What changed in SF 2472

39 passages reworded, 328 added and 321 removed; 162 of 850 unchanged.

Removed AddedIntroduced textText as passedAmendments

Compares wording only. The printed bills also mark changes to existing law with strikes and underlines, which aren’t shown here.

DIVISION I COUNTY PROPERTY TAXES AND BUDGETS

2. Section 331.423, subsection 1, paragraph c, Code 2026, is amended to read as follows:

c. For each fiscal year beginning on or after July 1, 2028, three dollars and fifty cents per thousand dollars of assessed value. For the fiscal year beginning July 1, 2027, the greater of:

(1) A c. For each fiscal year beginning on or after July 1, 2028, three dollars and fifty cents per thousand dollars of assessed value. For fiscal years beginning on or after July 1, 2027, but before July 1, 2030, a levy rate per one thousand dollars of assessed value equal to one thousand multiplied by the quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for levy under this subsection 1 divided by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

(2) A levy rate per one thousand dollars of assessed value that results in an amount of actual property tax dollars certified for levy under this subsection 1 equal to one hundred and one-half percent of the actual property tax dollars certified for levy under this subsection 1 for the current fiscal year.

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3. Section 331.423, subsection 1, Code 2026, is amended by adding the following new paragraph:

NEW PARAGRAPH.

d.

(1) For each fiscal year beginning on or after July 1, 2028, the levy rate imposed under this subsection 1 for the current fiscal year, unless subject to subparagraph (2), and for the budget year beginning July 1, 2028, only, not less than a levy rate per one thousand dollars of assessed value that results in an amount of actual property tax dollars certified for levy under this subsection 1 equal to one hundred and one-half percent of the actual property tax dollars certified for levy under this subsection 1 for the current fiscal year.

(2) (a) If the total assessed value, excluding value attributable to new valuation, used to calculate taxes for general county services under this subsection 1 for the budget year is equal to or exceeds one hundred two percent of the total assessed value used to calculate taxes for general county services for the current fiscal year, the levy rate imposed under this subsection 1 shall not exceed a levy rate per one thousand dollars of assessed value that is equal to one thousand multiplied by the quotient obtained by dividing the product of the budget adjustment factor multiplied by the current fiscal year’s actual property tax dollars certified for levy under this subsection 1 by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

d. For each fiscal year beginning on or after July 1, 2030, the lesser of:

(b) (i) For purposes of this subparagraph, “budget adjustment factor” is equal to one of the following, unless modified by the general assembly on or before January 31 immediately preceding the applicable fiscal year: (A) If the percentage change in the consumer price index for all urban consumers is less than four, one hundred two percent. (B) If the percentage change in the consumer price index for all urban consumers is equal to or greater than four but less than six, one hundred three percent. (C) If the percentage change in the consumer price index for all urban consumers is equal to or greater than six but less than eight, one hundred four percent. (D) If the percentage change in the consumer price index for all urban consumers is equal to or greater than eight, one hundred five percent.

(1) A levy rate per one thousand dollars of assessed value equal to one thousand multiplied by the quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for levy under this subsection 1 divided by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

(ii) The percentage change in the consumer price index for all urban consumers shall be equal to one hundred multiplied by the quotient of the remainder of the published value of the consumer price index for all urban consumers for the month ending eight months prior to the beginning of the applicable budget year minus the published value of the consumer price index for all urban consumers for the month ending twenty months prior to the beginning of the applicable budget year divided by the published value of the consumer price index for all urban consumers for the month ending twenty months prior to the beginning of the applicable budget year.

(2) Three dollars and fifty cents per thousand dollars of assessed value.

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5. Section 331.423, subsection 2, paragraph c, Code 2026, is amended to read as follows:

c. For each fiscal year beginning on or after July 1, 2028, three dollars and ninety-five cents per thousand dollars of assessed value. For the fiscal year beginning July 1, 2027, the greater of:

(1) A c. For each fiscal year beginning on or after July 1, 2028, three dollars and ninety-five cents per thousand dollars of assessed value. For fiscal years beginning on or after July 1, 2027, but before July 1, 2030, a levy rate per one thousand dollars of assessed value equal to one thousand multiplied by the quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for levy under this subsection 2 divided by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

(2) A levy rate per one thousand dollars of assessed value that results in an amount of actual property tax dollars certified for levy under this subsection 2 equal to one hundred and one-half percent of the actual property tax dollars certified for levy under this subsection 2 for the current fiscal year.

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6. Section 331.423, subsection 2, Code 2026, is amended by adding the following new paragraph:

NEW PARAGRAPH.

d.

(1) For each fiscal year beginning on or after July 1, 2028, the levy rate imposed under this subsection 2 for the current fiscal year, unless subject to subparagraph (2), and for the budget year beginning July 1, 2028, only, not less than a levy rate per one thousand dollars of assessed value that results in an amount of actual property tax dollars certified for levy under this subsection 2 equal to one hundred and one-half percent of the actual property tax dollars certified for levy under this subsection 2 for the current fiscal year.

(2) (a) If the total assessed value, excluding value attributable to new valuation, used to calculate taxes for rural county services under this subsection 2 for the budget year is equal to or exceeds one hundred two percent of the total assessed value used to calculate taxes for rural county services for the current fiscal year, the levy rate imposed under this subsection 2 shall not exceed a levy rate per one thousand dollars of assessed value that is equal to one thousand multiplied by the quotient obtained by dividing the product of the budget adjustment factor multiplied by the current fiscal year’s actual property tax dollars certified for levy under this subsection 2 by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

d. For each fiscal year beginning on or after July 1, 2030, the lesser of:

(b) (i) For purposes of this subparagraph, “budget adjustment factor” is equal to one of the following, unless modified by the general assembly on or before January 31 immediately preceding the applicable fiscal year: (A) If the percentage change in the consumer price index for all urban consumers is less than four, one hundred two percent. (B) If the percentage change in the consumer price index for all urban consumers is equal to or greater than four but less than six, one hundred three percent. (C) If the percentage change in the consumer price index for all urban consumers is equal to or greater than six but less than eight, one hundred four percent. (D) If the percentage change in the consumer price index for all urban consumers is equal to or greater than eight, one hundred five percent.

(1) A levy rate per one thousand dollars of assessed value equal to one thousand multiplied by the quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for levy under this subsection 2 divided by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

(ii) The percentage change in the consumer price index for all urban consumers shall be equal to one hundred multiplied by the quotient of the remainder of the published value of the consumer price index for all urban consumers for the month ending eight months prior to the beginning of the applicable budget year minus the published value of the consumer price index for all urban consumers for the month ending twenty months prior to the beginning of the applicable budget year divided by the published value of the consumer price index for all urban consumers for the month ending twenty months prior to the beginning of the applicable budget year.

(2) Three dollars and ninety-five cents per thousand dollars of assessed value.

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Sec.

8. Section 331.423, Code 2026, is amended by adding the following new subsection:

8. EFFECTIVE DATE. This division of this Act takes effect January 1, 2027.

NEW SUBSECTION. 2A. The amount of property tax dollars calculated under this section includes those amounts budgeted and received by the county as replacement taxes under chapter 437A or 437B, if applicable.

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9. APPLICABILITY. This division of this Act applies to property taxes and budgets for fiscal years beginning on or after July 1, 2027. DIVISION II CITY PROPERTY TAXES AND BUDGETS

9. EFFECTIVE DATE. This division of this Act takes effect January 1, 2027.

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10. APPLICABILITY. This division of this Act applies to property taxes and budgets for fiscal years beginning on or after July 1, 2027. DIVISION II CITY PROPERTY TAXES AND BUDGETS

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10. 11. Section 384.1, subsection 3, paragraph c, subparagraph (1), Code 2026, is amended to read as follows:

(1) For each fiscal year beginning on or after July 1, 2024, but before July 1, 2028 2027, subject to subparagraph (3), a city’s tax levy for the general fund, except for levies authorized in section 384.12, shall not exceed in any tax year the greater of eight dollars and ten cents per thousand dollars of assessed value used to calculate taxes for the budget year and the adjusted city general fund levy rate, as adjusted under subparagraph (2), if applicable.

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11. 12. Section 384.1, subsection 3, paragraph d, Code 2026, is amended to read as follows:

d.

(1) d. For each fiscal year beginning on or after July 1, 2028, a city’s tax levy rate for the general fund, except for levies authorized in section 384.12, shall not exceed eight dollars and ten cents per thousand dollars of assessed value used to calculate taxes in any fiscal year. For the fiscal year years beginning on or after July 1, 2027, but before July 1, 2030, a city’s tax levy rate for the general fund, except for levies authorized in section 384.12, shall not exceed a levy rate per one thousand dollars of assessed value equal to one thousand multiplied by the greater of: quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for levy under this subsection divided by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

(a) A levy rate per one thousand dollars of assessed value equal to one thousand multiplied by the quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for levy under this subsection divided by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

(b) A levy rate per one thousand dollars of assessed value that results in an amount of actual property tax dollars certified for levy under this subsection equal to one hundred and one-half percent of the actual property tax dollars certified for levy under this subsection for the current fiscal year.

(2) Notwithstanding other provisions of this paragraph, if a city’s actual levy rate for the current fiscal year is zero dollars per one thousand dollars of assessed value, a levy rate per one thousand dollars of assessed value equal to one thousand multiplied by the quotient of one hundred two percent of the city’s certified general fund budget for the current fiscal year divided by the remainder of the total assessed value used to calculate taxes for the budget year minus value attributable to new valuation.

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12. 13. Section 384.1, subsection 3, Code 2026, is amended by adding the following new paragraph:

NEW PARAGRAPH.

e.

(1) For each fiscal year beginning on or after July 1, 2028, a city’s tax levy rate for the general fund, except for levies authorized in section 384.12, shall not exceed the levy rate imposed under this subsection for the current fiscal year, unless subject to subparagraph (2), and for the budget year beginning July 1, 2028, only, not less than a levy rate per one thousand dollars of assessed value that results in an amount of actual property tax dollars certified for levy under this subsection equal to one hundred and one-half percent of the actual property tax dollars certified for levy under this subsection for the current fiscal year.

(2) (a) If the total assessed value, excluding value attributable to new valuation, used to calculate taxes under this subsection for the budget year is equal to or exceeds one hundred two percent of the total assessed value used to calculate taxes under this subsection for the current fiscal year, the city’s levy rate under this subsection shall not exceed a levy rate per one thousand dollars of assessed value that is equal to one thousand multiplied by the quotient obtained by dividing the product of the budget adjustment factor multiplied by the current fiscal year’s actual property tax dollars certified for levy under this subsection by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

(b) (i) For purposes of this subparagraph, “budget adjustment factor” is equal to one of the following, unless modified by the general assembly on or before January 31 immediately preceding the applicable fiscal year: (A) If the percentage change in the consumer price index for all urban consumers is less than four, one hundred two percent. (B) If the percentage change in the consumer price index for all urban consumers is equal to or greater than four but less than six, one hundred three percent. (C) If the percentage change in the consumer price index for all urban consumers is equal to or greater than six but less than eight, one hundred four percent. (D) If the percentage change in the consumer price index for all urban consumers is equal to or greater than eight, one hundred five percent.

e. For each fiscal year beginning on or after July 1, 2030, a city’s tax levy rate for the general fund, except for levies authorized in section 384.12, shall not exceed the lesser of:

(ii) The percentage change in the consumer price index for all urban consumers shall be equal to one hundred multiplied by the quotient of the remainder of the published value of the consumer price index for all urban consumers for the month ending eight months prior to the beginning of the applicable budget year minus the published value of the consumer price index for all urban consumers for the month ending twenty months prior to the beginning of the applicable budget year divided by the published value of the consumer price index for all urban consumers for the month ending twenty months prior to the beginning of the applicable budget year.

(3) Notwithstanding other provisions of this paragraph, if a city’s actual levy rate for the current fiscal year is zero dollars per one thousand dollars of assessed value, the city’s levy rate under this subsection shall not exceed a (1) A levy rate per one thousand dollars of assessed value equal to one thousand multiplied by the quotient of one hundred two percent of the city’s certified general fund budget for the current fiscal year year’s actual property tax dollars certified for levy under this subsection divided by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

(2) Eight dollars and ten cents per thousand dollars of assessed value.

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13. 14. Section 384.1, subsection 4, Code 2026, is amended by adding the following new paragraph:

NEW PARAGRAPH.

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15. Section 384.1, Code 2026, is amended by adding the following new subsection:

14. EFFECTIVE DATE. This division of this Act takes effect January 1, 2027.

NEW SUBSECTION. 3A. The amount of property tax dollars calculated under this section includes those amounts budgeted and received by the city as replacement taxes under chapter 437A or 437B, if applicable.

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15. APPLICABILITY. This division of this Act applies to property taxes and budgets for fiscal years beginning on or after July 1, 2027. DIVISION III SCHOOL TAXES AND BUDGETS

16. EFFECTIVE DATE. This division of this Act takes effect January 1, 2027.

Sec.

16. Section 257.1, subsection 2, paragraph b, Code 2026, is amended to read as follows:

b.

(1) (a) For the budget year commencing July 1, 1999, and for each succeeding budget year beginning before July 1, 2022, the regular program foundation base per pupil is eighty-seven and five-tenths percent of the regular program state cost per pupil.

(b) For the budget year commencing July 1, 2022, and for each succeeding budget year beginning before July 1, 2027, the regular program foundation base per pupil is eighty-eight and four-tenths percent of the regular program state cost per pupil.

(c) For the budget year commencing July 1, 2027, and each succeeding budget year, the regular program foundation base per pupil is one hundred percent of the regular program state cost per pupil.

(2) For the budget year commencing July 1, 1991, and for each succeeding budget year the special education support services foundation base is seventy-nine percent of the special education support services state cost per pupil.

(3) The combined foundation base is the sum of the regular program foundation base, the special education support services foundation base, the total teacher salary supplement district cost, the total professional development supplement district cost, the total early intervention supplement district cost, the total teacher leadership supplement district cost, and the total area education agency teacher salary supplement district cost.

17. APPLICABILITY. This division of this Act applies to property taxes and budgets for fiscal years beginning on or after July 1, 2027. DIVISION III RATE-LIMITED PROPERTY TAX LEVY RATES

Sec.

17. Section 257.3, subsection 1, paragraph a, Code 2026, is amended to read as follows:

a.

18. Section 24.48, Code 2026, is amended by adding the following new subsection:

(1) Except as provided in subsections 2 and 3, a school district shall cause to be levied each budget year beginning before July 1, 2027, for the school general fund, a foundation property tax equal to five dollars and forty cents per thousand dollars of assessed valuation on all taxable property in the district. The county auditor shall spread the foundation levy over all taxable property in the district.

NEW SUBSECTION.

(2) Except as provided in subsections 2 and 3, a school district shall cause to be levied for the budget year beginning July 1, 2027, and each succeeding budget year, for the school general fund, a foundation property tax equal to four dollars and forty-eight and six hundred sixty-two one-thousandths cents per thousand dollars of assessed valuation on all taxable property in the district. The county auditor shall spread the foundation levy over all taxable property in the district.

6. The authority to suspend property tax levy limitations under this section shall not apply to the limitations of section 444.25.

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18. Section 257.3, subsection 2, paragraphs a and b, Code 2026, are amended to read as follows:

a. Notwithstanding subsection 1, a reorganized school district for which the reorganization takes effect on or after July 1, 2027, shall cause a foundation property tax of four three dollars and forty sixty-six cents per thousand dollars of assessed valuation to be levied on all taxable property which, in the year preceding a reorganization, was within a school district affected by the reorganization as defined in section 275.1, or in the year preceding a dissolution was a part of a school district that dissolved if the dissolution proposal has been approved by the director of the department of education pursuant to section 275.55.

b. In For a reorganized school district for which the reorganization took effect on or after July 1, 2027, in succeeding school years, the foundation property tax levy on that portion shall be increased to the rate of four dollars and ninety seven cents per thousand dollars of assessed valuation the first succeeding year, five four dollars and fifteen twenty-eight cents per thousand dollars of assessed valuation the second succeeding year, and five four dollars and forty forty-eight and six hundred sixty-two one-thousandths cents per thousand dollars of assessed valuation the third succeeding year and each year thereafter under subsection 1, paragraph “a”.

19. Section 312.2, subsection 5, paragraph a, unnumbered paragraph 1, Code 2026, is amended to read as follows: The treasurer of state, before making any allotments to counties under this section, shall reduce the allotment to a county for the secondary road fund by the amount by which the total funds that the county transferred or provided during the prior fiscal year under section 331.429, subsection 1, paragraphs “a”, “b”, “d”, and “e”, are less than seventy-five fifty-one percent of the sum of the following:

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20.

NEW SECTION. 444.25 Maximum property tax levy rates —— adjustments.

1. For purposes of this section:

a. “Budget year” is the fiscal year beginning during the calendar year in which a budget is certified.

b. “Current fiscal year” is the fiscal year ending during the calendar year in which a budget for the budget year is certified.

c. “Rate-limited property tax levy” includes any ad valorem property tax levy limited by law to a specific property tax levy rate for a fiscal year beginning on or after July 1, 2027, expressed in statute as a specific amount of money due other than a calculated amount, per one thousand dollars of assessed value used to calculate taxes. “Rate-limited property tax levy” also includes a levy for a county agricultural extension under section 176A.10. This paragraph shall not be construed to include the school district foundation levy under section 257.3, the county general services levy under section 331.423, subsection 1, the county rural services levy under section 331.423, subsection 2, the city general fund levy under section 384.1, the physical plant and equipment levies under section 298.2, the school district bond tax under section 298.18, any levy under chapter 28M, a levy under section 384.12, subsection 1, paragraph “b”, levied for operation and maintenance of a regional transit district, any levy under chapter 347 or 347A, and any levy under chapter 386. In addition, “rate-limited property tax levy” does not include levy rates used in the calculations under section 312.2, subsection 5, paragraph “a”.

2. Except as provided in subsection 3, for the fiscal year beginning July 1, 2027, and each fiscal year thereafter, each rate-limited property tax levy shall, by operation of this section and in addition to any applicable levy rate limitation imposed by another provision of law, be limited to a levy rate per one thousand dollars of assessed value that is equal to one thousand multiplied by the quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for such levy divided by the total assessed value used to calculate such taxes for the budget year.

3.

a. For the fiscal year beginning July 1, 2027, and each fiscal year thereafter, if the rate limited property tax levy was not imposed by the governmental entity in the immediately preceding fiscal year, such levy may for the initial year of imposition be imposed at a rate not to exceed the maximum rate for such levy authorized by law.

