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Senate File 550 - IntroducedA Bill ForAn Act 1relating to state and local revenue and finances by
2modifying sales and use taxes, the charitable conservation
3contribution tax credit available against individual and
4corporate income taxes, the water service tax, property
5taxes, transit funding, and local option taxes, crediting
6moneys to the natural resources and outdoor recreation
7trust fund, modifying allocations of road use tax fund
8moneys, making appropriations, and including effective date,
9retroactive applicability, and applicability provisions.
10BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2SALES AND USE TAX RATES AND DISTRIBUTION
3 Section 1. Section 423.2, subsection 1, unnumbered
4paragraph 1, Code 2023, is amended to read as follows:
5There is imposed a tax of six percent at the rate specified
6in subsection 12 upon the sales price of all sales of tangible
7personal property, sold at retail in the state to consumers or
8users except as otherwise provided in this subchapter.
9 Sec. 2. Section 423.2, subsections 2 and 3, Code 2023, are
10amended to read as follows:
112. A tax of six percent at the rate specified in subsection
1212 is imposed upon the sales price of the sale or furnishing
13of gas, electricity, water, heat, pay television service, and
14communication service, including the sales price from such
15sales by any municipal corporation or joint water utility
16furnishing gas, electricity, water, heat, pay television
17service, and communication service to the public in its
18proprietary capacity, except as otherwise provided in this
19subchapter, when sold at retail in the state to consumers or
20users.
213. A tax of six percent at the rate specified in subsection
2212 is imposed upon the sales price of all sales of tickets
23or admissions to places of amusement, fairs, and athletic
24events except those of elementary and secondary educational
25institutions. A tax of six percent at the rate specified in
26subsection 12 is imposed on the sales price of an entry fee or
27like charge imposed solely for the privilege of participating
28in an activity at a place of amusement, fair, or athletic event
29unless the sales price of tickets or admissions charges for
30observing the same activity are taxable under this subchapter.
31A tax of six percent at the rate specified in subsection 12
32 is imposed upon that part of private club membership fees or
33charges paid for the privilege of participating in any athletic
34sports provided club members.
35 Sec. 3. Section 423.2, subsection 4, paragraph a, Code 2023,
-1-1is amended to read as follows:
2a. A tax of six percent at the rate specified in subsection
312 is imposed upon the sales price derived from the operation
4of all forms of amusement devices and games of skill, games of
5chance, raffles, and bingo games as defined in chapter 99B, and
6card game tournaments conducted under section 99B.27, that are
7operated or conducted within the state, the tax to be collected
8from the operator in the same manner as for the collection of
9taxes upon the sales price of tickets or admission as provided
10in this section. Nothing in this subsection shall legalize any
11games of skill or chance or slot-operated devices which are now
12prohibited by law.
13 Sec. 4. Section 423.2, subsection 5, Code 2023, is amended
14to read as follows:
155. There is imposed a tax of six percent at the rate
16specified in subsection 12 upon the sales price from the
17furnishing of services as defined in section 423.1.
18 Sec. 5. Section 423.2, subsection 7, paragraph a,
19unnumbered paragraph 1, Code 2023, is amended to read as
20follows:
21A tax of six percent at the rate specified in subsection 12
22 is imposed upon the sales price from the sales, furnishing, or
23service of solid waste collection and disposal service.
24 Sec. 6. Section 423.2, subsection 8, paragraph a, Code 2023,
25is amended to read as follows:
26a. A tax of six percent at the rate specified in subsection
2712 is imposed on the sales price from sales of bundled
28transactions. For the purposes of this subsection, a “bundled
29transaction” is the retail sale of two or more distinct and
30identifiable products, except real property and services to
31real property, which are sold for one nonitemized price. A
32“bundled transaction” does not include the sale of any products
33in which the sales price varies, or is negotiable, based on
34the selection by the purchaser of the products included in the
35transaction.
-2-1 Sec. 7. Section 423.2, subsection 9, Code 2023, is amended
2to read as follows:
39. A tax of six percent at the rate specified in
4subsection 12 is imposed upon the sales price from any mobile
5telecommunications service, including all paging services,
6that this state is allowed to tax pursuant to the provisions
7of the federal Mobile Telecommunications Sourcing Act, Pub.
8L. No.106-252, 4 U.S.C. §116 et seq. For purposes of this
9subsection, taxes on mobile telecommunications service, as
10defined under the federal Mobile Telecommunications Sourcing
11Act that are deemed to be provided by the customer’s home
12service provider, shall be paid to the taxing jurisdiction
13whose territorial limits encompass the customer’s place of
14primary use, regardless of where the mobile telecommunications
15service originates, terminates, or passes through and
16shall in all other respects be taxed in conformity with
17the federal Mobile Telecommunications Sourcing Act. All
18other provisions of the federal Mobile Telecommunications
19Sourcing Act are adopted by the state of Iowa and incorporated
20into this subsection by reference. With respect to mobile
21telecommunications service under the federal Mobile
22Telecommunications Sourcing Act, the director shall, if
23requested, enter into agreements consistent with the provisions
24of the federal Act.
25 Sec. 8. Section 423.2, subsection 10, paragraph a, Code
262023, is amended to read as follows:
27a. A tax of six percent at the rate specified in subsection
2812 is imposed on the sales price of specified digital products
29sold at retail in the state. The tax applies whether the
30purchaser obtains permanent use or less than permanent use of
31the specified digital product, whether the sale is conditioned
32or not conditioned upon continued payment from the purchaser,
33and whether the sale is on a subscription basis or is not on a
34subscription basis.
35 Sec. 9. Section 423.2, subsection 12, Code 2023, is amended
-3-1by striking the subsection and inserting in lieu thereof the
2following:
312. a. For the period beginning January 1, 2025, through
4December 31, 2050, the sales tax rate is seven percent.
5b. Beginning January 1, 2051, the sales tax rate is six
6percent.
7 Sec. 10. Section 423.2A, subsection 2, paragraphs a, b, and
8c, Code 2023, are amended to read as follows:
9a. (1) Transfer For the period beginning January 1,
102025, through December 31, 2027, transfer twenty-eight
11one-hundred-fortieths of the revenues collected under deposited
12into the general fund of the state under subsection 1 to the
13appropriate county accounts under chapter 423B for the counties
14from which the tax was collected.
15(2) For the period beginning January 1, 2028, through
16December 31, 2028, transfer twenty-seven one-hundred-fortieths
17of the revenues deposited into the general fund of the state
18under subsection 1 to the appropriate county accounts under
19chapter 423B for the counties from which the tax was collected.
20(3) For the period beginning January 1, 2029, through
21December 31, 2029, transfer twenty-six one-hundred-fortieths of
22the revenues deposited into the general fund of the state under
23subsection 1 to the appropriate county accounts under chapter
24423B for the counties from which the tax was collected.
25(4) For the period beginning January 1, 2030, through
26December 31, 2050, transfer twenty-five one-hundred-fortieths
27of the revenues deposited into the general fund of the state
28under subsection 1 to the appropriate county accounts under
29chapter 423B for the counties from which the tax was collected.
30(5) Beginning January 1, 2051, transfer five twenty-fourths
31of the revenues deposited into the general fund of the state
32under subsection 1 to the appropriate county accounts under
33chapter 423B for the counties from which the tax was collected.
34b. Transfer from the remaining revenues the amounts required
35under Article VII, section 10, of the Constitution of the State
-4-1of Iowa to the natural resources and outdoor recreation trust
2fund created in section 461.31, if applicable.
3c. Transfer one-sixth of from the remaining revenues an
4amount equal to one-seventh of the revenues deposited into the
5general fund of the state under subsection 1 to the secure an
6advanced vision for education fund created in section 423F.2.
7This paragraph “c” is repealed January 1, 2051.
8 Sec. 11. Section 423.5, subsection 1, unnumbered paragraph
91, Code 2023, is amended to read as follows:
10Except as provided in paragraph “b”, an excise tax at the
11rate of six percent specified in subsection 4 of the purchase
12price or installed purchase price is imposed on the following:
13 Sec. 12. Section 423.5, subsection 4, Code 2023, is amended
14by striking the subsection and inserting in lieu thereof the
15following:
164. a. For the period beginning January 1, 2025, through
17December 31, 2050, the use tax rate is seven percent.
18b. Beginning January 1, 2051, the use tax rate is six
19percent.
20 Sec. 13. Section 423.43, subsection 1, paragraph b, Code
212023, is amended by striking the paragraph and inserting in
22lieu thereof the following:
23b. Subsequent to the deposit into the general fund of
24the state the department shall do the following in the order
25prescribed:
26(1) (a) For the period beginning January 1, 2025, through
27December 31, 2043, transfer one-seventh of such revenues to the
28local use tax supplement fund, under section 423B.1A.
29(b) For the period beginning January 1, 2044, through
30December 31, 2050, transfer one-seventh of such revenues to the
31appropriate county accounts under chapter 423B for the counties
32from which the tax was paid.
33(c) Beginning January 1, 2051, transfer one-sixth of such
34revenues to the appropriate county accounts under chapter 423B
35for the counties from which the tax was paid.
-5- 1(2) Transfer one-sixth of such remaining revenues to the
2secure an advanced vision for education fund created in section
3423F.2. This subparagraph is repealed January 1, 2051.
4 Sec. 14. EFFECTIVE DATE. This division of this Act takes
5effect January 1, 2025.
6DIVISION II
7WATER SERVICE TAX
8 Sec. 15. Section 423G.3, Code 2023, is amended to read as
9follows:
10423G.3 Water service tax.
11An excise tax at the a rate of six percent equal to the rate
12being imposed under section 423.2, subsection 12, is imposed on
13the sales price from the sale or furnishing by a water utility
14of a water service in the state to consumers or users.
15 Sec. 16. Section 423G.6, subsection 2, Code 2023, is amended
16by striking the subsection.
17 Sec. 17. REPEAL. Section 423G.7, Code 2023, is repealed.
18 Sec. 18. EFFECTIVE DATE. This division of this Act takes
19effect January 1, 2025.
20DIVISION III
21LOCAL OPTION TAXES
22 Sec. 19. Section 15J.7, subsection 2, Code 2023, is amended
23to read as follows:
242. In addition to the moneys received pursuant to section
2515J.6, a municipality may deposit in the reinvestment project
26fund any other moneys lawfully at the municipality’s disposal,
27including but not limited to local sales and services tax
28receipts collected revenues received under chapter 423B if such
29use is a purpose authorized for the municipality under chapter
30423B.
31 Sec. 20. Section 28A.17, Code 2023, is amended to read as
32follows:
3328A.17 Local sales and services tax.
341. If an authority is established as provided in section
3528A.6 and after approval of a referendum by a simple majority
-6-1of votes cast in each metropolitan area in favor of the sales
2and services tax, the governing board of a county in this state
3within a metropolitan area which is part of the authority shall
4impose, at the request of the authority, a local sales and
5services tax at the rate of one-fourth of one percent on the
6sales price taxed by this state under section 423.2, within
7the metropolitan area located in this state. The referendum
8shall be called by resolution of the board and shall be held
9as provided in section 28A.6 to the extent applicable. The
10ballot proposition shall contain a statement as to the specific
11purpose or purposes for which the revenues shall be expended
12and the date of expiration of the tax. The local sales and
13services tax shall be imposed on the same basis, with the same
14exceptions, and following the same administrative procedures as
15provided for a county under sections 423B.5 and 423B.6, Code
162023. The amount of the sale, for the purposes of determining
17the amount of the local sales and services tax under this
18section, does not include the amount of any local sales and
19services tax imposed under sections 423B.5 and 423B.6, Code
202023.
212. The treasurer of state shall credit the local sales
22and services tax receipts and interest and penalties to the
23authority’s account. Moneys in this account shall be remitted
24quarterly to the authority. The proceeds of the tax imposed
25under this section shall be used only for the construction,
26reconstruction, or repair of metropolitan facilities as
27specified in the referendum. The local sales and services tax
28imposed under this section may be suspended for not less than
29a fiscal quarter or more than one year by action of the board.
30The suspension may be renewed or continued by the board, but
31the board shall act on the suspension at least annually.
32The local sales and services tax may also be repealed by a
33petition and favorable referendum following the procedures and
34requirements of sections 28A.5 and 28A.6 as applicable. The
35board shall give the department of revenue at least forty days’
-7-1notice of the repeal, suspension, or reinstatement of the tax
2and the effective dates for imposition, suspension, or repeal
3of the tax shall be as provided in section 423B.6, Code 2023.
43. A local sales and services tax authorized under this
5section shall not be imposed or collected on or after January
61, 2025.
7 Sec. 21. Section 76.4, Code 2023, is amended to read as
8follows:
976.4 Permissive application of funds.
10Whenever the governing authority of such political
11subdivision shall have on hand funds derived from any other
12source than taxation which may be appropriated to the payment
13either of interest or principal, or both principal and interest
14of such bonds, such funds may be so appropriated and used
15and the levy for the payment of the bonds correspondingly
16reduced. This section shall not restrict the authority of a
17political subdivision to apply sales and services tax receipts
18collected received pursuant to chapter 423B for such purpose.
19Notwithstanding section 423F.3, a school district may apply tax
20receipts received pursuant to chapter 423F for the purposes of
21this section.
22 Sec. 22. Section 99B.1, subsection 23, Code 2023, is amended
23to read as follows:
2423. “Net receipts” means gross receipts less amounts awarded
25as prizes and less state and local sales tax paid upon the
26gross receipts.
27 Sec. 23. Section 99B.14, subsection 1, Code 2023, is amended
28to read as follows:
291. A licensed qualified organization shall certify
30that the receipts from all charitable gambling conducted
31by the organization under this chapter, less reasonable
32expenses, charges, fees, taxes, and deductions, either will
33be distributed as prizes to participants or will be dedicated
34and distributed for educational, civic, public, charitable,
35patriotic, or religious uses. Reasonable expenses, charges,
-8-1fees, taxes other than the state and local sales tax, and
2deductions allowed by the department shall not exceed forty
3percent of net receipts.
4 Sec. 24. Section 99G.4, subsection 2, Code 2023, is amended
5to read as follows:
62. The income and property of the authority shall be exempt
7from all state and local taxes, and the sale of lottery tickets
8and shares issued and sold by the authority and its retail
9licensees shall be exempt from all state and local sales taxes.
10 Sec. 25. Section 99G.30A, subsection 2, paragraph a, Code
112023, is amended to read as follows:
12a. The director of revenue shall administer the monitor
13vending machine excise tax as nearly as possible in conjunction
14with the administration of state sales tax laws. The director
15shall provide appropriate forms or provide appropriate entries
16on the regular state tax forms for reporting local sales and
17services tax liability.
18 Sec. 26. Section 279.63, subsection 2, paragraph a, Code
192023, is amended to read as follows:
20a. All property tax levies, and income surtaxes, and local
21option sales taxes in place in the school district, listed by
22type of levy, rate, amount, duration, and notification of the
23maximum rate and amount limitations permitted by statute.
24 Sec. 27. Section 321.40, subsection 5, Code 2023, is amended
25by striking the subsection.
26 Sec. 28. Section 321.130, Code 2023, is amended to read as
27follows:
28321.130 Fees in lieu of taxes.
29The registration fees imposed by this chapter upon private
30passenger motor vehicles or semitrailers are in lieu of all
31state and local taxes, except local vehicle taxes, to which
32motor vehicles or semitrailers are subject.
33 Sec. 29. Section 418.13, subsection 2, Code 2023, is amended
34to read as follows:
352. In addition to the moneys received pursuant to section
-9-1418.10 or 418.12, a governmental entity may deposit in the
2flood project fund any other moneys lawfully received by the
3governmental entity, including but not limited to local sales
4and services tax receipts collected amounts received under
5chapter 423B.
6 Sec. 30. Section 421.26, Code 2023, is amended to read as
7follows:
8421.26 Personal liability for tax due.
9If a licensee or other person under section 452A.65, a
10retailer or purchaser under chapter 423A, 423B, 423C, 423D, or
11423E, or section 423.14, 423.14A, 423.29, 423.31, or 423.33,
12or a user under section 423.34, or a permit holder or licensee
13under section 453A.13, 453A.16, or 453A.44 fails to pay a tax
14under those sections when due, an officer of a corporation
15or association, notwithstanding section 489.304, a member or
16manager of a limited liability company, or a partner of a
17partnership, having control or supervision of or the authority
18for remitting the tax payments and having a substantial legal
19or equitable interest in the ownership of the corporation,
20association, limited liability company, or partnership, who has
21intentionally failed to pay the tax is personally liable for
22the payment of the tax, interest, and penalty due and unpaid.
23However, this section shall not apply to taxes on accounts
24receivable. The dissolution of a corporation, association,
25limited liability company, or partnership shall not discharge a
26person’s liability for failure to remit the tax due.
27 Sec. 31. Section 421.28, Code 2023, is amended to read as
28follows:
29421.28 Exceptions to successor liability.
30The immediate successor to a licensee’s or retailer’s
31business or stock of goods under chapter 423A or 423B, or
32section 423.33 or 452A.65, is not personally liable for
33the amount of delinquent tax, interest, or penalty due and
34unpaid if the immediate successor shows that the purchase of
35the business or stock of goods was made in good faith that
-10-1no delinquent tax, interest, or penalty was due and unpaid.
2For purposes of this section the immediate successor shows
3good faith by evidence that the department had provided
4the immediate successor with a certified statement that
5no delinquent tax, interest, or penalty is unpaid, or that
6the immediate successor had taken in good faith a certified
7statement from the licensee, retailer, or seller that no
8delinquent tax, interest, or penalty is unpaid. When requested
9to do so by a person with whom the licensee or retailer is
10negotiating the sale of the business or stock of goods, the
11director of revenue shall, upon being satisfied that such
12a situation exists, inform that person as to the amount of
13unpaid delinquent tax, interest, or penalty due by the licensee
14or the retailer. The giving of the information under this
15circumstance is not a violation of section 422.20, 422.72, or
16452A.63.
17 Sec. 32. Section 421.60, subsection 2, paragraph m,
18subparagraphs (1) and (2), Code 2023, are amended to read as
19follows:
20(1) The director may abate unpaid state sales and use
21taxes and local sales and services taxes owed by a retailer
22in the event that the retailer failed to collect tax from the
23purchaser as a result of erroneous written advice issued by
24the department that was specially directed to the retailer
25by the department and the retailer is unable to collect the
26tax, interest, or penalties from the purchaser. Before the
27tax, interest, and penalties shall be abated on the basis of
28erroneous written advice, the retailer must present a copy of
29the retailer’s request for written advice to the department and
30a copy of the department’s reply. The department shall not
31maintain a position against the retailer that is inconsistent
32with the erroneous written advice, except on the basis of
33subsequent written advice sent by the department to that
34retailer, or a change in state or federal law, a reported
35court case to the contrary, a contrary rule adopted by the
-11-1department, a change in material facts or circumstances
2relating to the retailer, or the retailer’s misrepresentation
3or incomplete or inadequate representation of material facts
4and circumstances in requesting the written advice.
5(2) (a) The director shall abate the unpaid state sales
6and use taxes and any local sales and services taxes owed by a
7retailer where the retailer failed to collect the tax from the
8purchaser on the charges paid for access to on-line computer
9services as a result of erroneous written advice issued by the
10department regarding the taxability of charges paid for access
11to on-line computer services. To qualify for the abatement
12under this subparagraph, the erroneous written advice shall
13have been issued by the department prior to July 1, 1999, and
14shall have been specially directed to the retailer by the
15department.
16(b) If an abatement of unpaid state sales and use taxes and
17any local sales and services taxes is granted to the retailer
18by the director pursuant to this subparagraph, the department
19is precluded from collecting from the purchaser any unpaid
20state sales and use taxes and any local sales and services
21taxes which were abated.
22 Sec. 33. Section 422.72, subsection 6, paragraph a, Code
232023, is amended to read as follows:
24a. The department may enter into a written informational
25exchange agreement for tax administration purposes with a city
26or county which is entitled to receive funds due to a local
27hotel and motel tax or a local sales and services tax. The
28written informational exchange agreement shall designate no
29more than two paid city or county employees that have access to
30actual return information relating to that city’s or county’s
31receipts from a local hotel and motel tax or a local sales and
32services tax.
33 Sec. 34. Section 423.4, subsection 2, paragraph d, Code
342023, is amended by striking the paragraph.
35 Sec. 35. Section 423.4, subsection 5, paragraph f, Code
-12-12023, is amended to read as follows:
2f. Notwithstanding the state sales tax imposed in section
3423.2, a rebate issued pursuant to this subsection shall not
4exceed an amount equal to five percent of the sales price
5of the tangible personal property or services furnished to
6purchasers at the automobile racetrack facility. Any local
7option taxes paid and collected shall not be subject to rebate
8under this subsection.
9 Sec. 36. Section 423.4, subsection 7, paragraph f, Code
102023, is amended to read as follows:
11f. The refund in this subsection applies only to state
12sales and use tax paid and does not apply to local option
13sales and services taxes imposed pursuant to chapter 423B.
14 Notwithstanding the state sales tax imposed in section 423.2,
15a refund issued pursuant to this section shall not exceed
16an amount equal to five percent of the sales price of the
17fuel used to create heat, power, and steam for processing
18or generating electrical current or from the sale price
19of electricity consumed by computers, machinery, or other
20equipment for operation of the data center business facility.
21 Sec. 37. Section 423.4, subsection 8, paragraph g, Code
222023, is amended to read as follows:
23g. The refund in this subsection applies only to state
24sales and use tax paid and does not apply to local option
25sales and services taxes imposed pursuant to chapter 423B.
26 Notwithstanding the state sales tax imposed in section 423.2,
27a refund issued pursuant to this section shall not exceed an
28amount equal to five percent of the sales price of the items
29listed in paragraph “a”, subparagraphs (1), (2), and (3).
30 Sec. 38. Section 423.14A, subsection 2, Code 2023, is
31amended to read as follows:
322. In addition to and not in lieu of any application of
33this chapter to sellers who are retailers and sellers who are
34retailers maintaining a place of business in this state, any
35person described in subsection 3, or the person’s agents,
-13-1shall be considered a retailer in this state and a retailer
2maintaining a place of business in this state for purposes of
3this chapter on or after January 1, 2019, and shall be subject
4to all requirements of this chapter imposed on retailers and
5retailers maintaining a place of business in this state,
6including but not limited to the requirement to collect and
7remit sales and use taxes pursuant to sections 423.14 and
8423.29, and local option taxes under chapter 423B.
9 Sec. 39. Section 423.33, subsection 1, paragraph c, Code
102023, is amended to read as follows:
11c. If the retailer fails to collect sales tax at the time
12of the transaction, the retailer shall thereafter remit the
13applicable sales tax, or the purchaser thereafter shall remit
14the applicable use tax. If the purchaser remits all applicable
15use tax, the retailer remains liable for any local sales and
16services tax under chapter 423B that the retailer failed to
17collect.
18 Sec. 40. Section 423.34A, unnumbered paragraph 1, Code
192023, is amended to read as follows:
20A purchaser is relieved of liability for payment of state
21sales or use tax, for payment of any local option sales tax,
22 for payment of interest, or for payment of any penalty for
23nonpayment of tax which nonpayment is not fraudulent, willful,
24or intentional, under the following circumstances:
25 Sec. 41. Section 423.36, subsection 9, paragraph a, Code
262023, is amended to read as follows:
27a. Except as provided in paragraph “b”, purchasers, users,
28and consumers of tangible personal property, specified digital
29products, or enumerated services taxed pursuant to subchapter
30II or III of this chapter or chapter 423B may be authorized,
31pursuant to rules adopted by the director, to remit tax owed
32directly to the department instead of the tax being collected
33and paid by the seller. To qualify for a direct pay tax permit,
34the purchaser, user, or consumer must accrue a tax liability
35of more than four thousand dollars in tax under subchapters
-14-1II and III in a semimonthly period and make deposits and file
2returns pursuant to section 423.31. This authority shall not
3be granted or exercised except upon application to the director
4and then only after issuance by the director of a direct pay
5tax permit.
6 Sec. 42. Section 423B.1, Code 2023, is amended by striking
7the section and inserting in lieu thereof the following:
8423B.1 Use of revenues deposited in the local sales and use
9tax fund — revenue purpose statement.
101. a. Revenues credited to and deposited in each county’s
11account within the local sales and use tax fund shall be
12expended by each recipient county and city as required by the
13revenue purpose statement, subject to the requirements of
14section 423B.7, subsection 7, and approved under this section
15for the city or for the county for the unincorporated areas of
16the county, or as required by subsection 3.
17b. A revenue purpose statement for the use of local option
18sales and services tax revenue under this chapter approved at
19election prior to January 1, 2025, and in effect on or set
20to take effect on or after January 1, 2025, and the use of
21revenues received under this chapter for purposes authorized
22under section 423B.10 for ordinances in effect and approved
23before January 1, 2025, shall continue in effect for revenues
24received under this chapter until the expiration of the revenue
25purpose statement or ordinance, if applicable, or until the
26county board of supervisors or city council, as applicable,
27adopts a new revenue purpose statement under subsection 2 or
28repeals or amends the ordinance for the use of revenues under
29section 423B.10.
302. The board of supervisors of each county and the city
31council of each city may adopt by resolution a revenue purpose
32statement for the expenditure of funds received under this
33chapter.
343. Each city and county without a valid revenue purpose
35statement shall expend the revenues received for the following
-15-1purposes in the order prescribed in this subsection, except
2that the payment of bonds for which the revenues have been
3pledged shall be paid first:
4a. Reduction of the county’s basic levies under section
5331.423 or reduction of the city general fund levy under
6section 384.1, as applicable.
7b. Reduction of any debt service levy of the county or city,
8as applicable.
9c. Reduction of the city’s additional taxes levied under
10section 384.12 or the county’s supplemental levies under
11section 331.424, as applicable.
12d. Reduction of any other property tax levy of the county
13or city, as applicable.
14 Sec. 43. NEW SECTION. 423B.1A Local use tax supplement
15fund.
161. A local use tax supplement fund is created in the state
17treasury under the control of the department of revenue. The
18fund shall consist of all moneys transferred under section
19423.43, subsection 1, paragraph “b”, subparagraph (1),
20subparagraph division (a), and moneys appropriated to the fund.
212. Moneys in the local use tax supplement fund are annually
22appropriated to the department of revenue and shall be used for
23supplement payments to cities and counties under this section.
243. For each year during the period beginning January 1,
252025, through December 31, 2043, each city or county for the
26unincorporated portion of the county, shall receive a local
27use tax supplement payment equal to the difference, but not
28less than zero between the amount of revenue received by the
29city or county under section 423B.7, Code 2023, for the period
30beginning January 1, 2024, and ending December 31, 2024, minus
31the amount that would have been received by that city or county
32for that period if all cities and the county were eligible for
33distributions of such revenues under section 423B.7, Code 2023.
34If moneys in the fund are insufficient to pay all supplement
35amounts for the year, the director of revenue shall prorate the
-16-1payment of the supplement payments and shall notify the cities
2and counties of the pro rata percentage.
34. The supplement payment calculated under subsection 3
4shall be paid to each city or county for the unincorporated
5area of the county and shall be combined with and be used in the
6same manner and be subject to the same requirements as moneys
7received by the city or county under section 423B.7 for that
8year.
95. Notwithstanding section 12C.7, subsection 2, interest or
10earnings on moneys deposited in the local use tax supplement
11fund shall be credited to the local use tax supplement fund.
12Notwithstanding section 8.33, moneys credited to the local use
13tax supplement fund shall not revert at the close of a fiscal
14year.
156. This section is repealed January 1, 2044. Moneys in the
16fund upon the repeal of this section shall be transferred to
17the appropriate county accounts under section 423B.7 for the
18counties from which the tax was paid.
19 Sec. 44. Section 423B.7, subsection 1, Code 2023, is amended
20to read as follows:
211. a. Except as provided in paragraphs paragraph “b” and
22“c”, the director shall credit the local sales and services tax
23receipts and interest and penalties from a county-imposed tax
24 as specified in section 423.2A, subsection 2, paragraph “a”,
25including any interest and penalties, to the county’s account
26in the local sales and services use tax fund for the county in
27 from which the tax was collected. The director shall credit
28the use tax receipts as specified in section 423.43, subsection
291, paragraph “b”, subparagraph (1), subparagraph divisions (b)
30and (c), including any interest and penalties, to the county’s
31account in the local sales and use tax fund for the county
32from which the use tax was paid.If the director is unable to
33determine from which county any of the receipts were collected
34or paid, as applicable, those receipts shall be allocated among
35the possible counties based on allocation rules adopted by the
-17-1director.
2b. The director shall credit the designated amount of the
3increase in local sales and services tax receipts, as computed
4in section 423B.10, collected in an urban renewal area of an
5eligible city that has adopted an ordinance pursuant to section
6423B.10, subsection 2, into a special city account in the local
7sales and services use tax fund.
8c. The director shall credit the local sales and services
9tax receipts and interest and penalties from a city-imposed tax
10under section 423B.1, subsection 2, to the city’s account in
11the local sales and services tax fund.
12 Sec. 45. Section 423B.7, subsections 2, 3, and 4, Code 2023,
13are amended to read as follows:
142. The director of revenue by the last day of each
15month shall transfer to each city or county where the local
16option tax is imposed the amount of tax moneys remitted to
17the department attributable to each city or county from the
18preceding month.
