House File 2745 H-8374 Amend House File 2745 as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < DIVISION I 4 PROPERTY TAX REVENUE LIMITATIONS —— BOND REVENUE USE 5 LIMITATIONS —— GENERAL FUND RESERVES 6 Section 1. Section 11.11, Code 2026, is amended to read as 7 follows: 8 11.11 Scope of audits. 9 The written report of the audit of a governmental 10 subdivision shall include the auditor’s opinion as to whether a 11 governmental subdivision’s financial statements are presented 12 fairly in all material respects in conformity with generally 13 accepted accounting principles or with an other another 14 comprehensive basis of accounting. As a part of conducting an 15 audit of a governmental subdivision, an evaluation of internal 16 control and tests for compliance with laws and regulations 17 shall be performed. As part of conducting an audit of a 18 governmental subdivision, an examination of the governmental 19 subdivision’s compliance with the reporting requirements of 20 section 331.403, subsection 3 , or section 384.22, subsection 2 , 21 if applicable, shall be performed. As part of conducting an 22 audit of a governmental subdivision for fiscal years beginning 23 on or after July 1, 2027, an examination of the governmental 24 subdivision’s compliance with section 24.35 shall be performed, 25 including verification of the circumstances resulting in actual 26 reserve funds exceeding the specified limits. 27 Sec. 2. Section 24.34, Code 2026, is amended to read as 28 follows: 29 24.34 Unliquidated obligations. 30 A city, county, or other political subdivision governmental 31 entity, as defined in section 24.35, may establish an 32 encumbrance system for any obligation not liquidated at the 33 close of the fiscal year in which the obligation has been 34 encumbered assigned, committed, restricted, or specified as 35 -1- HF 2745.4063 (2) 91 md/jh 1/ 53 #1.

nonspendable . The encumbered obligations may be retained 1 upon the books of the city, county, or other political 2 subdivision governmental entity, as defined in section 24.35, 3 until liquidated, all in accordance with generally accepted 4 governmental accounting practices principles, as established by 5 the governmental accounting standards board . 6 Sec. 3. NEW SECTION . 24.35 General fund reserves —— 7 limitations. 8 1. For purposes of this section: 9 a. “Budget year” is the fiscal year beginning during the 10 calendar year in which a budget is certified. 11 b. “Current fiscal year” is the fiscal year ending during 12 the calendar year in which a budget for the budget year is 13 certified. 14 c. “General fund” means a governmental entity’s fund 15 designated as such by law or the governmental entity’s fund 16 from which primary general operations of the governmental 17 entity are funded. 18 d. “Governmental entity” means any unit of government 19 or other public body or public corporation, including any 20 intergovernmental entity, that has the power to impose or 21 certify a property tax levy. “Governmental entity” does not 22 include a school district. 23 e. “Unassigned” means funds that are not restricted, 24 committed, assigned, or nonspendable within the meaning of 25 generally accepted accounting principles, as established by the 26 governmental accounting standards board. 27 2. a. For budgets certified for budget years beginning 28 on or after July 1, 2027, proposed unassigned reserve funds 29 identified within a governmental entity’s general fund shall 30 not exceed an amount equal to thirty-five percent of the 31 budgeted expenditures from the governmental entity’s general 32 fund for the current fiscal year prior to budgeted transfers 33 from such general fund. 34 b. If the governmental entity’s budget does not comply with 35 -2- HF 2745.4063 (2) 91 md/jh 2/ 53

the requirements of paragraph “a” , the department of management 1 shall not certify the governmental entity’s taxes back to the 2 county auditor under section 24.17 and the governmental entity 3 shall remedy the violation and recertify the budget. 4 3. Each governmental entity shall establish an obligated 5 funds account within the governmental entity’s general fund. 6 Restricted, committed, assigned, or nonspendable funds within 7 the meaning of generally accepted accounting principles, as 8 established by the governmental accounting standards board, 9 shall be deposited in and accounted for in the obligated funds 10 account, including but not limited to such funds that are 11 in the governmental entity’s general fund for the purchase, 12 lease-purchase, or major refurbishment of law enforcement, 13 public safety, and public works vehicles and equipment and for 14 vertical infrastructure and horizontal infrastructure projects. 15 4. To ensure uniformity, accuracy, and efficiency in the 16 certification of governmental entity budgets according to the 17 requirements of this section, the department of management 18 shall prescribe the procedures to be used and instruct the 19 appropriate officials of the various governmental entities on 20 implementation of the procedures. 21 Sec. 4. Section 24.48, Code 2026, is amended by adding the 22 following new subsection: 23 NEW SUBSECTION . 6. The authority to suspend property tax 24 levy limitations under this section shall not apply to the 25 limitations of section 444.25. 26 Sec. 5. Section 176A.8, subsection 13, Code 2026, is amended 27 by striking the subsection. 28 Sec. 6. NEW SECTION . 444.25 Maximum property tax levy 29 dollars. 30 1. For purposes of this section, unless the context 31 otherwise requires: 32 a. “Budget year” is the fiscal year beginning during the 33 calendar year in which a budget is certified. 34 b. “Current fiscal year” is the fiscal year ending during 35 -3- HF 2745.4063 (2) 91 md/jh 3/ 53