19. Section 257.4, subsection 1, paragraph b, Code 2026, is amended to read as follows:

b. If a budget year includes a voter-approved increase in the authorized rate of a voter-approved rate-limited property tax levy for which the increased rate was not approved for imposition in the current fiscal year, such rate-limited property tax levy may be imposed for that budget year at a rate not to exceed the voter-approved rate without application of subsection 2.

b. For the budget year beginning July 1, 2008, and succeeding budget years beginning before July 1, 2027, the department of management shall annually determine an adjusted additional property tax levy and a statewide maximum adjusted additional property tax levy rate, not to exceed the statewide average additional property tax levy rate, calculated by dividing the total adjusted additional property tax levy dollars statewide by the statewide total net taxable valuation. For purposes of this paragraph, the adjusted additional property tax levy shall be that portion of the additional property tax levy corresponding to the state cost per pupil multiplied by a school district’s weighted enrollment, and then multiplied by one hundred percent less the regular program foundation base per pupil percentage pursuant to section 257.1, and then reduced by the amount of the property tax replacement payment to be received under section 257.16B and the amount of the foundation base supplement payment to be received under section 257.16D. The district shall receive adjusted additional property tax levy aid in an amount equal to the difference between the adjusted additional property tax levy rate and the statewide maximum adjusted additional property tax levy rate, as applied per thousand dollars of assessed valuation on all taxable property in the district. The statewide maximum adjusted additional property tax levy rate shall be annually determined by the department taking into account amounts allocated pursuant to section 257.15, subsection 4, and the balance of the property tax equity and relief fund created in section 257.16A at the end of the calendar year.

4. The amount of property tax dollars calculated under this section includes those amounts budgeted and received by the governmental entity as replacement taxes under chapter 437A or 437B, if applicable.

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21.

NEW SECTION. 444.26 Use of bonds and indebtedness for general operations —— prohibition.

1. For purposes of this section:

a. “General operations” means services or activities generally funded from the governmental entity’s general fund, which are necessary for the operation of the governmental entity, including salaries and benefits, or which are for the health and welfare of the governmental entity’s citizens or primarily intended to benefit all residents of the governmental entity, but excluding direct and indirect capital expenditures properly allocable under the Internal Revenue Code, as defined in section 422.3, if the governmental entity were a taxpayer, capital leases, and services financed by statutory funds other than a debt service fund.

20. Section 257.4, subsection 2, Code 2026, is amended by adding the following new paragraph:

b. “Governmental entity” means any unit of government or other public body or public corporation, including any intergovernmental entity, that has the power to impose or certify a property tax levy.

NEW PARAGRAPH.

2. On or after July 1, 2026, the governing body of a governmental entity shall not issue bonds or other indebtedness payable from an ad valorem property tax levy for the purpose of funding the general operations of the governmental entity or otherwise use proceeds from the sale of bonds or issuance of other indebtedness to fund general operations.

c. This subsection applies to budget years beginning before July 1, 2027.

3. The department of management, following consultation with the city finance committee and the county finance committee, may adopt rules under chapter 17A for governmental entities to implement this section.

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21. Section 257.15, subsections 2 and 3, Code 2026, are amended to read as follows:

2. Property tax adjustment aid for 1992-1993 and succeeding years beginning before 2027-2028. For the budget year beginning July 1, 1992, and succeeding budget years beginning before July 1, 2027, the department of education shall pay property tax adjustment aid to a school district equal to the amount paid to the district for the base year less an amount equal to the product of the percent by which the taxable valuation in the district increased, if the taxable valuation increased, from January 1 of the year prior to the base year to January 1 of the base year and the property tax adjustment aid. The department of management shall adjust the rate of the additional property tax accordingly and notify the department of education of the amount of aid to be paid to each district from moneys appropriated for property tax adjustment aid.

3. Property tax adjustment aid appropriation. There is appropriated from the general fund of the state to the department of education, for each fiscal year beginning before July 1, 2027, an amount necessary to pay property tax adjustment aid to school districts under this section. Property tax adjustment aid shall be paid to school districts in the manner provided in section 257.16.

22. EFFECTIVE DATE. The following takes effect January 1, 2027: The section of this division of this Act amending section 312.2.

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22. Section 257.15, subsection 4, paragraph a, subparagraph (1), subparagraph division (d), Code 2026, is amended to read as follows:

(d) For the budget year beginning July 1, 2009, and succeeding budget years beginning before July 1, 2027, twenty-four million dollars.

23. APPLICABILITY. The following applies to fiscal years beginning on or after July 1, 2027: The section of this division of this Act amending section 312.2. DIVISION IV FIRSTHOME IOWA ACCOUNTS

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24. Section 12G.2, Code 2026, is amended by adding the following new subsection:

23. Section 257.15, subsection 4, paragraph b, Code 2026, is amended to read as follows:

NEW SUBSECTION.

b. After For fiscal years beginning before July 1, 2026, after lowering all school district adjusted additional property tax levy rates to the statewide maximum adjusted additional property tax levy rate under paragraph “a”, the department of management shall use any remaining funds at the end of the calendar year to further lower additional property taxes by increasing for the budget year beginning the following July 1, the regular program foundation base per pupil percentage under section 257.1. Moneys used pursuant to this paragraph shall supplant an equal amount of the appropriation made from the general fund of the state pursuant to section 257.16 that represents the increase in state foundation aid. Any moneys remaining at the conclusion of the fiscal year beginning July 1, 2025, shall be transferred by the department of management for deposit in the general fund of the state.

6. Create strategies for coordination of the program with the FirstHome Iowa program trust established in chapter 12L.

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25.

NEW SECTION. 12L.1 FirstHome Iowa program —— purpose and definitions.

1. The general assembly finds that the general welfare and well-being of the state are directly related to homeownership of the citizens of the state, and that a vital and valid public purpose is served by the creation and implementation of programs which encourage and make possible the attainment of homeownership by the greatest number of citizens of the state. The general welfare of the citizens of the state will be enhanced by establishing a FirstHome Iowa program which allows citizens of the state to invest money in a public trust for future application to the payment of qualified homebuyer expenses. The creation of the means of encouragement for citizens to invest in such a program represents the carrying out of a vital and valid public purpose. In order to make available to the citizens of the state an opportunity to fund future first-time homeownership, it is necessary that a public trust be established in which moneys may be invested for future use.

2. As used in this chapter, unless the context otherwise requires:

a. “Administrative fund” means the administrative fund established under section 12L.4.

b. “Beneficiary” means the individual designated by a participation agreement to benefit from advance payments of qualified homebuyer expenses on behalf of the beneficiary.

c. “First-time homebuyer” means an individual who is a resident of Iowa and who does not own, either individually or jointly, a single-family or multifamily residence, and who has not previously owned or purchased, either individually or jointly, a single-family or multifamily residence prior to the date of the qualified purchase for which the eligible home costs are paid or reimbursed from an account.

d. “FirstHome Iowa program trust” or “trust” means the trust created under section 12L.2.

e. “FirstHome Iowa program trust account” or “account” means an account within the trust that was established for the purpose of paying or reimbursing a beneficiary’s eligible qualified homebuyer expenses in connection with a qualified purchase.

f. “Individual” means a natural person.

g. “Participant” means an individual, individual’s legal representative, trust, or estate that has entered into a participation agreement under this chapter, either individually or jointly with the individual’s spouse, for the advance payment of qualified homebuyer expenses on behalf of a beneficiary.

h. “Participation agreement” means an agreement between a participant and the trust entered into under this chapter.

i. “Program fund” means the program fund established under section 12L.4.

j. “Qualified homebuyer expenses” means any of the following:

(1) A down payment or closing costs for the qualified purchase of a single-family residence in Iowa that is to be the homestead, as defined in section 425.11, of the beneficiary if such beneficiary is a first-time homebuyer with respect to such purchase.

(2) A cost, fee, tax, or payment incurred by, or charged or assigned to, a beneficiary as part of the purchase under subparagraph (1) and listed on the statement of receipts and disbursements for the sale, including any statement prescribed by 12 C.F.R. §1026.38, as amended.

(3) Any United States veterans administration funding fee incurred by, or charged or assigned to, a beneficiary in connection with a veterans administration home loan guaranty program.

24. Section 257.16A, subsections 2 and 3, Code 2026, are amended to read as follows:

k. “Qualified purchase” means the purchase of a single-family residence in Iowa by the account’s beneficiary for which the account’s beneficiary will use as a homestead, as defined in section 425.11, one year or more after the date the participant first opened the account.

2. There For each fiscal year beginning before July 1, 2027, there is appropriated annually all moneys in the fund to the department of management for purposes of section 257.15, subsection 4.

l. “Resident” means the same as defined in section 422.4.

3. Notwithstanding section 8.33, any moneys remaining in the property tax equity and relief fund at the end of a fiscal year shall not revert to any other fund but shall remain in the property tax equity and relief fund for use as provided in this section for the following fiscal year. However, at the end of the fiscal year beginning July 1, 2026, any moneys remaining in the property tax equity and relief fund shall be transferred for deposit into either the secure an advanced vision for education fund or the general fund of the state based on the fund from which the moneys were received.

m. “Single-family residence” means a single-family residence owned and occupied by a beneficiary as the beneficiary’s homestead within the meaning of section 425.1, including but not limited to a manufactured home, mobile home, condominium unit, or cooperative.

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26.

NEW SECTION. 12L.2 Creation of FirstHome Iowa program trust. A FirstHome Iowa program trust is created. The treasurer of state is the trustee of the trust, and has all powers necessary to carry out and effectuate the purposes, objectives, and provisions of this chapter pertaining to the trust, including the power to do all of the following:

1. Make and enter into contracts necessary for the administration of the trust created under this chapter.

2. Enter into agreements with any financial institution, the state, or any federal or other state agency, or other entity as required to implement this chapter.

3. Carry out the duties and obligations of the trust pursuant to this chapter.

4. Accept any grants, gifts, legislative appropriations, and other moneys from the state, any unit of federal, state, or local government, or any other person, firm, partnership, or corporation which the treasurer of state shall deposit into the administrative fund or the program fund.

5. Carry out studies and projections so the treasurer of state may advise participants regarding present and estimated future qualified homebuyer expenses and levels of financial participation in the trust required in order to enable participants to achieve their qualifying purchase objectives.

6. Participate in any federal, state, or local governmental program for the benefit of the trust.

7. Procure insurance against any loss in connection with the property, assets, or activities of the trust.

8. Enter into participation agreements with participants.

9. Make payments to or on behalf of beneficiaries for qualified homebuyer expenses pursuant to participation agreements.

10. Make refunds to participants upon the termination of participation agreements, and partial nonqualified distributions to participants, pursuant to the provisions, limitations, and restrictions set forth in this chapter.

11. Invest moneys from the program fund in any investments which are determined by the treasurer of state to be appropriate.

12. Engage investment advisors, if necessary, to assist in the investment of trust assets.

13. Contract for goods and services and engage personnel as necessary, including consultants, actuaries, managers, legal counsel, and auditors for the purpose of rendering professional, managerial, and technical assistance and advice to the treasurer of state regarding trust administration and operation.

14. Establish, impose, and collect administrative fees and charges in connection with transactions of the trust for deposit in the administrative fund and provide for reasonable service charges.

25. Section 257.16B, subsection 1, Code 2026, is amended to read as follows:

15. Administer the funds of the trust.

1. For each fiscal year beginning on or after July 1, 2023, but before July 1, 2027, there is appropriated from the general fund of the state to the department of education an amount necessary to make all school district property tax replacement payments under this section, as calculated in subsection 2.

16. Adopt rules pursuant to chapter 17A for the administration of the trust.

Sec.

27.

NEW SECTION. 12L.3 Participation agreements for trust. The trust may enter into participation agreements with participants on behalf of beneficiaries pursuant to the following terms and agreements:

1. Each participation agreement may require a participant to agree to invest a specific amount of money in the trust for a specific period of time for the benefit of a specific beneficiary. A participant shall not be required to make an annual contribution on behalf of a beneficiary. The maximum contribution that may be deducted for Iowa income tax purposes shall be the amount contributed by the participant during the applicable tax year, not to exceed five thousand five hundred dollars per beneficiary per year adjusted annually to reflect increases in the consumer price index.

2. The execution of a participation agreement by the trust shall not guarantee in any way that qualified homebuyer expenses will be equal to projections and estimates provided by the trust or that the beneficiary named in any participation agreement will qualify for a mortgage, home loan, or other forms of credit for a qualified purchase.

3.

a. A beneficiary under a participation agreement may be changed as permitted under rules adopted by the treasurer of state upon written request of the participant as long as the substitute beneficiary is eligible for participation.

b. Participation agreements may otherwise be freely amended throughout their terms in order to enable participants to increase or decrease the level of participation, change the designation of beneficiaries, and carry out similar matters as authorized by rule.

4. Each participation agreement shall provide that the participation agreement may be canceled upon the terms and conditions, and upon payment of applicable fees and costs set forth and contained in the rules adopted by the treasurer of state.

5. A participant may designate a successor in accordance with rules adopted by the treasurer of state. The designated successor shall succeed to the ownership of the account in the event of the death of the participant. In the event a participant dies and has not designated a successor to the account, the following criteria shall apply:

26. Section 257.16D, subsection 2, paragraph a, Code 2026, is amended to read as follows:

a. The beneficiary of the account, if eighteen years of age or older, shall become the owner of the account as well as remain the beneficiary upon filing the appropriate forms in accordance with rules adopted by the treasurer of state.

a. There For fiscal years beginning before July 1, 2027, there is appropriated annually from the fund to the department of management an amount necessary to make all foundation base supplement payments under this section. The department of management shall calculate each school district’s foundation base supplement payment based on the distribution methodology under paragraph “b”.

b. If the beneficiary of the account is under the age of eighteen, account ownership shall be transferred to the first surviving parent or other legal guardian of the beneficiary to file the appropriate forms in accordance with rules adopted by the treasurer of state.

Sec.

28.

NEW SECTION. 12L.4 FirstHome Iowa program and administrative funds —— investment and payments.

1.

a. The treasurer of state shall segregate moneys received by the trust into two funds: the FirstHome Iowa program fund and the administrative fund to be used for administration of the program.

b. All moneys paid by participants in connection with participation agreements shall be deposited as received into separate accounts within the program fund.

c. Contributions to the trust made by participants may only be made in the form of cash.

27. Section 257.16D, subsection 3, Code 2026, is amended to read as follows:

d. A participant or beneficiary may, directly or indirectly, direct the investment of any contributions to the trust or any earnings thereon no more than four times in a calendar year.

3. Notwithstanding section 8.33, any moneys remaining in the foundation base supplement fund at the end of a fiscal year shall not revert to any other fund but shall remain in the foundation base supplement fund for use as provided in this section for the following fiscal year. However, at the end of the fiscal year beginning July 1, 2026, any moneys remaining in the foundation base supplement fund shall be transferred for deposit in the secure an advanced vision for education fund.

2. Moneys accrued by participants in the program fund of the trust may be used for payments to or on behalf of a beneficiary for qualified homebuyer expenses.

Sec.

28. Section 257.31, Code 2026, is amended by adding the following new subsection:

NEW SUBSECTION.

19.

a. The board of directors of each school district with an unexpended fund balance in the district’s management levy fund under section 298A.3 at the conclusion of the fiscal year beginning July 1, 2025, that exceeds an amount equal to the total expenditures from the district’s management levy fund for the fiscal year beginning July 1, 2025, shall certify such unexpended fund balance and expenditure amounts, including any reserved or designated amounts in the fund and the purposes therefor, to the school budget review committee by November 15, 2026. The committee shall prescribe the form for such certifications.

29.

b. The committee shall conduct a review of the unexpended fund balances and expenditures of school district management levy funds certified under paragraph “a”. The committee shall consult with boards of directors of school districts and other relevant persons to determine the appropriateness of establishing district management levy fund unexpended fund balance limitations. By February 1, 2027, the committee shall make recommendations to the general assembly for establishing district management levy fund unexpended fund balance limitations for fiscal years beginning on or after July 1, 2028, including recommendations for limitations based on a percentage of the district’s management levy fund expenditures and recommendations for management levy limitations and expenditure requirements for excess funds.

NEW SECTION. 12L.5 Cancellation of agreements. A participant may cancel a participation agreement at will. Upon cancellation of a participation agreement, a participant shall be entitled to the return of the participant’s account balance.

Sec.

30.

29. Section 298.2, subsection 1, Code 2026, is amended to read as follows:

NEW SECTION. 12L.6 Ownership of payments and investment income —— transfer of ownership rights.

1.

a. A participant retains ownership of all payments made under a participation agreement up to the date of utilization for payment of qualified homebuyer expenses for the beneficiary.

b. All income derived from the investment of the payments made by the participant shall be considered to be held in trust for the benefit of the beneficiary.

2. In the event the FirstHome Iowa program is terminated prior to payment of qualified homebuyer expenses for the beneficiary, the participant is entitled to a refund of the participant’s account balance.

3. Any amounts which may be paid to any person or persons pursuant to the FirstHome Iowa program trust but which are not listed in this section are owned by the trust.

a. A physical plant and equipment levy of not exceeding one dollar and sixty-seven eighteen cents per thousand dollars of assessed valuation in the district is established except as otherwise provided in this subsection. The physical plant and equipment levy consists of the regular physical plant and equipment levy of not exceeding thirty-three twenty-four cents per thousand dollars of assessed valuation in the district and a voter-approved physical plant and equipment levy of not exceeding one dollar and thirty-four ninety-four cents per thousand dollars of assessed valuation in the district. However, the voter-approved physical plant and equipment levy may consist of a combination of a physical plant and equipment property tax levy and a physical plant and equipment income surtax as provided in subsection 4 with the maximum amount levied and imposed limited to an amount that could be raised by a one dollar and thirty-four ninety-four cent property tax levy. A voter-approved physical plant and equipment levy approved prior to the effective date of this division of this Act shall not exceed a rate that is seventy percent of the rate approved at election.

4. A participant may transfer ownership rights to another participant or may transfer funds to another account under the trust. The transfer shall be made and the property distributed in accordance with rules adopted by the treasurer of state or with the terms of the participation agreement.

b. For school budget years beginning on or after July 1, 2015 2027, a school district may by resolution of the board of directors adopted prior to April 30 preceding the budget year impose a physical plant and equipment levy at a rate in excess of the levy rate limitations under paragraph “a” if the board has refunded or refinanced a loan agreement entered into under section 297.36 and such refunding or refinancing complies with the maturity period authorized under section 297.36, subsection 1, paragraph “c”, and results in a lower amount of interest on the amount of the loan agreement. However, the rate imposed by a school district under this paragraph shall not exceed the rate imposed during the budget year in which the loan agreement was refunded or refinanced or seventy percent of such levy rate if the refunding or refinancing occurred in the budget year beginning July 1, 2026. Authorization to exceed the levy rate limitations of paragraph “a” shall terminate upon the maturity of the loan agreement after refunding or refinancing. Upon adoption of the resolution under this paragraph “b”, the board shall comply with the requirements of section 297.36, subsection 1, paragraph “b”.

