiscal year and the fiscal year beginning two years prior to the applicable year, but not to exceed 1.5 percent.

Regional78. supplement payments received by a region are paid in quarterly installments and shall be deposited in the region’s combined account under Code section 331.391 and used solely for providing mental health and disability services under the regional service system management plan.

UnderSection the28M.4, bill,Code for the fiscal years beginning July 1, 2021, andis Julyamended 1, 2022, each mental health and disability services region for which the region’s cash flow amount certified during the fiscal year exceeds a specified percentage of the proposed gross expenditures of the region for the fiscal year, the remaining quarterly payments of the region’s regional supplement payment are reduced by anadding amount equal to the amountfollowing bynew whichsubsection: the region’s cash flow amount certified exceeds the specified percentage of the proposed gross expenditures of the region for the fiscal year, but the reduction amount shall not exceed the total amount of the region’s regional supplement payment for the fiscal year.

IfNEW theSUBSECTION. region’s remaining quarterly payments are insufficient to effectuate the required reductions, the region is required to pay to the department of human services any amount for which the reduction in quarterly payments could not be made.

For4A. the fiscal year beginning July 1, 2023, and each succeeding fiscal year, each mental health and disability services region for which a cash flow amount is certified during the fiscal year, the remaining quarterly payments of the region’s regional supplement payment shall be reduced by an amount equal to the amount certified, but the reduction amount shall not exceed the total amount of the region’s regional supplement payment for the fiscal year.

IfA thecommission region’smay, remainingfollowing quarterlyapproval paymentsat areelection, insufficientimpose toa effectuatetransit thehotel requiredand reductions,motel thetax regionunder issection required423A.4, tosubsection pay1, toparagraph the“b”. department of human services any amount for which the reduction LSB 2179SV (3) 89 -39- md/jh 39/53 S.F.

587Sec. in quarterly payments could not be made.

The79. amount of reductions to quarterly payments and amounts paid to the department of human services as the result of a region’s certified cash flow amounts shall be transferred and credited to the risk pool created in the bill under new Code section 426B.6.

TheSection bill28M.4, alsosubsections establishes5 aand risk6, pool in the property tax relief fund under Code section2021, 426B.1are toamended provide additional funding to mentalread healthas andfollows: disability services regions meeting certain eligibility criteria.

The5. risk pool consists of moneys appropriated or credited to the risk pool by law.

TheA billcommission appropriatesshall $9,960,590levy fromfor the generaltax fundunder ofsection the28M.5 stateand shall control any tax revenues paid to the riskregional pooltransit fordistrict the fiscalcommission yearadministers beginningand, Julyincluding all moneys derived from the operation of the regional transit district, a transit hotel and motel tax imposed under section 423A.4, subsection 1, 2021.paragraph “b”, the sale of its the district’s property, interest on investments, or from any other source related to the regional transit district.

The6. bill appropriates $5,107,340 from the general fund of the state to the risk pool for the fiscal year beginning July 1, 2022.

ForTax eachrevenues fiscalcollected yearfrom beginninga onregional ortransit afterdistrict Julylevy 1,or 2025,a thetransit billhotel appropriatesand anmotel amounttax equalunder tosection the423A.4, risksubsection pool1, growthparagraph factor“b”, multipliedshall bybe theheld endingby balance of the riskcounty pooltreasurer. at the conclusion of a specified fiscal year.

TheBefore “riskthe poolfifteenth growthday factor”of for each fiscalmonth, year is the percentcounty increase,treasurer ifshall any,send in the amount ofcollected salesfor taxeach revenuefund depositedthrough into the generallast fundday of the statepreceding betweenmonth thefor fiscaldirect yeardeposit beginninginto three years prior to the applicabledepository fiscal year and theaccount fiscaldesignated yearby beginning two years prior to the applicablecommission. year, minus 1.5 percent.

The riskcounty pooltreasurer growthshall factorsend fora anynotice fiscalto yearthe maysecretary notof exceedthe 3.5commission percent.or the secretary’s designee stating the amount deposited, the date, the amount to be credited to each fund according to the budget, and the source of the revenue.

TheSec. bill establishes the composition of the risk pool board created in the bill.

Members80. shall serve for three-year terms.

StaffSection assistance28M.5, tosubsections the1 boardand shall4, beCode provided2021, byare theamended departmentto ofread humanas services.follows:

A1. regional administrator must apply to the risk pool board for assistance from the risk pool on or before October 31.

Thea. purpose of the assistance shall be to provide financial support for services provided by the regional administrator’s mental health and disability services region.

The commission, with the approval of the board isof LSBsupervisors 2179SVof (3)participating counties and the city council of participating cities in the chapter 28E agreement, may, subject to the reductions required under paragraph “b”, levy annually a tax not to exceed ninety-five cents per thousand dollars of the SF 587 (4) 89 -40- md/jhmd/jh/mb 40/5340/49 S.F.

587 requiredassessed tovalue determineof applicationall requirementstaxable toproperty ensurein prudenta useregional oftransit riskdistrict poolto assistance.the extent provided in this section.

The boardchapter 28E agreement may acceptauthorize orthe rejectcommission anto applicationlevy forthe assistancetax at different rates within the participating cities and counties in wholeamounts orsufficient to meet the revenue responsibilities of such cities and counties as allocated in part.the budget adopted by the commission.

