Senate Study Bill 3034 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED GOVERNOR BILL) A BILL FOR An Act relating to state and local government taxes, budgets, 1 and authority, by modifying provisions relating to the 2 assessment and taxation of property, funding from the 3 secure an advanced vision for education fund, the election 4 of certain county officers, urban renewal areas and urban 5 revitalization areas, establishing a rent reimbursement 6 program, establishing a program for certain first-time 7 homebuyers, establishing a local government shared-services 8 grant fund, making appropriations, and including effective 9 date, applicability, and retroactive applicability 10 provisions. 11 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 12 TLSB 5407XL (12) 91 md/jh

S.F. _____ H.F. _____ DIVISION I 1 PROPERTY TAX REVENUE LIMITATIONS —— BOND REVENUE USE 2 LIMITATIONS 3 Section 1. Section 11.11, Code 2026, is amended to read as 4 follows: 5 11.11 Scope of audits. 6 The written report of the audit of a governmental 7 subdivision shall include the auditor’s opinion as to whether a 8 governmental subdivision’s financial statements are presented 9 fairly in all material respects in conformity with generally 10 accepted accounting principles or with an other another 11 comprehensive basis of accounting. As a part of conducting an 12 audit of a governmental subdivision, an evaluation of internal 13 control and tests for compliance with laws and regulations 14 shall be performed. As part of conducting an audit of a 15 governmental subdivision, an examination of the governmental 16 subdivision’s compliance with the reporting requirements of 17 section 331.403, subsection 3 , or section 384.22, subsection 2 , 18 if applicable, shall be performed. As part of conducting an 19 audit of a governmental subdivision for fiscal years beginning 20 on or after July 1, 2027, an examination of the governmental 21 subdivision’s compliance with section 24.35 shall be performed, 22 including verification of the circumstances resulting in actual 23 reserve funds exceeding the specified limits. 24 Sec. 2. Section 24.34, Code 2026, is amended to read as 25 follows: 26 24.34 Unliquidated obligations. 27 A city, county, or other political subdivision governmental 28 entity, as defined in section 24.35, may establish an 29 encumbrance system for any obligation not liquidated at the 30 close of the fiscal year in which the obligation has been 31 encumbered assigned, committed, restricted, or specified as 32 nonspendable . The encumbered obligations may be retained upon 33 the books of the city, county, or other political subdivision 34 until liquidated, all in accordance with generally accepted 35 -1- LSB 5407XL (12) 91 md/jh 1/ 90

S.F. _____ H.F. _____ governmental accounting practices principles, as established by 1 the governmental accounting standards board . 2 Sec. 3. NEW SECTION . 24.35 General fund reserves —— 3 limitations. 4 1. For purposes of this section: 5 a. “Budget year” is the fiscal year beginning during the 6 calendar year in which a budget is certified. 7 b. “Current fiscal year” is the fiscal year ending during 8 the calendar year in which a budget for the budget year is 9 certified. 10 c. “General fund” means a governmental entity’s fund 11 designated as such by law or the governmental entity’s fund 12 from which primary general operations of the governmental 13 entity are funded. 14 d. “Governmental entity” means any unit of government 15 or other public body or public corporation, including any 16 intergovernmental entity, that has the power to impose or 17 certify a property tax levy. “Governmental entity” does not 18 include a school district. 19 e. “Unassigned” means funds that are not restricted, 20 committed, assigned, or nonspendable within the meaning of 21 generally accepted accounting principles, as established by the 22 governmental accounting standards board. 23 2. a. For budgets certified for budget years beginning 24 on or after July 1, 2027, proposed unassigned reserve funds 25 identified within a governmental entity’s general fund shall 26 not exceed an amount equal to ten percent of the budgeted 27 expenditures from the governmental entity’s general fund for 28 the current fiscal year prior to budgeted transfers from such 29 general fund. 30 b. If the governmental entity’s budget does not comply with 31 the requirements of paragraph “a” , the department of management 32 shall not certify the governmental entity’s taxes back to the 33 county auditor under section 24.17 and the governmental entity 34 shall remedy the violation and recertify the budget. 35 -2- LSB 5407XL (12) 91 md/jh 2/ 90