the calendar year in which a budget for the budget year is 1 certified. 2 c. “Governmental entity” means any unit of government 3 or other public body or public corporation, including any 4 intergovernmental entity or special purpose district, that 5 has the power to impose or certify a property tax levy. 6 “Governmental entity” does not include a school district. 7 d. “New valuation” means the increase from the current 8 fiscal year to the budget year in taxable valuation, as shown 9 on the assessment roll due to the following, the amount of each 10 as reported under section 331.510 by the county auditor to the 11 department of management: 12 (1) New construction. 13 (2) Additions or improvements to existing structures that 14 are not normal and necessary repairs under section 441.21, 15 subsection 8. 16 (3) Net boundary adjustments, including annexation, 17 severance, incorporation, consolidation, or discontinuance as 18 those terms are defined in section 368.1. 19 (4) Valuation exempt from property tax for the current 20 fiscal year as the result of prior new construction, additions, 21 or improvements under section 15.332, Code 2025, section 22 15.500, chapter 404, or chapter 427B, subchapter I, but which 23 is not exempt from property tax in the budget year. 24 e. “Property tax levy” means each ad valorem property tax 25 authorized by law to be imposed by a governmental entity, but 26 excluding any levy the revenue from which is specified by law 27 for debt service or required to be used exclusively for the 28 repayment of bonds or other indebtedness. 29 2. a. For the budget year beginning July 1, 2027, and 30 each budget year thereafter, the maximum aggregate amount of 31 property tax dollars that may be certified for levy among all 32 property tax levies imposed by a governmental entity against 33 property that is not new valuation shall not exceed an amount 34 equal to the sum of one hundred two percent of the aggregate 35 -4- HF 2745.4063 (2) 91 md/jh 4/ 53

amount of property tax dollars certified for levy by the 1 governmental entity among all property tax levies imposed by 2 the governmental entity for the current fiscal year. 3 b. If the budget year includes a voter-approved property tax 4 levy, or an increased rate thereof, that was not approved for 5 imposition in the current fiscal year, the maximum aggregate 6 amount of property tax dollars for the governmental entity 7 under paragraph “a” for the budget year shall be increased 8 by the amount of the voter-approved property tax levy or 9 the voter-approved rate increase, as applicable, approved 10 at election for the budget year. If the current fiscal 11 year includes a voter-approved property tax levy that is not 12 approved for imposition in the budget year, or a decreased rate 13 thereof, the maximum aggregate amount of property tax dollars 14 for the governmental entity under paragraph “a” for the budget 15 year shall be reduced by the amount of the voter-approved 16 property tax levy or voter-approved rate decrease, as 17 applicable, for the current fiscal year. 18 c. The amount of property tax dollars calculated under this 19 section includes those amounts budgeted by the governmental 20 entity as replacement taxes under chapter 437A or 437B, if 21 applicable. 22 3. For purposes of this section, if the governmental 23 entity’s taxes for a property tax levy were not certified 24 back by the department of management under section 24.17 for 25 the current fiscal year due to an act or omission of the 26 governmental entity, the current fiscal year’s property tax 27 dollars certified for levy for that property tax levy shall 28 be equal to the amount certified for levy for the fiscal year 29 immediately preceding the current fiscal year. 30 4. If a governmental entity certifies a budget that violates 31 this section, the department of management shall reduce each of 32 the applicable governmental entity’s property tax levies on a 33 pro rata basis so that the governmental entity is in compliance 34 with this section. 35 -5- HF 2745.4063 (2) 91 md/jh 5/ 53

