House Study Bill 313 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON KAUFMANN) A BILL FOR An Act relating to local government property taxes, financial 1 authority, and budgets, modifying appropriations, and 2 including effective date, applicability, and retroactive 3 applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1550YC (1) 91 jm/md
H.F. _____ DIVISION I 1 COUNTY PROPERTY TAXES AND BUDGETS 2 Section 1. Section 331.423, subsection 1, paragraph b, 3 subparagraph (1), Code 2025, is amended to read as follows: 4 (1) For each fiscal year beginning on or after July 1, 5 2024, but before July 1, 2028 2026 , subject to subparagraph 6 (3), the greater of three dollars and fifty cents per thousand 7 dollars of assessed value used to calculate taxes for general 8 county services for the budget year and the adjusted general 9 county basic levy rate, as adjusted under subparagraph (2), if 10 applicable. 11 Sec. 2. Section 331.423, subsection 1, paragraph c, Code 12 2025, is amended to read as follows: 13 c. For each fiscal year beginning on or after July 1, 2028, 14 three dollars and fifty cents per thousand dollars of assessed 15 value For each fiscal year beginning on or after July 1, 2026, 16 but before July 1, 2031, a levy rate per thousand dollars of 17 assessed value equal to one thousand multiplied by the quotient 18 of one hundred two percent of the current fiscal years actual 19 property tax dollars certified for levy under this subsection 20 1 divided by the remainder of the total assessed value used 21 to calculate such taxes for the budget year minus value 22 attributable to new valuation . 23 Sec. 3. Section 331.423, subsection 1, Code 2025, is amended 24 by adding the following new paragraph: 25 NEW PARAGRAPH . d. (1) For each fiscal year beginning on or 26 after July 1, 2031, the levy rate imposed under this subsection 27 1 for the current fiscal year, unless subject to subparagraph 28 (2). 29 (2) If the total assessed value, excluding value 30 attributable to new valuation, used to calculate taxes for 31 general county services under this subsection 1 for the budget 32 year is equal to or exceeds one hundred two percent of the 33 total assessed value used to calculate taxes for general county 34 services for the current fiscal year, a levy rate per thousand 35 -1- LSB 1550YC (1) 91 jm/md 1/ 52
H.F. _____ dollars of assessed value that is equal to one thousand 1 multiplied by the quotient of one hundred two percent of the 2 current fiscal years actual property tax dollars certified 3 for levy under this subsection 1 divided by the remainder of 4 the total assessed value used to calculate such taxes for the 5 budget year minus value attributable to new valuation. 6 Sec. 4. Section 331.423, subsection 2, paragraph b, 7 subparagraph (1), Code 2025, is amended to read as follows: 8 (1) For each fiscal year beginning on or after July 1, 2024, 9 but before July 1, 2028 2026 , subject to subparagraph (3), the 10 greater of three dollars and ninety-five cents per thousand 11 dollars of assessed value used to calculate taxes for rural 12 county services for the budget year and the adjusted rural 13 county basic levy rate, as adjusted under subparagraph (2), if 14 applicable. 15 Sec. 5. Section 331.423, subsection 2, paragraph c, Code 16 2025, is amended to read as follows: 17 c. For each fiscal year beginning on or after July 1, 2028, 18 three dollars and ninety-five cents per thousand dollars of 19 assessed value For each fiscal year beginning on or after July 20 1, 2026, but before July 1, 2031, a levy rate per thousand 21 dollars of assessed value equal to one thousand multiplied 22 by the quotient of one hundred two percent of the current 23 fiscal years actual property tax dollars certified for levy 24 under this subsection 2 divided by the remainder of the total 25 assessed value used to calculate such taxes for the budget year 26 minus value attributable to new valuation . 27 Sec. 6. Section 331.423, subsection 2, Code 2025, is amended 28 by adding the following new paragraph: 29 NEW PARAGRAPH . d. (1) For each fiscal year beginning on or 30 after July 1, 2031, the levy rate imposed under this subsection 31 2 for the current fiscal year, unless subject to subparagraph 32 (2). 33 (2) If the total assessed value, excluding value 34 attributable to new valuation, used to calculate taxes for 35 -2- LSB 1550YC (1) 91 jm/md 2/ 52
H.F. _____ rural county services under this subsection 2 for the budget 1 year is equal to or exceeds one hundred two percent of the 2 total assessed value used to calculate taxes for rural county 3 services for the current fiscal year, a levy rate per thousand 4 dollars of assessed value that is equal to one thousand 5 multiplied by the quotient of one hundred two percent of the 6 current fiscal years actual property tax dollars certified 7 for levy under this subsection 2 divided by the remainder of 8 the total assessed value used to calculate such taxes for the 9 budget year minus value attributable to new valuation. 10 Sec. 7. Section 331.423, subsection 3, Code 2025, is amended 11 by adding the following new paragraph: 12 NEW PARAGRAPH . c. New valuation means the increase from 13 the current fiscal year to the budget year in taxable valuation 14 due to the following, the amount of each as certified by the 15 county auditor to the department of management: 16 (1) New construction. 17 (2) Additions or improvements to existing structures that 18 are not normal and necessary repairs under section 441.21, 19 subsection 8. 20 (3) Net boundary adjustments, including annexation, 21 severance, incorporation, or discontinuance as those terms are 22 defined in section 368.1. 23 Sec. 8. EFFECTIVE DATE. This division of this Act takes 24 effect January 1, 2026. 25 Sec. 9. APPLICABILITY. This division of this Act applies 26 to property taxes and budgets for fiscal years beginning on or 27 after July 1, 2026. 28 DIVISION II 29 CITY PROPERTY TAXES AND BUDGETS 30 Sec. 10. Section 384.1, subsection 3, paragraph c, 31 subparagraph (1), Code 2025, is amended to read as follows: 32 (1) For each fiscal year beginning on or after July 1, 33 2024, but before July 1, 2028 2026 , subject to subparagraph 34 (3), a citys tax levy for the general fund, except for levies 35 -3- LSB 1550YC (1) 91 jm/md 3/ 52
H.F. _____ authorized in section 384.12 , shall not exceed in any tax year 1 the greater of eight dollars and ten cents per thousand dollars 2 of assessed value used to calculate taxes for the budget year 3 and the adjusted city general fund levy rate, as adjusted under 4 subparagraph (2), if applicable. 5 Sec. 11. Section 384.1, subsection 3, paragraph d, Code 6 2025, is amended to read as follows: 7 d. For each fiscal year beginning on or after July 1, 8 2028, a citys tax levy rate for the general fund, except for 9 levies authorized in section 384.12 , shall not exceed eight 10 dollars and ten cents per thousand dollars of assessed value 11 used to calculate taxes in any fiscal year For each fiscal 12 year beginning on or after July 1, 2026, but before July 1, 13 2031, a levy rate per thousand dollars of assessed value equal 14 to one thousand multiplied by the quotient of one hundred 15 two percent of the current fiscal years actual property tax 16 dollars certified for levy under this subsection divided by 17 the remainder of the total assessed value used to calculate 18 such taxes for the budget year minus value attributable to new 19 valuation . Notwithstanding other provisions of this paragraph, 20 if a citys actual levy rate for the current fiscal year is 21 zero dollars per thousand dollars of assessed value, a levy 22 rate per one thousand dollars of assessed value equal to one 23 thousand multiplied by the quotient of one hundred two percent 24 of the citys certified general fund budget for the current 25 fiscal year divided by the remainder of the total assessed 26 value used to calculate taxes for the budget year minus value 27 attributable to new valuation. 28 Sec. 12. Section 384.1, subsection 3, Code 2025, is amended 29 by adding the following new paragraph: 30 NEW PARAGRAPH . e. (1) For each fiscal year beginning on or 31 after July 1, 2031, the levy rate imposed under this subsection 32 for the current fiscal year, unless subject to subparagraph 33 (2). 34 (2) If the total assessed value, excluding value 35 -4- LSB 1550YC (1) 91 jm/md 4/ 52
H.F. _____ attributable to new valuation, used to calculate taxes under 1 this subsection for the budget year is equal to or exceeds 2 one hundred two percent of the total assessed value used to 3 calculate taxes under this subsection for the current fiscal 4 year, a levy rate per thousand dollars of assessed value 5 that is equal to one thousand multiplied by the quotient of 6 one hundred two percent of the current fiscal years actual 7 property tax dollars certified for levy under this subsection 8 divided by the remainder of the total assessed value used 9 to calculate such taxes for the budget year minus value 10 attributable to new valuation. 11 (3) Notwithstanding other provisions of this paragraph, if 12 a citys actual levy rate for the current fiscal year is zero 13 dollars per thousand dollars of assessed value, a levy rate per 14 one thousand dollars of assessed value equal to one thousand 15 multiplied by the quotient of one hundred two percent of the 16 citys certified general fund budget for the current fiscal 17 year divided by the remainder of the total assessed value used 18 to calculate taxes for the budget year minus value attributable 19 to new valuation. 20 Sec. 13. Section 384.1, subsection 4, Code 2025, is amended 21 by adding the following new paragraph: 22 NEW PARAGRAPH . c. New valuation means the increase from 23 the current fiscal year to the budget year in taxable valuation 24 due to the following, the amount of each as certified by the 25 county auditor to the department of management: 26 (1) New construction. 27 (2) Additions or improvements to existing structures that 28 are not normal and necessary repairs under section 441.21, 29 subsection 8. 30 (3) Net boundary adjustments, including annexation, 31 severance, incorporation, or discontinuance as those terms are 32 defined in section 368.1. 33 Sec. 14. EFFECTIVE DATE. This division of this Act takes 34 effect January 1, 2026. 35 -5- LSB 1550YC (1) 91 jm/md 5/ 52
H.F. _____ Sec. 15. APPLICABILITY. This division of this Act applies 1 to property taxes and budgets for fiscal years beginning on or 2 after July 1, 2026. 3 DIVISION III 4 SCHOOL TAXES AND BUDGETS 5 Sec. 16. Section 257.1, subsection 2, paragraph b, Code 6 2025, is amended to read as follows: 7 b. (1) (a) For the budget year commencing July 1, 1999, 8 and for each succeeding budget year beginning before July 9 1, 2022, the regular program foundation base per pupil is 10 eighty-seven and five-tenths percent of the regular program 11 state cost per pupil. 12 (b) For the budget year commencing July 1, 2022, and for 13 each succeeding budget year beginning before July 1, 2026 , 14 the regular program foundation base per pupil is eighty-eight 15 and four-tenths percent of the regular program state cost per 16 pupil. 17 (c) For the budget year commencing July 1, 2026, the regular 18 program foundation base per pupil is ninety and seventy-two 19 hundredths percent of the regular program state cost per pupil. 20 (d) For the budget year commencing July 1, 2027, the regular 21 program foundation base per pupil is ninety-three and four 22 hundredths percent of the regular program state cost per pupil. 23 (e) For the budget year commencing July 1, 2028, the regular 24 program foundation base per pupil is ninety-five and thirty-six 25 hundredths percent of the regular program state cost per pupil. 26 (f) For the budget year commencing July 1, 2029, the 27 regular program foundation base per pupil is ninety-five and 28 sixty-eight hundredths percent of the regular program state 29 cost per pupil. 30 (g) For the budget year commencing July 1, 2030, and each 31 succeeding budget year, the regular program foundation base per 32 pupil is one hundred percent of the regular program state cost 33 per pupil. 34 (2) (a) For the budget year commencing July 1, 1991, and 35 -6- LSB 1550YC (1) 91 jm/md 6/ 52
H.F. _____ for each succeeding budget year beginning before July 1, 2026, 1 the special education support services foundation base is 2 seventy-nine percent of the special education support services 3 state cost per pupil. 4 (b) For the budget year commencing July 1, 2026, the special 5 education support services foundation base is eighty-three and 6 two-tenths percent of the special education support services 7 state cost per pupil. 8 (c) For the budget year commencing July 1, 2027, the special 9 education support services foundation base is eighty-seven and 10 four-tenths percent of the special education support services 11 state cost per pupil. 12 (d) For the budget year commencing July 1, 2028, the special 13 education support services foundation base is ninety-one and 14 six-tenths percent of the special education support services 15 state cost per pupil. 16 (e) For the budget year commencing July 1, 2029, the special 17 education support services foundation base is ninety-five and 18 eight-tenths percent of the special education support services 19 state cost per pupil. 20 (f) For the budget year commencing July 1, 2030, and each 21 succeeding budget year, the special education support services 22 foundation base is one hundred percent of the special education 23 support services state cost per pupil. 24 (3) The combined foundation base is the sum of the regular 25 program foundation base, the special education support services 26 foundation base, the total teacher salary supplement district 27 cost, the total professional development supplement district 28 cost, the total early intervention supplement district cost, 29 the total teacher leadership supplement district cost, and the 30 total area education agency teacher salary supplement district 31 cost. 32 Sec. 17. Section 257.3, subsection 1, paragraph a, Code 33 2025, is amended to read as follows: 34 a. (1) Except as provided in subsections 2 and 3 , a school 35 -7- LSB 1550YC (1) 91 jm/md 7/ 52