S.F. _____ H.F. _____ 3. To ensure uniformity, accuracy, and efficiency in the 1 certification of governmental entity budgets according to the 2 requirements of this section, the department of management 3 shall prescribe the procedures to be used and instruct the 4 appropriate officials of the various governmental entities on 5 implementation of the procedures. 6 Sec. 4. Section 24.48, Code 2026, is amended by adding the 7 following new subsection: 8 NEW SUBSECTION . 6. The authority to suspend property tax 9 levy limitations under this section shall not apply to the 10 limitations of section 444.25, except for the reasons specified 11 under subsection 1, paragraph “b” or “c” . 12 Sec. 5. Section 176A.8, subsection 13, Code 2026, is amended 13 by striking the subsection. 14 Sec. 6. NEW SECTION . 444.25 Maximum property tax levy 15 dollars. 16 1. For purposes of this section, unless the context 17 otherwise requires: 18 a. “Budget year” is the fiscal year beginning during the 19 calendar year in which a budget is certified. 20 b. “Current fiscal year” is the fiscal year ending during 21 the calendar year in which a budget for the budget year is 22 certified. 23 c. “Governmental entity” means any unit of government 24 or other public body or public corporation, including any 25 intergovernmental entity or special purpose district, that 26 has the power to impose or certify a property tax levy. 27 “Governmental entity” does not include a school district. 28 d. “New valuation” means the increase from the current 29 fiscal year to the budget year in taxable valuation, as shown 30 on the assessment roll due to the following, the amount of each 31 as reported under section 331.510 by the county auditor to the 32 department of management: 33 (1) New construction. 34 (2) Additions or improvements to existing structures that 35 -3- LSB 5407XL (12) 91 md/jh 3/ 90

S.F. _____ H.F. _____ are not normal and necessary repairs under section 441.21, 1 subsection 8. 2 (3) Net boundary adjustments, including annexation, 3 severance, incorporation, consolidation, or discontinuance as 4 those terms are defined in section 368.1. 5 e. “Property tax levy” means each ad valorem property tax 6 authorized by law to be imposed by a governmental entity, but 7 excluding any levy the revenue from which is specified by law 8 for debt service or required to be used exclusively for the 9 repayment of bonds or other indebtedness. The levy under 10 section 384.1, subsection 2, on tracts of land and improvements 11 thereon used and assessed for agricultural or horticultural 12 purposes, shall be considered a separate property tax levy 13 under this section. 14 2. a. (1) For the budget year beginning July 1, 2027, and 15 each budget year thereafter, the maximum aggregate amount of 16 property tax dollars that may be certified for levy among all 17 property tax levies imposed by a governmental entity shall not 18 exceed an amount equal to the sum of one hundred two percent 19 of the aggregate amount of property tax dollars certified for 20 levy by the governmental entity among all property tax levies 21 imposed by the governmental entity for the current fiscal year 22 plus the sum of the new valuation growth amount for each of the 23 governmental entity’s property tax levies for the budget year. 24 (2) The new valuation growth amount for each property tax 25 levy is equal to the product of the following: 26 (a) A levy rate per one thousand dollars of assessed value 27 equal to one thousand multiplied by the quotient of one hundred 28 two percent of the aggregate amount of property tax dollars 29 certified for the levy by the governmental entity for the 30 current fiscal year divided by the remainder of the total 31 assessed value used to calculate such taxes for the property 32 tax levy within the governmental entity for the budget year 33 minus value attributable to new valuation. 34 (b) The amount of assessed value used to calculate such 35 -4- LSB 5407XL (12) 91 md/jh 4/ 90

