SF 2313 (LSB 5398XS (5) 91)

SENATE FILE 2313

BY  LOFGREN

A BILL FOR

An Act relating to property tax sales, including bidding procedures and foreclosures on certificates, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 321.46, subsection 2, Code 2026, is amended to read as follows:
   2.  Upon filing the application for a new initial registration and a new title, the applicant shall pay a title fee of thirty dollars, an annual registration fee prorated for the remaining unexpired months of the registration year, and a fee for new registration if applicable. A manufacturer applying for a certificate of title pursuant to section 322G.12 shall pay a title fee of twenty dollars. However, a title fee shall not be charged to a manufactured or mobile home retailer applying for a certificate of title for a used mobile home or manufactured home, titled in Iowa, as required under section 321.45, subsection 4. The county treasurer, if satisfied of the genuineness and regularity of the application, and in the case of a mobile home or manufactured home, that taxes are not owing under chapter 435, and that applicant has complied with all the requirements of this chapter, shall issue a new certificate of title and, except for a mobile home, manufactured home, or a vehicle returned to and accepted by a manufacturer as described in section 322G.12, a registration card to the purchaser or transferee, shall cancel the prior registration for the vehicle, and shall forward the necessary copies to the department on the date of issuance, as prescribed in section 321.24. Mobile homes or manufactured homes titled under chapter 448 447A that have been subject under section 446.18 to a public bidder sale in a county shall be titled in the county’s name, with no fee, and the county treasurer shall issue the title.
    Sec. 2.  Section 331.552, subsection 34, Code 2026, is amended to read as follows:
   34.  Destroy tax sale redemption certificates and all associated tax sale records after ten years have elapsed from the end of the fiscal year in which the certificate was redeemed. If a tax sale certificate of purchase is canceled as required by section 446.37 or 448.1, all associated tax sale records shall be destroyed after ten years have elapsed from the end of the fiscal year in which the tax sale certificate of purchase was canceled. This subsection applies to documents described in this subsection that are in existence before, on, or after July 1, 2003.
    Sec. 3.  Section 331.559, subsection 22, Code 2026, is amended to read as follows:
   22.  Carry out duties relating to the issuance of a tax deed or certificate of title for parcels, as defined in section 445.1, sold for delinquent taxes as provided in chapter 448 447A.
    Sec. 4.  Section 331.602, subsection 22, Code 2026, is amended by striking the subsection.
    Sec. 5.  Section 420.207, Code 2026, is amended to read as follows:
   420.207  Taxation in general.
   Sections 426A.11 through 426A.15, 427.1, 427.8 through 427.11, 428.4, 428.20, 428.22, 428.23, 437.1, 437.3, 441.21, 443.1 through 443.3, 444.2 through 444.4, 447.11, and 447.9 through 447.13, so far as applicable, apply to cities acting under special charters.
    Sec. 6.  Section 420.240, Code 2026, is amended to read as follows:
   420.240  Redemption statutes applicable.
   The provisions of sections 447.7 through, 447.8, 447.11, and 447.13 shall, so far as those sections shall be applicable, and are not changed or modified in this chapter, apply to sales of real estate for delinquent taxes contemplated in this chapter; but where the words “auditor of the county” or “treasurer” are used in those sections the words “city clerk”, “recorder”, “auditor”, or “person authorized to make out the tax list” and “city collector” or “city treasurer or officer authorized to receive same” shall be substituted.
    Sec. 7.  Section 420.241, Code 2026, is amended to read as follows:
   420.241  Deed —— when executed.
   Immediately after the expiration of ninety days from the date of service of the notice, as prescribed by sections 447.9 through 447.14 and section 448.1 420.227, the treasurer, collector, or person authorized to act as collector of taxes, shall make out a deed for each lot or parcel of land sold and remaining unredeemed and deliver the same to the purchaser upon the return of the certificate of purchase.
    Sec. 8.  Section 420.243, Code 2026, is amended to read as follows:
   420.243  Formal execution.
   Deeds executed by the city treasurer, collector, or person authorized to act as collector, may be in form substantially as provided by section 448.2, and shall be signed and acknowledged by the treasurer, collector, or other authorized person in the person’s official capacity.
    Sec. 9.  Section 420.244, Code 2026, is amended to read as follows:
   420.244  Force and effect.
   All deeds and conveyances made and executed on account of any general or special tax sale shall be of the same force and effect as deeds made by the county treasurer as provided in sections 448.3 through 448.5 chapter 447A for delinquent county taxes.
    Sec. 10.  Section 420.245, Code 2026, is amended to read as follows:
   420.245  Rights and remedies.
   The purchaser as well as the owner of any real property sold on account of such general or special delinquent taxes or assessments shall be entitled to all the rights and remedies which are granted and prescribed by sections 446.35, 446.36, and 448.6 through 448.14 chapter 447A, but wherever the words “county and county treasurer and auditor” are used, the words “city, city treasurer, city clerk, recorder, auditor, or collector or officer authorized to act as collector”, shall be substituted.