H.F. _____ district shall cause to be levied each budget year beginning 1 before July 1, 2026 , for the school general fund, a foundation 2 property tax equal to five dollars and forty cents per thousand 3 dollars of assessed valuation on all taxable property in the 4 district. The county auditor shall spread the foundation levy 5 over all taxable property in the district. 6 (2) Except as provided in subsections 2 and 3, a school 7 district shall cause to be levied for the budget year 8 beginning July 1, 2026, for the school general fund, a 9 foundation property tax equal to four dollars and ninety cents 10 per thousand dollars of assessed valuation on all taxable 11 property in the district. The county auditor shall spread the 12 foundation levy over all taxable property in the district. 13 (3) Except as provided in subsections 2 and 3, a school 14 district shall cause to be levied for the budget year beginning 15 July 1, 2027, for the school general fund, a foundation 16 property tax equal to four dollars and forty cents per thousand 17 dollars of assessed valuation on all taxable property in the 18 district. The county auditor shall spread the foundation levy 19 over all taxable property in the district. 20 (4) Except as provided in subsections 2 and 3, a school 21 district shall cause to be levied for the budget year beginning 22 July 1, 2028, for the school general fund, a foundation 23 property tax equal to three dollars and ninety cents per 24 thousand dollars of assessed valuation on all taxable 25 property in the district. The county auditor shall spread the 26 foundation levy over all taxable property in the district. 27 (5) Except as provided in subsections 2 and 3, a school 28 district shall cause to be levied for the budget year 29 beginning July 1, 2029, for the school general fund, a 30 foundation property tax equal to three dollars and forty cents 31 per thousand dollars of assessed valuation on all taxable 32 property in the district. The county auditor shall spread the 33 foundation levy over all taxable property in the district. 34 (6) Except as provided in subsections 2 and 3, a school 35 -8- LSB 1550YC (1) 91 jm/md 8/ 52
H.F. _____ district shall cause to be levied for the budget year beginning 1 July 1, 2030, and each succeeding budget year, for the school 2 general fund, a foundation property tax equal to two dollars 3 and ninety-seven cents per thousand dollars of assessed 4 valuation on all taxable property in the district. The county 5 auditor shall spread the foundation levy over all taxable 6 property in the district. 7 Sec. 18. Section 257.3, subsection 2, paragraphs a and b, 8 Code 2025, are amended to read as follows: 9 a. Notwithstanding subsection 1 , a reorganized school 10 district for which the reorganization takes effect on or after 11 July 1, 2026, shall cause a foundation property tax of four 12 two dollars and forty forty-two cents per thousand dollars of 13 assessed valuation to be levied on all taxable property which, 14 in the year preceding a reorganization, was within a school 15 district affected by the reorganization as defined in section 16 275.1 , or in the year preceding a dissolution was a part of a 17 school district that dissolved if the dissolution proposal has 18 been approved by the director of the department of education 19 pursuant to section 275.55 . 20 b. In For a reorganized school district for which the 21 reorganization took effect on or after July 1, 2026, in 22 succeeding school years, the foundation property tax levy on 23 that portion shall be increased to the rate of four two dollars 24 and ninety sixty-nine cents per thousand dollars of assessed 25 valuation the first succeeding year, five two dollars and 26 fifteen eighty-three cents per thousand dollars of assessed 27 valuation the second succeeding year, and five two dollars 28 and forty ninety-seven cents per thousand dollars of assessed 29 valuation the third succeeding year and each year thereafter 30 under subsection 1, paragraph a . 31 Sec. 19. Section 257.4, subsection 2, Code 2025, is amended 32 by adding the following new paragraph: 33 NEW PARAGRAPH . c. This subsection applies to budget years 34 beginning before July 1, 2030. 35 -9- LSB 1550YC (1) 91 jm/md 9/ 52
H.F. _____ Sec. 20. Section 257.15, subsections 2 and 3, Code 2025, are 1 amended to read as follows: 2 2. Property tax adjustment aid for 1992-1993 and succeeding 3 years. For the budget year beginning July 1, 1992, and 4 succeeding budget years beginning before July 1, 2030 , the 5 department of education shall pay property tax adjustment aid 6 to a school district equal to the amount paid to the district 7 for the base year less an amount equal to the product of 8 the percent by which the taxable valuation in the district 9 increased, if the taxable valuation increased, from January 1 10 of the year prior to the base year to January 1 of the base 11 year and the property tax adjustment aid. The department of 12 management shall adjust the rate of the additional property 13 tax accordingly and notify the department of education of 14 the amount of aid to be paid to each district from moneys 15 appropriated for property tax adjustment aid. 16 3. Property tax adjustment aid appropriation. There 17 is appropriated from the general fund of the state to the 18 department of education, for each fiscal year beginning 19 before July 1, 2030 , an amount necessary to pay property 20 tax adjustment aid to school districts under this section . 21 Property tax adjustment aid shall be paid to school districts 22 in the manner provided in section 257.16 . 23 Sec. 21. Section 257.15, subsection 4, paragraph a, 24 subparagraph (1), subparagraph division (d), Code 2025, is 25 amended to read as follows: 26 (d) For the budget year beginning July 1, 2009, and 27 succeeding budget years beginning before July 1, 2030 , 28 twenty-four million dollars. 29 Sec. 22. Section 257.15, subsection 4, paragraph b, Code 30 2025, is amended to read as follows: 31 b. After For fiscal years beginning before July 1, 2029, 32 after lowering all school district adjusted additional property 33 tax levy rates to the statewide maximum adjusted additional 34 property tax levy rate under paragraph a , the department of 35 -10- LSB 1550YC (1) 91 jm/md 10/ 52
H.F. _____ management shall use any remaining funds at the end of the 1 calendar year to further lower additional property taxes by 2 increasing for the budget year beginning the following July 3 1, the regular program foundation base per pupil percentage 4 under section 257.1 . Moneys used pursuant to this paragraph 5 shall supplant an equal amount of the appropriation made from 6 the general fund of the state pursuant to section 257.16 that 7 represents the increase in state foundation aid. Any moneys 8 remaining at the conclusion of the fiscal year beginning July 9 1, 2029, shall be transferred by the department of management 10 for deposit in the general fund of the state. 11 Sec. 23. Section 257.16A, subsections 2 and 3, Code 2025, 12 are amended to read as follows: 13 2. There For each fiscal year beginning before July 1, 14 2030, there is appropriated annually all moneys in the fund to 15 the department of management for purposes of section 257.15, 16 subsection 4 . 17 3. Notwithstanding section 8.33 , any moneys remaining in 18 the property tax equity and relief fund at the end of a fiscal 19 year shall not revert to any other fund but shall remain in the 20 property tax equity and relief fund for use as provided in this 21 section for the following fiscal year. However, at the end of 22 the fiscal year beginning July 1, 2029, any moneys remaining in 23 the property tax equity and relief fund shall be transferred 24 for deposit into either the secure an advanced vision for 25 education fund or the general fund of the state based on the 26 fund from which the moneys were received. 27 Sec. 24. Section 257.16B, subsection 1, Code 2025, is 28 amended to read as follows: 29 1. For each fiscal year beginning on or after July 1, 2022, 30 but before July 1, 2030, there is appropriated from the general 31 fund of the state to the department of education an amount 32 necessary to make all school district property tax replacement 33 payments under this section , as calculated in subsection 2 . 34 Sec. 25. Section 257.16D, subsection 2, paragraph a, Code 35 -11- LSB 1550YC (1) 91 jm/md 11/ 52
H.F. _____ 2025, is amended to read as follows: 1 a. There For fiscal years beginning before July 1, 2030, 2 there is appropriated annually from the fund to the department 3 of management an amount necessary to make all foundation base 4 supplement payments under this section . The department of 5 management shall calculate each school districts foundation 6 base supplement payment based on the distribution methodology 7 under paragraph b . 8 Sec. 26. Section 257.16D, subsection 3, Code 2025, is 9 amended to read as follows: 10 3. Notwithstanding section 8.33 , any moneys remaining in 11 the foundation base supplement fund at the end of a fiscal year 12 shall not revert to any other fund but shall remain in the 13 foundation base supplement fund for use as provided in this 14 section for the following fiscal year. However, at the end of 15 the fiscal year beginning July 1, 2029, any moneys remaining in 16 the foundation base supplement fund shall be transferred for 17 deposit in the secure an advanced vision for education fund. 18 Sec. 27. Section 257.31, Code 2025, is amended by adding the 19 following new subsection: 20 NEW SUBSECTION . 19. a. The board of directors of each 21 school district with an unexpended fund balance in the 22 districts management levy fund under section 298A.3 at the 23 conclusion of the fiscal year beginning July 1, 2024, that 24 exceeds an amount equal to the total expenditures from the 25 districts management fund for the fiscal year beginning 26 July 1, 2024, shall certify such unexpended fund balance and 27 expenditure amounts, including any reserved or designated 28 amounts in the fund and the purposes therefor, to the school 29 budget review committee by November 15, 2025. The committee 30 shall prescribe the form for such certifications. 31 b. The committee shall conduct a review of the unexpended 32 fund balances and expenditures of school district management 33 levy funds certified under paragraph a . The committee 34 shall consult with boards of directors of school districts 35 -12- LSB 1550YC (1) 91 jm/md 12/ 52
H.F. _____ and other relevant persons to determine the appropriateness 1 of establishing district management levy fund unexpended fund 2 balance limitations. By February 1, 2026, the committee 3 shall make recommendations to the general assembly for the 4 establishing district management levy fund unexpended fund 5 balance limitations for fiscal years beginning on or after July 6 1, 2027, including recommendations for limitations based on a 7 percentage of the districts management levy fund expenditures 8 and recommendations for management levy limitations and 9 expenditure requirements for excess funds. 10 Sec. 28. Section 298.4, subsection 1, unnumbered paragraph 11 1, Code 2025, is amended to read as follows: 12 The Unless prohibited by subsection 1A, paragraph a , the 13 board of directors of a school district may certify for levy by 14 April 30 of a school year, a tax on all taxable property in the 15 school district for a district management levy , subject to the 16 limitations in subsection 1A, paragraph b . The revenue from 17 the tax levied in this section shall be placed in the district 18 management levy fund of the school district. The district 19 management levy shall be expended only for the following 20 purposes: 21 Sec. 29. Section 298.4, Code 2025, is amended by adding the 22 following new subsection: 23 NEW SUBSECTION . 1A. a. (1) For the fiscal year beginning 24 July 1, 2027, if a school districts unexpended fund balance, 25 as defined in section 257.2, of the districts management levy 26 fund is equal to or exceeds one hundred eighty percent of the 27 average annual expenditures from the districts management 28 levy fund for the three consecutive fiscal years immediately 29 preceding the base year, the board of directors shall not 30 certify a levy under this section for the fiscal year. 31 (2) For the fiscal year beginning July 1, 2028, if a school 32 districts unexpended fund balance, as defined in section 33 257.2, of the districts management levy fund is equal to or 34 exceeds one hundred seventy-five percent of the average annual 35 -13- LSB 1550YC (1) 91 jm/md 13/ 52