S.F. _____ H.F. _____ taxes for the property tax levy within the governmental entity 1 for the budget year attributable to new valuation. 2 b. If the budget year includes a voter-approved property tax 3 levy that was not approved for imposition in the current fiscal 4 year, the maximum aggregate amount of property tax dollars for 5 the governmental entity under paragraph “a” for the budget 6 year shall be increased by the amount of the voter approved 7 property tax levy approved at election for the budget year. If 8 the current fiscal year includes a voter-approved property tax 9 levy that is not approved for imposition in the budget year, 10 the maximum aggregate amount of property tax dollars for the 11 governmental entity under paragraph “a” for the budget year 12 shall be reduced by the amount of the voter approved property 13 tax levy for the current fiscal year. 14 c. The amount of property tax dollars calculated under this 15 section includes those amounts budgeted by the governmental 16 entity as replacement taxes under chapter 437A or 437B, if 17 applicable. 18 3. For purposes of this section, if the governmental 19 entity’s taxes for a property tax levy were not certified 20 back by the department of management under section 24.17 for 21 the current fiscal year due to an act or omission of the 22 governmental entity, the current fiscal year’s property tax 23 dollars certified for levy for that property tax levy shall 24 be equal to the amount certified for levy for the fiscal year 25 immediately preceding the current fiscal year. 26 4. If a governmental entity certifies a budget that violates 27 this section, the department of management shall reduce each of 28 the applicable governmental entity’s property tax levies on a 29 pro rata basis so that the governmental entity is in compliance 30 with this section. 31 5. This section shall not be construed as removing or 32 otherwise affecting the property tax limitations, including 33 levy rate and use limitations, otherwise provided by law for 34 any property tax levy of the governmental entity. 35 -5- LSB 5407XL (12) 91 md/jh 5/ 90

S.F. _____ H.F. _____ Sec. 7. NEW SECTION . 444.26 Use of bonds and indebtedness 1 for general operations —— prohibition. 2 1. For purposes of this section: 3 a. “General operations” means services or activities 4 generally funded from the governmental entity’s general fund, 5 which are necessary for the operation of the governmental 6 entity, including salaries and benefits, or which are for the 7 health and welfare of the governmental entity’s citizens or 8 primarily intended to benefit all residents of the governmental 9 entity, but excluding services financed by statutory funds 10 other than a debt service fund. 11 b. “Governmental entity” means any unit of government 12 or other public body or public corporation, including any 13 intergovernmental entity, that has the power to impose or 14 certify a property tax levy. 15 2. On or after July 1, 2026, the governing body of a 16 governmental entity shall not issue bonds or other indebtedness 17 payable from an ad valorem property tax levy for the purpose of 18 funding the general operations of the governmental entity or 19 otherwise use proceeds from the sale of bonds or issuance of 20 other indebtedness to fund general operations. 21 3. The department of management, following consultation 22 with the city finance committee and the county finance 23 committee, may adopt rules under chapter 17A for governmental 24 entities to implement this section. 25 DIVISION II 26 COMMERCIAL AND INDUSTRIAL PROPERTY ASSESSMENT LIMITATIONS 27 Sec. 8. Section 441.21, subsection 5, paragraph b, 28 subparagraph (2), subparagraph divisions (a) and (b), Code 29 2026, are amended to read as follows: 30 (a) An amount equal to the product of the assessment 31 limitation percentage applicable to residential property under 32 subsection 4 for that assessment year multiplied by the actual 33 value of the property that exceeds zero dollars but does not 34 exceed one two hundred fifty thousand dollars. 35 -6- LSB 5407XL (12) 91 md/jh 6/ 90

S.F. _____ H.F. _____ (b) An amount equal to ninety percent of the actual value 1 of the property for that assessment year that exceeds one two 2 hundred fifty thousand dollars. 3 Sec. 9. Section 441.21, subsection 5, paragraph c, 4 subparagraph (2), subparagraph divisions (a) and (b), Code 5 2026, are amended to read as follows: 6 (a) An amount equal to the product of the assessment 7 limitation percentage applicable to residential property under 8 subsection 4 for that assessment year multiplied by the actual 9 value of the property that exceeds zero dollars but does not 10 exceed one two hundred fifty thousand dollars. 11 (b) An amount equal to ninety percent of the actual value 12 of the property for that assessment year that exceeds one two 13 hundred fifty thousand dollars. 14 Sec. 10. Section 441.21, subsection 5, paragraph e, 15 subparagraphs (1), (2), and (3), Code 2026, are amended to read 16 as follows: 17 (1) For the fiscal year beginning July 1, 2023, there 18 is appropriated from the general fund of the state to the 19 department of revenue the sum of one hundred twenty-two million 20 three hundred fifty thousand dollars to be used for payments 21 under this paragraph calculated as a result of the assessment 22 limitations imposed under paragraph “b” , subparagraph (2), 23 subparagraph division (a), and paragraph “c” , subparagraph (2), 24 subparagraph division (a). For each fiscal year beginning 25 on or after July 1, 2024, but before July 1, 2027, there 26 is appropriated from the general fund of the state to the 27 department of revenue the sum of one hundred twenty-five 28 million dollars to be used for payments under this paragraph 29 calculated as a result of the assessment limitations imposed 30 under paragraph “b” , subparagraph (2), subparagraph division 31 (a), and paragraph “c” , subparagraph (2), subparagraph division 32 (a). 33 (2) For fiscal years beginning on or after July 1, 2023, but 34 before July 1, 2027, each county treasurer shall be paid by the 35 -7- LSB 5407XL (12) 91 md/jh 7/ 90

