SSB 1208 (LSB 1550XC (21) 91)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON DAWSON)

A BILL FOR

An Act relating to local government property taxes, financial authority, and budgets, modifying appropriations, and including effective date, applicability, and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
COUNTY PROPERTY TAXES AND BUDGETS

    Section 1.  Section 331.423, subsection 1, paragraph b, subparagraph (1), Code 2025, is amended to read as follows:
   (1)  For each fiscal year beginning on or after July 1, 2024, but before July 1, 2028 2026, subject to subparagraph (3), the greater of three dollars and fifty cents per thousand dollars of assessed value used to calculate taxes for general county services for the budget year and the adjusted general county basic levy rate, as adjusted under subparagraph (2), if applicable.
    Sec. 2.  Section 331.423, subsection 1, paragraph c, Code 2025, is amended to read as follows:
   c.  For each fiscal year beginning on or after July 1, 2028, three dollars and fifty cents per thousand dollars of assessed value For each fiscal year beginning on or after July 1, 2026, but before July 1, 2031, a levy rate per thousand dollars of assessed value equal to one thousand multiplied by the quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for levy under this subsection 1 divided by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.
    Sec. 3.  Section 331.423, subsection 1, Code 2025, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  (1)  For each fiscal year beginning on or after July 1, 2031, the levy rate imposed under this subsection 1 for the current fiscal year, unless subject to subparagraph (2).
   (2)  If the total assessed value, excluding value attributable to new valuation, used to calculate taxes for general county services under this subsection 1 for the budget year is equal to or exceeds one hundred two percent of the total assessed value used to calculate taxes for general county services for the current fiscal year, a levy rate per thousand dollars of assessed value that is equal to one thousand multiplied by the quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for levy under this subsection 1 divided by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.
    Sec. 4.  Section 331.423, subsection 2, paragraph b, subparagraph (1), Code 2025, is amended to read as follows:
   (1)  For each fiscal year beginning on or after July 1, 2024, but before July 1, 2028 2026, subject to subparagraph (3), the greater of three dollars and ninety-five cents per thousand dollars of assessed value used to calculate taxes for rural county services for the budget year and the adjusted rural county basic levy rate, as adjusted under subparagraph (2), if applicable.
    Sec. 5.  Section 331.423, subsection 2, paragraph c, Code 2025, is amended to read as follows:
   c.  For each fiscal year beginning on or after July 1, 2028, three dollars and ninety-five cents per thousand dollars of assessed value For each fiscal year beginning on or after July 1, 2026, but before July 1, 2031, a levy rate per thousand dollars of assessed value equal to one thousand multiplied by the quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for levy under this subsection 2 divided by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.
    Sec. 6.  Section 331.423, subsection 2, Code 2025, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  (1)  For each fiscal year beginning on or after July 1, 2031, the levy rate imposed under this subsection 2 for the current fiscal year, unless subject to subparagraph (2).
   (2)  If the total assessed value, excluding value attributable to new valuation, used to calculate taxes for rural county services under this subsection 2 for the budget year is equal to or exceeds one hundred two percent of the total assessed value used to calculate taxes for rural county services for the current fiscal year, a levy rate per thousand dollars of assessed value that is equal to one thousand multiplied by the quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for levy under this subsection 2 divided by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.
    Sec. 7.  Section 331.423, subsection 3, Code 2025, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  c.  “New valuation” means the increase from the current fiscal year to the budget year in taxable valuation due to the following, the amount of each as certified by the county auditor to the department of management:
   (1)  New construction.
   (2)  Additions or improvements to existing structures that are not normal and necessary repairs under section 441.21, subsection 8.
   (3)  Net boundary adjustments, including annexation, severance, incorporation, or discontinuance as those terms are defined in section 368.1.
    Sec. 8.  EFFECTIVE DATE.  This division of this Act takes effect January 1, 2026.
    Sec. 9.  APPLICABILITY.  This division of this Act applies to property taxes and budgets for fiscal years beginning on or after July 1, 2026.
DIVISION II
CITY PROPERTY TAXES AND BUDGETS

    Sec. 10.  Section 384.1, subsection 3, paragraph c, subparagraph (1), Code 2025, is amended to read as follows:
   (1)  For each fiscal year beginning on or after July 1, 2024, but before July 1, 2028 2026, subject to subparagraph (3), a city’s tax levy for the general fund, except for levies authorized in section 384.12, shall not exceed in any tax year the greater of eight dollars and ten cents per thousand dollars of assessed value used to calculate taxes for the budget year and the adjusted city general fund levy rate, as adjusted under subparagraph (2), if applicable.
    Sec. 11.  Section 384.1, subsection 3, paragraph d, Code 2025, is amended to read as follows:
   d.  For each fiscal year beginning on or after July 1, 2028, a city’s tax levy rate for the general fund, except for levies authorized in section 384.12, shall not exceed eight dollars and ten cents per thousand dollars of assessed value used to calculate taxes in any fiscal year For each fiscal year beginning on or after July 1, 2026, but before July 1, 2031, a levy rate per thousand dollars of assessed value equal to one thousand multiplied by the quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for levy under this subsection divided by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.  Notwithstanding other provisions of this paragraph, if a city’s actual levy rate for the current fiscal year is zero dollars per thousand dollars of assessed value, a levy rate per one thousand dollars of assessed value equal to one thousand multiplied by the quotient of one hundred two percent of the city’s certified general fund budget for the current fiscal year divided by the remainder of the total assessed value used to calculate taxes for the budget year minus value attributable to new valuation.
    Sec. 12.  Section 384.1, subsection 3, Code 2025, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  e.  (1)  For each fiscal year beginning on or after July 1, 2031, the levy rate imposed under this subsection for the current fiscal year, unless subject to subparagraph (2).
   (2)  If the total assessed value, excluding value attributable to new valuation, used to calculate taxes under this subsection for the budget year is equal to or exceeds one hundred two percent of the total assessed value used to calculate taxes under this subsection for the current fiscal year, a levy rate per thousand dollars of assessed value that is equal to one thousand multiplied by the quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for levy under this subsection divided by the remainder of the total assessed value used to calculate such taxes for the budget year minus value attributable to new valuation.
   (3)  Notwithstanding other provisions of this paragraph, if a city’s actual levy rate for the current fiscal year is zero dollars per thousand dollars of assessed value, a levy rate per one thousand dollars of assessed value equal to one thousand multiplied by the quotient of one hundred two percent of the city’s certified general fund budget for the current fiscal year divided by the remainder of the total assessed value used to calculate taxes for the budget year minus value attributable to new valuation.
    Sec. 13.  Section 384.1, subsection 4, Code 2025, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  c.  “New valuation” means the increase from the current fiscal year to the budget year in taxable valuation due to the following, the amount of each as certified by the county auditor to the department of management:
   (1)  New construction.
   (2)  Additions or improvements to existing structures that are not normal and necessary repairs under section 441.21, subsection 8.
   (3)  Net boundary adjustments, including annexation, severance, incorporation, or discontinuance as those terms are defined in section 368.1.
    Sec. 14.  EFFECTIVE DATE.  This division of this Act takes effect January 1, 2026.
    Sec. 15.  APPLICABILITY.  This division of this Act applies to property taxes and budgets for fiscal years beginning on or after July 1, 2026.
DIVISION III
SCHOOL TAXES AND BUDGETS

    Sec. 16.  Section 257.1, subsection 2, paragraph b, Code 2025, is amended to read as follows:
   b.  (1)  (a)  For the budget year commencing July 1, 1999, and for each succeeding budget year beginning before July 1, 2022, the regular program foundation base per pupil is eighty-seven and five-tenths percent of the regular program state cost per pupil.
   (b)  For the budget year commencing July 1, 2022, and for each succeeding budget year beginning before July 1, 2026, the regular program foundation base per pupil is eighty-eight and four-tenths percent of the regular program state cost per pupil.
   (c)  For the budget year commencing July 1, 2026, the regular program foundation base per pupil is ninety and seventy-two hundredths percent of the regular program state cost per pupil.
   (d)  For the budget year commencing July 1, 2027, the regular program foundation base per pupil is ninety-three and four hundredths percent of the regular program state cost per pupil.
   (e)  For the budget year commencing July 1, 2028, the regular program foundation base per pupil is ninety-five and thirty-six hundredths percent of the regular program state cost per pupil.
   (f)  For the budget year commencing July 1, 2029, the regular program foundation base per pupil is ninety-five and sixty-eight hundredths percent of the regular program state cost per pupil.
   (g)  For the budget year commencing July 1, 2030, and each succeeding budget year, the regular program foundation base per pupil is one hundred percent of the regular program state cost per pupil.
   (2)  (a)  For the budget year commencing July 1, 1991, and for each succeeding budget year beginning before July 1, 2026, the special education support services foundation base is seventy-nine percent of the special education support services state cost per pupil.
   (b)  For the budget year commencing July 1, 2026, the special education support services foundation base is eighty-three and two-tenths percent of the special education support services state cost per pupil.
   (c)  For the budget year commencing July 1, 2027, the special education support services foundation base is eighty-seven and four-tenths percent of the special education support services state cost per pupil.
   (d)  For the budget year commencing July 1, 2028, the special education support services foundation base is ninety-one and six-tenths percent of the special education support services state cost per pupil.
   (e)  For the budget year commencing July 1, 2029, the special education support services foundation base is ninety-five and eight-tenths percent of the special education support services state cost per pupil.
