Resolutions-2018-005

2013 PROPERTY TAX LEGISLATION During the 2013 session the Iowa Legislature enacted, and the Governor signed, Senate File 295 ("SF 295"). Among other things, SF 295 limits annual assessed value growth with respect to residential and agricultural property from 4% to 3%, reduces as a rollback the taxable value applicable to commercial, industrial and railroad property to 95% for the 2013 assessment year and 90% for the 2014 assessment year and all years thereafter, and provides a partial exemption on telecommunications property. SF 295 also creates a new separate classification for multi-residential properties which were previously taxed as commercial properties, and assigns an incremental rollback percentage over several years for multi-residential properties such that the multi-residential rollback determination will match that for residential properties in the 2022 assessment year. As a result of SF 295, local governments expect to experience reductions in property tax revenues over the next several fiscal years. SF 295 includes state-funded replacement moneys for a portion of the expected reduction in property tax revenues to the local governments, but such replacement funding is limited in both amount and duration of availability. There can be no assurance the state-funded replacement moneys will be provided by the state, if at all, during the term the Bonds remain outstanding. The Issuer does not expect the state replacement funding to fully address the property tax reductions resulting from SF 295 during the term the Bonds remain outstanding.