5. A participant shall not be entitled to utilize any interest in the trust as security for a loan.

Sec.

31.

NEW SECTION. 12L.7 Annual audited financial report to governor and general assembly.

1.

a. The treasurer of state shall submit an annual audited financial report, prepared in accordance with generally accepted accounting principles, on the operations of the trust by November 1 to the governor and the general assembly.

b. The annual audit shall be made either by the auditor of state or by an independent certified public accountant designated by the auditor of state and shall include direct and indirect costs attributable to the use of outside consultants, independent contractors, and any other persons who are not state employees.

2. The annual audit shall be supplemented by all of the following information prepared by the treasurer of state:

a. Any related studies or evaluations prepared in the preceding year.

b. A summary of the benefits provided by the trust including the number of participants and beneficiaries in the trust.

30. Section 298.2, subsection 2, Code 2026, is amended by striking the subsection.

c. Any other information which is relevant in order to make a full, fair, and effective disclosure of the operations of the trust.

Sec.

32.

31. Section 298.4, subsection 1, unnumbered paragraph 1, Code 2026, is amended to read as follows: The Unless prohibited by subsection 1A, paragraph “a”, the board of directors of a school district may certify for levy by April 30 of a school year, a tax on all taxable property in the school district for a district management levy, subject to the limitations in subsection 1A, paragraph “b”. The revenue from the tax levied in this section shall be placed in the district management levy fund of the school district. The district management levy shall be expended only for the following purposes:

NEW SECTION. 12L.8 Tax considerations. State income tax treatment of the FirstHome Iowa program trust shall be as provided in section 422.7, subsections 46 and 47.

Sec.

32. Section 298.4, Code 2026, is amended by adding the following new subsection:

NEW SUBSECTION. 1A.

a.

(1) For the fiscal year beginning July 1, 2028, if a school district’s unexpended fund balance, as defined in section 257.2, of the district’s management levy fund is equal to or exceeds one hundred eighty percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year, the board of directors shall not certify a levy under this section for the fiscal year.

(2) For the fiscal year beginning July 1, 2029, if a school district’s unexpended fund balance, as defined in section 257.2, of the district’s management levy fund is equal to or exceeds one hundred seventy-five percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year, the board of directors shall not certify a levy under this section for the fiscal year.

(3) For the fiscal year beginning July 1, 2030, if a school district’s unexpended fund balance, as defined in section 257.2, of the district’s management levy fund is equal to or exceeds one hundred seventy percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year, the board of directors shall not certify a levy under this section for the fiscal year.

(4) For the fiscal year beginning July 1, 2031, if a school district’s unexpended fund balance, as defined in section 257.2, of the district’s management levy fund is equal to or exceeds one hundred sixty-five percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year, the board of directors shall not certify a levy under this section for the fiscal year.

(5) For the fiscal year beginning July 1, 2032, and each succeeding fiscal year, if a school district’s unexpended fund balance, as defined in section 257.2, of the district’s management levy fund is equal to or exceeds one hundred sixty percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year, the board of directors shall not certify a levy under this section for the fiscal year.

b.

(1) For the fiscal year beginning July 1, 2028, if a school district is not prohibited from certifying a levy pursuant to paragraph “a”, the maximum amount that the board of directors may certify for levy under this section shall be an amount equal to the remainder of one hundred eighty percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year minus the district’s management levy fund unexpended fund balance for the fiscal year preceding the base year.

33.

(2) For the fiscal year beginning July 1, 2029, if a school district is not prohibited from certifying a levy pursuant to paragraph “a”, the maximum amount that the board of directors may certify for levy under this section shall be an amount equal to the remainder of one hundred seventy-five percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year minus the district’s management levy fund unexpended fund balance for the fiscal year preceding the base year.

NEW SECTION. 12L.9 Property rights to assets in trust.

(3) For the fiscal year beginning July 1, 2030, if a school district is not prohibited from certifying a levy pursuant to paragraph “a”, the maximum amount that the board of directors may certify for levy under this section shall be an amount equal to the remainder of one hundred seventy percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year minus the district’s management levy fund unexpended fund balance for the fiscal year preceding the base year.

1. The assets of the trust shall at all times be preserved, invested, and expended solely and only for the purposes of the trust and shall be held in trust for the participants and beneficiaries.

(4) For the fiscal year beginning July 1, 2031, if a school district is not prohibited from certifying a levy pursuant to paragraph “a”, the maximum amount that the board of directors may certify for levy under this section shall be an amount equal to the remainder of one hundred sixty-five percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year minus the district’s management levy fund unexpended fund balance for the fiscal year preceding the base year.

2. No property rights in the trust shall exist in favor of the state.

(5) For the fiscal year beginning July 1, 2032, and each succeeding fiscal year, if a school district is not prohibited from certifying a levy pursuant to paragraph “a”, the maximum amount that the board of directors may certify for levy under this section shall be an amount equal to the remainder of one hundred sixty percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year minus the district’s management levy fund unexpended fund balance for the fiscal year preceding the base year.

3. The assets of the trust shall not be transferred or used by the state for any purposes other than the purposes of the trust.

Sec.

33. Section 298.18, subsection 1, paragraph d, Code 2026, is amended to read as follows:

d.

(1) The amount estimated and certified to apply on principal and interest for any one year may exceed two dollars and seventy one dollar and eighty-nine cents per thousand dollars of assessed value by the amount approved by the voters of the school corporation, but not exceeding four two dollars and five eighty-four cents per thousand dollars of the assessed value of the taxable property within any school corporation, provided that the registered voters of such school corporation have first approved such increased amount at an election held on a date specified in section 39.2, subsection 4, paragraph “c”. Amounts approved at election before the effective date of this division of this Act shall not exceed a rate that is seventy percent of the rate approved at election.

34.

(2) The levy rate limitations under this paragraph shall not apply to the payment of general obligation bonds approved for issuance at an election held on or before November 4, 2025, that are sold on or after May 1, 2026, and the payment of such bonds shall be subject to the levy rate limitations under section 298.18, subsection 1, paragraph “d”, Code 2026.

NEW SECTION. 12L.10 Construction. This chapter shall be construed liberally in order to effectuate its purpose.

Sec.

35. Section 232D.503, subsection 6, Code 2026, is amended by adding the following new paragraph:

34. Section 423F.2, subsection 3, paragraph b, subparagraph (1), Code 2026, is amended to read as follows:

NEW PARAGRAPH.

(1) Prior to distribution of moneys in the secure an advanced vision for education fund to school districts, an amount equal to the equity transfer amount for the fiscal year minus the foundation base transfer amount for the fiscal year shall be distributed and credited to the property tax equity and relief fund created in section 257.16A, an amount equal to the foundation base transfer amount shall be distributed and credited to the foundation base supplement fund created in section 257.16D, general fund of the state to be used for foundation aid resulting from the increase in the regular program foundation base per pupil to one hundred percent of the regular program state cost per pupil and an amount equal to the career academy transfer amount for the fiscal year shall be distributed and credited to the career academy fund created in section 257.51.

g. A FirstHome Iowa program trust account established for the minor pursuant to chapter 12L.

Sec.

36. Section 422.7, Code 2026, is amended by adding the following new subsections:

NEW SUBSECTION.

46.

a. Subtract the contribution that may be deducted for Iowa income tax purposes as a participant in the FirstHome Iowa program trust pursuant to section 12L.3, subsection 1. For purposes of this paragraph, a participant who makes a contribution on or before the date prescribed in section 422.21 for making and filing an individual income tax return, excluding extensions, or the date for making and filing an individual income tax return determined by the director pursuant to an order issued under section 421.17, subsection 30, may elect to be deemed to have made the contribution on the last day of the preceding calendar year. The director, after consultation with the treasurer of state, shall prescribe by rule the manner and method by which a participant may make an election authorized by the preceding sentence.

b. Add the amount resulting from the cancellation of a participation agreement refunded to the taxpayer as a participant in the FirstHome Iowa program trust to the extent previously deducted as a contribution to the trust.

c. Add, to the extent previously deducted as a contribution to the trust, the amount resulting from a withdrawal or transfer made by the taxpayer from the FirstHome Iowa program trust for purposes other than the payment of qualified homebuyer expenses.

NEW SUBSECTION.

35. Section 423F.2, subsection 3, paragraph b, subparagraph (3), Code 2026, is amended by striking the subparagraph.

47. Subtract, to the extent included, income from interest and earnings received from the FirstHome Iowa program trust created in chapter 12L.

Sec.

37. Section 541B.4, Code 2026, is amended by adding the following new subsections:

NEW SUBSECTION.

5. Withdrawal for deposit into FirstHome Iowa program trust account. First-time homebuyer account balances under this chapter may be withdrawn without penalty or taxation in this state if such withdrawal is deposited in an account within the FirstHome Iowa program trust under chapter 12L within thirty days of the withdrawal. The treasurer of state may by rule provide for the direct transfer of moneys within an account under this chapter to a FirstHome Iowa program trust account and such transfer shall not be subject to penalty or taxation in this state.

36. Section 423F.3, subsection 1, paragraph a, Code 2026, is amended to read as follows:

NEW SUBSECTION.

a. Reduction of the bond levies levy under sections section 298.18 and 298.18A and all other debt levies.

6. No new accounts. New accounts shall not be established under this chapter on or after July 1, 2026.

Sec.

38. Section 627.6, Code 2026, is amended by adding the following new subsection:

NEW SUBSECTION.

18. The debtor’s interest, whether as participant or beneficiary, in contributions and assets, including the accumulated earnings and market increases in value, held in an account in the FirstHome Iowa program trust organized under chapter 12L.

Sec.

39. Section 633.108, subsection 2, Code 2026, is amended by adding the following new paragraph:

NEW PARAGRAPH.

e. A FirstHome Iowa program trust account established for the minor pursuant to chapter 12L.

Sec.

40. Section 633.555, subsection 1, Code 2026, is amended by adding the following new paragraph:

NEW PARAGRAPH.

f. An account owner or participant under a FirstHome Iowa program trust account established for the protected person pursuant to chapter 12L.

Sec.

41. Section 633.678, subsection 1, Code 2026, is amended by adding the following new paragraph:

NEW PARAGRAPH.

f. An account owner or participant under a FirstHome Iowa program trust account established for the protected person pursuant to chapter 12L.

Sec.

42. Section 633.681, subsection 1, Code 2026, is amended by adding the following new paragraph:

NEW PARAGRAPH.

e. An account owner or participant under a FirstHome Iowa program trust account established for the protected person pursuant to chapter 12L.

Sec.

43. APPLICABILITY. The following applies to contributions made under chapter 12L on or after July 1, 2026, for tax years ending on or after that date: The section of this division of this Act enacting section 422.7, subsections 46 and 47. DIVISION V SCHOOL TAXES

Sec.

37. 44. Section 425A.3, 257.3, subsection 1, paragraph a, Code 2026, is amended to read as follows:

a.

(1) Except as provided in subsections 2 and 3, a school district shall cause to be levied each budget year beginning before July 1, 2028, for the school general fund, a foundation property tax equal to five dollars and forty cents per thousand dollars of assessed valuation on all taxable property in the district. The county auditor shall spread the foundation levy over all taxable property in the district.

(2) Except as provided in subsections 2 and 3, a school district shall cause to be levied for the budget year beginning July 1, 2028, for the school general fund, a foundation property tax equal to five dollars and ten cents per thousand dollars of assessed valuation on all taxable property in the district. The county auditor shall spread the foundation levy over all taxable property in the district.

(3) Except as provided in subsections 2 and 3, a school district shall cause to be levied for the budget year beginning July 1, 2029, and each succeeding budget year, for the school general fund, a foundation property tax equal to four dollars and ninety cents per thousand dollars of assessed valuation on all taxable property in the district. The county auditor shall spread the foundation levy over all taxable property in the district.

Sec.

45. Section 257.3, subsection 2, paragraphs a and b, Code 2026, are amended to read as follows:

a. Notwithstanding subsection 1, a reorganized school district shall cause a foundation property tax of four dollars and forty cents at a rate equal to one dollar per thousand dollars of assessed valuation less than the rate under subsection 1, paragraph “a”, for the applicable budget year to be levied on all taxable property which, in the year preceding a reorganization, was within a school district affected by the reorganization as defined in section 275.1, or in the year preceding a dissolution was a part of a school district that dissolved if the dissolution proposal has been approved by the director of the department of education pursuant to section 275.55.

b. In succeeding school years, the foundation property tax levy on that portion shall be increased to the rate of four dollars and ninety fifty cents per thousand dollars of assessed valuation less than the rate applicable to the budget year under subsection 1, paragraph “a”, for the first succeeding year, five dollars and fifteen twenty-five cents per thousand dollars of assessed valuation less than the rate applicable to the budget year under subsection 1, paragraph “a”, for the second succeeding year, and five dollars and forty cents per thousand dollars of assessed valuation the rate applicable to the budget year under subsection 1, paragraph “a”, for the third succeeding year and each year thereafter.

Sec.

46. Section 425A.3, subsection 1, Code 2026, is amended to read as follows:

1. The family farm tax credit fund shall be apportioned each year in the manner provided in this chapter so as to give a credit against the tax on each eligible tract of agricultural land within the several school districts of the state in which the levy for the general school fund exceeds five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”. The amount of the credit on each eligible tract of agricultural land shall be the amount the tax levied for the general school fund exceeds the amount of tax which would be levied on each eligible tract of agricultural land were the levy for the general school fund five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”, for the previous year. However, in the case of a deficiency in the family farm tax credit fund to pay the credits in full, the credit on each eligible tract of agricultural land in the state shall be proportionate and applied as provided in this chapter.

Sec.

38. 47. Section 425A.5, Code 2026, is amended to read as follows: 425A.5 Computation by county auditor. The family farm tax credit allowed each year shall be computed as follows: On or before April 1, the county auditor shall list by school districts all tracts of agricultural land which are entitled to credit, the taxable value for the previous year, the budget from each school district for the previous year, and the tax rate determined for the general fund of the school district in the manner prescribed in section 444.3 for the previous year, and if the tax rate is in excess of five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”, the auditor shall multiply the tax levy which is in excess of five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”, by the total taxable value of the agricultural land entitled to credit in the school district, and on or before April 1, certify the total amount of credit and the total number of acres entitled to the credit to the department of revenue.

Sec.

39. 48. Section 426.3, Code 2026, is amended to read as follows: 426.3 Where credit given. The agricultural land credit fund shall be apportioned each year in the manner hereinafter provided so as to give a credit against the tax on each tract of agricultural lands within the several school districts of the state in which the levy for the general school fund exceeds five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”; the amount of such credit on each tract of such lands shall be the amount the tax levied for the general school fund exceeds the amount of tax which would be levied on said tract of such lands were the levy for the general school fund five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”, for the previous year, except in the case of a deficiency in the agricultural land credit fund to pay said credits in full, in which case the credit on each eligible tract of such lands in the state shall be proportionate and shall be applied as hereinafter provided.

Sec.

40. 49. Section 426.6, subsection 1, Code 2026, is amended to read as follows:

1. The agricultural land tax credit allowed each year shall be computed as follows: On or before April 1, the county auditor shall list by school districts all tracts of agricultural lands which are entitled to credit, together with the taxable value for the previous year, together with the budget from each school district for the previous year, and the tax rate determined for the general fund of the district in the manner prescribed in section 444.3 for the previous year, and if such tax rate is in excess of five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”, the auditor shall multiply the tax levy which is in excess of five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”, by the total taxable value of the agricultural lands entitled to credit in the district, and on or before April 1, certify the amount to the department of revenue.

Sec.

41. REPEAL. Section 298.18A, Code 2026, is repealed.

50. ADJUSTMENT OF CALCULATIONS. For property tax credits under chapters 425A and 426 for property taxes due and payable in the fiscal year beginning July 1, 2027, the tax rate determined for the general fund of the school district in the manner prescribed in section 444.3 for the previous year shall be determined using the appropriate property tax levy rate under section 257.3, as amended in this division of this Act.

Sec.

42. ADJUSTMENT OF CALCULATIONS. For property tax credits under chapters 425A and 426 for property taxes due and payable in the fiscal year beginning July 1, 2027, the tax rate determined for the general fund of the school district in the manner prescribed in section 444.3 for the previous year shall be determined using the appropriate property tax levy rate under section 257.3, as amended in this division of this Act.

51. APPLICABILITY. This division of this Act applies to fiscal years and school budget years beginning on or after July 1, 2027. DIVISION VI SECURE AN ADVANCED VISION FOR EDUCATION FUND —— EQUITY TRANSFER PERCENTAGE —— FUTURE REPEAL

Sec.

52. Section 423.2, subsection 12, Code 2026, is amended to read as follows:

43. EFFECTIVE DATE. Except for the section of this division of this Act amending section 257.31, this division of this Act takes effect January 1, 2027.

12. The sales tax rate of six percent is reduced to five percent on January 1, 2051 2071.

Sec.

53. Section 423.2A, subsection 2, paragraph c, Code 2026, is amended to read as follows:

44. APPLICABILITY. Except for the section of this division of this Act amending section 257.31, this division of this Act applies to fiscal years and school budget years beginning on or after July 1, 2027. DIVISION IV PROPERTY CLASSIFICATIONS, VALUATIONS, AND ASSESSMENT LIMITATIONS

c. Transfer one-sixth of the remaining revenues to the secure an advanced vision for education fund created in section 423F.2. This paragraph “c” is repealed January 1, 2051 2071.

Sec.

