The bill proposes extensive modifications to local government property tax regulations in Iowa, particularly affecting levy rates for county and city services, as well as school funding. It amends Section 331.423 to change the effective dates for levy rates from July 1, 2028, to July 1, 2026, and establishes new rates for fiscal years beginning on or after July 1, 2026, and before July 1, 2031. The bill introduces a new definition for "new valuation" and outlines a gradual decrease in the foundation property tax for school districts from $5.40 to $3.40 per thousand dollars of assessed valuation over the years 2026 to 2029. Additionally, it sets a new foundation property tax rate of $2.97 for school districts starting July 1, 2030, and modifies existing laws regarding reorganized school districts.

Moreover, the bill includes significant changes to property tax credits and exemptions, particularly for veterans and senior citizens. It expands eligibility for homestead credits, allowing transfers to estates and surviving family members, while also increasing the property tax exemption for veterans. The bill transitions from a homestead property tax credit to a homestead property tax exemption, with a gradual increase in the exemption amount over several years. It also modifies the eligibility criteria for the property tax credit for individuals aged 70 and older, raising the income threshold. Additionally, the bill prohibits cities and counties from issuing bonds for general operations starting July 1, 2025, and eliminates the authority for counties to levy a tax for the brucellosis and tuberculosis eradication fund.

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