House Study Bill 596 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON NORDMAN) A BILL FOR An Act relating to local government taxes, budgets, and 1 authority, by establishing property tax limitations and 2 modifying provisions relating to the assessment and taxation 3 of property, certain taxpayer notices, bond issuances, and 4 councils of governments, and including applicability and 5 retroactive applicability provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 6158YC (2) 91 md/jh

H.F. _____ DIVISION I 1 PROPERTY TAX REVENUE LIMITATIONS 2 Section 1. Section 24.48, Code 2026, is amended by adding 3 the following new subsection: 4 NEW SUBSECTION . 6. The authority to suspend property tax 5 levy limitations under this section shall not apply to the 6 limitations of section 444.25. 7 Sec. 2. Section 384.12, subsection 4, Code 2026, is amended 8 by striking the subsection. 9 Sec. 3. NEW SECTION . 444.25 Maximum property tax levy 10 dollars. 11 1. For purposes of this section, unless the context 12 otherwise requires: 13 a. “Budget year” is the fiscal year beginning during the 14 calendar year in which a budget is certified. 15 b. “Current fiscal year” is the fiscal year ending during 16 the calendar year in which a budget for the budget year is 17 certified. 18 c. “Governmental entity” means any unit of government 19 or other public body or public corporation, including any 20 intergovernmental entity or special purpose district, that 21 has the power to impose or certify a property tax levy. 22 “Governmental entity” does not include a school district. 23 d. “New valuation” means the increase from the current 24 fiscal year to the budget year in taxable valuation, as shown 25 on the assessment roll due to the following, the amount of each 26 as reported under section 331.510 by the county auditor to the 27 department of management: 28 (1) New construction. 29 (2) Additions or improvements to existing structures that 30 are not normal and necessary repairs under section 441.21, 31 subsection 8. 32 (3) Net boundary adjustments, including annexation, 33 severance, incorporation, consolidation, or discontinuance as 34 those terms are defined in section 368.1. 35 -1- LSB 6158YC (2) 91 md/jh 1/ 23

H.F. _____ e. “Property tax levy” means each ad valorem property tax 1 authorized by law to be imposed by a governmental entity, but 2 excluding any levy the revenue from which is specified by law 3 for debt service or required to be used exclusively for the 4 repayment of bonds or other indebtedness. 5 2. a. For the budget year beginning July 1, 2027, and 6 each budget year thereafter, the maximum aggregate amount of 7 property tax dollars that may be certified for levy among all 8 property tax levies imposed by a governmental entity against 9 property that is not new valuation shall not exceed an amount 10 equal to the sum of one hundred two percent of the aggregate 11 amount of property tax dollars certified for levy by the 12 governmental entity among all property tax levies imposed by 13 the governmental entity for the current fiscal year. 14 b. If the budget year includes a voter-approved property tax 15 levy that was not approved for imposition in the current fiscal 16 year, the maximum aggregate amount of property tax dollars for 17 the governmental entity under paragraph “a” for the budget 18 year shall be increased by the amount of the voter-approved 19 property tax levy approved at election for the budget year. If 20 the current fiscal year includes a voter-approved property tax 21 levy that is not approved for imposition in the budget year, 22 the maximum aggregate amount of property tax dollars for the 23 governmental entity under paragraph “a” for the budget year 24 shall be reduced by the amount of the voter-approved property 25 tax levy for the current fiscal year. 26 c. The amount of property tax dollars calculated under this 27 section includes those amounts budgeted by the governmental 28 entity as replacement taxes under chapter 437A or 437B, if 29 applicable. 30 3. For purposes of this section, if the governmental 31 entity’s taxes for a property tax levy were not certified 32 back by the department of management under section 24.17 for 33 the current fiscal year due to an act or omission of the 34 governmental entity, the current fiscal year’s property tax 35 -2- LSB 6158YC (2) 91 md/jh 2/ 23