54. Section 423.5, subsection 4, Code 2026, is amended to read as follows:

45. Section 386.8, Code 2026, is amended to read as follows: 386.8 Operation tax. A city may establish a self-supported improvement district operation fund, and may certify taxes not to exceed the rate limitation as established in the ordinance creating the district, or any amendment thereto, each year to be levied for the fund against all of the property in the district, for the purpose of paying the administrative expenses of the district, which may include but are not limited to administrative personnel salaries, a separate administrative office, planning costs including consultation fees, engineering fees, architectural fees, and legal fees and all other expenses reasonably associated with the administration of the district and the fulfilling of the purposes of the district. The taxes levied for this fund may also be used for the purpose of paying maintenance expenses of improvements or self-liquidating improvements for a specified length of time with one or more options to renew if such is clearly stated in the petition which requests the council to authorize construction of the improvement or self-liquidating improvement, whether or not such petition is combined with the petition requesting creation of a district. Parcels of property which are assessed as residential property for property tax purposes are exempt from the tax levied under this section except residential properties within a duly designated historic district or property classified as residential multiresidential property under section 441.21, subsection 14 13, paragraph “a”, subparagraph (6) (5). A tax levied under this section is not subject to the levy limitation in section 384.1.

4. The use tax rate of six percent is reduced to five percent on January 1, 2051 2071.

Sec.

55. Section 423.43, subsection 1, paragraph b, Code 2026, is amended to read as follows:

46. Section 386.9, Code 2026, is amended to read as follows: 386.9 Capital improvement tax. A city may establish a capital improvement fund for a district and may certify taxes, not to exceed the rate established by the ordinance creating the district, or any subsequent amendment thereto, each year to be levied for the fund against all of the property in the district, for the purpose of accumulating moneys for the financing or payment of a part or all of the costs of any improvement or self-liquidating improvement. However, parcels of property which are assessed as residential property for property tax purposes are exempt from the tax levied under this section except residential properties within a duly designated historic district or property classified as residential multiresidential property under section 441.21, subsection 14 13, paragraph “a”, subparagraph (6) (5). A tax levied under this section is not subject to the levy limitations in section 384.1 or 384.7.

b. Subsequent to the deposit into the general fund of the state and after the transfer of such revenues collected under chapter 423B, the department shall transfer one-sixth of such remaining revenues to the secure an advanced vision for education fund created in section 423F.2. This paragraph is repealed January 1, 2051 2071.

Sec.

56. Section 423F.2, subsection 3, paragraph b, subparagraph (2), subparagraph division (b), Code 2026, is amended to read as follows:

47. Section 386.10, Code 2026, is amended to read as follows: 386.10 Debt service tax. A city shall establish a self-supported municipal improvement district debt service fund whenever any self-supported municipal improvement district bonds are issued and outstanding, other than revenue bonds, and shall certify taxes to be levied against all of the property in the district for the debt service fund in the amount necessary to pay interest as it becomes due and the amount necessary to pay, or to create a sinking fund to pay, the principal at maturity of all self-supported municipal improvement district bonds as authorized in section 386.11, issued by the city. However, parcels of property which are assessed as residential property for property tax purposes at the time of the issuance of the bonds are exempt from the tax levied under this section until the parcels are no longer assessed as residential property or until the residential properties are designated as a part of a historic district or property classified as residential multiresidential property under section 441.21, subsection 14 13, paragraph “a”, subparagraph (6) (5).

(b) For each fiscal year beginning on or after July 1, 2020, but before July 1, 2026, the equity transfer percentage is equal to the equity transfer percentage for the immediately preceding fiscal year, unless the amount of moneys available in the secure an advanced vision for education fund in the immediately preceding fiscal year equals or exceeds one hundred two percent of the amount of moneys available in the fund for the fiscal year prior to the immediately preceding fiscal year, in which case the equity transfer percentage shall be the equity transfer percentage for the immediately preceding fiscal year plus one percent subject to the limitation in subparagraph division (c).

Sec.

57. Section 423F.2, subsection 3, paragraph b, subparagraph (2), subparagraph division (c), Code 2026, is amended by striking the subparagraph division and inserting in lieu thereof the following:

(c) (i) For the fiscal year beginning July 1, 2026, the equity transfer percentage is twelve and one-half percent.

(ii) For the fiscal year beginning July 1, 2027, the equity transfer percentage is fifteen percent. (iii) For the fiscal year beginning July 1, 2028, the equity transfer percentage is seventeen and one-half percent.

(iv) For the fiscal year beginning July 1, 2029, the equity transfer percentage is twenty-two and one-half percent.

(v) For the fiscal year beginning July 1, 2030, and each fiscal year thereafter, the equity transfer percentage is twenty-five percent.

Sec.

58. Section 423F.6, Code 2026, is amended to read as follows: 423F.6 Repeal. This chapter is repealed January 1, 2051 2071.

Sec.

59. SCHOOL DISTRICT FUNDING RECONCILIATION. For amounts allocated under section 423F.2 for fiscal years beginning on or after July 1, 2026, the department of management shall adjust or reconcile actual amounts to be received by school districts in the fiscal year immediately following the fiscal year during which the revenues were collected. DIVISION VII ELDERLY AND DISABLED PROPERTY TAX CREDIT AND RENT REIMBURSEMENT

Sec.

60. Section 425.24, Code 2026, is amended to read as follows: 425.24 Maximum property tax for purpose of credit or reimbursement. For claimants under section 425.17, subsection 2, paragraph “a”, subparagraphs (1) and (2), and for the calculation under section 425.23, subsection 1, paragraph “c”, subparagraph (1), in any case in which property taxes due or rent constituting property taxes paid for any household exceeds one thousand five hundred dollars, the amount of property taxes due or rent constituting property taxes paid shall be deemed to have been one thousand five hundred dollars for purposes of this subchapter.

Sec.

61. APPLICABILITY.

1. This division of this Act applies to claims under chapter 425, subchapter II, for credits against property taxes due and payable in fiscal years beginning on or after July 1, 2027.

2. This division of this Act applies to claims under chapter 425, subchapter II, for reimbursement for rent constituting property taxes paid in base years beginning on or after January 1, 2026. DIVISION VIII PROPERTY CLASSIFICATIONS AND ASSESSMENT LIMITATIONS

Sec.

62. Section 386.8, Code 2026, is amended to read as follows: 386.8 Operation tax. A city may establish a self-supported improvement district operation fund, and may certify taxes not to exceed the rate limitation as established in the ordinance creating the district, or any amendment thereto, each year to be levied for the fund against all of the property in the district, for the purpose of paying the administrative expenses of the district, which may include but are not limited to administrative personnel salaries, a separate administrative office, planning costs including consultation fees, engineering fees, architectural fees, and legal fees and all other expenses reasonably associated with the administration of the district and the fulfilling of the purposes of the district. The taxes levied for this fund may also be used for the purpose of paying maintenance expenses of improvements or self-liquidating improvements for a specified length of time with one or more options to renew if such is clearly stated in the petition which requests the council to authorize construction of the improvement or self-liquidating improvement, whether or not such petition is combined with the petition requesting creation of a district. Parcels of property which are assessed as residential property for property tax purposes are exempt from the tax levied under this section except residential properties within a duly designated historic district or property classified as residential multiresidential property under section 441.21, subsection 14 13, paragraph “a”, subparagraph (6) (5). A tax levied under this section is not subject to the levy limitation in section 384.1.

Sec.

63. Section 386.9, Code 2026, is amended to read as follows: 386.9 Capital improvement tax. A city may establish a capital improvement fund for a district and may certify taxes, not to exceed the rate established by the ordinance creating the district, or any subsequent amendment thereto, each year to be levied for the fund against all of the property in the district, for the purpose of accumulating moneys for the financing or payment of a part or all of the costs of any improvement or self-liquidating improvement. However, parcels of property which are assessed as residential property for property tax purposes are exempt from the tax levied under this section except residential properties within a duly designated historic district or property classified as residential multiresidential property under section 441.21, subsection 14 13, paragraph “a”, subparagraph (6) (5). A tax levied under this section is not subject to the levy limitations in section 384.1 or 384.7.

Sec.

64. Section 386.10, Code 2026, is amended to read as follows: 386.10 Debt service tax. A city shall establish a self-supported municipal improvement district debt service fund whenever any self-supported municipal improvement district bonds are issued and outstanding, other than revenue bonds, and shall certify taxes to be levied against all of the property in the district for the debt service fund in the amount necessary to pay interest as it becomes due and the amount necessary to pay, or to create a sinking fund to pay, the principal at maturity of all self-supported municipal improvement district bonds as authorized in section 386.11, issued by the city. However, parcels of property which are assessed as residential property for property tax purposes at the time of the issuance of the bonds are exempt from the tax levied under this section until the parcels are no longer assessed as residential property or until the residential properties are designated as a part of a historic district or property classified as residential multiresidential property under section 441.21, subsection 14 13, paragraph “a”, subparagraph (6) (5).

Sec.

48. 65. Section 404.2, subsection 2, paragraph f, Code 2026, is amended to read as follows:

f. A statement specifying whether the revitalization is applicable to none, some, or all of the property assessed as residential, multiresidential, agricultural, commercial, or industrial property within the designated area or a combination thereof and whether the revitalization is for rehabilitation and additions to existing buildings or new construction or both. If revitalization is made applicable only to some property within an assessment classification, the definition of that subset of eligible property must be by uniform criteria which further some planning objective identified in the plan. The city shall state how long it is estimated that the area shall remain a designated revitalization area which time shall be longer than one year from the date of designation and shall state any plan by the city to issue revenue bonds for revitalization projects within the area. For a county, a revitalization area shall include only property which will be used as industrial property, commercial property, multiresidential property, or residential property. However, a county shall not provide a tax exemption under this chapter to commercial property, multiresidential property, or residential property which is located within the limits of a city.

Sec.

49. 66. Section 404.3, subsection 4, paragraph a, Code 2026, is amended by striking the paragraph and inserting in lieu thereof the following:

a. All qualified real estate assessed as any of the following is eligible to receive a one hundred percent exemption from taxation on the actual value added by the improvements:

Sec.

50. 67. Section 404.3A, Code 2026, is amended to read as follows: 404.3A Residential development area exemption. Notwithstanding the schedules provided for in section 404.3, all qualified real estate assessed as residential property or multiresidential property, excluding property classified as residential multiresidential property under section 441.21, subsection 14 13, paragraph “a”, subparagraph (6) (5), in an area designated under section 404.1, subsection 5, is eligible to receive an exemption from taxation on the first seventy-five thousand dollars of actual value added by the improvements. The exemption is for a period of five years.

Sec.

51. 68. Section 404.3D, Code 2026, is amended to read as follows: 404.3D Exemptions for residential and multiresidential property. For revitalization areas established under this chapter on or after July 1, 2024, and for first-year exemption applications for property located in a revitalization area in existence on July 1, 2024, filed on or after July 1, 2024, an exemption authorized under this chapter for property that is residential property or multiresidential property shall not apply to property tax levies imposed by a school district.

Sec.

52. 69. Section 441.21, subsection 1, paragraph b, subparagraph (1), 2, Code 2026, is amended to read as follows:

(1) The actual value of all property subject to assessment and taxation shall be the fair and reasonable market value of such property except as otherwise provided in this section. “Market value” is defined as the fair and reasonable exchange in the year in which the property is listed and valued between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and each being familiar with all the facts relating to the particular property. Sale prices of the property or comparable property in normal transactions reflecting market value, and the probable availability or unavailability of persons interested in purchasing the property, shall be taken into consideration in arriving at its market value. In arriving at market value, sale prices of property in abnormal transactions not reflecting market value shall not be taken into account, or shall be adjusted to eliminate the effect of factors which distort market value, including but not limited to built-to-suit construction, sale-leaseback transactions, leased fee sales, sales to immediate family of the seller between related parties, foreclosure or other forced sales, contract sales, discounted purchase transactions or purchase of adjoining land or other land to be operated as a unit.

2. In the event market value of the property being assessed cannot be readily established in the foregoing manner, then the assessor may determine the value of the property using the other uniform and recognized appraisal methods including its productive and earning capacity, if any, industrial conditions, its cost, physical and functional depreciation and obsolescence and replacement cost, and all other factors which would assist in determining the fair and reasonable market value of the property but the actual value shall not be determined by use of only one such factor. The following shall not be taken into consideration: Special value or use value of the property to its present owner, and the goodwill or value of a business which uses the property as distinguished from the value of the property as property. In addition, for assessment years beginning on or after January 1, 2018, and unless otherwise required for property valued by the department of revenue pursuant to chapters 428, 437, and 438, the assessor shall not take into consideration and shall not request from any person sales or receipts data, expense data, balance sheets, bank account information, or other data related to the financial condition of a business operating in whole or in part on the property if the property is both classified as commercial or industrial property and owned and used by the owner of the business. However, in assessing property that is rented or leased to low-income individuals and families as authorized by section 42 of the Internal Revenue Code, as amended, and which section limits the amount that the individual or family pays for the rental or lease of units in the property, the assessor shall, unless the owner elects to withdraw the property from the assessment procedures for section 42 property, use the productive and earning capacity from the actual rents received as a method of appraisal and shall take into account the extent to which that use and limitation reduces the market value of the property. The assessor shall not consider any tax credit equity or other subsidized financing as income provided to the property in determining the assessed value. The property owner shall notify the assessor when property is withdrawn from section 42 eligibility under the Internal Revenue Code or if the owner elects to withdraw the property from the assessment procedures for section 42 property under this subsection. The property shall not be subject to section 42 assessment procedures for the assessment year for which section 42 eligibility is withdrawn or an election is made. This notification must be provided to the assessor no later than March 1 of the assessment year or the owner will be subject to a penalty of five hundred dollars for that assessment year. The penalty shall be collected at the same time and in the same manner as regular property taxes. An election to withdraw from the assessment procedures for section 42 property is irrevocable. Property that is withdrawn from the assessment procedures for section 42 property shall be classified and assessed as residential multiresidential property unless the property otherwise fails to meet the requirements of subsection 14 13. Upon adoption of uniform rules by the department of revenue or succeeding authority covering assessments and valuations of such properties, the valuation on such properties shall be determined in accordance with such rules and in accordance with forms and guidelines contained in the real property appraisal manual prepared by the department as updated from time to time for assessment purposes to assure uniformity, but such rules, forms, and guidelines shall not be inconsistent with or change the foregoing means of determining the actual, market, taxable, and assessed values.

Sec.

53. 70. Section 441.21, subsection 1, 4, paragraph e, a, subparagraph (3), Code 2026, is amended to read as follows:

e. The actual value of agricultural property shall be determined on the basis of productivity and net earning capacity of the property determined on the basis of its use for agricultural purposes capitalized at a rate of seven percent and applied uniformly among counties and among classes of property. However, for assessment years beginning on or after January 1, 2027, structures on agricultural land constructed on or after January 1, 2027, that are not agricultural dwellings shall not be included in determination of productivity and net earning capacity of agricultural property and shall not be allocated any portion of the total county productivity value so determined. However, such structures shall be treated similarly to agricultural structures constructed before January 1, 2027, when applying any equalization order of the department. Such agricultural structures shall instead be valued according to the structure’s replacement cost less depreciation and obsolescence and the structure’s assessed value subject to taxation prior to application of any assessment limitation under subsection 4 shall be equal to the product of the structure’s value multiplied by the agricultural factor, as determined in 701 IAC 102.3(2) or succeeding rule of the department. Any formula or method employed to determine productivity and net earning capacity of property shall be adopted in full by rule.

(3) For valuations established for assessment years beginning on or after January 1, 2022, but before January 1, 2027, the calculation of the dividend for residential property under this subsection shall exclude the value of all property described in subsection 14, paragraph “a”, subparagraphs (2), (3), (4), (5), and (6), Code 2026, and the property described in subsection 14, paragraph “a”, subparagraph (7), Code 2026, that contains three or more separate dwelling units.

Sec.

54. 71. Section 441.21, subsection 2, 4, paragraph b, subparagraph (2), Code 2026, is amended to read as follows:

2. In the event market value of the property being assessed cannot be readily established in the foregoing manner, then the assessor may determine the value of the property using the other uniform and recognized appraisal methods including its productive and earning capacity, if any, industrial conditions, its cost, physical and functional depreciation and obsolescence and replacement cost, and all other factors which would assist in determining the fair and reasonable market value of the property but the actual value shall not be determined by use of only one such factor. The following shall not be taken into consideration: Special value or use value of the property to its present owner, and the goodwill or value of a business which uses the property as distinguished from the value of the property as property. In addition, for assessment years beginning on or after January 1, 2018, and unless otherwise required for property valued by the department of revenue pursuant to chapters 428, 437, and 438, the assessor shall not take into consideration and shall not request from any person sales or receipts data, expense data, balance sheets, bank account information, or other data related to the financial condition of a business operating in whole or in part on the property if the property is both classified as commercial or industrial property and owned and used by the owner of the business. However, in assessing property that is rented or leased to low-income individuals and families as authorized by section 42 of the Internal Revenue Code, as amended, and which section limits the amount that the individual or family pays for the rental or lease of units in the property, the assessor shall, unless the owner elects to withdraw the property from the assessment procedures for section 42 property, use the productive and earning capacity from the actual rents received as a method of appraisal and shall take into account the extent to which that use and limitation reduces the market value of the property. The assessor shall not consider any tax credit equity or other subsidized financing as income provided to the property in determining the assessed value. The property owner shall notify the assessor when property is withdrawn from section 42 eligibility under the Internal Revenue Code or if the owner elects to withdraw the property from the assessment procedures for section 42 property under this subsection. The property shall not be subject to section 42 assessment procedures for the assessment year for which section 42 eligibility is withdrawn or an election is made. This notification must be provided to the assessor no later than March 1 of the assessment year or the owner will be subject to a penalty of five hundred dollars for that assessment year. The penalty shall be collected at the same time and in the same manner as regular property taxes. An election to withdraw from the assessment procedures for section 42 property is irrevocable. Property that is withdrawn from the assessment procedures for section 42 property shall be classified and assessed as residential multiresidential property unless the property otherwise fails to meet the requirements of subsection 14 13. Upon adoption of uniform rules by the department of revenue or succeeding authority covering assessments and valuations of such properties, the valuation on such properties shall be determined in accordance with such rules and in accordance with forms and guidelines contained in the real property appraisal manual prepared by the department as updated from time to time for assessment purposes to assure uniformity, but such rules, forms, and guidelines shall not be inconsistent with or change the foregoing means of determining the actual, market, taxable, and assessed values.

(2) For valuations established for assessment years beginning on or after January 1, 2022, but before January 1, 2027, the calculation of the divisor for residential property under this subsection shall exclude the value of all property described in subsection 14, paragraph “a”, subparagraphs (2), (3), (4), (5), and (6), Code 2026, and the property described in subsection 14, paragraph “a”, subparagraph (7), Code 2026, that contains three or more separate dwelling units.

Sec.

55. 72. Section 441.21, subsections 4 and subsection 5, paragraph f, subparagraph (2), Code 2026, are is amended to read as follows:

4. For valuations established as of January 1, 1979 2026, the percentage of actual value at which agricultural and residential property shall be assessed shall be the quotient of the dividend and divisor as defined in this section determined under this subsection.

a.