5. This section shall not be construed as removing or 1 otherwise affecting property tax limitations, including levy 2 rate limitations expressed as a specific amount of money due 3 per an amount of value and use limitations, otherwise provided 4 by law for any property tax levy of the governmental entity. 5 Sec. 7. NEW SECTION . 444.26 Use of bonds and indebtedness 6 for general operations —— prohibition. 7 1. For purposes of this section: 8 a. “General operations” means services or activities 9 generally funded from the governmental entity’s general fund, 10 which are necessary for the operation of the governmental 11 entity, including salaries and benefits, or which are for the 12 health and welfare of the governmental entity’s citizens or 13 primarily intended to benefit all residents of the governmental 14 entity, but excluding direct and indirect capital expenditures 15 properly allocable under the Internal Revenue Code, as defined 16 in section 422.3, if the governmental entity were a taxpayer, 17 capital leases, and services financed by statutory funds other 18 than a debt service fund. 19 b. “Governmental entity” means any unit of government 20 or other public body or public corporation, including any 21 intergovernmental entity, that has the power to impose or 22 certify a property tax levy. 23 2. On or after July 1, 2026, the governing body of a 24 governmental entity shall not issue bonds or other indebtedness 25 payable from an ad valorem property tax levy for the purpose of 26 funding the general operations of the governmental entity or 27 otherwise use proceeds from the sale of bonds or issuance of 28 other indebtedness to fund general operations. 29 3. The department of management, following consultation 30 with the city finance committee and the county finance 31 committee, may adopt rules under chapter 17A for governmental 32 entities to implement this section. 33 DIVISION II 34 COMMERCIAL AND INDUSTRIAL PROPERTY —— TAXPAYER RELIEF FUND 35 -6- HF 2745.4063 (2) 91 md/jh 6/ 53

APPROPRIATION 1 Sec. 8. Section 8.57E, Code 2026, is amended by adding the 2 following new subsection: 3 NEW SUBSECTION . 1A. For each fiscal year beginning on or 4 after July 1, 2027, there is appropriated from the general fund 5 of the state to the taxpayer relief fund the sum of one hundred 6 twenty-five million dollars. 7 Sec. 9. Section 441.21, subsection 5, paragraph e, 8 subparagraphs (1), (2), and (3), Code 2026, are amended to read 9 as follows: 10 (1) For the fiscal year beginning July 1, 2023, there 11 is appropriated from the general fund of the state to the 12 department of revenue the sum of one hundred twenty-two million 13 three hundred fifty thousand dollars to be used for payments 14 under this paragraph calculated as a result of the assessment 15 limitations imposed under paragraph “b” , subparagraph (2), 16 subparagraph division (a), and paragraph “c” , subparagraph (2), 17 subparagraph division (a). For each fiscal year beginning 18 on or after July 1, 2024, but before July 1, 2027, there 19 is appropriated from the general fund of the state to the 20 department of revenue the sum of one hundred twenty-five 21 million dollars to be used for payments under this paragraph 22 calculated as a result of the assessment limitations imposed 23 under paragraph “b” , subparagraph (2), subparagraph division 24 (a), and paragraph “c” , subparagraph (2), subparagraph division 25 (a). 26 (2) For fiscal years beginning on or after July 1, 2023, but 27 before July 1, 2027, each county treasurer shall be paid by the 28 department of revenue an amount calculated under subparagraph 29 (4) for the applicable fiscal year . If an amount appropriated 30 for the fiscal year is insufficient to make all payments as 31 calculated under subparagraph (4), the director of revenue 32 shall prorate the payments to the county treasurers and shall 33 notify the county auditors of the pro rata percentage on or 34 before September 30. 35 -7- HF 2745.4063 (2) 91 md/jh 7/ 53