    Sec. 11.  Section 420.246, Code 2026, is amended to read as follows:
   420.246  Tax and deed statutes applicable.
   Sections 446.16, and 446.32, and 448.10 through 448.12 are applicable to cities acting under special charters, except that, where the word “treasurer” is used, there shall be substituted the words “city collector or treasurer or deputy treasurer or deputy or officer authorized to collect city taxes”; and where the word “auditor” is used, there shall be substituted the words “city clerk or recorder”.
    Sec. 12.  Section 435.25, subsection 2, Code 2026, is amended to read as follows:
   2.  Chapters 446, 447, and 448 447A apply to the sale of a home for the collection of delinquent taxes and interest, the redemption of a home sold for the collection of delinquent taxes and interest, and the execution of a tax sale certificate of title for the purchase of a home sold for the collection of delinquent taxes and interest in the same manner as though a home were real property within the meaning of these chapters to the extent consistent with this chapter. The certificate of title shall be issued by the county treasurer. The treasurer shall charge ten dollars for each certificate of title, except that the treasurer shall issue a tax sale certificate of title to the county at no charge.
    Sec. 13.  Section 437A.11, subsection 6, Code 2026, is amended to read as follows:
   6.  Section 445.3 applies with respect to the replacement taxes and special utility property tax levies and penalties and interest imposed by this chapter, except for the provisions limiting the commencement of actions. In addition, at the county treasurer’s discretion, chapters 446, 447, and 448 447A apply in the enforcement of the special utility property tax levies, but any tax deed issued shall not extinguish a tax lien or judgment lien for replacement taxes that has attached to the property.
    Sec. 14.  Section 437B.7, subsection 6, Code 2026, is amended to read as follows:
   6.  Section 445.3 applies with respect to the replacement taxes and special utility property tax levies and penalties and interest imposed by this chapter, except for the provisions limiting the commencement of actions. In addition, at the county treasurer’s discretion, chapters 446, 447, and 448 447A apply in the enforcement of the special utility property tax levies, but any tax deed issued shall not extinguish a tax lien or judgment lien for replacement taxes that has attached to the property.
    Sec. 15.  Section 445.1, unnumbered paragraph 1, Code 2026, is amended to read as follows:
   For the purpose of this chapter and chapters 446, 447, and 448 447A, section 331.553, subsection 3, and sections 427.8 through 427.12 and 569.8:
    Sec. 16.  Section 446.9, subsection 2, Code 2026, is amended to read as follows:
   2.  Publication of the date, time, and place of the annual tax sale shall be made once by the treasurer in at least one official newspaper in the county as selected by the board of supervisors and designated by the treasurer at least one week, but not more than three weeks, before the day of sale. The publication shall contain a description of the parcel to be sold that is clear, concise, and sufficient to distinguish the parcel to be sold from all other parcels. All items offered for sale pursuant to section 446.18 may be indicated by an “s” or by an asterisk. The publication shall also contain the name of the person in whose name the parcel to be sold is taxed and the amount delinquent for which the parcel is liable each year, the amount of the interest and fees, and the amount of the service fee as provided in section 446.10, subsection 2, all to be incorporated as a single sum. The publication shall contain a statement that, after the sale, if the parcel is not redeemed within the period provided in chapter 447, the right to redeem expires and a deed may be issued the tax sale certificate holder may proceed with a sheriff’s sale under chapter 447A.  If the treasurer has an official internet site with the information required by this section, the newspaper publication need only contain the date, time, and manner of the sale, the street addresses of the parcels to be sold, and the internet site address of the county containing the tax sale information for more information. If there is no newspaper of general circulation in the county, publication on the website alone shall be sufficient.
    Sec. 17.  Section 446.14, Code 2026, is amended to read as follows:
   446.14  Irregularities in advertisement.
   An irregularity or informality in the advertisement does not affect the legality of the sale or the title to a parcel conveyed by the county treasurer’s deed under this chapter and chapters 447 and 448 447A, and in all cases its provisions shall be sufficient notice to the owners of the sale of the parcel.
    Sec. 18.  Section 446.16, Code 2026, is amended to read as follows:
   446.16  Bid —— purchaser —— successful bidder registration fee.
   1.  The person who offers to pay the total amount due, which is a lien on any parcel, for the smallest percentage of the parcel is the purchaser, and when the purchaser designates the percentage of any parcel for which the purchaser will pay the total amount due, the percentage thus designated shall give the person an undivided interest upon the issuance of a treasurer’s deed, as provided in chapter 448. If two or more persons have placed an equal bid and the bids are the smallest percentage offered, the county treasurer shall use a random selection process to select the bidder to whom a certificate of purchase will be issued. The percentage that may be designated by any purchaser under this subsection shall not be less than one percent.  A bidder shall offer to pay the total amount due, plus the fee under subsection 2, and shall offer the percentage monthly interest the bidder bids to accept on redemption from tax sale. The percentage monthly interest shall not be greater than two percent, and lower bids shall be made in decrements of one-tenth of one percent. The bidder offering to accept the lowest interest rate shall be the winner at the auction.
