The Plymouth County Supervisors introduced an ordinance Tuesday that will allow cities to offer tax breaks on undeveloped lots in subdivisions.
If passed, that ordinance authorizes implementation of a new law approved by the Iowa Legislature last year allowing for a five-year extension to taxation on certain properties.
The law allows all undeveloped property acquired and subdivided for housing development on or after Jan. 1, 2011, to continue to be taxed the same way it has been until it is sold for construction or occupancy for five years from the date of the subdivision.
Prior to last year's change, Iowa law required property platted into a housing subdivision be fully assessed as an improved lot just three years after being subdivided.
Bob Heyderhoff, county assessor, explained the board of supervisors' ordinance is necessary for all cities in the county to be able to add an additional five years -- for a total of 10 -- to the tax exemption if they choose to do so.
"If the supervisors chose to, they could add on another five years but they didn't," Heyderhoff explained. "This ordinance freezes classification to what it was before the subdivision was made."
For example, agricultural land that is subdivided for housing but remains undeveloped would continue to be taxed as agricultural land for five years or until it is developed.
The ordinance introduced Tuesday by the supervisors affects any new developments from Jan. 1, 2012 forward, he said.
That means a subdivision created in 2005 would not be refunded based on the new law, Heyderhoff said.
"There's no way we could go back and recalculate it back to ag class," he said. "It would be almost impossible to do."
If the board of supervisors approves its ordinance, city governing bodies can add the five additional years if they want to, Heyderhoff said.
He explained that an ordinance passed by the city of Le Mars in December 2011 to extend the tax exemption was considered invalid at the time by the assessor's office.
"It was amending a county ordinance that didn't exist," Heyderhoff said.
Heyderhoff said it is his understanding the Le Mars City Council may have to amend its ordinance or create another -- if the county passes its proposed baseline ordinance.
Le Mars Mayor Dick Kirchoff said he did not think the city's existing ordinance, which would give some properties an additional five years, needs to be amended.
He said the city's attorney Joe Flannery and county attorney Darin Raymond have been working together to prepare the ordinance currently being considered by the county concerning the tax extensions.
"Joe went over all of it with us at our legal meeting," Kirchoff said. "He didn't say anything about it needing to be amended."
The county board of supervisors will review its proposed ordinance a second time at 10:30 a.m. during next Tuesday's meeting at the courthouse, 215 Fourth Ave. S.E., Le Mars.