The bill proposes comprehensive changes to local government property tax regulations in Iowa, particularly affecting counties, cities, and school districts. It establishes new levy rates for fiscal years beginning on or after July 1, 2026, and introduces a framework for calculating these rates based on assessed property values, while removing previous provisions that set certain levy rates to take effect in 2028. The bill also introduces a new foundation property tax for school districts, set at $2.97 per thousand dollars of assessed valuation, to be levied starting July 1, 2030, and modifies the foundation property tax rate for reorganized school districts from $4.00 to $2.42 per thousand dollars of assessed valuation for reorganizations effective on or after July 1, 2026.

Additionally, the bill makes significant adjustments to property tax credits and exemptions, including a transition from a homestead property tax credit to a homestead property tax exemption with increasing exemption amounts over the years. It modifies the eligibility criteria for the property tax credit for individuals aged 70 and older, raising the household income threshold from less than 250 percent to less than 350 percent of the federal poverty level, effective for assessment years beginning January 1, 2026. The bill also prohibits cities and counties from using bonds or other indebtedness to fund general operations starting July 1, 2025, and eliminates the authority for counties to levy a tax for the brucellosis and tuberculosis eradication fund. Overall, the bill aims to enhance tax relief for veterans and seniors while ensuring fiscal responsibility in local government operations.

Statutes affected:
Introduced: 331.423, 441.21, 384.12, 384.1, 257.3, 257.15, 257.16, 257.16D, 8.33, 298A.3, 298.4, 257.2, 423F.2, 425A.3, 444.3, 4.13, 425.1, 35.1, 425.1A, 425.2, 425.11, 483A.24, 483A.1, 426A.11, 165.18, 331.559