TheHowever, decisionfor a city participating in a regional transit district, the total of all the boardtax levies imposed in the city pursuant to section 384.12, subsection 10, and this section shall not exceed the aggregate of ninety-five cents per thousand dollars of the assessed value of all taxable property in the participating city or the levy rate determined under paragraph “b”, whichever is final.less.

Theb. total amount of risk pool assistance shall be limited to the amount available in the risk pool for a fiscal year.

Any(1) unobligatedIf balancea inregional thetransit riskdistrict poolimposes ata thetransit closehotel ofand amotel fiscaltax yearunder shallsection remain423A.4, insubsection 1, paragraph “b”, the riskmaximum poollevy forrate distributionauthorized inunder thethis succeedingsection fiscalshall year.be reduced as provided in this paragraph.

RiskFor pooleach assistancefiscal year beginning on or after July 1 following the first calendar year for which the transit hotel and motel tax is imposed in the regional transit district, and until subparagraph (4) applies, the levy rate imposed under this section shall onlynot exceed a rate equal to the rate that would be maderequired availablefor the fiscal year beginning July 1 following the election approving the transit hotel and motel tax to addresscollect onean oramount moreequal ofto the property taxes collected by the regional transit district for the fiscal year beginning July 1 following circumstances:the election approving the transit hotel and motel tax minus the amount of transit hotel and motel tax revenue received by the regional transit district for the first calendar year for which the transit hotel and motel tax is imposed.

(1)(2) continuingIf supportthe forregional mandatedtransit services;district authorizes the commission to levy the tax at different rates within the participating cities and counties, as authorized under paragraph “a”, the levy rate reduction required under this paragraph shall be applied by the department of management SF 587 (4) 89 -41- md/jh/mb 41/49 S.F.

(2)587 avoidingto theeach needparticipating forcity reductionand orcounty eliminationbased upon the revenue responsibilities of criticalsuch servicescities whenand counties as provided in the reductionchapter or28E eliminationagreement placeson consumers’the healthdate orthe safetytransit hotel and motel tax is approved at risk;election.

(3) avoidingIf thea needregional fortransit reductiondistrict orincreases eliminationthe rate of athe mobiletransit crisishotel teamand ormotel othertax, criticalfurther emergencyreductions servicesin whenthe maximum authorized levy rate under this section shall be implemented in the reductionsame ormanner eliminationas placesprovided under subparagraphs (1) and (2) for the public’sreductions healthfollowing orinitial safetyimposition atof risk;the transit hotel and motel tax.

(4) avoidingIf the needregional fortransit reductiondistrict orrepeals eliminationthe transit hotel and motel tax, the maximum authorized levy rate shall be ninety-five cents per thousand dollars of the servicesassessed orvalue otherfor supportfiscal providedyears tobeginning entireafter populationsthe date of consumerstermination withunder disabilities;section 423A.4, unless the transit hotel and motel tax is reinstated.

and4. (5) avoiding the need for reduction or elimination of services or other support that maintain consumers in a community setting or that would create a risk that the consumers would be placed in more restrictive, higher cost settings.

The riskproceeds poolof boardthe shalltax makelevy itsand finalother decisionsauthorized onrevenues orof beforethe Decemberregional 15transit regardingdistrict acceptanceshall orbe rejectionused offor the applicationsoperation and maintenance of a regional transit district, for assistancepayment andof debt obligations of the totaldistrict, amountand acceptedfor shallthe becreation consideredof obligated.a reserve fund.

The billcommission establishesmay basicdivide eligibilitythe forterritory riskof poola assistance,regional includingtransit requirementsdistrict thatoutside the mentalboundaries healthof anda disabilitycity servicesinto regionseparate isservice inareas complianceand withimpose thea regional servicetransit systemdistrict managementlevy plannot requirementsto andexceed that the regionmaximum meetsrate specifiedauthorized endingby balancethis thresholdssection forin certaineach fiscalservice years.area.

TheSec. ending balance thresholds are a specified percentage of the actual gross expenditures of the mental health and disability services region for a specific fiscal year.

The81. percentage for the LSB 2179SV (3) 89 -41- md/jh 41/53 S.F.

587Section fiscal303.52, yearsubsection beginning4, Julyparagraph 1,a, Code 2021, is 40amended percent.to read as follows:

Thea. percentage for the fiscal year beginning July 1, 2022, is 20 percent.

CurrentThe Codeboard sectionof 331.424Atrustees authorizesmay eachby countyordinance toimpose certify a propertylocal taxhotel levy for payment of mental health and disabilitymotel servicestax withinin theaccordance mentalwith healthchapter and423A. disability services regional system.

ToSec. coincide with the appropriation and payment of mental health and disability services regional supplement payments directly to the regions or to exempted counties, the bill ends the authority for such a property tax levy starting with the fiscal year beginning July 1, 2022.

Additionally,82. upon conclusion of the fiscal year beginning July 1, 2021, the county treasurer shall transfer the remaining balance of the county’s county services fund to the county’s region to which the county belongs in the fiscal year beginning July 1, 2022, for deposit in the region’s combined account under Code section 331.391.

