Bill > HF2577

Introduced Session

This bill relates to property taxation by modifying the methodology for determining actual value of residential, commercial, and industrial property, assessment limitations of certain classes of property, and certain levy rate limitations. DIVISION I —— ACTUAL VALUE LIMITATION. Under Code section 441.21, all property subject to taxation shall be valued at its actual value and, except as otherwise provided by law, shall be assessed at 100 percent of its actual value, and the value so assessed shall be taken and considered as the assessed value and taxable value of the property upon which the levy shall be made. Actual value is generally required to be the fair and reasonable market value. “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, but excluding certain abnormal sales. The bill provides that for assessment years beginning on or after January 1, 2027, but before January 1, 2030, the actual value of each individual residential, commercial, and industrial property, including after adjustments to actual values made as the result of equalization, shall not exceed 100 percent of the actual value of the property for the immediately preceding assessment year unless the property was not assessed in the immediately preceding assessment year, the property changed ownership, the property’s boundaries change, there is a change to the property’s classification, or new construction, additions, or improvements have been made to the property other than normal and necessary maintenance or repairs, not amounting to structural replacements or modification, and cost of the construction, additions, or improvements exceeds 5 percent of the property’s actual value. The bill provides that for assessment years beginning on or after January 1, 2030, the actual value of each such individual property, including after adjustments to actual values made as the result of equalization, shall not exceed the product of the annual inflation factor, as defined in the bill, and the actual value of the property for the immediately preceding assessment year unless the property was not assessed in the immediately preceding assessment year, the property changed ownership, the property’s boundaries changed, there is a change to the property’s classification, or new construction, additions, or improvements have been made to the property other than normal and necessary maintenance or repairs, not amounting to structural replacements or modification, and the cost of the construction, additions, or improvements exceeds 5 percent of the property’s actual value. The bill defines “annual inflation factor” to be an index, expressed as a percentage, determined based upon the consumer price for all urban consumers for the midwest region, but shall not be less than 100 percent nor greater than 103 percent. The bill also makes conforming changes to other provisions of law relating to the valuation of property. DIVISION II —— MODIFICATION OF ASSESSMENT LIMITATIONS. Code section 441.21(4) establishes the calculation for assessment limitations (rollback) for residential property and agricultural property. The bill strikes the calculation of the residential property assessment limitation for assessment years beginning on or after January 1, 2026, and strikes the provision within the agricultural property assessment limitation calculation that limits growth of residential or agricultural property to the growth in the other classification (ag-residential tie). The bill increases assessment limitations for residential property each assessment year from the assessment year beginning January 1, 2026, until the assessment limitation reaches 50 percent for assessment years beginning on or after January 1, 2028. By operation of the scheduled increases to the residential property assessment limitation, the assessment limitation applicable to that portion of commercial, and industrial property that is equal to or less than $150,000 is also increased. This division of the bill applies retroactively to assessment years beginning on or after January 1, 2026. DIVISION III —— PROPERTY TAX LEVY RATES. Under the bill, for the budget year beginning July 1, 2027, and each budget year thereafter, and notwithstanding any provision of law to the contrary, the maximum levy rate that may be imposed for a property tax levy by a governmental entity generally shall not exceed the levy rate for such property tax levy imposed by the governmental subdivision for the budget year beginning July 1, 2026, unless a higher levy rate is approved at election. The bill includes provisions to account for new voter-approved levies. Additionally, the limitation on any property tax levy rate under the bill may be increased provided the question has been submitted at the general election and received 60 percent of the votes cast on the proposition to authorize the levy rate increase for the proposed budget year. Under the bill, if the governmental entity is located in an area that is the subject of a governor’s proclamation of a state of disaster emergency or the declaration of a major disaster by the president of the United States, the limitation on any property tax levy rate may be temporarily increased for a budget year, unless approved at election for additional years. Under the bill, if the governmental entity is a city with a population of 5,000 or less, the city council may certify levy rates in excess of the rate limitation without an election. However, if at any time within 20 days following certification of the city’s budget, a petition is filed with the clerk of the city asking that the question of exceeding the levy rate limit be submitted to the registered voters of the city, the council shall direct the county commissioner of elections to call a special election upon the question of exceeding the levy rate limitation. DIVISION IV —— PROPERTY ASSESSMENT PROTESTS. Code section 441.37 establishes the period of time for filing protest of a property assessment with the local board of review. The bill amends the period of time for filing protests of property assessment from ending on April 30 to ending on May 30. The bill also makes corresponding changes to other deadlines following that change to the protest filing period. 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 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. The bill provides that all bond issuances for essential county purposes or essential corporate purposes are subject to an election if a petition is filed that is signed by eligible electors of the applicable jurisdiction equal in number to 10 percent of the persons in the jurisdiction who voted for the office of president of the United States at the last preceding general election. 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 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 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 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, and changes the number of voters required for a qualifying petition. The bill amends Code section 75.1, which governs elections held for the issuance of bonds by requiring 60 percent voter approval, to apply to merged areas and other political subdivisions. Code section 39.2(4)(d) provides that, for any political subdivision, if a special election is in whole or in part for the question of issuing bonds or other indebtedness, the election shall be held on the first Tuesday after the first Monday in November. The bill changes that provision to only apply to such date in November in an even-numbered year.

AI Summary

Committee Categories

Cindy Golding (R)*, 

Introduced, referred to Ways and Means. H.J. 330. (on 02/18/2026)

Official Document