H.F. _____ dollars certified for levy for that property tax levy shall 1 be equal to the amount certified for levy for the fiscal year 2 immediately preceding the current fiscal year. 3 4. If a governmental entity certifies a budget that violates 4 this section, the department of management shall reduce each of 5 the applicable governmental entity’s property tax levies on a 6 pro rata basis so that the governmental entity is in compliance 7 with this section. 8 5. This section shall not be construed as removing or 9 otherwise affecting the property tax limitations, including 10 levy rate and use limitations, otherwise provided by law for 11 any property tax levy of the governmental entity. 12 DIVISION II 13 RESIDENTIAL PROPERTY TAX EXEMPTION 14 Sec. 4. Section 427.1, Code 2026, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 43. a. For assessment years beginning on 17 or after January 1, 2026, an exemption from taxation shall be 18 allowed on each property classified as residential property 19 as defined in section 441.21, subsection 14. The exemption 20 under this subsection shall be in addition to any exemption or 21 credit for such property under any other provision of law, if 22 applicable. The exemption from taxation under this subsection 23 shall be the taxable value of the property or twenty-five 24 thousand dollars in taxable value, whichever is less. However, 25 the exemption under this subsection shall not apply to a 26 property tax imposed by a school district. 27 b. Section 25B.7, subsection 1, shall not apply to the 28 property tax exemption provided in this subsection. 29 Sec. 5. RETROACTIVE APPLICABILITY. This division of this 30 Act applies retroactively to assessment years beginning on or 31 after January 1, 2026. 32 DIVISION III 33 PROPERTY TAX INFORMATION DISCLOSURE 34 Sec. 6. Section 24.2A, subsection 1, paragraph c, Code 2026, 35 -3- LSB 6158YC (2) 91 md/jh 3/ 23

H.F. _____ is amended by striking the paragraph. 1 Sec. 7. Section 24.2A, subsection 1, paragraph d, Code 2026, 2 is amended to read as follows: 3 d. “Political subdivision” means a school district, a 4 county, or a city. In addition, for purposes of the statements 5 required under subsection 2, paragraph “b” , only, all 6 certifying boards that are not a political subdivision shall be 7 considered a single political subdivision and identified under 8 a designation of special taxing districts on such statements. 9 Sec. 8. Section 24.2A, subsection 2, paragraph a, Code 2026, 10 is amended to read as follows: 11 a. On or before 4:00 p.m. on March 5 of each year, each 12 political subdivision certifying board shall file with the 13 department of management a report containing all necessary 14 information for the department of management to compile and 15 calculate amounts required to be included in the statements 16 mailed under paragraph “b” . If a county or city certifying 17 board, except a school district, fails to file all necessary 18 information with the department of management by 4:00 p.m. on 19 March 5, taxes levied by the county or city certifying board 20 shall be limited to the prior year’s budget amount. 21 Sec. 9. Section 24.2A, subsection 2, paragraph b, Code 2026, 22 is amended by striking the paragraph and inserting in lieu 23 thereof the following: 24 b. Not later than March 15, the county auditor, using 25 information compiled and calculated by the department of 26 management under paragraph “a” , shall send to each property 27 owner or taxpayer within the county by regular mail an 28 individual statement, identified as not being a property tax 29 bill and indicating the approximate date when a property tax 30 bill will be delivered, but containing a minimum of all of the 31 following, including the information in subparagraphs (3), 32 (4), (5), (7), and (8) for each of the political subdivisions 33 comprising the owner’s or taxpayer’s taxing district: 34 (1) The address, property description, parcel 35 -4- LSB 6158YC (2) 91 md/jh 4/ 23

