HOUSE REPUBLICAN STAFF ANALYSIS Bill: House File 626 (Formerly HF443) Committee: Ways & Means Floor Manager: Rep. Koester Date: April 10, 2015 Staff: Brittany L. Telk (1-3452)
State Government: Ways & Means: House Floor: Senate Floor: Governor:
PASSED on March 26 (22-0) PASSED on April 2 (24-0-1 abs.)
Future Repeal of State Board of Tax Review The State Board of Tax Review is an independent and bipartisan board that reviews final decisions issued by the director of the Iowa Department of Revenue in contested case proceedings, and is also able to review director’s assessment of centrally assessed property where taxpayers may appeal directly to the board. This bill describes the future repeal of the state board of tax review. It assigns the board’s responsibilities to the Iowa Department of Revenue director, with the decisions being subject to judicial review. The bill also makes changes to references to the director, assigning these responsibilities to the department to avoid conflicts. The department’s decisions will now be appealable to the director.
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Section by Section Analysis Division I: Repeal of Future Repeal of Property Assessment Appeal Board Section 1 – Property assessment appeal board This section repeals the sunset provision for the Property Assessment Appeal Board.
Division II: Future Repeal of State Board of Tax Review -Transition Section 2 – State board of tax review – Future repeal This section provides for the future repeal of the state board of tax review. It also prohibits the board from accepting cases as well as taxpayers from filing an appeal with the board after the effective date. The board is repealed on the date is disposes of all pending cases or July 1, 2016, whichever is earlier. Section 3 – Effective date This section states this division is effective upon enactment.
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Division III: Corresponding Changes Related to Division II Section 4 – Personal financial disclosure This section strikes reference to the tax review board for lobbying and financial disclosure purposes. Section 5 – Powers and duties of director – Department of revenue This section makes a conforming change, repealing the board exemptions under the Iowa Administrative Procedure Act on July 1, 2016, and applying them to the director. Section 6 – Tax procedures and practices This section strikes reference to the state board of tax review from the litigation review process for taxpayer appeals. Sections 7-13 – Homestead tax credits and reimbursement These sections strike reference to the state board of tax review for homestead credit decisions and appeals, and provide these decisions may be appealed to the director within 30 days of the notice, with the director’s decision being subject to judicial review. They also strike references to director and place the department as responsible for determining whether a claim exists and all of the notification processes, throughout the appeals section and for the definition of “gross rent.” Section 14 – Setting aside allowance – Military service tax credit and exemptions This section strikes reference to the state board of tax review for military service tax credit decisions, and provides these decisions may be appealed to the director within 30 days of the notice, with the director’s decision being subject to judicial review. It also strikes references to director and gives the department the responsibility for determining whether a claim exists and setting aside allowances. Sections 15-16 – Audit – Recalculation or denial – False claim - Business property tax credit These sections strike reference to the state board of tax review for business property tax credit decisions, and provide these decisions may be appealed to the director within 30 days of the notice, with the director’s decision being subject to judicial review. They also strike references to the director and replace them with the department, which will now be in charge of determining incorrect credit calculations and notification processes. Sections 17-18 – Annual report by utility – Assessment and certification - Listing property for taxation These sections strike references to the director and replace them with the department; every individual, partnership, cooperation, waterworks and gasworks/pipelines will submit required reports to the department each year and the department will determine property value and make assessments. Sections 19-21 – Notice of assessment – Notification of taxpayers These sections strike reference to the state board of tax review, and replace it with the director of revenue who will send out notification of property assessments. Also, the taxpayer will be able to make appeal to the director of revenue, not the state board of tax review, with the director’s decision being subject to judicial review. They also strike reference to 17A, the state board of tax review, and put the director of the department of revenue in charge of the appeals process. Finally, they place the department as the responsible party for valuation purposes.
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Sections 22-58 –Utility taxes These sections place the department in charge of the responsibilities currently reserved for the director, including: statement reviews and submissions, value determination, property assessments and valuation, collection provisions and any other determinations needed for telephone companies, railway companies, electric transmission lines and pipeline companies operating services in the state. Sections 59-74 – Assessment and valuation of property These sections place the department in charge of the responsibilities currently reserved for the director, and make conforming changes throughout the entire chapter. Also, they strike references to the state board of tax review for assessment and property value decisions, and provide these decisions may be appealed to the director within 30 days of the notice, with the director’s decision being subject to judicial review. They make the same changes for assessment and property value decisions or mistakes by the auditor. Section 75 – Effective dates This section states the division takes effect immediately upon enactment, except: section 3, addressing financial disclosure provisions and section 1, addressing the future repeal of the State Board of Tax review, which both provisions will take effect July 1, 2016.
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