(3) On or before July 1 of each applicable fiscal year, the 1 assessor shall report to the county auditor that portion of the 2 total actual value of all commercial property and industrial 3 property in the county that is subject to the assessment 4 limitations imposed under paragraph “b” , subparagraph (2), 5 subparagraph division (a), and paragraph “c” , subparagraph (2), 6 subparagraph division (a), for the assessment year used to 7 calculate the taxes due and payable in that fiscal year. 8 Sec. 10. Section 441.21, subsection 5, paragraph e, 9 subparagraph (4), unnumbered paragraph 1, Code 2026, is amended 10 to read as follows: 11 On or before September 1 of each applicable fiscal year, the 12 county auditor shall prepare a statement, based on the report 13 received in subparagraph (3) and information transmitted to 14 the county auditor under chapter 434 , listing for each taxing 15 district in the county: 16 DIVISION III 17 SCHOOL TAXES 18 Sec. 11. Section 257.3, subsection 1, paragraph a, Code 19 2026, is amended to read as follows: 20 a. (1) Except as provided in subsections 2 and 3 , a school 21 district shall cause to be levied each budget year beginning 22 before July 1, 2027 , for the school general fund, a foundation 23 property tax equal to five dollars and forty cents per thousand 24 dollars of assessed valuation on all taxable property in the 25 district. The county auditor shall spread the foundation levy 26 over all taxable property in the district. 27 (2) Except as provided in subsections 2 and 3, a school 28 district shall cause to be levied for the budget year beginning 29 July 1, 2027, and each succeeding budget year, for the school 30 general fund, a foundation property tax equal to four dollars 31 and ninety cents per thousand dollars of assessed valuation 32 on all taxable property in the district. The county auditor 33 shall spread the foundation levy over all taxable property in 34 the district. 35 -8- HF 2745.4063 (2) 91 md/jh 8/ 53

Sec. 12. Section 257.3, subsection 2, paragraphs a and b, 1 Code 2026, are amended to read as follows: 2 a. Notwithstanding subsection 1, a reorganized school 3 district for which the reorganization takes effect on or after 4 July 1, 2027, shall cause a foundation property tax of four 5 three dollars and forty ninety cents per thousand dollars of 6 assessed valuation to be levied on all taxable property which, 7 in the year preceding a reorganization, was within a school 8 district affected by the reorganization as defined in section 9 275.1, or in the year preceding a dissolution was a part of a 10 school district that dissolved if the dissolution proposal has 11 been approved by the director of the department of education 12 pursuant to section 275.55. 13 b. In For a reorganized school district for which the 14 reorganization took effect on or after July 1, 2027, in 15 succeeding school years, the foundation property tax levy on 16 that portion shall be increased to the rate of four dollars and 17 ninety forty cents per thousand dollars of assessed valuation 18 the first succeeding year, five four dollars and fifteen 19 sixty-five cents per thousand dollars of assessed valuation the 20 second succeeding year, and five four dollars and forty ninety 21 cents per thousand dollars of assessed valuation the third 22 succeeding year and each year thereafter under subsection 1, 23 paragraph “a” . 24 Sec. 13. Section 425A.3, subsection 1, Code 2026, is amended 25 to read as follows: 26 1. The family farm tax credit fund shall be apportioned 27 each year in the manner provided in this chapter so as to give 28 a credit against the tax on each eligible tract of agricultural 29 land within the several school districts of the state in which 30 the levy for the general school fund exceeds five dollars and 31 forty cents per thousand dollars of assessed value the levy 32 rate under section 257.3, subsection 1, paragraph “a” . The 33 amount of the credit on each eligible tract of agricultural 34 land shall be the amount the tax levied for the general school 35 -9- HF 2745.4063 (2) 91 md/jh 9/ 53

fund exceeds the amount of tax which would be levied on each 1 eligible tract of agricultural land were the levy for the 2 general school fund five dollars and forty cents per thousand 3 dollars of assessed value the levy rate under section 257.3, 4 subsection 1, paragraph “a” , for the previous year. However, 5 in the case of a deficiency in the family farm tax credit fund 6 to pay the credits in full, the credit on each eligible tract 7 of agricultural land in the state shall be proportionate and 8 applied as provided in this chapter . 9 Sec. 14. Section 425A.5, Code 2026, is amended to read as 10 follows: 11 425A.5 Computation by county auditor. 12 The family farm tax credit allowed each year shall be 13 computed as follows: On or before April 1, the county auditor 14 shall list by school districts all tracts of agricultural 15 land which are entitled to credit, the taxable value for the 16 previous year, the budget from each school district for the 17 previous year, and the tax rate determined for the general 18 fund of the school district in the manner prescribed in 19 section 444.3 for the previous year, and if the tax rate is in 20 excess of five dollars and forty cents per thousand dollars of 21 assessed value the levy rate under section 257.3, subsection 22 1, paragraph “a” , the auditor shall multiply the tax levy which 23 is in excess of five dollars and forty cents per thousand 24 dollars of assessed value the levy rate under section 257.3, 25 subsection 1, paragraph “a” , by the total taxable value of the 26 agricultural land entitled to credit in the school district, 27 and on or before April 1, certify the total amount of credit 28 and the total number of acres entitled to the credit to the 29 department of revenue. 30 Sec. 15. Section 426.3, Code 2026, is amended to read as 31 follows: 32 426.3 Where credit given. 33 The agricultural land credit fund shall be apportioned each 34 year in the manner hereinafter provided so as to give a credit 35 -10- HF 2745.4063 (2) 91 md/jh 10/ 53