S.F. _____ H.F. _____ department of revenue an amount calculated under subparagraph 1 (4) for the applicable fiscal year . If an amount appropriated 2 for the fiscal year is insufficient to make all payments as 3 calculated under subparagraph (4), the director of revenue 4 shall prorate the payments to the county treasurers and shall 5 notify the county auditors of the pro rata percentage on or 6 before September 30. 7 (3) On or before July 1 of each applicable fiscal year, the 8 assessor shall report to the county auditor that portion of the 9 total actual value of all commercial property and industrial 10 property in the county that is subject to the assessment 11 limitations imposed under paragraph “b” , subparagraph (2), 12 subparagraph division (a), and paragraph “c” , subparagraph (2), 13 subparagraph division (a), for the assessment year used to 14 calculate the taxes due and payable in that fiscal year. 15 Sec. 11. Section 441.21, subsection 5, paragraph e, 16 subparagraph (4), unnumbered paragraph 1, Code 2026, is amended 17 to read as follows: 18 On or before September 1 of each applicable fiscal year, the 19 county auditor shall prepare a statement, based on the report 20 received in subparagraph (3) and information transmitted to 21 the county auditor under chapter 434 , listing for each taxing 22 district in the county: 23 Sec. 12. RETROACTIVE APPLICABILITY. The following apply 24 retroactively to assessment years beginning on or after January 25 1, 2026: 26 1. The section of this division of this Act amending 27 section 441.21, subsection 5, paragraph “b”, subparagraph (2), 28 subparagraph divisions (a) and (b). 29 2. The section of this division of this Act amending 30 section 441.21, subsection 5, paragraph “c”, subparagraph (2), 31 subparagraph divisions (a) and (b). 32 DIVISION III 33 PROPERTY TAX EXEMPTIONS AND CREDITS 34 Sec. 13. Section 2.48, subsection 3, paragraph f, 35 -8- LSB 5407XL (12) 91 md/jh 8/ 90

S.F. _____ H.F. _____ subparagraphs (1) and (2), Code 2026, are amended to read as 1 follows: 2 (1) The homestead property tax exemption and credit under 3 chapter 425 , subchapter I . 4 (2) The elderly and disabled property tax growth credit 5 under chapter 425 , subchapter II . 6 Sec. 14. Section 10A.518, subsection 2, paragraph b, Code 7 2026, is amended to read as follows: 8 b. The rules shall require the installation of smoke 9 detectors in existing single-family rental units and 10 multiple-unit residential buildings. Existing single-family 11 dwelling units shall be equipped with approved smoke detectors. 12 A person who files for a homestead credit exemption pursuant to 13 chapter 425 , subchapter I, shall certify that the single-family 14 dwelling unit for which the credit exemption is filed has a 15 smoke detector installed in compliance with this section , or 16 that one will be installed within thirty days of the date the 17 filing for the credit exemption is made. The director shall 18 adopt rules and establish appropriate procedures to administer 19 this subsection . 20 Sec. 15. Section 10A.518, subsection 3, paragraph b, Code 21 2026, is amended to read as follows: 22 b. The rules shall require the installation of carbon 23 monoxide alarms in existing single-family rental units and 24 multiple-unit residential buildings that have a fuel-fired 25 heater or appliance, a fireplace, or an attached garage. 26 Existing single-family dwellings that have a fuel-fired heater 27 or appliance, a fireplace, or an attached garage shall be 28 equipped with approved carbon monoxide alarms. For purposes 29 of this paragraph, “approved carbon monoxide alarm” means a 30 carbon monoxide alarm that meets the standards established by 31 the underwriters’ laboratories or is approved by the director 32 as established by rule under subsection 5 . A person who files 33 for a homestead credit exemption pursuant to chapter 425 , 34 subchapter I, shall certify that the single-family dwelling for 35 -9- LSB 5407XL (12) 91 md/jh 9/ 90

