The bill proposes comprehensive changes to local government property tax regulations in Iowa, particularly affecting levy rates for counties, cities, and school districts. It establishes new maximum levy rates for general county services at $3.50 and rural county services at $3.95 per thousand dollars of assessed value for fiscal years leading up to 2026. Starting July 1, 2026, a new framework for calculating these rates will be implemented, which will exclude new valuation increases. Additionally, the bill introduces a foundation property tax for school districts, beginning at $4.90 per thousand dollars of assessed valuation in 2026 and gradually decreasing to $3.40 by 2029. It also modifies the foundation property tax for reorganized school districts, changing the rate from $4.40 to $2.42 per thousand dollars of assessed valuation.

Moreover, the bill includes significant amendments regarding property tax credits and exemptions, particularly for veterans and senior citizens. It transitions from a homestead property tax credit to a homestead property tax exemption, with an incremental increase in the exemption amount over the years. The eligibility criteria for property tax credits for individuals aged 70 and older will also be adjusted, raising the household income threshold to less than 350 percent of the federal poverty level. Additionally, the bill prohibits cities and counties from using bonds or other forms of indebtedness to fund general operations starting July 1, 2025, and eliminates certain property tax adjustment aids for fiscal years beginning on or after July 1, 2030. Overall, the bill aims to streamline property tax regulations while providing targeted relief to specific groups and 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