H.F. _____ expenditures from the districts management levy fund for the 1 three consecutive fiscal years immediately preceding the base 2 year, the board of directors shall not certify a levy under 3 this section for the fiscal year. 4 (3) For the fiscal year beginning July 1, 2029, if a school 5 districts unexpended fund balance, as defined in section 6 257.2, of the districts management levy fund is equal to or 7 exceeds one hundred seventy percent of the average annual 8 expenditures from the districts management levy fund for the 9 three consecutive fiscal years immediately preceding the base 10 year, the board of directors shall not certify a levy under 11 this section for the fiscal year. 12 (4) For the fiscal year beginning July 1, 2030, if a school 13 districts unexpended fund balance, as defined in section 14 257.2, of the districts management levy fund is equal to or 15 exceeds one hundred sixty-five percent of the average annual 16 expenditures from the districts management levy fund for the 17 three consecutive fiscal years immediately preceding the base 18 year, the board of directors shall not certify a levy under 19 this section for the fiscal year. 20 (5) For the fiscal year beginning July 1, 2031, and each 21 succeeding fiscal year, if a school districts unexpended 22 fund balance, as defined in section 257.2, of the districts 23 management levy fund is equal to or exceeds one hundred sixty 24 percent of the average annual expenditures from the districts 25 management levy fund for the three consecutive fiscal years 26 immediately preceding the base year, the board of directors 27 shall not certify a levy under this section for the fiscal 28 year. 29 b. (1) For the fiscal year beginning July 1, 2027, if 30 a school district is not prohibited from certifying a levy 31 pursuant to paragraph a , the maximum amount that the board of 32 directors may certify for levy under this section shall be an 33 amount equal to the remainder of one hundred eighty percent of 34 the average annual expenditures from the districts management 35 -14- LSB 1550YC (1) 91 jm/md 14/ 52
H.F. _____ levy fund for the three consecutive fiscal years immediately 1 preceding the base year minus the districts management levy 2 fund unexpended fund balance for the fiscal year preceding the 3 base year. 4 (2) For the fiscal year beginning July 1, 2028, if a school 5 district is not prohibited from certifying a levy pursuant to 6 paragraph a , the maximum amount that the board of directors 7 may certify for levy under this section shall be an amount 8 equal to the remainder of one hundred seventy-five percent of 9 the average annual expenditures from the districts management 10 levy fund for the three consecutive fiscal years immediately 11 preceding the base year minus the districts management levy 12 fund unexpended fund balance for the fiscal year preceding the 13 base year. 14 (3) For the fiscal year beginning July 1, 2029, if a school 15 district is not prohibited from certifying a levy pursuant to 16 paragraph a , the maximum amount that the board of directors 17 may certify for levy under this section shall be an amount 18 equal to the remainder of one hundred seventy percent of the 19 average annual expenditures from the districts management 20 levy fund for the three consecutive fiscal years immediately 21 preceding the base year minus the districts management levy 22 fund unexpended fund balance for the fiscal year preceding the 23 base year. 24 (4) For the fiscal year beginning July 1, 2030, if a school 25 district is not prohibited from certifying a levy pursuant to 26 paragraph a , the maximum amount that the board of directors 27 may certify for levy under this section shall be an amount 28 equal to the remainder of one hundred sixty-five percent of 29 the average annual expenditures from the districts management 30 levy fund for the three consecutive fiscal years immediately 31 preceding the base year minus the districts management levy 32 fund unexpended fund balance for the fiscal year preceding the 33 base year. 34 (5) For the fiscal year beginning July 1, 2031, and each 35 -15- LSB 1550YC (1) 91 jm/md 15/ 52
H.F. _____ succeeding fiscal year, if a school district is not prohibited 1 from certifying a levy pursuant to paragraph a , the maximum 2 amount that the board of directors may certify for levy under 3 this section shall be an amount equal to the remainder of one 4 hundred sixty percent of the average annual expenditures from 5 the districts management levy fund for the three consecutive 6 fiscal years immediately preceding the base year minus the 7 districts management levy fund unexpended fund balance for the 8 fiscal year preceding the base year. 9 Sec. 30. Section 423F.2, subsection 3, paragraph b, 10 subparagraph (2), Code 2025, is amended to read as follows: 11 (2) For purposes of this subsection , the equity transfer 12 amount for fiscal years beginning before July 1, 2030, is 13 determined by multiplying the equity transfer percentage by the 14 amount of moneys available in the secure an advanced vision for 15 education fund in the fiscal year. For fiscal years beginning 16 on or after July 1, 2030, the equity transfer amount is zero. 17 (a) For the fiscal year beginning July 1, 2018, the equity 18 transfer percentage is two and one-tenth percent. For the 19 fiscal year beginning July 1, 2019, the equity transfer 20 percentage is three and one-tenth percent. 21 (b) For each fiscal year beginning on or after July 1, 22 2020, but before July 1, 2030, the equity transfer percentage 23 is equal to the equity transfer percentage for the immediately 24 preceding fiscal year, unless the amount of moneys available 25 in the secure an advanced vision for education fund in the 26 immediately preceding fiscal year equals or exceeds one hundred 27 two percent of the amount of moneys available in the fund for 28 the fiscal year prior to the immediately preceding fiscal year, 29 in which case the equity transfer percentage shall be the 30 equity transfer percentage for the immediately preceding fiscal 31 year plus one percent subject to the limitation in subparagraph 32 division (c). 33 (c) If the equity transfer percentage calculated under 34 subparagraph division (b) exceeds thirty percent, the equity 35 -16- LSB 1550YC (1) 91 jm/md 16/ 52
H.F. _____ transfer percentage for that fiscal year shall be thirty 1 percent. 2 Sec. 31. Section 423F.2, subsection 3, paragraph b, 3 subparagraph (3), unnumbered paragraph 1, Code 2025, is amended 4 to read as follows: 5 For purposes of this subsection , the foundation base 6 transfer amount for the fiscal year beginning July 1, 2019, is 7 zero, and for each fiscal year beginning on or after July 1, 8 2020, but before July 1, 2030, the foundation base transfer 9 amount equals the equity transfer amount for the fiscal year 10 under subparagraph (2) minus the sum of the following: 11 Sec. 32. Section 423F.2, subsection 3, paragraph b, Code 12 2025, is amended by adding the following new subparagraph: 13 NEW SUBPARAGRAPH . (04) For purposes of this subsection, the 14 foundation base transfer amount for each fiscal year beginning 15 on or after July 1, 2030, is zero. 16 Sec. 33. Section 425A.3, subsection 1, Code 2025, is amended 17 to read as follows: 18 1. The family farm tax credit fund shall be apportioned 19 each year in the manner provided in this chapter so as to give 20 a credit against the tax on each eligible tract of agricultural 21 land within the several school districts of the state in which 22 the levy for the general school fund exceeds five dollars and 23 forty cents per thousand dollars of assessed value the levy 24 rate under section 257.3, subsection 1, paragraph a . The 25 amount of the credit on each eligible tract of agricultural 26 land shall be the amount the tax levied for the general school 27 fund exceeds the amount of tax which would be levied on each 28 eligible tract of agricultural land were the levy for the 29 general school fund five dollars and forty cents per thousand 30 dollars of assessed value the levy rate under section 257.3, 31 subsection 1, paragraph a , for the previous year. However, 32 in the case of a deficiency in the family farm tax credit fund 33 to pay the credits in full, the credit on each eligible tract 34 of agricultural land in the state shall be proportionate and 35 -17- LSB 1550YC (1) 91 jm/md 17/ 52
H.F. _____ applied as provided in this chapter . 1 Sec. 34. Section 425A.5, Code 2025, is amended to read as 2 follows: 3 425A.5 Computation by county auditor. 4 The family farm tax credit allowed each year shall be 5 computed as follows: On or before April 1, the county auditor 6 shall list by school districts all tracts of agricultural 7 land which are entitled to credit, the taxable value for the 8 previous year, the budget from each school district for the 9 previous year, and the tax rate determined for the general 10 fund of the school district in the manner prescribed in 11 section 444.3 for the previous year, and if the tax rate is in 12 excess of five dollars and forty cents per thousand dollars of 13 assessed value the levy rate under section 257.3, subsection 14 1, paragraph a , the auditor shall multiply the tax levy which 15 is in excess of five dollars and forty cents per thousand 16 dollars of assessed value the levy rate under section 257.3, 17 subsection 1, paragraph a , by the total taxable value of the 18 agricultural land entitled to credit in the school district, 19 and on or before April 1, certify the total amount of credit 20 and the total number of acres entitled to the credit to the 21 department of revenue. 22 Sec. 35. Section 426.3, Code 2025, is amended to read as 23 follows: 24 426.3 Where credit given. 25 The agricultural land credit fund shall be apportioned each 26 year in the manner hereinafter provided so as to give a credit 27 against the tax on each tract of agricultural lands within the 28 several school districts of the state in which the levy for 29 the general school fund exceeds five dollars and forty cents 30 per thousand dollars of assessed value the levy rate under 31 section 257.3, subsection 1, paragraph a ; the amount of such 32 credit on each tract of such lands shall be the amount the tax 33 levied for the general school fund exceeds the amount of tax 34 which would be levied on said tract of such lands were the 35 -18- LSB 1550YC (1) 91 jm/md 18/ 52
H.F. _____ levy for the general school fund five dollars and forty cents 1 per thousand dollars of assessed value the levy rate under 2 section 257.3, subsection 1, paragraph a , for the previous 3 year, except in the case of a deficiency in the agricultural 4 land credit fund to pay said credits in full, in which case the 5 credit on each eligible tract of such lands in the state shall 6 be proportionate and shall be applied as hereinafter provided. 7 Sec. 36. Section 426.6, subsection 1, Code 2025, is amended 8 to read as follows: 9 1. The agricultural land tax credit allowed each year 10 shall be computed as follows: On or before April 1, the 11 county auditor shall list by school districts all tracts of 12 agricultural lands which are entitled to credit, together with 13 the taxable value for the previous year, together with the 14 budget from each school district for the previous year, and the 15 tax rate determined for the general fund of the district in 16 the manner prescribed in section 444.3 for the previous year, 17 and if such tax rate is in excess of five dollars and forty 18 cents per thousand dollars of assessed value the levy rate 19 under section 257.3, subsection 1, paragraph a , the auditor 20 shall multiply the tax levy which is in excess of five dollars 21 and forty cents per thousand dollars of assessed value the 22 levy rate under section 257.3, subsection 1, paragraph a , by 23 the total taxable value of the agricultural lands entitled to 24 credit in the district, and on or before April 1, certify the 25 amount to the department of revenue. 26 Sec. 37. ADJUSTMENT OF CALCULATIONS. For property tax 27 credits under chapters 425A and 426 for property taxes due and 28 payable in fiscal years beginning on or after July 1, 2026, but 29 before July 1, 2032, the tax rate determined for the general 30 fund of the school district in the manner prescribed in section 31 444.3 for the previous year shall be determined using the 32 appropriate property tax levy rate under section 257.3, as 33 amended in this division of this Act. 34 Sec. 38. EFFECTIVE DATE. Except for the section of this 35 -19- LSB 1550YC (1) 91 jm/md 19/ 52