   2.  The treasurer may establish and collect a reasonable registration fee from each registered successful bidder at the tax sale. The fee shall not be assessed against a county or municipality. The total of the fees collected shall not exceed the total costs of the tax sale. Registration fees Fees collected shall be deposited in the general fund of the county.
   3.  The delinquent tax lien transfers with the tax sale certificate, whether held by the county or purchased by an individual, through assignment or direct purchase at the tax sale. The delinquent tax sale lien expires when the tax sale certificate expires.
   4.  Only those persons as defined in section 4.1 are authorized to register to bid or to bid at the tax sale or to own a tax sale certificate by purchase, assignment, or otherwise. To be authorized to register to bid or to bid at a tax sale or to own a tax sale certificate, a person, other than an individual, must have a federal tax identification number and either a designation of agent for service of process on file with the secretary of state or a verified statement meeting the requirements of chapter 547 on file with the county recorder of the county in which the person wishes to register to bid or to bid at tax sale or of the county where the property that is the subject of the tax sale certificate is located.
    Sec. 19.  Section 446.19A, subsection 4, paragraph b, Code 2026, is amended to read as follows:
   b.  All persons who purchase certificates from the city or county under this subsection shall demonstrate the intent to rehabilitate the abandoned property for habitation or build a residential structure on the vacant lot if the property is not redeemed. In the alternative, the county or city may, if title to the property has vested in the county or city under section 448.1 chapter 447A, dispose of the property in accordance with section 331.361 or 364.7, as applicable.
    Sec. 20.  Section 446.23, Code 2026, is amended to read as follows:
   446.23  Resale.
   The person physically attending the sale and purchasing a tax sale certificate against any parcel shall immediately pay to the county treasurer the total amount bid plus the successful bidder fee. Upon failure to do so, or in the case of a written bid, failure to pay in full within twenty-four hours after notification by the treasurer that the bidder has won the auction, the parcel is again offered as if no such sale had been made successful bidder shall be the person who would have won had the defaulting purchaser not bid and who has paid the bid amount after similar notification by the treasurer that the bidder has won the auction. These payments may be made in the funds receivable in payment of taxes.
    Sec. 21.  Section 446.24, Code 2026, is amended to read as follows:
   446.24  Record of sales.
   The county treasurer or a designee shall attend all tax sales and keep a record in the county system of the sales, describing each parcel on which the total amount due was paid by the purchaser, as they are described in the copy of the notice on file in the treasurer’s office. The county system shall include a statement of the amount, kind of tax, the monthly interest rate to be paid on redemption, fees, and costs for each parcel, to whom sold, and the date of sale.
    Sec. 22.  Section 446.37, Code 2026, is amended to read as follows:
   446.37  Cancellation of sale.
   After three years have elapsed from the time of any tax sale, or after one year has elapsed from the time of any tax sale under section 446.19B, and the holder of a certificate has not filed an affidavit proof of service of notice of expiration of right of redemption sheriff’s sale under section 447.12 447A.2, the county treasurer shall cancel the sale from the county system. However, if the filing of affidavit of service is stayed by operation of law, the time period for the filing of the affidavit shall not expire until the later of six months after the stay has been lifted or three years from the time of the tax sale, and in the case of a tax sale under section 446.19B, the time period for the filing of the affidavit shall not expire until the later of six months after the stay has been lifted or one year from the time of the tax sale. This section does not apply to certificates of purchase at tax sale which are held by a county.
    Sec. 23.  Section 447.1, subsection 1, Code 2026, is amended to read as follows:
   1.  A parcel sold under this chapter and chapter 446 may be redeemed at any time before the right of redemption expires the sheriff’s sale held in accordance with chapter 447A, by payment to the county treasurer, to be held by the treasurer subject to the order of the purchaser, of the amount for which the parcel was sold, including the successful bidder fee and the fee for the certificate of purchase, and interest of two percent per month provided in the successful bid, counting each fraction of a month as an entire month, from the month of sale, and the total amount paid by the purchaser or the purchaser’s assignee for any subsequent year, with interest at the same rate added on the amount of the payment for each subsequent year from the month of payment, counting each fraction of a month as an entire month. The Unless the interest rate bid is zero, the total amount of interest must be at least one dollar and shall be rounded to the nearest whole dollar. Interest shall accrue on subsequent amounts as provided in section 446.32. The redemption must be received by the treasurer or entered through the county treasurer’s authorized internet site on or before the last day of the month to avoid additional interest being added to the amount necessary to redeem. However, if the last day of a month falls on a Saturday, Sunday, or a holiday, the payment must be received by the treasurer or entered through the county treasurer’s authorized internet site by the close of business on the first business day of the following month.