against the tax on each tract of agricultural lands within the 1 several school districts of the state in which the levy for 2 the general school fund exceeds five dollars and forty cents 3 per thousand dollars of assessed value the levy rate under 4 section 257.3, subsection 1, paragraph “a” ; the amount of such 5 credit on each tract of such lands shall be the amount the tax 6 levied for the general school fund exceeds the amount of tax 7 which would be levied on said tract of such lands were the 8 levy for the general school fund five dollars and forty cents 9 per thousand dollars of assessed value the levy rate under 10 section 257.3, subsection 1, paragraph “a” , for the previous 11 year, except in the case of a deficiency in the agricultural 12 land credit fund to pay said credits in full, in which case the 13 credit on each eligible tract of such lands in the state shall 14 be proportionate and shall be applied as hereinafter provided. 15 Sec. 16. Section 426.6, subsection 1, Code 2026, is amended 16 to read as follows: 17 1. The agricultural land tax credit allowed each year 18 shall be computed as follows: On or before April 1, the 19 county auditor shall list by school districts all tracts of 20 agricultural lands which are entitled to credit, together with 21 the taxable value for the previous year, together with the 22 budget from each school district for the previous year, and the 23 tax rate determined for the general fund of the district in 24 the manner prescribed in section 444.3 for the previous year, 25 and if such tax rate is in excess of five dollars and forty 26 cents per thousand dollars of assessed value the levy rate 27 under section 257.3, subsection 1, paragraph “a” , the auditor 28 shall multiply the tax levy which is in excess of five dollars 29 and forty cents per thousand dollars of assessed value the 30 levy rate under section 257.3, subsection 1, paragraph “a” , by 31 the total taxable value of the agricultural lands entitled to 32 credit in the district, and on or before April 1, certify the 33 amount to the department of revenue. 34 Sec. 17. ADJUSTMENT OF CALCULATIONS. For property tax 35 -11- HF 2745.4063 (2) 91 md/jh 11/ 53

credits under chapters 425A and 426 for property taxes due and 1 payable in the fiscal year beginning July 1, 2027, the tax rate 2 determined for the general fund of the school district in the 3 manner prescribed in section 444.3 for the previous year shall 4 be determined using the appropriate property tax levy rate 5 under section 257.3, as amended in this division of this Act. 6 Sec. 18. APPLICABILITY. This division of this Act applies 7 to fiscal years and school budget years beginning on or after 8 July 1, 2027. 9 DIVISION IV 10 SECURE AN ADVANCED VISION FOR EDUCATION FUND —— EQUITY TRANSFER 11 PERCENTAGE —— FUTURE REPEAL 12 Sec. 19. Section 423.2, subsection 12, Code 2026, is amended 13 to read as follows: 14 12. The sales tax rate of six percent is reduced to five 15 percent on January 1, 2051 2071 . 16 Sec. 20. Section 423.2A, subsection 2, paragraph c, Code 17 2026, is amended to read as follows: 18 c. Transfer one-sixth of the remaining revenues to the 19 secure an advanced vision for education fund created in section 20 423F.2 . This paragraph “c” is repealed January 1, 2051 2071 . 21 Sec. 21. Section 423.5, subsection 4, Code 2026, is amended 22 to read as follows: 23 4. The use tax rate of six percent is reduced to five 24 percent on January 1, 2051 2071 . 25 Sec. 22. Section 423.43, subsection 1, paragraph b, Code 26 2026, is amended to read as follows: 27 b. Subsequent to the deposit into the general fund of 28 the state and after the transfer of such revenues collected 29 under chapter 423B , the department shall transfer one-sixth of 30 such remaining revenues to the secure an advanced vision for 31 education fund created in section 423F.2 . This paragraph is 32 repealed January 1, 2051 2071 . 33 Sec. 23. Section 423F.2, subsection 3, paragraph b, 34 subparagraph (2), subparagraph division (b), Code 2026, is 35 -12- HF 2745.4063 (2) 91 md/jh 12/ 53