193. Seventy-five percent of each county’s account shall be
20remitted on the basis of the county’s population residing in
21the unincorporated area where the tax was imposed and those the
22 incorporated areas where the tax was imposed as follows:
23a. To the board of supervisors a pro rata share based upon
24the percentage of the above population of the county residing
25in the unincorporated area of the county where the tax was
26imposed according to the most recent certified federal census.
27b. To each city in the county where the tax was imposed
28 a pro rata share based upon the percentage of the city’s
29population residing in the county to the above population of
30the county according to the most recent certified federal
31census.
32c. If a subsequent certified census exists which modifies
33that most recent certified federal census for a participating
34 jurisdiction under paragraphs “a” and “b”, the computations
35under paragraphs “a” and “b” shall utilize the subsequent
-18-1certified census in the distribution formula under rules
2established by the director of revenue.
34. Twenty-five percent of each county’s account shall
4be remitted based on the sum of property tax dollars levied
5by the board of supervisors if the tax was imposed in the
6unincorporated areas and by each city in the county where the
7tax was imposed during the three-year period beginning July 1,
81982, and ending June 30, 1985, as follows:
9a. To the board of supervisors a pro rata share based upon
10the percentage of the total property tax dollars levied by the
11board of supervisors during the above three-year period.
12b. To each city council where the tax was imposed a pro rata
13share based upon the percentage of property tax dollars levied
14by the city during the above three-year period of the above
15total property tax dollars levied by the board of supervisors
16and each city where the tax was imposed during the above
17three-year period.
18 Sec. 46. Section 423B.7, subsection 5, Code 2023, is amended
19by striking the subsection.
20 Sec. 47. Section 423B.7, subsections 6 and 7, Code 2023, are
21amended to read as follows:
226. From each special city account under subsection 1,
23paragraph “b”, the sales and services tax revenues shall be
24remitted to the city council for deposit in the special fund
25created in section 403.19, subsection 2, to be used by the city
26as provided in section 423B.10. The distribution from the
27special city account is not subject to the distribution formula
28provided in subsections 3, and 4, and 5.
297. a. Subject to the requirement of paragraph “b” and the
30requirements under section 423B.1, subsection 3, local sales
31and services tax moneys amounts received by a city or county
32under this chapter may be expended for any lawful purpose of
33the city or county, including but not limited to expenses
34related to providing emergency medical services within the
35applicable city or county.
-19- 1b. Each city located in whole or in part in a qualified
2county and each qualified county for the unincorporated area
3for which the imposition of the local sales and services tax
4in the city or portion thereof or the unincorporated area, as
5applicable, was revenue purpose statement approved at election
6 on or after January 1, 2019 2025, shall require the use of
7 not less than fifty percent of the moneys received from the
8qualified county’s account in the local sales and services
9tax fund applicable county under this chapter for property
10tax relief. However, for a county with a population of four
11hundred thousand or more, a revenue purpose statement governing
12the use of revenues for the unincorporated area of the county
13approved on or after January 1, 2025, shall require the use of
14seventy-five percent of the moneys received by the county under
15this chapter for property tax relief.
16c. For purposes of this subsection, property tax relief
17includes payments under a chapter 28E agreement for purposes of
18a regional transit district if such payments are used to reduce
19the regional transit district levy under section 28M.5. For a
20city located in whole or in part in a county with a population
21of four hundred thousand or more, the use of revenues received
22under this chapter for the purposes of this paragraph shall
23not exceed ten percent of the amount received and for a county
24with a population of four hundred thousand or more, for the
25unincorporated area, shall not exceed twenty-five percent of
26the amount received under this chapter.
27 Sec. 48. Section 423B.9, subsection 1, paragraphs b and c,
28Code 2023, are amended to read as follows:
29b. “Designated portion” means the portion of the local
30option sales and services tax revenues received under this
31chapter which is authorized to be expended for one or a
32combination of purposes under an adopted public measure.
33c. “Secondary recipient” means a political subdivision of
34the state which is to receive revenues amounts from a local
35option sales and services tax revenues under this chapter
-20-1 over a period of years pursuant to the terms of a chapter 28E
2agreement with one or more cities or counties.
3 Sec. 49. Section 423B.9, subsections 2 and 3, Code 2023, are
4amended to read as follows:
52. An issuer of public bonds which is a recipient of
6revenues from a local option sales and services tax imposed
7 pursuant to this chapter may issue bonds in anticipation of
8the collection of one or more designated portions of the
9local option sales and services tax such revenues and may
10pledge irrevocably an amount of the revenue derived from the
11designated portions for each of the years the bonds remain
12outstanding to the payment of the bonds. Bonds may be issued
13only for one or more of the purposes set forth on the ballot
14proposition concerning the imposition of the local option sales
15and services tax in the revenue purpose statement, except bonds
16shall not be issued which are payable from that portion of tax
17revenues designated for property tax relief. The bonds may be
18issued in accordance with the procedures set forth in either
19subsection 3 or 4.
203. The governing body of an issuer may authorize the
21issuance of bonds which are payable from the designated portion
22of the revenues of the local option sales and services tax
23 received under this chapter, and not from property tax, by
24following the authorization procedures set forth for cities
25in section 384.83. Bonds may be issued for the purpose of
26refunding outstanding and previously issued bonds under this
27subsection without otherwise complying with the provisions of
28this subsection.
29 Sec. 50. Section 423B.9, subsection 4, paragraph b, Code
302023, is amended to read as follows:
31b. The provisions of chapter 76 apply to the bonds payable
32as provided in this subsection, except that the mandatory levy
33to be assessed pursuant to section 76.2 shall be at a rate
34to generate an amount which together with the receipts from
35the pledged designated portion of the local option sales and
-21-1services tax revenues received under this chapter is sufficient
2to pay the interest and principal on the bonds. All amounts
3collected as a result of the levy assessed pursuant to section
476.2 and paid out in the first instance for bond principal
5and interest shall be repaid to the bond issuer which levied
6the tax from the first available designated portion of local
7option sales and services tax collections revenues received
8under this chapter in excess of the requirement for the payment
9of the principal and interest of the bonds and when repaid
10shall be applied in reduction of property taxes. The amount
11of bonds which may be issued under section 76.3 shall be the
12amount which could be retired from the actual collections of
13the designated portions of the local option sales and services
14tax revenues received under this chapter for the last four
15calendar quarters, as certified by the director of revenue.
16The amount of tax revenues pledged jointly by other cities or
17counties may be considered for the purpose of determining the
18amount of bonds which may be issued. If the local option sales
19and services tax has been in effect revenues have been received
20under this chapter for less than four calendar quarters, the
21tax collected revenues received within the shorter period may
22be adjusted to project the collections amount of the designated
23portion for the full year for the purpose of determining the
24amount of the bonds which may be issued. The provisions of
25this section constitute separate authorization for the issuance
26of bonds and shall prevail in the event of conflict with
27any other provision of the Code limiting the amount of bonds
28which may be issued or the source of payment of the bonds.
29Bonds issued under this section shall not limit or restrict
30the authority of the bond issuer to issue bonds under other
31provisions of the Code.
32 Sec. 51. Section 423B.9, subsection 5, Code 2023, is amended
33to read as follows:
345. A city or county, jointly with one or more other
35political subdivisions as provided in chapter 28E, may pledge
-22-1irrevocably any amount derived from the designated portions
2of the revenues of the local option sales and services tax
3 received under this chapter to the support or payment of bonds
4of an issuer, issued for one or more purposes set forth on
5the ballot proposition concerning the imposition of the local
6option sales and services tax in the revenue purpose statement
7 or a political subdivision may apply the proceeds of its bonds
8to the support of any such purpose.
9 Sec. 52. Section 423B.10, subsection 1, paragraph b, Code
102023, is amended to read as follows:
11b. “Eligible city” means a city in which a local sales and
12services tax imposed by the county applies or a city described
13in section 423B.1, subsection 2, paragraph “a”, and in which an
14urban renewal area has been designated.
15 Sec. 53. Section 423B.10, subsections 2, 3, 5, and 6, Code
162023, are amended to read as follows:
172. a. Upon approval by the board of supervisors of each
18applicable county pursuant to paragraph “b”, an eligible city
19may by ordinance of the city council provide for the use of a
20designated amount of the increased local sales and services
21tax revenues collected received under this chapter which are
22attributable to retail establishments in an urban renewal
23area to fund urban renewal projects located in the area. The
24designated amount may be all or a portion of such increased
25revenues.
26b. A city shall not adopt an ordinance under paragraph
27“a” unless the board of supervisors of each county where the
28urban renewal area from which such local sales and services
29tax revenues are to be collected and used to fund urban
30renewal projects is located first adopts a resolution approving
31the collection and use of such local sales and services tax
32revenues.
333. To determine the revenue increase for purposes of
34subsection 2, revenue amounts shall be calculated by the
35department of revenue as follows:
-23- 1a. Determine the amount of local sales and services tax
2revenue collected and attributable to a one percent sales and
3services tax from retail establishments located in the area
4comprising the urban renewal area during the base year.
5b. Determine the current year one percent sales and services
6tax revenue amount for each fiscal year following the base year
7in the manner specified in paragraph “a”.
8c. The excess of the amount determined in paragraph “b” over
9the base year revenue amount determined in paragraph “a” is the
10increase in the local sales and services tax revenues of which
11the designated amount is to be deposited in the special city
12account created in section 423B.7, subsection 6.
135. In addition to the moneys received pursuant to the
14ordinance authorized under subsection 2, an eligible city
15may deposit any other local sales and services tax revenues
16received by it the city pursuant to the distribution formula in
17section 423B.7, subsections 3, 4, and 5, to the special fund
18described in section 403.19, subsection 2.
196. For purposes of this section, the eligible city shall
20assist the department of revenue in identifying retail
21establishments in the urban renewal area that are collecting
22the local sales and services tax. This process shall be
23ongoing until the ordinance is repealed.
24 Sec. 54. REPEAL. Sections 423B.2, 423B.3, 423B.4, 423B.5,
25423B.6, and 423B.8, Code 2023, are repealed.
26 Sec. 55. EFFECTIVE DATE. This division of this Act takes
27effect January 1, 2025.
28DIVISION IV
29Homestead property tax credit
30 Sec. 56. Section 2.48, subsection 3, paragraph f,
31subparagraph (1), Code 2023, is amended to read as follows:
32(1) The homestead tax exemption and credit under chapter
33425.
34 Sec. 57. Section 25B.7, subsection 2, paragraph a, Code
352023, is amended by striking the paragraph.
-24-1 Sec. 58. Section 100.18, subsection 2, paragraph b, Code
22023, is amended to read as follows:
3b. The rules shall require the installation of smoke
4detectors in existing single-family rental units and
5multiple-unit residential buildings. Existing single-family
6dwelling units shall be equipped with approved smoke detectors.
7A person who files for a homestead tax exemption and credit
8pursuant to chapter 425 shall certify that the single-family
9dwelling unit for which the credit is filed has a smoke
10detector installed in compliance with this section, or that one
11will be installed within thirty days of the date the filing
12for the credit is made. The state fire marshal shall adopt
13rules and establish appropriate procedures to administer this
14subsection.
15 Sec. 59. Section 100.18, subsection 3, paragraph b, Code
162023, is amended to read as follows:
17b. The rules shall require the installation of carbon
18monoxide alarms in existing single-family rental units and
19multiple-unit residential buildings that have a fuel-fired
20heater or appliance, a fireplace, or an attached garage.
21Existing single-family dwellings that have a fuel-fired heater
22or appliance, a fireplace, or an attached garage shall be
23equipped with approved carbon monoxide alarms. For purposes
24of this paragraph, “approved carbon monoxide alarm” means a
25carbon monoxide alarm that meets the standards established by
26the underwriters’ laboratories or is approved by the state fire
27marshal as established by rule under subsection 5. A person
28who files for a homestead tax exemption and credit pursuant
29to chapter 425 shall certify that the single-family dwelling
30for which the credit is filed and that has a fuel-fired heater
31or appliance, a fireplace, or an attached garage, has carbon
32monoxide alarms installed in compliance with this section,
33or that such alarms will be installed within thirty days of
34the date the filing for the credit is made. The state fire
35marshal shall adopt rules and establish appropriate procedures
-25-1to administer this subsection.
2 Sec. 60. Section 103.22, subsection 7, Code 2023, is amended
3to read as follows:
47. Prohibit an owner of property from performing work on the
5owner’s principal residence, if such residence is an existing
6dwelling rather than new construction and is not an apartment
7that is attached to any other apartment or building, as those
8terms are defined in section 499B.2, and is not larger than a
9single-family dwelling, or require such owner to be licensed
10under this chapter. In order to qualify for inapplicability
11pursuant to this subsection, a residence shall qualify for the
12homestead tax exemption and credit.
13 Sec. 61. Section 105.11, subsection 3, Code 2023, is amended
14to read as follows:
153. Prohibit an owner of property from performing work on the
16owner’s principal residence, if such residence is an existing
17dwelling rather than new construction and is not larger than a
18single-family dwelling, or farm property, excluding commercial
19or industrial installations or installations in public use
20buildings or facilities, or require such owner to be licensed
21under this chapter. In order to qualify for inapplicability
22pursuant to this subsection, a residence shall qualify for the
23homestead tax exemption and credit.
24 Sec. 62. Section 216.12, subsection 1, paragraph e, Code
252023, is amended to read as follows:
26e. The rental or leasing of a housing accommodation in a
27building which contains housing accommodations for not more
28than four families living independently of each other, if the
29owner resides in one of the housing accommodations for which
30the owner qualifies for the homestead tax exemption and credit
31under section 425.1.
32 Sec. 63. Section 321.1, subsection 6C, Code 2023, is amended
33to read as follows:
346C. “Bona fide residence” or “bona fide address” means the
35current street or highway address of an individual’s residence.
-26-1The bona fide residence of a person with more than one dwelling
2is the dwelling for which the person claims a homestead tax
3exemption and credit under chapter 425, if applicable. The
4bona fide residence of a homeless person is a primary nighttime
5residence meeting one of the criteria listed in section 48A.2,
6subsection 3.
7 Sec. 64. Section 321.1A, subsection 1, paragraph a, Code
82023, is amended to read as follows:
9a. The person has filed for a homestead tax exemption and
10credit on property in this state.
11 Sec. 65. Section 331.401, subsection 1, paragraphs e and f,
12Code 2023, are amended to read as follows:
13e. Adopt resolutions authorizing the county assessor
14to provide forms for homestead tax exemption and credit
15 claimants as provided in section 425.2 and military service tax
16exemptions as provided in section 426A.14.
17f. Examine and allow or disallow claims for homestead tax
18 exemption and credit in accordance with section 425.3 and
19claims for military service tax exemption in accordance with
20chapter 426A. The board, by a single resolution, may allow or
21disallow the exemptions recommended by the assessor.
22 Sec. 66. Section 331.512, subsection 3, Code 2023, is
23amended to read as follows:
243. Carry out duties relating to the homestead tax exemption
25and credit and agricultural land tax credit as provided in
26chapters 425 and 426.
27 Sec. 67. Section 331.559, subsection 12, Code 2023, is
28amended to read as follows:
2912. Carry out duties relating to the administration of
30the homestead tax exemption and credit and other credits as
31provided in sections 425.4, 425.5, 425.7, 425.9, 425.10, and
32425.25.
33 Sec. 68. Section 404.3, subsection 1, Code 2023, is amended
34to read as follows:
351. All qualified real estate assessed as residential
-27-1property is eligible to receive an exemption from taxation
2based on the actual value added by the improvements. The
3exemption is for a period of ten years. The amount of the
4exemption is equal to a percent of the actual value added by
5the improvements, determined as follows: One hundred fifteen
6percent of the value added by the improvements. However, the
7amount of the actual value added by the improvements which
8shall be used to compute the exemption shall not exceed twenty
9thousand dollars and the granting of the exemption shall not
10result in the actual value of the qualified real estate being
11reduced below the actual value on which the homestead credit
12 exemption is computed under section 425.1.
13 Sec. 69. Section 425.1, subsection 1, paragraph a, Code
142023, is amended to read as follows:
15a. A homestead credit fund is created. There For fiscal
16years beginning before July 1, 2028, there is appropriated
17annually from the general fund of the state to the department
18of revenue to be credited to the homestead credit fund, an
19amount sufficient to implement this subchapter.
20 Sec. 70. Section 425.1, subsection 1, Code 2023, is amended
21by adding the following new paragraph:
22 NEW PARAGRAPH. c. All moneys in the homestead credit fund
23at the end of the fiscal year beginning July 1, 2028, shall be
24transferred by the department of revenue for deposit in the
25general fund of the state.
26 Sec. 71. Section 425.1, subsections 2, 4, and 5, Code 2023,
27are amended to read as follows:
282. a. For fiscal years beginning before July 1, 2028, the
29moneys in the homestead credit fund shall be apportioned each
30year so as to give a credit against the tax on each eligible
31homestead in the state, but not more than the amount under
32paragraph “b”.
33b. (1) The For assessment years beginning before July
341, 2025, the homestead credit fund shall be apportioned each
35year so as to give a credit against the tax on each eligible
-28-1homestead in the state in an amount equal to the actual levy on
2the first four thousand eight hundred fifty dollars of actual
3value for each homestead.
4(2) For property taxes due and payable in the fiscal year
5beginning July 1, 2025, the homestead credit fund shall be
6apportioned each year so as to give a credit against the tax
7on each eligible homestead in the state in an amount equal
8to the actual levy on the first three thousand six hundred
9forty dollars of actual value for each homestead exempted under
10section 425.1A.
11(3) For property taxes due and payable in the fiscal year
12beginning July 1, 2026, the homestead credit fund shall be
13apportioned each year so as to give a credit against the tax
14on each eligible homestead in the state in an amount equal to
15the actual levy on the first two thousand four hundred thirty
16dollars of actual value for each homestead exempted under
17section 425.1A.
18(4) For property taxes due and payable in the fiscal year
19beginning July 1, 2027, the homestead credit fund shall be
20apportioned each year so as to give a credit against the tax
21on each eligible homestead in the state in an amount equal to
22the actual levy on the first one thousand two hundred twenty
23dollars of actual value for each homestead exempted under
24section 425.1A.
254. Annually For fiscal years beginning before July 1, 2028,
26annually the department of revenue shall certify to the county
27auditor of each county the credit and its amount in dollars.
28Each county auditor shall then enter the credit against the
29tax levied on each eligible homestead in each county payable
30during the ensuing year, designating on the tax lists the
31credit as being from the homestead credit fund, and credit
32shall then be given to the several taxing districts in which
33eligible homesteads are located in an amount equal to the
34credits allowed on the taxes of the homesteads. The amount of
35credits shall be apportioned by each county treasurer to the
-29-1several taxing districts as provided by law, in the same manner
2as though the amount of the credit had been paid by the owners
3of the homesteads. However, the several taxing districts shall
4not draw the funds so credited until after the semiannual
5allocations have been received by the county treasurer, as
6provided in this subchapter. Each county treasurer shall show
7on each tax receipt the amount of credit received from the
8homestead credit fund.
95. If For property taxes due and payable in fiscal years
10beginning before July 1, 2028, if the homestead tax credit
11computed under this section is less than sixty-two dollars
12and fifty cents, the amount of homestead tax credit on that
13eligible homestead shall be sixty-two dollars and fifty cents
14subject to the limitation imposed in this section.
15 Sec. 72. NEW SECTION. 425.1A Homestead tax exemption.
16The following exemptions from taxation shall be allowed:
171. a. Except as provided in paragraph “b”, for the
18assessment year beginning January 1, 2024, the eligible
19homestead, not to exceed two thousand five hundred dollars in
20taxable value.
21b. If the owner of the homestead has attained the age of
22sixty-five years by January 1 of the assessment year, the
23eligible homestead, not to exceed four thousand one hundred
24twenty-five dollars in taxable value.
252. a. Except as provided in paragraph “b”, for the
26assessment year beginning January 1, 2025, the eligible
27homestead, not to exceed five thousand dollars in taxable
28value.
29b. If the owner of the homestead has attained the age of
30sixty-five years by January 1 of the assessment year, the
31eligible homestead, not to exceed eight thousand two hundred
32fifty dollars in taxable value.
333. a. Except as provided in paragraph “b”, for the
34assessment year beginning January 1, 2026, the eligible
35homestead, not to exceed seven thousand five hundred dollars
-30-1in taxable value.
2b. If the owner of the homestead has attained the age of
3sixty-five years by January 1 of the assessment year, the
4eligible homestead, not to exceed twelve thousand three hundred
5seventy-five dollars in taxable value.
64. a. Except as provided in paragraph “b”, for the
7assessment year beginning January 1, 2027, and each succeeding
8assessment year, the eligible homestead, not to exceed ten
9thousand dollars in taxable value.
10b. If the owner of the homestead has attained the age of
11sixty-five years by January 1 of the assessment year, the
12eligible homestead, not to exceed sixteen thousand five hundred
13dollars in taxable value.
14 Sec. 73. Section 425.2, subsections 1, 2, 4, and 5, Code
152023, are amended to read as follows:
161. A person who wishes to qualify for the homestead
17exemption and credit allowed under this subchapter shall
18obtain the appropriate forms for filing for the exemption and
19 credit from the assessor. The person claiming the exemption
20and credit shall file a verified statement and designation of
21homestead with the assessor for the year for which the person
22is first claiming the exemption and credit. The claim shall be
23filed not later than July 1 of the year for which the person is
24claiming the exemption and credit. A claim filed after July 1
25of the year for which the person is claiming the exemption and
26 credit shall be considered as a claim filed for the following
27year.
282. Upon the filing and allowance of the claim, the claim
29shall be allowed on that homestead for successive years without
30further filing as long as the property is legally or equitably
31owned and used as a homestead by that person or that person’s
32spouse on July 1 of each of those successive years, and the
33owner of the property being claimed as a homestead declares
34residency in Iowa for purposes of income taxation, and the
35property is occupied by that person or that person’s spouse
-31-1for at least six months in each of those calendar years in
2which the fiscal year begins. When the property is sold or
3transferred, the buyer or transferee who wishes to qualify
4shall refile for the exemption and credit. However, when the
5property is transferred as part of a distribution made pursuant
6to chapter 598, the transferee who is the spouse retaining
7ownership of the property is not required to refile for the
8exemption and credit. Property divided pursuant to chapter 598
9shall not be modified following the division of the property.
10An owner who ceases to use a property for a homestead or
11intends not to use it as a homestead for at least six months in
12a calendar year shall provide written notice to the assessor
13by July 1 following the date on which the use is changed. A
14person who sells or transfers a homestead or the personal
15representative of a deceased person who had a homestead at the
16time of death, shall provide written notice to the assessor
17that the property is no longer the homestead of the former
18claimant.
194. Any person sixty-five years of age or older or any person
20who is disabled may request, in writing, from the appropriate
21assessor forms for filing for homestead tax exemption and
22 credit. Any person sixty-five years of age or older or who is
23disabled may complete the form, which shall include a statement
24of homestead, and mail or return it to the appropriate
25assessor. The signature of the claimant on the statement shall
26be considered the claimant’s acknowledgment that all statements
27and facts entered on the form are correct to the best of the
28claimant’s knowledge.
295. Upon adoption of a resolution by the county board of
30supervisors, any person may request, in writing, from the
31appropriate assessor forms for the filing for homestead tax
32exemption and credit. The person may complete the form, which
33shall include a statement of homestead, and mail or return it
34to the appropriate assessor. The signature of the claimant on
35the statement of homestead shall be considered the claimant’s
-32-1acknowledgment that all statements and facts entered on the
2form are correct to the best of the claimant’s knowledge.
3 Sec. 74. Section 425.3, subsection 4, Code 2023, is amended
4to read as follows:
54. The county auditor shall forward the claims to the board
6of supervisors. The board shall allow or disallow the claims.
7If the board disallows a claim, it shall send written notice,
8by mail, to the claimant at the claimant’s last known address.
9The notice shall state the reasons for disallowing the claim
10for the credit. The board is not required to send notice that
11a claim is disallowed if the claimant voluntarily withdraws the
12claim.
13 Sec. 75. Section 425.4, Code 2023, is amended to read as
14follows:
15425.4 Certification to treasurer.
16All claims which have been allowed by the board of
17supervisors shall be certified on or before August 1, in each
18year, by the county auditor to the county treasurer, which
19certificates shall list the total amount of dollars, listed by
20taxing district in the county, due for homestead tax exemptions
21and credits claimed and allowed. The county treasurer shall
22forthwith then certify to the department of revenue the total
23amount of dollars, listed by taxing district in the county, due
24for homestead tax exemptions and credits claimed and allowed.
25 Sec. 76. Section 425.6, Code 2023, is amended to read as
26follows:
27425.6 Waiver by neglect.
28If a person fails to file a claim or to have a claim on file
29with the assessor for the credits provided in this subchapter,
30the person is deemed to have waived the homestead exemption
31and credit for the year in which the person failed to file the
32claim or to have a claim on file with the assessor.
33 Sec. 77. Section 425.7, subsection 3, Code 2023, is amended
34to read as follows:
353. a. If the department of revenue determines that a claim
-33-1for homestead exemption and credit has been allowed by the
2board of supervisors which is not justifiable under the law
3and not substantiated by proper facts, the department may, at
4any time within thirty-six months from July 1 of the year in
5which the claim is allowed, set aside the allowance. Notice
6of the disallowance shall be given to the county auditor of
7the county in which the claim has been improperly granted and
8a written notice of the disallowance shall also be addressed
9to the claimant at the claimant’s last known address. The
10claimant or board of supervisors may appeal to the director
11of revenue within thirty days from the date of the notice of
12disallowance. The director shall grant a hearing and if, upon
13the hearing, the director determines that the disallowance was
14incorrect, the director shall set aside the disallowance. The
15director shall notify the claimant and the board of supervisors
16of the result of the hearing. The claimant or the board of
17supervisors may seek judicial review of the action of the
18director of revenue in accordance with chapter 17A.
19b. If a claim is disallowed by the department of revenue
20and not appealed to the director of revenue or appealed to
21the director of revenue and thereafter upheld upon final
22resolution, including any judicial review, any amounts of
23exemptions allowed and credits allowed and paid from the
24homestead credit fund including the penalty, if any, become a
25lien upon the property on which the exemption and credit was
26originally granted, if still in the hands of the claimant,
27and not in the hands of a bona fide purchaser, and any amount
28so erroneously paid including the penalty, if any, shall be
29collected by the county treasurer in the same manner as other
30taxes and the collections shall be returned to the department
31of revenue and credited to the homestead credit fund. The
32director of revenue may institute legal proceedings against a
33homestead credit claimant for the collection of payments made
34on disallowed credits and the penalty, if any. If a person
35makes a false claim or affidavit with fraudulent intent to
-34-1obtain the homestead exemption and credit, the person is guilty
2of a fraudulent practice and the claim shall be disallowed in
3full. If the credit has been paid, the amount of the credit
4plus a penalty equal to twenty-five percent of the amount of
5credit plus interest, at the rate in effect under section
6421.7, from the time of payment shall be collected by the
7county treasurer in the same manner as other property taxes,
8penalty, and interest are collected and when collected shall
9be paid to the director of revenue. If a homestead exemption
10and credit is disallowed and the claimant failed to give
11written notice to the assessor as required by section 425.2
12when the property ceased to be used as a homestead by the
13claimant, a civil penalty equal to five percent of the amount
14of the disallowed exemption or credit is assessed against the
15claimant.
16 Sec. 78. Section 425.8, subsection 1, Code 2023, is amended
17to read as follows:
181. The director of revenue shall prescribe the form
19for the making of a verified statement and designation of
20homestead, the form for the supporting affidavits required
21herein, and such other forms as may be necessary for the proper
22administration of this subchapter. Whenever necessary, the
23department of revenue shall forward to the county auditors of
24the several counties in the state the prescribed sample forms,
25and the county auditors shall furnish blank forms prepared
26in accordance therewith with the assessment rolls, books,
27and supplies delivered to the assessors. The department of
28revenue shall prescribe and the county auditors shall provide
29on the forms for claiming the homestead exemption and credit a
30statement to the effect that the owner realizes that the owner
31must give written notice to the assessor when the owner changes
32the use of the property.
33 Sec. 79. Section 425.9, subsections 2, 3, and 4, Code 2023,
34are amended to read as follows:
352. If any claim for exemption and credit made hereunder
-35-1 has been denied by the board of supervisors, and such action
2is subsequently reversed on appeal, the exemption and credit
3shall be allowed on the homestead involved in said appeal, and
4the director of revenue, the county auditor, and the county
5treasurer shall make such exemption and credit and change their
6books and records accordingly.
73. In the event the appealing taxpayer has paid one or both
8of the installments of the tax payable in the year or years in
9question on such homestead valuation, remittance shall be made
10to such taxpayer of the amount of such credit or exemption.
114. The amount of such credit shall be allocated and paid
12from the surplus redeposited in the homestead credit fund
13provided for in subsection 1. The amount of such exemption not
14covered by the credit shall be allowed as a credit on future
15taxes due and payable.
16 Sec. 80. Section 425.10, Code 2023, is amended to read as
17follows:
18425.10 Reversal of allowed claim.
19In the event any claim is allowed, and subsequently reversed
20on appeal, any exemption and credit made under the claim
21shall be void. The amount of the erroneous exemption and
22 credit shall be charged against the property in question, and
23the director of revenue, the county auditor, and the county
24treasurer are authorized and directed to correct their books
25and records accordingly. The amount of the erroneous credit,
26when collected, shall be returned by the county treasurer to
27the homestead credit fund to be reallocated the following year
28as provided in this subchapter.