H.F. _____ identification number, actual value, and taxable value of the 1 owner’s or taxpayer’s property. 2 (2) The classification of the owner’s or taxpayer’s 3 property, including identification of all assessment 4 limitations under section 441.21, and identification of each 5 property tax exemption or credit being received by the owner 6 or taxpayer for the property for the assessment year and the 7 immediately preceding assessment year. 8 (3) The sum of the current fiscal year’s actual property 9 taxes certified for levy for all of the political subdivision’s 10 levies on the owner’s or taxpayer’s property, the percentage 11 that such amount represents of the total taxes due on the 12 property, and the allocation of such amounts to specified 13 categories of the political subdivision’s services and 14 activities. 15 (4) The combined amount of the proposed property tax dollars 16 to be certified for all of the political subdivision’s levies 17 for the budget year on the owner’s or taxpayer’s property, 18 the percentage that such amount represents of the proposed 19 total taxes due on the property, the percentage increase of 20 such amount from the current fiscal year and the potential 21 reasons for any increases, and the allocation of such amounts 22 to specified categories of the political subdivision’s services 23 and activities, including that portion of such amount subject 24 to the limitation under section 444.25. 25 (5) Tax amounts provided under subparagraphs (3) and (4) 26 as a per month amount and a percentage change in the per month 27 amount between the current fiscal year and the budget year. 28 (6) A comparison of the combined amount of property taxes 29 due on the owner’s or taxpayer’s property for all political 30 subdivisions for the current fiscal year and the combined 31 proposed amount of property taxes due on the owner’s or 32 taxpayer’s property for all political subdivisions for the 33 budget year, including the percentage in change in such 34 amounts. 35 -5- LSB 6158YC (2) 91 md/jh 5/ 23

H.F. _____ (7) The date, time, and location of the political 1 subdivision’s public hearing under subsection 4, including 2 a statement of the owner or taxpayer’s ability to provide 3 feedback at the public hearing and protest property 4 assessments. 5 (8) Information on how to access on the political 6 subdivision’s internet site the political subdivision’s 7 statements under this section and other budget documents for 8 prior fiscal years. 9 (9) A link to the department of management’s internet site 10 where the property owner or taxpayer may view an example of the 11 statement and a brief explanation of the information included 12 on the statement. 13 Sec. 10. Section 24.2A, subsection 3, Code 2026, is amended 14 to read as follows: 15 3. The department of management shall prescribe the form 16 for the report required under subsection 2 , paragraph “a” ; 17 following consultation with the Iowa league of cities and the 18 Iowa state association of counties , the statements required to 19 be mailed under subsection 2 , paragraph “b” , ; and the public 20 hearing notice required under subsection 4 , paragraph “b” . The 21 statements required under subsection 2, paragraph “b” , shall be 22 clear, concise, written in plain language, and may be presented 23 using tables, written narrative, and graphic representations 24 and shall contain the internet site, mailing address, and a 25 telephone number for each political subdivision that owners 26 and taxpayers may call if they have questions related to the 27 statement. 28 Sec. 11. IMPLEMENTATION OF DIVISION OF ACT. Section 25B.2, 29 subsection 3, shall not apply to this division of this Act. 30 Sec. 12. APPLICABILITY. This division of this Act applies 31 to political subdivision budgets for fiscal years beginning on 32 or after July 1, 2027. 33 DIVISION IV 34 COUNCIL OF GOVERNMENTS 35 -6- LSB 6158YC (2) 91 md/jh 6/ 23

H.F. _____ Sec. 13. Section 28H.3, Code 2026, is amended by adding the 1 following new subsection: 2 NEW SUBSECTION . 5. Provide coordination, planning, and 3 technical assistance for local government entities for the 4 purpose of consolidating, sharing, or regionalizing services 5 among units of local government. 6 DIVISION V 7 BONDING 8 Sec. 14. Section 8.5, subsection 16, Code 2026, is amended 9 by striking the subsection. 10 Sec. 15. Section 28E.17, subsection 3, Code 2026, is amended 11 to read as follows: 12 3. a. A city which is a party to a joint transit agency 13 may issue general corporate purpose bonds for the support of a 14 capital program for the joint agency in the following manner: 15 in the manner set forth in section 384.26. 16 (1) The council shall give notice and conduct a hearing on 17 the proposal in the manner set forth in section 384.25 . If 18 a petition valid under section 362.4 is filed with the clerk 19 of the city prior to the hearing, asking that the question of 20 issuing the bonds be submitted to the registered voters of 21 the city, the council shall either by resolution declare the 22 proposal abandoned or shall direct the county commissioner of 23 elections to call a special election to vote upon the question 24 of issuing the bonds. Notice of the election and its conduct 25 shall be in the manner provided in section 384.26 . 26 (2) If no petition is filed, or if a petition is filed and 27 the proposition of issuing bonds is approved at the election, 28 the council may proceed with the authorization and issuance of 29 the bonds. 30 b. An agreement may provide for full or partial payment from 31 transit revenues to the cities for meeting debt service on such 32 bonds. 33 c. This subsection shall be construed as granting additional 34 power without limiting the power already existing in cities, 35 -7- LSB 6158YC (2) 91 md/jh 7/ 23

