Iowa House Bill HF2059

Iowa 2023-2024 Regular Session

• Introduced: 1/17/24
• Refer: 1/17/24

Caption

A bill for an act relating to the tax exemption of religious institution or society property being used for educational purposes by a third party, and including effective date and retroactive applicability provisions.

Impact

The immediate effect of HF2059 upon enactment and its retroactive applicability to assessment years beginning January 1, 2024, could significantly impact the financing and operations of religious educational entities. By ensuring that properties remain tax-exempt when used for educational purposes, supporters of the bill argue that it would encourage more religious organizations to participate in educational activities, thereby potentially increasing access to religious education for children.

Summary

House File 2059 (HF2059) is a legislative proposal in Iowa that addresses the tax exemption status for properties owned by religious institutions or societies when used for educational purposes. The bill amends existing tax regulations to allow grounds owned by a religious entity to maintain their tax-exempt status when used by third parties to provide educational instruction to children. This is particularly relevant when the instruction includes religious teachings consistent with the institution's doctrines and when no rental payments are made for the use of the grounds.

Contention

However, the bill may generate contention regarding the potential for misuse of tax exemptions granted under its provisions. Critics may argue that the lack of a requirement for a rental payment creates loopholes that could allow for non-educational use of these grounds under the guise of religious instruction. Additionally, there is concern that the bill's provisions related to reuse by various entities could lead to unintended consequences regarding tax revenue for local governments, introducing the possibility of fiscal strain on state resources.