S.F. _____ H.F. _____ which the credit exemption is filed and that has a fuel-fired 1 heater or appliance, a fireplace, or an attached garage, has 2 carbon monoxide alarms installed in compliance with this 3 section , or that such alarms will be installed within thirty 4 days of the date the filing for the credit exemption is made. 5 The director shall adopt rules and establish appropriate 6 procedures to administer this subsection . 7 Sec. 16. Section 25B.7, subsection 2, Code 2026, is amended 8 by striking the subsection. 9 Sec. 17. Section 103.22, subsection 7, Code 2026, is amended 10 to read as follows: 11 7. Prohibit an owner of property from performing work on the 12 owner’s principal residence, if such residence is an existing 13 dwelling rather than new construction and is not an apartment 14 that is attached to any other apartment or building, as those 15 terms are defined in section 499B.2 , and is not larger than a 16 single-family dwelling, or require such owner to be licensed 17 under this chapter . In order to qualify for inapplicability 18 pursuant to this subsection , a residence shall qualify for the 19 homestead tax credit exemption . 20 Sec. 18. Section 105.11, subsection 3, Code 2026, is amended 21 to read as follows: 22 3. Prohibit an owner of property from performing work on the 23 owner’s principal residence, if such residence is an existing 24 dwelling rather than new construction and is not larger than a 25 single-family dwelling, or farm property, excluding commercial 26 or industrial installations or installations in public use 27 buildings or facilities, or require such owner to be licensed 28 under this chapter . In order to qualify for inapplicability 29 pursuant to this subsection , a residence shall qualify for the 30 homestead tax credit exemption . 31 Sec. 19. Section 216.12, subsection 1, paragraph e, Code 32 2026, is amended to read as follows: 33 e. The rental or leasing of a housing accommodation in a 34 building which contains housing accommodations for not more 35 -10- LSB 5407XL (12) 91 md/jh 10/ 90

S.F. _____ H.F. _____ than four families living independently of each other, if the 1 owner resides in one of the housing accommodations for which 2 the owner qualifies for the homestead tax credit exemption 3 under section 425.1 chapter 425, subchapter I . 4 Sec. 20. Section 321.1, subsection 6C, Code 2026, is amended 5 to read as follows: 6 6C. “Bona fide residence” or “bona fide address” means 7 the current street or highway address of an individual’s 8 residence. The bona fide residence of a person with more than 9 one dwelling is the dwelling for which the person claims a 10 homestead tax credit exemption under chapter 425 , subchapter I , 11 if applicable. The bona fide residence of a homeless person 12 is a primary nighttime residence meeting one of the criteria 13 listed in section 48A.2, subsection 3 . 14 Sec. 21. Section 331.401, subsection 1, paragraphs e and f, 15 Code 2026, are amended to read as follows: 16 e. Adopt resolutions authorizing the county assessor 17 to provide forms for homestead tax exemption and credit 18 claimants as provided in section 425.2 and military service tax 19 exemptions as provided in section 426A.14 . 20 f. Examine and allow or disallow claims for homestead 21 tax exemption and credit in accordance with section 425.3 22 chapter 425, subchapter I, and claims for military service 23 tax exemption in accordance with chapter 426A . The board, 24 by a single resolution, may allow or disallow the exemptions 25 recommended by the assessor. 26 Sec. 22. Section 331.512, subsection 3, Code 2026, is 27 amended to read as follows: 28 3. Carry out duties relating to the homestead tax exemption 29 and credit and agricultural land tax credit as provided in 30 chapters 425 and 426 . 31 Sec. 23. Section 331.559, subsection 11, Code 2026, is 32 amended to read as follows: 33 11. Carry out duties relating to the administration of 34 the homestead tax exemption and credit and other credits as 35 -11- LSB 5407XL (12) 91 md/jh 11/ 90