29 Sec. 81. Section 425.11, subsection 1, paragraph d,
30subparagraph (1), unnumbered paragraph 1, Code 2023, is amended
31to read as follows:
32The homestead includes the dwelling house which the owner,
33in good faith, is occupying as a home on July 1 of the year for
34which the exemption and credit is claimed and occupies as a
35home for at least six months during the calendar year in which
-36-1the fiscal year begins, except as otherwise provided.
2 Sec. 82. Section 425.11, subsection 1, paragraph d,
3subparagraph (3), Code 2023, is amended to read as follows:
4(3) It must not embrace more than one dwelling house, but
5where a homestead has more than one dwelling house situated
6thereon, the exemption and credit provided for in this
7subchapter shall apply to the home and buildings used by the
8owner, but shall not apply to any other dwelling house and
9buildings appurtenant.
10 Sec. 83. Section 425.11, subsection 1, paragraph e, Code
112023, is amended to read as follows:
12e. “Owner” means the person who holds the fee simple
13title to the homestead, and in addition shall mean the person
14occupying as a surviving spouse or the person occupying under
15a contract of purchase which contract has been recorded in
16the office of the county recorder of the county in which the
17property is located; or the person occupying the homestead
18under devise or by operation of the inheritance laws where
19the whole interest passes or where the divided interest is
20shared only by persons related or formerly related to each
21other by blood, marriage or adoption; or the person occupying
22the homestead is a shareholder of a family farm corporation
23that owns the property; or the person occupying the homestead
24under a deed which conveys a divided interest where the divided
25interest is shared only by persons related or formerly related
26to each other by blood, marriage or adoption; or where the
27person occupying the homestead holds a life estate with the
28reversion interest held by a nonprofit corporation organized
29under chapter 504, provided that the holder of the life estate
30is liable for and pays property tax on the homestead; or where
31the person occupying the homestead holds an interest in a
32horizontal property regime under chapter 499B, regardless
33of whether the underlying land committed to the horizontal
34property regime is in fee or as a leasehold interest, provided
35that the holder of the interest in the horizontal property
-37-1regime is liable for and pays property tax on the homestead;
2or where the person occupying the homestead is a member of a
3community land trust as defined in 42 U.S.C. §12773, regardless
4of whether the underlying land is in fee or as a leasehold
5interest, provided that the member of the community land trust
6is occupying the homestead and is liable for and pays property
7tax on the homestead. For the purpose of this subchapter,
8the word “owner” shall be construed to mean a bona fide owner
9and not one for the purpose only of availing the person of
10the benefits of this subchapter. In order to qualify for the
11homestead tax exemption and credit, evidence of ownership shall
12be on file in the office of the clerk of the district court
13or recorded in the office of the county recorder at the time
14the owner files with the assessor a verified statement of the
15homestead claimed by the owner as provided in section 425.2.
16 Sec. 84. Section 425.12, Code 2023, is amended to read as
17follows:
18425.12 Indian land.
19Each forty acres of land, or fraction thereof, occupied by
20a member or members of the Sac and Fox Indians in Tama county,
21which land is held in trust by the secretary of the interior of
22the United States for said Indians, shall be given a homestead
23tax exemption and credit within the meaning and under the
24provisions of this subchapter. Application for such homestead
25tax exemption and credit shall be made to the county auditor of
26Tama county and may be made by a representative of the tribal
27council.
28 Sec. 85. Section 425.13, Code 2023, is amended to read as
29follows:
30425.13 Conspiracy to defraud.
31If any two or more persons conspire and confederate together
32with fraudulent intent to obtain the exemption and credit
33provided for under the terms of this subchapter by making a
34false deed, or a false contract of purchase, they are guilty of
35a fraudulent practice.
-38-1 Sec. 86. Section 425.15, subsection 1, unnumbered paragraph
21, Code 2023, is amended to read as follows:
3If the owner of a homestead allowed a an exemption and credit
4under this subchapter is any of the following, the exemption
5shall be the total actual value of the homestead and, for
6fiscal years for which credits are paid, the credit allowed
7on the homestead from the homestead credit fund shall be the
8entire amount of the tax levied on the homestead:
9 Sec. 87. Section 425.15, subsections 2, 3, and 4, Code 2023,
10are amended to read as follows:
112. a. For an owner described in subsection 1, paragraph
12“a”, “b”, or “c”, the exemption and credit allowed shall be
13continued to the estate of an owner who is deceased or the
14surviving spouse and any child, as defined in section 234.1,
15who are the beneficiaries of a deceased owner, so long as the
16surviving spouse remains unmarried.
17b. An individual described in subsection 1, paragraph
18“d”, is no longer eligible for the exemption and credit upon
19termination of dependency and indemnity compensation under 38
20U.S.C. §1301 et seq.
213. An owner or a beneficiary of an owner who elects to
22secure the exemption and credit provided in this section is not
23eligible for any other real property tax exemption provided by
24law for veterans of military service.
254. If an owner acquires a different homestead, the exemption
26and credit allowed under this section may be claimed on the new
27homestead unless the owner fails to meet the other requirements
28of this section.
29 Sec. 88. Section 425.15, subsection 5, paragraph a, Code
302023, is amended to read as follows:
31a. Except as provided in paragraph “b”, the list of the
32names and addresses of individuals allowed a an exemption
33and credit under this section and maintained by the county
34recorder, county treasurer, county assessor, city assessor, or
35other government body is confidential information and shall
-39-1not be disseminated to any person unless otherwise ordered by
2a court or released by the lawful custodian of the records
3pursuant to state or federal law. The county recorder, county
4treasurer, county assessor, city assessor, or other government
5body responsible for maintaining the names and addresses of
6individuals allowed a an exemption and credit under this
7section may display such exemption and credit on individual
8paper records and individual electronic records, including
9display on an internet site.
10 Sec. 89. Section 425.16, subsection 1, Code 2023, is amended
11to read as follows:
121. In addition to the homestead tax credit allowed under
13section 425.1, subsections 1 through 4, and the homestead
14exemption under section 425.lA, persons who own or rent their
15homesteads and who meet the qualifications provided in this
16subchapter are eligible for a property tax credit for property
17taxes due or reimbursement of rent constituting property taxes
18paid.
19 Sec. 90. Section 425.17, subsection 8, Code 2023, is amended
20to read as follows:
218. “Property taxes due” means property taxes including any
22special assessments, but exclusive of delinquent interest and
23charges for services, due on a claimant’s homestead in this
24state, but includes only property taxes for which the claimant
25is liable and which will actually be paid by the claimant.
26However, if the claimant is a person whose property taxes have
27been suspended under sections 427.8 and 427.9, “property taxes
28due” means property taxes including any special assessments,
29but exclusive of delinquent interest and charges for services,
30due on a claimant’s homestead in this state, but includes only
31property taxes for which the claimant is liable and which
32would have to be paid by the claimant if the payment of the
33taxes has not been suspended pursuant to sections 427.8 and
34427.9. “Property taxes due” shall be computed with no deduction
35for any credit under this subchapter or for any homestead
-40- 1exemption or credit allowed under section 425.1. Each claim
2shall be based upon the taxes due during the fiscal year next
3following the base year. If a homestead is owned by two or
4more persons as joint tenants or tenants in common, and one or
5more persons are not members of claimant’s household, “property
6taxes due” is that part of property taxes due on the homestead
7which equals the ownership percentage of the claimant and the
8claimant’s household. The county treasurer shall include with
9the tax receipt a statement that if the owner of the property
10is eighteen years of age or over, the person may be eligible
11for the credit allowed under this subchapter. If a homestead
12is an integral part of a farm, the claimant may use the total
13property taxes due for the larger unit. If a homestead is an
14integral part of a multidwelling or multipurpose building the
15property taxes due for the purpose of this subsection shall be
16prorated to reflect the portion which the value of the property
17that the household occupies as its homestead is to the value
18of the entire structure. For purposes of this subsection,
19“unit” refers to that parcel of property covered by a single tax
20statement of which the homestead is a part.
21 Sec. 91. Section 435.26, subsection 1, paragraph a, Code
222023, is amended to read as follows:
23a. A mobile home or manufactured home which is located
24outside a manufactured home community or mobile home park shall
25be converted to real estate by being placed on a permanent
26foundation and shall be assessed for real estate taxes. A
27home, after conversion to real estate, is eligible for the
28homestead tax exemption and credit and the military service tax
29exemption as provided in sections 425.2 and 426A.11. A taxable
30mobile home or manufactured home which is located outside
31of a manufactured home community or mobile home park as of
32January 1, 1995, is also exempt from the permanent foundation
33requirements of this chapter until the home is relocated.
34 Sec. 92. Section 435.26A, subsection 3, Code 2023, is
35amended to read as follows:
-41- 13. After the surrender of a manufactured home’s certificate
2of title under this section, the manufactured home shall
3continue to be taxed under section 435.22 and is not eligible
4for the homestead tax exemption and credit or the military
5service tax exemption and credit. A foreclosure action on a
6manufactured home whose title has been surrendered under this
7section shall be conducted as a real estate foreclosure. A tax
8lien and its priority shall remain the same on a manufactured
9home after its certificate of title has been surrendered.
10 Sec. 93. Section 483A.24, subsection 19, Code 2023, is
11amended to read as follows:
1219. Upon payment of a fee established by rules adopted
13pursuant to section 483A.1 for a lifetime trout fishing
14license, the department shall issue a lifetime trout fishing
15license to a person who is at least sixty-five years of age or
16to a person who qualifies for the disabled veteran homestead
17exemption and credit under section 425.15. The department
18shall prepare an application to be used by a person requesting
19a lifetime trout fishing license under this subsection.
20 Sec. 94. Section 499A.14, Code 2023, is amended to read as
21follows:
22499A.14 Taxation.
23The real estate shall be taxed in the name of the
24cooperative, and each member of the cooperative shall pay
25that member’s proportionate share of the tax in accordance
26with the proration formula set forth in the bylaws, and each
27member occupying an apartment as a residence shall receive
28that member’s proportionate homestead tax exemption and credit
29and each veteran of the military services of the United States
30identified as such under the laws of the state of Iowa or the
31United States shall receive as a credit that member’s veterans
32tax benefit as prescribed by the laws of the state of Iowa.
33 Sec. 95. EXISTING HOMESTEAD CLAIMS. Homestead credit
34claims approved under chapter 425, subchapter I, prior to and
35valid on the effective date of this division of this Act shall
-42-1result in a homestead exemption under chapter 425, subchapter
2I, as enacted in this division of this Act, without further
3filing by the claimant.
4 Sec. 96. IMPLEMENTATION. Section 25B.7, subsection 1,
5shall not apply to the property tax exemption provided in this
6division of this Act.
7 Sec. 97. APPLICABILITY. This division of this Act applies
8to assessment years beginning on or after January 1, 2024.
9DIVISION V
10ELDERLY PROPERTY TAX CREDIT
11 Sec. 98. Section 425.23, subsection 1, paragraph c,
12subparagraph (2), Code 2023, is amended to read as follows:
13(2) The difference between the actual amount of net
14 property taxes due on the homestead during the fiscal year next
15following the base year minus the actual amount of net property
16taxes due on the homestead during the first fiscal year for
17which the claimant filed a claim for a credit calculated under
18this paragraph “c” and for which the property taxes due on the
19homestead were calculated on an assessed valuation that was
20not a partial assessment and if the claimant has filed for the
21credit calculated under this paragraph “c” for each of the
22subsequent fiscal years after the first credit claimed.
23 Sec. 99. Section 425.23, subsection 2, Code 2023, is amended
24to read as follows:
252. a. The Except as provided in paragraph “b”, the
26 actual credit for property taxes due shall be determined
27by subtracting from the tentative credit the amount of the
28homestead credit under section 425.1 which is allowed as a
29credit against property taxes due in the fiscal year next
30following the base year by the claimant or any person of
31the claimant’s household. If the subtraction produces a
32negative amount, there shall be no credit but no refund shall
33be required. The actual reimbursement for rent constituting
34property taxes paid shall be equal to the tentative
35reimbursement.
-43- 1b. If the claimant’s tentative credit is the amount
2determined under subsection 1, paragraph “c”, subparagraph (2),
3the actual credit amount shall be equal to the tentative credit
4amount.
5 Sec. 100. EFFECTIVE DATE. This division of this Act, being
6deemed of immediate importance, takes effect upon enactment.
7 Sec. 101. RETROACTIVE APPLICABILITY. This division of
8this Act applies retroactively to claims under chapter 425,
9subchapter II, filed on or after January 1, 2022.
10DIVISION VI
11MILITARY SERVICE PROPERTY TAX EXEMPTION AND CREDIT
12 Sec. 102. Section 25B.7, subsection 2, paragraph c, Code
132023, is amended by striking the paragraph.
14 Sec. 103. Section 426A.1A, Code 2023, is amended to read as
15follows:
16426A.1A Appropriation.
17There For each fiscal year beginning before July 1, 2026,
18there is appropriated from the general fund of the state the
19amounts necessary to fund the credits provided under this
20chapter.
21 Sec. 104. Section 426A.2, Code 2023, is amended to read as
22follows:
23426A.2 Military service tax credit.
24The For each fiscal year beginning before July 1, 2026, the
25 moneys appropriated under section 426A.1A shall be apportioned
26each year so as to replace all or a portion of the tax which
27would be due on property eligible for military service tax
28exemption in the state, if the property were subject to
29taxation, the amount of the credit to be not more than six
30dollars and ninety-two cents per thousand dollars of assessed
31value of property, not to exceed nine hundred forty-five
32dollars, which would be subject to the tax, except for the
33military service tax exemption.
34 Sec. 105. Section 426A.11, subsections 1 and 2, Code 2023,
35are amended to read as follows:
-44- 11. The property, not to exceed two thousand seven hundred
2seventy-eight dollars in taxable value for assessment years
3beginning before January 1, 2024, of any veteran, as defined in
4section 35.1, of World War I.
52. a. The property, not to exceed one thousand eight
6hundred fifty-two dollars in taxable value for assessment years
7beginning before January 1, 2024, of an honorably separated,
8retired, furloughed to a reserve, placed on inactive status,
9or discharged veteran, as defined in section 35.1, subsection
102, paragraph “a” or “b”.
11b. The property, not to exceed two thousand fifty-five
12dollars in taxable value for the assessment year beginning
13January 1, 2024, of an honorably separated, retired, furloughed
14to a reserve, placed on inactive status, or discharged veteran,
15as defined in section 35.1, subsection 2, paragraph “a” or “b”.
16c. The property, not to exceed four thousand dollars in
17taxable value for assessment years beginning on or after
18January 1, 2025, of an honorably separated, retired, furloughed
19to a reserve, placed on inactive status, or discharged veteran,
20as defined in section 35.1, subsection 2, paragraph “a” or “b”.
21 Sec. 106. IMPLEMENTATION. Section 25B.7, subsection 1,
22shall not apply to the property tax exemption provided in this
23Act.
24 Sec. 107. APPLICABILITY. This division of this Act applies
25to assessment years beginning on or after January 1, 2024.
26DIVISION VII
27PROPERTY TAX ASSESSMENT LIMITATIONS
28 Sec. 108. Section 441.21, subsections 5, 9, and 10, Code
292023, are amended to read as follows:
305. a. (1) For valuations established as of January 1,
311979, property valued by the department of revenue pursuant
32to chapters 428, 433, and 437, and 438 shall be considered as
33one class of property and shall be assessed as a percentage
34of its actual value. The percentage shall be determined by
35the director of revenue in accordance with the provisions of
-45-1this section. For valuations established as of January 1,
21979, the percentage shall be the quotient of the dividend and
3divisor as defined in this section. The dividend shall be the
4total actual valuation established for 1978 by the department
5of revenue, plus ten percent of the amount so determined.
6The divisor for property valued by the department of revenue
7pursuant to chapters 428, 433, and 437, and 438 shall be the
8valuation established for 1978, plus the amount of value added
9to the total actual value by the revaluation of the property
10by the department of revenue as of January 1, 1979. For
11valuations established as of January 1, 1980, property valued
12by the department of revenue pursuant to chapters 428, 433, and
13 437, and 438 shall be assessed at a percentage of its actual
14value. The percentage shall be determined by the director of
15revenue in accordance with the provisions of this section. For
16valuations established as of January 1, 1980, the percentage
17shall be the quotient of the dividend and divisor as defined in
18this section. The dividend shall be the total actual valuation
19established for 1979 by the department of revenue, plus eight
20percent of the amount so determined. The divisor for property
21valued by the department of revenue pursuant to chapters 428,
22433, and 437, and 438 shall be the valuation established for
231979, plus the amount of value added to the total actual
24value by the revaluation of the property by the department of
25revenue as of January 1, 1980. For valuations established
26as of January 1, 1981, and each year thereafter beginning
27before January 1, 2025, the percentage of actual value at
28which property valued by the department of revenue pursuant to
29chapters 428, 433, and 437, and 438 shall be assessed shall
30be calculated in accordance with the methods provided herein,
31except that any references to ten percent in this subsection
32shall be eight percent. For valuations established on or after
33January 1, 2013, property valued by the department of revenue
34pursuant to chapter 434 shall be assessed at a portion of its
35actual value determined in the same manner at which property
-46-1assessed as commercial property is assessed under paragraph “b”
2 for the same assessment year. For valuations established for
3the assessment year beginning January 1, 2025, the percentage
4of actual value at which property valued by the department of
5revenue pursuant to chapter 438 shall be assessed shall be
6ninety-five percent. For valuations established for assessment
7years beginning on or after January 1, 2026, the percentage
8of actual value at which property valued by the department of
9revenue pursuant to chapter 438 shall be assessed shall be
10ninety percent.
11(2) (a) For valuations established for the assessment year
12beginning January 1, 2025, the percentage of actual value at
13which property valued by the department of revenue pursuant to
14chapters 428 and 437 shall be assessed shall be ninety-seven
15and one-half percent.
16(b) For valuations established for the assessment year
17beginning January 1, 2026, the percentage of actual value at
18which property valued by the department of revenue pursuant to
19chapters 428 and 437 shall be assessed shall be ninety-five
20percent.
21(c) For valuations established for the assessment year
22beginning January 1, 2027, the percentage of actual value at
23which property valued by the department of revenue pursuant to
24chapters 428 and 437 shall be assessed shall be ninety-two and
25one-half percent.
26(d) For valuations established for the assessment year
27beginning January 1, 2028, and each assessment year thereafter,
28the percentage of actual value at which property valued by the
29department of revenue pursuant to chapters 428 and 437 shall be
30assessed shall be ninety percent.
31b. For valuations established on or after January 1, 2013,
32commercial property, excluding properties referred to in
33section 427A.1, subsection 9, shall be assessed at a portion
34of its actual value, as determined in this paragraph “b”. For
35valuations established on or after January 1, 2013, property
-47-1valued by the department of revenue pursuant to chapter 434
2shall be assessed at a portion of its actual value determined
3in the same manner at which property assessed as commercial
4property is assessed for the same assessment year.
5(1) For valuations established for the assessment year
6beginning January 1, 2013, the percentage of actual value
7as equalized by the department of revenue as provided in
8section 441.49 at which commercial property shall be assessed
9shall be ninety-five percent. For valuations established
10for the assessment year beginning January 1, 2014, and each
11assessment year thereafter beginning before January 1, 2022,
12the percentage of actual value as equalized by the department
13of revenue as provided in section 441.49 at which commercial
14property shall be assessed shall be ninety percent.
15(2) For valuations established for the assessment year
16beginning January 1, 2022, and each assessment year thereafter,
17the portion of actual value at which each property unit of
18commercial property shall be assessed shall be the sum of the
19following:
20(a) An amount equal to the product of the assessment
21limitation percentage applicable to residential property under
22subsection 4 for that assessment year multiplied by the actual
23value of the property that exceeds zero dollars but does not
24exceed one hundred fifty thousand dollars.
25(b) (i) An For the assessment years beginning January 1,
262022, January 1, 2023, and January 1, 2024, an amount equal
27to ninety percent of the actual value of the property for
28that assessment year that exceeds one hundred fifty thousand
29dollars.
30(ii) For the assessment year beginning January 1, 2025,
31an amount equal to eighty-five percent of the actual value of
32the property for that assessment year that exceeds one hundred
33fifty thousand dollars.
34(iii) For the assessment year beginning January 1, 2026,
35and each assessment year thereafter, an amount equal to eighty
-48-1percent of the actual value of the property for that assessment
2year that exceeds one hundred fifty thousand dollars.
3c. For valuations established on or after January 1, 2013,
4industrial property, excluding properties referred to in
5section 427A.1, subsection 9, shall be assessed at a portion of
6its actual value, as determined in this paragraph “c”.
7(1) For valuations established for the assessment year
8beginning January 1, 2013, the percentage of actual value
9as equalized by the department of revenue as provided in
10section 441.49 at which industrial property shall be assessed
11shall be ninety-five percent. For valuations established
12for the assessment year beginning January 1, 2014, and each
13assessment year thereafter beginning before January 1, 2022,
14the percentage of actual value as equalized by the department
15of revenue as provided in section 441.49 at which industrial
16property shall be assessed shall be ninety percent.
17(2) For valuations established for the assessment year
18beginning January 1, 2022, and each assessment year thereafter,
19the portion of actual value at which each property unit of
20industrial property shall be assessed shall be the sum of the
21following:
22(a) An amount equal to the product of the assessment
23limitation percentage applicable to residential property under
24subsection 4 for that assessment year multiplied by the actual
25value of the property that exceeds zero dollars but does not
26exceed one hundred fifty thousand dollars.
27(b) (i) An For the assessment years beginning January 1,
282022, January 1, 2023, and January 1, 2024, an amount equal
29to ninety percent of the actual value of the property for
30that assessment year that exceeds one hundred fifty thousand
31dollars.
32(ii) For the assessment year beginning January 1, 2025,
33an amount equal to eighty-five percent of the actual value of
34the property for that assessment year that exceeds one hundred
35fifty thousand dollars.
-49- 1(iii) For the assessment year beginning January 1, 2026,
2and each assessment year thereafter, an amount equal to eighty
3percent of the actual value of the property for that assessment
4year that exceeds one hundred fifty thousand dollars.
5d. For valuations established for the assessment year
6beginning January 1, 2019, and each assessment year thereafter,
7the percentages or portions of actual value at which property
8is assessed, as determined under this subsection, shall not be
9applied to the value of wind energy conversion property valued
10under section 427B.26 the construction of which is approved by
11the Iowa utilities board on or after July 1, 2018.
12e. (1) For each fiscal year beginning on or after July 1,
132023, there is appropriated from the general fund of the state
14to the department of revenue the sum of one hundred twenty-five
15million dollars to be used for payments under this paragraph
16calculated as a result of the assessment limitations imposed
17under paragraph “b”, subparagraph (2), subparagraph division
18(a), and paragraph “c”, subparagraph (2), subparagraph division
19(a).
20(2) For fiscal years beginning on or after July 1, 2023,
21each county treasurer shall be paid by the department of
22revenue an amount calculated under subparagraph (4). If an
23amount appropriated for the fiscal year is insufficient to make
24all payments as calculated under subparagraph (4), the director
25of revenue shall prorate the payments to the county treasurers
26and shall notify the county auditors of the pro rata percentage
27on or before September 30.
28(3) On or before July 1 of each fiscal year, the assessor
29shall report to the county auditor that portion of the total
30actual value of all commercial property and industrial property
31in the county that is subject to the assessment limitations
32imposed under paragraph “b”, subparagraph (2), subparagraph
33division (a), and paragraph “c”, subparagraph (2), subparagraph
34division (a), for the assessment year used to calculate the
35taxes due and payable in that fiscal year.
-50- 1(4) On or before September 1 of each fiscal year, the county
2auditor shall prepare a statement, based on the report received
3in subparagraph (3) and information transmitted to the county
4auditor under chapter 434, listing for each taxing district in
5the county:
6(a) The product of the portion of the total actual value
7of all commercial property, industrial property, and property
8valued by the department under chapter 434 in the county
9that is subject to the assessment limitations imposed under
10paragraph “b”, subparagraph (2), subparagraph division (a),
11and paragraph “c”, subparagraph (2), subparagraph division
12(a), for the applicable assessment year used to calculate
13taxes which are due and payable in the applicable fiscal year
14multiplied by the difference, stated as a percentage, between
15ninety percent the percentage under paragraph “b”, subparagraph
16(2), subparagraph division (b), for the applicable assessment
17year and the assessment limitation percentage applicable to
18residential property under subsection 4 for the applicable
19assessment year.
20(b) The tax levy rate per one thousand dollars of assessed
21value for each taxing district for the applicable fiscal year.
22(c) The amount of the payment for each county is equal to
23the amount determined pursuant to subparagraph division (a),
24multiplied by the tax rate specified in subparagraph division
25(b), and then divided by one thousand dollars.
26(5) The county auditor shall certify and forward one copy of
27the statement described in subparagraph (4) to the department
28of revenue not later than September 1 of each fiscal year.
29(6) The amounts determined under this paragraph shall
30be paid by the department to the county treasurers in equal
31installments in September and March of each year. The county
32treasurer shall apportion the payments among the eligible
33taxing districts in the county and the amounts received by each
34taxing authority shall be treated the same as property taxes
35paid.
-51- 1f. For the purposes of this subsection, unless the context
2otherwise requires:
3(1) “Contiguous parcels” means any of the following:
4(a) Parcels that share a common boundary.
5(b) Parcels within the same building or structure
6regardless of whether the parcels share a common boundary.
7(c) Permanent improvements to the land that are situated
8on one or more parcels of land that are assessed and taxed
9separately from the permanent improvements if the parcels of
10land upon which the permanent improvements are situated share
11a common boundary.
12(2) “Parcel” means the same as defined in section 445.1.
13“Parcel” also means that portion of a parcel assigned a
14classification of commercial property or industrial property
15pursuant to section 441.21, subsection 14, paragraph “b”.
16(3) “Property unit” means a parcel or contiguous parcels
17all of which are located within the same county, with the same
18property tax classification, are owned by the same person, and
19are operated by that person for a common use and purpose.
209. Not later than November 1, 1979, and November 1 of each
21subsequent year, the director shall certify to the county
22auditor of each county the percentages of actual value at
23which residential property, agricultural property, commercial
24property, industrial property, property valued by the
25department of revenue pursuant to chapter 434, property valued
26by the department pursuant to chapter 438, and property valued
27by the department of revenue pursuant to chapters 428, 433,
28and 437, and 438 in each assessing jurisdiction in the county
29shall be assessed for taxation, including for assessment years
30beginning on or after January 1, 2022, the percentages used to
31apply the assessment limitations under subsection 5, paragraphs
32“b” and “c”. The county auditor shall proceed to determine the
33assessed values of agricultural property, residential property,
34commercial property, industrial property, property valued by
35the department of revenue pursuant to chapter 434, property
-52-1valued by the department pursuant to chapter 438, and property
2valued by the department of revenue pursuant to chapters 428,
3433, and 437, and 438 by applying such percentages to the
4current actual value of such property, as reported to the
5county auditor by the assessor, and the assessed values so
6determined shall be the taxable values of such properties upon
7which the levy shall be made.
810. The percentages of actual value computed by the
9department of revenue for agricultural property, residential
10property, commercial property, industrial property, property
11valued by the department of revenue pursuant to chapter 434,
12property valued by the department pursuant to chapter 438,
13 and property valued by the department of revenue pursuant to
14chapters 428, 433, and 437, and 438, including for assessment
15years beginning on or after January 1, 2022, the percentages
16used to apply the assessment limitations under subsection 5,
17paragraphs “b” and “c”, and used to determine assessed values of
18those classes of property do not constitute a rule as defined
19in section 17A.2, subsection 11.
20 Sec. 109. EFFECTIVE DATE. This division of this Act takes
21effect July 1, 2024.
22DIVISION VIII
23NATURAL RESOURCES AND OUTDOOR RECREATION TRUST FUND
24 Sec. 110. Section 2.45, Code 2023, is amended by adding the
25following new subsection:
26 NEW SUBSECTION. 6. a. The legislative natural resources
27and outdoor recreation trust fund review committee which
28shall be composed of ten members of the general assembly,
29consisting of five members from each chamber, to be appointed
30by the legislative council. In appointing the five members
31of each chamber to the committee, the council shall appoint
32three members from the majority party and two members from the
33minority party.
34b. The legislative natural resources and outdoor recreation
35trust fund review committee shall have the powers and duties
-53-1described in section 2.49.
2c. This subsection is repealed December 31, 2051.
3 Sec. 111. NEW SECTION. 2.49 Legislative natural resources
4and outdoor recreation trust fund review committee.
51. The legislative natural resources and outdoor recreation
6trust fund review committee shall meet during the legislative
7interim in calendar years 2030, 2040, and 2050. The committee
8shall consider the most effective ways to manage trust fund
9moneys to further the purpose of Article VII, section 10, of
10the Constitution of the State of Iowa. As part of its duties,
11the committee may consider any of the following:
12a. The administration of the trust fund, trust accounts, and
13designated funds as provided in chapter 461.
14b. The effectiveness of initiatives supported by trust fund
15moneys as provided in chapter 461.
162. The committee shall report to the legislative council
17the results of its considerations, which may include
18recommendations and proposed legislation for consideration
19during the next session of the general assembly.
203. This section is repealed December 31, 2051.
21 Sec. 112. Section 8.57, subsection 5, paragraph f,
22subparagraph (1), subparagraph division (c), Code 2023, is
23amended by striking the subparagraph division.