H.F. _____ division of this Act amending section 257.31, this division of 1 this Act takes effect July 1, 2026. 2 DIVISION IV 3 PROPERTY VALUATIONS AND ASSESSMENT LIMITATIONS 4 Sec. 39. Section 441.21, subsection 1, paragraph e, Code 5 2025, is amended to read as follows: 6 e. The actual value of agricultural property shall be 7 determined on the basis of productivity and net earning 8 capacity of the property determined on the basis of its use for 9 agricultural purposes capitalized at a rate of seven percent 10 and applied uniformly among counties and among classes of 11 property. However, for assessment years beginning on or after 12 January 1, 2026, structures on agricultural land constructed on 13 or after January 1, 2026, that are not agricultural dwellings 14 shall not be included in determination of productivity and net 15 earning capacity of agricultural property and shall not be 16 allocated any portion of the total county productivity value 17 so determined. Such agricultural structures shall instead 18 be valued under subsection 2 and the structures assessed 19 value subject to taxation shall be equal to the product of 20 the structures value multiplied by the agricultural factor, 21 as determined in 701 IAC 102.3(2) or succeeding rule of the 22 department. Any formula or method employed to determine 23 productivity and net earning capacity of property shall be 24 adopted in full by rule. 25 Sec. 40. Section 441.21, subsections 4 and 5, Code 2025, are 26 amended to read as follows: 27 4. For valuations established as of January 1, 1979 2025 , 28 the percentage of actual value at which agricultural and 29 residential property shall be assessed shall be the quotient of 30 the dividend and divisor as defined in this section determined 31 under this subsection . 32 a. (1) The percentage of actual value at which agricultural 33 property shall be assessed shall be the quotient of the 34 dividend and divisor as defined in this paragraph. The 35 -20- LSB 1550YC (1) 91 jm/md 20/ 52
H.F. _____ dividend for each class of property shall be the dividend 1 as determined for each class of agricultural property for 2 valuations established as of January 1, 1978 2024 , adjusted by 3 the product obtained by multiplying the percentage determined 4 for that year by the amount of any additions or deletions to 5 actual value, excluding those resulting from the revaluation 6 of existing properties, as reported by the assessors on the 7 abstracts of assessment for 1978 2024 , plus six three percent 8 of the amount so determined. 9 (2) However, if the difference between the dividend so 10 determined for either class of property and the dividend for 11 that class of property for valuations established as of January 12 1, 1978, adjusted by the product obtained by multiplying 13 the percentage determined for that year by the amount of 14 any additions or deletions to actual value, excluding those 15 resulting from the revaluation of existing properties, as 16 reported by the assessors on the abstracts of assessment for 17 1978, is less than six percent, the 1979 dividend for the other 18 class of property shall be the dividend as determined for that 19 class of property for valuations established as of January 20 1, 1978, adjusted by the product obtained by multiplying 21 the percentage determined for that year by the amount of 22 any additions or deletions to actual value, excluding those 23 resulting from the revaluation of existing properties, as 24 reported by the assessors on the abstracts of assessment for 25 1978, plus a percentage of the amount so determined which is 26 equal to the percentage by which the dividend as determined 27 for the other class of property for valuations established 28 as of January 1, 1978, adjusted by the product obtained by 29 multiplying the percentage determined for that year by the 30 amount of any additions or deletions to actual value, excluding 31 those resulting from the revaluation of existing properties, as 32 reported by the assessors on the abstracts of assessment for 33 1978, is increased in arriving at the 1979 dividend for the 34 other class of property. 35 -21- LSB 1550YC (1) 91 jm/md 21/ 52
H.F. _____ (3) For valuations established for assessment years 1 beginning on or after January 1, 2022, the calculation of the 2 dividend for residential property under this subsection shall 3 exclude the value of all property described in subsection 14 , 4 paragraph a , subparagraphs (2), (3), (4), (5), and (6), 5 and the property described in subsection 14 , paragraph a , 6 subparagraph (7), that contains three or more separate dwelling 7 units. 8 b. (1) The divisor for each class of property shall be 9 the total actual value of all such agricultural property in 10 the state in the preceding year, as reported by the assessors 11 on the abstracts of assessment submitted for 1978 2024 , plus 12 the amount of value added to said total actual value by the 13 revaluation of existing properties in 1979 2025 as equalized 14 by the director of revenue pursuant to section 441.49 . The 15 director shall utilize information reported on abstracts of 16 assessment submitted pursuant to section 441.45 in determining 17 such percentage. For valuations established as of January 18 1, 2026, and each assessment year thereafter, the percentage 19 of actual value as equalized by the department of revenue as 20 provided in section 441.49 at which agricultural property shall 21 be assessed shall be calculated in accordance with the methods 22 provided in this paragraph. 23 (2) For valuations established for assessment years 24 beginning on or after January 1, 2022, the calculation of the 25 divisor for residential property under this subsection shall 26 exclude the value of all property described in subsection 14 , 27 paragraph a , subparagraphs (2), (3), (4), (5), and (6), 28 and the property described in subsection 14 , paragraph a , 29 subparagraph (7), that contains three or more separate dwelling 30 units. 31 c. (1) For valuations established as of January 1, 1980, 32 and each assessment year thereafter beginning before January 33 1, 2013, the percentage of actual value as equalized by the 34 director of revenue as provided in section 441.49 at which 35 -22- LSB 1550YC (1) 91 jm/md 22/ 52
H.F. _____ agricultural and residential property shall be assessed shall 1 be calculated in accordance with the methods provided in 2 this subsection , including the limitation of increases in 3 agricultural and residential assessed values to the percentage 4 increase of the other class of property if the other class 5 increases less than the allowable limit adjusted to include 6 the applicable and current values as equalized by the director 7 of revenue, except that any references to six percent in this 8 subsection shall be four percent. 9 (2) For valuations established as of January 1, 2013, and 10 each assessment year thereafter, the percentage of actual 11 value as equalized by the department of revenue as provided in 12 section 441.49 at which agricultural and residential property 13 shall be assessed shall be calculated in accordance with the 14 methods provided in this subsection , including the limitation 15 of increases in agricultural and residential assessed values to 16 the percentage increase of the other class of property if the 17 other class increases less than the allowable limit adjusted 18 to include the applicable and current values as equalized by 19 the department of revenue, except that any references to six 20 percent in this subsection shall be three percent. 21 b. (1) For valuations established for the assessment year 22 beginning January 1, 2025, the percentage of actual value as 23 equalized by the department of revenue as provided in section 24 441.49 at which residential property shall be assessed shall 25 be fifty-seven and nine thousand four hundred fifty-three 26 ten-thousandths percent. 27 (2) For valuations established for the assessment year 28 beginning January 1, 2026, the percentage of actual value as 29 equalized by the department of revenue as provided in section 30 441.49 at which residential property shall be assessed shall be 31 sixty-eight and four hundred ninety one-thousandths percent. 32 (3) For valuations established for the assessment year 33 beginning January 1, 2027, the percentage of actual value as 34 equalized by the department of revenue as provided in section 35 -23- LSB 1550YC (1) 91 jm/md 23/ 52
H.F. _____ 441.49 at which residential property shall be assessed shall 1 be seventy-eight and nine thousand seven hundred twenty-six 2 ten-thousandths percent. 3 (4) For valuations established for the assessment year 4 beginning January 1, 2028, the percentage of actual value as 5 equalized by the department of revenue as provided in section 6 441.49 at which residential property shall be assessed shall 7 be eighty-nine and four thousand eight hundred sixty-three 8 ten-thousandths percent. 9 (5) For valuations established for the assessment year 10 beginning January 1, 2029, and each assessment year thereafter, 11 the percentage of actual value as equalized by the department 12 of revenue as provided in section 441.49 at which residential 13 property shall be assessed shall be one hundred percent. 14 5. a. (1) For valuations established as of January 1, 15 1979, property valued by the department of revenue pursuant to 16 chapter 437 shall be considered as one class of property and 17 shall be assessed as a percentage of its actual value. The 18 percentage shall be determined by the director of revenue in 19 accordance with the provisions of this section . For valuations 20 established as of January 1, 1979, the percentage shall be 21 the quotient of the dividend and divisor as defined in this 22 section . The dividend shall be the total actual valuation 23 established for 1978 by the department of revenue, plus ten 24 percent of the amount so determined. The divisor for property 25 valued by the department of revenue pursuant to chapter 437 26 shall be the valuation established for 1978, plus the amount of 27 value added to the total actual value by the revaluation of the 28 property by the department of revenue as of January 1, 1979. 29 For valuations established as of January 1, 1980, property 30 valued by the department of revenue pursuant to chapter 437 31 shall be assessed at a percentage of its actual value. The 32 percentage shall be determined by the director of revenue in 33 accordance with the provisions of this section . For valuations 34 established as of January 1, 1980, the percentage shall be 35 -24- LSB 1550YC (1) 91 jm/md 24/ 52
H.F. _____ the quotient of the dividend and divisor as defined in this 1 section . The dividend shall be the total actual valuation 2 established for 1979 by the department of revenue, plus eight 3 percent of the amount so determined. The divisor for property 4 valued by the department of revenue pursuant to chapter 437 5 shall be the valuation established for 1979, plus the amount of 6 value added to the total actual value by the revaluation of the 7 property by the department of revenue as of January 1, 1980. 8 For valuations established as of January 1, 1981, and each year 9 thereafter, the percentage of actual value at which property 10 valued by the department of revenue pursuant to chapter 437 11 shall be assessed shall be calculated in accordance with the 12 methods provided herein, except that any references to ten 13 percent in this subsection shall be eight percent. 14 (2) (1) For valuations established on or after January 1, 15 2013, property valued by the department of revenue pursuant to 16 chapter 434 shall be assessed at a portion of its actual value 17 determined in the same manner at which property assessed as 18 commercial property is assessed under paragraph b for the same 19 assessment year. 20 (3) (2) For valuations established for the assessment year 21 beginning January 1, 2025, and each assessment year thereafter, 22 the percentage of actual value at which property valued by the 23 department of revenue pursuant to chapters 428 , 437, and 438 24 shall be assessed shall be ninety-eight one hundred percent. 25 (4) For valuations established for the assessment year 26 beginning January 1, 2026, the percentage of actual value at 27 which property valued by the department of revenue pursuant 28 to chapters 428 and 438 shall be assessed shall be ninety-six 29 percent. 30 (5) For valuations established for the assessment year 31 beginning January 1, 2027, the percentage of actual value at 32 which property valued by the department of revenue pursuant to 33 chapters 428 and 438 shall be assessed shall be ninety-four 34 percent. 35 -25- LSB 1550YC (1) 91 jm/md 25/ 52
H.F. _____ (6) For valuations established for the assessment year 1 beginning January 1, 2028, the percentage of actual value at 2 which property valued by the department of revenue pursuant 3 to chapters 428 and 438 shall be assessed shall be ninety-two 4 percent. 5 (7) For valuations established on or after January 1, 2029, 6 the percentage of actual value at which property valued by the 7 department of revenue pursuant to chapters 428 and 438 shall be 8 assessed shall be ninety percent. 9 b. For valuations established on or after January 1, 2013 10 2025 , commercial property, excluding properties referred to in 11 section 427A.1, subsection 9 , shall be assessed at a portion of 12 its actual value, as determined in this paragraph b . 13 (1) For valuations established for the assessment year 14 beginning January 1, 2013, the percentage of actual value 15 as equalized by the department of revenue as provided in 16 section 441.49 at which commercial property shall be assessed 17 shall be ninety-five percent. For valuations established 18 for the assessment year beginning January 1, 2014, and each 19 assessment year thereafter beginning before January 1, 2022, 20 the percentage of actual value as equalized by the department 21 of revenue as provided in section 441.49 at which commercial 22 property shall be assessed shall be ninety percent. 23 (2) (1) For valuations established for the assessment 24 year beginning January 1, 2022 2025 , and each assessment year 25 thereafter beginning before January 1, 2029 , the portion of 26 actual value at which each property unit of commercial property 27 shall be assessed shall be the sum of the following: 28 (a) An amount equal to the product of the assessment 29 limitation percentage applicable to residential property under 30 subsection 4 for that assessment year multiplied by the actual 31 value of the property that exceeds zero dollars but does not 32 exceed one hundred fifty thousand dollars. 33 (b) (i) An For the assessment year beginning January 1, 34 2025, an amount equal to ninety ninety-two percent of the 35 -26- LSB 1550YC (1) 91 jm/md 26/ 52
