HomeMy WebLinkAboutA058 - Legal Opinion dated March 22, 2001 Page 1 of 1
Diane Voss
From: LuAnne Sodders <sodders@ city.am es.ia.us>
To: <TedTedesco@am es.net>; <judiehoffman@yahoo.com>; <sharonwirth@yahoo.com>;
<bobanncamp@aol.com>; <rcrosswind@aol.com>; <st.goodhue@isunet.net>;
<hcgbach@ames.net>; <schainker@city.ames.ia.us>; <voss@city.ames.ia.us>;
<OConnell@city.ames.ia.us>
Cc: <merlinp@pcpartner.net>
Sent: Thursday, March 22, 2001 10:56 AM
Subject: Merlin's E-mail on Somerset
E-mail from John Klaus:
With regard to the 3/21/01 E-mail of Mr. Pfannkuch, he is possibly
referring to the A.G. Opinion of March 22, 1983, that the governing body of
the city cannot give preferential treatment to a particular type of
property in an assessment classification. That opinion was followed by
legislation enacted in 1983 to amend subsection (f) of Section 404.2 to
insert the words:
"...none, some, or all of the property assessed as ...";
and, the sentence:
"If revitalization is made applicable only to some property within an
assessment classification, the definition of that subset of eligible
property must be by uniform criteria which further some planning objective
identified in the plan."
and, in subsection (h) DELETED
"...and shall be the same schedule used for all property of the same
classification located in an existing revitalization area ..."
It is my opinion the proposed Somerset plan conforms to the amended law.
3/22/2001
` Page 1 of 1
Diane Voss
From: merlin pfannkuch <merlinp@pcpartner.net>
To: <TedTedesco@am es.net>; <judiehoffman@yahoo.com>; <sharonwirth@yahoo.com>;
<bobanncamp@aol.com>; <rcrosswind@aol.com>; <st.goodhue@isunet.net>;
<hcgbach@ames.net>; <schainker@city.ames.ia.us>; <Klaus@city.ames.ia.us>;
<voss@city.ames.ia.us>; <OConnell@city.ames.ia.us>
Sent: Wednesday, March 21, 2001 2:05 PM
Subject: Re: Somerset
March 21, 2001
Re: Somerset
I suggest you take a look at Attorney General's Opinion 83-3-15. As I read that opinion, it would say
your proposed plan re Urban Revitalization for Somerset does not comply with Chapter 404, Code of
Iowa.
Thank you for your consideration.
Sincerely,
Merlin L.Pfannkuch
1424 Kellogg Ave.
Ames,IA 50010-5447
515--232-3319
merlin pWartner.net
3/22/2001
P. �1 f _ C)
Opinion No. 83-3-15 Page 1
*1847 1983 WL 41799 boundaries and existing and proposed land uses
Office of the Attorney General within the urban revitalization area, or may this
State of Iowa requirement be interpreted to imply that the city may
use subclassification(s) to encourage revitalization of
Opinion No. 83-3-15 specific types of land uses?
March 22, 1983
4. If the city may, pursuant to Iowa Code ch. 404
TAXATION: Discretion Granted to a City (1981), treat properties within the same assessment
Regarding Property Tax Exemptions for Urban classification in different manners, what permissable
Revitalization. Iowa Code §§ 404.2 and 404.3 system of subclassification of assessment classes
(1981). The governing body of a city cannot give could be used by cities?
preferential treatment to a particular type of property
within an assessment class. Such a result occurs if the 5. Does the language of Iowa Code § 404.2(2)(f)
governing body (1) grants a property tax exemption (1981), which states 'the revitalization is for
to certain types of property while omitting others rehabilitation and additions to existing buildings or
within the assessment class, or (2) provides different new construction or both . . .' require that all
tax exemption schedules for certain types of property rehabilitation and additions or new constructions that
within an assessment class. Furthermore, a city has meet the value added requirements of Section
no authority to give preferential treatment through 404.3(7) and 404.5 as determined by the local
property tax exemptions to certain types of new assessor, be eligible for the tax exemptions set out in
construction or rehabilitation and additions to existing the plan?
buildings. (Kuehn to Tuel, Administrator, City
Development Board, 3/22/83) 6. May a city designate an urban revitalization area
that consists of a parcel of property or a group of
Larry Tuel parcels of property upon which there is or will be
Administrator structures occupied solely by one single commercial
City Development Board concern or occupied by one residential structure?