    Sec. 24.  Section 447.7, subsection 2, paragraph d, Code 2026, is amended to read as follows:
   d.  If the court determines that the person maintaining the action or the person’s legal representative is entitled to redeem by virtue of legal disability or prior legal disability, the court shall so order. The order shall determine the rights, claims, and interests of all parties, including liens for taxes and claims for improvements made on or to the parcel by the person claiming under the tax title. The order shall establish the amount necessary to effect redemption. The redemption amount shall include the amount for redemption computed in accordance with section 447.1 or 447.3, whichever is applicable, including interest computed up to and including the date of payment of the total redemption amount to the clerk of court and the amount of all costs added to the redemption amount in accordance with section 447.13. In addition, if the person claiming under the tax title is determined by the court to have made improvements on or to the parcel after the treasurer’s deed was issued, or if the person is a third-party bidder at the sheriff’s sale under chapter 447A who bid more than the total taxes, interest and costs, the court shall enter judgment in favor of the person claiming under the tax title for an amount equal to the value of all such improvements, and such judgment shall be a lien on the parcel until paid. The order shall direct that the person maintaining the action shall pay to the clerk of court, within thirty days after the date of the order, the total redemption amount the order sets forth.
    Sec. 25.  Section 447.7, subsection 4, Code 2026, is amended to read as follows:
   4.  If a person with a legal disability is not in possession of the parcel at the time of the recording of the treasurer’s deed, the person or the person’s legal representative is forever barred and estopped from commencing an action under this section if either of the following occurs:
   a.  An affidavit is filed pursuant to section 448.15 and claims adverse to the tax title are barred by section 448.16.
   b.  An an action under subsection 2 is not brought within three years after the recording of the treasurer’s deed.
    Sec. 26.  Section 447.8, subsection 1, Code 2026, is amended to read as follows:
   1.  a.  After the delivery of the treasurer’s deed, a person entitled to redeem a parcel sold at tax sale shall do so only by an equitable action in the district court of the county where the parcel is located. The action to redeem may be maintained only by a person who was entitled to redeem the parcel during the ninety-day redemption period in section 447.12, except that such a person may assign the person’s right of redemption or right to maintain the action to another person, or by a person entitled to redeem under section 447.7.
   b.  In order to establish the right to redeem, the person maintaining the action shall be required to prove to the court either that the person maintaining the action or a predecessor in interest was not properly served with notice in accordance with the requirements of sections 447.9 through 447.12, or that the person maintaining the action or a predecessor in interest acquired an interest in or possession of the parcel during the ninety-day redemption period in section 447.12 of the expiration of the redemption period pursuant to section 447A.2. A person shall not be entitled to maintain such action by claiming that a different person was not properly served with notice of expiration of right of redemption, if the person seeking to maintain the action, or the person’s predecessor in interest, if applicable, was properly served with the notice. After the execution and delivery of the treasurer’s deed, a person may only redeem a parcel sold for delinquent taxes under this section or section 447.7.
    Sec. 27.  Section 447.8, subsection 6, Code 2026, is amended by striking the subsection.
    Sec. 28.  Section 447.13, subsection 1, Code 2026, is amended to read as follows:
   1.  The cost of serving the notice notices, including the cost of sending certified mail notices, and the cost of publication under section 447.10, if publication is required, shall be added to the amount necessary to redeem. The cost of a record search shall also be added to the amount necessary to redeem. However, if the certificate holder is other than a county, the search must be performed by an abstractor who is an active participant in the Iowa title guaranty program under section 16.91 or by an attorney licensed to practice law in the state of Iowa, and the amount of the cost of the record search that may be added to the amount necessary to redeem shall not exceed three hundred dollars.
    Sec. 29.  NEW SECTION.  447A.1  Scheduling of sheriff’s sale for tax sale certificates.
   On completion of the tax sale and issuance of the tax sale certificate under chapter 446, the county treasurer shall announce the date of the sheriff’s sale to be held on the tax sale certificates issued under chapter 446, which have not been redeemed. The sale shall be scheduled, in consultation with the sheriff, on a date as close as practicable to the third Monday in January.
    Sec. 30.  NEW SECTION.  447A.2  Notice of sheriff’s sale.
   Not later than sixty days before the scheduled sheriff’s sale, the holder of the tax sale certificate shall serve a notice pursuant to court rule 1.305, and file with the county treasurer proof of service on, all persons with an interest in the property and all adult residents of the property, other than lessees or trespassers. The notice shall be in substantially the following form:
[county] Treasurer
[county treasurer contact information] 
Property No. [parcel identification number]

Important Legal Notice:
Notice of sheriff’s sale to satisfy delinquent property taxes

   You are being given this notice because your property at [address of property], in which you appear to have an interest, has been sold at tax sale on [sale date], due to failure to pay legally required property taxes. If you want to keep your ownership or other interest in this property, your prompt attention to this notice is needed.