   (f)  For the budget year commencing July 1, 2030, and each succeeding budget year, the special education support services foundation base is one hundred percent of the special education support services state cost per pupil.
   (3)  The combined foundation base is the sum of the regular program foundation base, the special education support services foundation base, the total teacher salary supplement district cost, the total professional development supplement district cost, the total early intervention supplement district cost, the total teacher leadership supplement district cost, and the total area education agency teacher salary supplement district cost.
    Sec. 17.  Section 257.3, subsection 1, paragraph a, Code 2025, is amended to read as follows:
   a.  (1)  Except as provided in subsections 2 and 3, a school district shall cause to be levied each budget year beginning before July 1, 2026, for the school general fund, a foundation property tax equal to five dollars and forty cents per thousand dollars of assessed valuation on all taxable property in the district. The county auditor shall spread the foundation levy over all taxable property in the district.
   (2)  Except as provided in subsections 2 and 3, a school district shall cause to be levied for the budget year beginning July 1, 2026, for the school general fund, a foundation property tax equal to four dollars and ninety cents per thousand dollars of assessed valuation on all taxable property in the district. The county auditor shall spread the foundation levy over all taxable property in the district.
   (3)  Except as provided in subsections 2 and 3, a school district shall cause to be levied for the budget year beginning July 1, 2027, for the school general fund, a foundation property tax equal to four dollars and forty cents per thousand dollars of assessed valuation on all taxable property in the district. The county auditor shall spread the foundation levy over all taxable property in the district.
   (4)  Except as provided in subsections 2 and 3, a school district shall cause to be levied for the budget year beginning July 1, 2028, for the school general fund, a foundation property tax equal to three dollars and ninety cents per thousand dollars of assessed valuation on all taxable property in the district. The county auditor shall spread the foundation levy over all taxable property in the district.
   (5)  Except as provided in subsections 2 and 3, a school district shall cause to be levied for the budget year beginning July 1, 2029, for the school general fund, a foundation property tax equal to three dollars and forty cents per thousand dollars of assessed valuation on all taxable property in the district. The county auditor shall spread the foundation levy over all taxable property in the district.
   (6)  Except as provided in subsections 2 and 3, a school district shall cause to be levied for the budget year beginning July 1, 2030, and each succeeding budget year, for the school general fund, a foundation property tax equal to two dollars and ninety-seven cents per thousand dollars of assessed valuation on all taxable property in the district. The county auditor shall spread the foundation levy over all taxable property in the district.
    Sec. 18.  Section 257.3, subsection 2, paragraphs a and b, Code 2025, are amended to read as follows:
   a.  Notwithstanding subsection 1, a reorganized school district for which the reorganization takes effect on or after July 1, 2026, shall cause a foundation property tax of four two dollars and forty forty-two cents per thousand dollars of assessed valuation to be levied on all taxable property which, in the year preceding a reorganization, was within a school district affected by the reorganization as defined in section 275.1, or in the year preceding a dissolution was a part of a school district that dissolved if the dissolution proposal has been approved by the director of the department of education pursuant to section 275.55.
   b.  In For a reorganized school district for which the reorganization took effect on or after July 1, 2026, in succeeding school years, the foundation property tax levy on that portion shall be increased to the rate of four two dollars and ninety sixty-nine cents per thousand dollars of assessed valuation the first succeeding year, five two dollars and fifteen eighty-three cents per thousand dollars of assessed valuation the second succeeding year, and five two dollars and forty ninety-seven cents per thousand dollars of assessed valuation the third succeeding year and each year thereafter under subsection 1, paragraph “a”.
    Sec. 19.  Section 257.4, subsection 2, Code 2025, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  c.  This subsection applies to budget years beginning before July 1, 2030.
    Sec. 20.  Section 257.15, subsections 2 and 3, Code 2025, are amended to read as follows:
   2.  Property tax adjustment aid for 1992-1993 and succeeding years.  For the budget year beginning July 1, 1992, and succeeding budget years beginning before July 1, 2030, the department of education shall pay property tax adjustment aid to a school district equal to the amount paid to the district for the base year less an amount equal to the product of the percent by which the taxable valuation in the district increased, if the taxable valuation increased, from January 1 of the year prior to the base year to January 1 of the base year and the property tax adjustment aid. The department of management shall adjust the rate of the additional property tax accordingly and notify the department of education of the amount of aid to be paid to each district from moneys appropriated for property tax adjustment aid.
   3.  Property tax adjustment aid appropriation.  There is appropriated from the general fund of the state to the department of education, for each fiscal year beginning before July 1, 2030, an amount necessary to pay property tax adjustment aid to school districts under this section. Property tax adjustment aid shall be paid to school districts in the manner provided in section 257.16.
    Sec. 21.  Section 257.15, subsection 4, paragraph a, subparagraph (1), subparagraph division (d), Code 2025, is amended to read as follows:
   (d)  For the budget year beginning July 1, 2009, and succeeding budget years beginning before July 1, 2030, twenty-four million dollars.
    Sec. 22.  Section 257.15, subsection 4, paragraph b, Code 2025, is amended to read as follows:
   b.  After For fiscal years beginning before July 1, 2029, after lowering all school district adjusted additional property tax levy rates to the statewide maximum adjusted additional property tax levy rate under paragraph “a”, the department of management shall use any remaining funds at the end of the calendar year to further lower additional property taxes by increasing for the budget year beginning the following July 1, the regular program foundation base per pupil percentage under section 257.1. Moneys used pursuant to this paragraph shall supplant an equal amount of the appropriation made from the general fund of the state pursuant to section 257.16 that represents the increase in state foundation aid.  Any moneys remaining at the conclusion of the fiscal year beginning July 1, 2029, shall be transferred by the department of management for deposit in the general fund of the state.
    Sec. 23.  Section 257.16A, subsections 2 and 3, Code 2025, are amended to read as follows:
   2.  There For each fiscal year beginning before July 1, 2030, there is appropriated annually all moneys in the fund to the department of management for purposes of section 257.15, subsection 4.
   3.  Notwithstanding section 8.33, any moneys remaining in the property tax equity and relief fund at the end of a fiscal year shall not revert to any other fund but shall remain in the property tax equity and relief fund for use as provided in this section for the following fiscal year.  However, at the end of the fiscal year beginning July 1, 2029, any moneys remaining in the property tax equity and relief fund shall be transferred for deposit into either the secure an advanced vision for education fund or the general fund of the state based on the fund from which the moneys were received.
    Sec. 24.  Section 257.16B, subsection 1, Code 2025, is amended to read as follows:
   1.  For each fiscal year beginning on or after July 1, 2022, but before July 1, 2030, there is appropriated from the general fund of the state to the department of education an amount necessary to make all school district property tax replacement payments under this section, as calculated in subsection 2.
    Sec. 25.  Section 257.16D, subsection 2, paragraph a, Code 2025, is amended to read as follows:
   a.  There For fiscal years beginning before July 1, 2030, there is appropriated annually from the fund to the department of management an amount necessary to make all foundation base supplement payments under this section. The department of management shall calculate each school district’s foundation base supplement payment based on the distribution methodology under paragraph “b”.
    Sec. 26.  Section 257.16D, subsection 3, Code 2025, is amended to read as follows:
   3.  Notwithstanding section 8.33, any moneys remaining in the foundation base supplement fund at the end of a fiscal year shall not revert to any other fund but shall remain in the foundation base supplement fund for use as provided in this section for the following fiscal year.  However, at the end of the fiscal year beginning July 1, 2029, any moneys remaining in the foundation base supplement fund shall be transferred for deposit in the secure an advanced vision for education fund.
    Sec. 27.  Section 257.31, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  19.  a.  The board of directors of each school district with an unexpended fund balance in the district’s management levy fund under section 298A.3 at the conclusion of the fiscal year beginning July 1, 2024, that exceeds an amount equal to the total expenditures from the district’s management fund for the fiscal year beginning July 1, 2024, shall certify such unexpended fund balance and expenditure amounts, including any reserved or designated amounts in the fund and the purposes therefor, to the school budget review committee by November 15, 2025. The committee shall prescribe the form for such certifications.
   b.  The committee shall conduct a review of the unexpended fund balances and expenditures of school district management levy funds certified under paragraph “a”. The committee shall consult with boards of directors of school districts and other relevant persons to determine the appropriateness of establishing district management levy fund unexpended fund balance limitations. By February 1, 2026, the committee shall make recommendations to the general assembly for the establishing district management levy fund unexpended fund balance limitations for fiscal years beginning on or after July 1, 2027, including recommendations for limitations based on a percentage of the district’s management levy fund expenditures and recommendations for management levy limitations and expenditure requirements for excess funds.
    Sec. 28.  Section 298.4, subsection 1, unnumbered paragraph 1, Code 2025, is amended to read as follows:
   The Unless prohibited by subsection 1A, paragraph “a”, the board of directors of a school district may certify for levy by April 30 of a school year, a tax on all taxable property in the school district for a district management levy, subject to the limitations in subsection 1A, paragraph “b”. The revenue from the tax levied in this section shall be placed in the district management levy fund of the school district. The district management levy shall be expended only for the following purposes:
    Sec. 29.  Section 298.4, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  1A.  a.  (1)  For the fiscal year beginning July 1, 2027, if a school district’s unexpended fund balance, as defined in section 257.2, of the district’s management levy fund is equal to or exceeds one hundred eighty percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year, the board of directors shall not certify a levy under this section for the fiscal year.