24 Sec. 113. Section 8.57, subsection 5, paragraph f,
25subparagraph (1), subparagraph division (f), Code 2023, is
26amended to read as follows:
27(f) For the fiscal year beginning July 1, 2018, and for
28each fiscal year thereafter, the total moneys in excess of the
29moneys deposited under this paragraph “f” in the revenue bonds
30debt service fund, the revenue bonds federal subsidy holdback
31fund, the vision Iowa fund, the water quality infrastructure
32fund, the Iowa skilled worker and job creation fund, and the
33general fund of the state shall be deposited in the rebuild
34Iowa infrastructure fund and shall be used as provided in this
35section, notwithstanding section 8.60.
-54-1 Sec. 114. Section 8.57B, subsection 1, Code 2023, is amended
2to read as follows:
31. a. A water quality infrastructure fund is created within
4the division of soil conservation and water quality of the
5department of agriculture and land stewardship.
6b. The fund shall consist of moneys deposited in the
7fund pursuant to section 8.57, subsection 5, paragraph “f”,
8subparagraph (1), subparagraph division (c), moneys all of the
9following:
10(1) (a) Moneystransferred to the fund pursuant to section
11423G.6, and 461.33.
12(b) This subparagraph (1) is repealed December 31, 2051.
13(2) Moneys transferred orappropriations made to the fund
14and transfers of interest, earnings, and moneys from other
15funds as provided by law.
16 Sec. 115. Section 16.134A, subsection 2, paragraph a,
17subparagraphs (1) and (2), Code 2023, are amended to read as
18follows:
19(1) Moneys transferred to the fund pursuant to section
20423G.6 461.34.
21(2) This paragraph “a” is repealed on January 1, 2040
22 December 31, 2051.
23 Sec. 116. Section 307.24, subsection 5, paragraphs a, b, c,
24d, e, f, g, and h, Code 2023, are amended to read as follows:
25a. For department of natural resources facility roads,
26forty-five and one-half percent.
27b. a. For department of human services facility roads, six
28and one-half twelve percent.
29c. b. For department of corrections facility roads, five
30and one-half ten percent.
31d. c. For national guard facility roads, four seven and
32one-third percent.
33e. d. For state board of regents facility roads, thirty
34 fifty-five percent.
35f. e. For state fair board facility roads, two three and
-55-1two-thirds percent.
2g. f. For department of administrative services facility
3roads, one-half one percent.
4h. g. For department of education facility roads, six
5 eleven percent.
6 Sec. 117. Section 455A.17, Code 2023, is amended by striking
7the section and inserting in lieu thereof the following:
8455A.17 Regional meetings.
91. Beginning in calendar year 2024, and every four
10calendar years thereafter, the department shall arrange
11and conduct regional meetings to identify opportunities for
12regional resource enhancement and protection, and to review
13and recommend changes in resource enhancement and protection
14policies, programs, and funding. The department shall provide
15outreach and educational services to those attending, which
16shall include the distribution of information regarding
17resource enhancement and protection expenditures. The
18department shall promote attendance of interested persons for
19each regional meeting.
202. The expenses of the department in making the arrangements
21for and conducting regional meetings and providing outreach and
22educational services shall be paid from moneys credited to the
23administration fund created in section 456A.17.
24 Sec. 118. Section 455A.18, subsection 1, Code 2023, is
25amended to read as follows:
261. a. An Iowa resources enhancement and protection fund is
27created in the office of the treasurer of state.
28b. The fund consists of all revenues of the following:
29(1) (a) Moneys allocated from the natural resources and
30outdoor recreation trust fund as provided in section 461.35.
31(b) This subparagraph (1) is repealed December 31, 2051.
32(2) Revenuesand all other moneys lawfully credited or
33transferred to the fund. The director shall certify monthly
34the portions of the fund that are allocated to the various
35accounts as provided under section 455A.19. The director shall
-56-1certify before the twentieth of each month the portions of
2the fund resulting from the previous month’s receipts to be
3allocated to the various accounts.
4 Sec. 119. Section 455A.18, subsection 3, paragraph a, Code
52023, is amended by striking the paragraph.
6 Sec. 120. Section 455A.18, subsection 3, paragraph b, Code
72023, is amended to read as follows:
8b. Section 8.33 does not apply to moneys appropriated under
9this subsection credited to the fund.
10 Sec. 121. Section 461.2, Code 2023, is amended to read as
11follows:
12461.2 Definitions.
13As used in this chapter, unless the context otherwise
14requires:
151. “Authority” means the economic development authority
16created in section 15.105.
172. “Department” “Custodial department” means the department
18of agriculture and land stewardship, the department of
19management, the department of natural resources, or the
20department of transportation.
213. “Designated fund” means the water quality infrastructure
22fund created in section 8.57B, the water quality financial
23assistance fund created in section 16.134A, or the Iowa
24resources enhancement and protection fund created in section
25455A.18.
262. 4. “Fiscal year” means the state fiscal year effective
27as provided in section 3.12.
283. 5. “Initiative” includes a program, project, practice,
29strategy, or plan established or administered by an agency that
30furthers, or under the supervision or oversight of, a custodial
31department or the Iowa finance authority, if the initiative is
32supported in whole or in part by trust fund moneys to further a
33constitutional purpose as provided in section 461.3.
346. “Iowa nutrient reduction strategy” means the same as
35defined in section 455B.171.
-57- 17. “Nonpoint source” means a source of pollution other than
2a point source.
38. “Point source” means the same as defined in section
4455B.171.
59. “Public use area” means a park, preserve, recreation
6area, forest, water body, or a land or water trail owned or
7managed by the state or a political subdivision of the state.
84. 10. “Recreational purpose” includes means only hunting,;
9 trapping,; angling,; horseback riding,; swimming,; boating,;
10 camping,; picnicking,; hiking,; biking; recreational shooting;
11archery; using land or water trails; bird watching,; nature
12study,; water skiing,; snowmobiling;, other summer and winter
13sports, and viewing or enjoying historical, archaeological,
14scenic, or scientific sites.
1511. “Trust account” means the natural resources trust
16account created in section 461.32, the soil conservation and
17nonpoint source water protection trust account created in
18section 461.33, the watershed protection trust account created
19in section 461.34, the local conservation partnership trust
20account created in section 461.36, the water and land trails
21trust account created in section 461.37, or the lake and stream
22restoration trust account created in section 461.38.
235. 12. “Trust fund” means the natural resources and outdoor
24recreation trust fund created in section 461.31.
256. 13. “Trust fund moneys” means moneys originating from
26 credited to the natural resources and outdoor recreation trust
27fund or moneys allocated from the trust fund, including but not
28limited to moneys allocated to a trust account or allocated or
29transferred to a designated fund.
3014. “Water trail” means a point-to-point travel system on a
31navigable water body capable of supporting a floating vessel
32capable of carrying one or more persons on a recommended route
33connecting the points.
34 Sec. 122. Section 461.3, Code 2023, is amended to read as
35follows:
-58- 1461.3 Constitutional purpose, and implementation, and
2revenue.
31. This chapter is created for the constitutional purposes
4of protecting and enhancing water quality and natural areas
5in this state, including parks, trails, and fish and wildlife
6habitat, and conserving agricultural soils in this state.
72. This chapter is intended to implement Article VII,
8section 10, of the Constitution of the State of Iowa by
9establishing the natural resources and outdoor recreation
10trust fund, accounts in the including trust fund accounts,
11and appropriating or allocating trust fund moneys to support
12initiatives specified in subchapter IV. This chapter shall not
13be construed to require the state to appropriate, allocate,
14or transfer other moneys to support those initiatives or
15constitutional purposes.
16 Sec. 123. Section 461.11, subsection 2, Code 2023, is
17amended to read as follows:
182. The heads of each department receiving trust fund moneys
19 the custodial departments and the director of the authority
20 shall regularly meet and whenever practicable collaborate in
21decision making including by adopting rules providing for
22the administration of the trust fund and trust accounts,
23establishing funding priorities, and determining when it is
24beneficial to provide joint funding of initiatives.
25 Sec. 124. NEW SECTION. 461.20 Information regarding trust
26fund moneys.
271. Each year the department of revenue shall calculate
28an estimate of the total revenue to be transferred to the
29trust fund during the following fiscal year as required
30pursuant to section 423.2A. Not later than May 1 of each
31year, the department of revenue shall submit the estimate to
32each custodial department, the authority, and the legislative
33services agency.
342. A custodial department shall at least annually notify the
35legislative services agency of transfers of trust fund moneys
-59-1from a trust account to another trust account or designated
2fund as authorized in this chapter.
3 Sec. 125. Section 461.21, Code 2023, is amended to read as
4follows:
5461.21 Audit.
61. The auditor of state or a certified public accounting
7firm appointed by the auditor of state shall conduct an annual
8 audit of the trust fund and all trust accounts and transactions
9of the trust fund and trust accounts in the same manner as
10provided for departments pursuant to chapter 11, subchapter I.
112. The auditor of state or the certified public accounting
12firm appointed by the auditor as provided in subsection 1
13shall be paid from trust fund moneys without reducing the
14percentage of trust fund moneys distributed allocated to the
15Iowa resources enhancement and protection fund or any one a
16trust account established or designated fund pursuant to this
17chapter subchapter IV.
18 Sec. 126. Section 461.22, Code 2023, is amended to read as
19follows:
20461.22 Report Trust fund report.
21The three departments department of management shall jointly
22prepare and submit to the governor and the general assembly not
23later than January 15 of each year a complete trust fund report
24in an electronic format detailing all of the following:
251. The receipts and expenditures of the trust fund and its
26trust accounts, a summary of initiatives supported by trust
27fund moneys, the results of those expenditures, any performance
28goals or measurements, and plans for future short-term or
29long-term expenditures.
302. Recommendations An evaluation of the use of trust fund
31moneys to further progress in achieving the goals of the Iowa
32nutrient reduction strategy as prepared by the department of
33agriculture and land stewardship, the department of natural
34resources, and the college of agriculture and life sciences
35of the Iowa state university of science and technology. The
-60-1evaluation shall be based on the latest credible findings and
2recommendations recognized by those entities. The evaluation
3may include recommendations to the governor and general
4assembly, including legislation proposed by one or more of the
5departments entities.
6 Sec. 127. Section 461.23, Code 2023, is amended to read as
7follows:
8461.23 Rules.
9The department of revenue, the department of agriculture and
10land stewardship, the department of management, the department
11of natural resources, and the department of transportation, the
12Iowa finance authority, and the economic development authority
13 shall adopt rules separately or jointly as necessary in order
14to implement and administer this chapter.
15 Sec. 128. Section 461.24, Code 2023, is amended by striking
16the section and inserting in lieu thereof the following:
17461.24 Public listing.
18The department of management shall publish and maintain a
19public listing of moneys credited to and allocated from the
20trust fund, trust fund moneys allocated or transferred from
21trust accounts, and trust fund moneys allocated or transferred
22to designated funds to support initiatives. This section does
23not require the disclosure of information that is confidential
24as provided by rules adopted pursuant to section 461.23.
25 Sec. 129. NEW SECTION. 461.25 Use of trust fund moneys.
261. A custodial department shall not appropriate, allocate,
27or transfer trust fund moneys except as provided in this
28chapter. However, this subsection shall not be construed to
29limit a custodial department from using trust fund moneys with
30another person, including a custodial department, when engaging
31in a joint initiative as authorized by law.
322. During any fiscal year, a custodial department shall not
33use more than five percent of trust fund moneys allocated to
34a trust account to pay for expenses incurred in administering
35trust fund moneys allocated to that trust account.
-61- 13. In administering the use of trust fund moneys allocated
2to a trust account, a custodial department shall provide a
3higher priority to supporting initiatives that further goals of
4the Iowa nutrient reduction strategy.
54. A custodial department shall administer the use of
6trust fund moneys to support an initiative having primarily
7a recreational purpose only if such use is in cooperation
8with the authority. The authority shall review, score, and
9rank applications to support such initiatives as part of a
10competitive evaluation process. The scoring criteria must
11further the economic development policy of the state as
12provided in chapter 15.
135. When making a determination to support competing
14proposed initiatives relating to a public use area that
15benefits a locality, a custodial department or the authority
16shall provide a higher priority to supporting an initiative to
17improve an existing public use area.
186. When making a determination to support a proposed
19initiative to establish, improve, or expand a land trail,
20the proposal shall not be approved unless the sponsor of the
21proposal demonstrates to the custodial department or other
22entity making the funding decision how the trail is to be
23maintained by other sources of revenue.
247. In administering the use of trust fund moneys allocated
25to a trust account to support an initiative relating to
26the management of land, this chapter does not do any of the
27following:
28a. Prohibit the farming of the land in a manner that is
29consistent with the Iowa nutrient reduction strategy.
30b. Require a separation distance between an animal feeding
31operation and a public use area that is more restrictive than
32if the land were not managed pursuant to the initiative.
338. Trust fund moneys shall not be used to support any of the
34following:
35a. An initiative that establishes, improves, or expands a
-62-1single or multipurpose athletic field, baseball or softball
2diamond, tennis court, golf course, swimming pool, or other
3group or organized sport facility.
4b. The taking of property by exercising the power of eminent
5domain, including by acquiring property as provided in chapters
66A and 6B.
7 Sec. 130. Section 461.31, Code 2023, is amended to read as
8follows:
9461.31 Natural resources and outdoor recreation trust fund
10— creation.
111. A natural resources and outdoor recreation trust fund
12is created within the state treasury. The trust fund shall be
13administered by the department of management.
142. a. The trust fund shall be composed comprised of moneys
15 all of the following:
16(1) Moneys transferred to the trust fund pursuant to section
17423.2A.
18(2) Other moneysrequired to be credited to the trust
19fund by law and moneys accepted by a custodial department for
20placement in an account established in this subchapter and the
21trust fund from any source.
22b. Trust fund moneys are exclusively appropriated by law
23to carry out the constitutional purposes provided described in
24section 461.3.
25c. Trust fund moneys shall supplement and not replace
26moneys appropriated by the general assembly to support the
27constitutional purposes provided in section 461.3.
28d. Trust fund moneys shall only be used to support voluntary
29initiatives and shall not be used for regulatory efforts,
30enforcement actions, or litigation.
313. In administering a trust fund account, a custodial
32 department may contract, sue and be sued, and authorize payment
33for costs, fees, commissions, and other reasonable expenses
34from the trust account. However, a custodial department shall
35not in any manner directly or indirectly pledge the credit of
-63-1this state.
24. a. Except as provided in paragraph “b”, the treasurer
3of state shall, each month as directed by the department of
4management, allocate all trust fund moneys that have been
5credited to the trust fund, including moneys transferred to the
6trust fund as provided in section 423.2A, to each trust account
7and designated fund as provided in this subchapter.
8b. Notwithstanding sections 461.32 through 461.38, for the
9fiscal year beginning July 1, 2025, and for each subsequent
10fiscal year, only that amount as authorized by an Act of
11the general assembly shall be allocated from the trust fund
12to a trust account or designated fund as provided in this
13subchapter. However, if for a fiscal year no Act of the
14general assembly authorizes trust fund moneys to be allocated
15from the trust fund, the trust fund moneys shall be allocated
16from the trust fund to the trust accounts and designated funds
17as provided in this subchapter by operation of law.
185. a. Notwithstanding section 8.33, any unexpended balance
19in the trust fund or in an a trust account created within the
20trust fund at the end of each fiscal year shall be retained in
21the trust fund or the respective trust account.
22b. Notwithstanding section 12C.7, subsection 2, interest or
23earnings on investments or time deposits of the moneys in the
24trust fund and its respective trust accounts shall be credited
25to the trust fund and its respective trust accounts.
26c. The recapture of awards originating from an a trust
27 account and other repayments to an a trust account shall be
28retained in that trust account.
29 Sec. 131. Section 461.32, Code 2023, is amended to read as
30follows:
31461.32 Natural resources trust account — allocations.
321. A natural resources trust account is created in the trust
33fund. Twenty-three The trust account shall be administered by
34the department of natural resources.
352. Eighteenpercent of the moneys credited to the trust fund
-64-1shall be allocated to the trust account.
22. 3. The trust account shall be used by the department of
3natural resources to support all of the following initiatives:
4a. The establishment, restoration, or enhancement, and
5management of state parks, state preserves, state forests,
6wildlife areas, wildlife habitats, native prairies, and
7wetlands.
8(1) A higher priority shall be provided to supporting
9initiatives for the maintenance, preservation, or restoration
10of land and a lower priority shall be provided to supporting
11initiatives for the purchase or acquisition of land.
12(2) The department shall utilize an index that includes a
13comprehensive assessment mechanism to produce a statistically
14verifiable basis for determining whether to approve or
15disapprove the purchase or acquisition of the land. The
16department shall establish index criteria that justifies the
17land’s removal from private ownership and use.
18b. The construction or improvement of facilities located on
19land owned or managed by the department.
20b. c. Wildlife diversity.
21c. d. Recreational purposes.
22d. e. Technical assistance and financial incentives
23provided to private landowners to promote the management of
24forests, fisheries, recreational areas, wetlands, and wildlife.
25e. f. The improvement of water trails, rivers, and streams.
26f. g. Education and outreach that provide instruction
27regarding natural history and the outdoors. The subjects
28of such instruction may relate to opportunities involving a
29 recreational purposes purpose, outdoor safety, and or ethics.
30h. The construction, maintenance, or expansion of roads on
31state-owned land under the jurisdiction of the department of
32natural resources.
333. The department of natural resources shall to every extent
34possible consider its comprehensive plan provided in section
35456A.31 when making funding decisions.
-65-1 Sec. 132. Section 461.33, Code 2023, is amended to read as
2follows:
3461.33 Soil conservation and nonpoint source water protection
4trust account — allocations.
51. A soil conservation and nonpoint source water protection
6trust account is created in the trust fund. Twenty The trust
7account shall be administered by the department of agriculture
8and land stewardship.
92. Thirty-fourpercent of the moneys credited to the trust
10fund shall be allocated to the trust account.
113. Forty-seven percent of trust fund moneys allocated to
12the trust account shall first be transferred as directed by the
13department to any or all of the following:
14a. The water quality infrastructure fund created in section
158.57B to support water quality agriculture infrastructure
16programs created in section 466B.43 in order to reduce nutrient
17loads from nonpoint sources.
18b. The water quality financial assistance fund created
19in section 16.134A to support the water quality urban
20infrastructure program created in section 466B.44.
214. Each fiscal year, at least ten percent of the moneys
22allocated to the account shall be used to support the planting
23and maintenance of cover crops as provided in section 161A.73.
242. 5. a. The account shall be used by the department of
25agriculture and land stewardship remaining trust fund moneys
26allocated to the trust account shall be used by the department
27 to support all of the following initiatives:
28a. (1) Soil conservation and watershed protection,
29including by supporting the department’s division of
30soil conservation and water quality within the department
31of agriculture and land stewardship and soil and water
32conservation district commissioners. The department and
33commissioners may provide for the installation establishment
34 of conservation practices, management practices to control
35soil erosion on row-cropped land, and watershed protection
-66-1improvements as provided in chapters 161A, 161C, 461A, and 466,
2and 466B.
3b. (2) The conservation of highly erodible land. The
4department of agriculture and land stewardship may execute
5contracts with private landowners who agree to reserve such
6land only for uses that prevent erosion in excess of the
7applicable soil loss limits as established in section 161A.44.
8c. (3) Soil conservation or crop management practices
9used on land producing biomass for biorefineries, including
10cellulosic ethanol production.
113. b. The department of agriculture and land stewardship
12 may use unencumbered or unobligated trust fund moneys allocated
13to the trust account to provide financial incentives or
14technical assistance to landowners.
156. During a fiscal year, the department may transfer
16unencumbered or unobligated trust fund moneys allocated to
17the trust account for use by the department as is provided in
18subsection 5 to any of the following:
19a. The water quality infrastructure fund created in section
208.57B to support water quality agriculture infrastructure
21programs created in section 466B.43 in order to reduce nutrient
22loads from nonpoint sources.
23b. The water quality financial assistance fund created
24in section 16.134A to support the water quality urban
25infrastructure program created in section 466B.44.
26 Sec. 133. Section 461.34, Code 2023, is amended to read as
27follows:
28461.34 Watershed protection trust account — allocations.
291. A watershed protection trust account is created in the
30trust fund. Fourteen The trust account shall be administered
31by the department of natural resources.
322. Fifteenpercent of the moneys credited to the trust fund
33shall be allocated to the trust account.
343. Forty-seven percent of trust fund moneys allocated
35to the trust account shall first be transferred to the water
-67-1quality financial assistance fund created in section 16.134A
2for appropriation as provided in that section.
32. 4. The account Of the remaining trust fund moneys
4allocated to the trust account, fifty percent shall be used
5cooperatively distributed for use by the department of
6natural resources and the department of agriculture and land
7stewardship to support all of the following initiatives:
8a. Water water qualityresource projects administered by
9the department of natural resources to preserve watersheds,
10including but not limited to all of the following:
11(1) a. Projects to protect, restore, or enhance water
12quality in the state through the provision of financial
13assistance to communities for impairment-based, locally
14directed watershed projects. The department may use the
15account trust fund moneys to support the water resource
16restoration sponsor program as provided in section 455B.199.
17(2) b. Regional and community watershed assessment,
18planning, and prioritization efforts, including as provided in
19chapter 466B.
20c. Water quality protection programs provided in section
21466.7 that relate to any of the following:
22(1) The administration of geographic information systems
23for use in developing, monitoring, and displaying local
24watershed information.
25(2) An activity to support the collection and analysis of
26water quality monitoring.
27(3) Floodplain permitting.
28(4) Flood protection education to provide information to
29local officials regarding floodplain management.
30b. 5. Surface Of the remaining trust fund moneys allocated
31to the trust account, fifty percent shall be distributed for
32use by the department of agriculture and land stewardship
33to support surface water protection projects and practices
34administered by the department of agriculture and land
35stewardship or the department of natural resources, as
-68-1described in the Iowa nutrient reduction strategy including but
2not limited to the installation of permanent vegetation cover,
3filter strips, grass waterways, edge-of-field practices, and
4riparian forest buffers; dredging; and bank stabilization. The
5departments of agriculture and land stewardship and natural
6resources department may use the account trust fund moneys
7 to support the conservation buffer strip program provided in
8section 466.4 and the conservation reserve enhancement program
9as provided in section 466.5.
103. 6. The departments’ A decision by a department to
11prioritize initiatives may be based on the priority list of
12watersheds provided in section 456A.33A.
137. During a fiscal year, the department of natural
14resources or the department of agriculture and land stewardship
15may transfer unencumbered or unobligated trust fund moneys
16distributed to the custodial department pursuant to subsection
174 or 5 to the water quality financial assistance fund created
18in section 16.134A.
19 Sec. 134. Section 461.35, Code 2023, is amended to read as
20follows:
21461.35 Iowa resources enhancement and protection fund —
22allocation.
23Thirteen Ten percent of the moneys credited to the trust
24fund shall be allocated to the Iowa resources enhancement
25and protection fund created in section 455A.18 for further
26allocation as provided in section 455A.19.
27 Sec. 135. Section 461.36, Code 2023, is amended by striking
28the section and inserting in lieu thereof the following:
29461.36 Local conservation partnership trust account —
30allocations.
311. A local conservation partnership trust account is
32created in the trust fund. The trust account shall be
33administered by the department of natural resources.
342. Nine percent of the moneys credited to the trust fund
35shall be allocated to the trust account.
-69- 13. The department shall allocate the trust fund moneys
2credited to the account to local communities participating
3in the local conservation partnership program as provided in
4section 461.36A.
5 Sec. 136. NEW SECTION. 461.36A Local conservation
6partnership program.
71. As used in this section, unless the context otherwise
8requires:
9a. “Department” means the department of natural resources.
10b. “Local community” includes a political subdivision or
11a watershed management authority created pursuant to section
12466B.22.
132. The department shall establish and administer a local
14conservation partnership program to provide financing to local
15communities to do any of the following:
16a. Maintain and improve parks, preserves, wildlife areas,
17wildlife habitats, native prairies, forests, or wetlands.
18b. Promote wildlife diversity.
19c. Further a recreational purpose.
20d. Improve rivers and streams.
21e. Sponsor education and outreach programs and projects that
22provide instruction regarding natural history and the outdoors.
23The subjects of such instruction may relate to opportunities
24involving a recreational purpose, outdoor safety, or ethics.
25The programs and projects may assist Iowa students studying in
26fields of science, technology, engineering, and mathematics.
27f. Further any other purpose described in section 350.1.
283. As part of a local conservation partnership under the
29program, two or more local communities may enter into chapter
3028E agreements, and a local community may cooperate with
31the federal government or a nongovernmental organization.
32A nongovernmental organization shall not be eligible to
33participate in a local community partnership under the program
34unless the nongovernmental organization submits an application
35in association with a political subdivision or county
-70-1conservation board and enters into a chapter 28E agreement with
2the political subdivision or county conservation board.
34. a. A local community is not eligible to receive moneys
4from the department under the program to support a local
5conservation partnership, unless the local community finances
6a minimum percentage of the estimated or total cost of the
7initiative, whichever is less.
8b. The minimum amount of the cost-share contribution by a
9local community, as described in paragraph “a”, shall be as
10follows:
11(1) Ten percent for a local community located in a county
12having a population of fifteen thousand or less.
13(2) Twenty-five percent for a local community located in a
14county having a population of more than fifteen thousand but
15less than one hundred thousand.
16(3) Seventy-five percent for a local community located in a
17county having a population of one hundred thousand or more.
18 Sec. 137. Section 461.37, Code 2023, is amended to read as
19follows:
20461.37 Trails Water and land trails trust account —
21allocations.
221. A water and land trails trust account is created in the
23trust fund. Ten The trust account shall be administered by the
24department of transportation.
252. Fourpercent of the moneys credited to the trust fund
26shall be allocated to the trust account.
272. 3. The Of the amount of trust fund moneys allocated
28to the trust account, fifty percent shall be distributed for
29use by the department of transportation and the department of
30natural resources shall use moneys in the account to support
31initiatives related to the design, establishment, maintenance,
32improvement, and expansion of land trails.
333. 4. The Of the amount of trust fund moneys allocated to
34the trust account, fifty percent shall be distributed for use
35by the department of natural resources may use the account to
-71-1support the design, establishment, maintenance, improvement,
2and expansion of water trails. The department shall provide
3priority to stream restoration.
45. a. During a fiscal year, and pursuant to an agreement
5between the department of transportation and the department
6of natural resources, either custodial department that is
7distributed trust fund moneys for use under this section may
8transfer unencumbered or unobligated trust fund moneys to the
9other custodial department for use by the other custodial
10department as provided in this section.
11b. During a fiscal year, and pursuant to an agreement
12between the department of transportation and the department
13of natural resources, the department of transportation
14may transfer unencumbered or unobligated trust fund moneys
15allocated to the trust account and distributed for use by
16the department of transportation to another trust account
17administered by the department of natural resources for use by
18the department of natural resources.
19 Sec. 138. Section 461.38, Code 2023, is amended to read as
20follows:
21461.38 Lake and stream restoration trust account —
22allocations.
231. A lake and stream restoration trust account is created in
24the trust fund. Seven The trust account shall be administered
25by the department of natural resources.
262. Tenpercent of the moneys credited to the trust fund
27shall be allocated to the trust account.
282. 3. The department of natural resources shall use moneys
29in allocated to the trust account to support public all of the
30following:
31a. Publiclake restoration initiatives as follows:
32a. (1) An initiative shall account for a lake’s
33recreational purpose, and provide for environmental, aesthetic,
34ecological, and social value. It must improve water quality
35 further a goal of the Iowa nutrient reduction strategy.
-72- 1b. (2) The department’s A decision by the department to
2prioritize an initiative may be based on the department’s lake
3restoration plan and report as provided in section 456A.33B and
4the Iowa nutrient reduction strategy.
5b. The stabilization and restoration of stream banks.
6 Sec. 139. NEW SECTION. 461.51 Repeal.
7This chapter is repealed December 31, 2051.
8 Sec. 140. REPEAL. Section 455A.20, Code 2023, is repealed.
9 Sec. 141. CODE EDITOR DIRECTIVE.
101. The Code editor is directed to make the following
11transfers:
12a. Section 461.36A, as enacted in this division of this Act,
13to section 455A.31.
14b. Section 461.35, as amended in this division of this Act,
15to section 461.41.
162. The Code editor shall correct internal references in the
17Code and in any enacted legislation as necessary due to the
18enactment of this section.
19 Sec. 142. EFFECTIVE DATE. This division of this Act takes
20effect January 1, 2025.
21DIVISION IX
22CHARITABLE CONSERVATION CONTRIBUTION TAX CREDIT
23 Sec. 143. Section 2.48, subsection 3, paragraph e,
24subparagraph (6), Code 2023, is amended by striking the
25subparagraph.
26 Sec. 144. Section 422.11W, Code 2023, is amended by adding
27the following new subsection:
28 NEW SUBSECTION. 5. Commencing with tax years beginning
29on or after January 1, 2025, a charitable conservation
30contribution tax credit shall not be claimed against taxes as
31provided in this section, except for tax credits claimed for
32qualified real property interests conveyed prior to January 1,
332025.
34 Sec. 145. Section 422.33, subsection 25, Code 2023, is
35amended by striking the subsection and inserting in lieu
-73-1thereof the following:
225. The taxes imposed under this subchapter shall be reduced
3by a charitable conservation contribution tax credit as allowed
4under section 422.11W for each tax year the taxpayer has
5credit, in excess of tax liability, for qualified real property
6interests conveyed prior to January 1, 2025.
