Bill > HSB596

Introduced Session

This bill relates to local government taxes, budgets, and authority. DIVISION I —— PROPERTY TAX REVENUE LIMITATIONS. The bill enacts new Code section 444.25, which establishes a maximum aggregate amount of property tax dollars that may be certified for levy among all property tax levies imposed by a governmental entity, excluding debt service levies. For the budget year beginning July 1, 2027, and each budget year thereafter, the maximum aggregate amount of property tax dollars that may be certified for levy among all property tax levies imposed by a governmental entity against property that is not new valuation, as defined in the bill, shall not exceed an amount equal to the sum of 102 percent of the aggregate amount of property tax dollars certified for levy by the governmental entity among all property tax levies imposed by the governmental entity for the preceding fiscal year. If the budget year includes a voter-approved property tax levy that was not approved for imposition in the preceding fiscal year, the maximum aggregate amount of property tax dollars for the governmental entity for the budget year is increased by the amount of the voter-approved property tax levy approved at election for the budget year. If a governmental entity H.F. _____ certifies a budget that violates new Code section 444.25, the department of management shall reduce each of the applicable governmental entity’s property tax levies on a pro rata basis so that the governmental entity is in compliance. New Code section 444.25 does not remove or otherwise affect property tax limitations, including levy rate and use limitations, otherwise provided by law for any property tax levy of the governmental entity. The authority of the state appeal board under Code section 24.48 to suspend property tax levy limitations does not apply to the limitations of new Code section 444.25. DIVISION II —— RESIDENTIAL PROPERTY TAX EXEMPTION. The bill establishes a property tax exemption for all property classified as residential property under Code section 441.21(14). For assessment years beginning on or after January 1, 2026, such property is allowed an exemption, in addition to other exemptions or credits allowed by law, in an amount equal to the lesser of the taxable value of the property or $25,000 in taxable value. However, the exemption shall not apply to a property tax imposed by a school district. This division of the bill applies retroactively to assessment years beginning on or after January 1, 2026. DIVISION III —— PROPERTY TAX INFORMATION DISCLOSURE. Code section 24.2A, in part, requires the county auditor to provide by mail individual statements to property taxpayers that includes various pieces of information relating to the property tax dollars and levies of cities, counties, and school districts. The bill provides that such statements will also include information for all other certifying boards that are not a city, county, or school; however, all such entities shall be considered a single political subdivision and identified under a designation of “special taxing districts” on each statement. The bill also strikes the current list of items that must be included on each individual statement and establishes the minimum contents for the statement. H.F. _____ The bill requires that the statements be clear, concise, and written in plain language, and provides that the information in the individual statements may be presented using tables, written narrative, and graphic representations, and shall contain the internet site, mailing address, and a telephone number for each political subdivision that owners and taxpayers may call if they have questions related to the statement. The bill requires the department of management to consult with the Iowa league of cities and the Iowa state association of counties prior to prescribing the form for the statements. This division of the bill may include a state mandate as defined in Code section 25B.3. The bill makes inapplicable Code section 25B.2(3), which would relieve a political subdivision from complying with a state mandate if funding for the cost of the state mandate is not provided or specified. Therefore, political subdivisions are required to comply with any state mandate included in this division of the bill. This division of the bill applies to political subdivision budgets for fiscal years beginning on or after July 1, 2027. DIVISION IV —— COUNCIL OF GOVERNMENTS. Code chapter 28H establishes 17 councils of government (COG) based on specified geographic regions of the state. COG duties include providing planning services or technical assistance to the region, coordinating regional community development planning, coordinating delivery of community development programs and services, and preparing an annual regional community development plan. The bill adds coordination, planning, and technical assistance for local government entities for the purpose of consolidating, sharing, or regionalizing services among units of local government to the list of COG duties. DIVISION V —— BONDING. The bill modifies the procedures and requirements for the issuance of certain bonds and indebtedness by various political subdivisions. Counties and cities may generally contract indebtedness and approve the issuance of general obligation bonds to H.F. _____ carry out an essential county purpose or essential corporate purpose without voter approval, while the issuance of general obligation bonds to carry out a general county purpose or general corporate purpose generally requires voter approval by a 60 percent threshold. Current law also establishes circumstances under which the county or city may pursue the issuance of general obligation bonds for a general county purpose or general corporate purpose without voter approval, subject to the filing of a qualifying petition by eligible electors requesting an election. Beginning July 1, 2026, the bill establishes that the approval processes for bonds and indebtedness for essential county purposes and essential corporate purposes are the same as for general county purposes and general corporate purposes. Additionally, the bill eliminates the option for counties and cities to pursue the issuance of bonds or indebtedness under such procedures without an election. The changes in the bill are generally related to general obligation bonds payable through property taxes and generally not applicable to revenue bonds or loan agreements. The bill makes corresponding changes to other provisions of law governing the issuance of bonds and, by operation of law, the changes to county and city provisions governing the issuance of bonds apply to the issuances of certain other bonds or indebtedness by or on behalf of county hospitals, townships, regional transit districts, and certain other political subdivisions. Code section 296.2 provides that before indebtedness can be contracted by a school district in excess of 1.25 percent of the assessed value of the taxable property, a petition signed by eligible electors equal in number to 25 percent of those voting at the last election of school officials shall be filed with the president of the board of directors, asking that an election be called. The bill strikes that portion of the section limiting the provision to the issuance of indebtedness in excess of 1.25 percent of the assessed value of the taxable H.F. _____ property. Code section 423F.4 governs the ability of school districts to issue bonds payable from moneys from the secure an advanced vision for education fund. Under current law, such bonds may be issued without approval at election, unless a qualifying petition requesting an election is received. The bill makes all such bond issuances subject to 60 percent voter approval on or after July 1, 2026.

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No sponsors listed

Other Sponsors (1)

Subcommittee recommends passage. (on 01/29/2026)

Official Document