   (2)  For the fiscal year beginning July 1, 2028, if a school district’s unexpended fund balance, as defined in section 257.2, of the district’s management levy fund is equal to or exceeds one hundred seventy-five percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year, the board of directors shall not certify a levy under this section for the fiscal year.
   (3)  For the fiscal year beginning July 1, 2029, if a school district’s unexpended fund balance, as defined in section 257.2, of the district’s management levy fund is equal to or exceeds one hundred seventy percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year, the board of directors shall not certify a levy under this section for the fiscal year.
   (4)  For the fiscal year beginning July 1, 2030, if a school district’s unexpended fund balance, as defined in section 257.2, of the district’s management levy fund is equal to or exceeds one hundred sixty-five percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year, the board of directors shall not certify a levy under this section for the fiscal year.
   (5)  For the fiscal year beginning July 1, 2031, and each succeeding fiscal year, if a school district’s unexpended fund balance, as defined in section 257.2, of the district’s management levy fund is equal to or exceeds one hundred sixty percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year, the board of directors shall not certify a levy under this section for the fiscal year.
   b.  (1)  For the fiscal year beginning July 1, 2027, if a school district is not prohibited from certifying a levy pursuant to paragraph “a”, the maximum amount that the board of directors may certify for levy under this section shall be an amount equal to the remainder of one hundred eighty percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year minus the district’s management levy fund unexpended fund balance for the fiscal year preceding the base year.
   (2)  For the fiscal year beginning July 1, 2028, if a school district is not prohibited from certifying a levy pursuant to paragraph “a”, the maximum amount that the board of directors may certify for levy under this section shall be an amount equal to the remainder of one hundred seventy-five percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year minus the district’s management levy fund unexpended fund balance for the fiscal year preceding the base year.
   (3)  For the fiscal year beginning July 1, 2029, if a school district is not prohibited from certifying a levy pursuant to paragraph “a”, the maximum amount that the board of directors may certify for levy under this section shall be an amount equal to the remainder of one hundred seventy percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year minus the district’s management levy fund unexpended fund balance for the fiscal year preceding the base year.
   (4)  For the fiscal year beginning July 1, 2030, if a school district is not prohibited from certifying a levy pursuant to paragraph “a”, the maximum amount that the board of directors may certify for levy under this section shall be an amount equal to the remainder of one hundred sixty-five percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year minus the district’s management levy fund unexpended fund balance for the fiscal year preceding the base year.
   (5)  For the fiscal year beginning July 1, 2031, and each succeeding fiscal year, if a school district is not prohibited from certifying a levy pursuant to paragraph “a”, the maximum amount that the board of directors may certify for levy under this section shall be an amount equal to the remainder of one hundred sixty percent of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year minus the district’s management levy fund unexpended fund balance for the fiscal year preceding the base year.
    Sec. 30.  Section 423F.2, subsection 3, paragraph b, subparagraph (2), Code 2025, is amended to read as follows:
   (2)  For purposes of this subsection, the equity transfer amount for fiscal years beginning before July 1, 2030, is determined by multiplying the equity transfer percentage by the amount of moneys available in the secure an advanced vision for education fund in the fiscal year.  For fiscal years beginning on or after July 1, 2030, the equity transfer amount is zero.
   (a)  For the fiscal year beginning July 1, 2018, the equity transfer percentage is two and one-tenth percent. For the fiscal year beginning July 1, 2019, the equity transfer percentage is three and one-tenth percent.
   (b)  For each fiscal year beginning on or after July 1, 2020, but before July 1, 2030, the equity transfer percentage is equal to the equity transfer percentage for the immediately preceding fiscal year, unless the amount of moneys available in the secure an advanced vision for education fund in the immediately preceding fiscal year equals or exceeds one hundred two percent of the amount of moneys available in the fund for the fiscal year prior to the immediately preceding fiscal year, in which case the equity transfer percentage shall be the equity transfer percentage for the immediately preceding fiscal year plus one percent subject to the limitation in subparagraph division (c).
   (c)  If the equity transfer percentage calculated under subparagraph division (b) exceeds thirty percent, the equity transfer percentage for that fiscal year shall be thirty percent.
    Sec. 31.  Section 423F.2, subsection 3, paragraph b, subparagraph (3), unnumbered paragraph 1, Code 2025, is amended to read as follows:
   For purposes of this subsection, the foundation base transfer amount for the fiscal year beginning July 1, 2019, is zero, and for each fiscal year beginning on or after July 1, 2020, but before July 1, 2030, the foundation base transfer amount equals the equity transfer amount for the fiscal year under subparagraph (2) minus the sum of the following:
    Sec. 32.  Section 423F.2, subsection 3, paragraph b, Code 2025, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (04)  For purposes of this subsection, the foundation base transfer amount for each fiscal year beginning on or after July 1, 2030, is zero.
    Sec. 33.  Section 425A.3, subsection 1, Code 2025, is amended to read as follows:
   1.  The family farm tax credit fund shall be apportioned each year in the manner provided in this chapter so as to give a credit against the tax on each eligible tract of agricultural land within the several school districts of the state in which the levy for the general school fund exceeds five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”. The amount of the credit on each eligible tract of agricultural land shall be the amount the tax levied for the general school fund exceeds the amount of tax which would be levied on each eligible tract of agricultural land were the levy for the general school fund five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”, for the previous year. However, in the case of a deficiency in the family farm tax credit fund to pay the credits in full, the credit on each eligible tract of agricultural land in the state shall be proportionate and applied as provided in this chapter.
    Sec. 34.  Section 425A.5, Code 2025, is amended to read as follows:
   425A.5  Computation by county auditor.
   The family farm tax credit allowed each year shall be computed as follows:  On or before April 1, the county auditor shall list by school districts all tracts of agricultural land which are entitled to credit, the taxable value for the previous year, the budget from each school district for the previous year, and the tax rate determined for the general fund of the school district in the manner prescribed in section 444.3 for the previous year, and if the tax rate is in excess of five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”, the auditor shall multiply the tax levy which is in excess of five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”, by the total taxable value of the agricultural land entitled to credit in the school district, and on or before April 1, certify the total amount of credit and the total number of acres entitled to the credit to the department of revenue.
    Sec. 35.  Section 426.3, Code 2025, is amended to read as follows:
   426.3  Where credit given.
   The agricultural land credit fund shall be apportioned each year in the manner hereinafter provided so as to give a credit against the tax on each tract of agricultural lands within the several school districts of the state in which the levy for the general school fund exceeds five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”; the amount of such credit on each tract of such lands shall be the amount the tax levied for the general school fund exceeds the amount of tax which would be levied on said tract of such lands were the levy for the general school fund five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”, for the previous year, except in the case of a deficiency in the agricultural land credit fund to pay said credits in full, in which case the credit on each eligible tract of such lands in the state shall be proportionate and shall be applied as hereinafter provided.
    Sec. 36.  Section 426.6, subsection 1, Code 2025, is amended to read as follows:
   1.  The agricultural land tax credit allowed each year shall be computed as follows:  On or before April 1, the county auditor shall list by school districts all tracts of agricultural lands which are entitled to credit, together with the taxable value for the previous year, together with the budget from each school district for the previous year, and the tax rate determined for the general fund of the district in the manner prescribed in section 444.3 for the previous year, and if such tax rate is in excess of five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”, the auditor shall multiply the tax levy which is in excess of five dollars and forty cents per thousand dollars of assessed value the levy rate under section 257.3, subsection 1, paragraph “a”, by the total taxable value of the agricultural lands entitled to credit in the district, and on or before April 1, certify the amount to the department of revenue.
    Sec. 37.  ADJUSTMENT OF CALCULATIONS.  For property tax credits under chapters 425A and 426 for property taxes due and payable in fiscal years beginning on or after July 1, 2026, but before July 1, 2032, the tax rate determined for the general fund of the school district in the manner prescribed in section 444.3 for the previous year shall be determined using the appropriate property tax levy rate under section 257.3, as amended in this division of this Act.
    Sec. 38.  EFFECTIVE DATE.  Except for the section of this division of this Act amending section 257.31, this division of this Act takes effect July 1, 2026.
DIVISION IV
PROPERTY VALUATIONS AND ASSESSMENT LIMITATIONS

    Sec. 39.  Section 441.21, subsection 1, paragraph e, Code 2025, is amended to read as follows:
   e.  The actual value of agricultural property shall be determined on the basis of productivity and net earning capacity of the property determined on the basis of its use for agricultural purposes capitalized at a rate of seven percent and applied uniformly among counties and among classes of property.  However, for assessment years beginning on or after January 1, 2026, structures on agricultural land constructed on or after January 1, 2026, that are not agricultural dwellings shall not be included in determination of productivity and net earning capacity of agricultural property and shall not be allocated any portion of the total county productivity value so determined. Such agricultural structures shall instead be valued under subsection 2 and the structure’s assessed value subject to taxation shall be equal to the product of the structure’s value multiplied by the agricultural factor, as determined in 701 IAC 102.3(2) or succeeding rule of the department. Any formula or method employed to determine productivity and net earning capacity of property shall be adopted in full by rule.
    Sec. 40.  Section 441.21, subsections 4 and 5, Code 2025, are amended to read as follows:
   4.  For valuations established as of January 1, 1979 2025, the percentage of actual value at which agricultural and residential property shall be assessed shall be the quotient of the dividend and divisor as defined in this section determined under this subsection.
   a.  (1)  The percentage of actual value at which agricultural property shall be assessed shall be the quotient of the dividend and divisor as defined in this paragraph.  The dividend for each class of property shall be the dividend as determined for each class of agricultural property for valuations established as of January 1, 1978 2024, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978 2024, plus six three percent of the amount so determined.