Office for Planning & Programming
LOCAL The answers to your questions are dependent upon
the authority granted to cities by Iowa Code ch. 404
Dear Mr. Tuel: (1981). 1980 Op.Att'yGen. 639. The sections of
Iowa Code ch. 404 pertaining to the authority granted
You have requested the opinion of the Attorney to cities by the legislature are as follows:
General concerning several matters pertaining to
Iowa Code ch. 404 (1981). The questions you have 404.1 Area established by city. The governing
posed follow. body of a city may, by ordinance, designate an area
of the city as a revitalization area . . ..
1. Does the language 'applicable to residential,
agricultural commercial or industrial property within 404.2 Conditions mandatory. A city may only
the designated area or a combination thereof . . .' exercise the authority conferred upon it in this
contained in Iowa Code § 404.2(2)(t) (1981) require chapter after the following conditions have been
a city to make its urban revitalization plan applicable met:
to all property within the designated area that falls
within a specific assessment class (FN1)? 1. The governing body has adopted a resolution
finding that the rehabilitation, conservation,
2. Will different treatment of property within the redevelopment, or a combination thereof of the
same assessment classification violate the provisions area is necessary in the interest of the public
of Iowa Code § 404.2(2)(h) 1981, which requires the health, safety, or welfare of the residents of the
same tax exemption schedule to be used for all city and the area meets the criteria of section
property within the same classification located in an 404.1.
existing urban revitalization area?
2. The city has prepared a proposed plan for the
3. In conjunction with question two, does Iowa designated revitalization area. The proposed plan
Code § 404.2(2)(d) require an urban revitalization shall include all of the following:
plan to include the existing zoning classifications and
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Opinion No. 83-3-15 Page 2
a. A legal description of the real estate forming partial exemption from taxation on the actual value
the boundaries of the proposed area along with a added by the improvements. The exemption is for
map dipicting the existing parcels of real estate. a period of ten years. The amount of the partial
exemption is equal to a percent of the actual value
b. The existing assessed valuation of the real added by the improvements, determined as
estate in the proposed area, listing the land and follows:
building values separately.
a. For the first year, eighty percent.
c. A list of names and addresses of the owners
of record of real estate within the area. b. For the second year, seventy percent.
d. The existing zoning classifications and ***
district boundaries and the existing and proposed
land uses within the area. 3. All qualified real estate is eligible to receive a
one hundred percent exemption from taxation on
e. Any proposals for improving or expanding the actual value added by the improvements. The
city services within the area including but not exemption is for a period of three years.
limited to transportation facilities, sewage,
garbage collection, street maintenance, park 4. All qualified real estate assessed as
facilities and police and fire protection. commercial property, consisting of three or more
separate living quarters with at least seventy-five
f. A statement specifying whether the percent of the space used for residential purposes,
revitalization is applicable to residential, is eligible to receive a one hundred percent
agricultural, commercial or industrial property exemption from taxation on the actual value added
within the designated area or a combination by the improvements. The exemption is for a
thereof and whether the revitalization is for period of ten years.
rehabilitation and additions to existing buildings
or new construction or both. . . . 5. The owners of qualified real estate eligible for
the exemption provided in this section shall elect to
*1848 *** take the applicable exemption provided in
subsection 1, 2, 3 or 4 or provided in the different
h. Any tax exemption schedule that shall be schedule adopted in the city plan if a different
used in lieu of the schedule set out in section schedule has been adopted. Once the election has
404.3, subsection 1, 2, 3 or 4. This schedule been made and the exemption granted, the owner
shall not allow a greater exemption, but may is not permitted to change the method of
allow a smaller exemption, than allowed in the exemption.
