This bill proposes significant modifications to local government property tax regulations in Iowa, particularly focusing on the levy rates for county and city services, as well as school funding. It establishes a new timeline for fiscal years, moving the starting point from July 1, 2028, to July 1, 2026, and introduces a new calculation method for levy rates that ensures a minimum increase of one hundred and one-half percent of the previous year's certified amounts. The bill also defines "new valuation" to include increases from new construction and improvements, and it sets a budget adjustment factor based on the consumer price index. Additionally, it revises the foundation base per pupil for school funding to 100% of state costs, while reducing the foundation property tax rate for school districts from $5.40 to $4.48662 per thousand dollars of assessed valuation, effective July 1, 2026.

Moreover, the bill addresses property tax exemptions and assessments, particularly for residential and multiresidential properties, introducing a one hundred percent tax exemption for qualified improvements and establishing new assessment percentages that gradually increase to 100% by 2036. It also modifies the eligibility criteria for homestead credits and exemptions, particularly for individuals aged sixty-five and older or those with disabilities, while consolidating the filing process for these credits. The bill further limits property tax levy rates for various governmental entities and prohibits cities and counties from using bonds for general operations starting July 1, 2025. Overall, the bill aims to streamline property tax processes, enhance funding mechanisms for local governments and schools, and ensure equitable distribution of resources, with most provisions effective January 1, 2026, and applicable to fiscal years beginning on or after July 1, 2026.

Statutes affected:
Introduced: 331.423, 331.510, 384.12, 257.3, 257.4, 257.1, 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, 441.21, 386.11, 404.3, 404.3A, 427A.1, 441.49, 441.47, 335.30A, 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, 441.16, 97B.9, 28M.5