   (2)  However, if the difference between the dividend so determined for either class of property and the dividend for that class of property for valuations established as of January 1, 1978, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978, is less than six percent, the 1979 dividend for the other class of property shall be the dividend as determined for that class of property for valuations established as of January 1, 1978, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978, plus a percentage of the amount so determined which is equal to the percentage by which the dividend as determined for the other class of property for valuations established as of January 1, 1978, adjusted by the product obtained by multiplying the percentage determined for that year by the amount of any additions or deletions to actual value, excluding those resulting from the revaluation of existing properties, as reported by the assessors on the abstracts of assessment for 1978, is increased in arriving at the 1979 dividend for the other class of property.
   (3)  For valuations established for assessment years beginning on or after January 1, 2022, the calculation of the dividend for residential property under this subsection shall exclude the value of all property described in subsection 14, paragraph “a”, subparagraphs (2), (3), (4), (5), and (6), and the property described in subsection 14, paragraph “a”, subparagraph (7), that contains three or more separate dwelling units.
   b.  (1)  The divisor for each class of property shall be the total actual value of all such agricultural property in the state in the preceding year, as reported by the assessors on the abstracts of assessment submitted for 1978 2024, plus the amount of value added to said total actual value by the revaluation of existing properties in 1979 2025 as equalized by the director of revenue pursuant to section 441.49. The director shall utilize information reported on abstracts of assessment submitted pursuant to section 441.45 in determining such percentage.  For valuations established as of January 1, 2026, and each assessment year thereafter, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which agricultural property shall be assessed shall be calculated in accordance with the methods provided in this paragraph.
   (2)  For valuations established for assessment years beginning on or after January 1, 2022, the calculation of the divisor for residential property under this subsection shall exclude the value of all property described in subsection 14, paragraph “a”, subparagraphs (2), (3), (4), (5), and (6), and the property described in subsection 14, paragraph “a”, subparagraph (7), that contains three or more separate dwelling units. 
   c.  (1)  For valuations established as of January 1, 1980, and each assessment year thereafter beginning before January 1, 2013, the percentage of actual value as equalized by the director of revenue as provided in section 441.49 at which agricultural and residential property shall be assessed shall be calculated in accordance with the methods provided in this subsection, including the limitation of increases in agricultural and residential assessed values to the percentage increase of the other class of property if the other class increases less than the allowable limit adjusted to include the applicable and current values as equalized by the director of revenue, except that any references to six percent in this subsection shall be four percent.
   (2)  For valuations established as of January 1, 2013, and each assessment year thereafter, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which agricultural and residential property shall be assessed shall be calculated in accordance with the methods provided in this subsection, including the limitation of increases in agricultural and residential assessed values to the percentage increase of the other class of property if the other class increases less than the allowable limit adjusted to include the applicable and current values as equalized by the department of revenue, except that any references to six percent in this subsection shall be three percent.
   b.  (1)  For valuations established for the assessment year beginning January 1, 2025, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be fifty-seven and nine thousand four hundred fifty-three ten-thousandths percent.
   (2)  For valuations established for the assessment year beginning January 1, 2026, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be sixty-eight and four hundred ninety one-thousandths percent.
   (3)  For valuations established for the assessment year beginning January 1, 2027, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be seventy-eight and nine thousand seven hundred twenty-six ten-thousandths percent.
   (4)  For valuations established for the assessment year beginning January 1, 2028, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be eighty-nine and four thousand eight hundred sixty-three ten-thousandths percent.
   (5)  For valuations established for the assessment year beginning January 1, 2029, and each assessment year thereafter, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which residential property shall be assessed shall be one hundred percent.
   5.  a.  (1)  For valuations established as of January 1, 1979, property valued by the department of revenue pursuant to chapter 437 shall be considered as one class of property and shall be assessed as a percentage of its actual value. The percentage shall be determined by the director of revenue in accordance with the provisions of this section. For valuations established as of January 1, 1979, the percentage shall be the quotient of the dividend and divisor as defined in this section. The dividend shall be the total actual valuation established for 1978 by the department of revenue, plus ten percent of the amount so determined. The divisor for property valued by the department of revenue pursuant to chapter 437 shall be the valuation established for 1978, plus the amount of value added to the total actual value by the revaluation of the property by the department of revenue as of January 1, 1979. For valuations established as of January 1, 1980, property valued by the department of revenue pursuant to chapter 437 shall be assessed at a percentage of its actual value. The percentage shall be determined by the director of revenue in accordance with the provisions of this section. For valuations established as of January 1, 1980, the percentage shall be the quotient of the dividend and divisor as defined in this section. The dividend shall be the total actual valuation established for 1979 by the department of revenue, plus eight percent of the amount so determined. The divisor for property valued by the department of revenue pursuant to chapter 437 shall be the valuation established for 1979, plus the amount of value added to the total actual value by the revaluation of the property by the department of revenue as of January 1, 1980. For valuations established as of January 1, 1981, and each year thereafter, the percentage of actual value at which property valued by the department of revenue pursuant to chapter 437 shall be assessed shall be calculated in accordance with the methods provided herein, except that any references to ten percent in this subsection shall be eight percent.
   (2)  (1)  For valuations established on or after January 1, 2013, property valued by the department of revenue pursuant to chapter 434 shall be assessed at a portion of its actual value determined in the same manner at which property assessed as commercial property is assessed under paragraph “b” for the same assessment year.
   (3)  (2)  For valuations established for the assessment year beginning January 1, 2025, and each assessment year thereafter, the percentage of actual value at which property valued by the department of revenue pursuant to chapters 428, 437, and 438 shall be assessed shall be ninety-eight one hundred percent.
   (4)  For valuations established for the assessment year beginning January 1, 2026, the percentage of actual value at which property valued by the department of revenue pursuant to chapters 428 and 438 shall be assessed shall be ninety-six percent.
   (5)  For valuations established for the assessment year beginning January 1, 2027, the percentage of actual value at which property valued by the department of revenue pursuant to chapters 428 and 438 shall be assessed shall be ninety-four percent.
   (6)  For valuations established for the assessment year beginning January 1, 2028, the percentage of actual value at which property valued by the department of revenue pursuant to chapters 428 and 438 shall be assessed shall be ninety-two percent.
   (7)  For valuations established on or after January 1, 2029, the percentage of actual value at which property valued by the department of revenue pursuant to chapters 428 and 438 shall be assessed shall be ninety percent.
   b.  For valuations established on or after January 1, 2013 2025, commercial property, excluding properties referred to in section 427A.1, subsection 9, shall be assessed at a portion of its actual value, as determined in this paragraph “b”.
   (1)  For valuations established for the assessment year beginning January 1, 2013, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which commercial property shall be assessed shall be ninety-five percent. For valuations established for the assessment year beginning January 1, 2014, and each assessment year thereafter beginning before January 1, 2022, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which commercial property shall be assessed shall be ninety percent.
   (2)  (1)  For valuations established for the assessment year beginning January 1, 2022 2025, and each assessment year thereafter beginning before January 1, 2029, the portion of actual value at which each property unit of commercial property shall be assessed shall be the sum of the following:
   (a)  An amount equal to the product of the assessment limitation percentage applicable to residential property under subsection 4 for that assessment year multiplied by the actual value of the property that exceeds zero dollars but does not exceed one hundred fifty thousand dollars.
   (b)  (i)  An For the assessment year beginning January 1, 2025, an amount equal to ninety ninety-two percent of the actual value of the property for that assessment year that exceeds one hundred fifty thousand dollars.
   (ii)  For the assessment year beginning January 1, 2026, an amount equal to ninety-four percent of the actual value of the property for that assessment year that exceeds one hundred fifty thousand dollars.
   (iii)  For the assessment year beginning January 1, 2027, an amount equal to ninety-six percent of the actual value of the property for that assessment year that exceeds one hundred fifty thousand dollars.
   (iv)  For the assessment year beginning January 1, 2028, an amount equal to ninety-eight percent of the actual value of the property for that assessment year that exceeds one hundred fifty thousand dollars.
   (2)  For valuations established for the assessment year beginning January 1, 2029, and each assessment year thereafter, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which commercial property shall be assessed shall be one hundred percent.
   c.  For valuations established on or after January 1, 2013 2025, industrial property, excluding properties referred to in section 427A.1, subsection 9, shall be assessed at a portion of its actual value, as determined in this paragraph “c”.
   (1)  For valuations established for the assessment year beginning January 1, 2013, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which industrial property shall be assessed shall be ninety-five percent. For valuations established for the assessment year beginning January 1, 2014, and each assessment year thereafter beginning before January 1, 2022, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which industrial property shall be assessed shall be ninety percent.
   (2)  (1)  For valuations established for the assessment year beginning January 1, 2022 2025, and each assessment year thereafter beginning before January 1, 2029, the portion of actual value at which each property unit of industrial property shall be assessed shall be the sum of the following:
   (a)  An amount equal to the product of the assessment limitation percentage applicable to residential property under subsection 4 for that assessment year multiplied by the actual value of the property that exceeds zero dollars but does not exceed one hundred fifty thousand dollars.
   (b)  (i)  An For the assessment year beginning January 1, 2025, an amount equal to ninety ninety-two percent of the actual value of the property for that assessment year that exceeds one hundred fifty thousand dollars.