amended to read as follows: 1 (b) For each fiscal year beginning on or after July 1, 2 2020, but before July 1, 2026, the equity transfer percentage 3 is equal to the equity transfer percentage for the immediately 4 preceding fiscal year, unless the amount of moneys available 5 in the secure an advanced vision for education fund in the 6 immediately preceding fiscal year equals or exceeds one hundred 7 two percent of the amount of moneys available in the fund for 8 the fiscal year prior to the immediately preceding fiscal year, 9 in which case the equity transfer percentage shall be the 10 equity transfer percentage for the immediately preceding fiscal 11 year plus one percent subject to the limitation in subparagraph 12 division (c). 13 Sec. 24. Section 423F.2, subsection 3, paragraph b, 14 subparagraph (2), subparagraph division (c), Code 2026, is 15 amended by striking the subparagraph division and inserting in 16 lieu thereof the following: 17 (c) (i) For the fiscal year beginning July 1, 2026, the 18 equity transfer percentage is twelve and one-half percent. 19 (ii) For the fiscal year beginning July 1, 2027, the equity 20 transfer percentage is fifteen percent. 21 (iii) For the fiscal year beginning July 1, 2028, the equity 22 transfer percentage is seventeen and one-half percent. 23 (iv) For the fiscal year beginning July 1, 2029, the equity 24 transfer percentage is twenty-two and one-half percent. 25 (v) For the fiscal year beginning July 1, 2030, and each 26 fiscal year thereafter, the equity transfer percentage is 27 twenty-five percent. 28 Sec. 25. Section 423F.6, Code 2026, is amended to read as 29 follows: 30 423F.6 Repeal. 31 This chapter is repealed January 1, 2051 2071 . 32 Sec. 26. SCHOOL DISTRICT FUNDING RECONCILIATION. 33 For amounts allocated under section 423F.2 for fiscal 34 years beginning on or after July 1, 2026, the department of 35 -13- HF 2745.4063 (2) 91 md/jh 13/ 53

management shall adjust or reconcile actual amounts to be 1 received by school districts in the fiscal year immediately 2 following the fiscal year during which the revenues were 3 collected. 4 DIVISION V 5 PROPERTY PARCEL INFORMATION 6 Sec. 27. Section 331.510, Code 2026, is amended by adding 7 the following new subsection: 8 NEW SUBSECTION . 5. a. An annual report not later 9 than January 1 to the department of management containing 10 parcel-level property data, including parcel identification 11 information, location, size, valuation, classification, types 12 of structures and improvements, exemptions, credits, historical 13 amounts of property taxes due and payable, and whether the 14 parcel is subject to a division of revenue. 15 b. In addition to the information required under paragraph 16 “a” , the department of management may require additional 17 parcel-level data deemed necessary by the director of the 18 department of management. The department shall prescribe the 19 form and manner of submitting the annual report under this 20 subsection. 21 c. The department of management shall establish and manage 22 a searchable internet-based dashboard that contains the 23 information collected under paragraphs “a” and “b” , as well as 24 individual parcel information tax information provided as part 25 of the statements required under section 24.2A, subsection 2, 26 paragraph “b” . 27 DIVISION VI 28 URBAN RENEWAL 29 Sec. 28. Section 15A.1, subsection 1, paragraph b, Code 30 2026, is amended to read as follows: 31 b. For purposes of this chapter , “economic development” 32 means private or joint public and private investment involving 33 the creation of new jobs and income or the retention of 34 existing jobs and income that would otherwise be lost or the 35 -14- HF 2745.4063 (2) 91 md/jh 14/ 53