   The simplest way to resolve this matter is to contact the treasurer’s office and pay the delinquent property taxes and charges in full. We show that as of [date of notice], and if payment is received by [day before second month’s interest attaches] the amount to pay this debt in full is [amount of sale price, successful bidder fee and one month’s interest, rounded to the nearest dollar]. If you pay after that date, but before the sheriff’s sale date (see below) this amount will be increased by interest and other charges as provided by law.

   You should know that unless you pay off all delinquent taxes, fees, and interest before the sheriff’s sale on the tax certificate, currently scheduled for [scheduled sale date] at [time] in the [county] treasurer’s office, a treasurer’s deed will be issued to the winning bidder, which will allow the bidder to evict you and any other claimants to the property.

   You should also know that, if the property is a single-family or two-family dwelling and you are an individual who is either an owner, contract seller, or contract purchaser of the property, you may demand that the sheriff’s sale be postponed for six months after the sale date noted above. To be effective, a written demand for delay of sale must be received by the county treasurer’s office no later than [ten days before the scheduled sheriff’s sale date].

   If you have any questions about this notice, or if you are unable to provide or borrow the money needed to pay off the property tax debt, you should contact an attorney at once.
    Sec. 31.  NEW SECTION.  447A.3  Optional method of service.
   1.  In lieu of the notice requirements of section 447A.2, if a person whose only interest is as a judgment creditor, the person may be served by regular mail and certified mail to the person, or if the person was represented by an attorney currently licensed to practice law in Iowa, by regular or electronic mail to the attorney.
   2.  If the public records of the secretary of state show that creditor has a registered agent, service may be made by certified mail to the registered agent.
   3.  If a person with an interest cannot be found, or is evading service, the tax sale purchaser may file an affidavit to that effect, and serve that person by both regular and certified mail to that person’s last known address.
    Sec. 32.  NEW SECTION.  447A.4  Delay of sale.
   If the property is a property primarily used or intended for human habitation containing two or fewer dwelling units, an individual who is either an owner, contract seller, or contract purchaser of the property, may demand that the sheriff’s sale be postponed for six months after the initial scheduled sheriff’s sale date. To be effective, a written demand for delay of sale must be received by the county treasurer’s office no later than ten days before the scheduled sheriff’s sale date. At the scheduled sale, the treasurer shall announce the properties with delay demands and the new sale date scheduled for delayed sales, including sales delayed under section 447.10, which will be as close as practicable to the first Monday occurring six months after the originally scheduled January sale date.
    Sec. 33.  NEW SECTION.  447A.5  Posting of notice of sale.
   If the property is a property primarily used or intended for human habitation containing four or fewer dwelling units, the tax sale certificate holder shall post the following notice, in a weather-resistant form, on a main entrance to the property no later than thirty days before the scheduled sheriff’s sale date:
Important Legal Notice
Notice of Sheriff’s Sale to Collect Delinquent Property Taxes

   On [date of tax sale] this property was sold to pay delinquent property taxes. A sheriff’s sale on the property will be held on [date of scheduled sheriff’s sale] at [time] in the office of the [county] treasurer. If the delinquent taxes plus costs, interest, and fees are not paid to the county treasurer before that date, you will probably lose any interest you have in this property. If you are unable to pay such amounts and wish to keep your interest in this property, you should consult an attorney at once.
    Sec. 34.  NEW SECTION.  447A.6  Manner of sale.
   The sheriff’s sale shall be conducted at the county treasurer’s office by the sheriff with the assistance of the treasurer. To the extent feasible, the procedures for the sheriff’s sale shall be the same as that of a special execution against real property under chapter 626, with the following modifications:
   1.  The notices provided in sections 626.74, 626.75, and 626.78 shall not be required.
   2.  The holder of the tax sale certificate shall, within two days of the scheduled sale, file a verified accounting of the tax sale principal, successful bidder fee, advancements, interest, attorney fees and costs of the sheriff’s sale, and tender the certificate to the treasurer. The treasurer shall credit the certificate holder in such sum against the certificate holder’s opening bid, and may require cash from the certificate holder only to the extent that the holder’s bid exceeds such sum. Unless otherwise directed by the certificate holder in writing, the sum shall be deemed submitted as the certificate holder’s opening bid.
   3.  If the attorney fees under subsection 2 include a charge or advance for a title search, a copy of the results of the search shall be filed with the treasurer at least ten days before the scheduled sale, and be a public record, with no warranty from either the attorney, other than of authenticity, or from the title agent.
   4.  Section 626.81 shall not apply.
   5.  If there is an overplus from the sheriff’s sale proceeds over that amount due to the tax sale certificate holder, the treasurer shall deduct and pay from the proceeds the amount of the tax sale certificate, plus interest and allowable charges, to the certificate holder upon surrender of the certificate.