S.F. _____ H.F. _____ provided in sections 425.4 , 425.5 , 425.7 , 425.9 , 425.10 , and 1 425.25 chapter 425 . 2 Sec. 24. Section 404.3, subsection 1, Code 2026, is amended 3 to read as follows: 4 1. All qualified real estate assessed as residential 5 property is eligible to receive an exemption from taxation 6 based on the actual value added by the improvements. The 7 exemption is for a period of ten years. The amount of the 8 exemption is equal to a percent of the actual value added by 9 the improvements, determined as follows: One hundred fifteen 10 percent of the value added by the improvements. However, the 11 amount of the actual value added by the improvements which 12 shall be used to compute the exemption shall not exceed twenty 13 thousand dollars and the granting of the exemption shall not 14 result in the actual value of the qualified real estate being 15 reduced below the actual value on which the homestead credit 16 exemption is computed under section 425.1 . 17 Sec. 25. Section 425.1, Code 2026, is amended by striking 18 the section and inserting in lieu thereof the following: 19 425.1 Property tax exemption. 20 1. For each assessment year beginning on or after January 21 1, 2026, an exemption from taxation shall be allowed on each 22 eligible homestead as follows: 23 a. Except as provided in paragraph “b” , the eligible 24 homestead, not to exceed four thousand eight hundred fifty 25 dollars in taxable value. 26 b. (1) If the owner of the homestead is any of the 27 following, the exemption allowed on the homestead shall be the 28 entire taxable value of the homestead: 29 (a) A veteran of any of the military forces of the United 30 States who acquired the homestead under 38 U.S.C. §21.801, 31 21.802, prior to August 6, 1991, or under 38 U.S.C. §2101, 32 2102. 33 (b) A veteran as defined in section 35.1 with a permanent 34 service-connected disability rating of one hundred percent, as 35 -12- LSB 5407XL (12) 91 md/jh 12/ 90

S.F. _____ H.F. _____ certified by the United States department of veterans affairs, 1 or a permanent and total disability rating based on individual 2 unemployability that is compensated at the one hundred percent 3 disability rate, as certified by the United States department 4 of veterans affairs. 5 (c) A former member of the national guard of any state 6 who otherwise meets the service requirements of section 35.1, 7 subsection 2, paragraph “b” , subparagraph (2) or (7), with a 8 permanent service-connected disability rating of one hundred 9 percent, as certified by the United States department of 10 veterans affairs, or a permanent and total disability rating 11 based on individual unemployability that is compensated at the 12 one hundred percent disability rate, as certified by the United 13 States department of veterans affairs. 14 (d) An individual who is a surviving spouse or a child and 15 who is receiving dependency and indemnity compensation pursuant 16 to 38 U.S.C. §1301 et seq., as certified by the United States 17 department of veterans affairs. 18 (2) (a) For an owner described in subparagraph (1), 19 subparagraph division (a), (b), or (c), the exemption allowed 20 shall be continued to the estate of an owner who is deceased 21 or the surviving spouse and any child, as defined in section 22 234.1, who are the beneficiaries of a deceased owner, so long 23 as the surviving spouse remains unmarried. 24 (b) An individual described in subparagraph (1), 25 subparagraph division (d), is no longer eligible for the 26 exemption upon termination of dependency and indemnity 27 compensation under 38 U.S.C. §1301 et seq. 28 (3) An owner or a beneficiary of an owner who elects to 29 secure the exemption provided in this paragraph is not eligible 30 for the exemption provided in paragraph “a” or any other real 31 property tax credit or exemption provided by law for veterans 32 of military service. 33 (4) If an owner acquires a different homestead, the 34 exemption allowed under this paragraph may be claimed on 35 -13- LSB 5407XL (12) 91 md/jh 13/ 90