H.F. _____ and as providing an alternative independent method for the 1 carrying out of any project for the issuance and sale of bonds 2 for the financing of a city’s share of a capital expenditures 3 project of a joint transit agency, and no further proceedings 4 with respect to the authorization of the bonds shall be 5 required. 6 Sec. 16. Section 28M.3, subsection 1, Code 2026, is amended 7 to read as follows: 8 1. A regional transit district shall have all the rights, 9 powers, and duties of a county enterprise pursuant to sections 10 331.462 through 331.469 as they relate to the purpose for 11 which the regional transit district is created, including 12 the authority to issue revenue bonds for the establishment, 13 construction, reconstruction, repair, equipping, remodeling, 14 extension, maintenance, and operation of works, vehicles, and 15 facilities of a regional transit district. In addition, a 16 regional transit district, with the approval of the board of 17 supervisors, may issue general obligation bonds as an essential 18 county purpose pursuant to chapter 331, subchapter IV, part 3 , 19 for the establishment, construction, reconstruction, repair, 20 equipping, remodeling, extension, maintenance, and operation of 21 works, vehicles, and facilities of a regional transit district. 22 Such general obligation bonds are payable from the property tax 23 levy authorized in section 28M.5 . 24 Sec. 17. Section 75.1, subsection 1, Code 2026, is amended 25 to read as follows: 26 1. When a proposition to authorize an issuance of bonds by 27 a county, township, school corporation, merged area, city, or 28 by any political subdivision or local board or commission, is 29 submitted to the electors, such proposition shall not be deemed 30 carried or adopted, anything in the statutes to the contrary 31 notwithstanding, unless the vote in favor of such authorization 32 is equal to at least sixty percent of the total vote cast for 33 and against said proposition at said election. All elections 34 on such proposition shall be held on the date specified in 35 -8- LSB 6158YC (2) 91 md/jh 8/ 23

H.F. _____ section 39.2, subsection 4 , paragraph “d” . 1 Sec. 18. Section 296.2, Code 2026, is amended to read as 2 follows: 3 296.2 Petition for election. 4 Before indebtedness can be contracted in excess of one 5 and one-quarter percent of the assessed value of the taxable 6 property , a petition signed by eligible electors equal 7 in number to twenty-five percent of those voting at the 8 last election of school officials shall be filed with the 9 president of the board of directors, asking that an election 10 be called, stating the amount of bonds proposed to be issued , 11 and the purpose or purposes for which the indebtedness is 12 to be created , and that the purpose or purposes cannot be 13 accomplished within the limit of one and one-quarter percent 14 of the valuation . The petition may request the calling of an 15 election on one or more propositions separately and a each 16 proposition may include one or more purposes. 17 Sec. 19. Section 331.441, subsection 2, paragraph b, 18 subparagraphs (7), (12), (14), (18), and (19), Code 2026, are 19 amended to read as follows: 20 (7) Enlargement and improvement of a county hospital 21 acquired and operated under chapter 347A , subject to a maximum 22 of two percent of the assessed value of the taxable property in 23 the county. However, notice of the proposed bond issue shall 24 be published once each week for two consecutive weeks and if, 25 within twenty days following the date of the first publication, 26 a petition requesting an election on the proposal and signed 27 by eligible electors of the county equal in number to at least 28 twenty percent of the votes cast at the preceding election 29 for governor is filed with the county auditor, the proposal 30 is subject to the election requirements in section 331.442, 31 subsections 2, 3, and 4 , for general county purpose bonds. 32 (12) (a) Funding the acquisition, construction, 33 reconstruction, improvement, repair, or equipping of 34 waterworks, water mains and extensions, ponds, reservoirs, 35 -9- LSB 6158YC (2) 91 md/jh 9/ 23