   6.  The procedures of section 626.98 will be modified to provide that there is no redemption, and that the deed to the winning bidder will be issued by the treasurer.
    Sec. 35.  NEW SECTION.  447A.7  Attorney fees.
   The reasonable fees of the attorney representing the tax certificate owner for services from completion of the tax sale until the sheriff’s sale shall be added to the sale bid of the tax certificate owner. A copy of the itemized billing of the attorney shall be filed with the treasurer and shall be accessible to the public. If the property is redeemed or purchased at the sheriff’s sale by a third party, the attorney shall deposit the fees in the attorney’s trust account. If no party in interest commences a legal action, or files a pleading in an action under section 447A.9, subsection 5, demanding a determination of the proper amount of attorney fees and costs owing to the attorney from the certificate holder within ninety days after the sheriff’s sale, the attorney may apply the fees to the tax sale certificate holder’s account.
    Sec. 36.  NEW SECTION.  447A.8  Optional procedure.
   A person holding title under a tax deed issued under chapter 448 before July 1, 2026, may, at any time before July 1 of the year following the calendar year in which the tax deed was issued, request that the tax deed be canceled, a new tax sale certificate be issued, and that the treasurer resell the property at the next annual sheriff’s sale under this chapter. Sheriff’s sales under this procedure shall not be subject to a demand for delay of sale. The priority of the new certificate shall, for purposes of conflicting claims on the property, relate back to the date of the original tax sale.
    Sec. 37.  NEW SECTION.  447A.9  Overplus —— exemption.
   1.  An overplus at the sheriff’s sale is exempt from execution by a creditor to the same extent that the property was exempt immediately prior to the sheriff’s sale.
   2.  Any person with a previously existing interest in the property, other than an owner, contract vendor, or contract vendee of the property, shall have thirty days after the sheriff’s sale to file a verified claim with the treasurer. The claim may include facts to establish that the overplus is not exempt from execution. A claim not timely filed is barred against the overplus.
   3.  At any time after the claim deadline, the owners, contract vendors, contract vendees, and persons with timely filed claims may file with the treasurer a written agreement for distribution of the overplus, according to which the treasurer shall distribute the overplus.
   4.  Within ninety days after the sheriff’s sale, any person listed in subsection 3 may file an action in equity in the district court requesting a determination of the claims against the overplus. The treasurer shall distribute the overplus as ordered by court. The action may also determine the proper amount of attorney fees and charges of the certificate holder.
   5.  If no such action under subsection 4 is filed, the treasurer shall distribute the overplus, free of all other claims, to the taxpayers of record in the treasurer’s office at the time of the sheriff’s sale as follows: 
   a.  If the property is held in joint tenancy and all tenants are living, the proceeds will be divided equally among the joint tenants.
   b.  If the property is held in joint tenancy and one tenant is deceased, the proceeds shall be paid to the surviving tenant.
   c.  If a property is not held in joint tenancy, and the owner is deceased with an estate pending, the owner’s share shall be paid to the owner’s personal representative.
   d.  If an owner is under conservatorship, the owner’s share shall be paid to the conservator.
   e.  If a taxpayer cannot be readily located, has died with no surviving joint tenant or estate pending, or a check mailed to the taxpayer has been returned or has not been cashed within one hundred twenty days of mailing, the taxpayer’s share shall be paid into the fund established by section 556.18. 
    Sec. 38.  NEW SECTION.  447A.10  Continuance of sale.
   If the holder of the tax sale certificate has not timely obtained service on all parties required to be served with the notices provided in sections 447A.2 and 447A.5, the tax sale certificate holder may have the sale continued to the date for sales subject to a delay of sale under section 447A.4. Unless the certificate holder can establish to the treasurer by clear and convincing evidence that the delay is not the fault of the certificate holder, interest, attorney fees, and charges incurred by the tax certificate holder shall not accrue after the originally scheduled sale date.
    Sec. 39.  Section 461A.25, subsection 1, Code 2026, is amended to read as follows:
   1.  The commission may recommend that the executive council lease property under the commission’s jurisdiction. All leases shall reserve to the public of the state the right to enter upon the property leased for any lawful purpose. The council may, if it approves the recommendation and the lease to be entered into is for five years or less, execute the lease in behalf of the state and commission. If the recommendation is for a lease in excess of five years, with the exception of agricultural lands specifically dealt with in Article I, section 24, of the Constitution of the State of Iowa, the council shall advertise for bids. If a bid is accepted, the lease shall be let or executed by the council in accordance with the most desirable bid. The lease shall not be executed for a term longer than fifty years. Any such leasehold interest, including any improvements placed on it, shall be listed on the tax rolls as provided in chapters 428 and 443 and assessed and valued as provided in chapter 441; taxes shall be levied on it as provided in chapter 444 and collected as provided in chapter 445; and the leasehold interest is subject to tax sale, redemption, and apportionment of taxes as provided in chapters 446, 447, and 448 447A. The lessee shall discharge and pay all taxes.