(1) The percentage of actual value at which agricultural property shall be assessed shall be the quotient of the dividend and divisor as defined in this paragraph. The dividend for each class of property shall be the dividend as determined for each class of agricultural property for valuations established as of January 1, 1978 2025, as determined under the applicable law for that assessment year, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978 2025, plus six three percent of the amount so determined.

(2) However, if the difference between the dividend so determined for either class of property and the dividend for that class of property for valuations established as of January 1, 1978, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978, is less than six percent, the 1979 dividend for the other class of property shall be the dividend as determined for that class of property for valuations established as of January 1, 1978, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978, plus a percentage of the amount so determined which is equal to the percentage by which the dividend as determined for the other class of property for valuations established as of January 1, 1978, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978, is increased in arriving at the 1979 dividend for the other class of property.

(3) For valuations established for assessment years beginning on or after January 1, 2022, the calculation of the dividend for residential property under this subsection shall exclude the value of all property described in subsection 14, paragraph “a”, subparagraphs (2), (3), (4), (5), and (6), and the property described in subsection 14, paragraph “a”, subparagraph (7), that contains three or more separate dwelling units.

b.

(1) The divisor for each class of property shall be the total actual value of all such agricultural property in the state in the preceding year, as reported by the assessors on the abstracts of assessment submitted for 1978 2025, as determined under the applicable law for that assessment year, plus the amount of value added to said total actual value by the revaluation of existing properties in 1979 2026 as equalized by the director of revenue pursuant to section 441.49. The director shall utilize information reported on abstracts of assessment submitted pursuant to section 441.45 in determining such percentage. For valuations established as of January 1, 2027, and each assessment year thereafter, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which agricultural property shall be assessed shall be calculated in accordance with the methods provided in this paragraph.

(2) For valuations established for assessment years beginning on or after January 1, 2022, the calculation of the divisor for residential property under this subsection shall exclude the value of all property described in subsection 14, paragraph “a”, subparagraphs (2), (3), (4), (5), and (6), and the property described in subsection 14, paragraph “a”, subparagraph (7), that contains three or more separate dwelling units.

c.

(1) For valuations established as of January 1, 1980, and each assessment year thereafter beginning before January 1, 2013, the percentage of actual value as equalized by the director of revenue as provided in section 441.49 at which agricultural and residential property shall be assessed shall be calculated in accordance with the methods provided in this subsection, including the limitation of increases in agricultural and residential assessed values to the percentage increase of the other class of property if the other class increases less than the allowable limit adjusted to include the applicable and current values as equalized by the director of revenue, except that any references to six percent in this subsection shall be four percent.

(2) For valuations established as of January 1, 2013, and each assessment year thereafter, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which agricultural and residential property shall be assessed shall be calculated in accordance with the methods provided in this subsection, including the limitation of increases in agricultural and residential assessed values to the percentage increase of the other class of property if the other class increases less than the allowable limit adjusted to include the applicable and current values as equalized by the department of revenue, except that any references to six percent in this subsection shall be three percent.

b.

(1) For valuations established for the assessment year beginning January 1, 2025, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be forty-four and five thousand three hundred forty-five ten-thousandths percent.

(2) For valuations established for the assessment year beginning January 1, 2026, and the assessment year beginning January 1, 2027, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be seventy-two and one-half percent.

(3) For valuations established for the assessment year beginning January 1, 2028, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be seventy-five and one-fourth percent.

(4) For valuations established for the assessment year beginning January 1, 2029, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be seventy-eight percent.

(5) For valuations established for the assessment year beginning January 1, 2030, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be eighty and three-fourths percent.

(6) For valuations established for the assessment year beginning January 1, 2031, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be eighty-three and one-half percent.

(7) For valuations established for the assessment year beginning January 1, 2032, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be eighty-six and one-fourth percent.

(8) For valuations established for the assessment year beginning January 1, 2033, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be eighty-nine percent.

(9) For valuations established for the assessment year beginning January 1, 2034, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be ninety-one and three-fourths percent.

(10) For valuations established for the assessment year beginning January 1, 2035, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be ninety-four and one-half percent.

(11) For valuations established for the assessment year beginning January 1, 2036, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be ninety-seven and one-fourth percent.

(12) For valuations established for the assessment year beginning January 1, 2037, and each assessment year thereafter, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be one hundred percent.

5.

a.

(1) For valuations established as of January 1, 1979, property valued by the department of revenue pursuant to chapter 437 shall be considered as one class of property and shall be assessed as a percentage of its actual value. The percentage shall be determined by the director of revenue in accordance with the provisions of this section. For valuations established as of January 1, 1979, the percentage shall be the quotient of the dividend and divisor as defined in this section. The dividend shall be the total actual valuation established for 1978 by the department of revenue, plus ten percent of the amount so determined. The divisor for property valued by the department of revenue pursuant to chapter 437 shall be the valuation established for 1978, plus the amount of value added to the total actual value by the revaluation of the property by the department of revenue as of January 1, 1979. For valuations established as of January 1, 1980, property valued by the department of revenue pursuant to chapter 437 shall be assessed at a percentage of its actual value. The percentage shall be determined by the director of revenue in accordance with the provisions of this section. For valuations established as of January 1, 1980, the percentage shall be the quotient of the dividend and divisor as defined in this section. The dividend shall be the total actual valuation established for 1979 by the department of revenue, plus eight percent of the amount so determined. The divisor for property valued by the department of revenue pursuant to chapter 437 shall be the valuation established for 1979, plus the amount of value added to the total actual value by the revaluation of the property by the department of revenue as of January 1, 1980. For valuations established as of January 1, 1981, and each year thereafter, the percentage of actual value at which property valued by the department of revenue pursuant to chapter 437 shall be assessed shall be calculated in accordance with the methods provided herein, except that any references to ten percent in this subsection shall be eight percent.

(2) (1) For valuations established on or after January 1, 2013, property valued by the department of revenue pursuant to chapter 434 shall be assessed at a portion of its actual value determined in the same manner at which property assessed as commercial property is assessed under paragraph “b” for the same assessment year.

(3) (2) For valuations established for the assessment year beginning January 1, 2025, the percentage of actual value at which property valued by the department of revenue pursuant to chapters 428 and 438 shall be assessed shall be ninety-eight percent.

(4) (3) For valuations established for the assessment year beginning January 1, 2026, and each assessment year thereafter, the percentage of actual value at which property valued by the department of revenue pursuant to chapters 428, 437, and 438 shall be assessed shall be ninety-six one hundred percent.

(5) For valuations established for the assessment year beginning January 1, 2027, the percentage of actual value at which property valued by the department of revenue pursuant to chapters 428 and 438 shall be assessed shall be ninety-four percent.

(6) For valuations established for the assessment year beginning January 1, 2028, the percentage of actual value at which property valued by the department of revenue pursuant to chapters 428 and 438 shall be assessed shall be ninety-two percent.

(7) For valuations established on or after January 1, 2029, the percentage of actual value at which property valued by the department of revenue pursuant to chapters 428 and 438 shall be assessed shall be ninety percent.

b. For valuations established on or after January 1, 2013, commercial Commercial property, excluding properties referred to in section 427A.1, subsection 9, shall be assessed at a portion of its actual value, as determined in this paragraph “b”.

(1) For valuations established for the assessment year beginning January 1, 2013, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which commercial property shall be assessed shall be ninety-five percent. For valuations established for the assessment year beginning January 1, 2014, and each assessment year thereafter beginning before January 1, 2022, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which commercial property shall be assessed shall be ninety percent.

(2) (1) For valuations established for the assessment year beginning January 1, 2022, and each assessment year thereafter beginning before January 1, 2026, the portion of actual value at which each property unit of commercial property shall be assessed shall be the sum of the following:

(a) An amount equal to the product of the assessment limitation percentage applicable to residential property under subsection 4 for that assessment year multiplied by the actual value of the property that exceeds zero dollars but does not exceed one hundred fifty thousand dollars.

(b) An amount equal to ninety percent of the actual value of the property for that assessment year that exceeds one hundred fifty thousand dollars.

(2) For valuations established for the assessment year beginning January 1, 2026, and each assessment year thereafter, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which commercial property shall be assessed shall be one hundred percent.

c. For valuations established on or after January 1, 2013, industrial Industrial property, excluding properties referred to in section 427A.1, subsection 9, shall be assessed at a portion of its actual value, as determined in this paragraph “c”.

(1) For valuations established for the assessment year beginning January 1, 2013, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which industrial property shall be assessed shall be ninety-five percent. For valuations established for the assessment year beginning January 1, 2014, and each assessment year thereafter beginning before January 1, 2022, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which industrial property shall be assessed shall be ninety percent.

(2) (1) For valuations established for the assessment year beginning January 1, 2022, and each assessment year thereafter beginning before January 1, 2026, the portion of actual value at which each property unit of industrial property shall be assessed shall be the sum of the following:

(a) An amount equal to the product of the assessment limitation percentage applicable to residential property under subsection 4 for that assessment year multiplied by the actual value of the property that exceeds zero dollars but does not exceed one hundred fifty thousand dollars.

(b) An amount equal to ninety percent of the actual value of the property for that assessment year that exceeds one hundred fifty thousand dollars.

(2) For valuations established for the assessment year beginning January 1, 2026, and each assessment year thereafter, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which industrial property shall be assessed shall be one hundred percent.

d. For valuations established for the assessment year beginning January 1, 2019, and each assessment year thereafter beginning before January 1, 2026, the percentages or portions of actual value at which property is assessed, as determined under this subsection, shall not be applied to the value of wind energy conversion property valued under section 427B.26 the construction of which is approved by the Iowa utilities commission on or after July 1, 2018.

e.

(1) For the fiscal year beginning July 1, 2023, there is appropriated from the general fund of the state to the department of revenue the sum of one hundred twenty-two million three hundred fifty thousand dollars to be used for payments under this paragraph calculated as a result of the assessment limitations imposed under paragraph “b”, subparagraph (2), subparagraph division (a), and paragraph “c”, subparagraph (2), subparagraph division (a). For each fiscal year beginning on or after July 1, 2024, but before July 1, 2027, there is appropriated from the general fund of the state to the department of revenue the sum of one hundred twenty-five million dollars to be used for payments under this paragraph calculated as a result of the assessment limitations imposed under paragraph “b”, subparagraph (2), subparagraph division (a), Code 2026, and paragraph “c”, subparagraph (2), subparagraph division (a), Code 2026.

(2) For fiscal years beginning on or after July 1, 2023, but before July 1, 2027, each county treasurer shall be paid by the department of revenue an amount calculated under subparagraph (4) for the applicable fiscal year. If an amount appropriated for the fiscal year is insufficient to make all payments as calculated under subparagraph (4), the director of revenue shall prorate the payments to the county treasurers and shall notify the county auditors of the pro rata percentage on or before September 30.

(3) On or before July 1 of each applicable fiscal year, the assessor shall report to the county auditor that portion of the total actual value of all commercial property and industrial property in the county that is subject to the assessment limitations imposed under paragraph “b”, subparagraph (2), subparagraph division (a), Code 2026, and paragraph “c”, subparagraph (2), subparagraph division (a), Code 2026, for the assessment year used to calculate the taxes due and payable in that fiscal year.

(4) On or before September 1 of each applicable fiscal year, the county auditor shall prepare a statement, based on the report received in subparagraph (3) and information transmitted to the county auditor under chapter 434, listing for each taxing district in the county:

(a) The product of the portion of the total actual value of all commercial property, industrial property, and property valued by the department under chapter 434 in the county that is subject to the assessment limitations imposed under paragraph “b”, subparagraph (2), subparagraph division (a), Code 2026, and paragraph “c”, subparagraph (2), subparagraph division (a), Code 2026, for the applicable assessment year used to calculate taxes which are due and payable in the applicable fiscal year multiplied by the difference, stated as a percentage, between ninety percent and the assessment limitation percentage applicable to residential property under subsection 4 for the applicable assessment year.

(b) The tax levy rate per one thousand dollars of assessed value for each taxing district for the applicable fiscal year.

(c) The amount of the payment for each county is equal to the amount determined pursuant to subparagraph division (a), multiplied by the tax rate specified in subparagraph division (b), and then divided by one thousand dollars.

(5) The county auditor shall certify and forward one copy of the statement described in subparagraph (4) to the department of revenue not later than September 1 of each fiscal year.

(6) The amounts determined under this paragraph shall be paid by the department to the county treasurers in equal installments in September and March of each year. The county treasurer shall apportion the payments among the eligible taxing districts in the county and the amounts received by each taxing authority shall be treated the same as property taxes paid.

f. For the purposes of this subsection, unless the context otherwise requires:

(1) “Contiguous parcels” means any of the following:

(a) Parcels that share a common boundary.

(b) Parcels within the same building or structure regardless of whether the parcels share a common boundary.

(c) Permanent improvements to the land that are situated on one or more parcels of land that are assessed and taxed separately from the permanent improvements if the parcels of land upon which the permanent improvements are situated share a common boundary.

(2) “Parcel” means the same as defined in section 445.1. “Parcel” also means that portion of a parcel assigned a classification of commercial property or industrial property pursuant to section 441.21, subsection 13, paragraph “c”, or subsection 14, paragraph “b”, Code 2026. 2026, as applicable.

(3) “Property unit” means a parcel or contiguous parcels all of which are located within the same county, with the same property tax classification, are owned by the same person, and are operated by that person for a common use and purpose.

Sec.

56. 73. Section 441.21, subsection 8, paragraph b, Code 2026, is amended to read as follows:

b. Notwithstanding paragraph “a”, any construction or installation of a solar energy system on property classified as agricultural, residential, multiresidential, commercial, or industrial property shall not increase the actual, assessed, and taxable values of the property for five full assessment years.

Sec.

57. 74. Section 441.21, subsections 9 and 10, Code 2026, are amended to read as follows:

9. Not later than November 1, 1979 2026, and November 1 of each subsequent year, the director shall certify to the county auditor of each county the percentages of actual value at which residential property, agricultural property, commercial property, industrial property, property valued by the department of revenue pursuant to chapters 428 and 438, property valued by the department of revenue pursuant to chapter 434, and property valued by the department of revenue pursuant to chapter 437 in each assessing jurisdiction in the county each classification of property shall be assessed for taxation, including for assessment years beginning on or after January 1, 2022, the percentages used to apply the assessment limitations under subsection 5, paragraphs “b” and “c”. The county auditor shall proceed to determine the assessed values of agricultural property, residential property, commercial property, industrial property, property valued by the department of revenue pursuant to chapters 428 and 438, property valued by the department of revenue pursuant to chapter 434, and property valued by the department of revenue pursuant to chapter 437 by applying such percentages to the current actual value of such property, as reported to the county auditor by the assessor, and the assessed values so determined shall be the taxable values of such properties upon which the levy shall be made.

10. The percentages percentage of actual value computed determined by the department of revenue under subsection 4 for agricultural property, residential property, commercial property, industrial property, property valued by the department of revenue pursuant to chapters 428 and 438, property valued by the department of revenue pursuant to chapter 434, and property valued by the department of revenue pursuant to chapter 437, including for assessment years beginning on or after January 1, 2022, the percentages used to apply the assessment limitations under subsection 5, paragraphs “b” and “c”, and under this section and used to determine assessed values of those classes of agricultural property do does not constitute a rule as defined in section 17A.2, subsection 11.

Sec.

58. 75. Section 441.21, subsection 13, paragraph a, unnumbered paragraph 1, Code 2026, is amended to read as follows: Beginning with valuations established on or after January 1, 2016 2027, but before January 1, 2022, all of the following shall be valued as a separate class of property known as multiresidential property and, excluding properties referred to in section 427A.1, subsection 9, shall be assessed at a percentage of its actual value, as determined in this subsection:

Sec.

59. 76. Section 441.21, subsection 13, paragraph b, Code 2026, is amended by striking the paragraph and inserting in lieu thereof the following:

b.

(1) For valuations established for the assessment year beginning January 1, 2027, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be seventy-two and one-half the percentage of actual value determined by the department of revenue at which property assessed as residential property is assessed for the same assessment year under subsection 4 plus three percent, but not to exceed one hundred percent.

(2) For valuations established for the assessment year beginning January 1, 2028, and each assessment year thereafter, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be seventy-five and one-fourth the percentage of actual value determined by the department of revenue at which property assessed as residential property is assessed for the same assessment year under subsection 4 plus six percent, but not to exceed one hundred percent.

(3) For valuations established for the assessment year beginning January 1, 2029, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be seventy-eight percent.

(4) For valuations established for the assessment year beginning January 1, 2030, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be eighty and three-fourths percent.

(5) For valuations established for the assessment year beginning January 1, 2031, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be eighty-three and one-half percent.

(6) For valuations established for the assessment year beginning January 1, 2032, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be eighty-six and one-fourth percent.

(7) For valuations established for the assessment year beginning January 1, 2033, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be eighty-nine percent.

(8) For valuations established for the assessment year beginning January 1, 2034, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be ninety-one and three-fourths percent.

(9) For valuations established for the assessment year beginning January 1, 2035, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be ninety-four and one-half percent.

(10) For valuations established for the assessment year beginning January 1, 2036, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be ninety-seven and one-fourth percent.

(11) For valuations established for the assessment year beginning January 1, 2037, and each assessment year thereafter, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which multiresidential property shall be assessed shall be one hundred percent.

Sec.

60. 77. Section 441.21, subsection 13, paragraph c, Code 2026, is amended to read as follows:

c. Beginning with valuations established on or after January 1, 2016 2027, but before January 1, 2022, for parcels for which a portion of the parcel satisfies the requirements for classification as multiresidential property pursuant to paragraph “a”, subparagraph (5) or (6), the assessor shall assign to that portion of the parcel the classification of multiresidential property and to such other portions of the parcel the property classification for which such other portions qualify.

Sec.

61. 78. Section 441.21, subsection 13, Code 2026, is amended by adding the following new paragraph:

NEW PARAGRAPH.

f. NEW PARAGRAPH. 0e. For purposes of equalization under sections 441.47 through 441.49, multiresidential property shall be considered residential property.

Sec.

62. 79. Section 441.21, subsection 14, Code 2026, is amended to read as follows:

14.

Sec.

63. 80. Section 558.46, Code 2026, is amended by adding the following new subsection:

NEW SUBSECTION. 4A. For the purposes of this section, “residential property” includes multiresidential property.

Sec.