   (ii)  For the assessment year beginning January 1, 2026, an amount equal to ninety-four percent of the actual value of the property for that assessment year that exceeds one hundred fifty thousand dollars.
   (iii)  For the assessment year beginning January 1, 2027, an amount equal to ninety-six percent of the actual value of the property for that assessment year that exceeds one hundred fifty thousand dollars.
   (iv)  For the assessment year beginning January 1, 2028, an amount equal to ninety-eight percent of the actual value of the property for that assessment year that exceeds one hundred fifty thousand dollars.
   (2)  For valuations established for the assessment year beginning January 1, 2029, and each assessment year thereafter, the percentage of actual value as equalized by the department of revenue as provided in section 441.49 at which industrial property shall be assessed shall be one hundred percent.
   d.  For valuations established for the assessment year beginning January 1, 2019, and each assessment year thereafter beginning before January 1, 2029, the percentages or portions of actual value at which property is assessed, as determined under this subsection, shall not be applied to the value of wind energy conversion property valued under section 427B.26 the construction of which is approved by the Iowa utilities commission on or after July 1, 2018.
   e.  (1)  For the fiscal year beginning July 1, 2023, there is appropriated from the general fund of the state to the department of revenue the sum of one hundred twenty-two million three hundred fifty thousand dollars to be used for payments under this paragraph calculated as a result of the assessment limitations imposed under paragraph “b”, subparagraph (2), subparagraph division (a), and paragraph “c”, subparagraph (2), subparagraph division (a). For each fiscal year beginning on or after July 1, 2024, but before July 1, 2026, there is appropriated from the general fund of the state to the department of revenue the sum of one hundred twenty-five million dollars to be used for payments under this paragraph calculated as a result of the assessment limitations imposed under paragraph “b”, subparagraph (2), subparagraph division (a), Code 2025, and paragraph “c”, subparagraph (2), subparagraph division (a), Code 2025.  For each fiscal year beginning on or after July 1, 2026, but before July 1, 2030, there is appropriated from the general fund of the state to the department of revenue the sum of one hundred twenty-five million dollars to be used for payments under this paragraph calculated as a result of the assessment limitations imposed under paragraph “b”, subparagraph (1), subparagraph division (a), and paragraph “c”, subparagraph (1), subparagraph division (a). 
   (2)  For fiscal years beginning on or after July 1, 2023, each county treasurer shall be paid by the department of revenue an amount calculated under subparagraph (4) for the applicable fiscal year. If an amount appropriated for the fiscal year is insufficient to make all payments as calculated under subparagraph (4), the director of revenue shall prorate the payments to the county treasurers and shall notify the county auditors of the pro rata percentage on or before September 30. 
   (3)  On or before July 1 of each fiscal year, the assessor shall report to the county auditor that portion of the total actual value of all commercial property and industrial property in the county that is subject to the assessment limitations imposed under paragraph “b”, subparagraph (2) (1), subparagraph division (a), and paragraph “c”, subparagraph (2) (1), subparagraph division (a), for the assessment year, or applicable predecessor provisions, used to calculate the taxes due and payable in that fiscal year.
   (4)  On or before September 1 of each fiscal year, the county auditor shall prepare a statement, based on the report received in subparagraph (3) and information transmitted to the county auditor under chapter 434, listing for each taxing district in the county:
   (a)  The product of the portion of the total actual value of all commercial property, industrial property, and property valued by the department under chapter 434 in the county that is subject to the assessment limitations imposed under paragraph “b”, subparagraph (2) (1), subparagraph division (a), and paragraph “c”, subparagraph (2) (1), subparagraph division (a), for the applicable assessment year, or applicable predecessor provisions, used to calculate taxes which are due and payable in the applicable fiscal year multiplied by the difference, stated as a percentage, between ninety percent the percentage for the applicable assessment year under paragraph “b”, subparagraph (1), subparagraph division (a), and the assessment limitation percentage applicable to residential property under subsection 4 for the applicable assessment year. 
   (b)  The tax levy rate per one thousand dollars of assessed value for each taxing district for the applicable fiscal year.
   (c)  The amount of the payment for each county is equal to the amount determined pursuant to subparagraph division (a), multiplied by the tax rate specified in subparagraph division (b), and then divided by one thousand dollars.
   (5)  The county auditor shall certify and forward one copy of the statement described in subparagraph (4) to the department of revenue not later than September 1 of each fiscal year.
   (6)  The amounts determined under this paragraph shall be paid by the department to the county treasurers in equal installments in September and March of each year. The county treasurer shall apportion the payments among the eligible taxing districts in the county and the amounts received by each taxing authority shall be treated the same as property taxes paid.
   f.  For the purposes of this subsection, unless the context otherwise requires:
   (1)  “Contiguous parcels” means any of the following:
   (a)  Parcels that share a common boundary.
   (b)  Parcels within the same building or structure regardless of whether the parcels share a common boundary.
   (c)  Permanent improvements to the land that are situated on one or more parcels of land that are assessed and taxed separately from the permanent improvements if the parcels of land upon which the permanent improvements are situated share a common boundary.
   (2)  “Parcel” means the same as defined in section 445.1. “Parcel” also means that portion of a parcel assigned a classification of commercial property or industrial property pursuant to section 441.21, subsection 14, paragraph “b”.
   (3)  “Property unit” means a parcel or contiguous parcels all of which are located within the same county, with the same property tax classification, are owned by the same person, and are operated by that person for a common use and purpose.
    Sec. 41.  Section 441.21, subsection 13, Code 2025, is amended by striking the subsection.
    Sec. 42.  SAVINGS PROVISION.  This division of this Act, pursuant to section 4.13, does not affect the operation of, or prohibit the application of, prior provisions of section 441.21, or rules adopted under chapter 17A to administer prior provisions of section 441.21, for assessment years beginning before January 1, 2025, or for duties, powers, protests, appeals, proceedings, actions, or remedies attributable to an assessment year beginning before January 1, 2025, including property taxes due and payable in a fiscal year as the result of an assessment year beginning before January 1, 2025.
DIVISION V
DISABLED VETERAN AND HOMESTEAD CREDITS AND EXEMPTIONS

    Sec. 43.  Section 25B.7, subsection 2, paragraph a, Code 2025, is amended to read as follows:
   a.  Homestead tax credit pursuant to section 425.1, and sections 425.2 through 425.13, and section 425.15.
    Sec. 44.  Section 425.1, subsection 2, Code 2025, is amended by striking the subsection and inserting in lieu thereof the following:
   2.  a.  The homestead credit fund shall be apportioned each year so as to give a credit against the tax on each eligible homestead in the state equal to the sum of the amounts calculated pursuant to paragraphs “b” and “c”. The amount of credit allowed on each eligible homestead shall be as follows:
   b.  (1)  If the owner of a homestead allowed a credit under this subchapter is any of the following, the homestead credit allowed on the homestead shall be the entire amount of tax levied on the homestead:
   (a)  A veteran of any of the military forces of the United States who acquired the homestead under 38 U.S.C. §21.801, 21.802 prior to August 6, 1991, or under 38 U.S.C. §2101, 2102.
   (b)  A veteran as defined in section 35.1 with a permanent service-connected disability rating of one hundred percent, as certified by the United States department of veterans affairs, or a permanent and total disability rating based on individual unemployability that is compensated at the one hundred percent disability rate, as certified by the United States department of veterans affairs.
   (c)  A former member of the national guard of any state who otherwise meets the service requirements of section 35.1, subsection 2, paragraph “b”, subparagraph (2) or (7), with a permanent service-connected disability rating of one hundred percent, as certified by the United States department of veterans affairs, or a permanent and total disability rating based on individual unemployability that is compensated at the one hundred percent disability rate, as certified by the United States department of veterans affairs.
   (d)  An individual who is a surviving spouse or a child and who is receiving dependency and indemnity compensation pursuant to 38 U.S.C. §1301 et seq., as certified by the United States department of veterans affairs.
   (2)  (a)  For an owner described in subparagraph (1), subparagraph division (a), (b), or (c), the credit allowed shall be continued to the estate of an owner who is deceased or the surviving spouse and any child, as defined in section 234.1, who are the beneficiaries of a deceased owner, so long as the surviving spouse remains unmarried.
   (b)  An individual described in subparagraph (1), subparagraph division (d), is no longer eligible for the credit upon termination of dependency and indemnity compensation under 38 U.S.C. §1301 et seq.
   (3)  An owner or a beneficiary of an owner who elects to secure the credit provided in this paragraph is not eligible for the credit provided in paragraph “c” or any other real property tax credit or exemption provided by law for veterans of military service.
   (4)  If an owner acquires a different homestead, the credit allowed under this section may be claimed on the new homestead unless the owner fails to meet the other requirements of this section.
   (5)  (a)  Except as provided in subparagraph division (b), the list of the names and addresses of individuals allowed a credit under this section and maintained by the county recorder, county treasurer, county assessor, city assessor, or other government body is confidential information and shall not be disseminated to any person unless otherwise ordered by a court or released by the lawful custodian of the records pursuant to state or federal law. The county recorder, county treasurer, county assessor, city assessor, or other government body responsible for maintaining the names and addresses of individuals allowed a credit under this section may display such credit on individual paper records and individual electronic records, including display on an internet site.
   (b)  Upon request, a county recorder, county assessor, city assessor, or other entity may share information as described in subparagraph division (a) to a county veterans service officer for purposes of providing information on benefits and services available to veterans and their families.
