This bill proposes comprehensive modifications to property tax regulations in Iowa, particularly affecting local governments, school districts, and property assessments. It establishes new levy rate calculations for counties and cities starting from fiscal years beginning July 1, 2026, which will be based on the current fiscal year's actual property tax dollars and total assessed value, excluding new valuation. The bill also introduces a budget adjustment factor linked to the consumer price index, ensuring that levy rates do not fall below a specified percentage of the previous year's certified property tax dollars. Additionally, it modifies the foundation property tax rates for school districts, reducing the rate from $5.40 to $2.97 per $1,000 of assessed value for budget years beginning July 1, 2026, and introduces new requirements for managing unexpended fund balances.

Furthermore, the bill includes significant changes to property tax exemptions and assessments, such as replacing the homestead property tax credit with a homestead property tax exemption starting January 1, 2025, and increasing exemptions for veterans. It also establishes a five-year tax exemption for improvements in designated revitalization areas and modifies assessment criteria for agricultural properties. The effective date for many provisions is set for January 1, 2026, with applicability to fiscal years starting on or after July 1, 2026. Overall, the bill aims to streamline property tax processes, enhance accountability for school districts, and ensure fair taxation practices across various property types.

Statutes affected:
Introduced: 331.423, 441.21, 384.12, 257.3, 257.4, 257.15, 257.16, 257.16D, 8.33, 298A.3, 297.36, 298.4, 257.2, 39.2, 423F.2, 423F.3, 425A.3, 444.3, 386.11, 404.3, 404.3A, 4.13, 425.1, 35.1, 425.1A, 425.2, 425.11, 483A.24, 483A.1, 347A.3, 357F.8, 357G.8, 176A.10, 312.2, 331.429, 165.18, 331.559