The Iowa Senate has passed a bill that would allow something like tax abatement for property owners who rebuild in disaster zones.
Senator Rob Hogg, a Democrat from Cedar Rapids, says cities and counties would be allowed to give land owners a break on property taxes by keeping the property tax valuation the same as it was before the disaster rather than raising it to reflect all the post-disaster improvements.
"Here’s an example: if you had a house that was valued at $100,000 before the flood and after the flood you fixed it up and it’s now worth $125,000 a city can…say, ‘We’re going to hold that for a period of five years at $100,000 as an incentive to encourage redevelopment in these disaster-affected areas,’" Hogg says.
Cities or counties would have to establish "revitalization zones" where this property tax relief program would be available. "And that’s going to be a significant incentive for redevelopment," Hogg says.
Hogg is not aware of a city or county hit by last year’s disaster that has asked for this kind of property tax break, but he’s hopeful it will be embraced. "I’m virtually certain some cities will," Hogg says.
Another section of the bill that cleared the Senate Thursday is designed to help city and county governments that were hit by last year’s disasters, and found themselves paying government workers lots of overtime and buying disaster-related supplies. In some instances, those local governments exceeded their "certified budget" with that disaster spending. Hogg says the bill would allow that kind of over-spending in areas of the state which have been declared a presidential disaster.
"You know, some of the penalties for violating certified budgets are pretty severe. It’s actually a criminal matter on the county side," Hogg says. "We wanted communities not to be penalized for doing things that maybe didn’t comply with every detail of the law in response to this emergency."
The bill now goes to the House for consideration.