EffectiveSection July331.402, 1,subsection 2022,2, theparagraph billf, prohibitsCode a2021, countyis fromamended transferring any funds of the county to theread combinedas accountfollows: of a mental health and disability services region.

Iff. the bill takes effect after March 31, 2021, for each county for which the amount of taxes certified for levy for the purposes of Code section 331.424A for the fiscal year beginning July 1, 2021, exceeds the product of the population of the county multiplied by $21.14, the department of management shall reduce the amount of such taxes certified for levy to an amount not to exceed the product of the population of the county multiplied by $21.14 and shall revise the rate of taxation as necessary to raise the reduced amount.

TheImpose departmenta oflocal managementhotel isand requiredmotel totax report the reduction in theaccordance certifiedwith taxeschapter and423A. the revised rate of taxation to the county auditors by June 15, 2021.

InSec. order to timely implement the provisions of the bill establishing the risk pool for mental health and disability services regions for the fiscal year beginning July 1, 2021, LSB 2179SV (3) 89 -42- md/jh 42/53 S.F.

58783. and the fiscal year beginning July 1, 2022, the director of human services is required, subject to the membership requirements in the bill, to appoint temporary members of the risk pool board to review and approve risk pool assistance applications and establish alternative application deadlines and expedited application review and approval timelines.

TheSection bill384.12, providessubsection that10, theCode department2021, ofis humanamended services may adopt emergency rules to implementread theas provisionsfollows: of division I of the bill.

ExceptSF as587 provided(4) in89 division-42- Imd/jh/mb of42/49 theS.F. bill, division I of the bill takes effect upon enactment.

DIVISION587 II10. —— PROPERTY TAX REPLACEMENT PAYMENTS.

Currenta. Code section 441.21A establishes and appropriates amounts from the general fund of the state for commercial and industrial property tax replacement claims.

SuchA claimstax arefor calculatedthe byoperation theand departmentmaintenance of revenuea basedmunicipal ontransit thesystem differenceor betweenfor theoperation actualand valuemaintenance of a regional transit district, and assessedfor valuethe creation of alla commercialreserve andfund industrialfor propertythe system or district, in an amount not to exceed ninety-five cents per thousand dollars of assessed value each taxingyear districtor inthe levy rate determined under paragraph “b”, if applicable, when the state.revenues from the transit system or district are insufficient for such purposes.

Currentb. law appropriates an amount necessary for the payment of all commercial and industrial property tax replacement claims for each fiscal year beginning on or after July 1, 2014, subject to a maximum total appropriation for fiscal years beginning on or after July 1, 2017, of the total amount necessary for the payment of replacement claims in the fiscal year beginning July 1, 2016.

The(1) billIf eliminates the appropriationcity forparticipates fiscalin yearsa beginningregional ontransit ordistrict afterunder Julychapter 1,28M 2027, and specifies that theimposes maximuma totaltransit appropriationhotel forand themotel fiscaltax yearsunder beginningsection on423A.4, orthe aftermaximum Julylevy 1,rate 2022, but before July 1, 2027, shall notbe exceed the totallevy amountrate necessarydetermined forunder thesection payment28M.5, ofsubsection replacement1, claimsparagraph in“b”. the fiscal year.

The(2) bill(a) modifiesIf the methodologycity forimposes calculatinga andtransit apportioninghotel commercial and industrialmotel property tax replacementunder claimssection for423A.4, fiscalthe yearsmaximum beginninglevy onrate orshall afterbe Julyreduced 1,as 2022,provided butin beforethis Julysubparagraph. 1, 2027.

TheFor billeach requiresfiscal suchyear claimsbeginning on or after July 1 following the first calendar year for which the transit hotel and motel tax is imposed in the city, and until subparagraph division (c) applies, the levy rate imposed under this subsection shall not exceed a rate equal to the rate that would be calculatedrequired basedfor onthe fiscal year beginning July 1 following the election approving the transit hotel and paidmotel tax to taxingcollect authorities,an asamount definedequal LSBto 2179SVthe (3)property 89taxes -43-collected md/jhby 43/53the S.F.city under this subsection for the fiscal year beginning July 1 following the election approving the transit hotel and motel tax minus the amount of transit hotel and motel tax revenue received by the city for the first calendar year for which the transit hotel and motel tax is imposed.

587(b) If a city increases the rate of the transit hotel and motel tax, further reductions in the bill,maximum insteadauthorized oflevy taxingrate districtsunder asthis issubsection requiredshall be implemented in the same manner as provided under currentsubparagraph law.division (a) for the reduction following initial imposition of the transit hotel and motel tax.

The(c) amountIf of each taxing authority’s replacement claim is determined based on specified fractions of the amountcity receivedrepeals by the taxingtransit authorityhotel under Code section 441.21A for the fiscal year beginning July 1, 2021, as calculated by the department of revenue in consultation with the department of management, and whethermotel thetax, taxingSF authority587 is(4) a89 qualified-43- taxingmd/jh/mb authority.43/49 S.F.

The587 specifiedthe fractionsmaximum areauthorized reducedlevy overrate theshall periodbe ofninety-five fiscalcents yearsper beginningthousand Julydollars 1,of 2022,the andassessed endingvalue Junefor 30,fiscal 2027,years inbeginning after the casedate of atermination qualifiedunder taxingsection authority,423A.4, andunless ending June 30, 2025, in the casetransit ofhotel aand taxingmotel authoritytax that is notreinstated. a qualified taxing authority.