H.F. _____ actual value of the property for that assessment year that 1 exceeds one hundred fifty thousand dollars. 2 (ii) For the assessment year beginning January 1, 2026, 3 an amount equal to ninety-four percent of the actual value of 4 the property for that assessment year that exceeds one hundred 5 fifty thousand dollars. 6 (iii) For the assessment year beginning January 1, 2027, 7 an amount equal to ninety-six percent of the actual value of 8 the property for that assessment year that exceeds one hundred 9 fifty thousand dollars. 10 (iv) For the assessment year beginning January 1, 2028, an 11 amount equal to ninety-eight percent of the actual value of 12 the property for that assessment year that exceeds one hundred 13 fifty thousand dollars. 14 (2) For valuations established for the assessment year 15 beginning January 1, 2029, and each assessment year thereafter, 16 the percentage of actual value as equalized by the department 17 of revenue as provided in section 441.49 at which commercial 18 property shall be assessed shall be one hundred percent. 19 c. For valuations established on or after January 1, 2013 20 2025 , industrial property, excluding properties referred to in 21 section 427A.1, subsection 9 , shall be assessed at a portion of 22 its actual value, as determined in this paragraph c . 23 (1) For valuations established for the assessment year 24 beginning January 1, 2013, the percentage of actual value 25 as equalized by the department of revenue as provided in 26 section 441.49 at which industrial property shall be assessed 27 shall be ninety-five percent. For valuations established 28 for the assessment year beginning January 1, 2014, and each 29 assessment year thereafter beginning before January 1, 2022, 30 the percentage of actual value as equalized by the department 31 of revenue as provided in section 441.49 at which industrial 32 property shall be assessed shall be ninety percent. 33 (2) (1) For valuations established for the assessment 34 year beginning January 1, 2022 2025 , and each assessment year 35 -27- LSB 1550YC (1) 91 jm/md 27/ 52
H.F. _____ thereafter beginning before January 1, 2029 , the portion of 1 actual value at which each property unit of industrial property 2 shall be assessed shall be the sum of the following: 3 (a) An amount equal to the product of the assessment 4 limitation percentage applicable to residential property under 5 subsection 4 for that assessment year multiplied by the actual 6 value of the property that exceeds zero dollars but does not 7 exceed one hundred fifty thousand dollars. 8 (b) (i) An For the assessment year beginning January 1, 9 2025, an amount equal to ninety ninety-two percent of the 10 actual value of the property for that assessment year that 11 exceeds one hundred fifty thousand dollars. 12 (ii) For the assessment year beginning January 1, 2026, 13 an amount equal to ninety-four percent of the actual value of 14 the property for that assessment year that exceeds one hundred 15 fifty thousand dollars. 16 (iii) For the assessment year beginning January 1, 2027, 17 an amount equal to ninety-six percent of the actual value of 18 the property for that assessment year that exceeds one hundred 19 fifty thousand dollars. 20 (iv) For the assessment year beginning January 1, 2028, an 21 amount equal to ninety-eight percent of the actual value of 22 the property for that assessment year that exceeds one hundred 23 fifty thousand dollars. 24 (2) For valuations established for the assessment year 25 beginning January 1, 2029, and each assessment year thereafter, 26 the percentage of actual value as equalized by the department 27 of revenue as provided in section 441.49 at which industrial 28 property shall be assessed shall be one hundred percent. 29 d. For valuations established for the assessment year 30 beginning January 1, 2019, and each assessment year thereafter 31 beginning before January 1, 2029 , the percentages or portions 32 of actual value at which property is assessed, as determined 33 under this subsection , shall not be applied to the value of 34 wind energy conversion property valued under section 427B.26 35 -28- LSB 1550YC (1) 91 jm/md 28/ 52
H.F. _____ the construction of which is approved by the Iowa utilities 1 commission on or after July 1, 2018. 2 e. (1) For the fiscal year beginning July 1, 2023, 3 there is appropriated from the general fund of the state to 4 the department of revenue the sum of one hundred twenty-two 5 million three hundred fifty thousand dollars to be used 6 for payments under this paragraph calculated as a result 7 of the assessment limitations imposed under paragraph b , 8 subparagraph (2), subparagraph division (a), and paragraph 9 c , subparagraph (2), subparagraph division (a). For each 10 fiscal year beginning on or after July 1, 2024, but before 11 July 1, 2026, there is appropriated from the general fund of 12 the state to the department of revenue the sum of one hundred 13 twenty-five million dollars to be used for payments under this 14 paragraph calculated as a result of the assessment limitations 15 imposed under paragraph b , subparagraph (2), subparagraph 16 division (a), Code 2025, and paragraph c , subparagraph (2), 17 subparagraph division (a) , Code 2025 . For each fiscal year 18 beginning on or after July 1, 2026, but before July 1, 2030, 19 there is appropriated from the general fund of the state to 20 the department of revenue the sum of one hundred twenty-five 21 million dollars to be used for payments under this paragraph 22 calculated as a result of the assessment limitations imposed 23 under paragraph b , subparagraph (1), subparagraph division 24 (a), and paragraph c , subparagraph (1), subparagraph division 25 (a). 26 (2) For fiscal years beginning on or after July 1, 2023, 27 each county treasurer shall be paid by the department of 28 revenue an amount calculated under subparagraph (4) for the 29 applicable fiscal year . If an amount appropriated for the 30 fiscal year is insufficient to make all payments as calculated 31 under subparagraph (4), the director of revenue shall prorate 32 the payments to the county treasurers and shall notify the 33 county auditors of the pro rata percentage on or before 34 September 30. 35 -29- LSB 1550YC (1) 91 jm/md 29/ 52
H.F. _____ (3) On or before July 1 of each fiscal year, the assessor 1 shall report to the county auditor that portion of the total 2 actual value of all commercial property and industrial 3 property in the county that is subject to the assessment 4 limitations imposed under paragraph b , subparagraph (2) (1) , 5 subparagraph division (a), and paragraph c , subparagraph (2) 6 (1) , subparagraph division (a), for the assessment year , or 7 applicable predecessor provisions, used to calculate the taxes 8 due and payable in that fiscal year. 9 (4) On or before September 1 of each fiscal year, the county 10 auditor shall prepare a statement, based on the report received 11 in subparagraph (3) and information transmitted to the county 12 auditor under chapter 434 , listing for each taxing district in 13 the county: 14 (a) The product of the portion of the total actual value 15 of all commercial property, industrial property, and property 16 valued by the department under chapter 434 in the county 17 that is subject to the assessment limitations imposed under 18 paragraph b , subparagraph (2) (1) , subparagraph division 19 (a), and paragraph c , subparagraph (2) (1) , subparagraph 20 division (a), for the applicable assessment year , or applicable 21 predecessor provisions, used to calculate taxes which are due 22 and payable in the applicable fiscal year multiplied by the 23 difference, stated as a percentage, between ninety percent the 24 percentage for the applicable assessment year under paragraph 25 b , subparagraph (1), subparagraph division (a), and the 26 assessment limitation percentage applicable to residential 27 property under subsection 4 for the applicable assessment year. 28 (b) The tax levy rate per one thousand dollars of assessed 29 value for each taxing district for the applicable fiscal year. 30 (c) The amount of the payment for each county is equal to 31 the amount determined pursuant to subparagraph division (a), 32 multiplied by the tax rate specified in subparagraph division 33 (b), and then divided by one thousand dollars. 34 (5) The county auditor shall certify and forward one copy of 35 -30- LSB 1550YC (1) 91 jm/md 30/ 52
H.F. _____ the statement described in subparagraph (4) to the department 1 of revenue not later than September 1 of each fiscal year. 2 (6) The amounts determined under this paragraph shall 3 be paid by the department to the county treasurers in equal 4 installments in September and March of each year. The county 5 treasurer shall apportion the payments among the eligible 6 taxing districts in the county and the amounts received by each 7 taxing authority shall be treated the same as property taxes 8 paid. 9 f. For the purposes of this subsection , unless the context 10 otherwise requires: 11 (1) Contiguous parcels means any of the following: 12 (a) Parcels that share a common boundary. 13 (b) Parcels within the same building or structure 14 regardless of whether the parcels share a common boundary. 15 (c) Permanent improvements to the land that are situated 16 on one or more parcels of land that are assessed and taxed 17 separately from the permanent improvements if the parcels of 18 land upon which the permanent improvements are situated share 19 a common boundary. 20 (2) Parcel means the same as defined in section 445.1 . 21 Parcel also means that portion of a parcel assigned a 22 classification of commercial property or industrial property 23 pursuant to section 441.21, subsection 14, paragraph b . 24 (3) Property unit means a parcel or contiguous parcels 25 all of which are located within the same county, with the same 26 property tax classification, are owned by the same person, and 27 are operated by that person for a common use and purpose. 28 Sec. 41. Section 441.21, subsection 13, Code 2025, is 29 amended by striking the subsection. 30 Sec. 42. SAVINGS PROVISION. This division of this Act, 31 pursuant to section 4.13, does not affect the operation of, 32 or prohibit the application of, prior provisions of section 33 441.21, or rules adopted under chapter 17A to administer prior 34 provisions of section 441.21, for assessment years beginning 35 -31- LSB 1550YC (1) 91 jm/md 31/ 52
H.F. _____ before January 1, 2025, or for duties, powers, protests, 1 appeals, proceedings, actions, or remedies attributable to an 2 assessment year beginning before January 1, 2025, including 3 property taxes due and payable in a fiscal year as the result 4 of an assessment year beginning before January 1, 2025. 5 DIVISION V 6 DISABLED VETERAN AND HOMESTEAD CREDITS AND EXEMPTIONS 7 Sec. 43. Section 25B.7, subsection 2, paragraph a, Code 8 2025, is amended to read as follows: 9 a. Homestead tax credit pursuant to section 425.1 , and 10 sections 425.2 through 425.13 , and section 425.15 . 11 Sec. 44. Section 425.1, subsection 2, Code 2025, is amended 12 by striking the subsection and inserting in lieu thereof the 13 following: 14 2. a. The homestead credit fund shall be apportioned 15 each year so as to give a credit against the tax on each 16 eligible homestead in the state equal to the sum of the amounts 17 calculated pursuant to paragraphs b and c . The amount of 18 credit allowed on each eligible homestead shall be as follows: 19 b. (1) If the owner of a homestead allowed a credit under 20 this subchapter is any of the following, the homestead credit 21 allowed on the homestead shall be the entire amount of tax 22 levied on the homestead: 23 (a) A veteran of any of the military forces of the United 24 States who acquired the homestead under 38 U.S.C. 21.801, 25 21.802 prior to August 6, 1991, or under 38 U.S.C. 2101, 2102. 26 (b) A veteran as defined in section 35.1 with a permanent 27 service-connected disability rating of one hundred percent, as 28 certified by the United States department of veterans affairs, 29 or a permanent and total disability rating based on individual 30 unemployability that is compensated at the one hundred percent 31 disability rate, as certified by the United States department 32 of veterans affairs. 33 (c) A former member of the national guard of any state 34 who otherwise meets the service requirements of section 35.1, 35 -32- LSB 1550YC (1) 91 jm/md 32/ 52