7 Sec. 146. PRESERVATION OF EXISTING RIGHTS. This division
8of this Act is not intended to and shall not limit, modify, or
9otherwise adversely affect any amount of tax credit issued,
10awarded, or allowed prior to January 1, 2025, nor shall it
11limit, modify, or otherwise adversely affect a taxpayer’s right
12to claim or redeem a tax credit issued, awarded, or allowed
13prior to January 1, 2025, including but not limited to any tax
14credit carryforward amount.
15 Sec. 147. EFFECTIVE DATE. This division of this Act takes
16effect January 1, 2025.
17 Sec. 148. APPLICABILITY. This division of this Act applies
18to tax years beginning on or after January 1, 2025.
19DIVISION X
20Property tax benefits and incentives
21 Sec. 149. NEW SECTION. 404.3C Assessment agreements —
22commercial property.
231. For revitalization areas established under this chapter
24on or after the effective date of this division of this Act
25and for first-year exemption applications for property located
26in a revitalization area in existence on the effective date
27of this division of this Act filed on or after the effective
28date of this division of this Act, commercial property shall
29not receive a tax exemption under this chapter unless the city
30or county, as applicable, and the owner of the qualified real
31estate enter into a written assessment agreement specifying a
32minimum actual value until a specified termination date for the
33duration of the exemption period.
342. a. The assessment agreement shall be presented to the
35appropriate assessor. The assessor shall review the plans and
-74-1specifications for the improvements to be made to the property
2and if the minimum actual value contained in the assessment
3agreement appears to be reasonable, the assessor shall execute
4the following certification upon the agreement:
5 The undersigned assessor, being legally responsible for the
6assessment of the above described property upon completion of
7the improvements to be made on it, certifies that the actual
8value assigned to that land and improvements upon completion
9shall not be less than $.........
10b. The assessment agreement with the certification of
11the assessor and a copy of this subsection shall be filed in
12the office of the county recorder of the county where the
13property is located. Upon completion of the improvements,
14the assessor shall value the property as required by law,
15except that the actual value shall not be less than the minimum
16actual value contained in the assessment agreement. This
17subsection does not prohibit the assessor from assigning a
18higher actual value to the property or prohibit the owner
19from seeking administrative or legal remedies to reduce the
20actual value assigned except that the actual value shall not
21be reduced below the minimum actual value contained in the
22assessment agreement. An assessor, county auditor, board of
23review, director of revenue, or court of this state shall not
24reduce or order the reduction of the actual value below the
25minimum actual value in the agreement during the term of the
26agreement regardless of the actual value which may result from
27the incomplete construction of improvements, destruction or
28diminution by any cause, insured or uninsured, except in the
29case of acquisition or reacquisition of the property by a
30public entity. Recording of an assessment agreement complying
31with this subsection constitutes notice of the assessment
32agreement to a subsequent purchaser or encumbrancer of the land
33or any part of it, whether voluntary or involuntary, and is
34binding upon a subsequent purchaser or encumbrancer.
35 Sec. 150. NEW SECTION. 404.3D Exemptions for residential
-75-1property.
2For revitalization areas established under this chapter on
3or after the effective date of this division of this Act and
4for first-year exemption applications for property located in a
5revitalization area in existence on the effective date of this
6division of this Act filed on or after the effective date of
7this division of this Act, an exemption otherwise authorized
8under this chapter shall not be authorized for or approved by a
9city or county, as applicable, for property that is residential
10property.
11 Sec. 151. EFFECTIVE DATE. This division of this Act takes
12effect July 1, 2024.
13DIVISION XI
14TAX INCREMENT FINANCING
15 Sec. 152. Section 403.19, subsection 2, paragraph a, Code
162023, is amended to read as follows:
17a. That portion of the taxes each year in excess of such
18amount shall be allocated to and when collected be paid into
19a special fund of the municipality to pay the principal of
20and interest on loans, moneys advanced to, or indebtedness,
21whether funded, refunded, assumed, or otherwise, including
22bonds issued under the authority of section 403.9, subsection
231, incurred by the municipality to finance or refinance, in
24whole or in part, an urban renewal project within the area,
25and to provide assistance for low and moderate income family
26housing as provided in section 403.22. However, except
27as provided in paragraph “b”, taxes for the regular and
28voter-approved physical plant and equipment levy of a school
29district imposed pursuant to section 298.2 and taxes for the
30instructional support program of a school district imposed
31pursuant to section 257.19, taxes for the payment of bonds
32and interest of each taxing district, and taxes imposed under
33section 346.27, subsection 22, related to joint county-city
34buildings shall be collected against all taxable property
35within the taxing district without limitation by the provisions
-76-1of this subsection. Additionally, for property taxes due and
2payable in fiscal years beginning on or after July 1, 2025,
3if the portion of the urban renewal area that is subject to a
4division of revenue under this section contains wind energy
5conversion property that is subject to special valuation under
6section 427B.26, foundation property taxes of a school district
7imposed under section 257.3 shall be collected against all
8taxable property within that portion of the urban renewal area
9without limitation by the provisions of this subsection and
10when collected be paid into the fund of the school district
11into which all other property taxes are paid.
12DIVISION XII
13transit funding
14 Sec. 153. Section 364.2, subsection 4, paragraph f,
15subparagraph (1), subparagraph division (b), Code 2023, is
16amended to read as follows:
17(b) For franchise fees assessed and collected during fiscal
18years beginning on or after July 1, 2013 2024, but before
19July 1, 2030, by a city that is the subject of a judgment,
20court-approved settlement, or court-approved compromise
21providing for payment of restitution, a refund, or a return
22described in section 384.3A, subsection 3, paragraph “j” with
23a population exceeding two hundred thousand, the rate of the
24franchise fee shall not exceed seven and one-half percent
25of gross revenues generated from sales of the franchisee in
26the city, and franchise fee amounts assessed and collected
27during such fiscal years in excess of five percent of gross
28revenues generated from sales shall be used solely for the
29purpose specified in section 384.3A, subsection 3, paragraph
30“j”. A city may assess and collect a franchise fee in excess
31of five percent of gross revenues generated from the sales
32of the franchisee pursuant to this subparagraph division (b)
33for a period not to exceed seven consecutive fiscal years
34once the franchise fee is first imposed at a rate in excess
35of five percent. An ordinance increasing the franchise fee
-77-1rate to greater than five percent pursuant to this subparagraph
2division (b) shall not become effective unless approved at
3an election. After passage of the ordinance, the council
4shall submit the proposal at a special election held on a date
5specified in section 39.2, subsection 4, paragraph “b”. If a
6majority of those voting on the proposal approves the proposal,
7the city may proceed as proposed. The complete text of the
8ordinance shall be included on the ballot and the full text
9of the ordinance posted for the voters pursuant to section
1052.25. All absentee voters shall receive the full text of the
11ordinance along with the absentee ballot. This subparagraph
12division (b) is repealed July 1, 2030.
13 Sec. 154. Section 384.3A, subsection 3, paragraph j, Code
142023, is amended to read as follows:
15j. For franchise fees assessed and collected by a city in
16excess of five percent of gross revenues generated from sales
17of the franchisee within the city pursuant to section 364.2,
18subsection 4, paragraph “f”, subparagraph (1), subparagraph
19division (b), during fiscal years beginning on or after July 1,
202013 2024, but before July 1, 2030, the adjustment, renewal,
21or extension of any part or all of the legal indebtedness of
22a city, whether evidenced by bonds, warrants, court-approved
23settlements, court-approved compromises, or judgments, or the
24funding or refunding of the same, if such legal indebtedness
25relates to restitution, a refund, or a return ordered by a
26court of competent jurisdiction for franchise fees assessed
27and collected by the city before June 20, 2013 solely for the
28reduction of property tax levies that support the operation and
29maintenance of a municipal transit system or a regional transit
30district or to maintain transportation service levels of a
31municipal transit system or a regional transit district. This
32paragraph “j” is repealed July 1, 2030.
33 Sec. 155. EFFECTIVE DATE. This division of this Act takes
34effect July 1, 2024.
35EXPLANATION
-78-1The inclusion of this explanation does not constitute agreement with
2the explanation’s substance by the members of the general assembly.
3This bill relates to state and local revenue and finances.
4DIVISION I — SALES AND USE TAX RATES AND DISTRIBUTION. An
5amendment to the Iowa Constitution was ratified on November 2,
62010, which created a natural resources and outdoor recreation
7trust fund (fund) and dedicated a portion of state revenues to
8the fund for the purposes of protecting and enhancing water
9quality and natural areas in the state including parks, trails,
10and fish and wildlife habitat, and conserving agricultural
11soils in the state (Article VII, section 10). The fund is
12codified in Code section 461.31. Pursuant to the amendment,
13the amount credited to the fund will be equal to the amount
14generated by an increase in the state sales tax rate occurring
15after the effective date of the constitutional amendment, but
16shall not exceed the amount that a state sales tax rate of
170.375 percent would generate. The state sales tax rate has not
18been increased since the effective date of the constitutional
19amendment, so no amounts have been credited to the fund. The
20bill increases the sales tax rate and the use tax rate from 6
21percent to 7 percent beginning January 1, 2025. In lieu of the
22local option and sales services tax revenue repealed in another
23division of the bill, the bill transfers a specified amount of
24the state sales and use tax revenues collected to the local
25sales and use tax fund established under Code chapter 423B,
26for allocation and expenditure in a manner similar to that
27which was provided for local sales and services tax revenues.
28However, as provided in another division of the bill, amounts
29resulting from the increase in the use tax for the period
30beginning January 1, 2025, through December 31, 2043, are
31deposited in the local use tax supplement fund to be used
32for purposes of that fund. The amount of sales tax revenues
33transferred to the local sales and use tax fund under Code
34chapter 423B for the period beginning January 1, 2025, through
35December 31, 2027, is an amount equating to a tax of 1.4
-79-1percent. The amount transferred is then reduced each year by
2an amount equating to a 0.05 percent tax until January 1, 2030.
3The amount of sales tax revenues transferred to the local sales
4and use tax fund under Code chapter 423B beginning January 1,
52030, is an amount equating to a tax of 1.25 percent. The bill,
6as the result of Article VII, section 10, of the Constitution
7of the State of Iowa, also amends the transfer of sales tax
8revenues to the secure an advanced vision for education fund in
9Code section 423.2A(2).
10DIVISION II — WATER SERVICE TAX. The bill changes the water
11service tax on the furnishing of water to consumers so that the
12rate is equal to the rate of the sales tax that is being imposed
13under Code chapter 423.
14Currently, one-half of the moneys collected from the water
15service tax are deposited into the general fund of the state
16and one-half of the moneys are deposited into the water quality
17financial assistance fund created in Code section 16.134A.
18 The bill strikes the provision requiring one-half of the
19water service tax moneys be deposited into the water quality
20financial assistance fund and requires all moneys generated
21from the water service tax be deposited into the general fund
22of the state.
23The bill also strikes the future repeal of the water service
24excise tax.
25The division takes effect January 1, 2025.
26DIVISION III — LOCAL OPTION TAXES. Code chapter 423B
27authorizes, following approval at election, the imposition of
28a local option sales and services tax at a rate not to exceed
29one percent to be administered similarly to the state sales
30and services tax and authorizes the imposition of a local
31vehicle tax. The bill strikes the authorization for the local
32vehicle tax and also strikes the authorization to impose the
33local option sales and services tax under Code chapter 423B,
34but instead authorizes cities and counties to expend specified
35state sales and use tax revenues that are deposited in the
-80-1local sales and use tax fund following the increase of the
2state sales and use taxes rates in previous sections of the
3bill.
4Under the bill, sales and services tax revenue credited to
5and deposited in each county’s account within the local sales
6and use tax fund must be expended by each recipient county
7and city as required by the jurisdiction’s revenue purpose
8statement, including a revenue purpose statement approved at
9election prior to January 1, 2025, and in effect on or set to
10take effect on or after January 1, 2025, for the use of local
11option sales and use tax revenue previously collected under
12Code chapter 423B, or be used to reduce specified property tax
13levies.
14The bill also modifies the requirements and permissible uses
15of funds received under Code chapter 423B. The bill specifies
16that for a county with a population of 400,000 or more, a
17revenue purpose statement governing the use of revenues for the
18unincorporated area of the county approved on or after January
191, 2025, shall require the use of 75 percent of such moneys
20for property tax relief. Additionally, the bill provides that
21property tax relief includes payments under a Code chapter
2228E agreement for purposes of a regional transit district if
23such payments are used to reduce the regional transit district
24levy. For a city located in whole or in part in a county with
25a population of 400,000 or more, the use of revenues received
26under Code chapter 423B for such regional transit district
27purposes shall not exceed 10 percent of the amount received
28and for a county with a population of 400,000 or more, for the
29unincorporated area, shall not exceed 25 percent.
30The board of supervisors of each county and the city
31council of each city may adopt by resolution a revenue purpose
32statement for the expenditure of funds received under Code
33chapter 423B.
34The revenues transferred to the local sales and use tax fund
35continue to be allocated to the specific county account for
-81-1the county in which the tax was collected. Additionally, all
2cities and counties are eligible to receive the allocation of
3revenues, not just those that had previously approved the local
4option tax.
5As provided in another division of the bill, specified
6amounts of use tax revenue is transferred to the local use
7tax supplement fund, as created in the bill. Moneys in the
8local use tax supplement fund are annually appropriated to the
9department of revenue to be used for supplement payments to
10cities and counties. For each year during the period beginning
11January 1, 2025, through December 31, 2043, each city or county
12for the unincorporated portion of the county shall receive a
13local use tax supplement payment equal to the difference, but
14not less than zero, between the amount of revenue received
15by the city or county under Code section 423B.7, Code 2023,
16for the period beginning January 1, 2024, and ending December
1731, 2024, minus the amount that would have been received by
18that city or county for that period if all cities and the
19county were eligible for distributions of such revenues under
20Code section 423B.7, Code 2023. If moneys in the fund are
21insufficient to pay all supplement amounts for the year, the
22director of revenue shall prorate the payment of the supplement
23payments. The supplement payment is required to be combined
24with and be used in the same manner and be subject to the same
25requirements as moneys received by the city or county under
26Code section 423B.7 for that year. The bill establishes a
27future repeal of the Code section establishing the supplement
28payments on January 1, 2044. Moneys in the fund upon the
29repeal shall be transferred to the appropriate county accounts
30for the counties from which the tax was paid.
31Code section 423B.10 allows a city in which a local sales
32and services tax is imposed to, by ordinance and following
33approval of the board of supervisors, to provide for the use
34of a designated amount of increased local option sales and
35services tax revenue for urban renewal purposes. The bill
-82-1modifies provisions governing this authorization to provide for
2the use of a specified amount of the applicable increased state
3sales tax revenues deposited in the local sales and use tax
4fund in lieu of the increased local option sales and services
5tax revenue. The bill allows city ordinances providing for the
6use of certain local option sales and services tax revenues for
7urban renewal purposes in effect on January 1, 2025, to remain
8in effect until expiration, amendment, or repeal.
9The bill also eliminates the authority to impose a local
10sales and services tax under the quad cities interstate
11metropolitan authority compact under Code chapter 28A beginning
12on January 1, 2025.
13The division takes effect January 1, 2025.
14DIVISION IV — HOMESTEAD PROPERTY TAX CREDIT. Code chapter
15425 establishes a homestead property tax credit in an amount
16equal to the property tax levy on the first $4,850 of actual
17value. The homestead credit is paid for from the homestead
18credit fund under Code section 425.1 for which there is an
19annual appropriation for an amount sufficient to implement the
20credit.
21The bill reduces the amount of the homestead credit over a
22period beginning with the fiscal year beginning July 1, 2025,
23until the credit is ended in the fiscal year beginning July
241, 2028, at which time the remaining moneys in the homestead
25credit fund are transferred for deposit in the general fund
26of the state. During the same period, the bill establishes
27a homestead property tax exemption. For the assessment year
28beginning January 1, 2024, the exemption amount is $2,500,
29but $4,125 for owners 65 or older. For the assessment year
30beginning January 1, 2025, the exemption amount is $5,000,
31but $8,250 for owners 65 or older. For the assessment year
32beginning January 1, 2026, the exemption amount is $7,500,
33but $12,375 for owners 65 or older. For the assessment year
34beginning January 1, 2027, and each succeeding assessment year,
35the exemption amount is $10,000, but $16,500 for owners 65 or
-83-1older.
2Code section 25B.7 provides that if a state appropriation
3made to fund a credit or exemption is not sufficient to fully
4fund the credit or exemption, the political subdivision shall
5be required to extend to the taxpayer only that portion of the
6credit or exemption estimated by the department of revenue to
7be funded by the state appropriation. The requirement for
8fully funding and the consequences of not fully funding under
9Code section 25B.7 applies to the homestead credit under Code
10chapter 425. The bill strikes the portion of Code section
1125B.7 that makes the requirement for fully funding and the
12consequences of not fully funding applicable to the homestead
13property tax credit and provides that the general requirement
14of Code section 25B.7 for property tax credits and exemptions
15on or after January 1, 1997, does not apply to the homestead
16property tax exemption established in the bill.
17The bill makes corresponding changes to various other
18provisions of the Code relating to and referencing the
19homestead property tax credit.
20The bill provides that homestead credit claims approved
21prior to and valid on the effective date of the division shall
22result in a homestead tax exemption under Code chapter 425,
23subchapter I, as enacted in the division, without further
24filing by the claimant.
25Division IV applies to assessment years beginning on or
26after January 1, 2024.
27DIVISION V — ELDERLY PROPERTY TAX CREDIT. The bill amends
28Code section 423.23 to modify part of the calculation for the
29elderly property tax credit to account for the homestead credit
30for the property under Code section 425.1. The division takes
31effect upon enactment and applies retroactively to claims for
32the credit filed on or after January 1, 2022.
33DIVISION VI — MILITARY SERVICE PROPERTY TAX EXEMPTION AND
34CREDIT. Division VII relates to the military service property
35tax exemption and credit. Under current law, veterans of World
-84-1War I are entitled to a property tax exemption of $2,778 in
2taxable value and honorably discharged veterans who served
3during other specific time periods are entitled to a property
4tax exemption of $1,852 in taxable value. The bill increases
5the exemption amount for all eligible veterans to $2,055 for
6the assessment year beginning January 1, 2024, and to $4,000
7for assessment years beginning on or after January 1, 2025.
8Under current law, the state provides funding to local
9governments for the military service property tax exemption
10and credit up to $6.92 per $1,000 of assessed value of the
11exempt property. The bill reduces the amount of the credit for
12the fiscal year beginning July 1, 2025, to $6.92 per $1,000
13of assessed value of the exempt property, but not to exceed
14$945 of assessed value and eliminates funding for the credit
15starting with the fiscal year beginning July 1, 2026.
16Code section 25B.7 provides that if a state appropriation
17made to fund a credit or exemption is not sufficient to fully
18fund the credit or exemption, the political subdivision shall
19be required to extend to the taxpayer only that portion of the
20credit or exemption estimated by the department of revenue to
21be funded by the state appropriation. The requirement for
22fully funding and the consequences of not fully funding under
23Code section 25B.7 applies to the military service property
24tax credit and exemption to the extent of $6.92 per $1,000
25of assessed value of the exempt property. The bill strikes
26the portion of Code section 25B.7 that makes the requirement
27for fully funding and the consequences of not fully funding
28applicable to the military service property tax credit and
29exemption and provides that the general requirement of Code
30section 25B.7 for property tax credits and exemptions on or
31after January 1, 1997, does not apply to the military property
32tax exemption established in the bill.
33The division applies to assessment years beginning on or
34after January 1, 2024.
35DIVISION VII — PROPERTY TAX ASSESSMENT LIMITATIONS. Code
-85-1section 441.21 establishes assessment limitations for various
2classifications of property. The bill reduces the percentage
3of actual value at which property valued by the department
4of revenue pursuant to Code chapter 438 (pipelines) shall
5be assessed by 5 percent each year from 100 percent for the
6assessment year beginning January 1, 2024, to 90 percent for
7assessment years beginning on or after January 1, 2025.
8The bill also reduces the percentage of actual value at
9which the portion of commercial, industrial, and railway
10properties that exceeds $150,000 is assessed by 5 percent each
11year from 90 percent for the assessment year beginning January
121, 2024, to 80 percent for assessment years beginning on or
13after January 1, 2026. Accordingly, the bill makes a change
14to the payments made to local governments under Code section
15441.21(5)(e) that are in part calculated using the assessment
16limitation applied to commercial and industrial property.
172018 Iowa Acts, chapter 1158, changed the assessment of
18telephone and telegraph company property under Code chapter
19433. Code chapter 433 applies to the assessment and taxation
20of telephone and telegraph company property for assessment
21years beginning before January 1, 2022. Starting with the
22assessment year beginning January 1, 2022, such property is
23assessed locally in the same manner as commercial property.
24References to Code chapter 433 are not included in the
25applicable Code section as amended in the bill for assessment
26years beginning on or after January 1, 2025.
27This division of the bill takes effect July 1, 2024.
28DIVISION VIII — NATURAL RESOURCES AND OUTDOOR RECREATION
29TRUST FUND. The bill amends provisions in Code chapter 461
30(the natural resources and outdoor recreation Act) that is
31to implement Article VII, section 10, of the Constitution
32of the State of Iowa when the sales tax is increased. The
33bill increases the sales tax in division I. The Code chapter
34establishes the natural resources and outdoor recreation trust
35fund (trust fund) and associated accounts (renamed trust
-86-1accounts) supported by a portion of state revenue generated
2by an increase in the state’s sales tax. The purpose of
3the constitutional provision is to protect and enhance water
4quality and natural areas, including parks, trails, and fish
5and wildlife habitat, and conserve agricultural soils in this
6state.
7ALLOCATIONS OF TRUST FUND MONEYS. The bill alters the
8percentage of moneys to be allocated from the trust fund
9(trust fund moneys) to its trust accounts, including the
10natural resources trust account administered by the department
11of natural resources (DNR), the soil conservation and water
12protection trust account (renamed the soil conservation and
13nonpoint source water protection trust account) administered
14by the department of agriculture and land stewardship (DALS),
15the watershed protection trust account administered by DNR
16in cooperation with DALS, the local conservation partnership
17trust account administered by DNR, the trails trust account
18(renamed the water and land trails trust account) administered
19by DOT in cooperation with DNR, and the lake restoration
20trust account (renamed the lake and stream restoration trust
21account) administered by DNR. It also reduces the allocations
22of trust fund moneys to the Iowa resources enhancement and
23protection (REAP) fund administered by DNR. It transfers
24trust fund moneys allocated to the renamed soil conservation
25and nonpoint source water protection trust account and the
26watershed protection trust account to the water quality
27infrastructure fund used to support nonpoint water quality
28programs administered by DALS; and to the water quality
29financial assistance fund administered by the Iowa finance
30authority (IFA) to support the wastewater and drinking water
31treatment financial assistance program (administered by IFA),
32the water quality financing program (administered by IFA), and
33the water quality urban infrastructure program (administered by
34DALS). The bill revises provisions in the local conservation
35partnership trust account as a program to be administered
-87-1by DNR. The bill provides that trust fund moneys may be
2transferred from the renamed soil conservation and nonpoint
3source water protection trust account to the water quality
4infrastructure fund and from the watershed protection trust
5account to the water quality financial assistance fund upon
6direction by the custodial department. The bill eliminates
7current funding sources, including the annual appropriation
8to the REAP fund from the general fund which is due to expire
9on June 30, 2026, and both a tax on the sales price on water
10service, which another division of the bill repeals, and the
11use of wagering tax receipts, which would otherwise expire on
12July 1, 2039.
13Code section 312.2(2) requires the treasurer of state
14to allocate from the road use tax fund an amount equal to
15sixty-five hundredths of one percent of all road use tax funds
16for the purposes of carrying out Code section 307.24(5). Code
17section 307.24(5) requires such funds to be used to construct,
18reconstruct, improve, and maintain state institutional roads
19and state park roads which are part of the state park, state
20institution, and other specified state land road systems, and
21bridges on such roads, roads located on state fairgrounds,
22and the roads and bridges located on property of community
23colleges, upon the request of the state board, department,
24or commission which has jurisdiction over such roads. The
25bill strikes the statutory allocation of such funding for
26department of natural resources facility roads and reallocates
27that portion of the funding to the remaining entities that
28receive allocations under Code section 307.24(5). The bill
29authorizes the department of natural resources to use moneys in
30the natural resources trust account created within the natural
31resources trust fund under Code section 461.32, as amended
32in the bill, to support the construction, maintenance, or
33expansion of roads on state-owned land under the jurisdiction
34of the department of natural resources.
35ADMINISTRATION. The bill provides that the legislative
-88-1council is to appoint a committee to review the trust fund and
2its allocations. The bill requires the economic development
3authority to be involved in decisions that use trust fund
4moneys to support initiatives with a recreational purpose. In
5making decisions to expend trust fund moneys, a higher priority
6is given to supporting an initiative that furthers a goal of
7the Iowa nutrient reduction strategy. A higher priority is
8provided to maintaining or preserving existing public use lands
9rather than acquiring new land. Several provisions place
10restrictions upon the use of trust fund moneys for support
11relating to certain initiatives, including athletic fields or
12facilities. Trust fund moneys cannot be used to support an
13exercise of eminent domain powers.
14REPEAL. Code chapter 461 is repealed December 31, 2051.
15EFFECTIVE DATE. The division of the bill takes effect
16January 1, 2025.
17DIVISION IX — CHARITABLE CONSERVATION CONTRIBUTION
18TAX CREDIT. The bill prohibits a charitable conservation
19contribution tax credit from being claimed against the
20individual or corporate income tax, except for qualified real
21property interests conveyed prior to January 1, 2025. The bill
22allows the credit in excess of tax liability to carry forward
23for qualified real property interests conveyed prior to January
241, 2025. The bill preserves existing rights and is intended to
25not limit, modify, or otherwise adversely affect any amount of
26the tax credit issued, awarded, or allowed prior to the repeal
27date of any tax credit. The division takes effect January 1,
282025, and applies to tax years beginning on or after that date.
29DIVISION X — PROPERTY TAX BENEFITS AND INCENTIVES. The bill
30amends Code chapter 404 (urban revitalization areas) to provide
31that for revitalization areas established on or after the
32effective date of the division and for first-year property tax
33exemption applications for property located in a revitalization
34area in existence on the effective date of the division filed
35on or after the effective date of the division, commercial
-89-1property shall not receive a tax exemption under Code chapter
2404 unless the city or county, as applicable, and the owner
3of the qualified real estate enter into a written assessment
4agreement specifying a minimum actual value until a specified
5termination date for the duration of the exemption period.
6The bill also establishes limitations on exemptions for
7residential property within revitalization areas. For
8revitalization areas established on or after the effective date
9of the division and for first-year exemption applications for
10property located in a revitalization area in existence on the
11effective date of the division filed on or after the effective
12date of the division, an exemption otherwise authorized under
13Code chapter 404 shall not be authorized for or approved by a
14city or county, as applicable, for property that is residential
15property.
16Division X of the bill takes effect July 1, 2024.
17DIVISION XI — TAX INCREMENT FINANCING. Code section 403.19
18authorizes municipalities to provide by ordinance for the
19division of property tax revenue (tax increment financing)
20collected against property located within an urban renewal
21area. The bill provides that for property taxes due and
22payable in fiscal years beginning on or after July 1, 2025,
23if the portion of the urban renewal area that is subject
24to a division of property tax revenue contains wind energy
25conversion property that is subject to special valuation under
26Code section 427B.26, foundation property taxes of a school
27district imposed under Code section 257.3 in that portion of
28the urban renewal area shall not be subject to the division of
29property tax revenue and shall instead be paid to the school
30district.
31DIVISION XII — TRANSIT FUNDING. Cities may grant various
32types of franchises for specified services under Code section
33362.4 and may generally impose a franchise fee based upon
34a percentage of gross revenues generated from sales of the
35franchisee within the city not to exceed 5 percent. An
-90-1exception allowing for a franchise fee up to 7.5 percent exists
2in specified circumstances for a period of fiscal years ending
3July 1, 2030, if approved at election. The bill strikes
4the provisions providing for that exception and establishes
5conditions under which a city with a population that exceeds
6200,000 may impose a franchise fee of up to 7.5 percent for
7fiscal years beginning on or after July 1, 2024. The bill
8requires that franchise fee amounts collected during such
9fiscal years in excess of 5 percent of gross revenues generated
10from sales shall be used solely for the reduction of property
11tax levies used to support the operation and maintenance of a
12municipal transit system or a regional transit district or to
13maintain transportation service levels of a municipal transit
14system or a regional transit district.
15The division of the bill takes effect July 1, 2024.
-91-md/jh
2modifying sales and use taxes, the charitable conservation
3contribution tax credit available against individual and
4corporate income taxes, the water service tax, property
5taxes, transit funding, and local option taxes, crediting
6moneys to the natural resources and outdoor recreation
7trust fund, modifying allocations of road use tax fund
8moneys, making appropriations, and including effective date,
9retroactive applicability, and applicability provisions.
10BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2SALES AND USE TAX RATES AND DISTRIBUTION
3 Section 1. Section 423.2, subsection 1, unnumbered
4paragraph 1, Code 2023, is amended to read as follows:
5There is imposed a tax of six percent at the rate specified
6in subsection 12 upon the sales price of all sales of tangible
7personal property, sold at retail in the state to consumers or
8users except as otherwise provided in this subchapter.