   (6)  (a)  For an owner who makes an application to secure the credit provided in this paragraph before July 1, 2025, and for the beneficiary of such an owner, “homestead” shall mean the same as defined in section 425.11 for each succeeding assessment year.
   (b)  For an owner who makes an application to secure the credit provided in this paragraph on or after July 1, 2025, and for the beneficiary of such an owner, “homestead” shall mean the same as provided in section 425.11, except the homestead shall not include appurtenances and shall not exceed one-half acre.
   (7)  For purposes of this paragraph, “permanent and total disability rating based on individual unemployability” means a condition under which a person has either a permanent service-connected disability rating of sixty percent or two or more permanent service-connected disability conditions in which one of the conditions has at least a forty percent rating and the combined rating for all the conditions is at least seventy percent, and the person has an administrative adjustment added to the service-connected disability rating, due to individual unemployability, such that the United States department of veterans affairs rates the veteran permanently and totally disabled for purposes of disability compensation.
   c.  (1)  For assessment years beginning prior to January 1, 2026, unless eligible under paragraph “b”, an amount equal to the actual levy on the first four thousand eight hundred fifty dollars of actual value for each homestead.
   (2)  For the assessment year beginning January 1, 2026, unless eligible under paragraph “b”, an amount equal to the actual levy on the first three thousand six hundred forty dollars of actual value for each homestead.
   (3)  For the assessment year beginning January 1, 2027, unless eligible under paragraph “b”, an amount equal to the actual levy on the first two thousand four hundred thirty dollars of actual value for each homestead.
   (4)  For the assessment year beginning January 1, 2028, unless eligible under paragraph “b”, an amount equal to the actual levy on the first one thousand two hundred twenty dollars of actual value for each homestead.
    Sec. 45.  Section 425.1A, subsection 1, Code 2025, is amended to read as follows:
   1.  The following exemptions from taxation shall be allowed in addition to the homestead credit for an owner that has attained the age of sixty-five years by January 1 of the assessment year:
   a.  For the assessment year beginning January 1, 2023, the eligible homestead, not to exceed three thousand two hundred fifty dollars in taxable value.
   b.  For the assessment year years beginning on or after January 1, 2024, and each succeeding assessment year but before January 1, 2026, the eligible homestead, not to exceed six thousand five hundred dollars in taxable value.
    Sec. 46.  Section 425.1A, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  1A.  The following exemptions from taxation shall be allowed on each eligible homestead and shall be in addition to any applicable homestead credit for an owner:
   a.  For the assessment year beginning January 1, 2026, the eligible homestead, not to exceed four thousand six hundred eighty dollars. If, however, the owner has attained the age of sixty-five by January 1 of the assessment year, the eligible homestead, not to exceed six thousand five hundred dollars.
   b.  For the assessment year beginning January 1, 2027, the eligible homestead, not to exceed ten thousand five hundred seventy dollars in taxable value.
   c.  For the assessment year beginning January 1, 2028, the eligible homestead, not to exceed eighteen thousand five hundred dollars in taxable value.
   d.  For the assessment year beginning January 1, 2029, and for each succeeding assessment year the eligible homestead, not to exceed twenty-five thousand dollars in taxable value.
    Sec. 47.  Section 425.2, subsections 1 and 2, Code 2025, are amended to read as follows:
   1.  A person who wishes to qualify for the homestead credit or exemption allowed under this subchapter shall obtain the appropriate forms for filing for the credit from the assessor.  The forms shall include the ability to claim the credit and the exemption under section 425.1A. However, a separate form shall be required for claiming a credit under section 425.1, subsection 2, paragraph “b”. The person claiming the credit or exemption shall file a verified statement and designation of homestead with the assessor for the year for which the person is first claiming the credit or exemption. The claim shall be filed not later than July 1 of the year for which the person is claiming the credit or exemption. A claim filed after July 1 of the year for which the person is claiming the credit or exemption shall be considered as a claim filed for the following year.
   2.  Upon the filing and allowance of the claim, the claim shall be allowed on that homestead for successive years without further filing as long as the property is legally or equitably owned and used as a homestead by that person or that person’s spouse on July 1 of each of those successive years, and the owner of the property being claimed as a homestead declares residency in Iowa for purposes of income taxation, and the property is occupied by that person or that person’s spouse for at least six months in each of those calendar years in which the fiscal year begins. When the property is sold or transferred, the buyer or transferee who wishes to qualify shall refile for the credit or exemption. However, when the property is transferred as part of a distribution made pursuant to chapter 598, the transferee who is the spouse retaining ownership of the property is not required to refile for the credit or exemption. Property divided pursuant to chapter 598 shall not be modified following the division of the property. An owner who ceases to use a property for a homestead or intends not to use it as a homestead for at least six months in a calendar year shall provide written notice to the assessor by July 1 following the date on which the use is changed. A person who sells or transfers a homestead or the personal representative of a deceased person who had a homestead at the time of death, shall provide written notice to the assessor that the property is no longer the homestead of the former claimant.
    Sec. 48.  Section 425.2, subsection 4, Code 2025, is amended by striking the subsection.
    Sec. 49.  Section 425.2, subsections 5 and 6, Code 2025, are amended to read as follows:
   5.  Any person sixty-five years of age or older or any person who is disabled may request, in writing, from the appropriate assessor forms for filing for homestead tax credit. Any person sixty-five years of age or older or who is disabled may complete the form, which shall include a statement of homestead, and mail or return it to the appropriate assessor. The signature of the claimant on the statement shall be considered the claimant’s acknowledgment that all statements and facts entered on the form are correct to the best of the claimant’s knowledge.
   6.  Upon adoption of a resolution by the county board of supervisors, any person may request, in writing, from the appropriate assessor forms for the filing for homestead tax credit. The person may complete the form, which shall include a statement of homestead, and mail or return it to the appropriate assessor. The signature of the claimant on the statement of homestead shall be considered the claimant’s acknowledgment that all statements and facts entered on the form are correct to the best of the claimant’s knowledge.
    Sec. 50.  Section 425.8, subsection 1, Code 2025, is amended to read as follows:
   1.  The director of revenue shall prescribe the form for the making of a verified statement and designation of homestead, the form for the supporting affidavits required herein, and such other forms as may be necessary for the proper administration of this subchapter. Whenever necessary, the department of revenue shall forward to the county auditors of the several counties in the state the prescribed sample forms, and the county auditors shall furnish blank forms prepared in accordance therewith with the assessment rolls, books, and supplies delivered to the assessors. The department of revenue shall prescribe and the county auditors shall provide on the forms for claiming the homestead credit a statement to the effect that the owner realizes that the owner must give written notice to the assessor when the owner changes the use of the property.
    Sec. 51.  Section 425.11, subsection 1, paragraph d, subparagraph (1), unnumbered paragraph 1, Code 2025, is amended to read as follows:
   The homestead includes the dwelling house which the owner, in good faith, is occupying as a home on July 1 of the year for which the credit or exemption is claimed and occupies as a home for at least six months during the calendar year in which the fiscal year begins, except as otherwise provided.
    Sec. 52.  Section 425.11, subsection 1, paragraph d, subparagraph (3), Code 2025, is amended to read as follows:
   (3)  It must not embrace more than one dwelling house, but where a homestead has more than one dwelling house situated thereon, the exemption and or credit provided for in this subchapter shall apply to the home and buildings used by the owner, but shall not apply to any other dwelling house and buildings appurtenant.
    Sec. 53.  Section 425.11, subsection 1, paragraph e, subparagraph (2), Code 2025, is amended to read as follows:
   (2)  For the purpose of this subchapter, the word “owner” shall be construed to mean a bona fide owner and not one for the purpose only of availing the person of the benefits of this subchapter. In order to qualify for the homestead tax credit and or exemption, evidence of ownership shall be on file in the office of the clerk of the district court or recorded in the office of the county recorder at the time the owner files with the assessor a verified statement of the homestead claimed by the owner as provided in section 425.2.
    Sec. 54.  Section 483A.24, subsection 19, Code 2025, is amended to read as follows:
   19.  Upon payment of a fee established by rules adopted pursuant to section 483A.1 for a lifetime trout fishing license, the department shall issue a lifetime trout fishing license to a person who is at least sixty-five years of age or to a person who qualifies for the disabled veteran homestead credit under section 425.15 425.1, subsection 2, paragraph “b”. The department shall prepare an application to be used by a person requesting a lifetime trout fishing license under this subsection.
    Sec. 55.  REPEAL.  Section 425.15, Code 2025, is repealed.
    Sec. 56.  APPLICABILITY.  This division of this Act applies to assessment years beginning on or after January 1, 2026.
DIVISION VI
MILITARY SERVICE PROPERTY TAX EXEMPTION

    Sec. 57.  Section 426A.11, subsection 2, Code 2025, is amended to read as follows:
   2.  a.  The property, not to exceed one thousand eight hundred fifty-two dollars in taxable value for assessment years beginning before January 1, 2023, of an honorably separated, retired, furloughed to a reserve, placed on inactive status, or discharged veteran, as defined in section 35.1, subsection 2, paragraph “a” or “b”.
   b.  The property, not to exceed four thousand dollars in taxable value for the assessment years beginning on or after January 1, 2023, but before January 1, 2025, of an honorably separated, retired, furloughed to a reserve, placed on inactive status, or discharged veteran, as defined in section 35.1, subsection 2, paragraph “a” or “b”.
   c.  The property, not to exceed the following amounts in taxable value, of an honorably separated, retired, furloughed to a reserve, placed on inactive status, or discharged veteran, as defined in section 35.1, subsection 2, paragraph “a” or “b”:
   (1)  Five thousand dollars in taxable value for the assessment year beginning January 1, 2025.