schedule specified in the corresponding
subsection of section 404.3 and shall be the same 6. The tax exemption schedule specified in
schedule used for all property of the same subsection 1, 2, 3 or 4 shall apply to every
classification located in an existing revitalization revitalization area within a city unless a different
area. schedule is adopted in the city plan as provided in
section 404.2. However, a city plan shall not
404.3 Basis of tax exemption. adopt a different schedule unless every
revitalization area within the city has the same
1. All qualified real estate assessed as residential schedule applied to it and the schedule adopted
property is eligible to receive an exemption from does not provide for a larger tax exemption in a
taxation based on the actual value added by the particular year than is provided for that year in the
improvements. The exemption is for a period of schedule specified in the corresponding subsection
ten years. The amount of the exemption is equal of this section.
to a percent of the actual value added by the
improvements, determined as follows: One 7. 'Qualified real estate' as used in this chapter .
hundred fifteen percent of the value added by the . means real property . . . which is located in a
improvements. . . . designated revitalization area . . ..
2. All qualified real estate is eligible to receive a An examination of Iowa Code ch. 404 discloses that
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Opinion No. 83-3-15 Page 3
the obvious legislative intent was to permit a city to 1974). The provision may not be interpreted to
grant certain defined tax exemptions to qualified real provide for expansion by subclassification .
estate in a class designated by Iowa Code §
404.2(2)(f). The exemptions provide an incentive to Question five requires a similar result to that
encourage urban revitalization. The statute proceeds reached in question one. Section 404.2(2)(f)
to set forth a scheme whereby the governing body of authorizes the governing body of a city authority to
a city has the discretion to adopt an urban provide urban revitalization tax exemption incentives
revitalization tax exemption plan. to projects involving (1) rehabilitation and additions
to existing buildings, (2) new construction, or (3)
Section 404.2(2)(f) authorizes the governing body both. Therefore, while § 404.2(2)(f) authorizes a
of a city authority to provide urban revitalization tax city authority to limit the urban revitalization tax
exemption incentives to all classes of real estate in exemption incentives to projects involving either
accordance with the schedules set forth in Iowa Code rehabilitation and additions to existing buildings or
§ 404.3. Section 404.2(2)(f) gives a city authority to new construction, it provides no authority to enact an
limit the urban revitalization tax exemption incentives ordinance which would make a tax exemption
to a particular class of property or properties, but it applicable to only certain types of new construction
does not give the city authority to limit the tax or rehabilitation and additions to existing buildings.
exemption incentives to a particular type of property
within a class. Therefore, with reference to question The answers to questions one, two and three render
one, the city has no authority to enact an ordinance question four moot. Question six has been answered
which would grant a tax exemption to only a by a prior opinion of the Attorney General. See 1980
particular type of property within an assessment Op.Att'yGen. 786.
class. The governing body of a city must provide the
tax exemption uniformly to property within the same Based upon the foregoing, it is the opinion of the
assessment class. Attorney General that the governing body of a city
which has adopted an urban revitalization tax
Question two queries whether or not a city may give exemption plan, cannot give preferential treatment to
preferential treatment to a particular type of property a particular type of property within as assessment
within the same assessment class by providing class. Such a result occurs if the governing body (1)
different tax exemption schedules. Iowa Code §§ grants a property tax exemption to certain types of
404.2(2)(h) and 404.3(6) clearly require that cities property while omitting others within the assessment
provide the same exemption schedules for all types of class, or (2) provides different tax exemption
property within the same assessment classification. schedules for certain types of property within an
Therefore, with reference to question two, the assessment class. Furthermore, a city has no
governing body of a city cannot enact an ordinance authority to give preferential treatment through
which would allow different tax exemption schedules property tax exemptions to certain types of new
for property within the same assessment class. construction or rehabilitation and additions to existing
buildings.
*1849 Given the aforementioned discussion
regarding Iowa Code §§ 404.2 and 404.3, it also Yours truly,
follows that question three must be answered in the
negative. Iowa Code § 404.2(2)(d) must be Gerald A. Kuehn
interpreted as setting forth one of several
informational requirements that a proposed urban Assistant Attorney General
revitalization plan must contain. Where the language
of the statute is clear and plain, there is no room for (FN1) Assessment classes or classifications are
construction. Iowa Nat'l Indus. Loan Co. v. Iowa discussed in Iowa Code §§ 441.21 and 441.47
State Dep't of Revenue, 224 N.W.2d 437, 440 (Iowa (1981).
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