9 Sec. 2. Section 423.2, subsections 2 and 3, Code 2023, are
10amended to read as follows:
112. A tax of six percent at the rate specified in subsection
1212 is imposed upon the sales price of the sale or furnishing
13of gas, electricity, water, heat, pay television service, and
14communication service, including the sales price from such
15sales by any municipal corporation or joint water utility
16furnishing gas, electricity, water, heat, pay television
17service, and communication service to the public in its
18proprietary capacity, except as otherwise provided in this
19subchapter, when sold at retail in the state to consumers or
20users.
213. A tax of six percent at the rate specified in subsection
2212 is imposed upon the sales price of all sales of tickets
23or admissions to places of amusement, fairs, and athletic
24events except those of elementary and secondary educational
25institutions. A tax of six percent at the rate specified in
26subsection 12 is imposed on the sales price of an entry fee or
27like charge imposed solely for the privilege of participating
28in an activity at a place of amusement, fair, or athletic event
29unless the sales price of tickets or admissions charges for
30observing the same activity are taxable under this subchapter.
31A tax of six percent at the rate specified in subsection 12
32 is imposed upon that part of private club membership fees or
33charges paid for the privilege of participating in any athletic
34sports provided club members.
35 Sec. 3. Section 423.2, subsection 4, paragraph a, Code 2023,
-1-1is amended to read as follows:
2a. A tax of six percent at the rate specified in subsection
312 is imposed upon the sales price derived from the operation
4of all forms of amusement devices and games of skill, games of
5chance, raffles, and bingo games as defined in chapter 99B, and
6card game tournaments conducted under section 99B.27, that are
7operated or conducted within the state, the tax to be collected
8from the operator in the same manner as for the collection of
9taxes upon the sales price of tickets or admission as provided
10in this section. Nothing in this subsection shall legalize any
11games of skill or chance or slot-operated devices which are now
12prohibited by law.
13 Sec. 4. Section 423.2, subsection 5, Code 2023, is amended
14to read as follows:
155. There is imposed a tax of six percent at the rate
16specified in subsection 12 upon the sales price from the
17furnishing of services as defined in section 423.1.
18 Sec. 5. Section 423.2, subsection 7, paragraph a,
19unnumbered paragraph 1, Code 2023, is amended to read as
20follows:
21A tax of six percent at the rate specified in subsection 12
22 is imposed upon the sales price from the sales, furnishing, or
23service of solid waste collection and disposal service.
24 Sec. 6. Section 423.2, subsection 8, paragraph a, Code 2023,
25is amended to read as follows:
26a. A tax of six percent at the rate specified in subsection
2712 is imposed on the sales price from sales of bundled
28transactions. For the purposes of this subsection, a “bundled
29transaction” is the retail sale of two or more distinct and
30identifiable products, except real property and services to
31real property, which are sold for one nonitemized price. A
32“bundled transaction” does not include the sale of any products
33in which the sales price varies, or is negotiable, based on
34the selection by the purchaser of the products included in the
35transaction.
-2-1 Sec. 7. Section 423.2, subsection 9, Code 2023, is amended
2to read as follows:
39. A tax of six percent at the rate specified in
4subsection 12 is imposed upon the sales price from any mobile
5telecommunications service, including all paging services,
6that this state is allowed to tax pursuant to the provisions
7of the federal Mobile Telecommunications Sourcing Act, Pub.
8L. No.106-252, 4 U.S.C. §116 et seq. For purposes of this
9subsection, taxes on mobile telecommunications service, as
10defined under the federal Mobile Telecommunications Sourcing
11Act that are deemed to be provided by the customer’s home
12service provider, shall be paid to the taxing jurisdiction
13whose territorial limits encompass the customer’s place of
14primary use, regardless of where the mobile telecommunications
15service originates, terminates, or passes through and
16shall in all other respects be taxed in conformity with
17the federal Mobile Telecommunications Sourcing Act. All
18other provisions of the federal Mobile Telecommunications
19Sourcing Act are adopted by the state of Iowa and incorporated
20into this subsection by reference. With respect to mobile
21telecommunications service under the federal Mobile
22Telecommunications Sourcing Act, the director shall, if
23requested, enter into agreements consistent with the provisions
24of the federal Act.
25 Sec. 8. Section 423.2, subsection 10, paragraph a, Code
262023, is amended to read as follows:
27a. A tax of six percent at the rate specified in subsection
2812 is imposed on the sales price of specified digital products
29sold at retail in the state. The tax applies whether the
30purchaser obtains permanent use or less than permanent use of
31the specified digital product, whether the sale is conditioned
32or not conditioned upon continued payment from the purchaser,
33and whether the sale is on a subscription basis or is not on a
34subscription basis.
35 Sec. 9. Section 423.2, subsection 12, Code 2023, is amended
-3-1by striking the subsection and inserting in lieu thereof the
2following:
312. a. For the period beginning January 1, 2025, through
4December 31, 2050, the sales tax rate is seven percent.
5b. Beginning January 1, 2051, the sales tax rate is six
6percent.
7 Sec. 10. Section 423.2A, subsection 2, paragraphs a, b, and
8c, Code 2023, are amended to read as follows:
9a. (1) Transfer For the period beginning January 1,
102025, through December 31, 2027, transfer twenty-eight
11one-hundred-fortieths of the revenues collected under deposited
12into the general fund of the state under subsection 1 to the
13appropriate county accounts under chapter 423B for the counties
14from which the tax was collected.
15(2) For the period beginning January 1, 2028, through
16December 31, 2028, transfer twenty-seven one-hundred-fortieths
17of the revenues deposited into the general fund of the state
18under subsection 1 to the appropriate county accounts under
19chapter 423B for the counties from which the tax was collected.
20(3) For the period beginning January 1, 2029, through
21December 31, 2029, transfer twenty-six one-hundred-fortieths of
22the revenues deposited into the general fund of the state under
23subsection 1 to the appropriate county accounts under chapter
24423B for the counties from which the tax was collected.
25(4) For the period beginning January 1, 2030, through
26December 31, 2050, transfer twenty-five one-hundred-fortieths
27of the revenues deposited into the general fund of the state
28under subsection 1 to the appropriate county accounts under
29chapter 423B for the counties from which the tax was collected.
30(5) Beginning January 1, 2051, transfer five twenty-fourths
31of the revenues deposited into the general fund of the state
32under subsection 1 to the appropriate county accounts under
33chapter 423B for the counties from which the tax was collected.
34b. Transfer from the remaining revenues the amounts required
35under Article VII, section 10, of the Constitution of the State
-4-1of Iowa to the natural resources and outdoor recreation trust
2fund created in section 461.31, if applicable.
3c. Transfer one-sixth of from the remaining revenues an
4amount equal to one-seventh of the revenues deposited into the
5general fund of the state under subsection 1 to the secure an
6advanced vision for education fund created in section 423F.2.
7This paragraph “c” is repealed January 1, 2051.
8 Sec. 11. Section 423.5, subsection 1, unnumbered paragraph
91, Code 2023, is amended to read as follows:
10Except as provided in paragraph “b”, an excise tax at the
11rate of six percent specified in subsection 4 of the purchase
12price or installed purchase price is imposed on the following:
13 Sec. 12. Section 423.5, subsection 4, Code 2023, is amended
14by striking the subsection and inserting in lieu thereof the
15following:
164. a. For the period beginning January 1, 2025, through
17December 31, 2050, the use tax rate is seven percent.
18b. Beginning January 1, 2051, the use tax rate is six
19percent.
20 Sec. 13. Section 423.43, subsection 1, paragraph b, Code
212023, is amended by striking the paragraph and inserting in
22lieu thereof the following:
23b. Subsequent to the deposit into the general fund of
24the state the department shall do the following in the order
25prescribed:
26(1) (a) For the period beginning January 1, 2025, through
27December 31, 2043, transfer one-seventh of such revenues to the
28local use tax supplement fund, under section 423B.1A.
29(b) For the period beginning January 1, 2044, through
30December 31, 2050, transfer one-seventh of such revenues to the
31appropriate county accounts under chapter 423B for the counties
32from which the tax was paid.
33(c) Beginning January 1, 2051, transfer one-sixth of such
34revenues to the appropriate county accounts under chapter 423B
35for the counties from which the tax was paid.
-5- 1(2) Transfer one-sixth of such remaining revenues to the
2secure an advanced vision for education fund created in section
3423F.2. This subparagraph is repealed January 1, 2051.
4 Sec. 14. EFFECTIVE DATE. This division of this Act takes
5effect January 1, 2025.
6DIVISION II
7WATER SERVICE TAX
8 Sec. 15. Section 423G.3, Code 2023, is amended to read as
9follows:
10423G.3 Water service tax.
11An excise tax at the a rate of six percent equal to the rate
12being imposed under section 423.2, subsection 12, is imposed on
13the sales price from the sale or furnishing by a water utility
14of a water service in the state to consumers or users.
15 Sec. 16. Section 423G.6, subsection 2, Code 2023, is amended
16by striking the subsection.
17 Sec. 17. REPEAL. Section 423G.7, Code 2023, is repealed.
18 Sec. 18. EFFECTIVE DATE. This division of this Act takes
19effect January 1, 2025.
20DIVISION III
21LOCAL OPTION TAXES
22 Sec. 19. Section 15J.7, subsection 2, Code 2023, is amended
23to read as follows:
242. In addition to the moneys received pursuant to section
2515J.6, a municipality may deposit in the reinvestment project
26fund any other moneys lawfully at the municipality’s disposal,
27including but not limited to local sales and services tax
28receipts collected revenues received under chapter 423B if such
29use is a purpose authorized for the municipality under chapter
30423B.
31 Sec. 20. Section 28A.17, Code 2023, is amended to read as
32follows:
3328A.17 Local sales and services tax.
341. If an authority is established as provided in section
3528A.6 and after approval of a referendum by a simple majority
-6-1of votes cast in each metropolitan area in favor of the sales
2and services tax, the governing board of a county in this state
3within a metropolitan area which is part of the authority shall
4impose, at the request of the authority, a local sales and
5services tax at the rate of one-fourth of one percent on the
6sales price taxed by this state under section 423.2, within
7the metropolitan area located in this state. The referendum
8shall be called by resolution of the board and shall be held
9as provided in section 28A.6 to the extent applicable. The
10ballot proposition shall contain a statement as to the specific
11purpose or purposes for which the revenues shall be expended
12and the date of expiration of the tax. The local sales and
13services tax shall be imposed on the same basis, with the same
14exceptions, and following the same administrative procedures as
15provided for a county under sections 423B.5 and 423B.6, Code
162023. The amount of the sale, for the purposes of determining
17the amount of the local sales and services tax under this
18section, does not include the amount of any local sales and
19services tax imposed under sections 423B.5 and 423B.6, Code
202023.
212. The treasurer of state shall credit the local sales
22and services tax receipts and interest and penalties to the
23authority’s account. Moneys in this account shall be remitted
24quarterly to the authority. The proceeds of the tax imposed
25under this section shall be used only for the construction,
26reconstruction, or repair of metropolitan facilities as
27specified in the referendum. The local sales and services tax
28imposed under this section may be suspended for not less than
29a fiscal quarter or more than one year by action of the board.
30The suspension may be renewed or continued by the board, but
31the board shall act on the suspension at least annually.
32The local sales and services tax may also be repealed by a
33petition and favorable referendum following the procedures and
34requirements of sections 28A.5 and 28A.6 as applicable. The
35board shall give the department of revenue at least forty days’
-7-1notice of the repeal, suspension, or reinstatement of the tax
2and the effective dates for imposition, suspension, or repeal
3of the tax shall be as provided in section 423B.6, Code 2023.
43. A local sales and services tax authorized under this
5section shall not be imposed or collected on or after January
61, 2025.
7 Sec. 21. Section 76.4, Code 2023, is amended to read as
8follows:
976.4 Permissive application of funds.
10Whenever the governing authority of such political
11subdivision shall have on hand funds derived from any other
12source than taxation which may be appropriated to the payment
13either of interest or principal, or both principal and interest
14of such bonds, such funds may be so appropriated and used
15and the levy for the payment of the bonds correspondingly
16reduced. This section shall not restrict the authority of a
17political subdivision to apply sales and services tax receipts
18collected received pursuant to chapter 423B for such purpose.
19Notwithstanding section 423F.3, a school district may apply tax
20receipts received pursuant to chapter 423F for the purposes of
21this section.
22 Sec. 22. Section 99B.1, subsection 23, Code 2023, is amended
23to read as follows:
2423. “Net receipts” means gross receipts less amounts awarded
25as prizes and less state and local sales tax paid upon the
26gross receipts.
27 Sec. 23. Section 99B.14, subsection 1, Code 2023, is amended
28to read as follows:
291. A licensed qualified organization shall certify
30that the receipts from all charitable gambling conducted
31by the organization under this chapter, less reasonable
32expenses, charges, fees, taxes, and deductions, either will
33be distributed as prizes to participants or will be dedicated
34and distributed for educational, civic, public, charitable,
35patriotic, or religious uses. Reasonable expenses, charges,
-8-1fees, taxes other than the state and local sales tax, and
2deductions allowed by the department shall not exceed forty
3percent of net receipts.
4 Sec. 24. Section 99G.4, subsection 2, Code 2023, is amended
5to read as follows:
62. The income and property of the authority shall be exempt
7from all state and local taxes, and the sale of lottery tickets
8and shares issued and sold by the authority and its retail
9licensees shall be exempt from all state and local sales taxes.
10 Sec. 25. Section 99G.30A, subsection 2, paragraph a, Code
112023, is amended to read as follows:
12a. The director of revenue shall administer the monitor
13vending machine excise tax as nearly as possible in conjunction
14with the administration of state sales tax laws. The director
15shall provide appropriate forms or provide appropriate entries
16on the regular state tax forms for reporting local sales and
17services tax liability.
18 Sec. 26. Section 279.63, subsection 2, paragraph a, Code
192023, is amended to read as follows:
20a. All property tax levies, and income surtaxes, and local
21option sales taxes in place in the school district, listed by
22type of levy, rate, amount, duration, and notification of the
23maximum rate and amount limitations permitted by statute.
24 Sec. 27. Section 321.40, subsection 5, Code 2023, is amended
25by striking the subsection.
26 Sec. 28. Section 321.130, Code 2023, is amended to read as
27follows:
28321.130 Fees in lieu of taxes.
29The registration fees imposed by this chapter upon private
30passenger motor vehicles or semitrailers are in lieu of all
31state and local taxes, except local vehicle taxes, to which
32motor vehicles or semitrailers are subject.
33 Sec. 29. Section 418.13, subsection 2, Code 2023, is amended
34to read as follows:
352. In addition to the moneys received pursuant to section
-9-1418.10 or 418.12, a governmental entity may deposit in the
2flood project fund any other moneys lawfully received by the
3governmental entity, including but not limited to local sales
4and services tax receipts collected amounts received under
5chapter 423B.
6 Sec. 30. Section 421.26, Code 2023, is amended to read as
7follows:
8421.26 Personal liability for tax due.
9If a licensee or other person under section 452A.65, a
10retailer or purchaser under chapter 423A, 423B, 423C, 423D, or
11423E, or section 423.14, 423.14A, 423.29, 423.31, or 423.33,
12or a user under section 423.34, or a permit holder or licensee
13under section 453A.13, 453A.16, or 453A.44 fails to pay a tax
14under those sections when due, an officer of a corporation
15or association, notwithstanding section 489.304, a member or
16manager of a limited liability company, or a partner of a
17partnership, having control or supervision of or the authority
18for remitting the tax payments and having a substantial legal
19or equitable interest in the ownership of the corporation,
20association, limited liability company, or partnership, who has
21intentionally failed to pay the tax is personally liable for
22the payment of the tax, interest, and penalty due and unpaid.
23However, this section shall not apply to taxes on accounts
24receivable. The dissolution of a corporation, association,
25limited liability company, or partnership shall not discharge a
26person’s liability for failure to remit the tax due.
27 Sec. 31. Section 421.28, Code 2023, is amended to read as
28follows:
29421.28 Exceptions to successor liability.
30The immediate successor to a licensee’s or retailer’s
31business or stock of goods under chapter 423A or 423B, or
32section 423.33 or 452A.65, is not personally liable for
33the amount of delinquent tax, interest, or penalty due and
34unpaid if the immediate successor shows that the purchase of
35the business or stock of goods was made in good faith that
-10-1no delinquent tax, interest, or penalty was due and unpaid.
2For purposes of this section the immediate successor shows
3good faith by evidence that the department had provided
4the immediate successor with a certified statement that
5no delinquent tax, interest, or penalty is unpaid, or that
6the immediate successor had taken in good faith a certified
7statement from the licensee, retailer, or seller that no
8delinquent tax, interest, or penalty is unpaid. When requested
9to do so by a person with whom the licensee or retailer is
10negotiating the sale of the business or stock of goods, the
11director of revenue shall, upon being satisfied that such
12a situation exists, inform that person as to the amount of
13unpaid delinquent tax, interest, or penalty due by the licensee
14or the retailer. The giving of the information under this
15circumstance is not a violation of section 422.20, 422.72, or
16452A.63.
17 Sec. 32. Section 421.60, subsection 2, paragraph m,
18subparagraphs (1) and (2), Code 2023, are amended to read as
19follows:
20(1) The director may abate unpaid state sales and use
21taxes and local sales and services taxes owed by a retailer
22in the event that the retailer failed to collect tax from the
23purchaser as a result of erroneous written advice issued by
24the department that was specially directed to the retailer
25by the department and the retailer is unable to collect the
26tax, interest, or penalties from the purchaser. Before the
27tax, interest, and penalties shall be abated on the basis of
28erroneous written advice, the retailer must present a copy of
29the retailer’s request for written advice to the department and
30a copy of the department’s reply. The department shall not
31maintain a position against the retailer that is inconsistent
32with the erroneous written advice, except on the basis of
33subsequent written advice sent by the department to that
34retailer, or a change in state or federal law, a reported
35court case to the contrary, a contrary rule adopted by the
-11-1department, a change in material facts or circumstances
2relating to the retailer, or the retailer’s misrepresentation
3or incomplete or inadequate representation of material facts
4and circumstances in requesting the written advice.
5(2) (a) The director shall abate the unpaid state sales
6and use taxes and any local sales and services taxes owed by a
7retailer where the retailer failed to collect the tax from the
8purchaser on the charges paid for access to on-line computer
9services as a result of erroneous written advice issued by the
10department regarding the taxability of charges paid for access
11to on-line computer services. To qualify for the abatement
12under this subparagraph, the erroneous written advice shall
13have been issued by the department prior to July 1, 1999, and
14shall have been specially directed to the retailer by the
15department.
16(b) If an abatement of unpaid state sales and use taxes and
17any local sales and services taxes is granted to the retailer
18by the director pursuant to this subparagraph, the department
19is precluded from collecting from the purchaser any unpaid
20state sales and use taxes and any local sales and services
21taxes which were abated.
22 Sec. 33. Section 422.72, subsection 6, paragraph a, Code
232023, is amended to read as follows:
24a. The department may enter into a written informational
25exchange agreement for tax administration purposes with a city
26or county which is entitled to receive funds due to a local
27hotel and motel tax or a local sales and services tax. The
28written informational exchange agreement shall designate no
29more than two paid city or county employees that have access to
30actual return information relating to that city’s or county’s
31receipts from a local hotel and motel tax or a local sales and
32services tax.
33 Sec. 34. Section 423.4, subsection 2, paragraph d, Code
342023, is amended by striking the paragraph.
35 Sec. 35. Section 423.4, subsection 5, paragraph f, Code
-12-12023, is amended to read as follows:
2f. Notwithstanding the state sales tax imposed in section
3423.2, a rebate issued pursuant to this subsection shall not
4exceed an amount equal to five percent of the sales price
5of the tangible personal property or services furnished to
6purchasers at the automobile racetrack facility. Any local
7option taxes paid and collected shall not be subject to rebate
8under this subsection.
9 Sec. 36. Section 423.4, subsection 7, paragraph f, Code
102023, is amended to read as follows:
11f. The refund in this subsection applies only to state
12sales and use tax paid and does not apply to local option
13sales and services taxes imposed pursuant to chapter 423B.
14 Notwithstanding the state sales tax imposed in section 423.2,
15a refund issued pursuant to this section shall not exceed
16an amount equal to five percent of the sales price of the
17fuel used to create heat, power, and steam for processing
18or generating electrical current or from the sale price
19of electricity consumed by computers, machinery, or other
20equipment for operation of the data center business facility.
21 Sec. 37. Section 423.4, subsection 8, paragraph g, Code
222023, is amended to read as follows:
23g. The refund in this subsection applies only to state
24sales and use tax paid and does not apply to local option
25sales and services taxes imposed pursuant to chapter 423B.
26 Notwithstanding the state sales tax imposed in section 423.2,
27a refund issued pursuant to this section shall not exceed an
28amount equal to five percent of the sales price of the items
29listed in paragraph “a”, subparagraphs (1), (2), and (3).
30 Sec. 38. Section 423.14A, subsection 2, Code 2023, is
31amended to read as follows:
322. In addition to and not in lieu of any application of
33this chapter to sellers who are retailers and sellers who are
34retailers maintaining a place of business in this state, any
35person described in subsection 3, or the person’s agents,
-13-1shall be considered a retailer in this state and a retailer
2maintaining a place of business in this state for purposes of
3this chapter on or after January 1, 2019, and shall be subject
4to all requirements of this chapter imposed on retailers and
5retailers maintaining a place of business in this state,
6including but not limited to the requirement to collect and
7remit sales and use taxes pursuant to sections 423.14 and
8423.29, and local option taxes under chapter 423B.
9 Sec. 39. Section 423.33, subsection 1, paragraph c, Code
102023, is amended to read as follows:
11c. If the retailer fails to collect sales tax at the time
12of the transaction, the retailer shall thereafter remit the
13applicable sales tax, or the purchaser thereafter shall remit
14the applicable use tax. If the purchaser remits all applicable
15use tax, the retailer remains liable for any local sales and
16services tax under chapter 423B that the retailer failed to
17collect.
18 Sec. 40. Section 423.34A, unnumbered paragraph 1, Code
192023, is amended to read as follows:
20A purchaser is relieved of liability for payment of state
21sales or use tax, for payment of any local option sales tax,
22 for payment of interest, or for payment of any penalty for
23nonpayment of tax which nonpayment is not fraudulent, willful,
24or intentional, under the following circumstances:
25 Sec. 41. Section 423.36, subsection 9, paragraph a, Code
262023, is amended to read as follows:
27a. Except as provided in paragraph “b”, purchasers, users,
28and consumers of tangible personal property, specified digital
29products, or enumerated services taxed pursuant to subchapter
30II or III of this chapter or chapter 423B may be authorized,
31pursuant to rules adopted by the director, to remit tax owed
32directly to the department instead of the tax being collected
33and paid by the seller. To qualify for a direct pay tax permit,
34the purchaser, user, or consumer must accrue a tax liability
35of more than four thousand dollars in tax under subchapters
-14-1II and III in a semimonthly period and make deposits and file
2returns pursuant to section 423.31. This authority shall not
3be granted or exercised except upon application to the director
4and then only after issuance by the director of a direct pay
5tax permit.
6 Sec. 42. Section 423B.1, Code 2023, is amended by striking
7the section and inserting in lieu thereof the following:
8423B.1 Use of revenues deposited in the local sales and use
9tax fund — revenue purpose statement.
101. a. Revenues credited to and deposited in each county’s
11account within the local sales and use tax fund shall be
12expended by each recipient county and city as required by the
13revenue purpose statement, subject to the requirements of
14section 423B.7, subsection 7, and approved under this section
15for the city or for the county for the unincorporated areas of
16the county, or as required by subsection 3.
17b. A revenue purpose statement for the use of local option
18sales and services tax revenue under this chapter approved at
19election prior to January 1, 2025, and in effect on or set
20to take effect on or after January 1, 2025, and the use of
21revenues received under this chapter for purposes authorized
22under section 423B.10 for ordinances in effect and approved
23before January 1, 2025, shall continue in effect for revenues
24received under this chapter until the expiration of the revenue
25purpose statement or ordinance, if applicable, or until the
26county board of supervisors or city council, as applicable,
27adopts a new revenue purpose statement under subsection 2 or
28repeals or amends the ordinance for the use of revenues under
29section 423B.10.
302. The board of supervisors of each county and the city
31council of each city may adopt by resolution a revenue purpose
32statement for the expenditure of funds received under this
33chapter.
343. Each city and county without a valid revenue purpose
35statement shall expend the revenues received for the following
-15-1purposes in the order prescribed in this subsection, except
2that the payment of bonds for which the revenues have been
3pledged shall be paid first:
4a. Reduction of the county’s basic levies under section
5331.423 or reduction of the city general fund levy under
6section 384.1, as applicable.
7b. Reduction of any debt service levy of the county or city,
8as applicable.
9c. Reduction of the city’s additional taxes levied under
10section 384.12 or the county’s supplemental levies under
11section 331.424, as applicable.
12d. Reduction of any other property tax levy of the county
13or city, as applicable.
14 Sec. 43. NEW SECTION. 423B.1A Local use tax supplement
15fund.
161. A local use tax supplement fund is created in the state
17treasury under the control of the department of revenue. The
18fund shall consist of all moneys transferred under section
19423.43, subsection 1, paragraph “b”, subparagraph (1),
20subparagraph division (a), and moneys appropriated to the fund.
212. Moneys in the local use tax supplement fund are annually
22appropriated to the department of revenue and shall be used for
23supplement payments to cities and counties under this section.
243. For each year during the period beginning January 1,
252025, through December 31, 2043, each city or county for the
26unincorporated portion of the county, shall receive a local
27use tax supplement payment equal to the difference, but not
28less than zero between the amount of revenue received by the
29city or county under section 423B.7, Code 2023, for the period
30beginning January 1, 2024, and ending December 31, 2024, minus
31the amount that would have been received by that city or county
32for that period if all cities and the county were eligible for
33distributions of such revenues under section 423B.7, Code 2023.
34If moneys in the fund are insufficient to pay all supplement
35amounts for the year, the director of revenue shall prorate the
-16-1payment of the supplement payments and shall notify the cities
2and counties of the pro rata percentage.
34. The supplement payment calculated under subsection 3
4shall be paid to each city or county for the unincorporated
5area of the county and shall be combined with and be used in the
6same manner and be subject to the same requirements as moneys
7received by the city or county under section 423B.7 for that
8year.
95. Notwithstanding section 12C.7, subsection 2, interest or
10earnings on moneys deposited in the local use tax supplement
11fund shall be credited to the local use tax supplement fund.
12Notwithstanding section 8.33, moneys credited to the local use
13tax supplement fund shall not revert at the close of a fiscal
14year.
156. This section is repealed January 1, 2044. Moneys in the
16fund upon the repeal of this section shall be transferred to
17the appropriate county accounts under section 423B.7 for the
18counties from which the tax was paid.
19 Sec. 44. Section 423B.7, subsection 1, Code 2023, is amended
20to read as follows:
211. a. Except as provided in paragraphs paragraph “b” and
22“c”, the director shall credit the local sales and services tax
23receipts and interest and penalties from a county-imposed tax
24 as specified in section 423.2A, subsection 2, paragraph “a”,
25including any interest and penalties, to the county’s account
26in the local sales and services use tax fund for the county in
27 from which the tax was collected. The director shall credit
28the use tax receipts as specified in section 423.43, subsection
291, paragraph “b”, subparagraph (1), subparagraph divisions (b)
30and (c), including any interest and penalties, to the county’s
31account in the local sales and use tax fund for the county
32from which the use tax was paid.If the director is unable to
33determine from which county any of the receipts were collected
34or paid, as applicable, those receipts shall be allocated among
35the possible counties based on allocation rules adopted by the
-17-1director.
2b. The director shall credit the designated amount of the
3increase in local sales and services tax receipts, as computed
4in section 423B.10, collected in an urban renewal area of an
5eligible city that has adopted an ordinance pursuant to section
6423B.10, subsection 2, into a special city account in the local
7sales and services use tax fund.
8c. The director shall credit the local sales and services
9tax receipts and interest and penalties from a city-imposed tax
10under section 423B.1, subsection 2, to the city’s account in
11the local sales and services tax fund.
12 Sec. 45. Section 423B.7, subsections 2, 3, and 4, Code 2023,
13are amended to read as follows:
142. The director of revenue by the last day of each
15month shall transfer to each city or county where the local
16option tax is imposed the amount of tax moneys remitted to
17the department attributable to each city or county from the
18preceding month.
193. Seventy-five percent of each county’s account shall be
20remitted on the basis of the county’s population residing in
21the unincorporated area where the tax was imposed and those the
22 incorporated areas where the tax was imposed as follows:
23a. To the board of supervisors a pro rata share based upon
24the percentage of the above population of the county residing
25in the unincorporated area of the county where the tax was
26imposed according to the most recent certified federal census.
27b. To each city in the county where the tax was imposed
28 a pro rata share based upon the percentage of the city’s
29population residing in the county to the above population of
30the county according to the most recent certified federal
31census.
32c. If a subsequent certified census exists which modifies
33that most recent certified federal census for a participating
34 jurisdiction under paragraphs “a” and “b”, the computations
35under paragraphs “a” and “b” shall utilize the subsequent
-18-1certified census in the distribution formula under rules
2established by the director of revenue.
