October 31, 2003

Submitted by:

Senator Bryan Sievers
Representative Jim Kurtenbach

House File 692, Division 1, signed into law by Governor Vilsack on June 4, 2003, requires the Department of Revenue, in consultation with the Department of Management, to initiate and coordinate the establishment of a property tax implementation committee and provide staffing assistance to the committee.

In accordance with House File 692, membership of the property tax implementation committee shall include four members of the General Assembly, one each appointed by the majority leader of the Senate, the speaker of the House of Representatives, the minority leader of the Senate, and the minority leader of the House of Representatives. The committee shall also include members appointed by the Department of Revenue representing the Department of Revenue, the Department of Management, counties, cities, school districts, local assessors, commercial property taxpayers, industrial property taxpayers, residential property taxpayers, and agricultural property taxpayers, and other appropriate stakeholders.

Committee members appointed by stakeholders identified by the Legislative leadership are:

• Senator Bryan Sievers, Co-Chair
• Representative Jim Kurtenbach, Co-Chair
• Senator Herman Quirmbach
• Representative Don Shoultz
• Michael Ralston, Director Iowa Department of Revenue
• Richard Stradley, Iowa Department of Revenue
• Cynthia Eisenhauer, Iowa Department of Management
• Randy Bauer, Iowa Department of Management
• Ted Tedesco, Ames Mayor, Iowa League of Cities
• Gary Bilyeu, Story County Assessor, Iowa State Association of Counties
• Jerry Shepler, Warren County Farmer, Iowa Farm Bureau Federation
• Tim McGee, Lucas County Assessor, Iowa State Association of Assessors
• Mary Maloney, Polk County Treasurer, Iowa State Association of Treasurers
• Grant Veeder, Black Hawk County Auditor, Iowa State Association of Auditors
• Kim Dreher, Knapp Properties, Iowa Association of Realtors
• Curtis Rouse, Pioneer Hi-Bred Tax Director, Iowa Taxpayers Association
• Larry Sigel, School Finance Director, Iowa Association of School Boards
• Mark Schuling, Attorney and Shareholder, Brick Gentry Law Firm
• Larry Countryman, Wilson Trailer Chief Financial Officer, Iowa Association of Business and Industry
• Thomas K. Jarrett, Deere & Company Director of Taxes

September 3 Meeting

The first meeting of the Property Tax Implementation Committee convened on September 3, 2003, at the State Historical Building in Des Moines, Iowa. Senator Bryan Sievers called the meeting to order at 1:30 p.m. Approximately 50 members of the public were also in attendance.

The committee reviewed House File 692 as it pertains to the formation and charge of the property tax implementation committee.

In accordance with House File 692 the committee accepted the volunteering counties of Cerro Gordo, Woodbury, and Warren as the three official designated counties. Dickinson County also asked to participate in the study and will be provided equal access to discussion and data analysis on a funding-available basis.

Discussion during the first meeting of the committee focused on the creation of subcommittees to more efficiently manage the issues identified in House File 692. The four subcommittees and the volunteers to serve on these subcommittees are as follows:

Subcommittees

1. Counties / Cities

a. Land and square foot of value tax
b. Base year conversion issues
c. Equalization and Assessment Limitations

2. Broad Implementation Issues

a. Equalization and Assessment Limitations
b. Credits and Exemptions
c. Payments in-lieu of taxes for government and nonprofits
d. Tax Increment Financing, Urban Renewal Issues and Bonding
e. School finance

3. Property Tax Structure

a. Current items paid for by property taxes
b. Discussion of what property taxes should pay for
c. Analysis of property tax limitations
d. Performance measures for governments

4. Definitions of categories and classes

a. Agriculture
b. Apartments, Mobile Home Parks
c. Appeal time frames
d. Recreation / Green Space and other categories

Subcommittee Members

1. Counties/Cities

a. Dick Stradley
b. Tim McGee
c. Jim Kurtenbach
d. Don Shoultz
e. Tom Jarrett
f. Larry Countryman
g. Jerry Shepler

2. Broad Implementation Issues

a. Larry Sigel
b. Mary Maloney
c. Randy Bauer
d. Herman Quirmbach
e. Ted Tedesco
f. Jim Kurtenbach
g. Curtis Rouse

3. Property Tax Structure

a. Bryan Sievers
b. Grant Veeder
c. Jerry Shepler
d. Larry Countryman
e. Cynthia Eisenhauer

4. Definitions

a. Bryan Sievers
b. Mike Ralston
c. Kim Dreher
d. Gary Bilyeu
e. Mark Schuling

Responsibilities

The Department of Revenue will be responsible for the day-to-day operations and answering questions from the test counties. In order to stay informed, the committee will receive a list of the questions submitted to the Department along with the Department's responses.

Representative Kurtenbach will serve as chair for the subcommittees dealing with Counties and Cities (subcommittee 1) and Broad Implementation Issues (subcommittee 2). Senator Sievers will serve as chair for the subcommittees dealing with Property Tax Structure (subcommittee 3) and Definitions of Categories and Classes. Each subcommittee chair will be responsible for scheduling their subcommittee meetings. The implementation committee should meet three or four times per year, or as often as necessary. Each subcommittee shall meet prior to the second meeting of the implementation committee. No date was set for the next implementation committee meeting.

Cary Halfpop of the Department of Revenue will serve as the communications liaison for all committee information including minutes, agenda-posting, and making sure items are also posted to the committee Web site hosted by the Department of Revenue. All individuals wishing to be included on an e-mail contact list to receive notices of meetings and other information were encouraged to send their e-mail address to Cary Halfpop at the Iowa Department of Revenue.

Meetings of Subcommittees

One subcommittee has met at the time of the submission of this report.

Representative Jim Kurtenbach called a meeting of the Counties and Cities subcommittee to order on Thursday, October 16, 2003, at 1 p.m. at the State Historical Building in Des Moines.

The subcommittee discussed and provided a framework for the collection of archival data and will work with the primary software providers from the cities and counties to identify essential data elements. Upon identifying the requisite data elements the committee will request data from the participating cities and counties and conduct analysis of the proposed, square foot of value, property tax proposal.

Summary

At this time, the committee has met the basic requirements of the law as provided for in House File 692. One essential item that has not been addressed, but should be addressed prior to the adjournment of the 2004 legislative session, is a request for funding by the Legislature for the implementation committee and participating cities and counties.