UnderSec. the bill, a taxing authority that is eligible to continue to receive commercial and industrial property tax replacement payments includes a city, county, community college, or other governmental entity or political subdivision in this state authorized to certify a levy on property located within such authority, but does not include a school district.

A84. qualified taxing authority is either a taxing authority that is not a city or a county or a taxing authority that is a city or a county in which the total assessed value as of January 1, 2019, of specified taxable property located in the taxing authority is less than 131.14 percent of the total assessed value as of January 1, 2012, of specified taxable property located in the taxing authority.

TheSection bill423A.4, requiresCode each2021, taxingis authority’samended property tax replacement claim payment for fiscal years beginning on or after July 1, 2022, but before July 1, 2027, to beread apportionedas andfollows: credited by the governing body of the taxing authority among the taxing authority’s tax levies in the same proportion that each property tax levy bears to the total of all property tax levies imposed by the taxing authority for the fiscal year for which the payment is received.

The423A.4 billLocally alsoimposed establishesLocal requirementshotel forand themotel apportionment of amounts allocated to property tax levies—— thattransit arehotel subjectand tomotel atax. division of taxes under Code section 403.19 (tax increment financing).

LSB1. 2179SV (3) 89 -44- md/jh 44/53 S.F.

587a. Under current law, the legislative tax expenditure committee established under Code section 2.48 is required to review the commercial and industrial property tax replacement claim expenditures.

TheA billcity, eliminatesa thatcounty, requiredor periodica review.land use district created under chapter 303, subchapter IV, may impose, by ordinance of the city council or by resolution of the board of supervisors or by ordinance of the board of trustees, a local hotel and motel tax, at a rate not to exceed seven percent, which shall be imposed in increments of one or more full percentage points upon the sales price from the renting of lodging.

DIVISIONThe IIItax ——when SCHOOLimposed FOUNDATIONby PERCENTAGE.a city shall apply only within the corporate boundaries of that city, when imposed by a county shall apply only outside incorporated areas within that county, and when imposed by a land use district shall apply only within the corporate boundaries of that district.

ForA purposeslocal ofhotel calculatingand statemotel foundationtax aidimposed received by schoola districtscity underor Codecounty chaptershall 257,not be imposed within the regularcorporate programboundaries foundationof basea perland pupiluse isdistrict 87.5during percentany period of time that the regularland programuse statedistrict costis perimposing pupil.a local hotel and motel tax.

Theb. bill increases that percentage to 88.4 percent for school budget years beginning on or after July 1, 2022.

TheA sectionregional transit district or a city that is not participating in a regional transit district may impose, by resolution of divisionthe IIIregional amendingtransit Codedistrict sectioncommission 257.3(1)(d)or takesby effectordinance Julyof 1,the 2022.city council, a transit hotel and motel tax, at a rate not to exceed five percent, which shall be imposed in increments of one or more full percentage points upon the sales price from the renting of lodging.

DIVISIONThe IVtax ——when PUBLICimposed EDUCATIONby ANDa RECREATIONALregional TAXtransit LEVY.district shall apply only within the boundaries of the regional transit district and may be imposed in addition to any tax imposed under paragraph “a”.

CodeThe chaptertax 300when authorizesimposed theby imposition of a voter-approvedcity propertyshall taxapply levyonly forwithin the establishmentcorporate andSF maintenance587 of(4) public89 recreation-44- placesmd/jh/mb and44/49 playgrounds,S.F. and necessary accommodations for the recreation places and playgrounds, in the public school buildings and grounds of the district.

Code587 chapterboundaries 300 also authorizes each school board to cooperate with public or private agencies having custody and management of publicthat parkscity or buildings or grounds open to the public for the supervision and instructionmay necessarybe toimposed carry on public educational and recreational activities in theaddition parks,to buildings,any andtax groundsimposed locatedunder withinparagraph the“a”. district.

Such2. activities may be supported by imposition of a voter-approved property tax levy not to exceed $0.13 and one-half cents per $1,000 of assessed value.

TheWithin propertyten taxdays levyof underthe Codeelection chapterat 300which alsoa providesmajority financialof supportthose tovoting communityon educationthe programsquestion establishedfavors underthe Codeimposition, chapterrepeal, 276,or whichchange providein educational,the recreational,rate cultural,of the local hotel and othermotel communitytax servicesor the transit hotel and programs.motel tax , the county auditor shall give written notice by sending a copy of the abstract of votes from the favorable election to the director of revenue.

Division3. IV of the bill repeals Code chapter 300 and makes corresponding amendments to other provisions of law effective LSB 2179SV (3) 89 -45- md/jh 45/53 S.F.

587A Julylocal 1,hotel 2022, and appliesmotel totax fiscalimposed yearsby beginninga oncity, county, or afterland use district shall be imposed on January 1 or July 1, 2022.following the notification of the director of revenue.

TheA billtransit provideshotel thatand financialmotel supporttax forimposed by a communityregional educationtransit programdistrict underor Codea chaptercity 276shall may be providedimposed fromon fundsJanuary received1, byfollowing the schoolnotification districtof underthe Codedirector chapterof 423F.revenue.