64. SAVINGS PROVISION. This division of this Act, pursuant to section 4.13, does not affect the operation of, or prohibit the application of, prior provisions of section 441.21, or rules adopted under chapter 17A to administer prior provisions of section 441.21, for assessment years beginning before January 1, 2026, or for duties, powers, protests, appeals, proceedings, actions, or remedies attributable to an assessment year beginning before January 1, 2026, including property taxes due and payable in a fiscal year as the result of an assessment year beginning before January 1, 2026.

Sec.

65. 81. EFFECTIVE DATE. The following take effect January 1, 2027:

1. The section of this division of this Act amending section 386.8.

Sec.

66. RETROACTIVE APPLICABILITY. Except as otherwise provided in this division of this Act, this division of this Act applies retroactively to assessment years beginning on or after January 1, 2026.

Sec.

67. 82. APPLICABILITY. The following apply to assessment years beginning on or after January 1, 2027:

1. The section of this division of this Act amending section 386.8.

11. The section of this division of this Act amending section 441.21, subsection 14.

12. The section of this division of this Act amending section 558.46. DIVISION V DISABLED VETERAN AND HOMESTEAD CREDITS AND EXEMPTIONS IX EMERGENCY MEDICAL SERVICES LEVY

Sec.

68. Section 25B.7, subsection 2, paragraph a, Code 2026, is amended to read as follows:

a. Homestead tax credit pursuant to section 425.1, and sections 425.2 through 425.13, and section 425.15.

Sec.

69. Section 425.1, subsection 2, Code 2026, is amended by striking the subsection and inserting in lieu thereof the following:

2.

a. The homestead credit fund shall be apportioned each year so as to give a credit against the tax on each eligible homestead in the state equal to the amounts specified pursuant to paragraph “b” or “c”, as applicable.

b.

(1) If the owner of a homestead allowed a credit under this subchapter is any of the following, the homestead credit allowed on the homestead shall be the entire amount of tax levied on the homestead:

(a) A veteran of any of the military forces of the United States who acquired the homestead under 38 U.S.C. §21.801, 21.802 prior to August 6, 1991, or under 38 U.S.C. §2101, 2102.

(b) A veteran as defined in section 35.1 with a permanent service-connected disability rating of one hundred percent, as certified by the United States department of veterans affairs, or a permanent and total disability rating based on individual unemployability that is compensated at the one hundred percent disability rate, as certified by the United States department of veterans affairs.

(c) A former member of the national guard of any state who otherwise meets the service requirements of section 35.1, subsection 2, paragraph “b”, subparagraph (2) or (7), with a permanent service-connected disability rating of one hundred percent, as certified by the United States department of veterans affairs, or a permanent and total disability rating based on individual unemployability that is compensated at the one hundred percent disability rate, as certified by the United States department of veterans affairs.

(d) An individual who is a surviving spouse or a child and who is receiving dependency and indemnity compensation pursuant to 38 U.S.C. §1301 et seq., as certified by the United States department of veterans affairs.

(2) (a) For an owner described in subparagraph (1), subparagraph division (a), (b), or (c), the credit allowed shall be continued to the estate of an owner who is deceased or the surviving spouse and any child, as defined in section 234.1, who are the beneficiaries of a deceased owner, so long as the surviving spouse remains unmarried.

(b) An individual described in subparagraph (1), subparagraph division (d), is no longer eligible for the credit upon termination of dependency and indemnity compensation under 38 U.S.C. §1301 et seq.

(3) An owner or a beneficiary of an owner who elects to secure the credit provided in this paragraph is not eligible for the credit provided in paragraph “c” or any other real property tax credit or exemption provided by law for veterans of military service.

(4) If an owner acquires a different homestead, the credit allowed under this paragraph may be claimed on the new homestead unless the owner fails to meet the other requirements of this paragraph.

(5) (a) Except as provided in subparagraph division (b), the list of the names and addresses of individuals allowed a credit under this paragraph and maintained by the county recorder, county treasurer, county assessor, city assessor, or other government body is confidential information and shall not be disseminated to any person unless otherwise ordered by a court or released by the lawful custodian of the records pursuant to state or federal law. The county recorder, county treasurer, county assessor, city assessor, or other government body responsible for maintaining the names and addresses of individuals allowed a credit under this paragraph may display such credit on individual paper records and individual electronic records, including display on an internet site.

(b) Upon request, a county recorder, county assessor, city assessor, or other entity may share information as described in subparagraph division (a) to a county veterans service officer for purposes of providing information on benefits and services available to veterans and their families.

(6) (a) For an owner who makes an application to secure the credit provided in this paragraph before July 1, 2026, and for the beneficiary of such an owner, “homestead” shall mean the same as defined in section 425.11 for each succeeding assessment year.

(b) For an owner who makes an application to secure the credit provided in this paragraph on or after July 1, 2026, and for the beneficiary of such an owner, “homestead” shall mean the same as provided in section 425.11, except the homestead shall not include appurtenances and shall not exceed one-half acre.

(7) For purposes of this paragraph, “permanent and total disability rating based on individual unemployability” means a condition under which a person has either a permanent service-connected disability rating of sixty percent or two or more permanent service-connected disability conditions in which one of the conditions has at least a forty percent rating and the combined rating for all the conditions is at least seventy percent, and the person has an administrative adjustment added to the service-connected disability rating, due to individual unemployability, such that the United States department of veterans affairs rates the veteran permanently and totally disabled for purposes of disability compensation.

c.

(1) For assessment years beginning prior to January 1, 2026, unless eligible under section 425.15, Code 2026, an amount equal to the actual levy on the first four thousand eight hundred fifty dollars of actual value for each homestead.

(2) For the assessment year beginning January 1, 2026, and each assessment year thereafter, unless eligible under paragraph “b”, zero.

Sec.

70. Section 425.1A, subsection 1, Code 2026, is amended to read as follows:

1. The following exemptions from taxation shall be allowed in addition to following application of the homestead credit exemption under subsection 1A and the exemption under subsection 1B, if applicable, for an owner that has attained the age of sixty-five years by January 1 of the assessment year:

a. For the assessment year beginning January 1, 2023, the eligible homestead, not to exceed three thousand two hundred fifty dollars in taxable value.

b. For the assessment year years beginning on or after January 1, 2024, and each succeeding assessment year, the eligible homestead, not to exceed six thousand five hundred dollars in taxable value.

Sec.

71. Section 425.1A, Code 2026, is amended by adding the following new subsections:

NEW SUBSECTION. 1A.

a. For the assessment year beginning January 1, 2026, an exemption from taxation of twenty-five percent of taxable value, not to exceed an exemption of one hundred seventy-five thousand dollars in taxable value, shall be allowed on each eligible homestead.

b. For the assessment year beginning January 1, 2027, an exemption from taxation of twenty-seven and one-half percent of taxable value, not to exceed an exemption of one hundred ninety-two thousand five hundred dollars in taxable value, shall be allowed on each eligible homestead.

c. For the assessment year beginning January 1, 2028, an exemption from taxation of thirty percent of taxable value, not to exceed an exemption of two hundred ten thousand dollars in taxable value, shall be allowed on each eligible homestead.

d. For the assessment year beginning January 1, 2029, an exemption from taxation of thirty-two and one-half percent of taxable value, not to exceed an exemption of two hundred twenty-seven thousand five hundred dollars in taxable value, shall be allowed on each eligible homestead.

e. For the assessment year beginning January 1, 2030, an exemption from taxation of thirty-five percent of taxable value, not to exceed an exemption of two hundred forty-five thousand dollars in taxable value, shall be allowed on each eligible homestead.

f. For the assessment year beginning January 1, 2031, an exemption from taxation of thirty-seven and one-half percent of taxable value, not to exceed an exemption of two hundred sixty-two thousand five hundred dollars in taxable value, shall be allowed on each eligible homestead.

g. For the assessment year beginning January 1, 2032, an exemption from taxation of forty percent of taxable value, not to exceed an exemption of two hundred eighty thousand dollars in taxable value, shall be allowed on each eligible homestead.

h. For the assessment year beginning January 1, 2033, an exemption from taxation of forty-two and one-half percent of taxable value, not to exceed an exemption of two hundred ninety-seven thousand five hundred dollars in taxable value, shall be allowed on each eligible homestead.

i. For the assessment year beginning January 1, 2034, an exemption from taxation of forty-five percent of taxable value, not to exceed an exemption of three hundred fifteen thousand dollars in taxable value, shall be allowed on each eligible homestead.

j. For the assessment year beginning January 1, 2035, an exemption from taxation of forty-seven and one-half percent of taxable value, not to exceed an exemption of three hundred thirty-two thousand five hundred dollars in taxable value, shall be allowed on each eligible homestead.

k.

(1) Except as provided in subparagraph (2), for each assessment year beginning on or after January 1, 2036, an exemption from taxation of fifty percent of taxable value, not to exceed an exemption of three hundred fifty thousand dollars in taxable value, shall be allowed on each eligible homestead.

(2) (a) For an owner that has attained the age of sixty years but has not yet attained the age of seventy by January 1 of the assessment year, the amount of the exemption shall be sixty percent of taxable value, not to exceed an exemption of three hundred fifty thousand dollars in taxable value.

(b) For an owner that has attained the age of seventy years but has not yet attained the age of eighty by January 1 of the assessment year, the amount of the exemption shall be seventy percent of taxable value, not to exceed an exemption of three hundred fifty thousand dollars in taxable value.

(c) For an owner that has attained the age of eighty years but has not yet attained the age of ninety by January 1 of the assessment year, the amount of the exemption shall be eighty percent of taxable value, not to exceed an exemption of three hundred fifty thousand dollars in taxable value.

(d) For an owner that has attained the age of ninety years but has not yet attained the age of one hundred by January 1 of the assessment year, the amount of the exemption shall be ninety percent of taxable value, not to exceed an exemption of three hundred fifty thousand dollars in taxable value.

(e) For an owner that has attained the age of one hundred years by January 1 of the assessment year, the amount of the exemption shall be one hundred percent of taxable value, not to exceed an exemption of three hundred fifty thousand dollars in taxable value.

NEW SUBSECTION. 1B.

a. For purposes of this subsection:

(1) “Mortgage” means the same as defined in section 554.9102.

(2) “Unencumbered homestead” means a homestead as defined in section 425.11, but excluding appurtenances and that portion of the land upon which the dwelling house is situated that exceeds one-half acre, owned by an individual that has attained the age of sixty-five years by January 1 of the applicable assessment year and for which no mortgage or other indebtedness or account secured by an interest in the homestead exists on January 1 of the assessment year.

b.

(1) For the assessment year beginning January 1, 2026, if the homestead is an unencumbered homestead, an exemption from taxation of twenty-five percent of the taxable value following application of the exemption under subsection 1A, but before the exemption under subsection 1, if applicable.

(2) For the assessment year beginning January 1, 2027, if the homestead is an unencumbered homestead, an exemption from taxation of fifty percent of the taxable value following application of the exemption under subsection 1A, but before the exemption under subsection 1, if applicable.

(3) For the assessment year beginning January 1, 2028, if the homestead is an unencumbered homestead, an exemption from taxation of seventy-five percent of the taxable value following application of the exemption under subsection 1A, but before the exemption under subsection 1, if applicable.

(4) For each assessment year beginning on or after January 1, 2029, if the homestead is an unencumbered homestead, an exemption from taxation of one hundred percent of the taxable value following application of the exemption under subsection 1A, but before the exemption under subsection 1, if applicable.

c. The exemption under this subsection shall not apply to voter-approved levies or property tax levies, or portions thereof, that are for the payment of voter-approved bonds or other voter-approved indebtedness. For purposes of this subsection, “voter-approved levy” means a levy under chapter 28E, subchapter II, section 260C.22, section 260C.28, chapter 300, section 384.7, chapter 386, section 422D.5, and the voter-approved physical plant and equipment levy under section 298.2.

Sec.

72. 83. Section 425.1A, 422D.1, subsection 2, 1, paragraph a, subparagraph (2), Code 2026, is amended to read as follows:

(2) (a) An For fiscal years beginning before July 1, 2027, an ad valorem property tax not to exceed seventy-five cents per one thousand dollars of assessed value on all taxable property within the county.

2. Section 25B.7, subsection 1, shall not apply to the property tax exemption exemptions provided in this section.

(b) For fiscal years beginning on or after July 1, 2027, an ad valorem property tax not to exceed one dollar and fifty cents per one thousand dollars of assessed value on all taxable property within the county. However, for counties authorized to impose the ad valorem property tax under this subparagraph for the fiscal year beginning July 1, 2026, the maximum levy rate for such county shall not exceed a rate of seventy-five cents per one thousand dollars of assessed value unless a rate in excess thereof, not to exceed one dollar and fifty cents per one thousand dollars of assessed value, is approved at an election held on or after July 1, 2026. DIVISION X SCHOOL DISTRICT UNSPENT BALANCES —— ON-TIME FUNDING AND MODIFIED SUPPLEMENTAL AMOUNTS

Sec.

73. Section 425.2, subsections 1 and 2, Code 2026, are amended to read as follows:

84. Section 257.7, Code 2026, is amended by adding the following new subsection:

1. A person who wishes to qualify for the homestead credit or exemptions allowed under this subchapter shall obtain the appropriate forms for filing for the credit from the assessor. The forms shall include the ability to claim the credit under section 425.1 and the exemptions under section 425.1A. However, a separate form shall be required for claiming a credit under section 425.1, subsection 2, paragraph “b”. The person claiming the credit or exemption shall file a verified statement and designation of homestead with the assessor for the year for which the person is first claiming the credit or exemption. The claim shall be filed not later than July 1 of the year for which the person is claiming the credit or exemption. A claim filed after July 1 of the year for which the person is claiming the credit or exemption shall be considered as a claim filed for the following year.

NEW SUBSECTION.

2. Upon the filing and allowance of the claim, the claim shall be allowed on that homestead for successive years without further filing as long as the property is legally or equitably owned and used as a homestead by that person or that person’s spouse on July 1 of each of those successive years, and the owner of the property being claimed as a homestead declares residency in Iowa for purposes of income taxation, and the property is occupied by that person or that person’s spouse for at least six months in each of those calendar years in which the fiscal year begins. When the property is sold or transferred, the buyer or transferee who wishes to qualify shall refile for the credit or exemption. However, when the property is transferred as part of a distribution made pursuant to chapter 598, the transferee who is the spouse retaining ownership of the property is not required to refile for the credit or exemption. Property divided pursuant to chapter 598 shall not be modified following the division of the property. An owner who ceases to use a property for a homestead or intends not to use it as a homestead for at least six months in a calendar year shall provide written notice to the assessor by July 1 following the date on which the use is changed. A person who sells or transfers a homestead or the personal representative of a deceased person who had a homestead at the time of death, shall provide written notice to the assessor that the property is no longer the homestead of the former claimant.

3. Unspent balances. For school budget years beginning on or after July 1, 2026, a school district’s actual unspent balance from the preceding year used to calculate the authorized budget under subsection 1 shall not exceed an amount equal to thirty-five percent of the school district’s authorized expenditures for the budget year immediately preceding the base year unless a greater amount is authorized by the school budget review committee based on one or more grounds authorized for the approval of a modified supplemental amount under section 257.31.

Sec.

85. Section 257.13, Code 2026, is amended to read as follows: 257.13 On-time funding budget adjustment.

1.

a. For the school budget year beginning July 1, 2001, and succeeding budget years beginning before July 1, 2026, if a district’s actual enrollment for the budget year, determined under section 257.6, is greater than its budget enrollment for the budget year, the district shall be eligible to receive an on-time funding budget adjustment. The adjustment shall be in an amount equal to the difference between the actual enrollment for the budget year and the budget enrollment for the budget year, multiplied by the district cost per pupil.

2.

b. The board of directors of a school district that wishes to receive an on-time funding budget adjustment under this subsection shall adopt a resolution to receive the adjustment and notify the school budget review committee annually, but not earlier than November 1, as determined by the department of education. The school budget review committee shall establish a modified supplemental amount pursuant to subsection 1 paragraph “a”.

2.

a. For the school budget years beginning on or after July 1, 2026, if a district’s actual enrollment for the budget year, determined under section 257.6, is greater than its budget enrollment for the budget year, the district may request an on-time budget adjustment. The adjustment shall not exceed an amount equal to the difference between the actual enrollment for the budget year and the budget enrollment for the budget year, multiplied by the district cost per pupil.

b. To request an on-time budget adjustment under this subsection, the board of directors of a school district shall adopt a resolution to receive the adjustment and notify the school budget review committee on or before a date established by the committee. The school budget review committee may establish a modified supplemental amount pursuant to paragraph “a”.

74. Section 425.2, subsection 4, Code 2026, is amended by striking the subsection.

3. If the board of directors of a school district determines that a need exists for additional funds exceeding the on-time funding budget adjustment pursuant to this section, a request for a modified supplemental amount based upon increased enrollment may be submitted to the school budget review committee as provided in section 257.31.

Sec.

86.

75. Section 425.2, subsections 5 and 6, Code 2026, are amended to read as follows:

NEW SECTION. 279.63A Unspent balance —— policy.

5. Any person sixty-five years of age or older or any person who is disabled may request, in writing, from the appropriate assessor forms for filing for homestead tax credit. Any person sixty-five years of age or older or who is disabled may complete the form, which shall include a statement of homestead, and mail or return it to the appropriate assessor. The signature of the claimant on the statement shall be considered the claimant’s acknowledgment that all statements and facts entered on the form are correct to the best of the claimant’s knowledge.

1. The board of directors of each school district shall establish a policy that defines a targeted range and maximum amount of unspent balance of authorized expenditures, determined by a percent of authorized expenditures under section 257.7 or other methodology specified in the policy. The policy shall also state the date the policy was adopted and the date the policy was most recently reviewed or revised under subsection 2. The targeted range and maximum amount established in the policy shall be made with the intent to equalize educational opportunity, provide a good education for all the children of the school district, provide property tax relief, decrease the percentage of school costs paid from property taxes, and to provide reasonable control of school costs.

6. Upon adoption of a resolution by the county board of supervisors, any person may request, in writing, from the appropriate assessor forms for the filing for homestead tax credit. The person may complete the form, which shall include a statement of homestead, and mail or return it to the appropriate assessor. The signature of the claimant on the statement of homestead shall be considered the claimant’s acknowledgment that all statements and facts entered on the form are correct to the best of the claimant’s knowledge.

2. Targeted ranges and maximum amounts defined in the policy under subsection 1 shall be reviewed annually by the board of directors and such review shall be entered in the minutes of the board and approved revisions shall be made to the policy.

Sec.

