House File No. 52l. 'vVays and meam. BY MOORE. March 10, 1919. A BILL FOR AN ACT To provide for the taxation of mortgages on real property; to define the mortgage interest of real property for the purpose of taxation; to prevent double taxation on the taxable value of encumbered real property Il1 this state, and provide for contract between the owner and mortgagee for pay- ment of tax. Be It Enacted by the Gelleral Assembly of the State of Iowa: 1 Section 1. As used in and for the purpose of this act; the words "real 2 property", "real estate", "and lands", shall include all property a conveyance 3 whereof may be recorded by a recorder of deeds or county clerk under existing 4 laws: The word "mortgage" shall meiln any instrument creating or evidencing a 5 lien of any kind on such property give or taken as security for a debt; an 6 executory contract for the sale of land under which the vendee is entitled to 7 or c10es take possession thereof shall be deemed a mortgage of said land for the 8 unpaid balance of the purchase price. 1 Sec. 2. A mortgage on real estate in this state is hereby declared tn 2 be an interest in real estate for the purposes of assessment and taxation. 3 The amount and value of any mortgage upon real estate in this state shall be 4 assessed and taxed to the mortgagee or his assigns, except as hereinafter pro- S vided, and the taxes levied thereon shall be a lien on the mortgage interest; and th( 6 excess in value of the real estate above the mortgage or mortgages thereon shall bt 7 assessed and taxed to the mortgagor or owner of the premises and be a lien on thE 8 owner's int~rest. The mortgagee or his assigns may pay the tax levied on the in- 9 terest of the owner and have a lien thereon secured by the mortgage to the extent -2- to of the amount so paid with the lawful interest thereon. The mortgagor or owner U may pay the tax levied on the mortgage interest; and the amount so paid shall be [2 claimed and held tobe ~ payment on the indebtedness secured by the mortgage, and l3 it may affect any interest due thereon. In case of non-payment of any tax levied l4 upon the interest of the owner or mortgagee or assigns the land upon which the tax l5 is unpaid shall be sold at the time and in the manner provided by law for the sale 16 of real estate for delinquent taxes; and the holder of either the interest of the L? mortgagor or mortgagee may redeem from such sale the interest sold; and the amount 18 paid in redemption shall be treated and cause the same rights to accrue in favor of 19 the party making the payment as if payment had been made before sale. 1 Sec. 3. The county auditor shall compile the assessment books, and shall 2 each year prior to the first day of January, examine the records of mortgages 3 filed, and make a record in the assessment book against the land covered thereby, 4 of any mortgages and the amQ,unt of such mortgage and the name of the mortgagee or 5 assignee. The assessor shall at the time the property is assessed, assess the 6 mortgage interest and the value of the real property above the mortgage interest 7 separately. Said assessment as to the mortgage interest, and the value in excess 8 thereof shall be revised annually, as the facts may require to affect an assessment 9 of the real property, in accordance with the provisions of this act. Provided .0 that the total assessed value of any real property, incl~lding-the interest of the .1 mortgagor and mortgagee shall not be changed excepting when all the real property .2 of the county is assessed, unless the value of said property is changed by reason .3 of a change in the improvements thereon. And provided further that when it is .4 provided and agreed in any mortgage, that the mortgagor shall and will pay the tax .5 levied upon the mortgage, or the debt secured thereby, that such auditor shall not .6 enter said mortgage for separate assessment and taxation, but both interests shall -3- 17 be assessed and taxed to the mortgagor or owner of the property mortgaged; an 18 provided further that in case the amount of the mortgage or mortgages exceed th 19 taxable value of the land as assessed, then such taxable value of the land as 20 assessed, shall be the value used for taxation purposes, and the tax thereon 21 shall be paid by the party to be charged as hereinbefore provided; provided 22 further that such agreement contained in the mortgage will not destroy the 23 negotiability of any note or bond secured thereby. 1 Sec. 4. The mortgagee or assignee may file with the c~unty auditor 2 a statement in writing verified under oath; showing any payment or payments 3 on the principal debt, and thereafter the assesSOr shall assess the balance of 4 unpaid principal only against the mortgage interest. 1 Sec. S. vVhen the tax herein provided to be paid by mortgages is taxed 2 against such mortgagee, the rate shall be computed on the taxable value of stlch 3 mortgage interest at the five mill rate as provided in section thirteen hundred 4 ten, supplement to code, 1913. vVhen the tax herein provided to be paid by the 5 owner of real estate either on the excess in yalue, above the mortgage, or 6 on the entire interest as hereinbefore provided is taxed against the owner of th( 7 real estate, then the rate shall be computed on the taxable value- thereof at the 8 rate for taxation of real property. 1 Sec. 6. This act shall apply to all mortgages filed on and after 2 July 4, 1919. Mortgages on lands in this state filed on and after said date 3 shall not be taxed in any other manner than herein provided. All mortgages 4 on real estate recorded prior to July 4, 1919, shall be taxable as provided by 5 law under provision of law relating thereto, prior to enactment hereof. Pro- 6 vided that this act shall not apply to corporations, the property of which -4- IS now, or may hereafter be held to be exempt from taxation under state or federal laws, nor to exempt real estate from taxation where the mortgage thereon is by any state or federal laws, helel free from taxation in this state. The purpose of this law is to provide for the taxation of the taxable value of real property including the mortgage interest therein, anel to prevent double taxation of such property by levying a tax on the lanel, against the owner thereof, and a separate tax on the mortgage, against the owner thereof, and shall be so construed.
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