ByOnce operationimposed, of the definitiontax ofshall “schoolremain infrastructure”in undereffect Codeat section 423F.3(6)(a)(1), moneys received by a school district from the securerate animposed advanced vision for educationa fundminimum mayof continueone toyear. be utilized for activities previously provided for under Code chapter 300 and Code chapter 276.

DivisionA IVlocal alsohotel provides that moneys available in the public education and recreationmotel levytax fundor ata thetransit conclusionhotel of the fiscal year beginning July 1, 2021, and endingmotel Junetax 30, 2022, shall beterminate expendedonly byon theJune school30 corporationor forDecember the31. purposes authorized under chapter 300, Code 2021.

DIVISIONAt Vleast ——forty-five ELDERLYdays PROPERTYprior TAXto CREDIT.the tax being effective or prior to a revision in the tax rate or prior to the repeal of the tax, a city, county, or land use district, or regional transit district shall provide notice by mail of such action to the director of revenue.

DivisionThe Vdirector ofshall thehave bill modifies the eligibilityauthority forto andwaive the calculationnotice ofrequirement. the amount of the property tax credit for persons ages 70 and older under Code chapter 425, subchapter II.

Under4. the bill, a person filing a claim for the property tax credit who is at least 70 years of age and who has a household income of less than 250 percent of the federal poverty level is eligible to receive a credit against property taxes due on the claimant’s homestead.

Fora. such a claimant, the tentative credit amount is equal to the greater of the following:

(1)A thecity, amountcounty, ofor theland credituse asdistrict calculatedshall underimpose theor schedulerepeal ofa credithotel amountsand specifiedmotel intax Codeor sectionincrease 425.23(1)(a)or asreduce if the claimanttax wasrate only after an eligibleelection claimantat forwhich a creditmajority underof thatthose provision;voting on the question favors imposition, repeal, or change in rate.

andA (2)regional thetransit differencedistrict betweenor thecity actualshall amountimpose ofor propertyrepeal taxesa duetransit onhotel theand homesteadmotel duringtax theor applicableincrease fiscalor yearreduce minus the actualtax amountrate ofonly propertyafter taxesan dueelection onat the homestead based on a full assessment during the first fiscal year for which the claimant filed for a creditmajority calculated under the bill and if the claimant has filed for the credit for each of thethose subsequentvoting fiscalon years after the firstquestion LSBfavors 2179SVimposition, (3)repeal, 89or -46-change md/jhin 46/53rate. S.F.

However, a local hotel and motel tax of a city or county shall not be repealed or reduced in rate if obligations are outstanding which are payable as provided in section 423A.7, unless funds sufficient to pay the principal, interest, and SF 587 credit(4) claimed.89 -45- md/jh/mb 45/49 S.F.

The587 billpremium, alsoif modifiesany, theon appropriation to the elderlyoutstanding andobligations disabledat property tax credit and reimbursementprior fund under Code section 425.39, by limiting the amount of the credit to bematurity paid by the director of revenue to each county treasurer for claimants who have reachedbeen 70properly yearsset ofaside age and specifiespledged for that Codepurpose. section 25B.7(1), which requires the state to fund the cost of providing new property tax credits, shall not apply to the amount of the credit in excess of the amount paid by the director of revenue as determined in the bill.

Divisionb. V of the bill applies to claims under Code chapter 425, subchapter II, filed on or after January 1, 2022.

DIVISION(1) VIIf ——the FUTURElocal TAXhotel CHANGES.and motel tax applies only within the corporate boundaries of a city, only the registered voters of the city shall be permitted to vote.

The billelection amendsshall 2018be Iowaheld Acts,at chapter 1161, section 133 (trigger), by striking the twotime conditionsof necessary for the triggerregular tocity occur,election andor specifiesat thea provisionsspecial inelection 2018called Iowafor Acts,that chapterpurpose. 1161, sections 99-132, take effect January 1, 2023.

Currently,(2) If the twolocal conditionshotel areand necessarymotel fortax theapplies triggeronly toin occurthe includeunincorporated netareas generalof funda revenuescounty foror theonly fiscalwithin yearthe endingcorporate Juneboundaries 30,of 2022,a equalingland oruse exceedingdistrict, $8.3146only billion,the andregistered alsovoters equalingof orthe exceedingunincorporated 104areas percent of the netcounty generalor fundthe revenuesregistered forvoters of the fiscalland yearuse endingdistrict, Juneas 30,applicable, 2021.shall be permitted to vote.

IfThe theseelection twoshall conditionsbe areheld notat satisfied,the currenttime lawof institutes the changesgeneral forelection tax years beginning on or afterat thea Januaryspecial 1election followingcalled the first fiscal year for whichthat thepurpose. two conditions do occur.

By(3) strikingFor thea “trigger”,transit thehotel billand setsmotel intax motionimposed numerousby taxa changesregional fortransit taxdistrict, yearsonly beginningthe onregistered orvoters afterof Januarythe 1,regional 2023,transit describeddistrict below.shall be permitted to vote.

INDIVIDUALThe INCOMEelection TAX.shall be held at the time of the general election or the regular city election.