34. Twenty-five percent of each county’s account shall
4be remitted based on the sum of property tax dollars levied
5by the board of supervisors if the tax was imposed in the
6unincorporated areas and by each city in the county where the
7tax was imposed during the three-year period beginning July 1,
81982, and ending June 30, 1985, as follows:
9a. To the board of supervisors a pro rata share based upon
10the percentage of the total property tax dollars levied by the
11board of supervisors during the above three-year period.
12b. To each city council where the tax was imposed a pro rata
13share based upon the percentage of property tax dollars levied
14by the city during the above three-year period of the above
15total property tax dollars levied by the board of supervisors
16and each city where the tax was imposed during the above
17three-year period.
18 Sec. 46. Section 423B.7, subsection 5, Code 2023, is amended
19by striking the subsection.
20 Sec. 47. Section 423B.7, subsections 6 and 7, Code 2023, are
21amended to read as follows:
226. From each special city account under subsection 1,
23paragraph “b”, the sales and services tax revenues shall be
24remitted to the city council for deposit in the special fund
25created in section 403.19, subsection 2, to be used by the city
26as provided in section 423B.10. The distribution from the
27special city account is not subject to the distribution formula
28provided in subsections 3, and 4, and 5.
297. a. Subject to the requirement of paragraph “b” and the
30requirements under section 423B.1, subsection 3, local sales
31and services tax moneys amounts received by a city or county
32under this chapter may be expended for any lawful purpose of
33the city or county, including but not limited to expenses
34related to providing emergency medical services within the
35applicable city or county.
-19- 1b. Each city located in whole or in part in a qualified
2county and each qualified county for the unincorporated area
3for which the imposition of the local sales and services tax
4in the city or portion thereof or the unincorporated area, as
5applicable, was revenue purpose statement approved at election
6 on or after January 1, 2019 2025, shall require the use of
7 not less than fifty percent of the moneys received from the
8qualified county’s account in the local sales and services
9tax fund applicable county under this chapter for property
10tax relief. However, for a county with a population of four
11hundred thousand or more, a revenue purpose statement governing
12the use of revenues for the unincorporated area of the county
13approved on or after January 1, 2025, shall require the use of
14seventy-five percent of the moneys received by the county under
15this chapter for property tax relief.
16c. For purposes of this subsection, property tax relief
17includes payments under a chapter 28E agreement for purposes of
18a regional transit district if such payments are used to reduce
19the regional transit district levy under section 28M.5. For a
20city located in whole or in part in a county with a population
21of four hundred thousand or more, the use of revenues received
22under this chapter for the purposes of this paragraph shall
23not exceed ten percent of the amount received and for a county
24with a population of four hundred thousand or more, for the
25unincorporated area, shall not exceed twenty-five percent of
26the amount received under this chapter.
27 Sec. 48. Section 423B.9, subsection 1, paragraphs b and c,
28Code 2023, are amended to read as follows:
29b. “Designated portion” means the portion of the local
30option sales and services tax revenues received under this
31chapter which is authorized to be expended for one or a
32combination of purposes under an adopted public measure.
33c. “Secondary recipient” means a political subdivision of
34the state which is to receive revenues amounts from a local
35option sales and services tax revenues under this chapter
-20-1 over a period of years pursuant to the terms of a chapter 28E
2agreement with one or more cities or counties.
3 Sec. 49. Section 423B.9, subsections 2 and 3, Code 2023, are
4amended to read as follows:
52. An issuer of public bonds which is a recipient of
6revenues from a local option sales and services tax imposed
7 pursuant to this chapter may issue bonds in anticipation of
8the collection of one or more designated portions of the
9local option sales and services tax such revenues and may
10pledge irrevocably an amount of the revenue derived from the
11designated portions for each of the years the bonds remain
12outstanding to the payment of the bonds. Bonds may be issued
13only for one or more of the purposes set forth on the ballot
14proposition concerning the imposition of the local option sales
15and services tax in the revenue purpose statement, except bonds
16shall not be issued which are payable from that portion of tax
17revenues designated for property tax relief. The bonds may be
18issued in accordance with the procedures set forth in either
19subsection 3 or 4.
203. The governing body of an issuer may authorize the
21issuance of bonds which are payable from the designated portion
22of the revenues of the local option sales and services tax
23 received under this chapter, and not from property tax, by
24following the authorization procedures set forth for cities
25in section 384.83. Bonds may be issued for the purpose of
26refunding outstanding and previously issued bonds under this
27subsection without otherwise complying with the provisions of
28this subsection.
29 Sec. 50. Section 423B.9, subsection 4, paragraph b, Code
302023, is amended to read as follows:
31b. The provisions of chapter 76 apply to the bonds payable
32as provided in this subsection, except that the mandatory levy
33to be assessed pursuant to section 76.2 shall be at a rate
34to generate an amount which together with the receipts from
35the pledged designated portion of the local option sales and
-21-1services tax revenues received under this chapter is sufficient
2to pay the interest and principal on the bonds. All amounts
3collected as a result of the levy assessed pursuant to section
476.2 and paid out in the first instance for bond principal
5and interest shall be repaid to the bond issuer which levied
6the tax from the first available designated portion of local
7option sales and services tax collections revenues received
8under this chapter in excess of the requirement for the payment
9of the principal and interest of the bonds and when repaid
10shall be applied in reduction of property taxes. The amount
11of bonds which may be issued under section 76.3 shall be the
12amount which could be retired from the actual collections of
13the designated portions of the local option sales and services
14tax revenues received under this chapter for the last four
15calendar quarters, as certified by the director of revenue.
16The amount of tax revenues pledged jointly by other cities or
17counties may be considered for the purpose of determining the
18amount of bonds which may be issued. If the local option sales
19and services tax has been in effect revenues have been received
20under this chapter for less than four calendar quarters, the
21tax collected revenues received within the shorter period may
22be adjusted to project the collections amount of the designated
23portion for the full year for the purpose of determining the
24amount of the bonds which may be issued. The provisions of
25this section constitute separate authorization for the issuance
26of bonds and shall prevail in the event of conflict with
27any other provision of the Code limiting the amount of bonds
28which may be issued or the source of payment of the bonds.
29Bonds issued under this section shall not limit or restrict
30the authority of the bond issuer to issue bonds under other
31provisions of the Code.
32 Sec. 51. Section 423B.9, subsection 5, Code 2023, is amended
33to read as follows:
345. A city or county, jointly with one or more other
35political subdivisions as provided in chapter 28E, may pledge
-22-1irrevocably any amount derived from the designated portions
2of the revenues of the local option sales and services tax
3 received under this chapter to the support or payment of bonds
4of an issuer, issued for one or more purposes set forth on
5the ballot proposition concerning the imposition of the local
6option sales and services tax in the revenue purpose statement
7 or a political subdivision may apply the proceeds of its bonds
8to the support of any such purpose.
9 Sec. 52. Section 423B.10, subsection 1, paragraph b, Code
102023, is amended to read as follows:
11b. “Eligible city” means a city in which a local sales and
12services tax imposed by the county applies or a city described
13in section 423B.1, subsection 2, paragraph “a”, and in which an
14urban renewal area has been designated.
15 Sec. 53. Section 423B.10, subsections 2, 3, 5, and 6, Code
162023, are amended to read as follows:
172. a. Upon approval by the board of supervisors of each
18applicable county pursuant to paragraph “b”, an eligible city
19may by ordinance of the city council provide for the use of a
20designated amount of the increased local sales and services
21tax revenues collected received under this chapter which are
22attributable to retail establishments in an urban renewal
23area to fund urban renewal projects located in the area. The
24designated amount may be all or a portion of such increased
25revenues.
26b. A city shall not adopt an ordinance under paragraph
27“a” unless the board of supervisors of each county where the
28urban renewal area from which such local sales and services
29tax revenues are to be collected and used to fund urban
30renewal projects is located first adopts a resolution approving
31the collection and use of such local sales and services tax
32revenues.
333. To determine the revenue increase for purposes of
34subsection 2, revenue amounts shall be calculated by the
35department of revenue as follows:
-23- 1a. Determine the amount of local sales and services tax
2revenue collected and attributable to a one percent sales and
3services tax from retail establishments located in the area
4comprising the urban renewal area during the base year.
5b. Determine the current year one percent sales and services
6tax revenue amount for each fiscal year following the base year
7in the manner specified in paragraph “a”.
8c. The excess of the amount determined in paragraph “b” over
9the base year revenue amount determined in paragraph “a” is the
10increase in the local sales and services tax revenues of which
11the designated amount is to be deposited in the special city
12account created in section 423B.7, subsection 6.
135. In addition to the moneys received pursuant to the
14ordinance authorized under subsection 2, an eligible city
15may deposit any other local sales and services tax revenues
16received by it the city pursuant to the distribution formula in
17section 423B.7, subsections 3, 4, and 5, to the special fund
18described in section 403.19, subsection 2.
196. For purposes of this section, the eligible city shall
20assist the department of revenue in identifying retail
21establishments in the urban renewal area that are collecting
22the local sales and services tax. This process shall be
23ongoing until the ordinance is repealed.
24 Sec. 54. REPEAL. Sections 423B.2, 423B.3, 423B.4, 423B.5,
25423B.6, and 423B.8, Code 2023, are repealed.
26 Sec. 55. EFFECTIVE DATE. This division of this Act takes
27effect January 1, 2025.
28DIVISION IV
29Homestead property tax credit
30 Sec. 56. Section 2.48, subsection 3, paragraph f,
31subparagraph (1), Code 2023, is amended to read as follows:
32(1) The homestead tax exemption and credit under chapter
33425.
34 Sec. 57. Section 25B.7, subsection 2, paragraph a, Code
352023, is amended by striking the paragraph.
-24-1 Sec. 58. Section 100.18, subsection 2, paragraph b, Code
22023, is amended to read as follows:
3b. The rules shall require the installation of smoke
4detectors in existing single-family rental units and
5multiple-unit residential buildings. Existing single-family
6dwelling units shall be equipped with approved smoke detectors.
7A person who files for a homestead tax exemption and credit
8pursuant to chapter 425 shall certify that the single-family
9dwelling unit for which the credit is filed has a smoke
10detector installed in compliance with this section, or that one
11will be installed within thirty days of the date the filing
12for the credit is made. The state fire marshal shall adopt
13rules and establish appropriate procedures to administer this
14subsection.
15 Sec. 59. Section 100.18, subsection 3, paragraph b, Code
162023, is amended to read as follows:
17b. The rules shall require the installation of carbon
18monoxide alarms in existing single-family rental units and
19multiple-unit residential buildings that have a fuel-fired
20heater or appliance, a fireplace, or an attached garage.
21Existing single-family dwellings that have a fuel-fired heater
22or appliance, a fireplace, or an attached garage shall be
23equipped with approved carbon monoxide alarms. For purposes
24of this paragraph, “approved carbon monoxide alarm” means a
25carbon monoxide alarm that meets the standards established by
26the underwriters’ laboratories or is approved by the state fire
27marshal as established by rule under subsection 5. A person
28who files for a homestead tax exemption and credit pursuant
29to chapter 425 shall certify that the single-family dwelling
30for which the credit is filed and that has a fuel-fired heater
31or appliance, a fireplace, or an attached garage, has carbon
32monoxide alarms installed in compliance with this section,
33or that such alarms will be installed within thirty days of
34the date the filing for the credit is made. The state fire
35marshal shall adopt rules and establish appropriate procedures
-25-1to administer this subsection.
2 Sec. 60. Section 103.22, subsection 7, Code 2023, is amended
3to read as follows:
47. Prohibit an owner of property from performing work on the
5owner’s principal residence, if such residence is an existing
6dwelling rather than new construction and is not an apartment
7that is attached to any other apartment or building, as those
8terms are defined in section 499B.2, and is not larger than a
9single-family dwelling, or require such owner to be licensed
10under this chapter. In order to qualify for inapplicability
11pursuant to this subsection, a residence shall qualify for the
12homestead tax exemption and credit.
13 Sec. 61. Section 105.11, subsection 3, Code 2023, is amended
14to read as follows:
153. Prohibit an owner of property from performing work on the
16owner’s principal residence, if such residence is an existing
17dwelling rather than new construction and is not larger than a
18single-family dwelling, or farm property, excluding commercial
19or industrial installations or installations in public use
20buildings or facilities, or require such owner to be licensed
21under this chapter. In order to qualify for inapplicability
22pursuant to this subsection, a residence shall qualify for the
23homestead tax exemption and credit.
24 Sec. 62. Section 216.12, subsection 1, paragraph e, Code
252023, is amended to read as follows:
26e. The rental or leasing of a housing accommodation in a
27building which contains housing accommodations for not more
28than four families living independently of each other, if the
29owner resides in one of the housing accommodations for which
30the owner qualifies for the homestead tax exemption and credit
31under section 425.1.
32 Sec. 63. Section 321.1, subsection 6C, Code 2023, is amended
33to read as follows:
346C. “Bona fide residence” or “bona fide address” means the
35current street or highway address of an individual’s residence.
-26-1The bona fide residence of a person with more than one dwelling
2is the dwelling for which the person claims a homestead tax
3exemption and credit under chapter 425, if applicable. The
4bona fide residence of a homeless person is a primary nighttime
5residence meeting one of the criteria listed in section 48A.2,
6subsection 3.
7 Sec. 64. Section 321.1A, subsection 1, paragraph a, Code
82023, is amended to read as follows:
9a. The person has filed for a homestead tax exemption and
10credit on property in this state.
11 Sec. 65. Section 331.401, subsection 1, paragraphs e and f,
12Code 2023, are amended to read as follows:
13e. Adopt resolutions authorizing the county assessor
14to provide forms for homestead tax exemption and credit
15 claimants as provided in section 425.2 and military service tax
16exemptions as provided in section 426A.14.
17f. Examine and allow or disallow claims for homestead tax
18 exemption and credit in accordance with section 425.3 and
19claims for military service tax exemption in accordance with
20chapter 426A. The board, by a single resolution, may allow or
21disallow the exemptions recommended by the assessor.
22 Sec. 66. Section 331.512, subsection 3, Code 2023, is
23amended to read as follows:
243. Carry out duties relating to the homestead tax exemption
25and credit and agricultural land tax credit as provided in
26chapters 425 and 426.
27 Sec. 67. Section 331.559, subsection 12, Code 2023, is
28amended to read as follows:
2912. Carry out duties relating to the administration of
30the homestead tax exemption and credit and other credits as
31provided in sections 425.4, 425.5, 425.7, 425.9, 425.10, and
32425.25.
33 Sec. 68. Section 404.3, subsection 1, Code 2023, is amended
34to read as follows:
351. All qualified real estate assessed as residential
-27-1property is eligible to receive an exemption from taxation
2based on the actual value added by the improvements. The
3exemption is for a period of ten years. The amount of the
4exemption is equal to a percent of the actual value added by
5the improvements, determined as follows: One hundred fifteen
6percent of the value added by the improvements. However, the
7amount of the actual value added by the improvements which
8shall be used to compute the exemption shall not exceed twenty
9thousand dollars and the granting of the exemption shall not
10result in the actual value of the qualified real estate being
11reduced below the actual value on which the homestead credit
12 exemption is computed under section 425.1.
13 Sec. 69. Section 425.1, subsection 1, paragraph a, Code
142023, is amended to read as follows:
15a. A homestead credit fund is created. There For fiscal
16years beginning before July 1, 2028, there is appropriated
17annually from the general fund of the state to the department
18of revenue to be credited to the homestead credit fund, an
19amount sufficient to implement this subchapter.
20 Sec. 70. Section 425.1, subsection 1, Code 2023, is amended
21by adding the following new paragraph:
22 NEW PARAGRAPH. c. All moneys in the homestead credit fund
23at the end of the fiscal year beginning July 1, 2028, shall be
24transferred by the department of revenue for deposit in the
25general fund of the state.
26 Sec. 71. Section 425.1, subsections 2, 4, and 5, Code 2023,
27are amended to read as follows:
282. a. For fiscal years beginning before July 1, 2028, the
29moneys in the homestead credit fund shall be apportioned each
30year so as to give a credit against the tax on each eligible
31homestead in the state, but not more than the amount under
32paragraph “b”.
33b. (1) The For assessment years beginning before July
341, 2025, the homestead credit fund shall be apportioned each
35year so as to give a credit against the tax on each eligible
-28-1homestead in the state in an amount equal to the actual levy on
2the first four thousand eight hundred fifty dollars of actual
3value for each homestead.
4(2) For property taxes due and payable in the fiscal year
5beginning July 1, 2025, the homestead credit fund shall be
6apportioned each year so as to give a credit against the tax
7on each eligible homestead in the state in an amount equal
8to the actual levy on the first three thousand six hundred
9forty dollars of actual value for each homestead exempted under
10section 425.1A.
11(3) For property taxes due and payable in the fiscal year
12beginning July 1, 2026, the homestead credit fund shall be
13apportioned each year so as to give a credit against the tax
14on each eligible homestead in the state in an amount equal to
15the actual levy on the first two thousand four hundred thirty
16dollars of actual value for each homestead exempted under
17section 425.1A.
18(4) For property taxes due and payable in the fiscal year
19beginning July 1, 2027, the homestead credit fund shall be
20apportioned each year so as to give a credit against the tax
21on each eligible homestead in the state in an amount equal to
22the actual levy on the first one thousand two hundred twenty
23dollars of actual value for each homestead exempted under
24section 425.1A.
254. Annually For fiscal years beginning before July 1, 2028,
26annually the department of revenue shall certify to the county
27auditor of each county the credit and its amount in dollars.
28Each county auditor shall then enter the credit against the
29tax levied on each eligible homestead in each county payable
30during the ensuing year, designating on the tax lists the
31credit as being from the homestead credit fund, and credit
32shall then be given to the several taxing districts in which
33eligible homesteads are located in an amount equal to the
34credits allowed on the taxes of the homesteads. The amount of
35credits shall be apportioned by each county treasurer to the
-29-1several taxing districts as provided by law, in the same manner
2as though the amount of the credit had been paid by the owners
3of the homesteads. However, the several taxing districts shall
4not draw the funds so credited until after the semiannual
5allocations have been received by the county treasurer, as
6provided in this subchapter. Each county treasurer shall show
7on each tax receipt the amount of credit received from the
8homestead credit fund.
95. If For property taxes due and payable in fiscal years
10beginning before July 1, 2028, if the homestead tax credit
11computed under this section is less than sixty-two dollars
12and fifty cents, the amount of homestead tax credit on that
13eligible homestead shall be sixty-two dollars and fifty cents
14subject to the limitation imposed in this section.
15 Sec. 72. NEW SECTION. 425.1A Homestead tax exemption.
16The following exemptions from taxation shall be allowed:
171. a. Except as provided in paragraph “b”, for the
18assessment year beginning January 1, 2024, the eligible
19homestead, not to exceed two thousand five hundred dollars in
20taxable value.
21b. If the owner of the homestead has attained the age of
22sixty-five years by January 1 of the assessment year, the
23eligible homestead, not to exceed four thousand one hundred
24twenty-five dollars in taxable value.
252. a. Except as provided in paragraph “b”, for the
26assessment year beginning January 1, 2025, the eligible
27homestead, not to exceed five thousand dollars in taxable
28value.
29b. If the owner of the homestead has attained the age of
30sixty-five years by January 1 of the assessment year, the
31eligible homestead, not to exceed eight thousand two hundred
32fifty dollars in taxable value.
333. a. Except as provided in paragraph “b”, for the
34assessment year beginning January 1, 2026, the eligible
35homestead, not to exceed seven thousand five hundred dollars
-30-1in taxable value.
2b. If the owner of the homestead has attained the age of
3sixty-five years by January 1 of the assessment year, the
4eligible homestead, not to exceed twelve thousand three hundred
5seventy-five dollars in taxable value.
64. a. Except as provided in paragraph “b”, for the
7assessment year beginning January 1, 2027, and each succeeding
8assessment year, the eligible homestead, not to exceed ten
9thousand dollars in taxable value.
10b. If the owner of the homestead has attained the age of
11sixty-five years by January 1 of the assessment year, the
12eligible homestead, not to exceed sixteen thousand five hundred
13dollars in taxable value.
14 Sec. 73. Section 425.2, subsections 1, 2, 4, and 5, Code
152023, are amended to read as follows:
161. A person who wishes to qualify for the homestead
17exemption and credit allowed under this subchapter shall
18obtain the appropriate forms for filing for the exemption and
19 credit from the assessor. The person claiming the exemption
20and credit shall file a verified statement and designation of
21homestead with the assessor for the year for which the person
22is first claiming the exemption and credit. The claim shall be
23filed not later than July 1 of the year for which the person is
24claiming the exemption and credit. A claim filed after July 1
25of the year for which the person is claiming the exemption and
26 credit shall be considered as a claim filed for the following
27year.
282. Upon the filing and allowance of the claim, the claim
29shall be allowed on that homestead for successive years without
30further filing as long as the property is legally or equitably
31owned and used as a homestead by that person or that person’s
32spouse on July 1 of each of those successive years, and the
33owner of the property being claimed as a homestead declares
34residency in Iowa for purposes of income taxation, and the
35property is occupied by that person or that person’s spouse
-31-1for at least six months in each of those calendar years in
2which the fiscal year begins. When the property is sold or
3transferred, the buyer or transferee who wishes to qualify
4shall refile for the exemption and credit. However, when the
5property is transferred as part of a distribution made pursuant
6to chapter 598, the transferee who is the spouse retaining
7ownership of the property is not required to refile for the
8exemption and credit. Property divided pursuant to chapter 598
9shall not be modified following the division of the property.
10An owner who ceases to use a property for a homestead or
11intends not to use it as a homestead for at least six months in
12a calendar year shall provide written notice to the assessor
13by July 1 following the date on which the use is changed. A
14person who sells or transfers a homestead or the personal
15representative of a deceased person who had a homestead at the
16time of death, shall provide written notice to the assessor
17that the property is no longer the homestead of the former
18claimant.
194. Any person sixty-five years of age or older or any person
20who is disabled may request, in writing, from the appropriate
21assessor forms for filing for homestead tax exemption and
22 credit. Any person sixty-five years of age or older or who is
23disabled may complete the form, which shall include a statement
24of homestead, and mail or return it to the appropriate
25assessor. The signature of the claimant on the statement shall
26be considered the claimant’s acknowledgment that all statements
27and facts entered on the form are correct to the best of the
28claimant’s knowledge.
295. Upon adoption of a resolution by the county board of
30supervisors, any person may request, in writing, from the
31appropriate assessor forms for the filing for homestead tax
32exemption and credit. The person may complete the form, which
33shall include a statement of homestead, and mail or return it
34to the appropriate assessor. The signature of the claimant on
35the statement of homestead shall be considered the claimant’s
-32-1acknowledgment that all statements and facts entered on the
2form are correct to the best of the claimant’s knowledge.
3 Sec. 74. Section 425.3, subsection 4, Code 2023, is amended
4to read as follows:
54. The county auditor shall forward the claims to the board
6of supervisors. The board shall allow or disallow the claims.
7If the board disallows a claim, it shall send written notice,
8by mail, to the claimant at the claimant’s last known address.
9The notice shall state the reasons for disallowing the claim
10for the credit. The board is not required to send notice that
11a claim is disallowed if the claimant voluntarily withdraws the
12claim.
13 Sec. 75. Section 425.4, Code 2023, is amended to read as
14follows:
15425.4 Certification to treasurer.
16All claims which have been allowed by the board of
17supervisors shall be certified on or before August 1, in each
18year, by the county auditor to the county treasurer, which
19certificates shall list the total amount of dollars, listed by
20taxing district in the county, due for homestead tax exemptions
21and credits claimed and allowed. The county treasurer shall
22forthwith then certify to the department of revenue the total
23amount of dollars, listed by taxing district in the county, due
24for homestead tax exemptions and credits claimed and allowed.
25 Sec. 76. Section 425.6, Code 2023, is amended to read as
26follows:
27425.6 Waiver by neglect.
28If a person fails to file a claim or to have a claim on file
29with the assessor for the credits provided in this subchapter,
30the person is deemed to have waived the homestead exemption
31and credit for the year in which the person failed to file the
32claim or to have a claim on file with the assessor.
33 Sec. 77. Section 425.7, subsection 3, Code 2023, is amended
34to read as follows:
353. a. If the department of revenue determines that a claim
-33-1for homestead exemption and credit has been allowed by the
2board of supervisors which is not justifiable under the law
3and not substantiated by proper facts, the department may, at
4any time within thirty-six months from July 1 of the year in
5which the claim is allowed, set aside the allowance. Notice
6of the disallowance shall be given to the county auditor of
7the county in which the claim has been improperly granted and
8a written notice of the disallowance shall also be addressed
9to the claimant at the claimant’s last known address. The
10claimant or board of supervisors may appeal to the director
11of revenue within thirty days from the date of the notice of
12disallowance. The director shall grant a hearing and if, upon
13the hearing, the director determines that the disallowance was
14incorrect, the director shall set aside the disallowance. The
15director shall notify the claimant and the board of supervisors
16of the result of the hearing. The claimant or the board of
17supervisors may seek judicial review of the action of the
18director of revenue in accordance with chapter 17A.
19b. If a claim is disallowed by the department of revenue
20and not appealed to the director of revenue or appealed to
21the director of revenue and thereafter upheld upon final
22resolution, including any judicial review, any amounts of
23exemptions allowed and credits allowed and paid from the
24homestead credit fund including the penalty, if any, become a
25lien upon the property on which the exemption and credit was
26originally granted, if still in the hands of the claimant,
27and not in the hands of a bona fide purchaser, and any amount
28so erroneously paid including the penalty, if any, shall be
29collected by the county treasurer in the same manner as other
30taxes and the collections shall be returned to the department
31of revenue and credited to the homestead credit fund. The
32director of revenue may institute legal proceedings against a
33homestead credit claimant for the collection of payments made
34on disallowed credits and the penalty, if any. If a person
35makes a false claim or affidavit with fraudulent intent to
-34-1obtain the homestead exemption and credit, the person is guilty
2of a fraudulent practice and the claim shall be disallowed in
3full. If the credit has been paid, the amount of the credit
4plus a penalty equal to twenty-five percent of the amount of
5credit plus interest, at the rate in effect under section
6421.7, from the time of payment shall be collected by the
7county treasurer in the same manner as other property taxes,
8penalty, and interest are collected and when collected shall
9be paid to the director of revenue. If a homestead exemption
10and credit is disallowed and the claimant failed to give
11written notice to the assessor as required by section 425.2
12when the property ceased to be used as a homestead by the
13claimant, a civil penalty equal to five percent of the amount
14of the disallowed exemption or credit is assessed against the
15claimant.
16 Sec. 78. Section 425.8, subsection 1, Code 2023, is amended
17to read as follows:
181. The director of revenue shall prescribe the form
19for the making of a verified statement and designation of
20homestead, the form for the supporting affidavits required
21herein, and such other forms as may be necessary for the proper
22administration of this subchapter. Whenever necessary, the
23department of revenue shall forward to the county auditors of
24the several counties in the state the prescribed sample forms,
25and the county auditors shall furnish blank forms prepared
26in accordance therewith with the assessment rolls, books,
27and supplies delivered to the assessors. The department of
28revenue shall prescribe and the county auditors shall provide
29on the forms for claiming the homestead exemption and credit a
30statement to the effect that the owner realizes that the owner
31must give written notice to the assessor when the owner changes
32the use of the property.
33 Sec. 79. Section 425.9, subsections 2, 3, and 4, Code 2023,
34are amended to read as follows:
352. If any claim for exemption and credit made hereunder
-35-1 has been denied by the board of supervisors, and such action
2is subsequently reversed on appeal, the exemption and credit
3shall be allowed on the homestead involved in said appeal, and
4the director of revenue, the county auditor, and the county
5treasurer shall make such exemption and credit and change their
6books and records accordingly.
73. In the event the appealing taxpayer has paid one or both
8of the installments of the tax payable in the year or years in
9question on such homestead valuation, remittance shall be made
10to such taxpayer of the amount of such credit or exemption.
114. The amount of such credit shall be allocated and paid
12from the surplus redeposited in the homestead credit fund
13provided for in subsection 1. The amount of such exemption not
14covered by the credit shall be allowed as a credit on future
15taxes due and payable.
16 Sec. 80. Section 425.10, Code 2023, is amended to read as
17follows:
18425.10 Reversal of allowed claim.
19In the event any claim is allowed, and subsequently reversed
20on appeal, any exemption and credit made under the claim
21shall be void. The amount of the erroneous exemption and
22 credit shall be charged against the property in question, and
23the director of revenue, the county auditor, and the county
24treasurer are authorized and directed to correct their books
25and records accordingly. The amount of the erroneous credit,
26when collected, shall be returned by the county treasurer to
27the homestead credit fund to be reallocated the following year
28as provided in this subchapter.
29 Sec. 81. Section 425.11, subsection 1, paragraph d,
30subparagraph (1), unnumbered paragraph 1, Code 2023, is amended
31to read as follows:
32The homestead includes the dwelling house which the owner,
33in good faith, is occupying as a home on July 1 of the year for
34which the exemption and credit is claimed and occupies as a
35home for at least six months during the calendar year in which
-36-1the fiscal year begins, except as otherwise provided.
2 Sec. 82. Section 425.11, subsection 1, paragraph d,
3subparagraph (3), Code 2023, is amended to read as follows:
4(3) It must not embrace more than one dwelling house, but
5where a homestead has more than one dwelling house situated
6thereon, the exemption and credit provided for in this
7subchapter shall apply to the home and buildings used by the
8owner, but shall not apply to any other dwelling house and
9buildings appurtenant.