    Sec. 40.  Section 631.1, subsection 2, Code 2026, is amended to read as follows:
   2.  The district court sitting in small claims shall have concurrent jurisdiction of an action for forcible entry and detainer which is based on those grounds set forth in section 648.1, subsections 1, 2, 3 and 5, and the grounds set forth in section 648.1, subsection 6, relating to a treasurer’s deed issued after a sheriff’s sale under chapter 447A. When commenced under this chapter, the action shall be a small claim for the purposes of this chapter.  In a small claim based on section 648.1, subsection 6, brought by the certificate holder or its affiliate, the court may grant a continuance of up to thirty days if the taxpayer presents substantial evidence that the taxpayer will be able to redeem the property by payment in full of the delinquent taxes and lawful charges, including the reasonable attorney fees and costs for the forcible entry and detainer action, within the continuance period, unless the taxpayer has previously requested such a continuance or has requested a delay of sale under section 447A.3. The court may condition such a continuance on the taxpayer taking steps, such as authorizing a payroll or bank deduction plan, to ensure that all subsequent taxes are timely paid. If all delinquent taxes, interest, and lawful charges are paid to the treasurer prior to the rescheduled hearing, the property shall be treated as if the tax sale certificate had been timely redeemed.
    Sec. 41.  REPEAL.  Sections 447.9, 447.10, and 447.12, Code 2026, are repealed.
    Sec. 42.  REPEAL.  Chapter 448, Code 2026, is repealed.
    Sec. 43.  INTENT —— STUDY.
   1.  It is the intent of the general assembly that tax sales shall be open and accessible to the greatest feasible number of bidders.
   2.  The governor shall designate an individual to study, in consultation with six representative county treasurers appointed by the Iowa state county treasurers association, tax sales in Iowa, including the feasibility of a statewide online system or a coordinated online system of county systems and present the person’s recommendations in a report filed with the general assembly before January 1, 2027. Any proposed system may contain electronic links to public records, such as assessed valuations and property descriptions, to provide better information to bidders to allow them to make intelligent decisions on prospective bids. Other subjects for the study may include a system of electronic transfers to make taxpayer budgeting easier, including modification of interest accrual to accommodate periodic payments, allowing written bids where a tax sale is conducted live, and such other related subjects as the designated person may decide.
    Sec. 44.  APPLICABILITY.  This Act applies as follows:
   1.  Except as provided in section 447A.8, property sold at tax sales held before January 1, 2026, shall be subject to existing law, with the option provided in section 447A.8. If the option is exercised, a sheriff’s sale will be scheduled under the new rules, pursuant to this Act.
   2.  Tax sales in 2026 will be conducted under existing law as to advertising and tax sale, but will be subject to this Act with respect to proceedings after the tax sale.
   3.  All tax sales on or after January 1, 2027, and the resulting proceedings, will be conducted under this Act.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Under current law, a notice of the annual tax sale containing certain information shall be published in at least one official newspaper. This bill specifies that if the treasurer has an official internet site with the information required by Code section 446.9, then the publication in the newspaper only needs to include the following: (1) date, time, and manner of the sale; (2) the street address of the parcels; and (3) the internet site address of the county containing the required information. Additionally, if there is no newspaper of general circulation, publication on the internet site is sufficient.
   Under current law, the bidder who offers to pay the total amount of delinquent taxes due for the smallest percentage of the parcel is the purchaser. The bill requires the successful bidder to pay the total amount due, plus the successful bidder fee. Under the bill, bidders shall offer the monthly interest percentage the bidder is willing to accept on redemption from tax sale. The bill specifies that the monthly interest percentage shall not be greater than 2 percent, and lower bids shall be made in decrements of 0.1. The bidder offering to accept the lowest interest rate shall be the winner at the auction.
   Under current law, the treasurer establishes and collects a registration fee from each bidder at the tax sale. The bill eliminates the registration fee. Instead, the treasurer establishes and collects a fee only from the successful bidder.
   The bill gives the successful bidder 24 hours after receiving notice that they have won the auction to pay the total amount due. If the successful bidder defaults, the person who would have won had the defaulting purchaser not bid shall be notified that they are the successful bidder and pay the total amount due within 24 hours.
   The bill repeals Code chapter 448 and establishes a new procedure for a purchaser of a tax sale certificate to obtain the title to the property when the previous property owner does not redeem the property in accordance with Code chapter 447. The bill requires the county treasurer to announce the date of a sheriff’s sale to be held for properties for which tax certificates have been issued following a tax sale. The sheriff’s sale is scheduled in consultation with the sheriff and shall be scheduled on a date as close as practicable to the third Monday in January.
   The holder of the tax sale certificate shall personally serve all persons with an interest in the property no later than 60 days before the scheduled sheriff’s sale. The bill prescribes the form for the notice. The bill allows alternative service to a person whose interest in the property is as a judgment creditor only and prescribes requirements for service for other specified interested parties.