H.F. _____ subsection 2, paragraph b , subparagraph (2) or (7), with a 1 permanent service-connected disability rating of one hundred 2 percent, as certified by the United States department of 3 veterans affairs, or a permanent and total disability rating 4 based on individual unemployability that is compensated at the 5 one hundred percent disability rate, as certified by the United 6 States department of veterans affairs. 7 (d) An individual who is a surviving spouse or a child and 8 who is receiving dependency and indemnity compensation pursuant 9 to 38 U.S.C. 1301 et seq., as certified by the United States 10 department of veterans affairs. 11 (2) (a) For an owner described in subparagraph (1), 12 subparagraph division (a), (b), or (c), the credit allowed 13 shall be continued to the estate of an owner who is deceased 14 or the surviving spouse and any child, as defined in section 15 234.1, who are the beneficiaries of a deceased owner, so long 16 as the surviving spouse remains unmarried. 17 (b) An individual described in subparagraph (1), 18 subparagraph division (d), is no longer eligible for the credit 19 upon termination of dependency and indemnity compensation under 20 38 U.S.C. 1301 et seq. 21 (3) An owner or a beneficiary of an owner who elects to 22 secure the credit provided in this paragraph is not eligible 23 for the credit provided in paragraph c or any other real 24 property tax credit or exemption provided by law for veterans 25 of military service. 26 (4) If an owner acquires a different homestead, the credit 27 allowed under this section may be claimed on the new homestead 28 unless the owner fails to meet the other requirements of this 29 section. 30 (5) (a) Except as provided in subparagraph division (b), 31 the list of the names and addresses of individuals allowed 32 a credit under this section and maintained by the county 33 recorder, county treasurer, county assessor, city assessor, or 34 other government body is confidential information and shall 35 -33- LSB 1550YC (1) 91 jm/md 33/ 52
H.F. _____ not be disseminated to any person unless otherwise ordered by 1 a court or released by the lawful custodian of the records 2 pursuant to state or federal law. The county recorder, county 3 treasurer, county assessor, city assessor, or other government 4 body responsible for maintaining the names and addresses of 5 individuals allowed a credit under this section may display 6 such credit on individual paper records and individual 7 electronic records, including display on an internet site. 8 (b) Upon request, a county recorder, county assessor, city 9 assessor, or other entity may share information as described in 10 subparagraph division (a) to a county veterans service officer 11 for purposes of providing information on benefits and services 12 available to veterans and their families. 13 (6) (a) For an owner who makes an application to secure 14 the credit provided in this paragraph before July 1, 2025, 15 and for the beneficiary of such an owner, homestead shall 16 mean the same as defined in section 425.11 for each succeeding 17 assessment year. 18 (b) For an owner who makes an application to secure the 19 credit provided in this paragraph on or after July 1, 2025, and 20 for the beneficiary of such an owner, homestead shall mean the 21 same as provided in section 425.11, except the homestead shall 22 not include appurtenances and shall not exceed one-half acre. 23 (7) For purposes of this paragraph, permanent and total 24 disability rating based on individual unemployability means 25 a condition under which a person has either a permanent 26 service-connected disability rating of sixty percent or two or 27 more permanent service-connected disability conditions in which 28 one of the conditions has at least a forty percent rating and 29 the combined rating for all the conditions is at least seventy 30 percent, and the person has an administrative adjustment added 31 to the service-connected disability rating, due to individual 32 unemployability, such that the United States department of 33 veterans affairs rates the veteran permanently and totally 34 disabled for purposes of disability compensation. 35 -34- LSB 1550YC (1) 91 jm/md 34/ 52
H.F. _____ c. (1) For assessment years beginning prior to January 1, 1 2026, unless eligible under paragraph b , an amount equal to 2 the actual levy on the first four thousand eight hundred fifty 3 dollars of actual value for each homestead. 4 (2) For the assessment year beginning January 1, 2026, 5 unless eligible under paragraph b , an amount equal to the 6 actual levy on the first three thousand six hundred forty 7 dollars of actual value for each homestead. 8 (3) For the assessment year beginning January 1, 2027, 9 unless eligible under paragraph b , an amount equal to the 10 actual levy on the first two thousand four hundred thirty 11 dollars of actual value for each homestead. 12 (4) For the assessment year beginning January 1, 2028, 13 unless eligible under paragraph b , an amount equal to the 14 actual levy on the first one thousand two hundred twenty 15 dollars of actual value for each homestead. 16 Sec. 45. Section 425.1A, subsection 1, Code 2025, is amended 17 to read as follows: 18 1. The following exemptions from taxation shall be allowed 19 in addition to the homestead credit for an owner that has 20 attained the age of sixty-five years by January 1 of the 21 assessment year: 22 a. For the assessment year beginning January 1, 2023, the 23 eligible homestead, not to exceed three thousand two hundred 24 fifty dollars in taxable value. 25 b. For the assessment year years beginning on or after 26 January 1, 2024, and each succeeding assessment year but before 27 January 1, 2026 , the eligible homestead, not to exceed six 28 thousand five hundred dollars in taxable value. 29 Sec. 46. Section 425.1A, Code 2025, is amended by adding the 30 following new subsection: 31 NEW SUBSECTION . 1A. The following exemptions from taxation 32 shall be allowed on each eligible homestead and shall be in 33 addition to any applicable homestead credit for an owner: 34 a. For the assessment year beginning January 1, 2026, the 35 -35- LSB 1550YC (1) 91 jm/md 35/ 52
H.F. _____ eligible homestead, not to exceed four thousand six hundred 1 eighty dollars. If, however, the owner has attained the age of 2 sixty-five by January 1 of the assessment year, the eligible 3 homestead, not to exceed six thousand five hundred dollars. 4 b. For the assessment year beginning January 1, 2027, the 5 eligible homestead, not to exceed ten thousand five hundred 6 seventy dollars in taxable value. 7 c. For the assessment year beginning January 1, 2028, 8 the eligible homestead, not to exceed eighteen thousand five 9 hundred dollars in taxable value. 10 d. For the assessment year beginning January 1, 2029, and 11 for each succeeding assessment year the eligible homestead, not 12 to exceed twenty-five thousand dollars in taxable value. 13 Sec. 47. Section 425.2, subsections 1 and 2, Code 2025, are 14 amended to read as follows: 15 1. A person who wishes to qualify for the homestead credit 16 or exemption allowed under this subchapter shall obtain the 17 appropriate forms for filing for the credit from the assessor. 18 The forms shall include the ability to claim the credit and 19 the exemption under section 425.1A. However, a separate form 20 shall be required for claiming a credit under section 425.1, 21 subsection 2, paragraph b . The person claiming the credit 22 or exemption shall file a verified statement and designation 23 of homestead with the assessor for the year for which the 24 person is first claiming the credit or exemption . The claim 25 shall be filed not later than July 1 of the year for which the 26 person is claiming the credit or exemption . A claim filed 27 after July 1 of the year for which the person is claiming the 28 credit or exemption shall be considered as a claim filed for 29 the following year. 30 2. Upon the filing and allowance of the claim, the claim 31 shall be allowed on that homestead for successive years without 32 further filing as long as the property is legally or equitably 33 owned and used as a homestead by that person or that persons 34 spouse on July 1 of each of those successive years, and the 35 -36- LSB 1550YC (1) 91 jm/md 36/ 52
H.F. _____ owner of the property being claimed as a homestead declares 1 residency in Iowa for purposes of income taxation, and the 2 property is occupied by that person or that persons spouse 3 for at least six months in each of those calendar years in 4 which the fiscal year begins. When the property is sold or 5 transferred, the buyer or transferee who wishes to qualify 6 shall refile for the credit or exemption . However, when the 7 property is transferred as part of a distribution made pursuant 8 to chapter 598 , the transferee who is the spouse retaining 9 ownership of the property is not required to refile for the 10 credit or exemption . Property divided pursuant to chapter 598 11 shall not be modified following the division of the property. 12 An owner who ceases to use a property for a homestead or 13 intends not to use it as a homestead for at least six months in 14 a calendar year shall provide written notice to the assessor 15 by July 1 following the date on which the use is changed. A 16 person who sells or transfers a homestead or the personal 17 representative of a deceased person who had a homestead at the 18 time of death, shall provide written notice to the assessor 19 that the property is no longer the homestead of the former 20 claimant. 21 Sec. 48. Section 425.2, subsection 4, Code 2025, is amended 22 by striking the subsection. 23 Sec. 49. Section 425.2, subsections 5 and 6, Code 2025, are 24 amended to read as follows: 25 5. Any person sixty-five years of age or older or any person 26 who is disabled may request, in writing, from the appropriate 27 assessor forms for filing for homestead tax credit . Any 28 person sixty-five years of age or older or who is disabled 29 may complete the form, which shall include a statement of 30 homestead, and mail or return it to the appropriate assessor. 31 The signature of the claimant on the statement shall be 32 considered the claimants acknowledgment that all statements 33 and facts entered on the form are correct to the best of the 34 claimants knowledge. 35 -37- LSB 1550YC (1) 91 jm/md 37/ 52
H.F. _____ 6. Upon adoption of a resolution by the county board 1 of supervisors, any person may request, in writing, from 2 the appropriate assessor forms for the filing for homestead 3 tax credit . The person may complete the form, which shall 4 include a statement of homestead, and mail or return it to 5 the appropriate assessor. The signature of the claimant on 6 the statement of homestead shall be considered the claimants 7 acknowledgment that all statements and facts entered on the 8 form are correct to the best of the claimants knowledge. 9 Sec. 50. Section 425.8, subsection 1, Code 2025, is amended 10 to read as follows: 11 1. The director of revenue shall prescribe the form 12 for the making of a verified statement and designation of 13 homestead, the form for the supporting affidavits required 14 herein, and such other forms as may be necessary for the proper 15 administration of this subchapter . Whenever necessary, the 16 department of revenue shall forward to the county auditors of 17 the several counties in the state the prescribed sample forms, 18 and the county auditors shall furnish blank forms prepared in 19 accordance therewith with the assessment rolls, books, and 20 supplies delivered to the assessors. The department of revenue 21 shall prescribe and the county auditors shall provide on the 22 forms for claiming the homestead credit a statement to the 23 effect that the owner realizes that the owner must give written 24 notice to the assessor when the owner changes the use of the 25 property. 26 Sec. 51. Section 425.11, subsection 1, paragraph d, 27 subparagraph (1), unnumbered paragraph 1, Code 2025, is amended 28 to read as follows: 29 The homestead includes the dwelling house which the owner, 30 in good faith, is occupying as a home on July 1 of the year for 31 which the credit or exemption is claimed and occupies as a home 32 for at least six months during the calendar year in which the 33 fiscal year begins, except as otherwise provided. 34 Sec. 52. Section 425.11, subsection 1, paragraph d, 35 -38- LSB 1550YC (1) 91 jm/md 38/ 52
H.F. _____ subparagraph (3), Code 2025, is amended to read as follows: 1 (3) It must not embrace more than one dwelling house, but 2 where a homestead has more than one dwelling house situated 3 thereon, the exemption and or credit provided for in this 4 subchapter shall apply to the home and buildings used by the 5 owner, but shall not apply to any other dwelling house and 6 buildings appurtenant. 7 Sec. 53. Section 425.11, subsection 1, paragraph e, 8 subparagraph (2), Code 2025, is amended to read as follows: 9 (2) For the purpose of this subchapter , the word owner 10 shall be construed to mean a bona fide owner and not one for 11 the purpose only of availing the person of the benefits of this 12 subchapter . In order to qualify for the homestead tax credit 13 and or exemption, evidence of ownership shall be on file in the 14 office of the clerk of the district court or recorded in the 15 office of the county recorder at the time the owner files with 16 the assessor a verified statement of the homestead claimed by 17 the owner as provided in section 425.2 . 18 Sec. 54. Section 483A.24, subsection 19, Code 2025, is 19 amended to read as follows: 20 19. Upon payment of a fee established by rules adopted 21 pursuant to section 483A.1 for a lifetime trout fishing 22 license, the department shall issue a lifetime trout fishing 23 license to a person who is at least sixty-five years of age or 24 to a person who qualifies for the disabled veteran homestead 25 credit under section 425.15 425.1, subsection 2, paragraph b . 26 The department shall prepare an application to be used by a 27 person requesting a lifetime trout fishing license under this 28 subsection . 29 Sec. 55. REPEAL. Section 425.15, Code 2025, is repealed. 30 Sec. 56. APPLICABILITY. This division of this Act applies 31 to assessment years beginning on or after January 1, 2026. 32 DIVISION VI 33 MILITARY SERVICE PROPERTY TAX EXEMPTION 34 Sec. 57. Section 426A.11, subsection 2, Code 2025, is 35 -39- LSB 1550YC (1) 91 jm/md 39/ 52
