The bill introduces significant modifications to property tax regulations and school funding in Iowa, effective January 1, 2026, and applicable to fiscal years beginning on or after July 1, 2026. It amends Section 331.423 to adjust levy rates for general and rural county services, changing the application timeline from July 1, 2028, to July 1, 2026, and establishes a formula for determining these rates based on property assessments and certified tax dollars. The bill also outlines conditions for adjusting levy rates based on the consumer price index and transitions to a full funding model for education by July 1, 2026, setting the foundation base at one hundred percent of the regular program state cost per pupil. Additionally, it introduces new provisions for property tax rates, including a reduction in the foundation property tax rate for school districts from $5.40 to $2.97 per $1,000 of assessed value starting July 1, 2026.

Further amendments include the establishment of limitations on property tax levies for counties and cities, with maximum rates calculated based on current fiscal year tax dollars and assessed values. The bill eliminates school district property tax replacement payments and appropriations from the foundation base supplement fund starting July 1, 2026, while modifying the funding formula to include media and educational services. It also specifies that agricultural structures built after January 1, 2026, will not be included in productivity calculations, and it increases property tax exemptions for veterans and elderly individuals. Overall, the legislation aims to streamline property tax processes, ensure fiscal responsibility, and adjust funding mechanisms for education and local governments.

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