   For properties primarily used or intended for human habitation containing two or fewer dwelling units, an individual who is either an owner, contract seller, or contract purchaser may demand that the sheriff’s sale be postponed for six months after the scheduled sheriff’s sale date. A written demand for delay of sale must be received by the county treasurer’s office no later than 10 days before the scheduled sheriff’s sale date. On the scheduled date, the treasurer shall announce the properties with delay demands and the new sale date scheduled for the delayed sales. The delayed sales shall be scheduled as close as practicable to the first Monday occurring six months after the originally scheduled January sale date.
   The bill also requires the certificate holder to post the notice of sale in a weather-resistant form on the main entrance of a property no later than 30 days before the scheduled sheriff’s sale if the property being sold is primarily used or intended for human habitation containing two or fewer dwelling units. 
   The bill specifies that the sheriff’s sale shall be conducted at the treasurer’s office by the sheriff with the assistance of the treasurer. To the extent feasible, the procedures shall be the same as that of a special execution under Code chapter 626, with certain modifications, as specified in the bill.
   The bill requires the reasonable fees of the attorney representing the tax certificate holder for services from the completion of the tax sale until the sheriff’s sale to be added to the sale bid of the tax certificate holder. A copy of the itemized billing of the attorney shall be given to the treasurer and shall be accessible to the public. If the property is redeemed or purchased at the sheriff’s sale by a third party, the attorney shall deposit the fees in the attorney’s trust account. If no party in interest commences a legal action, or files a pleading in an action demanding a determination of the proper amount of attorney fees and costs owing to the attorney for the certificate holder within 90 days after the sheriff’s sale, the attorney may apply the fees to the tax sale certificate holder’s account.
   The bill allows for a person holding title of a tax deed issued under Code chapter 448, Code 2026, before July 1, 2026, to request that the tax deed be canceled, a new tax sale certificate be issued, and that the treasurer resell the property at the next annual sheriff’s sale. The request must be made before July 1 of the year following the calendar year in which the tax deed was issued. Sheriff’s sales under this procedure shall not be subject to a demand for delay of sale. The priority of the new certificate shall, for purposes of conflicting claims on the property, relate back to the date of the original tax sale.
   The bill provides that an overplus at the sheriff’s sale is exempt from execution by a creditor to the same extent that the property was exempt immediately prior to the sheriff’s sale. A person with a previous existing interest in the property, other than an owner, contract vendor, or contract vendee of the property, shall have 30 days after the sale to file a verified claim with the treasurer. The claims may include facts to establish that the overplus is not exempt from execution. A claim not timely filed is barred against the overplus. At any time after the claim filing deadline, the owners, contract vendors, and contract vendees, and persons with timely filed claims may file with the treasurer a written agreement for distribution of the overplus, according to which the treasurer shall distribute the overplus. Within 90 days after the sale, specified persons may file an action in equity in the district court requesting a determination of the claims against the overplus. The action may also determine the proper amount of attorney fees and charges of the certificate holder. If no such action is timely filed, the treasurer shall distribute the overplus, free of all other claims, to the taxpayers of record in the treasurer’s office at the time of the sheriff’s sale, as provided in the bill.
   The bill also allows for a continuance of sale if the holder of the tax certificate has not timely obtained service on all parties required to be served with the notices. Unless the certificate holder can establish to the treasurer by clear and convincing evidence that the delay is not the fault of the certificate holder, interest, attorney fees, and charges incurred by the tax sale certificate holder shall not accrue after the originally scheduled sale date.
   The bill grants small claims court jurisdiction of an action for forcible entry and detainer based on grounds set forth in Code section 648.1, subsection 6, relating to a treasurer’s deed issued after a sheriff’s sale under Code chapter 447A.  The court may grant a continuance of up to 30 days if the taxpayer presents substantial evidence that the taxpayer will be able to redeem the property by payment in full of the delinquent taxes and lawful charges, including reasonable attorney fees and costs for the forcible entry and detainer action, within the continuance period, unless the taxpayer has previously requested such a continuance or has requested a delay of sale. The court may condition such continuance on the taxpayer taking steps, such as authorizing a payroll or bank deduction plan, to ensure that all subsequent taxes are timely paid. If all delinquent taxes, interest, and lawful charges are paid to the treasurer prior to the rescheduled hearing, the property shall be treated as if the tax sale certificate had been timely redeemed.
   The bill mandates a study of tax sales done by a designee of the governor, in consultation with six county treasurers appointed by the Iowa state county treasurer’s association, including but not limited to the feasibility of a statewide online system or a coordinated online system of county systems. Recommendations shall be presented to the general assembly before January 1, 2027.
   The bill establishes applicability provisions based on the date of the tax sale affecting the property.
   The bill makes conforming changes to other provisions of the Code.