S.F. _____ H.F. _____ the new homestead unless the owner fails to meet the other 1 requirements of this paragraph. 2 (5) (a) Except as provided in subparagraph division (b), 3 the list of the names and addresses of individuals allowed an 4 exemption under this paragraph and maintained by the county 5 recorder, county treasurer, county assessor, city assessor, 6 or other governmental body is confidential information and 7 shall not be disseminated to any person unless otherwise 8 ordered by a court or released by the lawful custodian of 9 the records pursuant to state or federal law. The county 10 recorder, county treasurer, county assessor, city assessor, 11 or other governmental body responsible for maintaining the 12 names and addresses of individuals allowed an exemption under 13 this paragraph may display such exemption on individual paper 14 records and individual electronic records, including display on 15 an internet site. 16 (b) Upon request, a county recorder, county assessor, city 17 assessor, or other entity may share information as described in 18 subparagraph division (a) to a county veterans service officer 19 for purposes of providing information on benefits and services 20 available to veterans and their families. 21 (6) For purposes of this paragraph, “permanent and total 22 disability rating based on individual unemployability” means 23 a condition under which a person has either a permanent 24 service-connected disability rating of sixty percent or two or 25 more permanent service-connected disability conditions in which 26 one of the conditions has at least a forty percent rating and 27 the combined rating for all the conditions is at least seventy 28 percent, and the person has an administrative adjustment added 29 to the service-connected disability rating, due to individual 30 unemployability, such that the United States department of 31 veterans affairs rates the veteran permanently and totally 32 disabled for purposes of disability compensation. 33 2. Section 25B.7 shall not apply to the property tax 34 exemption provided in this subchapter. 35 -14- LSB 5407XL (12) 91 md/jh 14/ 90

S.F. _____ H.F. _____ 3. Homestead credit claims approved under chapter 425, 1 subchapter I, Code 2026, prior to and valid on the effective 2 date of this division of this Act shall result in a homestead 3 exemption under this subchapter I without further filing by the 4 claimant if the claimant meets the criteria for the exemption 5 and the assessor has appropriate information to verify such 6 eligibility. 7 Sec. 26. Section 425.2, Code 2026, is amended to read as 8 follows: 9 425.2 Qualifying for credit exemption . 10 1. A person who wishes to qualify for the homestead credit 11 exemption allowed under this subchapter shall obtain the 12 appropriate forms for filing for the credit exemption from the 13 assessor. The person claiming the credit exemption shall file 14 a verified statement and designation of homestead with the 15 assessor for the year for which the person is first claiming 16 the credit exemption . The claim shall be filed not later than 17 July 1 of the year for which the person is claiming the credit 18 exemption . A claim filed after July 1 of the year for which the 19 person is claiming the credit exemption shall be considered as 20 a claim filed for the following year. 21 2. Upon the filing and allowance of the claim, the claim 22 shall be allowed on that homestead for successive years without 23 further filing as long as the property is legally or equitably 24 owned and used as a homestead by that person or that person’s 25 spouse on July 1 of each of those successive years, and the 26 owner of the property being claimed as a homestead declares 27 residency in Iowa for purposes of income taxation, and the 28 property is occupied by that person or that person’s spouse 29 for at least six months in each of those calendar years in 30 which the fiscal year begins. When the property is sold or 31 transferred, the buyer or transferee who wishes to qualify 32 shall refile for the credit exemption . However, when the 33 property is transferred as part of a distribution made pursuant 34 to chapter 598 , the transferee who is the spouse retaining 35 -15- LSB 5407XL (12) 91 md/jh 15/ 90

S.F. _____ H.F. _____ ownership of the property is not required to refile for the 1 credit exemption . Property divided pursuant to chapter 598 2 shall not be modified following the division of the property. 3 An owner who ceases to use a property for a homestead or 4 intends not to use it as a homestead for at least six months in 5 a calendar year shall provide written notice to the assessor 6 by July 1 following the date on which the use is changed. A 7 person who sells or transfers a homestead or the personal 8 representative of a deceased person who had a homestead at the 9 time of death, shall provide written notice to the assessor 10 that the property is no longer the homestead of the former 11 claimant. 12 3. In case the owner of the homestead is in active service 13 in the armed forces of this state or of the United States, 14 or is sixty-five years of age or older, or is disabled, the 15 statement and designation may be signed and delivered by any 16 member of the owner’s family, by the owner’s guardian or 17 conservator, or by any other person who may represent the owner 18 under power of attorney. If the owner of the homestead is 19 married, the spouse may sign and deliver the statement and 20 designation. The director of health and human services or 21 the director’s designee may make application for the benefits 22 of this subchapter as the agent for and on behalf of persons 23 receiving assistance under chapter 249 . 24 4. The form for claiming the credit shall also include 25 the ability to claim the exemption under section 425.1A for 26 qualified owners. If the claim for the homestead credit is 27 allowed, such allowance shall also include allowance of the 28 homestead exemption if the owner meets the age criteria for 29 the exemption. The homestead exemption shall be allowed for 30 successive years without further filing in the same manner as 31 the homestead credit. 32 5. 4. Any person sixty-five years of age or older or 33 any person who is disabled may request, in writing, from the 34 appropriate assessor forms for filing for the homestead tax 35 -16- LSB 5407XL (12) 91 md/jh 16/ 90

