A. Scope; Applicability: Pursuant to chapter 427B of the code of Iowa, a partial exemption from property taxation of the actual value added to the industrial real estate by the new construction of industrial real estate, research service facilities, warehouses, distribution centers and the acquisition of or improvement to machinery and equipment assessed as real estate pursuant to section 427A.1(1)(e) of the code of Iowa, shall be conditioned as follows:
1. "New construction", as referred to herein, means new buildings and structures, and includes new buildings and structures which are constructed as additions to existing buildings and structures. New construction does not include reconstruction of an existing building or structure which does not constitute complete replacement of an existing building or refitting of an existing building or structure unless the reconstruction of an existing building or structure is required due to economic obsolescence and the reconstruction is necessary to implement recognized industry standards for the manufacturing and processing of specific products and the reconstruction is required for the owner of the building or structure to continue to competitively manufacture or process those products, which determination shall receive prior approval from the city council upon the recommendation of the Iowa development commission.
2. The exemption shall also apply to new machinery and equipment assessed as real estate pursuant to section 427A.1, subsection 1, paragraph e, of the code of Iowa, unless the machinery or equipment is part of the normal replacement or operating process to maintain or expand the existing operational status.
3. "Research service facilities" means a building or group of buildings devoted primarily to research and development activities, including, but not limited to, the design and production or manufacture of prototype products for experimental use, and corporate research services which do not have a primary purpose of providing on site services to the public.
4. "Warehouse" means a building or structure used as public warehouse for the storage of goods pursuant to chapter 554, article 7 of the code of Iowa, except that it does not mean a building or structure used primarily to store raw agricultural products or from which goods are sold at retail.
5. "Distribution center" means a building or structure used primarily for the storage of goods which are intended for subsequent shipment to retail outlets. Distribution center does not mean a building or structure used primarily to store raw agricultural products, used primarily by a manufacturer to store goods to be used in the manufacturing process, used primarily for the storage of petroleum products, or used for the retail sale of goods.
6. A property tax exemption under this section shall not be granted if the property for which the exemption is claimed has received any other property tax exemption authorized by law.
B. Application, Information; Prior Approval Of New Construction Proposals:
1. An application shall be filed for each project resulting in actual value added for which an exemption is claimed. The application for exemption shall be filed by the owner of the property with the local assessor by February 1 of the assessment year in which the value added is first assessed for taxation. Applications for exemption shall be made on forms prescribed by the director of revenue of the state of Iowa and shall contain information pertaining to the nature of the improvement, its cost and other information deemed necessary by the said director.
2. A person may submit a proposal to the city council to receive prior approval for eligibility for a tax exemption on new construction. The city council, by ordinance, may give its prior approval of a tax exemption for new construction if the new construction is in conformance with the zoning plans for the city. The prior approval ordinance shall not be enacted until not less than thirty (30) days after a public hearing held in accordance with section 362.3 of the code of Iowa. Prior approval does not entitle the owner to exemption from taxation until the new construction has been completed and found to be qualified real estate. However, if the tax exemption for new construction is not approved, the person may submit an amended proposal to the city council to approve or reject.
C. Amount Of Exemption:
1. The actual value added to industrial real estate for the reasons specified in this section is eligible to receive a partial exemption from taxation for a period of five (5) years. However, if property ceases to be classified as industrial real estate or ceases to be used as a research service facility or a warehouse or distribution center, the partial exemption for the value added shall not be allowed for subsequent assessment years. "Actual value added", as used in this section, means the actual value added as of the first of the year for which the exemption is received, except that "actual value added by improvements to machinery and equipment" means the actual value as determined by the assessor as of January 1 of each year for which the exemption is received. The amount of actual value added which is eligible to be exempt from taxation shall be as follows:
For the first year | 75 percent |
For the second year | 60 percent |
For the third year | 45 percent |
For the fourth year | 30 percent |
For the fifth year | 15 percent |
2. However, the granting of the exemption under this section for new construction constituting complete replacement of an existing building or structure shall not result in the assessed value of the industrial real estate being reduced below the assessed value of the industrial real estate before the start of the new construction added.
D. Duration, Repeal Of Exemption: The partial exemption shall be available until such time as this section is repealed by the city council. When, in the determination of the city council, continuation of the exemption granted in this section ceases to be of benefit to the city, the city council may repeal this section, but all existing exemptions shall continue until their expiration. (Ord. 55-08, 9-2-2008)