H.F. _____ capacity, wells, dams, pumping installations, real and personal 1 property, or other facilities available or used for the 2 storage, transportation, or utilization of water. 3 (a) (b) The county board of supervisors may on its 4 own motion or upon a written petition of a water supplier 5 established under chapter 357A or 504 direct the county 6 auditor to establish a special service area tax district for 7 the purpose of issuing general obligation bonds. The special 8 service area tax district shall include only unincorporated 9 portions of the county and shall be drawn according to 10 engineering recommendations provided by the water supplier or 11 the county engineer and, in addition, shall be drawn in order 12 that an election provided for in subparagraph division (b) 13 section 331.442 can be administered. The county’s debt service 14 tax levy for the county general obligation bonds issued for 15 the purposes set out in this subparagraph shall be levied only 16 against taxable property within the county which is included 17 within the boundaries of the special service area tax district. 18 An owner of property not included within the boundaries of 19 the special service area tax district may petition the board 20 of supervisors to be included in the special service area tax 21 district subsequent to its establishment. 22 (b) General obligation bonds for the purposes described 23 in this subparagraph are subject to an election held in the 24 manner provided in section 331.442, subsections 1 through 4 , 25 if not later than fifteen days following the action by the 26 county board of supervisors, eligible electors file a petition 27 with the county commissioner of elections asking that the 28 question of issuing the bonds be submitted to the registered 29 voters of the special service area tax district. The petition 30 must be signed by eligible electors equal in number to at 31 least five percent of the registered voters residing in the 32 special service area tax district. If the petition is duly 33 filed within the fifteen days, the board of supervisors shall 34 either adopt a resolution declaring that the proposal to issue 35 -10- LSB 6158YC (2) 91 md/jh 10/ 23

H.F. _____ the bonds is abandoned, or direct the county commissioner of 1 elections to call a special election within a special service 2 area tax district upon the question of issuing the bonds. 3 (14) The aiding of the planning, undertaking, and carrying 4 out of urban renewal projects under the authority of chapter 5 403 and for the purposes set out in section 403.12 . However, 6 bonds issued for this purpose are subject to the right of 7 petition for an election as provided in section 331.442, 8 subsection 5 , without limitation on the amount of the bond 9 issue or the population of the county, and the board shall 10 include notice of the right of petition in the notice of 11 proposed action required under section 331.443, subsection 2 . 12 (18) The remediation, restoration, repair, cleanup, 13 replacement, and improvement of property, buildings, equipment, 14 and public facilities that have been damaged by a disaster 15 as defined in section 29C.2 and that are located in an area 16 that the governor has proclaimed a disaster emergency or the 17 president of the United States has declared a major disaster. 18 Bonds issued pursuant to section 331.443 for the purposes 19 specified in this subparagraph shall be issued not later 20 than ten years after the governor has proclaimed a disaster 21 emergency or the president of the United States has declared a 22 major disaster, whichever is later. 23 (19) The reimbursement of the county’s general fund or 24 other funds of the county for expenditures made related to 25 remediation, restoration, repair, and cleanup of damage caused 26 by a disaster as defined in section 29C.2 , if the damage is 27 located in an area that the governor has proclaimed a disaster 28 emergency or the president of the United States has declared a 29 major disaster. Bonds issued pursuant to section 331.443 for 30 the purposes specified in this subparagraph shall be issued 31 not later than ten years after the governor has proclaimed a 32 disaster emergency or the president of the United States has 33 declared a major disaster, whichever is later. 34 Sec. 20. Section 331.442, subsection 1, Code 2026, is 35 -11- LSB 6158YC (2) 91 md/jh 11/ 23