H.F. _____ amended to read as follows: 1 2. a. The property, not to exceed one thousand eight 2 hundred fifty-two dollars in taxable value for assessment years 3 beginning before January 1, 2023, of an honorably separated, 4 retired, furloughed to a reserve, placed on inactive status, 5 or discharged veteran, as defined in section 35.1, subsection 6 2 , paragraph a or b . 7 b. The property, not to exceed four thousand dollars in 8 taxable value for the assessment years beginning on or after 9 January 1, 2023, but before January 1, 2025, of an honorably 10 separated, retired, furloughed to a reserve, placed on inactive 11 status, or discharged veteran, as defined in section 35.1, 12 subsection 2 , paragraph a or b . 13 c. The property, not to exceed the following amounts in 14 taxable value, of an honorably separated, retired, furloughed 15 to a reserve, placed on inactive status, or discharged veteran, 16 as defined in section 35.1, subsection 2, paragraph a or b : 17 (1) Five thousand dollars in taxable value for the 18 assessment year beginning January 1, 2025. 19 (2) Six thousand dollars in taxable value for the assessment 20 year beginning January 1, 2026. 21 (3) Seven thousand dollars in taxable value for assessment 22 years beginning on or after January 1, 2027. 23 Sec. 58. RETROACTIVE APPLICABILITY. This division of this 24 Act applies retroactively to January 1, 2025, for assessment 25 years beginning on or after that date. 26 DIVISION VII 27 PROPERTY TAX LEVY RATES 28 Sec. 59. NEW SECTION . 444.25 Maximum property tax levy 29 rates adjustments. 30 1. For purposes of this section: 31 a. Budget year is the fiscal year beginning during the 32 calendar year in which a budget is certified. 33 b. Current fiscal year is the fiscal year ending during 34 the calendar year in which a budget for the budget year is 35 -40- LSB 1550YC (1) 91 jm/md 40/ 52
H.F. _____ certified. 1 c. Rate-limited property tax levy includes any ad valorem 2 property tax levy limited by law to a specific property tax 3 levy rate per one thousand dollars of assessed value used to 4 calculate taxes, but does not include the school district 5 foundation levy under section 257.3, the county general 6 services levy under section 331.423, subsection 1, the county 7 rural services levy under section 331.423, subsection 2, or the 8 city general fund levy under section 384.1, subsection 3. 9 2. For each fiscal year beginning on or after July 1, 10 2026, each rate-limited property tax levy may only be imposed 11 if the governmental entity imposed such levy for the fiscal 12 year beginning July 1, 2025, and shall, by operation of this 13 section, be limited to a levy rate per one thousand dollars 14 of assessed value that is equal to one thousand multiplied by 15 the quotient of one hundred two percent of the current fiscal 16 years actual property tax dollars certified for such levy 17 divided by the total assessed value used to calculate such 18 taxes for the budget year. 19 Sec. 60. NEW SECTION . 444.26 Use of bonds and indebtedness 20 for general operations prohibition. 21 1. For purposes of this section, general operations means 22 services or activities generally funded from the governmental 23 entitys general fund, which are necessary for the operation 24 of the governmental entity, including salaries and benefits, 25 or which are for the health and welfare of the governmental 26 entitys citizens or primarily intended to benefit all 27 residents of the governmental entity, but excluding services 28 financed by statutory funds other than a debt service fund. 29 2. On or after July 1, 2025, a city or county shall not 30 issue bonds or other indebtedness payable from an ad valorem 31 property tax levy for the purpose of funding the general 32 operations of the city or general operations of the county, as 33 applicable, or otherwise use proceeds from the sale of bonds or 34 issuance of other indebtedness to fund general operations. 35 -41- LSB 1550YC (1) 91 jm/md 41/ 52
H.F. _____ 3. The city finance committee shall adopt rules under 1 chapter 17A for cities to implement this section. The county 2 finance committee shall adopt rules under chapter 17A for 3 counties to implement this section. 4 DIVISION VIII 5 ELDERLY PROPERTY TAXES LOW INCOME 6 Sec. 61. Section 425.17, subsection 2, paragraph a, 7 subparagraph (3), Code 2025, is amended to read as follows: 8 (3) A person filing a claim for credit under this subchapter 9 who has attained the age of seventy years on or before December 10 31 of the base year, who has a household income of less than two 11 three hundred fifty percent of the federal poverty level, as 12 defined by the most recently revised poverty income guidelines 13 published by the United States department of health and human 14 services, and is domiciled in this state at the time the claim 15 is filed or at the time of the persons death in the case of a 16 claim filed by the executor or administrator of the claimants 17 estate. 18 Sec. 62. APPLICABILITY. This division of this Act applies 19 to assessment years beginning on or after January 1, 2026. 20 DIVISION IX 21 BRUCELLOSIS AND TUBERCULOSIS ERADICATION FUND LEVY 22 Sec. 63. Section 165.18, subsections 2 and 3, Code 2025, are 23 amended by striking the subsections. 24 Sec. 64. Section 331.512, subsection 1, paragraph e, Code 25 2025, is amended by striking the paragraph. 26 Sec. 65. Section 331.559, subsection 2, Code 2025, is 27 amended by striking the subsection. 28 Sec. 66. EFFECTIVE DATE. This division of this Act takes 29 effect July 1, 2025. 30 Sec. 67. APPLICABILITY. This division of this Act applies 31 to property taxes due and payable in fiscal years beginning on 32 or after July 1, 2025. 33 EXPLANATION 34 The inclusion of this explanation does not constitute agreement with 35 -42- LSB 1550YC (1) 91 jm/md 42/ 52
H.F. _____ the explanations substance by the members of the general assembly. 1 This bill relates to local government property taxes, 2 financial authority, and budgets. 3 DIVISION I COUNTY PROPERTY TAXES AND BUDGETS. Code 4 section 331.423 establishes a levy rate limitation for the 5 general county services levy and a limitation for the rural 6 county services levy. The bill modifies the general county 7 services levy rate limitation for fiscal years beginning on or 8 after July 1, 2026, but before July 1, 2031, to be a levy rate 9 not to exceed a levy rate per $1,000 of assessed value equal to 10 1,000 multiplied by the quotient of 102 percent of the current 11 fiscal years actual property tax dollars certified for levy 12 for general county services divided by the remainder of the 13 total assessed value used to calculate taxes for the budget 14 year minus value attributable to new valuation as defined in 15 the bill. 16 For each fiscal year beginning on or after July 1, 2031, the 17 maximum levy rate is the levy rate imposed by the county for 18 the current fiscal year (immediately preceding fiscal year), 19 unless the total assessed value, excluding new valuation, 20 as defined in the bill, used to calculate taxes for general 21 county services for the budget year is equal to or exceeds 102 22 percent of the total assessed value used to calculate taxes for 23 general county services for the current fiscal year; then the 24 countys maximum levy rate for general county services shall 25 not exceed a levy rate per $1,000 of assessed value equal to 26 1,000 multiplied by the quotient of 102 percent of the current 27 fiscal years actual property tax dollars certified for levy 28 for general county services divided by the remainder of the 29 total assessed value used to calculate taxes for the budget 30 year minus value attributable to new valuation as defined in 31 the bill. 32 The bill similarly modifies the maximum levy rate for rural 33 county services for fiscal years beginning on or after July 1, 34 2026. 35 -43- LSB 1550YC (1) 91 jm/md 43/ 52
H.F. _____ The division takes effect January 1, 2026, and applies to 1 county taxes and budgets for fiscal years beginning on or after 2 July 1, 2026. 3 DIVISION II CITY PROPERTY TAXES AND BUDGETS. Code section 4 384.1 establishes the city general fund levy and limits on the 5 levy rate. The bill modifies the levy rate limit for fiscal 6 years beginning on or after July 1, 2026, but before July 1, 7 2031, not to exceed a levy rate per $1,000 of assessed value 8 equal to 1,000 multiplied by the quotient of 102 percent of the 9 current fiscal years actual property tax dollars certified for 10 levy for city general services divided by the remainder of the 11 total assessed value used to calculate taxes for the budget 12 year minus value attributable to new valuation as defined in 13 the bill. For each fiscal year beginning on or after July 14 1, 2031, the maximum levy rate is the levy rate imposed by 15 the city for the current fiscal year (immediately preceding 16 fiscal year), unless the total assessed value, excluding new 17 valuation, as defined in the bill, used to calculate taxes for 18 the budget year is equal to or exceeds 102 percent of the total 19 assessed value used to calculate taxes for the current fiscal 20 year; then the citys maximum levy rate for general services 21 shall not exceed a levy rate per $1,000 of assessed value equal 22 to 1,000 multiplied by the quotient of 102 percent of the 23 current fiscal years actual property tax dollars certified 24 for levy for general services divided by the remainder of the 25 total assessed value used to calculate taxes for the budget 26 year minus value attributable to new valuation as defined in 27 the bill. The bill also establishes a methodology to determine 28 a maximum levy rate for a city that is not imposing a general 29 fund levy in the current fiscal year. 30 The division takes effect January 1, 2026, and applies to 31 property taxes and budgets for fiscal years beginning on or 32 after July 1, 2026. 33 DIVISION III SCHOOL TAXES AND BUDGETS. As part of 34 the state school foundation program, for school budget 35 -44- LSB 1550YC (1) 91 jm/md 44/ 52
H.F. _____ years beginning on or after July 1, 2022, Code section 257.1 1 establishes the regular program foundation base to be 88.4 2 percent of the regular program state cost per pupil. Beginning 3 with the budget year beginning July 1, 2026, the bill increases 4 that percentage each budget year until the percentage is 100 5 percent for budget years beginning on or after July 1, 2030. 6 Similarly, the bill increases the special education support 7 services foundation base percentage from 79 percent to 100 8 percent over the same period of budget years. 9 Code section 257.3 requires school districts to levy a 10 foundation property tax of $5.40 per $1,000 of assessed value 11 on all taxable property in the school district. The bill 12 reduces the foundation property tax levy rate over a period of 13 budget years starting with the budget year beginning July 1, 14 2026, until the levy rate is $2.97 per $1,000 of assessed value 15 for budget years beginning on or after July 1, 2030. 16 Code section 257.3 provides an exception to the foundation 17 property tax levy rate of $5.40 for those school districts that 18 have recently been reorganized. Such districts are provided 19 reduced foundation property tax levy rates for three years 20 following the reorganization. The bill adjusts those reduced 21 rates for reorganizations that take effect on or after July 22 1, 2026, to reflect the reductions made in the bill to the 23 foundation property tax levy imposed by school districts that 24 are not subject to a reorganization and eliminates certain 25 supplemental aid related to such reorganized school district 26 rates for budget years beginning on or after July 1, 2030. 27 The bill eliminates certain property tax adjustment aid 28 under Code section 257.15(2) and (3) for fiscal years beginning 29 on or after July 1, 2030. 30 The bill eliminates the $24 million general fund 31 appropriation for adjusted additional property tax levy aid 32 under Code section 257.15(4) for fiscal years beginning on 33 or after July 1, 2030. The bill also eliminates the annual 34 appropriation of the balance of the property tax equity and 35 -45- LSB 1550YC (1) 91 jm/md 45/ 52