The(4) taxFor changesa includetransit reducinghotel theand numbermotel oftax individualimposed incomeby taxa bracketscity, fromonly ninethe toregistered four,voters andof modifying the taxablecity incomeshall amountsbe andpermitted taxto ratesvote. as follows:

IncomeThe over:election shall be held at the time of the general election or the regular city election.

But5. not over:

TaxThe Rate:locally imposed local hotel and motel tax and the transit hotel and motel tax shall be collected and remitted as provided in section 423A.5A.

1)Sec. $0 $6,000 4.40% 2) $6,000 $30,000 4.82% 3) $30,000 $75,000 5.70% LSB 2179SV (3) 89 -47- md/jh 47/53 S.F.

58785. 4) $75,000 6.50% For a married couple filing a joint return, the taxable income amounts in each bracket above are doubled.

Also,Section the423A.5A, taxablesubsection income3, amountsCode in2021, eachis bracketamended above will be indexed to inflationread andas increasedfollows: in future tax years, beginning in the tax year following the 2023 tax year.

INDIVIDUAL3. INCOME TAX CALCULATION.

UnderUnless currentotherwise law,provided in this section, the startingstate-imposed pointtax forunder computingsection 423A.3 and any locally , the Iowalocal individualhotel incomeand motel tax isimposed federaltax adjustedunder grosssection income423A.4, beforeand the nettransit operatinghotel lossand deduction,motel whichtax isimposed generallyunder asection taxpayer’s423A.4, grossshall incomebe minuscollected severalby deductions.the lodging provider from the user of SF 587 (4) 89 -46- md/jh/mb 46/49 S.F.

From587 that point,lodging Iowa requires several adjustments and thenshall providesbe taxpayersremitted withto a deduction for federal income taxes paid, and the optiondepartment. to deduct a standard deduction or itemized deductions.

The billlodging changesprovider theshall startingadd point for computing the individualstate-imposed income tax to federalthe taxablesales income,price whichof includesthe alllodging deductions and adjustmentsthe takentax, atwhen thecollected, federalshall levelbe instated computingas tax,a includingdistinct aitem, standardseparate deductionand orapart itemizedfrom deductions,the andsales price of the qualifiedlodging businessand incomefrom deductionthe allowedlocally forimposed certaintax incometaxes earnedimposed fromunder asection pass-through423A.4 entity., if any.

BecauseThe thelodging startingprovider pointshall changesadd tothe federallocally taxableimposed income,each andtax federalimposed lawunder doessection not423A.4, provideif forany, to the filingsales statusprice of marriedthe filinglodging separatelyand onthe tax, when collected, shall be stated as a combineddistinct return,item, separate and apart from the billsales repealsprice thatof filingthe statuslodging, optionand forfrom Iowathe taxstate-imposed purposes.tax, and from the other taxes imposed under section 423A.4.

BecauseSec. net operating loss is no longer calculated at the state level, the bill requires a taxpayer to add back any federal net operating loss deduction carried over from a taxable year beginning prior to the 2023 tax year, but allows taxpayers to deduct any remaining Iowa net operating loss from a prior taxable year.

The86. bill repeals the individual alternative minimum tax (AMT), allows an individual to claim any remaining AMT credit against the individual’s regular tax liability for the 2023 tax year, and then repeals the AMT credit in the tax year following the 2023 tax year.

TheSection bill423A.6, repealssubsections most1, Iowa-specific3, deductions, exemptions, and adjustments4, currentlyCode available2021, whenare computingamended netto incomeread LSBas 2179SVfollows: (3) 89 -48- md/jh 48/53 S.F.

5871. and taxable income under Iowa law, including the Iowa optional standard deduction and all itemized deductions, and the ability to deduct federal income taxes, except for a one-year phase out in the 2023 tax year for taxes paid, or refunds received, that relate to a prior year.

The billdirector maintainsof revenue shall administer the add-backstate, forand incomelocal, fromand securitiestransit hotel and motel tax taxes as nearly as possible in conjunction with the administration of the state sales tax law, except that areportion federallyof exemptthe butlaw notwhich state-exempt,implements andthe forstreamlined bonussales depreciationand amounts.use tax agreement.

The billdirector maintainsshall theprovide generalappropriate pensionforms, exclusionor andprovide on the deductionregular state tax forms, for incomereporting fromstate, federaland securities.local, and transit hotel and motel tax liability.

TheAll billmoneys maintainsreceived theor deductionrefunded forone contributionshundred toeighty days after the Iowadate 529on plan,which thea Iowacity, ABLEcounty, plan,or aland first-timeuse homebuyerdistrict, savingsor account,regional transit district, terminates its local hotel and anmotel individualtax developmentor account.transit hotel and motel tax and all moneys received from the state hotel and motel tax shall be deposited in or withdrawn from the general fund of the state.

The3. bill also maintains the deductions for military pension income, military active duty pay, social security retirement benefits, certain payments received for providing unskilled in-home health care, certain amounts received from the veterans trust fund, victim compensation awards, biodiesel production refunds, certain wages paid to individuals with disabilities or individuals previously convicted of a felony, certain organ donations, and Segal AmeriCorps education award payments.

The billdirector, modifiesin theconsultation existingwith deductionlocal officials, shall collect and account for healtha insurancelocal paymentshotel inand Codemotel sectiontax 422.7(29)and toa maketransit thehotel deductionand onlymotel applicabletax toand taxpayersshall whocredit areall atrevenues leastto 65the yearslocal oldtransient andguest whotax havefund netcreated incomein belowsection $100,000.423A.7.