76. Section 425.8, subsection 1, Code 2026, is amended to read as follows:

1. The director of revenue shall prescribe the form for the making of a verified statement and designation of homestead, the form for the supporting affidavits required herein, and such other forms as may be necessary for the proper administration of this subchapter. Whenever necessary, the department of revenue shall forward to the county auditors of the several counties in the state the prescribed sample forms, and the county auditors shall furnish blank forms prepared in accordance therewith with the assessment rolls, books, and supplies delivered to the assessors. The department of revenue shall prescribe and the county auditors shall provide on the forms for claiming the homestead credit a statement to the effect that the owner realizes that the owner must give written notice to the assessor when the owner changes the use of the property.

87. EFFECTIVE DATE. This division of this Act, being deemed of immediate importance, takes effect upon enactment. DIVISION XI GENERAL FUND RESERVES

Sec.

77. Section 425.11, subsection 1, paragraph d, subparagraph (1), unnumbered paragraph 1, Code 2026, is amended to read as follows: The homestead includes the dwelling house which the owner, in good faith, is occupying as a home on July 1 of the year for which the credit or exemption is claimed and occupies as a home for at least six months during the calendar year in which the fiscal year begins, except as otherwise provided.

88. Section 11.11, Code 2026, is amended to read as follows: 11.11 Scope of audits. The written report of the audit of a governmental subdivision shall include the auditor’s opinion as to whether a governmental subdivision’s financial statements are presented fairly in all material respects in conformity with generally accepted accounting principles or with an other another comprehensive basis of accounting. As a part of conducting an audit of a governmental subdivision, an evaluation of internal control and tests for compliance with laws and regulations shall be performed. As part of conducting an audit of a governmental subdivision, an examination of the governmental subdivision’s compliance with the reporting requirements of section 331.403, subsection 3, or section 384.22, subsection 2, if applicable, shall be performed. As part of conducting an audit of a governmental subdivision for fiscal years beginning on or after July 1, 2027, an examination of the governmental subdivision’s compliance with section 24.35 shall be performed, including verification of the circumstances resulting in actual reserve funds exceeding the specified limits.

Sec.

78. Section 425.11, subsection 1, paragraph d, subparagraph (3), Code 2026, is amended to read as follows:

(3) It must not embrace more than one dwelling house, but where a homestead has more than one dwelling house situated thereon, the exemption and or credit provided for in this subchapter shall apply to the home and buildings used by the owner, but shall not apply to any other dwelling house and buildings appurtenant.

89. Section 24.34, Code 2026, is amended to read as follows: 24.34 Unliquidated obligations. A city, county, or other political subdivision governmental entity, as defined in section 24.35, may establish an encumbrance system for any obligation not liquidated at the close of the fiscal year in which the obligation has been encumbered assigned, committed, restricted, or specified as nonspendable. The encumbered obligations may be retained upon the books of the city, county, or other political subdivision governmental entity, as defined in section 24.35, until liquidated, all in accordance with generally accepted governmental accounting practices principles, as established by the governmental accounting standards board.

Sec.

90.

NEW SECTION. 24.35 General fund reserves —— limitations.

1. For purposes of this section:

a. “Budget year” is the fiscal year beginning during the calendar year in which a budget is certified.

b. “Current fiscal year” is the fiscal year ending during the calendar year in which a budget for the budget year is certified.

c. “General fund” means a governmental entity’s fund designated as such by law or the governmental entity’s fund from which primary general operations of the governmental entity are funded.

d. “Governmental entity” means any unit of government or other public body or public corporation, including any intergovernmental entity, that has the power to impose or certify a property tax levy. “Governmental entity” does not include a school district or a governmental entity within the meaning of this paragraph if the governmental entity has a bond rating for the budget year that is the highest classification, as established by at least one of the standard rating services approved by the superintendent of banking by rule adopted under chapter 17A.

e. “Unassigned” means funds that are not restricted, committed, assigned, or nonspendable within the meaning of generally accepted accounting principles, as established by the governmental accounting standards board.

2.

a. For budgets certified for budget years beginning on or after July 1, 2027, proposed unassigned reserve funds identified within a governmental entity’s general fund shall not exceed an amount equal to thirty-five percent of the budgeted expenditures from the governmental entity’s general fund for the current fiscal year prior to budgeted transfers from such general fund.

b. If the governmental entity’s budget does not comply with the requirements of paragraph “a”, the department of management shall not certify the governmental entity’s taxes back to the county auditor under section 24.17 and the governmental entity shall remedy the violation and recertify the budget.

79. Section 425.11, subsection 1, paragraph e, subparagraph (2), Code 2026, is amended to read as follows:

3. Each governmental entity shall establish an obligated funds account within the governmental entity’s general fund. Restricted, committed, assigned, or nonspendable funds within the meaning of generally accepted accounting principles, as established by the governmental accounting standards board, shall be deposited in and accounted for in the obligated funds account, including but not limited to such funds that are in the governmental entity’s general fund for the purchase, lease-purchase, or major refurbishment of law enforcement, public safety, and public works vehicles and equipment and for vertical infrastructure and horizontal infrastructure projects.

(2) For the purpose of this subchapter, the word “owner” shall be construed to mean a bona fide owner and not one for the purpose only of availing the person of the benefits of this subchapter. In order to qualify for the homestead tax credit and or exemption, evidence of ownership shall be on file in the office of the clerk of the district court or recorded in the office of the county recorder at the time the owner files with the assessor a verified statement of the homestead claimed by the owner as provided in section 425.2.

4. To ensure uniformity, accuracy, and efficiency in the certification of governmental entity budgets according to the requirements of this section, the department of management shall prescribe the procedures to be used and instruct the appropriate officials of the various governmental entities on implementation of the procedures.

Sec.

80. Section 483A.24, subsection 20, Code 2026, is amended to read as follows:

20. Upon payment of a fee established by rules adopted pursuant to section 483A.1 for a lifetime trout fishing license, the department shall issue a lifetime trout fishing license to a person who is at least sixty-five years of age or to a person who qualifies for the disabled veteran homestead credit under section 425.15 425.1, subsection 2, paragraph “b”. The department shall prepare an application to be used by a person requesting a lifetime trout fishing license under this subsection.

91. Section 176A.8, subsection 13, Code 2026, is amended by striking the subsection. DIVISION XII PROPERTY PARCEL INFORMATION

Sec.

92. Section 331.510, Code 2026, is amended by adding the following new subsection:

NEW SUBSECTION.

5.

a. An annual report not later than September 1 to the department of management containing parcel-level property data, including parcel identification information, location, size, valuation, classification, types of structures and improvements, exemptions, credits, and reporting year amounts of property taxes due and payable.

b. In addition to the information required under paragraph “a”, the department of management may require additional parcel-level data deemed necessary by the director of the department of management. The department shall prescribe the form and manner of submitting the annual report under this subsection.

81. REPEAL. Section 425.15, Code 2026, is repealed.

c. The first annual report under this subsection shall be due not later than September 1, 2027. DIVISION XIII URBAN RENEWAL

Sec.

93. Section 15A.1, subsection 1, paragraph b, Code 2026, is amended to read as follows:

82. IMPLEMENTATION. Homestead owners who have filed for or that are receiving homestead credits or exemptions under chapter 425, subchapter I, before the effective date of this division of this Act shall continue to receive such credits and exemptions for which the owner is eligible for assessment years beginning on or after January 1, 2026, without refiling, and, if the owner is eligible, shall receive the exemption under section 425.1A, subsection 1A, as enacted in this division of this Act, without filing for such exemption.

b. For purposes of this chapter, “economic development” means private or joint public and private investment involving the creation of new jobs and income or the retention of existing jobs and income that would otherwise be lost or the provision of workforce housing.

Sec.

94. Section 15A.1, subsection 2, Code 2026, is amended by adding the following new paragraph:

NEW PARAGRAPH.

83. RETROACTIVE APPLICABILITY. This division of this Act applies retroactively to assessment years beginning on or after January 1, 2026. DIVISION VI MILITARY SERVICE PROPERTY TAX EXEMPTION

e. Development policies that advance the development of workforce housing.

Sec.

84. Section 426A.11, subsection 2, Code 2026, is amended to read as follows:

2.

a. The property, not to exceed one thousand eight hundred fifty-two dollars in taxable value for assessment years beginning before January 1, 2023, of an honorably separated, retired, furloughed to a reserve, placed on inactive status, or discharged veteran, as defined in section 35.1, subsection 2, paragraph “a” or “b”.

b. The property, not to exceed four thousand dollars in taxable value for the assessment years beginning on or after January 1, 2023, but before January 1, 2026, of an honorably separated, retired, furloughed to a reserve, placed on inactive status, or discharged veteran, as defined in section 35.1, subsection 2, paragraph “a” or “b”.

c. The property, not to exceed the following amounts in taxable value, of an honorably separated, retired, furloughed to a reserve, placed on inactive status, or discharged veteran, as defined in section 35.1, subsection 2, paragraph “a” or “b”:

(1) Five thousand dollars in taxable value for the assessment year beginning January 1, 2026.

(2) Six thousand dollars in taxable value for the assessment year beginning January 1, 2027.

(3) Seven thousand dollars in taxable value for assessment years beginning on or after January 1, 2028.

95. Section 331.403, subsection 3, paragraph b, subparagraph (19), Code 2026, is amended by striking the subparagraph.

Sec.

85. RETROACTIVE APPLICABILITY. This division of this Act applies retroactively to January 1, 2026, for assessment years beginning on or after that date. DIVISION VII HOSPITAL AND EMERGENCY MEDICAL SERVICES PROPERTY TAX LEVIES

96. Section 384.22, subsection 2, paragraph b, subparagraph (19), Code 2026, is amended by striking the subparagraph.

Sec.

86. Section 347.7, Code 2026, is amended by adding the following new subsection:

NEW SUBSECTION. 3A.

a. For fiscal years beginning on or after July 1, 2027, any property tax levy imposed for a county hospital under this chapter that is limited by law to a specific property tax levy rate per one thousand dollars of assessed value shall not exceed a levy rate per one thousand dollars of assessed value that is equal to one thousand multiplied by the quotient obtained by dividing one hundred five percent of the current fiscal year’s actual property tax dollars certified for such levy by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

97. Section 403.17, subsection 10, Code 2026, is amended to read as follows:

b. For purposes of this subsection, “budget year”, “current fiscal year”, and “new valuation” mean the same as defined in section 331.423.

10. “Economic development area” means an area of a municipality designated by the local governing body as appropriate for commercial and industrial enterprises, public improvements related to housing and residential development, or construction of housing and residential development for low and moderate income families, including single or multifamily housing. If an urban renewal plan for an urban renewal area is based upon a finding that the area is an economic development area and that no part contains slum or blighted conditions, then the division of revenue provided in section 403.19 and stated in the plan shall be limited to twenty years from the calendar year following the calendar year in which the municipality first certifies to the county auditor the amount of any loans, advances, indebtedness, or bonds which qualify for payment from the division of revenue provided in section 403.19. Such designated area shall not include agricultural land, including land which is part of a century farm, unless the owner of the agricultural land or century farm agrees to include the agricultural land or century farm in the urban renewal area. For the purposes of this subsection, “century farm” means a farm in which at least forty acres of such farm have been held in continuous ownership by the same family for one hundred years or more.

Sec.

87. Section 347A.3, Code 2026, is amended by adding the following new subsection:

NEW SUBSECTION.

3.

a. For fiscal years beginning on or after July 1, 2027, any property tax levy imposed for a county hospital under this chapter that is limited by law to a specific property tax levy rate per one thousand dollars of assessed value shall not exceed a levy rate per one thousand dollars of assessed value that is equal to one thousand multiplied by the quotient obtained by dividing one hundred five percent of the current fiscal year’s actual property tax dollars certified for such levy by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

98. Section 403.17, subsection 14, Code 2026, is amended to read as follows:

b. For purposes of this subsection, “budget year”, “current fiscal year”, and “new valuation” mean the same as defined in section 331.423.

14. “Low or and moderate income families” means those families, including single person households, earning no more than eighty percent of the higher of the median family income of the county or the statewide nonmetropolitan area as determined by the latest United States department of housing and urban development, section 8 income guidelines.

Sec.

88. 99. Section 357F.8, 403.17, Code 2026, is amended by adding the following new subsection:

NEW SUBSECTION. 14A. “Low and moderate income family housing” means housing for low and moderate income families and includes housing that meets the requirements of section 15.353.

Sec. 100. Section 403.19, subsection 2, paragraph a, Code 2026, is amended to read as follows:

a. That portion of the taxes each year in excess of such amount shall be allocated to and when collected be paid into a special fund of the municipality to pay the principal of and interest on loans, moneys advanced to, or indebtedness, whether funded, refunded, assumed, or otherwise, including bonds issued under the authority of section 403.9, subsection 1, incurred by the municipality to finance or refinance, in whole or in part, an urban renewal project within the area, and to provide assistance for low and moderate income family housing as provided in section 403.22. However, except as provided in paragraph “b”, taxes for the regular and voter-approved physical plant and equipment levy of a school district imposed pursuant to section 298.2; and taxes for the instructional support program of a school district imposed pursuant to section 257.19,; taxes for the payment of bonds and interest of each taxing district,; foundation property taxes of a school district imposed under section 257.3 levied against property located in an incorporated area and subject to an ordinance providing for a division of revenue adopted on or after January 1, 2027; foundation property taxes of a school district imposed under section 257.3 levied against property subject to a division of revenue subject to the sixty percent limitation under paragraph “e” for the applicable fiscal year; and taxes imposed under section 346.27, subsection 22, related to joint county-city buildings shall be collected against all taxable property within the taxing district without limitation by the provisions of this subsection.

Sec. 101. Section 403.19, subsection 2, Code 2026, is amended by adding the following new paragraph:

NEW PARAGRAPH.

e. For urban renewal areas for which an ordinance providing for a division of revenue in effect on the effective date of this division of this Act that is not limited in duration under section 403.17, subsection 10, Code 2026, after twenty years following the effective date of this division of this Act or after twenty years from the calendar year following the calendar year in which the municipality first certifies to the county auditor the amount of any loans, advances, indebtedness, or bonds which qualify for payment from the division of revenue, whichever is later, the amount determined under paragraph “a” that may be paid into the municipality’s special fund shall not exceed sixty percent of the amount otherwise determined under paragraph “a” but for this paragraph and such excess amounts shall be allocated and paid to the respective taxing districts in the same manner as amounts under subsection 1. The municipality may exceed the limitation in this paragraph to the extent necessary for payments of bonds or other indebtedness incurred before the effective date of this division of this Act, but in such event the municipality shall not issue bonds or other indebtedness payable from such division of revenue while exceeding the limitation and the municipality shall not be eligible to utilize school district foundation property taxes imposed under section 257.3. This paragraph shall not apply to divisions of revenue established by community colleges under chapter 260E or rural improvement zones under chapter 357H.

Sec. 102. Section 403.19, Code 2026, is amended by adding the following new subsection:

NEW SUBSECTION. 3A. An ordinance providing for a division of revenue under this section that is adopted on or after the effective date of this division of this Act shall be limited to twenty-three years from the calendar year following the calendar year in which the municipality first certifies to the county auditor the amount of any loans, advances, indebtedness, or bonds that qualify for payment from the division of revenue provided for in this section. The ordinance shall terminate and be of no further force and effect following the twenty-three-year period provided in this subsection. This subsection shall not apply to divisions of revenue established by community colleges under chapter 260E or rural improvement zones under chapter 357H.

Sec. 103. Section 403.19, Code 2026, is amended by adding the following new subsection:

NEW SUBSECTION.

12. For any fiscal year beginning on or after July 1, 2027, following written request filed with the county auditor and the board of directors of the school district, a school district may approve by resolution of the board of directors the payment from the school district’s general fund to the municipality for deposit in the special fund under this section all or a portion of the school district foundation property taxes under section 257.3 levied against property located in an incorporated area and subject to an ordinance providing for a division of revenue adopted on or after January 1, 2027, for one or more applicable fiscal years. If approved, the board of directors shall file such resolution with the county auditor. Payments approved under this subsection are voluntary and a school district is not required to pay over the revenue to the municipality unless approved by resolution. Amounts paid by a school district under this subsection shall continue to be considered foundation property taxes levied under section 257.3 and such payment shall not result in the adjustment of state foundation aid or other amounts under chapter 257.

Sec. 104. REPEAL. Section 403.22, Code 2026, is repealed.

Sec. 105. IMPLEMENTATION. For a division of revenue in effect on the effective date of this division of this Act that was subject to the duration limitation of section 403.22, subsection 5, prior to the effective date of this division of this Act, such division of revenue shall continue to be subject to the duration limitation otherwise applicable to an urban renewal area established upon the determination that the area is an economic development area, as provided in section 403.17, subsection 10, Code 2026.

Sec. 106. EFFECTIVE DATE. This division of this Act, being deemed of immediate importance, takes effect upon enactment.

Sec. 107. APPLICABILITY. The following applies to property taxes due and payable in fiscal years beginning on or after July 1, 2028: The portion of the section of this division of this Act excluding taxes under section 257.3 from divisions of revenue by amending section 403.19, subsection 2, paragraph “a”.

Sec. 108. APPLICABILITY. The following applies to urban renewal areas in existence on or established on or after the effective date of this division of this Act: The section of this division of this Act repealing section 403.22. DIVISION XIV ASSESSMENT PROCEDURES

Sec. 109. Section 441.21, subsection 3, Code 2026, is amended to read as follows:

3.

a. “Actual value”, “taxable value”, or “assessed value” as used in other sections of the Code in relation to assessment of property for taxation shall mean the valuations as determined by this section; however, other provisions of the Code providing special methods or formulas for assessing or valuing specified property shall remain in effect, but this section shall be applicable to the extent consistent with such provisions. The assessor and department of revenue shall disclose at the written request of the taxpayer all information in any formula or method used to determine the actual value of the taxpayer’s property. In addition, for assessment years beginning on or after January 1, 2027, if the taxpayer’s residential property has increased in actual value by ten percent or more as compared to either of the two immediately preceding assessment years, the assessor shall provide the taxpayer with a statement of the reasons for the increase in actual value, information specifying the portion of actual value increase attributable to a change in classification, revaluation, new construction, improvements, or renovations to the property, and all information in any formula or method used to determine the actual value.

b.