provision of workforce housing . 1 Sec. 29. Section 15A.1, subsection 2, Code 2026, is amended 2 by adding the following new paragraph: 3 NEW PARAGRAPH . e. Development policies that advance the 4 development of workforce housing. 5 Sec. 30. Section 331.403, subsection 3, paragraph b, 6 subparagraph (19), Code 2026, is amended by striking the 7 subparagraph. 8 Sec. 31. Section 384.22, subsection 2, paragraph b, 9 subparagraph (19), Code 2026, is amended by striking the 10 subparagraph. 11 Sec. 32. Section 403.17, subsection 10, Code 2026, is 12 amended to read as follows: 13 10. “Economic development area” means an area of a 14 municipality designated by the local governing body as 15 appropriate for commercial and industrial enterprises, public 16 improvements related to housing and residential development, 17 or construction of housing and residential development for low 18 and moderate income families, including single or multifamily 19 housing. If an urban renewal plan for an urban renewal area is 20 based upon a finding that the area is an economic development 21 area and that no part contains slum or blighted conditions, 22 then the division of revenue provided in section 403.19 and 23 stated in the plan shall be limited to twenty years from 24 the calendar year following the calendar year in which the 25 municipality first certifies to the county auditor the amount 26 of any loans, advances, indebtedness, or bonds which qualify 27 for payment from the division of revenue provided in section 28 403.19 . Such designated area shall not include agricultural 29 land, including land which is part of a century farm, unless 30 the owner of the agricultural land or century farm agrees to 31 include the agricultural land or century farm in the urban 32 renewal area. For the purposes of this subsection , “century 33 farm” means a farm in which at least forty acres of such farm 34 have been held in continuous ownership by the same family for 35 -15- HF 2745.4063 (2) 91 md/jh 15/ 53

one hundred years or more. 1 Sec. 33. Section 403.17, subsection 14, Code 2026, is 2 amended to read as follows: 3 14. “Low or and moderate income families” means those 4 families, including single person households, earning no 5 more than eighty percent of the higher of the median family 6 income of the county or the statewide nonmetropolitan area as 7 determined by the latest United States department of housing 8 and urban development, section 8 income guidelines. 9 Sec. 34. Section 403.17, Code 2026, is amended by adding the 10 following new subsection: 11 NEW SUBSECTION . 14A. “Low and moderate income family 12 housing” means housing for low and moderate income families and 13 includes housing that meets the requirements of section 15.353. 14 Sec. 35. Section 403.19, subsection 2, paragraph a, Code 15 2026, is amended to read as follows: 16 a. That portion of the taxes each year in excess of such 17 amount shall be allocated to and when collected be paid into a 18 special fund of the municipality to pay the principal of and 19 interest on loans, moneys advanced to, or indebtedness, whether 20 funded, refunded, assumed, or otherwise, including bonds 21 issued under the authority of section 403.9, subsection 1 , 22 incurred by the municipality to finance or refinance, in whole 23 or in part, an urban renewal project within the area, and to 24 provide assistance for low and moderate income family housing 25 as provided in section 403.22 . However, except as provided 26 in paragraph “b” , taxes for the regular and voter-approved 27 physical plant and equipment levy of a school district imposed 28 pursuant to section 298.2 ; and taxes for the instructional 29 support program of a school district imposed pursuant to 30 section 257.19 , ; taxes for the payment of bonds and interest of 31 each taxing district , ; foundation property taxes of a school 32 district imposed under section 257.3 levied against property 33 located in an incorporated area and subject to an ordinance 34 providing for a division of revenue adopted on or after January 35 -16- HF 2745.4063 (2) 91 md/jh 16/ 53

1, 2027; taxes for emergency medical services imposed pursuant 1 to chapter 357F, 357G, or 422D; and taxes imposed under section 2 346.27, subsection 22 , related to joint county-city buildings 3 shall be collected against all taxable property within the 4 taxing district without limitation by the provisions of this 5 subsection . 6 Sec. 36. Section 403.19, subsection 2, Code 2026, is amended 7 by adding the following new paragraph: 8 NEW PARAGRAPH . e. For urban renewal areas for which an 9 ordinance providing for a division of revenue is not limited 10 in duration under section 403.17, subsection 10, after twenty 11 years following the effective date of this division of this 12 Act or after twenty years from the calendar year following 13 the calendar year in which the municipality first certifies 14 to the county auditor the amount of any loans, advances, 15 indebtedness, or bonds which qualify for payment from the 16 division of revenue, whichever is later, the amount determined 17 under paragraph “a” that may be paid into the municipality’s 18 special fund shall not exceed sixty percent of the amount 19 otherwise determined under paragraph “a” but for this paragraph 20 and such excess amounts shall be allocated and paid to the 21 respective taxing districts in the same manner as amounts under 22 subsection 1. The municipality may exceed the limitation in 23 this paragraph to the extent necessary for payments of bonds 24 or other indebtedness incurred before the effective date of 25 this division of this Act, but in such event the municipality 26 shall not issue bonds or other indebtedness payable from such 27 division of revenue while exceeding the limitation. This 28 paragraph shall not apply to divisions of revenue established 29 by community colleges under chapter 260E or rural improvement 30 zones under chapter 357H. 31 Sec. 37. Section 403.19, Code 2026, is amended by adding the 32 following new subsection: 33 NEW SUBSECTION . 3A. An ordinance providing for a division 34 of revenue under this section that is adopted on or after the 35 -17- HF 2745.4063 (2) 91 md/jh 17/ 53