TheLocal billauthorities alsoshall modifiesnot therequire existingany capitaltax gainpermit deductionnot inrequired Code section 422.7(21) to restrict the deduction to the sale of real property used in farming businesses by permitting the taxpayerdirector to take the deduction if either of therevenue. following apply:

the4. taxpayer materially participated in the farming business for at least 10 years and held the real property for at least 10 years;

orSection the422.25, taxpayersubsection sold4, thesections real422.30, property422.67, toSF a587 relative.(4) 89 -47- md/jh/mb 47/49 S.F.

The587 billand expands422.68, section 422.69, subsection 1, sections 422.70, 422.71, 422.72, 422.74, and 422.75, section 423.14, subsection 1, and sections 423.23, 423.24, 423.25, 423.31, 423.33, 423.35, 423.37 through 423.42, and 423.47, consistent with the definitionprovisions of “relative”this chapter, apply with respect to includethe antaxes entityauthorized under this chapter, in whichthe asame relativemanner ofand with the taxpayersame haseffect aas legalif orthe equitablestate, interestand inlocal, theand entitytransit ashotel anand owner,motel member,taxes partner,were orretail beneficiary.sales taxes within the meaning of those statutes.

TheNotwithstanding billthis providessubsection, athe newdirector deductionshall provide for anyquarterly incomefiling of anreturns employeeand LSBfor 2179SVother (3)than 89quarterly -49-filing md/jhof 49/53returns S.F.both as prescribed in section 423.31.

587The resultingdirector frommay therequire paymentall bypersons anwho employer,are whetherengaged paidin to the employeebusiness orof aderiving lender,any ofsales principalprice orsubject interestto ontax theunder employee’sthis qualifiedchapter educationto loan.register with the department.

TheAll billtaxes alsocollected modifiesunder thethis calculationchapter ofby neta incomeretailer, forlodging purposesprovider, oflodging thefacilitator, alternatelodging taxplatform, calculationor inany Codeother sectionperson 422.5(3)are anddeemed (3B),to andbe theheld tax return filing thresholds in Codetrust sectionfor 422.13,the tostate require that any amount of itemizedIowa deduction,and standardthe deduction,local personaljurisdictions exemptionimposing deduction,the ortaxes. qualified business income deduction that was allowed in computing federal taxable income shall be added back.

CORPORATESec. INCOME TAX AND FRANCHISE TAX CALCULATION.

Under87. current law, the starting point for calculating the corporate income tax and franchise tax is federal taxable income before the net operating loss deduction, because net operating loss is calculated at the state level.

TheSection bill423A.7, repealssubsections the2 separateand calculation3, ofCode net2021, operatingare lossamended atto theread stateas level.follows:

As2. a result, the bill requires taxpayers to add back any federal net operating loss deduction carried over from a taxable year beginning prior to the trigger year, but allows taxpayers to deduct any remaining Iowa net operating loss from a prior taxable year.

TheAll billmoneys alsoin repealsthe mostlocal Iowa-specifictransient deductions,guest exemptions,tax fund shall be remitted at least quarterly by the department, pursuant to rules of the director of revenue, to each city in the amount collected under section 423A.4, subsection 1, paragraph “a”, from businesses in that city, to each county in the amount collected under section 423A.4, subsection 1, paragraph “a”, from businesses in the unincorporated areas of the county, and adjustmentsto currentlyeach availableland whenuse computingdistrict netin incomethe amount collected under section 423A.4, subsection 1, paragraph “a”, from businesses in that land use district, to each regional transit district in the amount collected under section 423A.4, subsection 1, paragraph “b”, from businesses within the boundaries of the regional transit district and taxableto incomeeach city in the amount collected under Iowasection law.423A.4, subsection 1, paragraph “b”, from businesses in that city .

TheSF bill587 maintains(4) the89 add-back-48- formd/jh/mb income48/49 fromS.F. securities that are federally exempt but not state exempt, and for bonus depreciation amounts.

The587 bill3. maintains the deductions for income from federal securities, for foreign dividend and subpart F income, for certain wages paid to individuals with disabilities or individuals previously convicted of a felony, and for biodiesel production refunds.

DIVISIONMoneys VIIreceived ——by CHARITABLEthe CONSERVATIONcity CONTRIBUTIONfrom TAXthis CREDIT.fund collected under section 423A.4, subsection 1, paragraph “a”, shall be credited to the general fund of the city, subject to the provisions of subsection 4.

DivisionSec. VII of the bill repeals the charitable conservation contribution tax credit available against the individual and corporate income taxes.

Currently,88. individual and corporate income taxes are reduced by an amount equal to 50 LSB 2179SV (3) 89 -50- md/jh 50/53 S.F.

587Section percent423A.7, ofCode the2021, fair market value of real property located in this state that is conveyedamended unconditionally in perpetuity by adding the taxpayerfollowing fornew conservationsubsection: purposes.

DivisionNEW VIISUBSECTION. of the bill applies to such conveyances occurring on or after July 1, 2021.

DIVISION6. VIII —— FOREST RESERVATIONS.