S.F. _____ H.F. _____ credit exemption . Any person sixty-five years of age or 1 older or who is disabled may complete the form, which shall 2 include a statement of homestead, and mail or return it to the 3 appropriate assessor. The signature of the claimant on the 4 statement shall be considered the claimant’s acknowledgment 5 that all statements and facts entered on the form are correct 6 to the best of the claimant’s knowledge. 7 6. 5. Upon adoption of a resolution by the county board 8 of supervisors, any person may request, in writing, from the 9 appropriate assessor forms for the filing for homestead tax 10 credit exemption . The person may complete the form, which 11 shall include a statement of homestead, and mail or return it 12 to the appropriate assessor. The signature of the claimant on 13 the statement of homestead shall be considered the claimant’s 14 acknowledgment that all statements and facts entered on the 15 form are correct to the best of the claimant’s knowledge. 16 Sec. 27. Section 425.3, Code 2026, is amended to read as 17 follows: 18 425.3 Verification of claims for homestead credit exemption . 19 1. The assessor shall retain a permanent file of current 20 homestead exemption claims filed in the assessor’s office. The 21 assessor shall file a notice of transfer of property for which 22 a claim is filed when notice is received from the office of the 23 county recorder. 24 2. The county recorder shall give notice to the assessor 25 of each transfer of title filed in the recorder’s office. The 26 notice shall describe the property transferred, the name of the 27 person transferring the title to the property, and the name of 28 the person to whom title to the property has been transferred. 29 3. Not later than July 6 of each year, the assessor shall 30 remit the statements and designation of homesteads to the 31 county auditor with the assessor’s recommendation for allowance 32 or disallowance. If the assessor recommends disallowance 33 of a claim, the assessor shall submit the reasons for the 34 recommendation, in writing, to the county auditor. 35 -17- LSB 5407XL (12) 91 md/jh 17/ 90

S.F. _____ H.F. _____ 4. The county auditor shall forward the claims to the board 1 of supervisors. The board shall allow or disallow the claims. 2 If the board disallows a claim, it shall send written notice, 3 by mail, to the claimant at the claimant’s last known address. 4 The notice shall state the reasons for disallowing the claim. 5 The board is not required to send notice that a claim is 6 disallowed if the claimant voluntarily withdraws the claim. 7 Sec. 28. Section 425.4, Code 2026, is amended to read as 8 follows: 9 425.4 Certification to treasurer . 10 All claims which have been allowed by the board of 11 supervisors shall be certified on or before August 1, in each 12 year, by the county auditor to the county treasurer, which 13 certificates shall list the total amount of dollars, listed by 14 taxing district in the county, due for homestead tax exemptions 15 and credits claimed and allowed assessor . The county treasurer 16 shall then certify to the department of revenue the total 17 amount of dollars, listed by taxing district in the county, due 18 for homestead tax credits claimed and allowed. 19 Sec. 29. Section 425.6, Code 2026, is amended to read as 20 follows: 21 425.6 Waiver by neglect. 22 If a person fails to file a claim or to have a claim on file 23 with the assessor for the credits exemption provided in this 24 subchapter , the person is deemed to have waived the homestead 25 exemption and credit for the year in which the person failed to 26 file the claim or to have a claim on file with the assessor. 27 Sec. 30. Section 425.7, subsection 3, Code 2026, is amended 28 to read as follows: 29 3. a. If the department of revenue determines that a claim 30 for homestead exemption and credit has been allowed by the 31 board of supervisors which is not justifiable under the law 32 and not substantiated by proper facts, the department may, at 33 any time within thirty-six months from July 1 of the year in 34 which the claim is allowed, set aside the allowance. Notice 35 -18- LSB 5407XL (12) 91 md/jh 18/ 90