effective date of this division of this Act shall be limited 1 to twenty-three years from the calendar year following the 2 calendar year in which the municipality first certifies to the 3 county auditor the amount of any loans, advances, indebtedness, 4 or bonds that qualify for payment from the division of 5 revenue provided for in this section. The ordinance shall 6 terminate and be of no further force and effect following the 7 twenty-three-year period provided in this subsection. This 8 subsection shall not apply to divisions of revenue established 9 by community colleges under chapter 260E or rural improvement 10 zones under chapter 357H. 11 Sec. 38. Section 403.19, Code 2026, is amended by adding the 12 following new subsection: 13 NEW SUBSECTION . 12. For any fiscal year beginning on 14 or after July 1, 2027, following written request filed with 15 the county auditor and the board of directors of the school 16 district, a school district may approve by resolution of the 17 board of directors the payment from the school district’s 18 general fund to the municipality for deposit in the special 19 fund under this section all or a portion of the school district 20 foundation property taxes under section 257.3 levied against 21 property located in an incorporated area and subject to an 22 ordinance providing for a division of revenue adopted on or 23 after January 1, 2027, for one or more applicable fiscal years. 24 If approved, the board of directors shall file such resolution 25 with the county auditor. Payments approved under this 26 subsection are voluntary and a school district is not required 27 to pay over the revenue to the municipality unless approved 28 by resolution. Amounts paid by a school district under this 29 subsection shall continue to be considered foundation property 30 taxes levied under section 257.3 and such payment shall not 31 result in the adjustment of state foundation aid or other 32 amounts under chapter 257. 33 Sec. 39. REPEAL. Section 403.22, Code 2026, is repealed. 34 Sec. 40. EFFECTIVE DATE. This division of this Act, being 35 -18- HF 2745.4063 (2) 91 md/jh 18/ 53

deemed of immediate importance, takes effect upon enactment. 1 Sec. 41. APPLICABILITY. The following applies to property 2 taxes due and payable in fiscal years beginning on or after 3 July 1, 2027: 4 The portion of the section of this division of this Act 5 excluding taxes for emergency medical services imposed pursuant 6 to chapter 357F, 357G, or 422D from divisions of revenue by 7 amending section 403.19, subsection 2, paragraph “a”. 8 Sec. 42. APPLICABILITY. The following applies to property 9 taxes due and payable in fiscal years beginning on or after 10 July 1, 2028: 11 The portion of the section of this division of this Act 12 excluding taxes under section 257.3 from divisions of revenue 13 by amending section 403.19, subsection 2, paragraph “a”. 14 Sec. 43. APPLICABILITY. The following applies to urban 15 renewal areas in existence on or established on or after the 16 effective date of this division of this Act: 17 The section of this division of this Act repealing section 18 403.22. 19 DIVISION VII 20 ASSESSMENT PROCEDURES 21 Sec. 44. Section 441.21, subsection 3, Code 2026, is amended 22 to read as follows: 23 3. a. “Actual value” , “taxable value” , or “assessed 24 value” as used in other sections of the Code in relation to 25 assessment of property for taxation shall mean the valuations 26 as determined by this section ; however, other provisions of 27 the Code providing special methods or formulas for assessing 28 or valuing specified property shall remain in effect, but this 29 section shall be applicable to the extent consistent with such 30 provisions. The assessor and department of revenue shall 31 disclose at the written request of the taxpayer all information 32 in any formula or method used to determine the actual value of 33 the taxpayer’s property. In addition, for assessment years 34 beginning on or after January 1, 2027, if the taxpayer’s 35 -19- HF 2745.4063 (2) 91 md/jh 19/ 53