H.F. _____ relief fund under Code section 257.16A for purposes designated 1 under Code section 257.15(4) and requires remaining moneys at 2 the end of a specified fiscal year to be transferred back to 3 the funds from which they were received. 4 The bill eliminates the payment of school district property 5 tax replacement payments for fiscal years beginning on or after 6 July 1, 2030. 7 The bill eliminates the annual appropriation of moneys in 8 the foundation base supplement fund for fiscal years beginning 9 on or after July 1, 2030, and requires the remaining moneys 10 at the end of a specified fiscal year to be transferred for 11 deposit in the secure an advanced vision for education fund. 12 The bill eliminates transfers from the secure an advanced 13 vision for education fund to the property tax equity and relief 14 fund and the foundation base supplement fund for fiscal years 15 beginning on or after July 1, 2030. 16 In Code chapters 425A (family farm tax credit) and 426 17 (agricultural land tax credit), the bill replaces references 18 to the school foundation property tax levy rate ($5.40) with 19 citations to the appropriate provision of the Code section 20 establishing the foundation property tax rate. 21 The bill requires each school district with an unexpended 22 fund balance in the districts management levy fund under 23 Code section 298A.3 at the conclusion of the fiscal year 24 beginning July 1, 2024, that exceeds an amount equal to the 25 total expenditures from the districts management fund for the 26 fiscal year beginning July 1, 2024, to certify such unexpended 27 fund balance and expenditure amounts, including any reserved 28 or designated amounts in the fund and the purposes therefor, 29 to the school budget review committee by November 15, 2025. 30 The committee is then required to conduct a review of the 31 unexpended fund balances and expenditures of school district 32 management levy funds certified under the bill. By February 1, 33 2026, the committee shall make recommendations to the general 34 assembly for the establishing district management levy fund 35 -46- LSB 1550YC (1) 91 jm/md 46/ 52
H.F. _____ unexpended fund balance limitations for fiscal years beginning 1 on or after July 1, 2027, including recommendations for 2 limitations based on a percentage of the districts management 3 levy fund expenditures and recommendations for management levy 4 limitations and expenditure requirements for excess funds. 5 The bill also amends Code section 298.4 by providing that for 6 fiscal years beginning on or after July 1, 2027, if a school 7 districts unexpended fund balance of the districts management 8 levy fund is equal to or exceeds a specified percentage of the 9 average annual expenditures from the districts management 10 levy fund for the three consecutive fiscal years immediately 11 preceding the base year, the board of directors may not certify 12 a district management levy for the fiscal year. Additionally, 13 if a school district is not prohibited from certifying a levy 14 under the bill, the maximum amount that the board of directors 15 may certify for levy under this Code section shall be an 16 amount equal to the remainder of a specified percentage of the 17 average annual expenditures from the districts management 18 levy fund for the three consecutive fiscal years immediately 19 preceding the base year minus the districts management levy 20 fund unexpended fund balance for the fiscal year preceding the 21 base year. 22 Except for the section of the division amending Code section 23 257.31, this division of the bill takes effect July 1, 2026. 24 DIVISION IV PROPERTY VALUATIONS AND ASSESSMENT 25 LIMITATIONS. Code section 441.21 provides that the actual 26 value of agricultural property shall be determined on the 27 basis of productivity and net earning capacity and that any 28 formula or method employed to determine productivity and net 29 earning capacity of property shall be adopted in full by rule 30 of the department of revenue. The bill amends that provision 31 by specifying that for assessment years beginning on or after 32 January 1, 2026, structures on agricultural land constructed on 33 or after January 1, 2026, that are not agricultural dwellings 34 shall not be included in determination of productivity and net 35 -47- LSB 1550YC (1) 91 jm/md 47/ 52
H.F. _____ earning capacity of agricultural property and shall not be 1 allocated any portion of the total county productivity value 2 so determined. Such agricultural structures shall instead 3 be valued under Code section 441.21(2) and the structures 4 assessed value subject to taxation shall be equal to the 5 product of the structures value multiplied by the agricultural 6 factor, as determined in 701 IAC 102.3(2) or succeeding rule 7 of the department. 8 Code section 441.21(4) establishes the calculation for 9 assessment limitations (rollback) for residential property and 10 agricultural property. The bill strikes the calculation of 11 the residential property assessment limitation for assessment 12 years beginning on or after January 1, 2025, and strikes 13 the provision within the agricultural property assessment 14 limitation calculation that limits growth of residential or 15 agricultural property to the growth in the other classification 16 (ag-residential tie). The bill establishes a schedule of 17 assessment limitations for residential property that increases 18 year assessment year from the assessment year beginning January 19 1, 2025, until the assessment limitation reaches 100 percent 20 for assessment years beginning on or after January 1, 2029. 21 By operation of the scheduled increases to the residential 22 property assessment limitation, the assessment limitation 23 applicable to that portion of commercial, industrial, and 24 railway property that is equal to or less than $150,000 is 25 also increased. During that period of scheduled increase, the 26 bill also increases the 90 percent assessment limitation on 27 the portion of commercial, industrial, and railway property 28 that exceeds $150,000 until that percentage is 100 percent. 29 The bill makes similar changes to other assessment limitations 30 applicable to other classifications of property, including 31 utility property. 32 The bill modifies provisions governing the calculation 33 of payments made to local governments under Code section 34 441.21(5)(e) that are made to replace property taxes due to the 35 -48- LSB 1550YC (1) 91 jm/md 48/ 52
H.F. _____ application of the residential property assessment limitation 1 to certain portions of commercial and industrial property 2 valuations and eliminates the appropriation for such payments 3 for fiscal years beginning on or after July 1, 2030, due to 4 elimination of the assessment limitations. 5 DIVISION V DISABLED VETERAN AND HOMESTEAD CREDITS AND 6 EXEMPTIONS. 7 HOMESTEAD CREDIT. Over a period of years, the bill replaces 8 the homestead property tax credit, other than the portion 9 of the credit provided to certain disabled veterans, with a 10 homestead property tax exemption. Currently, the homestead 11 credit is an amount equal to the levy on the first $4,850 12 of actual value for each homestead. For the assessment year 13 beginning January 1, 2026, the homestead credit equals the levy 14 on the first $3,640 of actual value. For the assessment year 15 beginning January 1, 2027, the homestead credit equals the levy 16 on the first $2,430 of actual value. For the assessment year 17 beginning January 1, 2028, the homestead credit equals the 18 levy on the first $1,220 of actual value. The bill eliminates 19 the homestead credit, other than the homestead credit reserved 20 for disabled veterans, commencing with the assessment year 21 beginning July 1, 2029. 22 HOMESTEAD EXEMPTION. The bill modifies the homestead 23 exemption by increasing the current $6,500 taxable value 24 exemption amount and eliminating the requirement that an owner 25 be 65 years of age or older. 26 For the assessment year beginning January 1, 2026, the 27 exemption amount increases to $4,680, except for owners 65 28 and older, who remain at $6,500. For the assessment year 29 beginning January 1, 2027, the exemption amount increases to 30 $10,500. For the assessment year beginning January 1, 2028, 31 the exemption amount increases to $18,500, and for assessment 32 years beginning on or after January 1, 2029, the exemption 33 amount is $25,000. 34 DISABLED VETERAN. The bill moves the disabled homestead 35 -49- LSB 1550YC (1) 91 jm/md 49/ 52
H.F. _____ credit from Code section 425.15 to Code section 425.1, and 1 makes changes to the scope of the disabled veteran homestead 2 credit for new applicants. Currently, a disabled veteran with 3 a 100 percent permanent and total disability rating receives 4 a homestead credit on the entire amount of tax levied on the 5 homestead. The bill specifies that a separate application 6 form is required to claim the disabled homestead credit. The 7 bill does not change the homestead credit for an eligible 8 disabled veteran who makes an application for the homestead 9 credit before July 1, 2025. For a disabled veteran who makes 10 an application for the homestead credit on or after July 1, 11 2025, the bill changes the definition to homestead to exclude 12 appurtenances and limits the size of the homestead credit to 13 property on one-half acre. 14 REIMBURSEMENT. The state continues to reimburse local 15 governments for the homestead credit, as determined under the 16 bill, including the disabled veterans homestead credit under 17 the bill, but does not reimburse local governments for the 18 homestead exemption under current law and in the bill. 19 This division of the bill applies to assessment years 20 beginning on or after January 1, 2026. 21 DIVISION VI MILITARY SERVICE PROPERTY TAX EXEMPTION. 22 Under current law, a veteran receives a property tax exemption 23 of $4,000 in taxable value on property owned by the veteran. 24 The bill increases the veterans property tax exemption from 25 $4,000 to the following exemption amounts: for the assessment 26 year beginning January 1, 2025, $5,000; for the assessment 27 year beginning January 1, 2026, $6,000; for assessment years 28 beginning on or after January 1, 2027, $7,000. 29 The division applies retroactively to assessment years 30 beginning on or after January 1, 2025. 31 DIVISION VII PROPERTY TAX LEVY RATES. The bill 32 establishes a reduction for rate-limited property tax levies. 33 The bill defines rate-limited property tax levy to be any ad 34 valorem property tax levy limited by law to a specific property 35 -50- LSB 1550YC (1) 91 jm/md 50/ 52
H.F. _____ tax levy rate per $1,000 of assessed value used to calculate 1 taxes, but does not include the school district foundation levy 2 under Code section 257.3, the county general services levy 3 under Code section 331.423(1), the county rural services levy 4 under Code section 331.423(2), or the city general fund levy 5 under Code section 384.1(3). 6 For each fiscal year beginning on or after July 1, 2026, 7 each rate-limited property tax levy may only be imposed if 8 the governmental entity imposed such levy for the fiscal year 9 beginning July 1, 2025, and shall, by operation of the bill, 10 be limited to a levy rate that is equal to 1,000 multiplied 11 by the quotient of 102 percent of the current fiscal years 12 actual property tax dollars certified for such levy divided by 13 the total assessed value used to calculate such taxes for the 14 budget year. 15 The bill also provides that, on or after July 1, 2025, a city 16 or county shall not issue bonds or other indebtedness payable 17 from an ad valorem property tax levy for the purpose of funding 18 the general operations of the city or general operations of 19 the county, as applicable, or otherwise use proceeds from the 20 sale of bonds or issuance of other indebtedness to fund general 21 operations. The bill defines general operations to mean 22 services or activities generally funded from the governmental 23 entitys general fund, which are necessary for the operation 24 of the governmental entity, including salaries and benefits, 25 or which are for the health and welfare of the governmental 26 entitys citizens or primarily intended to benefit all 27 residents of the governmental entity, but excluding services 28 financed by statutory funds other than a debt service fund. 29 The city finance committee is required to adopt rules under 30 Code chapter 17A for cities to implement the new Code section 31 governing funding of general operations. The county finance 32 committee is required to adopt rules under chapter 17A for 33 counties to implement the new Code section governing funding 34 of general operations. 35 -51- LSB 1550YC (1) 91 jm/md 51/ 52
H.F. _____ DIVISION VIII ELDERLY PROPERTY TAXES LOW INCOME. The 1 bill modifies the eligibility for the property tax credit for 2 persons ages 70 and older under Code chapter 425, subchapter 3 II. Currently, a person filing a claim for the property tax 4 credit who is at least 70 years of age and who has a household 5 income of less than 250 percent of the federal poverty level is 6 eligible to receive a specified credit amount against property 7 taxes due on the claimants homestead. The bill increases the 8 household income threshold for eligibility from less than 250 9 percent of the federal poverty level to less than 350 percent 10 of the federal poverty level. 11 The division applies to assessment years beginning on or 12 after January 1, 2026. 13 DIVISION IX BRUCELLOSIS AND TUBERCULOSIS ERADICATION 14 FUND LEVY. Code section 165.18 authorizes the secretary of 15 agriculture to direct the board of supervisors of each county 16 to levy an amount sufficient to pay the expenses estimated to 17 be incurred from the brucellosis and tuberculosis eradication 18 fund for the following fiscal year, subject to a maximum levy 19 of 33.75 cents per $1,000. The bill strikes the authority to 20 levy such a tax beginning with property taxes due and payable 21 in fiscal years beginning July 1, 2025. 22 -52- LSB 1550YC (1) 91 jm/md 52/ 52