Currenta. Code chapter 427C authorizes a property tax exemption for certain forest reservations and fruit-tree reservations.

ExceptThe asrevenue otherwisederived providedby ina theregional bill,transit thedistrict billfrom providesthe thattransit forhotel assessmentand yearsmotel beginningtax onauthorized orby aftersection January423A.4 1,shall 2022,be aexpended forestexclusively reservationfor isthe onlypurposes allowedof the exemptionregional authorizedtransit district under Code chapter 427C28M ifand theshall ownerresult isin activelya engagedreduction in the operationmaximum orlevy managementrate offor the forestregional reservation.transit district, as provided in section 28M.5, subsection 1, paragraph “b”.

DivisionHowever, VIIIthe amount of therevenue billderived grantsby the naturalregional resourcetransit commissiondistrict in the authoritysecond tocalendar adoptyear rulesthat totransit interprethotel and motel tax is imposed that exceeds the provisionsamount of revenue derived by the billregional relatingtransit todistrict in the requirementfirst calendar year that thetransit ownerhotel and motel tax is imposed shall be activelyused engagedfor inproperty tax relief for the operationlevy orunder managementsection of28M.5 in addition to the forestreduction reservation,to includingthe butlevy notrate limitedas tothe standardsresult forof wildlifethe controlrevenue practices,derived invasivein speciesthe controlfirst measures,calendar conservationyear measures,that the transit hotel and forestmotel practices.tax is imposed.

Ifb. interpretive rulemaking authority is clearly vested in the discretion of an agency by statute, the applicable judicial standard of review is whether the rules constitute an irrational, illogical, or wholly unjustifiable interpretation of law by the agency (Code section 17A.19(10)(l)).

IfThe interpretiverevenue rulemakingderived authorityby isa notcity clearlyfrom vestedthe intransit thehotel discretionand ofmotel antax agency,authorized by section 423A.4 shall be expended exclusively for the applicableoperation judicialand standardmaintenance of reviewa ismunicipal whethertransit thesystem rulesand constituteshall anresult erroneousin interpretationa ofreduction lawin (Codethe maximum levy rate for the city under section 17A.19(10)(c)).384.12, subsection 10.

ForHowever, eachthe forestamount reservationof applicationrevenue filedderived afterby Februarythe 1,city 2021,in butthe onsecond orcalendar beforeyear Februarythat 1,transit 2022,hotel theand ownermotel musttax fileis byimposed Februarythat 1,exceeds 2022,the withamount of revenue derived by the departmentcity ofin naturalthe resources,first evidencecalendar year that thetransit ownerhotel meetsand themotel requirementtax is imposed shall be used for activeproperty engagementtax relief for the levy under section 384.12, subsection 10, in addition to the operationreduction orto managementthe levy rate as the result of the forestrevenue LSBderived 2179SVin (3)the 89first -51-calendar md/jhyear 51/53that S.F.the transit hotel and motel tax is imposed.

SF 587 reservation.(4) 89 -49- md/jh/mb 49/49

Under the bill, the department of revenue, in consultation with the department of natural resources, is required to establish by rule five regions within the state.

Forest reservation exemptions for which the application was filed on or before February 1, 2021, shall terminate according to the schedule provided in the bill for each of the five regions and the owners of such forest reservations must reapply for the exemption.

For forest reservations subject to the termination and reapplication schedule, the requirement for the owner to be actively engaged in the operation or management of the forest reservation shall not apply until the owner reapplies for the forest reservation exemption.

Except for the forest reservation exemptions subject to the region-based reapplication process provided for in the bill, the bill limits the period of the exemption for forest reservations to five years and provides that the five-year exemption period for applications filed on or after February 2, 2021, but on or before February 1, 2022, begins with the assessment year beginning January 1, 2022, unless, the owner fails to satisfy the requirement in the bill to provide evidence of being actively engaged in the operation or management of the forest reservation.

The bill also specifies that upon expiration of the applicable exemption period for forest reservations or fruit-tree reservations under Code chapter 427C, the owner may reapply for an exemption if the property meets all the criteria for the exemption under the Code chapter.

The bill requires the department of natural resources to review each application for a forest reservation tax exemption before the application is accepted.

The bill requires the department of natural resources to use aerial photographs to determine forest reservation eligibility and authorizes an on-site review, if necessary.

Additionally, an area that is a forest reservation may be inspected each year by the department LSB 2179SV (3) 89 -52- md/jh 52/53 S.F.

587 of natural resources to determine if the area is maintained as forest reservation.

The bill specifies that the prohibition on using forest or fruit-tree reservations for economic gain other than the gain from raising fruit or forest trees includes but is not limited to leases or charges for persons who enter or go on the reservation for the recreational use thereof or for hunting.

Division VIII of the bill does not affect the operation of, or prohibit the application of, prior provisions of Code chapter 427C or Code section 441.22, or rules adopted to administer prior provisions of Code chapter 427C or Code section 441.22, for assessment years beginning before January 1, 2022, and for duties, powers, protests, appeals, proceedings, actions, or remedies attributable to an assessment year beginning before January 1, 2022.

Division VIII of the bill takes effect upon enactment and applies to assessment years beginning on or after January 1, 2022.

LSB 2179SV (3) 89 -53- md/jh 53/53