   (2)  Six thousand dollars in taxable value for the assessment year beginning January 1, 2026.
   (3)  Seven thousand dollars in taxable value for assessment years beginning on or after January 1, 2027.
    Sec. 58.  RETROACTIVE APPLICABILITY.  This division of this Act applies retroactively to January 1, 2025, for assessment years beginning on or after that date.
DIVISION VII
PROPERTY TAX LEVY RATES

    Sec. 59.  NEW SECTION.  444.25  Maximum property tax levy rates —— adjustments.
   1.  For purposes of this section:
   a.  “Budget year” is the fiscal year beginning during the calendar year in which a budget is certified.
   b.  “Current fiscal year” is the fiscal year ending during the calendar year in which a budget for the budget year is certified.
   c.  “Rate-limited property tax levy” includes any ad valorem property tax levy limited by law to a specific property tax levy rate per one thousand dollars of assessed value used to calculate taxes, but does not include the school district foundation levy under section 257.3, the county general services levy under section 331.423, subsection 1, the county rural services levy under section 331.423, subsection 2, or the city general fund levy under section 384.1, subsection 3.
   2.  For each fiscal year beginning on or after July 1, 2026, each rate-limited property tax levy may only be imposed if the governmental entity imposed such levy for the fiscal year beginning July 1, 2025, and shall, by operation of this section, be limited to a levy rate per one thousand dollars of assessed value that is equal to one thousand multiplied by the quotient of one hundred two percent of the current fiscal year’s actual property tax dollars certified for such levy divided by the total assessed value used to calculate such taxes for the budget year.
    Sec. 60.  NEW SECTION.  444.26  Use of bonds and indebtedness for general operations —— prohibition.
   1.  For purposes of this section, “general operations” means services or activities generally funded from the governmental entity’s general fund, which are necessary for the operation of the governmental entity, including salaries and benefits, or which are for the health and welfare of the governmental entity’s citizens or primarily intended to benefit all residents of the governmental entity, but excluding services financed by statutory funds other than a debt service fund.
   2.  On or after July 1, 2025, a city or county shall not issue bonds or other indebtedness payable from an ad valorem property tax levy for the purpose of funding the general operations of the city or general operations of the county, as applicable, or otherwise use proceeds from the sale of bonds or issuance of other indebtedness to fund general operations.
   3.  The city finance committee shall adopt rules under chapter 17A for cities to implement this section. The county finance committee shall adopt rules under chapter 17A for counties to implement this section.
DIVISION VIII
ELDERLY PROPERTY TAXES —— LOW INCOME

    Sec. 61.  Section 425.17, subsection 2, paragraph a, subparagraph (3), Code 2025, is amended to read as follows:
   (3)  A person filing a claim for credit under this subchapter who has attained the age of seventy years on or before December 31 of the base year, who has a household income of less than two three hundred fifty percent of the federal poverty level, as defined by the most recently revised poverty income guidelines published by the United States department of health and human services, and is domiciled in this state at the time the claim is filed or at the time of the person’s death in the case of a claim filed by the executor or administrator of the claimant’s estate.
    Sec. 62.  APPLICABILITY.  This division of this Act applies to assessment years beginning on or after January 1, 2026.
DIVISION IX
BRUCELLOSIS AND TUBERCULOSIS ERADICATION FUND —— LEVY

    Sec. 63.  Section 165.18, subsections 2 and 3, Code 2025, are amended by striking the subsections.
    Sec. 64.  Section 331.512, subsection 1, paragraph e, Code 2025, is amended by striking the paragraph.
    Sec. 65.  Section 331.559, subsection 2, Code 2025, is amended by striking the subsection.
    Sec. 66.  EFFECTIVE DATE.  This division of this Act takes effect July 1, 2025.
    Sec. 67.  APPLICABILITY.  This division of this Act applies to property taxes due and payable in fiscal years beginning on or after July 1, 2025.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill relates to local government property taxes, financial authority, and budgets.
   DIVISION I —— COUNTY PROPERTY TAXES AND BUDGETS. Code section 331.423 establishes a levy rate limitation for the general county services levy and a limitation for the rural county services levy. The bill modifies the general county services levy rate limitation for fiscal years beginning on or after July 1, 2026, but before July 1, 2031, to be a levy rate not to exceed a levy rate per $1,000 of assessed value equal to 1,000 multiplied by the quotient of 102 percent of the current fiscal year’s actual property tax dollars certified for levy for general county services divided by the remainder of the total assessed value used to calculate taxes for the budget year minus value attributable to new valuation as defined in the bill.
   For each fiscal year beginning on or after July 1, 2031, the maximum levy rate is the levy rate imposed by the county for the current fiscal year (immediately preceding fiscal year), unless the total assessed value, excluding new valuation, as defined in the bill, used to calculate taxes for general county services for the budget year is equal to or exceeds 102 percent of the total assessed value used to calculate taxes for general county services for the current fiscal year; then the county’s maximum levy rate for general county services shall not exceed a levy rate per $1,000 of assessed value equal to 1,000 multiplied by the quotient of 102 percent of the current fiscal year’s actual property tax dollars certified for levy for general county services divided by the remainder of the total assessed value used to calculate taxes for the budget year minus value attributable to new valuation as defined in the bill.
   The bill similarly modifies the maximum levy rate for rural county services for fiscal years beginning on or after July 1, 2026.
   The division takes effect January 1, 2026, and applies to county taxes and budgets for fiscal years beginning on or after July 1, 2026.
   DIVISION II —— CITY PROPERTY TAXES AND BUDGETS. Code section 384.1 establishes the city general fund levy and limits on the levy rate. The bill modifies the levy rate limit for fiscal years beginning on or after July 1, 2026, but before July 1, 2031, not to exceed a levy rate per $1,000 of assessed value equal to 1,000 multiplied by the quotient of 102 percent of the current fiscal year’s actual property tax dollars certified for levy for city general services divided by the remainder of the total assessed value used to calculate taxes for the budget year minus value attributable to new valuation as defined in the bill. For each fiscal year beginning on or after July 1, 2031, the maximum levy rate is the levy rate imposed by the city for the current fiscal year (immediately preceding fiscal year), unless the total assessed value, excluding new valuation, as defined in the bill, used to calculate taxes for the budget year is equal to or exceeds 102 percent of the total assessed value used to calculate taxes for the current fiscal year; then the city’s maximum levy rate for general services shall not exceed a levy rate per $1,000 of assessed value equal to 1,000 multiplied by the quotient of 102 percent of the current fiscal year’s actual property tax dollars certified for levy for general services divided by the remainder of the total assessed value used to calculate taxes for the budget year minus value attributable to new valuation as defined in the bill. The bill also establishes a methodology to determine a maximum levy rate for a city that is not imposing a general fund levy in the current fiscal year. 
   The division takes effect January 1, 2026, and applies to property taxes and budgets for fiscal years beginning on or after July 1, 2026.
   DIVISION III —— SCHOOL TAXES AND BUDGETS. As part of the state school foundation program, for school budget years beginning on or after July 1, 2022, Code section 257.1 establishes the regular program foundation base to be 88.4 percent of the regular program state cost per pupil. Beginning with the budget year beginning July 1, 2026, the bill increases that percentage each budget year until the percentage is 100 percent for budget years beginning on or after July 1, 2030. Similarly, the bill increases the special education support services foundation base percentage from 79 percent to 100 percent over the same period of budget years.
   Code section 257.3 requires school districts to levy a foundation property tax of $5.40 per $1,000 of assessed value on all taxable property in the school district. The bill reduces the foundation property tax levy rate over a period of budget years starting with the budget year beginning July 1, 2026, until the levy rate is $2.97 per $1,000 of assessed value for budget years beginning on or after July 1, 2030.
   Code section 257.3 provides an exception to the foundation property tax levy rate of $5.40 for those school districts that have recently been reorganized. Such districts are provided reduced foundation property tax levy rates for three years following the reorganization. The bill adjusts those reduced rates for reorganizations that take effect on or after July 1, 2026, to reflect the reductions made in the bill to the foundation property tax levy imposed by school districts that are not subject to a reorganization and eliminates certain supplemental aid related to such reorganized school district rates for budget years beginning on or after July 1, 2030.
   The bill eliminates certain property tax adjustment aid under Code section 257.15(2) and (3) for fiscal years beginning on or after July 1, 2030.
   The bill eliminates the $24 million general fund appropriation for adjusted additional property tax levy aid under Code section 257.15(4) for fiscal years beginning on or after July 1, 2030. The bill also eliminates the annual appropriation of the balance of the property tax equity and relief fund under Code section 257.16A for purposes designated under Code section 257.15(4) and requires remaining moneys at the end of a specified fiscal year to be transferred back to the funds from which they were received.
   The bill eliminates the payment of school district property tax replacement payments for fiscal years beginning on or after July 1, 2030.
   The bill eliminates the annual appropriation of moneys in the foundation base supplement fund for fiscal years beginning on or after July 1, 2030, and requires the remaining moneys at the end of a specified fiscal year to be transferred for deposit in the secure an advanced vision for education fund.
   The bill eliminates transfers from the secure an advanced vision for education fund to the property tax equity and relief fund and the foundation base supplement fund for fiscal years beginning on or after July 1, 2030.
   In Code chapters 425A (family farm tax credit) and 426 (agricultural land tax credit), the bill replaces references to the school foundation property tax levy rate ($5.40) with citations to the appropriate provision of the Code section establishing the foundation property tax rate.
   The bill requires each school district with an unexpended fund balance in the district’s management levy fund under Code section 298A.3 at the conclusion of the fiscal year beginning July 1, 2024, that exceeds an amount equal to the total expenditures from the district’s management fund for the fiscal year beginning July 1, 2024, to certify such unexpended fund balance and expenditure amounts, including any reserved or designated amounts in the fund and the purposes therefor, to the school budget review committee by November 15, 2025. The committee is then required to conduct a review of the unexpended fund balances and expenditures of school district management levy funds certified under the bill. By February 1, 2026, the committee shall make recommendations to the general assembly for the establishing district management levy fund unexpended fund balance limitations for fiscal years beginning on or after July 1, 2027, including recommendations for limitations based on a percentage of the district’s management levy fund expenditures and recommendations for management levy limitations and expenditure requirements for excess funds.
   The bill also amends Code section 298.4 by providing that for fiscal years beginning on or after July 1, 2027, if a school district’s unexpended fund balance of the district’s management levy fund is equal to or exceeds a specified percentage of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year, the board of directors may not certify a district management levy for the fiscal year. Additionally, if a school district is not prohibited from certifying a levy under the bill, the maximum amount that the board of directors may certify for levy under this Code section shall be an amount equal to the remainder of a specified percentage of the average annual expenditures from the district’s management levy fund for the three consecutive fiscal years immediately preceding the base year minus the district’s management levy fund unexpended fund balance for the fiscal year preceding the base year.
   Except for the section of the division amending Code section 257.31, this division of the bill takes effect July 1, 2026.
   DIVISION IV —— PROPERTY VALUATIONS AND ASSESSMENT LIMITATIONS. Code section 441.21 provides that the actual value of agricultural property shall be determined on the basis of productivity and net earning capacity and that any formula or method employed to determine productivity and net earning capacity of property shall be adopted in full by rule of the department of revenue. The bill amends that provision by specifying that for assessment years beginning on or after January 1, 2026, structures on agricultural land constructed on or after January 1, 2026, that are not agricultural dwellings shall not be included in determination of productivity and net earning capacity of agricultural property and shall not be allocated any portion of the total county productivity value so determined. Such agricultural structures shall instead be valued under Code section 441.21(2) and the structure’s assessed value subject to taxation shall be equal to the product of the structure’s value multiplied by the agricultural factor, as determined in 701 IAC 102.3(2) or succeeding rule of the department.
   Code section 441.21(4) establishes the calculation for assessment limitations (rollback) for residential property and agricultural property. The bill strikes the calculation of the residential property assessment limitation for assessment years beginning on or after January 1, 2025, and strikes the provision within the agricultural property assessment limitation calculation that limits growth of residential or agricultural property to the growth in the other classification (ag-residential tie). The bill establishes a schedule of assessment limitations for residential property that increases year assessment year from the assessment year beginning January 1, 2025, until the assessment limitation reaches 100 percent for assessment years beginning on or after January 1, 2029. By operation of the scheduled increases to the residential property assessment limitation, the assessment limitation applicable to that portion of commercial, industrial, and railway property that is equal to or less than $150,000 is also increased. During that period of scheduled increase, the bill also increases the 90 percent assessment limitation on the portion of commercial, industrial, and railway property that exceeds $150,000 until that percentage is 100 percent. The bill makes similar changes to other assessment limitations applicable to other classifications of property, including utility property.
   The bill modifies provisions governing the calculation of payments made to local governments under Code section 441.21(5)(e) that are made to replace property taxes due to the application of the residential property assessment limitation to certain portions of commercial and industrial property valuations and eliminates the appropriation for such payments for fiscal years beginning on or after July 1, 2030, due to elimination of the assessment limitations.
   DIVISION V —— DISABLED VETERAN AND HOMESTEAD CREDITS AND EXEMPTIONS.
   HOMESTEAD CREDIT. Over a period of years, the bill replaces the homestead property tax credit, other than the portion of the credit provided to certain disabled veterans, with a homestead property tax exemption. Currently, the homestead credit is an amount equal to the levy on the first $4,850 of actual value for each homestead. For the assessment year beginning January 1, 2026, the homestead credit equals the levy on the first $3,640 of actual value. For the assessment year beginning January 1, 2027, the homestead credit equals the levy on the first $2,430 of actual value. For the assessment year beginning January 1, 2028, the homestead credit equals the levy on the first $1,220 of actual value. The bill eliminates the homestead credit, other than the homestead credit reserved for disabled veterans, commencing with the assessment year beginning July 1, 2029.
   HOMESTEAD EXEMPTION. The bill modifies the homestead exemption by increasing the current $6,500 taxable value exemption amount and eliminating the requirement that an owner be 65 years of age or older.
   For the assessment year beginning January 1, 2026, the exemption amount increases to $4,680, except for owners 65 and older, who remain at $6,500. For the assessment year beginning January 1, 2027, the exemption amount increases to $10,500. For the assessment year beginning January 1, 2028, the exemption amount increases to $18,500, and for assessment years beginning on or after January 1, 2029, the exemption amount is $25,000.
   DISABLED VETERAN. The bill moves the disabled homestead credit from Code section 425.15 to Code section 425.1, and makes changes to the scope of the disabled veteran homestead credit for new applicants. Currently, a disabled veteran with a 100 percent permanent and total disability rating receives a homestead credit on the entire amount of tax levied on the homestead. The bill specifies that a separate application form is required to claim the disabled homestead credit. The bill does not change the homestead credit for an eligible disabled veteran who makes an application for the homestead credit before July 1, 2025. For a disabled veteran who makes an application for the homestead credit on or after July 1, 2025, the bill changes the definition to “homestead” to exclude appurtenances and limits the size of the homestead credit to property on one-half acre.
   REIMBURSEMENT. The state continues to reimburse local governments for the homestead credit, as determined under the bill, including the disabled veterans homestead credit under the bill, but does not reimburse local governments for the homestead exemption under current law and in the bill.
   This division of the bill applies to assessment years beginning on or after January 1, 2026.
   DIVISION VI —— MILITARY SERVICE PROPERTY TAX EXEMPTION.  Under current law, a veteran receives a property tax exemption of $4,000 in taxable value on property owned by the veteran. The bill increases the veterans property tax exemption from $4,000 to the following exemption amounts: for the assessment year beginning January 1, 2025, $5,000; for the assessment year beginning January 1, 2026, $6,000; for assessment years beginning on or after January 1, 2027, $7,000.
   The division applies retroactively to assessment years beginning on or after January 1, 2025.
   DIVISION VII —— PROPERTY TAX LEVY RATES. The bill establishes a reduction for rate-limited property tax levies. The bill defines “rate-limited property tax levy” to be any ad valorem property tax levy limited by law to a specific property tax levy rate per $1,000 of assessed value used to calculate taxes, but does not include the school district foundation levy under Code section 257.3, the county general services levy under Code section 331.423(1), the county rural services levy under Code section 331.423(2), or the city general fund levy under Code section 384.1(3).
   For each fiscal year beginning on or after July 1, 2026, each rate-limited property tax levy may only be imposed if the governmental entity imposed such levy for the fiscal year beginning July 1, 2025, and shall, by operation of the bill, be limited to a levy rate that is equal to 1,000 multiplied by the quotient of 102 percent of the current fiscal year’s actual property tax dollars certified for such levy divided by the total assessed value used to calculate such taxes for the budget year.
   The bill also provides that, on or after July 1, 2025, a city or county shall not issue bonds or other indebtedness payable from an ad valorem property tax levy for the purpose of funding the general operations of the city or general operations of the county, as applicable, or otherwise use proceeds from the sale of bonds or issuance of other indebtedness to fund general operations. The bill defines “general operations” to mean services or activities generally funded from the governmental entity’s general fund, which are necessary for the operation of the governmental entity, including salaries and benefits, or which are for the health and welfare of the governmental entity’s citizens or primarily intended to benefit all residents of the governmental entity, but excluding services financed by statutory funds other than a debt service fund.
   The city finance committee is required to adopt rules under Code chapter 17A for cities to implement the new Code section governing funding of general operations. The county finance committee is required to adopt rules under chapter 17A for counties to implement the new Code section governing funding of general operations.
   DIVISION VIII —— ELDERLY PROPERTY TAXES —— LOW INCOME. The bill modifies the eligibility for the property tax credit for persons ages 70 and older under Code chapter 425, subchapter II. Currently, a person filing a claim for the property tax credit who is at least 70 years of age and who has a household income of less than 250 percent of the federal poverty level is eligible to receive a specified credit amount against property taxes due on the claimant’s homestead. The bill increases the household income threshold for eligibility from less than 250 percent of the federal poverty level to less than 350 percent of the federal poverty level.
   The division applies to assessment years beginning on or after January 1, 2026.
   DIVISION IX —— BRUCELLOSIS AND TUBERCULOSIS ERADICATION FUND —— LEVY. Code section 165.18 authorizes the secretary of agriculture to direct the board of supervisors of each county to levy an amount sufficient to pay the expenses estimated to be incurred from the brucellosis and tuberculosis eradication fund for the following fiscal year, subject to a maximum levy of 33.75 cents per $1,000. The bill strikes the authority to levy such a tax beginning with property taxes due and payable in fiscal years beginning July 1, 2025.