H.F. _____ amended to read as follows: 1 1. A county which either proposes to carry out any general 2 county purpose within or without its the county’s boundaries 3 or, on or after July 1, 2026, proposes to carry out any 4 essential county purpose within or without the county’s 5 boundaries , and to contract indebtedness and issue general 6 obligation bonds to provide funds to pay all or any part of the 7 costs of a project, shall do so in accordance with this part. 8 Sec. 21. Section 331.442, subsection 2, paragraph b, Code 9 2026, is amended to read as follows: 10 b. Before the board may institute proceedings for the 11 issuance of bonds for a general county purpose , it shall call a 12 county special election to vote upon the question of issuing 13 the bonds. At the election the proposition shall be submitted 14 in the following form: 15 Shall the county of ..... , state of Iowa, issue its general 16 obligation bonds in an amount not exceeding the amount of $ ... 17 for the purpose of ............ ? 18 Sec. 22. Section 331.442, subsection 4, Code 2026, is 19 amended to read as follows: 20 4. The proposition of issuing bonds for a general county 21 purpose is not carried or adopted unless the vote in favor of 22 the proposition is equal to at least sixty percent of the total 23 vote cast for and against the proposition at the election. If 24 the proposition of issuing the general county purpose bonds is 25 approved by the voters, the board may proceed with the issuance 26 of the bonds. 27 Sec. 23. Section 331.442, subsection 5, Code 2026, is 28 amended by striking the subsection. 29 Sec. 24. Section 331.443, subsection 1, Code 2026, is 30 amended to read as follows: 31 1. A county which proposes to carry out an essential county 32 purpose within or without its the county’s boundaries, and to 33 contract indebtedness and issue general obligation bonds to 34 provide funds to pay all or any part of the cost of a project 35 -12- LSB 6158YC (2) 91 md/jh 12/ 23

H.F. _____ shall do so in accordance with this part. However, if the 1 county proposes to carry out an essential county purpose on or 2 after July 1, 2026, any such indebtedness or bonds shall be 3 governed by section 331.442. 4 Sec. 25. Section 331.445, Code 2026, is amended to read as 5 follows: 6 331.445 Categories for general obligation bonds. 7 The board may issue general obligation bonds pursuant to 8 a resolution adopted at a regular or special meeting by a 9 majority of the total number of supervisors. Each subparagraph 10 of section 331.441, subsection 2 , paragraphs “b” and “c” , 11 describes a separate category. Separate categories of 12 essential county purposes and of general county purposes may 13 be incorporated in a single notice of intention to institute 14 proceedings for the issuance of bonds, or separate categories 15 may be incorporated in separate notices, and after an 16 opportunity has been provided for filing objections, or after a 17 favorable election has been held, if required, the board may 18 include in a single resolution and sell as a single issue of 19 bonds, any number or combination of essential county purposes 20 or general county purposes. If an essential county purpose is 21 combined with a general county purpose in a single notice of 22 intention to institute proceedings to issue bonds, then the 23 entire issue is subject to the election requirement in section 24 331.442. 25 Sec. 26. Section 359.45, Code 2026, is amended to read as 26 follows: 27 359.45 Anticipatory bonds. 28 Townships may anticipate the collection of taxes authorized 29 by section 359.43 and for such purposes may direct the county 30 board of supervisors to issue bonds under sections 331.441 31 through 331.449 , relating to essential county purpose bonds 32 except that the bonds are payable only from tax levies on 33 property subject to the levy under section 359.43 . 34 Sec. 27. Section 384.24, subsection 3, paragraphs q, w, and 35 -13- LSB 6158YC (2) 91 md/jh 13/ 23

H.F. _____ x, Code 2026, are amended to read as follows: 1 q. The aiding in the planning, undertaking, and carrying out 2 of urban renewal projects under the authority of chapter 403 , 3 and all of the purposes set out in section 403.12 . However, 4 bonds issued for this purpose are subject to the right of 5 petition for an election as provided in section 384.26 , without 6 limitation on the amount of the bond issue or the size of 7 the city, and the council shall include notice of the right 8 of petition in the notice required under section 384.25, 9 subsection 2 . 10 w. The remediation, restoration, repair, cleanup, 11 replacement, and improvement of property, buildings, equipment, 12 and public facilities that have been damaged by a disaster 13 as defined in section 29C.2 and that are located in an area 14 that the governor has proclaimed a disaster emergency or the 15 president of the United States has declared a major disaster. 16 Bonds issued pursuant to section 384.25 for the purposes 17 specified in this paragraph shall be issued not later than ten 18 years after the governor has proclaimed a disaster emergency 19 or the president of the United States has declared a major 20 disaster, whichever is later. 21 x. The reimbursement of the city’s general fund or other 22 funds of the city for expenditures made related to remediation, 23 restoration, repair, and cleanup of damage caused by a disaster 24 as defined in section 29C.2 , if the damage is located in an 25 area that the governor has proclaimed a disaster emergency 26 or the president of the United States has declared a major 27 disaster. Bonds issued pursuant to section 384.25 for the 28 purposes specified in this paragraph shall be issued not later 29 than ten years after the governor has proclaimed a disaster 30 emergency or the president of the United States has declared a 31 major disaster, whichever is later. 32 Sec. 28. Section 384.25, subsection 1, Code 2026, is amended 33 to read as follows: 34 1. A city which proposes to carry out any essential 35 -14- LSB 6158YC (2) 91 md/jh 14/ 23