(1) For assessment years beginning before January 1, 2018, the burden of proof shall be upon any complainant attacking such valuation as excessive, inadequate, inequitable, or capricious. However, in protest or appeal proceedings when the complainant offers competent evidence by at least two disinterested witnesses that the market value of the property is less than the market value determined by the assessor, the burden of proof thereafter shall be upon the officials or persons seeking to uphold such valuation to be assessed.

a. For fiscal years beginning on or after July 1, 2027, any property tax levy imposed for the district under this chapter that is limited by law to a specific property tax levy rate per one thousand dollars of assessed value shall not exceed a levy rate per one thousand dollars of assessed value that is equal to one thousand multiplied by the quotient obtained by dividing one hundred five percent of the current fiscal year’s actual property tax dollars certified for such levy by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

(2) (1) For assessment years beginning on or after January 1, 2018, the except as provided in subparagraph (3), the burden of proof shall be upon any complainant attacking such valuation as excessive, inadequate, inequitable, or capricious. However, in protest or appeal proceedings when the complainant offers competent evidence that the market value of the property is different than the market value determined by the assessor, the burden of proof thereafter shall be upon the officials or persons seeking to uphold such valuation to be assessed.

b. For purposes of this subsection, “budget year”, “current fiscal year”, and “new valuation” mean the same as defined in section 331.423.

(3) (2) If the classification of a property has been previously adjudicated by the property assessment appeal board or a court as part of an appeal under this chapter, there is a presumption that the classification of the property has not changed for each of the four subsequent assessment years, unless a subsequent such adjudication of the classification of the property has occurred, and the burden of demonstrating a change in use shall be upon the person asserting a change to the property’s classification.

Sec.

(3) For assessment years beginning on or after January 1, 2027, for residential property, if the taxpayer’s property actual value increased by ten percent or more as compared to either of the two immediately preceding assessment years, including an increase as the result of an equalization order, and the property did not change classification or primary use and the increase in actual value is not the result of new construction, improvements, or renovations to the property, the actual value so determined by the assessor is not presumed to be the actual value and in any protest or appeal the assessor shall have the burden of proof that the valuation is not excessive, inadequate, inequitable, or capricious.

89. Sec. 110. Section 357G.8, 441.33, Code 2026, is amended by adding the following new subsection:

NEW SUBSECTION.

3. Ex parte communications with board of review members are prohibited in protests before the board. DIVISION XV VALUATIONS —— ABNORMAL TRANSACTIONS —— REAL ESTATE TRANSFER TAX FORMS

Sec. 111. Section 428A.7, Code 2026, is amended to read as follows: 428A.7 Forms provided by director of revenue. The director of revenue shall prescribe the form of the declaration of value and shall include an appropriate place for the inclusion of special facts and circumstances relating to the actual sales price in real estate transfers including but not limited to factors that distort market value such as built-to-suit sales, sale-leaseback sales, leased fee sales, and the abnormal transactions identified in section 441.21, subsection 1, paragraph “b”, subparagraph (1). The director shall provide an adequate number of the declaration of value forms to each county recorder in the state. If the declaration of value form requires or provides for the inclusion of the social security number or federal tax identification number of a seller or buyer, the department shall provide that the social security number or federal tax identification number remains confidential and cannot be obtained by public examination.

Sec. 112. Section 441.21, subsection 1, paragraph b, subparagraph (1), Code 2026, is amended to read as follows:

(1) The actual value of all property subject to assessment and taxation shall be the fair and reasonable market value of such property except as otherwise provided in this section. “Market value” is defined as the fair and reasonable exchange in the year in which the property is listed and valued between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and each being familiar with all the facts relating to the particular property. Sale prices of the property or comparable property in normal transactions reflecting market value, and the probable availability or unavailability of persons interested in purchasing the property, shall be taken into consideration in arriving at its market value. In arriving at market value, sale prices of property in abnormal transactions not reflecting market value shall not be taken into account, or shall be adjusted to eliminate the effect of factors which distort market value, including but not limited to built-to-suit construction, sale-leaseback transactions, leased fee sales, sales to immediate family of the seller between related parties, foreclosure or other forced sales, contract sales, discounted purchase transactions or purchase of adjoining land or other land to be operated as a unit.

Sec. 113. RETROACTIVE APPLICABILITY. This division of this Act applies retroactively to assessment years beginning on or after January 1, 2026. DIVISION XVI AGRICULTURAL EXTENSION LEVY

Sec. 114. Section 176A.10, Code 2026, is amended to read as follows: 176A.10 County agricultural extension education tax.

1. The extension council of each extension district shall, at a meeting held before April 30, estimate the amount of money required to be raised by taxation for financing the county agricultural extension education program authorized in this chapter. The annual tax levy and the amount of money to be raised from the levy for the county agricultural extension education fund shall not exceed the following: amount levied for the immediately preceding fiscal year plus any allowable increase under section 444.25.

a.

(1) Except as provided in subparagraph (2), for an extension district having a population of less than thirty thousand, an annual levy of twenty and one-fourth cents per thousand dollars of the assessed valuation of the taxable property in the district up to a maximum of seventy thousand dollars for the fiscal year commencing July 1, 1985, and seventy-five thousand dollars for each subsequent fiscal year.

(2) For an extension district having a population of less than thirty thousand and as provided in subsection 2, an annual levy of thirty cents per thousand dollars of the assessed valuation of the taxable property in the district up to a maximum of eighty-seven thousand dollars payable during the fiscal year commencing July 1, 1992, and an increase of six thousand dollars in the amount payable during each subsequent fiscal year.

b.

(1) Except as provided in subparagraph (2), for an extension district having a population of thirty thousand or more but less than fifty thousand, an annual levy of twenty and one-fourth cents per thousand dollars of the assessed valuation of the taxable property in the district up to a maximum of eighty-four thousand dollars for the fiscal year commencing July 1, 1985, and ninety thousand dollars for each subsequent fiscal year.

(2) For an extension district having a population of thirty thousand or more but less than fifty thousand and as provided in subsection 2, an annual levy of twenty and one-fourth cents per thousand dollars of the assessed valuation of the taxable property in the district up to a maximum of one hundred four thousand dollars payable during the fiscal year commencing July 1, 1992, and an increase of seven thousand dollars in the amount payable during each subsequent fiscal year.

c.

(1) Except as provided in subparagraph (2), for an extension district having a population of fifty thousand or more but less than ninety-five thousand, an annual levy of thirteen and one-half cents per thousand dollars of the assessed valuation of the taxable property in the district up to a maximum of one hundred five thousand dollars for the fiscal year commencing July 1, 1985, and one hundred twelve thousand five hundred dollars for each subsequent fiscal year.

(2) For an extension district having a population of fifty thousand or more but less than ninety thousand and as provided in subsection 2, an annual levy of thirteen and one-half cents per thousand dollars of the assessed valuation of the taxable property in the district up to a maximum of one hundred thirty thousand five hundred dollars payable during the fiscal year commencing July 1, 1992, and an increase of nine thousand dollars in the amount payable during each subsequent fiscal year.

d.

(1) Except as provided in subparagraph (2), for an extension district having a population of ninety-five thousand or more, an annual levy of thirteen and one-half cents per thousand dollars of the assessed valuation of the taxable property in the district up to a maximum of one hundred forty thousand dollars for the fiscal year commencing July 1, 1985, and one hundred fifty thousand dollars for each subsequent fiscal year.

(2) For an extension district having a population of ninety thousand or more but less than two hundred thousand and as provided in subsection 2, an annual levy of thirteen and one-half cents per thousand dollars of the assessed valuation of the taxable property in the district up to a maximum of one hundred eighty thousand dollars payable during the fiscal year commencing July 1, 1992, and an increase of fifteen thousand dollars in the amount payable during each subsequent fiscal year.

e. For an extension district having a population of two hundred thousand or more and as provided in subsection 2, an annual levy of five cents per thousand dollars of the assessed valuation of the taxable property in the district up to a maximum of two hundred thousand dollars payable during the fiscal year commencing July 1, 1992, and an increase of twenty-five thousand dollars in the amount payable during each subsequent fiscal year.

2. An extension council of an extension district may choose to be subject to the levy and revenue limits specified in subsection 1, paragraph “a”, subparagraph (2), paragraph “b”, subparagraph (2), paragraph “c”, subparagraph (2), and paragraph “d”, subparagraph (2), and subsection 1, paragraph “e”, for the purpose of the annual levy for the fiscal year commencing July 1, 1991, which levy is payable in the fiscal year beginning July 1, 1992. Before an extension district may be subject to the levy and revenue limits specified in subsection 1, paragraph “a”, subparagraph (2), paragraph “b”, subparagraph (2), paragraph “c”, subparagraph (2), and paragraph “d”, subparagraph (2), and subsection 1, paragraph “e”, for fiscal years beginning on or after July 1, 1992, which levy is payable in fiscal years beginning on or after July 1, 1993, the question of whether the district shall be subject to the levy and revenue limits as specified in such paragraphs must be submitted to the registered voters of the district. The question shall be submitted at the time of a general election. If the question is approved by a majority of those voting on the question the levy and revenue limits specified in subsection 1, paragraph “a”, subparagraph (2), paragraph “b”, subparagraph (2), paragraph “c”, subparagraph (2), and paragraph “d”, subparagraph (2), and subsection 1, paragraph “e”, shall thereafter apply to the extension district. The question need only be approved at one general election. If a majority of those voting on the question vote against the question, the district may continue to submit the question at subsequent general elections until approved.

3.

a. For fiscal years beginning on or after July 1, 2027, any property tax levy imposed for the district under this chapter that is limited by law to a specific property tax levy rate per one thousand dollars of assessed value shall not exceed a levy rate per one thousand dollars of assessed value that is equal to one thousand multiplied by the quotient obtained by dividing one hundred five percent of the current fiscal year’s actual property tax dollars certified for such levy by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

b. For purposes of this subsection, “budget year”, “current fiscal year”, and “new valuation” mean the same as defined in section 384.1.

Sec.

90.

NEW SECTION. 422D.5A Levy limitation.

1. For fiscal years beginning on or after July 1, 2027, any property tax levy imposed under this chapter that is limited by law to a specific property tax levy rate per one thousand dollars of assessed value shall not exceed a levy rate per one thousand dollars of assessed value that is equal to one thousand multiplied by the quotient obtained by dividing one hundred five percent of the current fiscal year’s actual property tax dollars certified for such levy by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.

2. For purposes of this section, “budget year”, “current fiscal year”, and “new valuation” mean the same as defined in section 331.423. DIVISION VIII PROPERTY TAX LEVY RATES

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91. Section 176A.10, subsection 2, Code 2026, is amended by striking the subsection.

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92. Section 312.2, subsection 5, paragraph a, Code 2026, is amended to read as follows:

a. The treasurer of state, before making any allotments to counties under this section, shall reduce the allotment to a county for the secondary road fund by the amount by which the total funds that the county transferred or provided during the prior fiscal year under section 331.429, subsection 1, paragraphs “a”, “b”, “d”, and “e”, are less than seventy-five fifty-one percent of the sum of the following:

(1) From the general fund of the county, the dollar equivalent of a tax of sixteen and seven-eighths eleven and thirteen-sixteenths cents per thousand dollars of assessed value on all taxable property in the county.

(2) From the rural services fund of the county, the dollar equivalent of a tax of three two dollars and three-eighths of a cent ten and twenty-one eightieths cents per thousand dollars of assessed value on all taxable property not located within the corporate limits of a city in the county.

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93.

NEW SECTION. 444.25 Maximum property tax levy rates —— adjustments.

1. For purposes of this section:

a. “Budget year” is the fiscal year beginning during the calendar year in which a budget is certified.

b. “Current fiscal year” is the fiscal year ending during the calendar year in which a budget for the budget year is certified.

c. “Rate-limited property tax levy” includes any ad valorem property tax levy limited by law to a specific property tax levy rate per one thousand dollars of assessed value used to calculate taxes, but does not include the school district foundation levy under section 257.3, the county general services levy under section 331.423, subsection 1, the county rural services levy under section 331.423, subsection 2, the city general fund levy under section 384.1, subsection 3, the physical plant and equipment levies under section 298.2, the school district bond tax under section 298.18, any levy under chapter 28M, a levy under section 384.12, subsection 1, paragraph “a”, levied for operation and maintenance of a municipal transit system, a levy under section 384.12, subsection 1, paragraph “b”, levied for operation and maintenance of a regional transit district, a levy for the office of the assessor under section 441.16, a levy for a county agricultural extension under section 176A.10, any levy under chapter 347 or 347A, any levy under chapter 386, and any levy under chapter 357F, 357G, or 422D. In addition, “rate-limited property tax levy” does not include levy rates used in the calculations under section 312.2, subsection 5, paragraph “a”.

2. The extension council in each extension district shall comply with chapter 24.

2. For the fiscal year beginning July 1, 2027, each rate-limited property tax levy may only be imposed if the governmental entity imposed such levy for the fiscal year beginning July 1, 2026, and shall, by operation of this section, be limited to a levy rate per one thousand dollars of assessed value that is equal to one thousand multiplied by the quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for such levy divided by the total assessed value used to calculate such taxes for the budget year, but not less than a levy rate per one thousand dollars of assessed value that results in an amount of actual property tax dollars certified for levy for such levy equal to one hundred and one-half percent of the actual property tax dollars certified for such levy for the fiscal year beginning July 1, 2026.

Sec. 115. APPLICABILITY. This division of this Act applies to property taxes due and payable in fiscal years beginning on or after July 1, 2027. DIVISION XVII CHAPTER 404 —— SCHOOL TAXES

3. For the fiscal year beginning July 1, 2028, and each fiscal year thereafter, rate-limited property tax levies may be imposed by any governmental entity otherwise authorized by law, regardless of whether the governmental entity imposed the levy for the fiscal year beginning July 1, 2026, at rates not to exceed those established by the general assembly by statute following receipt and consideration of the report submitted by the legislative interim committee requested to be established by the legislative council in this division of this Act.

Sec. 116. Section 404.3D, Code 2026, is amended to read as follows: 404.3D Exemptions for residential property.

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1. For revitalization areas established under this chapter on or after July 1, 2024, and for first-year exemption applications for property located in a revitalization area in existence on July 1, 2024, filed on or after July 1, 2024, an exemption authorized under this chapter for property that is residential property shall not apply to property tax levies imposed by a school district.

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2. In addition to the inapplicability of the exemption to school district property tax levies specified under subsection 1, for property taxes due and payable in fiscal years beginning on or after July 1, 2027, if such a property receiving an exemption is located in both a revitalization area and an urban renewal area, the school district property taxes on the property shall not be subject to the division of revenue under section 403.19 and when collected shall be paid to the school district.

NEW SECTION. 444.26 Use of bonds and indebtedness for general operations —— prohibition.

Sec. 117. EFFECTIVE DATE. This division of this Act, being deemed of immediate importance, takes effect upon enactment. DIVISION XVIII UTILITY REPLACEMENT TAX TASK FORCE

1. For purposes of this section:

Sec. 118. Section 437A.15, subsection 7, paragraph b, Code 2026, is amended to read as follows:

a. “Exempt finance lease” means a finance lease of the governmental entity if the aggregate principal amount of all finance leases of the governmental entity is less than one and one-fourth percent of the governmental entity’s general fund budget for the most recently completed fiscal year.

b. The task force shall study the accuracy of the taxes imposed under this chapter and chapter 437B, ways to modernize the administration of such taxes, methods of simplifying administration of the replacement taxes, elimination of property taxes imposed under this chapter or chapter 437B, simplification of thresholds for replacement tax rate adjustments while retaining tax stability, the effects of the replacement such taxes under this chapter and chapter 437B on local taxing authorities, local taxing districts, consumers, and taxpayers through January 1, 2024 December 31, 2026, including ways to maintain continuity for local taxing districts and consumers and ways to provide a competitive and equitable tax environment for taxpayers. If the task force recommends modifications to the replacement tax that will further the purposes of tax neutrality for local taxing authorities, local taxing districts, taxpayers, and consumers, consistent with the stated purposes of this chapter taxes, the department of management shall transmit those recommendations to the general assembly.

b. “General operations” means services or activities generally funded from the governmental entity’s general fund, which are necessary for the operation of the governmental entity, including salaries and benefits, or which are for the health and welfare of the governmental entity’s citizens or primarily intended to benefit all residents of the governmental entity, but excluding services financed by statutory funds other than a debt service fund.

Sec. 119. EFFECTIVE DATE. This division of this Act, being deemed of immediate importance, takes effect upon enactment. DIVISION XIX PAYMENTS IN LIEU OF PROPERTY TAXES —— TASK FORCE

c. “Indebtedness” includes but is not limited to leases and finance leases, excluding exempt finance leases, for public safety vehicles, maintenance vehicles and equipment, sanitation vehicles and equipment, transit vehicles, public works vehicles and machinery, recreation equipment and facilities, and information technology and office equipment, but does not include subscription-based information technology arrangements for software.

Sec. 120. PAYMENTS IN LIEU OF PROPERTY TAXES TASK FORCE —— REPORT.

2. On or after July 1, 2026, a city or county shall not issue bonds or other indebtedness payable from an ad valorem property tax levy for the purpose of funding the general operations of the city or general operations of the county, as applicable, or otherwise use proceeds from the sale of bonds or issuance of other indebtedness to fund general operations.

1. By January 10, 2027, the department of revenue shall prepare and submit a report approved by the task force created under subsection 2, including recommended legislative actions, to the general assembly regarding the establishment of a program under which counties may implement a program for the collection of payments in lieu of property taxes from owners of property that is exempt, in whole or in part, from ad valorem property taxes, but excluding government-owned property.

3. The department of management shall adopt rules under chapter 17A to implement this section.

2. The department shall convene a task force consisting of at least all of the following persons:

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a. The director of revenue, or the director’s designee.

95. PROPERTY TAXATION RATES —— STUDY COMMITTEE.

b. The director of the department of management, or the director’s designee.

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c. All members of the Polk county board of supervisors.

a. The legislative council is requested to establish a legislative study committee during the 2026 legislative interim and the 2027 legislative interim to examine appropriate rates of property taxation imposed by governmental entities following the adjustments to assessment limitations and levy rate limitations made in this Act and determine an alternative methodology and period of time to increase the percentage of actual value at which residential and multiresidential property are subject to tax under section 441.21, subsections 4 and 13, from seventy-five percent to one hundred percent.

d. One mayor from a city located, in whole or in part, within Polk county, selected by the director of revenue.

b. The study committee shall consist of the following voting members of the general assembly:

e. Three representatives from tax-exempt entities located in Polk county of varying sizes, selected by the director of revenue.

(1) Two members of the senate appointed by the majority leader of the senate.

f. One private property owner, selected by the director of revenue.

(2) One member of the senate appointed by the minority leader of the senate.

g. Four ex officio, nonvoting legislative members consisting of the following: