Senate Study Bill 3001 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON DAWSON) A BILL FOR An Act relating to state and local government taxes, fees, 1 financial authority, and budgets, modifying divisions 2 of revenue, modifying appropriations, and including 3 effective date, applicability, and retroactive applicability 4 provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5195XC (18) 91 md/jh

S.F. _____ DIVISION I 1 COUNTY PROPERTY TAXES AND BUDGETS 2 Section 1. Section 331.423, subsection 1, paragraph b, 3 subparagraph (1), Code 2026, is amended to read as follows: 4 (1) For each fiscal year beginning on or after July 1, 5 2024, but before July 1, 2028 2027 , subject to subparagraph 6 (3), the greater of three dollars and fifty cents per thousand 7 dollars of assessed value used to calculate taxes for general 8 county services for the budget year and the adjusted general 9 county basic levy rate, as adjusted under subparagraph (2), if 10 applicable. 11 Sec. 2. Section 331.423, subsection 1, paragraph c, Code 12 2026, is amended to read as follows: 13 c. For each fiscal year beginning on or after July 1, 2028, 14 three dollars and fifty cents per thousand dollars of assessed 15 value. For the fiscal year beginning July 1, 2027, the greater 16 of: 17 (1) A levy rate per one thousand dollars of assessed value 18 equal to one thousand multiplied by the quotient of one hundred 19 two percent of the current fiscal year’s actual property tax 20 dollars certified for levy under this subsection 1 divided by 21 the remainder of the total assessed value used to calculate 22 such taxes for the budget year minus value attributable to new 23 valuation. 24 (2) A levy rate per one thousand dollars of assessed value 25 that results in an amount of actual property tax dollars 26 certified for levy under this subsection 1 equal to one 27 hundred and one-half percent of the actual property tax dollars 28 certified for levy under this subsection 1 for the current 29 fiscal year. 30 Sec. 3. Section 331.423, subsection 1, Code 2026, is amended 31 by adding the following new paragraph: 32 NEW PARAGRAPH . d. (1) For each fiscal year beginning 33 on or after July 1, 2028, the levy rate imposed under this 34 subsection 1 for the current fiscal year, unless subject to 35 -1- LSB 5195XC (18) 91 md/jh 1/ 103

S.F. _____ subparagraph (2), and for the budget year beginning July 1, 1 2028, only, not less than a levy rate per one thousand dollars 2 of assessed value that results in an amount of actual property 3 tax dollars certified for levy under this subsection 1 equal 4 to one hundred and one-half percent of the actual property tax 5 dollars certified for levy under this subsection 1 for the 6 current fiscal year. 7 (2) (a) If the total assessed value, excluding value 8 attributable to new valuation, used to calculate taxes for 9 general county services under this subsection 1 for the budget 10 year is equal to or exceeds one hundred two percent of the 11 total assessed value used to calculate taxes for general 12 county services for the current fiscal year, the levy rate 13 imposed under this subsection 1 shall not exceed a levy rate 14 per one thousand dollars of assessed value that is equal to 15 one thousand multiplied by the quotient obtained by dividing 16 the product of the budget adjustment factor multiplied by the 17 current fiscal year’s actual property tax dollars certified 18 for levy under this subsection 1 by the remainder of the total 19 assessed value used to calculate such taxes for the budget year 20 minus value attributable to new valuation. 21 (b) (i) For purposes of this subparagraph, “budget 22 adjustment factor” is equal to one of the following, unless 23 modified by the general assembly on or before January 31 24 immediately preceding the applicable fiscal year: 25 (A) If the percentage change in the consumer price index for 26 all urban consumers is less than four, one hundred two percent. 27 (B) If the percentage change in the consumer price index for 28 all urban consumers is equal to or greater than four but less 29 than six, one hundred three percent. 30 (C) If the percentage change in the consumer price index for 31 all urban consumers is equal to or greater than six but less 32 than eight, one hundred four percent. 33 (D) If the percentage change in the consumer price index 34 for all urban consumers is equal to or greater than eight, one 35 -2- LSB 5195XC (18) 91 md/jh 2/ 103

S.F. _____ hundred five percent. 1 (ii) The percentage change in the consumer price index for 2 all urban consumers shall be equal to one hundred multiplied 3 by the quotient of the remainder of the published value of the 4 consumer price index for all urban consumers for the month 5 ending eight months prior to the beginning of the applicable 6 budget year minus the published value of the consumer price 7 index for all urban consumers for the month ending twenty 8 months prior to the beginning of the applicable budget year 9 divided by the published value of the consumer price index for 10 all urban consumers for the month ending twenty months prior to 11 the beginning of the applicable budget year. 12 Sec. 4. Section 331.423, subsection 2, paragraph b, 13 subparagraph (1), Code 2026, is amended to read as follows: 14 (1) For each fiscal year beginning on or after July 1, 2024, 15 but before July 1, 2028 2027 , subject to subparagraph (3), the 16 greater of three dollars and ninety-five cents per thousand 17 dollars of assessed value used to calculate taxes for rural 18 county services for the budget year and the adjusted rural 19 county basic levy rate, as adjusted under subparagraph (2), if 20 applicable. 21 Sec. 5. Section 331.423, subsection 2, paragraph c, Code 22 2026, is amended to read as follows: 23 c. For each fiscal year beginning on or after July 1, 2028, 24 three dollars and ninety-five cents per thousand dollars of 25 assessed value. For the fiscal year beginning July 1, 2027, 26 the greater of: 27 (1) A levy rate per one thousand dollars of assessed value 28 equal to one thousand multiplied by the quotient of one hundred 29 two percent of the current fiscal year’s actual property tax 30 dollars certified for levy under this subsection 2 divided by 31 the remainder of the total assessed value used to calculate 32 such taxes for the budget year minus value attributable to new 33 valuation. 34 (2) A levy rate per one thousand dollars of assessed value 35 -3- LSB 5195XC (18) 91 md/jh 3/ 103

S.F. _____ that results in an amount of actual property tax dollars 1 certified for levy under this subsection 2 equal to one 2 hundred and one-half percent of the actual property tax dollars 3 certified for levy under this subsection 2 for the current 4 fiscal year. 5 Sec. 6. Section 331.423, subsection 2, Code 2026, is amended 6 by adding the following new paragraph: 7 NEW PARAGRAPH . d. (1) For each fiscal year beginning 8 on or after July 1, 2028, the levy rate imposed under this 9 subsection 2 for the current fiscal year, unless subject to 10 subparagraph (2), and for the budget year beginning July 1, 11 2028, only, not less than a levy rate per one thousand dollars 12 of assessed value that results in an amount of actual property 13 tax dollars certified for levy under this subsection 2 equal 14 to one hundred and one-half percent of the actual property tax 15 dollars certified for levy under this subsection 2 for the 16 current fiscal year. 17 (2) (a) If the total assessed value, excluding value 18 attributable to new valuation, used to calculate taxes for 19 rural county services under this subsection 2 for the budget 20 year is equal to or exceeds one hundred two percent of the 21 total assessed value used to calculate taxes for rural county 22 services for the current fiscal year, the levy rate imposed 23 under this subsection 2 shall not exceed a levy rate per 24 one thousand dollars of assessed value that is equal to one 25 thousand multiplied by the quotient obtained by dividing the 26 product of the budget adjustment factor multiplied by the 27 current fiscal year’s actual property tax dollars certified 28 for levy under this subsection 2 by the remainder of the total 29 assessed value used to calculate such taxes for the budget year 30 minus value attributable to new valuation. 31 (b) (i) For purposes of this subparagraph, “budget 32 adjustment factor” is equal to one of the following, unless 33 modified by the general assembly on or before January 31 34 immediately preceding the applicable fiscal year: 35 -4- LSB 5195XC (18) 91 md/jh 4/ 103

S.F. _____ (A) If the percentage change in the consumer price index for 1 all urban consumers is less than four, one hundred two percent. 2 (B) If the percentage change in the consumer price index for 3 all urban consumers is equal to or greater than four but less 4 than six, one hundred three percent. 5 (C) If the percentage change in the consumer price index for 6 all urban consumers is equal to or greater than six but less 7 than eight, one hundred four percent. 8 (D) If the percentage change in the consumer price index 9 for all urban consumers is equal to or greater than eight, one 10 hundred five percent. 11 (ii) The percentage change in the consumer price index for 12 all urban consumers shall be equal to one hundred multiplied 13 by the quotient of the remainder of the published value of the 14 consumer price index for all urban consumers for the month 15 ending eight months prior to the beginning of the applicable 16 budget year minus the published value of the consumer price 17 index for all urban consumers for the month ending twenty 18 months prior to the beginning of the applicable budget year 19 divided by the published value of the consumer price index for 20 all urban consumers for the month ending twenty months prior to 21 the beginning of the applicable budget year. 22 Sec. 7. Section 331.423, subsection 3, Code 2026, is amended 23 by adding the following new paragraph: 24 NEW PARAGRAPH . c. “New valuation” means the increase 25 from the current fiscal year to the budget year in taxable 26 valuation, as shown on the assessment roll due to the 27 following, the amount of each as reported under section 331.510 28 by the county auditor to the department of management: 29 (1) New construction. 30 (2) Additions or improvements to existing structures that 31 are not normal and necessary repairs under section 441.21, 32 subsection 8. 33 (3) Net boundary adjustments, including annexation, 34 severance, incorporation, consolidation, or discontinuance as 35 -5- LSB 5195XC (18) 91 md/jh 5/ 103

S.F. _____ those terms are defined in section 368.1. 1 Sec. 8. EFFECTIVE DATE. This division of this Act takes 2 effect January 1, 2027. 3 Sec. 9. APPLICABILITY. This division of this Act applies 4 to property taxes and budgets for fiscal years beginning on or 5 after July 1, 2027. 6 DIVISION II 7 CITY PROPERTY TAXES AND BUDGETS 8 Sec. 10. Section 384.1, subsection 3, paragraph c, 9 subparagraph (1), Code 2026, is amended to read as follows: 10 (1) For each fiscal year beginning on or after July 1, 11 2024, but before July 1, 2028 2027 , subject to subparagraph 12 (3), a city’s tax levy for the general fund, except for levies 13 authorized in section 384.12 , shall not exceed in any tax year 14 the greater of eight dollars and ten cents per thousand dollars 15 of assessed value used to calculate taxes for the budget year 16 and the adjusted city general fund levy rate, as adjusted under 17 subparagraph (2), if applicable. 18 Sec. 11. Section 384.1, subsection 3, paragraph d, Code 19 2026, is amended to read as follows: 20 d. (1) For each fiscal year beginning on or after July 1, 21 2028, a city’s tax levy rate for the general fund, except for 22 levies authorized in section 384.12 , shall not exceed eight 23 dollars and ten cents per thousand dollars of assessed value 24 used to calculate taxes in any fiscal year. For the fiscal 25 year beginning July 1, 2027, a city’s tax levy rate for the 26 general fund, except for levies authorized in section 384.12, 27 shall not exceed the greater of: 28 (a) A levy rate per one thousand dollars of assessed value 29 equal to one thousand multiplied by the quotient of one hundred 30 two percent of the current fiscal year’s actual property tax 31 dollars certified for levy under this subsection divided by 32 the remainder of the total assessed value used to calculate 33 such taxes for the budget year minus value attributable to new 34 valuation. 35 -6- LSB 5195XC (18) 91 md/jh 6/ 103

S.F. _____ (b) A levy rate per one thousand dollars of assessed value 1 that results in an amount of actual property tax dollars 2 certified for levy under this subsection equal to one hundred 3 and one-half percent of the actual property tax dollars 4 certified for levy under this subsection for the current fiscal 5 year. 6 (2) Notwithstanding other provisions of this paragraph, 7 if a city’s actual levy rate for the current fiscal year is 8 zero dollars per one thousand dollars of assessed value, a levy 9 rate per one thousand dollars of assessed value equal to one 10 thousand multiplied by the quotient of one hundred two percent 11 of the city’s certified general fund budget for the current 12 fiscal year divided by the remainder of the total assessed 13 value used to calculate taxes for the budget year minus value 14 attributable to new valuation. 15 Sec. 12. Section 384.1, subsection 3, Code 2026, is amended 16 by adding the following new paragraph: 17 NEW PARAGRAPH . e. (1) For each fiscal year beginning on 18 or after July 1, 2028, a city’s tax levy rate for the general 19 fund, except for levies authorized in section 384.12, shall 20 not exceed the levy rate imposed under this subsection for the 21 current fiscal year, unless subject to subparagraph (2), and 22 for the budget year beginning July 1, 2028, only, not less than 23 a levy rate per one thousand dollars of assessed value that 24 results in an amount of actual property tax dollars certified 25 for levy under this subsection equal to one hundred and 26 one-half percent of the actual property tax dollars certified 27 for levy under this subsection for the current fiscal year. 28 (2) (a) If the total assessed value, excluding value 29 attributable to new valuation, used to calculate taxes under 30 this subsection for the budget year is equal to or exceeds 31 one hundred two percent of the total assessed value used to 32 calculate taxes under this subsection for the current fiscal 33 year, the city’s levy rate under this subsection shall not 34 exceed a levy rate per one thousand dollars of assessed value 35 -7- LSB 5195XC (18) 91 md/jh 7/ 103

S.F. _____ that is equal to one thousand multiplied by the quotient 1 obtained by dividing the product of the budget adjustment 2 factor multiplied by the current fiscal year’s actual property 3 tax dollars certified for levy under this subsection by the 4 remainder of the total assessed value used to calculate such 5 taxes for the budget year minus value attributable to new 6 valuation. 7 (b) (i) For purposes of this subparagraph, “budget 8 adjustment factor” is equal to one of the following, unless 9 modified by the general assembly on or before January 31 10 immediately preceding the applicable fiscal year: 11 (A) If the percentage change in the consumer price index for 12 all urban consumers is less than four, one hundred two percent. 13 (B) If the percentage change in the consumer price index for 14 all urban consumers is equal to or greater than four but less 15 than six, one hundred three percent. 16 (C) If the percentage change in the consumer price index for 17 all urban consumers is equal to or greater than six but less 18 than eight, one hundred four percent. 19 (D) If the percentage change in the consumer price index 20 for all urban consumers is equal to or greater than eight, one 21 hundred five percent. 22 (ii) The percentage change in the consumer price index for 23 all urban consumers shall be equal to one hundred multiplied 24 by the quotient of the remainder of the published value of the 25 consumer price index for all urban consumers for the month 26 ending eight months prior to the beginning of the applicable 27 budget year minus the published value of the consumer price 28 index for all urban consumers for the month ending twenty 29 months prior to the beginning of the applicable budget year 30 divided by the published value of the consumer price index for 31 all urban consumers for the month ending twenty months prior to 32 the beginning of the applicable budget year. 33 (3) Notwithstanding other provisions of this paragraph, 34 if a city’s actual levy rate for the current fiscal year is 35 -8- LSB 5195XC (18) 91 md/jh 8/ 103

S.F. _____ zero dollars per one thousand dollars of assessed value, the 1 city’s levy rate under this subsection shall not exceed a levy 2 rate per one thousand dollars of assessed value equal to one 3 thousand multiplied by the quotient of one hundred two percent 4 of the city’s certified general fund budget for the current 5 fiscal year divided by the remainder of the total assessed 6 value used to calculate taxes for the budget year minus value 7 attributable to new valuation. 8 Sec. 13. Section 384.1, subsection 4, Code 2026, is amended 9 by adding the following new paragraph: 10 NEW PARAGRAPH . c. “New valuation” means the increase 11 from the current fiscal year to the budget year in taxable 12 valuation, as shown on the assessment roll due to the 13 following, the amount of each as reported under section 331.510 14 by the county auditor to the department of management: 15 (1) New construction. 16 (2) Additions or improvements to existing structures that 17 are not normal and necessary repairs under section 441.21, 18 subsection 8. 19 (3) Net boundary adjustments, including annexation, 20 severance, incorporation, consolidation, or discontinuance as 21 those terms are defined in section 368.1. 22 Sec. 14. EFFECTIVE DATE. This division of this Act takes 23 effect January 1, 2027. 24 Sec. 15. APPLICABILITY. This division of this Act applies 25 to property taxes and budgets for fiscal years beginning on or 26 after July 1, 2027. 27 DIVISION III 28 SCHOOL TAXES AND BUDGETS 29 Sec. 16. Section 257.1, subsection 2, paragraph b, Code 30 2026, is amended to read as follows: 31 b. (1) (a) For the budget year commencing July 1, 1999, 32 and for each succeeding budget year beginning before July 33 1, 2022, the regular program foundation base per pupil is 34 eighty-seven and five-tenths percent of the regular program 35 -9- LSB 5195XC (18) 91 md/jh 9/ 103

S.F. _____ state cost per pupil. 1 (b) For the budget year commencing July 1, 2022, and for 2 each succeeding budget year beginning before July 1, 2027 , 3 the regular program foundation base per pupil is eighty-eight 4 and four-tenths percent of the regular program state cost per 5 pupil. 6 (c) For the budget year commencing July 1, 2027, and each 7 succeeding budget year, the regular program foundation base per 8 pupil is one hundred percent of the regular program state cost 9 per pupil. 10 (2) (a) For the budget year commencing July 1, 1991, and 11 for each succeeding budget year beginning before July 1, 2027, 12 the special education support services foundation base is 13 seventy-nine percent of the special education support services 14 state cost per pupil. 15 (b) For the budget year commencing July 1, 2027, and each 16 succeeding budget year, the special education support services 17 foundation base is one hundred percent of the special education 18 support services state cost per pupil. 19 (3) The combined foundation base is the sum of the regular 20 program foundation base, the special education support services 21 foundation base, the total teacher salary supplement district 22 cost, the total professional development supplement district 23 cost, the total early intervention supplement district cost, 24 the total teacher leadership supplement district cost, and the 25 total area education agency teacher salary supplement district 26 cost , and the amounts added to the combined district cost of 27 the school district for media services and educational services 28 under section 257.37 . 29 Sec. 17. Section 257.3, subsection 1, paragraph a, Code 30 2026, is amended to read as follows: 31 a. (1) Except as provided in subsections 2 and 3 , a school 32 district shall cause to be levied each budget year beginning 33 before July 1, 2027 , for the school general fund, a foundation 34 property tax equal to five dollars and forty cents per thousand 35 -10- LSB 5195XC (18) 91 md/jh 10/ 103

S.F. _____ dollars of assessed valuation on all taxable property in the 1 district. The county auditor shall spread the foundation levy 2 over all taxable property in the district. 3 (2) Except as provided in subsections 2 and 3, a school 4 district shall cause to be levied for the budget year beginning 5 July 1, 2027, and each succeeding budget year, for the school 6 general fund, a foundation property tax equal to four dollars 7 and forty-eight and six hundred sixty-two one-thousandths cents 8 per thousand dollars of assessed valuation on all taxable 9 property in the district. The county auditor shall spread the 10 foundation levy over all taxable property in the district. 11 Sec. 18. Section 257.3, subsection 2, paragraphs a and b, 12 Code 2026, are amended to read as follows: 13 a. Notwithstanding subsection 1, a reorganized school 14 district for which the reorganization takes effect on or after 15 July 1, 2027, shall cause a foundation property tax of four 16 three dollars and forty sixty-six cents per thousand dollars of 17 assessed valuation to be levied on all taxable property which, 18 in the year preceding a reorganization, was within a school 19 district affected by the reorganization as defined in section 20 275.1, or in the year preceding a dissolution was a part of a 21 school district that dissolved if the dissolution proposal has 22 been approved by the director of the department of education 23 pursuant to section 275.55. 24 b. In For a reorganized school district for which the 25 reorganization took effect on or after July 1, 2027, in 26 succeeding school years, the foundation property tax levy on 27 that portion shall be increased to the rate of four dollars and 28 ninety seven cents per thousand dollars of assessed valuation 29 the first succeeding year, five four dollars and fifteen 30 twenty-eight cents per thousand dollars of assessed valuation 31 the second succeeding year, and five four dollars and forty 32 forty-eight and six hundred sixty-two one-thousandths cents per 33 thousand dollars of assessed valuation the third succeeding 34 year and each year thereafter under subsection 1, paragraph “a” . 35 -11- LSB 5195XC (18) 91 md/jh 11/ 103

S.F. _____ Sec. 19. Section 257.4, subsection 1, paragraph a, Code 1 2026, is amended by adding the following new subparagraphs: 2 NEW SUBPARAGRAPH . (10) The amount added to the combined 3 district cost of the school district for media services under 4 section 257.37. 5 NEW SUBPARAGRAPH . (11) The amount added to the combined 6 district cost of the school district for educational services 7 under section 257.37. 8 Sec. 20. Section 257.4, subsection 1, paragraph b, Code 9 2026, is amended to read as follows: 10 b. For the budget year beginning July 1, 2008, and 11 succeeding budget years beginning before July 1, 2027 , the 12 department of management shall annually determine an adjusted 13 additional property tax levy and a statewide maximum adjusted 14 additional property tax levy rate, not to exceed the statewide 15 average additional property tax levy rate, calculated by 16 dividing the total adjusted additional property tax levy 17 dollars statewide by the statewide total net taxable valuation. 18 For purposes of this paragraph, the adjusted additional 19 property tax levy shall be that portion of the additional 20 property tax levy corresponding to the state cost per pupil 21 multiplied by a school district’s weighted enrollment, and then 22 multiplied by one hundred percent less the regular program 23 foundation base per pupil percentage pursuant to section 24 257.1 , and then reduced by the amount of the property tax 25 replacement payment to be received under section 257.16B and 26 the amount of the foundation base supplement payment to be 27 received under section 257.16D . The district shall receive 28 adjusted additional property tax levy aid in an amount equal 29 to the difference between the adjusted additional property 30 tax levy rate and the statewide maximum adjusted additional 31 property tax levy rate, as applied per thousand dollars of 32 assessed valuation on all taxable property in the district. 33 The statewide maximum adjusted additional property tax levy 34 rate shall be annually determined by the department taking 35 -12- LSB 5195XC (18) 91 md/jh 12/ 103

S.F. _____ into account amounts allocated pursuant to section 257.15, 1 subsection 4 , and the balance of the property tax equity and 2 relief fund created in section 257.16A at the end of the 3 calendar year. 4 Sec. 21. Section 257.4, subsection 2, Code 2026, is amended 5 by adding the following new paragraph: 6 NEW PARAGRAPH . c. This subsection applies to budget years 7 beginning before July 1, 2027. 8 Sec. 22. Section 257.15, subsections 2 and 3, Code 2026, are 9 amended to read as follows: 10 2. Property tax adjustment aid for 1992-1993 and succeeding 11 years beginning before 2027-2028 . For the budget year beginning 12 July 1, 1992, and succeeding budget years beginning before July 13 1, 2027 , the department of education shall pay property tax 14 adjustment aid to a school district equal to the amount paid 15 to the district for the base year less an amount equal to the 16 product of the percent by which the taxable valuation in the 17 district increased, if the taxable valuation increased, from 18 January 1 of the year prior to the base year to January 1 of the 19 base year and the property tax adjustment aid. The department 20 of management shall adjust the rate of the additional property 21 tax accordingly and notify the department of education of 22 the amount of aid to be paid to each district from moneys 23 appropriated for property tax adjustment aid. 24 3. Property tax adjustment aid appropriation. There 25 is appropriated from the general fund of the state to the 26 department of education, for each fiscal year beginning 27 before July 1, 2027 , an amount necessary to pay property 28 tax adjustment aid to school districts under this section . 29 Property tax adjustment aid shall be paid to school districts 30 in the manner provided in section 257.16 . 31 Sec. 23. Section 257.15, subsection 4, paragraph a, 32 subparagraph (1), subparagraph division (d), Code 2026, is 33 amended to read as follows: 34 (d) For the budget year beginning July 1, 2009, and 35 -13- LSB 5195XC (18) 91 md/jh 13/ 103

S.F. _____ succeeding budget years beginning before July 1, 2027 , 1 twenty-four million dollars. 2 Sec. 24. Section 257.15, subsection 4, paragraph b, Code 3 2026, is amended to read as follows: 4 b. After For fiscal years beginning before July 1, 2026, 5 after lowering all school district adjusted additional property 6 tax levy rates to the statewide maximum adjusted additional 7 property tax levy rate under paragraph “a” , the department of 8 management shall use any remaining funds at the end of the 9 calendar year to further lower additional property taxes by 10 increasing for the budget year beginning the following July 11 1, the regular program foundation base per pupil percentage 12 under section 257.1 . Moneys used pursuant to this paragraph 13 shall supplant an equal amount of the appropriation made from 14 the general fund of the state pursuant to section 257.16 that 15 represents the increase in state foundation aid. Any moneys 16 remaining at the conclusion of the fiscal year beginning July 17 1, 2025, shall be transferred by the department of management 18 for deposit in the general fund of the state. 19 Sec. 25. Section 257.16A, subsections 2 and 3, Code 2026, 20 are amended to read as follows: 21 2. There For each fiscal year beginning before July 1, 22 2027, there is appropriated annually all moneys in the fund to 23 the department of management for purposes of section 257.15, 24 subsection 4 . 25 3. Notwithstanding section 8.33 , any moneys remaining in 26 the property tax equity and relief fund at the end of a fiscal 27 year shall not revert to any other fund but shall remain in the 28 property tax equity and relief fund for use as provided in this 29 section for the following fiscal year. However, at the end of 30 the fiscal year beginning July 1, 2026, any moneys remaining in 31 the property tax equity and relief fund shall be transferred 32 for deposit into either the secure an advanced vision for 33 education fund or the general fund of the state based on the 34 fund from which the moneys were received. 35 -14- LSB 5195XC (18) 91 md/jh 14/ 103

S.F. _____ Sec. 26. Section 257.16B, subsection 1, Code 2026, is 1 amended to read as follows: 2 1. For each fiscal year beginning on or after July 1, 2023, 3 but before July 1, 2027, there is appropriated from the general 4 fund of the state to the department of education an amount 5 necessary to make all school district property tax replacement 6 payments under this section , as calculated in subsection 2 . 7 Sec. 27. Section 257.16D, subsection 2, paragraph a, Code 8 2026, is amended to read as follows: 9 a. There For fiscal years beginning before July 1, 2027, 10 there is appropriated annually from the fund to the department 11 of management an amount necessary to make all foundation base 12 supplement payments under this section . The department of 13 management shall calculate each school district’s foundation 14 base supplement payment based on the distribution methodology 15 under paragraph “b” . 16 Sec. 28. Section 257.16D, subsection 3, Code 2026, is 17 amended to read as follows: 18 3. Notwithstanding section 8.33 , any moneys remaining in 19 the foundation base supplement fund at the end of a fiscal year 20 shall not revert to any other fund but shall remain in the 21 foundation base supplement fund for use as provided in this 22 section for the following fiscal year. However, at the end of 23 the fiscal year beginning July 1, 2026, any moneys remaining in 24 the foundation base supplement fund shall be transferred for 25 deposit in the secure an advanced vision for education fund. 26 Sec. 29. Section 257.31, Code 2026, is amended by adding the 27 following new subsection: 28 NEW SUBSECTION . 19. a. The board of directors of each 29 school district with an unexpended fund balance in the 30 district’s management levy fund under section 298A.3 at the 31 conclusion of the fiscal year beginning July 1, 2025, that 32 exceeds an amount equal to the total expenditures from the 33 district’s management levy fund for the fiscal year beginning 34 July 1, 2025, shall certify such unexpended fund balance and 35 -15- LSB 5195XC (18) 91 md/jh 15/ 103

S.F. _____ expenditure amounts, including any reserved or designated 1 amounts in the fund and the purposes therefor, to the school 2 budget review committee by November 15, 2026. The committee 3 shall prescribe the form for such certifications. 4 b. The committee shall conduct a review of the unexpended 5 fund balances and expenditures of school district management 6 levy funds certified under paragraph “a” . The committee 7 shall consult with boards of directors of school districts 8 and other relevant persons to determine the appropriateness 9 of establishing district management levy fund unexpended fund 10 balance limitations. By February 1, 2027, the committee 11 shall make recommendations to the general assembly for 12 establishing district management levy fund unexpended fund 13 balance limitations for fiscal years beginning on or after July 14 1, 2028, including recommendations for limitations based on a 15 percentage of the district’s management levy fund expenditures 16 and recommendations for management levy limitations and 17 expenditure requirements for excess funds. 18 Sec. 30. Section 298.2, subsection 1, Code 2026, is amended 19 to read as follows: 20 1. a. A physical plant and equipment levy of not exceeding 21 one dollar and sixty-seven eighteen cents per thousand dollars 22 of assessed valuation in the district is established except 23 as otherwise provided in this subsection . The physical plant 24 and equipment levy consists of the regular physical plant and 25 equipment levy of not exceeding thirty-three twenty-four cents 26 per thousand dollars of assessed valuation in the district 27 and a voter-approved physical plant and equipment levy of 28 not exceeding one dollar and thirty-four ninety-four cents 29 per thousand dollars of assessed valuation in the district. 30 However, the voter-approved physical plant and equipment levy 31 may consist of a combination of a physical plant and equipment 32 property tax levy and a physical plant and equipment income 33 surtax as provided in subsection 4 with the maximum amount 34 levied and imposed limited to an amount that could be raised 35 -16- LSB 5195XC (18) 91 md/jh 16/ 103

S.F. _____ by a one dollar and thirty-four ninety-four cent property tax 1 levy. A voter-approved physical plant and equipment levy 2 approved prior to the effective date of this division of this 3 Act shall not exceed a rate that is seventy percent of the rate 4 approved at election. 5 b. For school budget years beginning on or after July 1, 6 2015 2027 , a school district may by resolution of the board of 7 directors adopted prior to April 30 preceding the budget year 8 impose a physical plant and equipment levy at a rate in excess 9 of the levy rate limitations under paragraph “a” if the board 10 has refunded or refinanced a loan agreement entered into under 11 section 297.36 and such refunding or refinancing complies with 12 the maturity period authorized under section 297.36, subsection 13 1 , paragraph “c” , and results in a lower amount of interest on 14 the amount of the loan agreement. However, the rate imposed 15 by a school district under this paragraph shall not exceed the 16 rate imposed during the budget year in which the loan agreement 17 was refunded or refinanced or seventy percent of such levy 18 rate if the refunding or refinancing occurred in the budget 19 year beginning July 1, 2026 . Authorization to exceed the levy 20 rate limitations of paragraph “a” shall terminate upon the 21 maturity of the loan agreement after refunding or refinancing. 22 Upon adoption of the resolution under this paragraph “b” , the 23 board shall comply with the requirements of section 297.36, 24 subsection 1 , paragraph “b” . 25 Sec. 31. Section 298.2, subsection 2, Code 2026, is amended 26 by striking the subsection. 27 Sec. 32. Section 298.4, subsection 1, unnumbered paragraph 28 1, Code 2026, is amended to read as follows: 29 The Unless prohibited by subsection 1A, paragraph “a” , the 30 board of directors of a school district may certify for levy by 31 April 30 of a school year, a tax on all taxable property in the 32 school district for a district management levy , subject to the 33 limitations in subsection 1A, paragraph “b” . The revenue from 34 the tax levied in this section shall be placed in the district 35 -17- LSB 5195XC (18) 91 md/jh 17/ 103

S.F. _____ management levy fund of the school district. The district 1 management levy shall be expended only for the following 2 purposes: 3 Sec. 33. Section 298.4, Code 2026, is amended by adding the 4 following new subsection: 5 NEW SUBSECTION . 1A. a. (1) For the fiscal year beginning 6 July 1, 2028, if a school district’s unexpended fund balance, 7 as defined in section 257.2, of the district’s management levy 8 fund is equal to or exceeds one hundred eighty percent of the 9 average annual expenditures from the district’s management 10 levy fund for the three consecutive fiscal years immediately 11 preceding the base year, the board of directors shall not 12 certify a levy under this section for the fiscal year. 13 (2) For the fiscal year beginning July 1, 2029, if a school 14 district’s unexpended fund balance, as defined in section 15 257.2, of the district’s management levy fund is equal to or 16 exceeds one hundred seventy-five percent of the average annual 17 expenditures from the district’s management levy fund for the 18 three consecutive fiscal years immediately preceding the base 19 year, the board of directors shall not certify a levy under 20 this section for the fiscal year. 21 (3) For the fiscal year beginning July 1, 2030, if a school 22 district’s unexpended fund balance, as defined in section 23 257.2, of the district’s management levy fund is equal to or 24 exceeds one hundred seventy percent of the average annual 25 expenditures from the district’s management levy fund for the 26 three consecutive fiscal years immediately preceding the base 27 year, the board of directors shall not certify a levy under 28 this section for the fiscal year. 29 (4) For the fiscal year beginning July 1, 2031, if a school 30 district’s unexpended fund balance, as defined in section 31 257.2, of the district’s management levy fund is equal to or 32 exceeds one hundred sixty-five percent of the average annual 33 expenditures from the district’s management levy fund for the 34 three consecutive fiscal years immediately preceding the base 35 -18- LSB 5195XC (18) 91 md/jh 18/ 103