H.F. _____ corporate purpose within or without its the city’s corporate 1 limits, and to contract indebtedness and issue general 2 obligation bonds to provide funds to pay all or any part of the 3 cost of a project must do so in accordance with the provisions 4 of this subchapter . However, if the city proposes to carry out 5 an essential corporate purpose on or after July 1, 2026, any 6 such indebtedness or bonds shall be governed by section 384.26. 7 Sec. 29. Section 384.26, subsection 1, Code 2026, is amended 8 to read as follows: 9 1. A city which either proposes to carry out any general 10 corporate purpose within or without its the city’s corporate 11 limits or, on or after July 1, 2026, proposes to carry out 12 any essential county purpose within or without the city’s 13 corporate limits , and to contract indebtedness and issue 14 general obligation bonds to provide funds to pay all or any 15 part of the costs of a project, must do so in accordance with 16 the provisions of this subchapter . 17 Sec. 30. Section 384.26, subsection 2, paragraph b, Code 18 2026, is amended to read as follows: 19 b. Before the council may institute proceedings for the 20 issuance of bonds for a general corporate purpose , it shall 21 call a special election to vote upon the question of issuing 22 the bonds. At the election the proposition must be submitted 23 in the following form: 24 Shall the ............ (insert the name of the city) issue 25 its bonds in an amount not exceeding the amount of $ .... for 26 the purpose of .......... ? 27 Sec. 31. Section 384.26, subsection 4, Code 2026, is amended 28 to read as follows: 29 4. The proposition of issuing general corporate purpose 30 bonds is not carried or adopted unless the vote in favor of the 31 proposition is equal to at least sixty percent of the total 32 vote cast for and against the proposition at the election. 33 If the proposition of issuing the general corporate purpose 34 bonds is approved by the voters, the city may proceed with the 35 -15- LSB 6158YC (2) 91 md/jh 15/ 23

H.F. _____ issuance of the bonds. 1 Sec. 32. Section 384.26, subsection 5, Code 2026, is amended 2 by striking the subsection. 3 Sec. 33. Section 384.28, subsection 1, Code 2026, is amended 4 to read as follows: 5 1. A city may issue general obligation bonds pursuant 6 to a resolution adopted at a regular or special meeting 7 by a majority of the total number of members to which the 8 council is entitled. Each paragraph of section 384.24, 9 subsections 3 and 4 , describes a separate category. Separate 10 categories of essential corporate purposes and of general 11 corporate purposes may be incorporated in a single notice 12 of intention to institute proceedings for the issuance of 13 bonds, or separate categories may be incorporated in separate 14 notices, and after an opportunity has been provided for filing 15 objections, or after a favorable election has been held, if 16 required, the council may include in a single resolution and 17 sell as a single issue of bonds, any number or combination of 18 essential corporate purposes or general corporate purposes. 19 If an essential corporate purpose is combined with a general 20 corporate purpose in a single notice of intention to institute 21 proceedings to issue bonds, then the entire issue is subject to 22 the referendum requirement provided in section 384.26. 23 Sec. 34. Section 386.11, subsection 3, Code 2026, is amended 24 to read as follows: 25 3. Before the council may institute proceedings for the 26 issuance of bonds, it shall proceed in the same manner as is 27 required for the institution of proceedings for the issuance 28 of bonds for an essential corporate purpose as provided in 29 section 384.25, subsection 2 and all of the provisions of that 30 subsection apply to bonds issued pursuant to this section 31 384.26 . 32 Sec. 35. Section 423F.4, Code 2026, is amended to read as 33 follows: 34 423F.4 Borrowing authority for school districts. 35 -16- LSB 6158YC (2) 91 md/jh 16/ 23

