CHAPTER 8

INDUSTRIAL PROPERTY TAX EXEMPTIONS

8.01    PURPOSE. The purpose of this chapter is to provide for a partial exemption from property taxation of the actual value added to industrial real estate by the new construction of industrial real estate, research-service facilities, warehouses and distribution centers.

8.02    DEFINITIONS. For use in this chapter the following terms are defined:

1. “Actual value added” means the actual value added as of the first year for which the exemption is received.

2. “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.

3. “New construction” 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 structure 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 competitively to manufacture or process those products, which determination shall receive prior approval from the City Council of the City upon the recommendation of the Iowa Department of Economic Development.

4. “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.

5. “Warehouse” means a building or structure used as a 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.

8.03    PERIOD OF PARTIAL EXEMPTION. The actual value added to industrial real estate by the new construction of industrial real estate, research-service facilities, warehouses and distribution centers is eligible to receive a partial exemption from taxation for a period of five (5) years.

(Code of Iowa, Sec. 427B.3)

8.04    AMOUNTS ELIGIBLE FOR EXEMPTION. The amount of actual value added which is eligible to be exempt from taxation shall be as follows:

(Code of Iowa, Sec. 427B.3)

1. For the first year, seventy-five percent (75%)

2. For the second year, sixty percent (60%)

3. For the third year, forty-five percent (45%)

4. For the fourth year, thirty percent (30%)

5. For the fifth year, fifteen percent (15%)

8.05    LIMITATIONS. The granting of the exemption under this chapter 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.

(Code of Iowa, Sec. 427B.3)

8.06    APPLICATIONS. An application shall be filed for each project resulting in actual value added for which an exemption is claimed.

(Code of Iowa, Sec. 427B.4)

1. 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.

2. Applications for exemption shall be made on forms prescribed by the Director of Revenue and Finance and shall contain information pertaining to the nature of the improvement, its cost, and other information deemed necessary by the Director of Revenue and Finance.

8.07    NEW CONSTRUCTION APPROVAL. A property owner may submit a proposal to the City Council involving planned new construction of industrial property, including approved reconstruction, and request prior approval for the granting of a tax exemption. Such a proposal shall be submitted and considered as follows:

1. The property owner shall file the proposal in writing with the City Clerk not more than three (3) years before the planned new construction is to be completed. The proposal shall be filed in quintuplicate and shall contain the following information:

1. The business name and address of the property owner seeking the exemption and the name, title, address and phone number of the company officer with whom communications may be made regarding the proposal;

2. The nature of the property owner’s business including the products manufactured or processed by the business;

3. The location of the planned new construction and its zoning classification;

4. A detailed description of the planned new construction and its estimated cost;

5. The purpose and goal of the planned new construction, including information concerning proposed employment, community impact and necessity for receiving a prior guarantee of tax exemption, as well as any other relevant data and explanations;

6. The written proposal under this section may be combined with the required written request under Section 8.08, provided all information under both provisions is provided.

2. Upon receiving the written proposal, the City Clerk shall provide the extra copies of the request for approval to the Mayor, City Manager, Director of Planning and Development and the City Attorney and ask the City Council to set the matter for public hearing.

3. The City Council shall hold a public hearing regarding the proposal following notice thereof according to law.

4. Not less than thirty (30) days after said public hearing, the City Council may enact an ordinance approving the tax exemption, conditioned upon the new construction being completed as proposed and found to be qualified real estate. The granting of prior approval under this section shall be discretionary.

5. If an ordinance is adopted hereunder, it shall identify the planned new construction and incorporate any conditions required by the City Council. The City Council shall file a certified copy of the ordinance in the office of the Des Moines County Assessor.

6. In the event an ordinance approving the proposal is not adopted, the property owner may submit an amended proposal to the City Council for consideration following the same procedure as in the making of the original proposal.

8.08    RECONSTRUCTION APPROVAL. All reconstruction of industrial property shall be approved by ordinance in the manner provided by this section to be eligible for a tax exemption under this chapter. The procedure for receiving such approval shall be as follows:

1. The property owner seeking the exemption shall file a written request for an approval ordinance with the City Clerk not later than ninety (90) days before an application for exemption must be filed with the Des Moines County Assessor. The request shall be filed in quintuplicate and shall contain the following information:

1. The business name and address of the property owner seeking the exemption and the name, title, address and phone number of the company officer with whom communications may be made regarding the request;

2. The nature of the property owner’s business including the products manufactured or processed by the business;

3. The location of the reconstruction project and its zoning classification;

4. A detailed description of the reconstruction involved and its estimated cost. If the reconstruction is being performed in connection with a project also involving other new construction, the description and cost of the total project shall be included;

5. The purpose of the reconstruction project, including specific evidence and justification that the reconstruction is required and necessary:

(1) Due to economic obsolescence, and

(2) To implement recognized industry standards for the manufacturing and processing of specific products, and

(3) For the owner to continue to competitively manufacture or process those products;

6. The original or certified copy of the written recommendation of the Iowa Department of Economic Development that the reconstruction project be approved.

2. Upon receiving the written request, the City Clerk shall provide extra copies of the request for approval to the Mayor, City Manager, Director of Planning and Development and the City Attorney and ask the City Council to set the matter for public hearing.

3. The City Council shall hold a public hearing on the requested ordinance following notice thereof according to law.

4. Not less than thirty (30) days after the public hearing, the City Council shall enact the ordinance approving the reconstruction as eligible for a tax exemption under this chapter if it determines that the Iowa Department of Economic Development has made a recommendation for approval and that the reconstruction is required and necessary:

1. Due to economic obsolescence; and

2. To implement recognized industry standards for the manufacturing and processing of specific products; and

3. For the owner to continue to competitively manufacture those products.

5. The ordinance adopted shall incorporate the required findings and the City Clerk shall file a certified copy of it in the office of the Des Moines County Assessor.

6. In the event the ordinance is disapproved because the necessary determinations could not be made as required, the property owner may submit a revised reconstruction proposal which shall be submitted in the same manner as the original request.

8.09    EXEMPTION REPEALED. When in the opinion of the City Council continuation of the exemption granted by this chapter ceases to be of benefit to the City, the City Council may repeal this chapter, but all existing exemptions shall continue until their expiration.

(Code of Iowa, Sec. 427B.5)

8.10    DUAL EXEMPTIONS PROHIBITED. A property tax exemption under this chapter shall not be granted if the property for which the exemption is claimed has received any other property tax exemption authorized by law.

(Code of Iowa, Sec. 427B.6)