This bill introduces comprehensive modifications to property tax regulations and funding mechanisms for local governments and school districts in Iowa, effective January 1, 2026, and applicable to fiscal years beginning on or after July 1, 2026. Key changes include the establishment of new limitations on property tax levies for counties and cities, which will be based on the current fiscal year's actual property tax dollars certified for levy, adjusted by a budget adjustment factor. The foundation property tax rate for school districts is reduced from $5.40 to $2.97 per $1,000 of assessed value starting in fiscal year 2026, while provisions for unexpended fund balances in school district management levy funds are introduced, requiring certification to the school budget review committee for future fiscal years.

Additionally, the bill modifies assessment practices, mandating that residential, commercial, and industrial properties be assessed at 100% of their actual value starting January 1, 2025. It introduces a new homestead exemption for individuals aged sixty-five and older, allowing for an exemption of up to $50,000 in taxable value for each eligible homestead. The legislation also consolidates the application process for property tax credits and exemptions, ensuring that individuals who have already filed will continue to receive benefits without needing to refile. Overall, the bill aims to streamline property tax assessments, enhance financial relief for certain groups, and create a more structured framework for property taxation and budgeting across Iowa.

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