H.F. _____ 1. Subject to the conditions established under subsection 1 subsections 2 and 3 , a school district may anticipate its share 2 of the revenues under section 423F.2 by issuing bonds in the 3 manner provided in section 423E.5 , Code 2019. However, to the 4 extent any school district has issued bonds anticipating the 5 proceeds of an extended local sales and services tax for school 6 infrastructure purposes imposed by a county pursuant to former 7 chapter 423E , Code and Code Supplement 2007, prior to July 1, 8 2008, the pledge of such revenues for the payment of principal 9 and interest on such bonds shall be replaced by a pledge of its 10 share of the revenues under section 423F.2 . 11 2. a. Bonds issued on or after July 1, 2019, but before 12 July 1, 2026, shall not be sold at public sale as provided in 13 chapter 75 , or at a private sale, without notice and hearing. 14 Notice of the time and place of the public hearing shall be 15 published not less than ten nor more than twenty days before 16 the public hearing in a newspaper which is a newspaper of 17 general circulation in the school district. 18 b. For bonds subject to the requirements of paragraph 19 “a” , if at any time prior to the fifteenth day following the 20 hearing, the secretary of the board of directors receives a 21 petition containing the required number of signatures and 22 asking that the question of the issuance of such bonds be 23 submitted to the voters of the school district, the board shall 24 either rescind its adoption of the resolution or direct the 25 county commissioner of elections to submit the question to the 26 registered voters of the school district at an election held 27 on the date specified in section 39.2, subsection 4 , paragraph 28 “d” . The petition must be signed by eligible electors equal 29 in number to not less than one hundred or thirty percent of 30 the number of voters at the last preceding election of school 31 officials under section 277.1 , whichever is greater. If the 32 board submits the question at an election and a majority of 33 those voting on the question favors issuance of the bonds, the 34 board shall be authorized to issue the bonds. 35 -17- LSB 6158YC (2) 91 md/jh 17/ 23

H.F. _____ c. After fourteen days from the date of the hearing under 1 paragraph “a” or fourteen days after the date of the election 2 held under paragraph “b” , if applicable, whichever is later, 3 an action shall not be brought questioning the legality of 4 any bonds or the power of the authority to issue any bonds 5 or to the legality of any proceedings in connection with the 6 authorization or issuance of the bonds. 7 3. a. Bonds issued on or after July 1, 2026, shall not be 8 sold at public sale as provided in chapter 75, or at a private 9 sale, without notice, hearing, and approval at election and the 10 vote in favor of such authorization is equal to at least sixty 11 percent of the total vote cast for and against the proposition. 12 Notice of the time and place of the public hearing shall be 13 published not less than ten nor more than twenty days before 14 the public hearing in a newspaper which is a newspaper of 15 general circulation in the school district. 16 b. After the public hearing, the board shall either rescind 17 its adoption of the resolution in favor of issuing the bonds 18 or direct the county commissioner of elections to submit the 19 question to the registered voters of the school district at an 20 election held on the date specified in section 39.2, subsection 21 4, paragraph “d” . If a majority of those voting on the question 22 favors issuance of the bonds, the board shall be authorized to 23 issue the bonds. 24 c. After fourteen days after the date of the election held 25 under paragraph “b” , an action shall not be brought questioning 26 the legality of any bonds or the power of the authority to 27 issue any bonds or to the legality of any proceedings in 28 connection with the authorization or issuance of the bonds. 29 Sec. 36. Section 468.240, Code 2026, is amended to read as 30 follows: 31 468.240 Supervisors of county over two hundred thousand may 32 establish. 33 The board of a county with a population of two hundred 34 thousand persons or more that has established a drainage 35 -18- LSB 6158YC (2) 91 md/jh 18/ 23