10 Sec. 83. Section 425.11, subsection 1, paragraph e, Code
112023, is amended to read as follows:
12e. “Owner” means the person who holds the fee simple
13title to the homestead, and in addition shall mean the person
14occupying as a surviving spouse or the person occupying under
15a contract of purchase which contract has been recorded in
16the office of the county recorder of the county in which the
17property is located; or the person occupying the homestead
18under devise or by operation of the inheritance laws where
19the whole interest passes or where the divided interest is
20shared only by persons related or formerly related to each
21other by blood, marriage or adoption; or the person occupying
22the homestead is a shareholder of a family farm corporation
23that owns the property; or the person occupying the homestead
24under a deed which conveys a divided interest where the divided
25interest is shared only by persons related or formerly related
26to each other by blood, marriage or adoption; or where the
27person occupying the homestead holds a life estate with the
28reversion interest held by a nonprofit corporation organized
29under chapter 504, provided that the holder of the life estate
30is liable for and pays property tax on the homestead; or where
31the person occupying the homestead holds an interest in a
32horizontal property regime under chapter 499B, regardless
33of whether the underlying land committed to the horizontal
34property regime is in fee or as a leasehold interest, provided
35that the holder of the interest in the horizontal property
-37-1regime is liable for and pays property tax on the homestead;
2or where the person occupying the homestead is a member of a
3community land trust as defined in 42 U.S.C. §12773, regardless
4of whether the underlying land is in fee or as a leasehold
5interest, provided that the member of the community land trust
6is occupying the homestead and is liable for and pays property
7tax on the homestead. For the purpose of this subchapter,
8the word “owner” shall be construed to mean a bona fide owner
9and not one for the purpose only of availing the person of
10the benefits of this subchapter. In order to qualify for the
11homestead tax exemption and credit, evidence of ownership shall
12be on file in the office of the clerk of the district court
13or recorded in the office of the county recorder at the time
14the owner files with the assessor a verified statement of the
15homestead claimed by the owner as provided in section 425.2.
16 Sec. 84. Section 425.12, Code 2023, is amended to read as
17follows:
18425.12 Indian land.
19Each forty acres of land, or fraction thereof, occupied by
20a member or members of the Sac and Fox Indians in Tama county,
21which land is held in trust by the secretary of the interior of
22the United States for said Indians, shall be given a homestead
23tax exemption and credit within the meaning and under the
24provisions of this subchapter. Application for such homestead
25tax exemption and credit shall be made to the county auditor of
26Tama county and may be made by a representative of the tribal
27council.
28 Sec. 85. Section 425.13, Code 2023, is amended to read as
29follows:
30425.13 Conspiracy to defraud.
31If any two or more persons conspire and confederate together
32with fraudulent intent to obtain the exemption and credit
33provided for under the terms of this subchapter by making a
34false deed, or a false contract of purchase, they are guilty of
35a fraudulent practice.
-38-1 Sec. 86. Section 425.15, subsection 1, unnumbered paragraph
21, Code 2023, is amended to read as follows:
3If the owner of a homestead allowed a an exemption and credit
4under this subchapter is any of the following, the exemption
5shall be the total actual value of the homestead and, for
6fiscal years for which credits are paid, the credit allowed
7on the homestead from the homestead credit fund shall be the
8entire amount of the tax levied on the homestead:
9 Sec. 87. Section 425.15, subsections 2, 3, and 4, Code 2023,
10are amended to read as follows:
112. a. For an owner described in subsection 1, paragraph
12“a”, “b”, or “c”, the exemption and credit allowed shall be
13continued to the estate of an owner who is deceased or the
14surviving spouse and any child, as defined in section 234.1,
15who are the beneficiaries of a deceased owner, so long as the
16surviving spouse remains unmarried.
17b. An individual described in subsection 1, paragraph
18“d”, is no longer eligible for the exemption and credit upon
19termination of dependency and indemnity compensation under 38
20U.S.C. §1301 et seq.
213. An owner or a beneficiary of an owner who elects to
22secure the exemption and credit provided in this section is not
23eligible for any other real property tax exemption provided by
24law for veterans of military service.
254. If an owner acquires a different homestead, the exemption
26and credit allowed under this section may be claimed on the new
27homestead unless the owner fails to meet the other requirements
28of this section.
29 Sec. 88. Section 425.15, subsection 5, paragraph a, Code
302023, is amended to read as follows:
31a. Except as provided in paragraph “b”, the list of the
32names and addresses of individuals allowed a an exemption
33and credit under this section and maintained by the county
34recorder, county treasurer, county assessor, city assessor, or
35other government body is confidential information and shall
-39-1not be disseminated to any person unless otherwise ordered by
2a court or released by the lawful custodian of the records
3pursuant to state or federal law. The county recorder, county
4treasurer, county assessor, city assessor, or other government
5body responsible for maintaining the names and addresses of
6individuals allowed a an exemption and credit under this
7section may display such exemption and credit on individual
8paper records and individual electronic records, including
9display on an internet site.
10 Sec. 89. Section 425.16, subsection 1, Code 2023, is amended
11to read as follows:
121. In addition to the homestead tax credit allowed under
13section 425.1, subsections 1 through 4, and the homestead
14exemption under section 425.lA, persons who own or rent their
15homesteads and who meet the qualifications provided in this
16subchapter are eligible for a property tax credit for property
17taxes due or reimbursement of rent constituting property taxes
18paid.
19 Sec. 90. Section 425.17, subsection 8, Code 2023, is amended
20to read as follows:
218. “Property taxes due” means property taxes including any
22special assessments, but exclusive of delinquent interest and
23charges for services, due on a claimant’s homestead in this
24state, but includes only property taxes for which the claimant
25is liable and which will actually be paid by the claimant.
26However, if the claimant is a person whose property taxes have
27been suspended under sections 427.8 and 427.9, “property taxes
28due” means property taxes including any special assessments,
29but exclusive of delinquent interest and charges for services,
30due on a claimant’s homestead in this state, but includes only
31property taxes for which the claimant is liable and which
32would have to be paid by the claimant if the payment of the
33taxes has not been suspended pursuant to sections 427.8 and
34427.9. “Property taxes due” shall be computed with no deduction
35for any credit under this subchapter or for any homestead
-40- 1exemption or credit allowed under section 425.1. Each claim
2shall be based upon the taxes due during the fiscal year next
3following the base year. If a homestead is owned by two or
4more persons as joint tenants or tenants in common, and one or
5more persons are not members of claimant’s household, “property
6taxes due” is that part of property taxes due on the homestead
7which equals the ownership percentage of the claimant and the
8claimant’s household. The county treasurer shall include with
9the tax receipt a statement that if the owner of the property
10is eighteen years of age or over, the person may be eligible
11for the credit allowed under this subchapter. If a homestead
12is an integral part of a farm, the claimant may use the total
13property taxes due for the larger unit. If a homestead is an
14integral part of a multidwelling or multipurpose building the
15property taxes due for the purpose of this subsection shall be
16prorated to reflect the portion which the value of the property
17that the household occupies as its homestead is to the value
18of the entire structure. For purposes of this subsection,
19“unit” refers to that parcel of property covered by a single tax
20statement of which the homestead is a part.
21 Sec. 91. Section 435.26, subsection 1, paragraph a, Code
222023, is amended to read as follows:
23a. A mobile home or manufactured home which is located
24outside a manufactured home community or mobile home park shall
25be converted to real estate by being placed on a permanent
26foundation and shall be assessed for real estate taxes. A
27home, after conversion to real estate, is eligible for the
28homestead tax exemption and credit and the military service tax
29exemption as provided in sections 425.2 and 426A.11. A taxable
30mobile home or manufactured home which is located outside
31of a manufactured home community or mobile home park as of
32January 1, 1995, is also exempt from the permanent foundation
33requirements of this chapter until the home is relocated.
34 Sec. 92. Section 435.26A, subsection 3, Code 2023, is
35amended to read as follows:
-41- 13. After the surrender of a manufactured home’s certificate
2of title under this section, the manufactured home shall
3continue to be taxed under section 435.22 and is not eligible
4for the homestead tax exemption and credit or the military
5service tax exemption and credit. A foreclosure action on a
6manufactured home whose title has been surrendered under this
7section shall be conducted as a real estate foreclosure. A tax
8lien and its priority shall remain the same on a manufactured
9home after its certificate of title has been surrendered.
10 Sec. 93. Section 483A.24, subsection 19, Code 2023, is
11amended to read as follows:
1219. Upon payment of a fee established by rules adopted
13pursuant to section 483A.1 for a lifetime trout fishing
14license, the department shall issue a lifetime trout fishing
15license to a person who is at least sixty-five years of age or
16to a person who qualifies for the disabled veteran homestead
17exemption and credit under section 425.15. The department
18shall prepare an application to be used by a person requesting
19a lifetime trout fishing license under this subsection.
20 Sec. 94. Section 499A.14, Code 2023, is amended to read as
21follows:
22499A.14 Taxation.
23The real estate shall be taxed in the name of the
24cooperative, and each member of the cooperative shall pay
25that member’s proportionate share of the tax in accordance
26with the proration formula set forth in the bylaws, and each
27member occupying an apartment as a residence shall receive
28that member’s proportionate homestead tax exemption and credit
29and each veteran of the military services of the United States
30identified as such under the laws of the state of Iowa or the
31United States shall receive as a credit that member’s veterans
32tax benefit as prescribed by the laws of the state of Iowa.
33 Sec. 95. EXISTING HOMESTEAD CLAIMS. Homestead credit
34claims approved under chapter 425, subchapter I, prior to and
35valid on the effective date of this division of this Act shall
-42-1result in a homestead exemption under chapter 425, subchapter
2I, as enacted in this division of this Act, without further
3filing by the claimant.
4 Sec. 96. IMPLEMENTATION. Section 25B.7, subsection 1,
5shall not apply to the property tax exemption provided in this
6division of this Act.
7 Sec. 97. APPLICABILITY. This division of this Act applies
8to assessment years beginning on or after January 1, 2024.
9DIVISION V
10ELDERLY PROPERTY TAX CREDIT
11 Sec. 98. Section 425.23, subsection 1, paragraph c,
12subparagraph (2), Code 2023, is amended to read as follows:
13(2) The difference between the actual amount of net
14 property taxes due on the homestead during the fiscal year next
15following the base year minus the actual amount of net property
16taxes due on the homestead during the first fiscal year for
17which the claimant filed a claim for a credit calculated under
18this paragraph “c” and for which the property taxes due on the
19homestead were calculated on an assessed valuation that was
20not a partial assessment and if the claimant has filed for the
21credit calculated under this paragraph “c” for each of the
22subsequent fiscal years after the first credit claimed.
23 Sec. 99. Section 425.23, subsection 2, Code 2023, is amended
24to read as follows:
252. a. The Except as provided in paragraph “b”, the
26 actual credit for property taxes due shall be determined
27by subtracting from the tentative credit the amount of the
28homestead credit under section 425.1 which is allowed as a
29credit against property taxes due in the fiscal year next
30following the base year by the claimant or any person of
31the claimant’s household. If the subtraction produces a
32negative amount, there shall be no credit but no refund shall
33be required. The actual reimbursement for rent constituting
34property taxes paid shall be equal to the tentative
35reimbursement.
-43- 1b. If the claimant’s tentative credit is the amount
2determined under subsection 1, paragraph “c”, subparagraph (2),
3the actual credit amount shall be equal to the tentative credit
4amount.
5 Sec. 100. EFFECTIVE DATE. This division of this Act, being
6deemed of immediate importance, takes effect upon enactment.
7 Sec. 101. RETROACTIVE APPLICABILITY. This division of
8this Act applies retroactively to claims under chapter 425,
9subchapter II, filed on or after January 1, 2022.
10DIVISION VI
11MILITARY SERVICE PROPERTY TAX EXEMPTION AND CREDIT
12 Sec. 102. Section 25B.7, subsection 2, paragraph c, Code
132023, is amended by striking the paragraph.
14 Sec. 103. Section 426A.1A, Code 2023, is amended to read as
15follows:
16426A.1A Appropriation.
17There For each fiscal year beginning before July 1, 2026,
18there is appropriated from the general fund of the state the
19amounts necessary to fund the credits provided under this
20chapter.
21 Sec. 104. Section 426A.2, Code 2023, is amended to read as
22follows:
23426A.2 Military service tax credit.
24The For each fiscal year beginning before July 1, 2026, the
25 moneys appropriated under section 426A.1A shall be apportioned
26each year so as to replace all or a portion of the tax which
27would be due on property eligible for military service tax
28exemption in the state, if the property were subject to
29taxation, the amount of the credit to be not more than six
30dollars and ninety-two cents per thousand dollars of assessed
31value of property, not to exceed nine hundred forty-five
32dollars, which would be subject to the tax, except for the
33military service tax exemption.
34 Sec. 105. Section 426A.11, subsections 1 and 2, Code 2023,
35are amended to read as follows:
-44- 11. The property, not to exceed two thousand seven hundred
2seventy-eight dollars in taxable value for assessment years
3beginning before January 1, 2024, of any veteran, as defined in
4section 35.1, of World War I.
52. a. The property, not to exceed one thousand eight
6hundred fifty-two dollars in taxable value for assessment years
7beginning before January 1, 2024, of an honorably separated,
8retired, furloughed to a reserve, placed on inactive status,
9or discharged veteran, as defined in section 35.1, subsection
102, paragraph “a” or “b”.
11b. The property, not to exceed two thousand fifty-five
12dollars in taxable value for the assessment year beginning
13January 1, 2024, of an honorably separated, retired, furloughed
14to a reserve, placed on inactive status, or discharged veteran,
15as defined in section 35.1, subsection 2, paragraph “a” or “b”.
16c. The property, not to exceed four thousand dollars in
17taxable value for assessment years beginning on or after
18January 1, 2025, of an honorably separated, retired, furloughed
19to a reserve, placed on inactive status, or discharged veteran,
20as defined in section 35.1, subsection 2, paragraph “a” or “b”.
21 Sec. 106. IMPLEMENTATION. Section 25B.7, subsection 1,
22shall not apply to the property tax exemption provided in this
23Act.
24 Sec. 107. APPLICABILITY. This division of this Act applies
25to assessment years beginning on or after January 1, 2024.
26DIVISION VII
27PROPERTY TAX ASSESSMENT LIMITATIONS
28 Sec. 108. Section 441.21, subsections 5, 9, and 10, Code
292023, are amended to read as follows:
305. a. (1) For valuations established as of January 1,
311979, property valued by the department of revenue pursuant
32to chapters 428, 433, and 437, and 438 shall be considered as
33one class of property and shall be assessed as a percentage
34of its actual value. The percentage shall be determined by
35the director of revenue in accordance with the provisions of
-45-1this section. For valuations established as of January 1,
21979, the percentage shall be the quotient of the dividend and
3divisor as defined in this section. The dividend shall be the
4total actual valuation established for 1978 by the department
5of revenue, plus ten percent of the amount so determined.
6The divisor for property valued by the department of revenue
7pursuant to chapters 428, 433, and 437, and 438 shall be the
8valuation established for 1978, plus the amount of value added
9to the total actual value by the revaluation of the property
10by the department of revenue as of January 1, 1979. For
11valuations established as of January 1, 1980, property valued
12by the department of revenue pursuant to chapters 428, 433, and
13 437, and 438 shall be assessed at a percentage of its actual
14value. The percentage shall be determined by the director of
15revenue in accordance with the provisions of this section. For
16valuations established as of January 1, 1980, the percentage
17shall be the quotient of the dividend and divisor as defined in
18this section. The dividend shall be the total actual valuation
19established for 1979 by the department of revenue, plus eight
20percent of the amount so determined. The divisor for property
21valued by the department of revenue pursuant to chapters 428,
22433, and 437, and 438 shall be the valuation established for
231979, plus the amount of value added to the total actual
24value by the revaluation of the property by the department of
25revenue as of January 1, 1980. For valuations established
26as of January 1, 1981, and each year thereafter beginning
27before January 1, 2025, the percentage of actual value at
28which property valued by the department of revenue pursuant to
29chapters 428, 433, and 437, and 438 shall be assessed shall
30be calculated in accordance with the methods provided herein,
31except that any references to ten percent in this subsection
32shall be eight percent. For valuations established on or after
33January 1, 2013, property valued by the department of revenue
34pursuant to chapter 434 shall be assessed at a portion of its
35actual value determined in the same manner at which property
-46-1assessed as commercial property is assessed under paragraph “b”
2 for the same assessment year. For valuations established for
3the assessment year beginning January 1, 2025, the percentage
4of actual value at which property valued by the department of
5revenue pursuant to chapter 438 shall be assessed shall be
6ninety-five percent. For valuations established for assessment
7years beginning on or after January 1, 2026, the percentage
8of actual value at which property valued by the department of
9revenue pursuant to chapter 438 shall be assessed shall be
10ninety percent.
11(2) (a) For valuations established for the assessment year
12beginning January 1, 2025, the percentage of actual value at
13which property valued by the department of revenue pursuant to
14chapters 428 and 437 shall be assessed shall be ninety-seven
15and one-half percent.
16(b) For valuations established for the assessment year
17beginning January 1, 2026, the percentage of actual value at
18which property valued by the department of revenue pursuant to
19chapters 428 and 437 shall be assessed shall be ninety-five
20percent.
21(c) For valuations established for the assessment year
22beginning January 1, 2027, the percentage of actual value at
23which property valued by the department of revenue pursuant to
24chapters 428 and 437 shall be assessed shall be ninety-two and
25one-half percent.
26(d) For valuations established for the assessment year
27beginning January 1, 2028, and each assessment year thereafter,
28the percentage of actual value at which property valued by the
29department of revenue pursuant to chapters 428 and 437 shall be
30assessed shall be ninety percent.
31b. For valuations established on or after January 1, 2013,
32commercial property, excluding properties referred to in
33section 427A.1, subsection 9, shall be assessed at a portion
34of its actual value, as determined in this paragraph “b”. For
35valuations established on or after January 1, 2013, property
-47-1valued by the department of revenue pursuant to chapter 434
2shall be assessed at a portion of its actual value determined
3in the same manner at which property assessed as commercial
4property is assessed for the same assessment year.
5(1) For valuations established for the assessment year
6beginning January 1, 2013, the percentage of actual value
7as equalized by the department of revenue as provided in
8section 441.49 at which commercial property shall be assessed
9shall be ninety-five percent. For valuations established
10for the assessment year beginning January 1, 2014, and each
11assessment year thereafter beginning before January 1, 2022,
12the percentage of actual value as equalized by the department
13of revenue as provided in section 441.49 at which commercial
14property shall be assessed shall be ninety percent.
15(2) For valuations established for the assessment year
16beginning January 1, 2022, and each assessment year thereafter,
17the portion of actual value at which each property unit of
18commercial property shall be assessed shall be the sum of the
19following:
20(a) An amount equal to the product of the assessment
21limitation percentage applicable to residential property under
22subsection 4 for that assessment year multiplied by the actual
23value of the property that exceeds zero dollars but does not
24exceed one hundred fifty thousand dollars.
25(b) (i) An For the assessment years beginning January 1,
262022, January 1, 2023, and January 1, 2024, an amount equal
27to ninety percent of the actual value of the property for
28that assessment year that exceeds one hundred fifty thousand
29dollars.
30(ii) For the assessment year beginning January 1, 2025,
31an amount equal to eighty-five percent of the actual value of
32the property for that assessment year that exceeds one hundred
33fifty thousand dollars.
34(iii) For the assessment year beginning January 1, 2026,
35and each assessment year thereafter, an amount equal to eighty
-48-1percent of the actual value of the property for that assessment
2year that exceeds one hundred fifty thousand dollars.
3c. For valuations established on or after January 1, 2013,
4industrial property, excluding properties referred to in
5section 427A.1, subsection 9, shall be assessed at a portion of
6its actual value, as determined in this paragraph “c”.
7(1) For valuations established for the assessment year
8beginning January 1, 2013, the percentage of actual value
9as equalized by the department of revenue as provided in
10section 441.49 at which industrial property shall be assessed
11shall be ninety-five percent. For valuations established
12for the assessment year beginning January 1, 2014, and each
13assessment year thereafter beginning before January 1, 2022,
14the percentage of actual value as equalized by the department
15of revenue as provided in section 441.49 at which industrial
16property shall be assessed shall be ninety percent.
17(2) For valuations established for the assessment year
18beginning January 1, 2022, and each assessment year thereafter,
19the portion of actual value at which each property unit of
20industrial property shall be assessed shall be the sum of the
21following:
22(a) An amount equal to the product of the assessment
23limitation percentage applicable to residential property under
24subsection 4 for that assessment year multiplied by the actual
25value of the property that exceeds zero dollars but does not
26exceed one hundred fifty thousand dollars.
27(b) (i) An For the assessment years beginning January 1,
282022, January 1, 2023, and January 1, 2024, an amount equal
29to ninety percent of the actual value of the property for
30that assessment year that exceeds one hundred fifty thousand
31dollars.
32(ii) For the assessment year beginning January 1, 2025,
33an amount equal to eighty-five percent of the actual value of
34the property for that assessment year that exceeds one hundred
35fifty thousand dollars.
-49- 1(iii) For the assessment year beginning January 1, 2026,
2and each assessment year thereafter, an amount equal to eighty
3percent of the actual value of the property for that assessment
4year that exceeds one hundred fifty thousand dollars.
5d. For valuations established for the assessment year
6beginning January 1, 2019, and each assessment year thereafter,
7the percentages or portions of actual value at which property
8is assessed, as determined under this subsection, shall not be
9applied to the value of wind energy conversion property valued
10under section 427B.26 the construction of which is approved by
11the Iowa utilities board on or after July 1, 2018.
12e. (1) For each fiscal year beginning on or after July 1,
132023, there is appropriated from the general fund of the state
14to the department of revenue the sum of one hundred twenty-five
15million dollars to be used for payments under this paragraph
16calculated as a result of the assessment limitations imposed
17under paragraph “b”, subparagraph (2), subparagraph division
18(a), and paragraph “c”, subparagraph (2), subparagraph division
19(a).
20(2) For fiscal years beginning on or after July 1, 2023,
21each county treasurer shall be paid by the department of
22revenue an amount calculated under subparagraph (4). If an
23amount appropriated for the fiscal year is insufficient to make
24all payments as calculated under subparagraph (4), the director
25of revenue shall prorate the payments to the county treasurers
26and shall notify the county auditors of the pro rata percentage
27on or before September 30.
28(3) On or before July 1 of each fiscal year, the assessor
29shall report to the county auditor that portion of the total
30actual value of all commercial property and industrial property
31in the county that is subject to the assessment limitations
32imposed under paragraph “b”, subparagraph (2), subparagraph
33division (a), and paragraph “c”, subparagraph (2), subparagraph
34division (a), for the assessment year used to calculate the
35taxes due and payable in that fiscal year.
-50- 1(4) On or before September 1 of each fiscal year, the county
2auditor shall prepare a statement, based on the report received
3in subparagraph (3) and information transmitted to the county
4auditor under chapter 434, listing for each taxing district in
5the county:
6(a) The product of the portion of the total actual value
7of all commercial property, industrial property, and property
8valued by the department under chapter 434 in the county
9that is subject to the assessment limitations imposed under
10paragraph “b”, subparagraph (2), subparagraph division (a),
11and paragraph “c”, subparagraph (2), subparagraph division
12(a), for the applicable assessment year used to calculate
13taxes which are due and payable in the applicable fiscal year
14multiplied by the difference, stated as a percentage, between
15ninety percent the percentage under paragraph “b”, subparagraph
16(2), subparagraph division (b), for the applicable assessment
17year and the assessment limitation percentage applicable to
18residential property under subsection 4 for the applicable
19assessment year.
20(b) The tax levy rate per one thousand dollars of assessed
21value for each taxing district for the applicable fiscal year.
22(c) The amount of the payment for each county is equal to
23the amount determined pursuant to subparagraph division (a),
24multiplied by the tax rate specified in subparagraph division
25(b), and then divided by one thousand dollars.
26(5) The county auditor shall certify and forward one copy of
27the statement described in subparagraph (4) to the department
28of revenue not later than September 1 of each fiscal year.
29(6) The amounts determined under this paragraph shall
30be paid by the department to the county treasurers in equal
31installments in September and March of each year. The county
32treasurer shall apportion the payments among the eligible
33taxing districts in the county and the amounts received by each
34taxing authority shall be treated the same as property taxes
35paid.
-51- 1f. For the purposes of this subsection, unless the context
2otherwise requires:
3(1) “Contiguous parcels” means any of the following:
4(a) Parcels that share a common boundary.
5(b) Parcels within the same building or structure
6regardless of whether the parcels share a common boundary.
7(c) Permanent improvements to the land that are situated
8on one or more parcels of land that are assessed and taxed
9separately from the permanent improvements if the parcels of
10land upon which the permanent improvements are situated share
11a common boundary.
12(2) “Parcel” means the same as defined in section 445.1.
13“Parcel” also means that portion of a parcel assigned a
14classification of commercial property or industrial property
15pursuant to section 441.21, subsection 14, paragraph “b”.
16(3) “Property unit” means a parcel or contiguous parcels
17all of which are located within the same county, with the same
18property tax classification, are owned by the same person, and
19are operated by that person for a common use and purpose.
209. Not later than November 1, 1979, and November 1 of each
21subsequent year, the director shall certify to the county
22auditor of each county the percentages of actual value at
23which residential property, agricultural property, commercial
24property, industrial property, property valued by the
25department of revenue pursuant to chapter 434, property valued
26by the department pursuant to chapter 438, and property valued
27by the department of revenue pursuant to chapters 428, 433,
28and 437, and 438 in each assessing jurisdiction in the county
29shall be assessed for taxation, including for assessment years
30beginning on or after January 1, 2022, the percentages used to
31apply the assessment limitations under subsection 5, paragraphs
32“b” and “c”. The county auditor shall proceed to determine the
33assessed values of agricultural property, residential property,
34commercial property, industrial property, property valued by
35the department of revenue pursuant to chapter 434, property
-52-1valued by the department pursuant to chapter 438, and property
2valued by the department of revenue pursuant to chapters 428,
3433, and 437, and 438 by applying such percentages to the
4current actual value of such property, as reported to the
5county auditor by the assessor, and the assessed values so
6determined shall be the taxable values of such properties upon
7which the levy shall be made.
810. The percentages of actual value computed by the
9department of revenue for agricultural property, residential
10property, commercial property, industrial property, property
11valued by the department of revenue pursuant to chapter 434,
12property valued by the department pursuant to chapter 438,
13 and property valued by the department of revenue pursuant to
14chapters 428, 433, and 437, and 438, including for assessment
15years beginning on or after January 1, 2022, the percentages
16used to apply the assessment limitations under subsection 5,
17paragraphs “b” and “c”, and used to determine assessed values of
18those classes of property do not constitute a rule as defined
19in section 17A.2, subsection 11.
20 Sec. 109. EFFECTIVE DATE. This division of this Act takes
21effect July 1, 2024.
22DIVISION VIII
23NATURAL RESOURCES AND OUTDOOR RECREATION TRUST FUND
24 Sec. 110. Section 2.45, Code 2023, is amended by adding the
25following new subsection:
26 NEW SUBSECTION. 6. a. The legislative natural resources
27and outdoor recreation trust fund review committee which
28shall be composed of ten members of the general assembly,
29consisting of five members from each chamber, to be appointed
30by the legislative council. In appointing the five members
31of each chamber to the committee, the council shall appoint
32three members from the majority party and two members from the
33minority party.
34b. The legislative natural resources and outdoor recreation
35trust fund review committee shall have the powers and duties
-53-1described in section 2.49.
2c. This subsection is repealed December 31, 2051.
3 Sec. 111. NEW SECTION. 2.49 Legislative natural resources
4and outdoor recreation trust fund review committee.
51. The legislative natural resources and outdoor recreation
6trust fund review committee shall meet during the legislative
7interim in calendar years 2030, 2040, and 2050. The committee
8shall consider the most effective ways to manage trust fund
9moneys to further the purpose of Article VII, section 10, of
10the Constitution of the State of Iowa. As part of its duties,
11the committee may consider any of the following:
12a. The administration of the trust fund, trust accounts, and
13designated funds as provided in chapter 461.
14b. The effectiveness of initiatives supported by trust fund
15moneys as provided in chapter 461.
162. The committee shall report to the legislative council
17the results of its considerations, which may include
18recommendations and proposed legislation for consideration
19during the next session of the general assembly.
203. This section is repealed December 31, 2051.
21 Sec. 112. Section 8.57, subsection 5, paragraph f,
22subparagraph (1), subparagraph division (c), Code 2023, is
23amended by striking the subparagraph division.
24 Sec. 113. Section 8.57, subsection 5, paragraph f,
25subparagraph (1), subparagraph division (f), Code 2023, is
26amended to read as follows:
27(f) For the fiscal year beginning July 1, 2018, and for
28each fiscal year thereafter, the total moneys in excess of the
29moneys deposited under this paragraph “f” in the revenue bonds
30debt service fund, the revenue bonds federal subsidy holdback
31fund, the vision Iowa fund, the water quality infrastructure
32fund, the Iowa skilled worker and job creation fund, and the
33general fund of the state shall be deposited in the rebuild
34Iowa infrastructure fund and shall be used as provided in this
35section, notwithstanding section 8.60.
-54-1 Sec. 114. Section 8.57B, subsection 1, Code 2023, is amended
2to read as follows:
31. a. A water quality infrastructure fund is created within
4the division of soil conservation and water quality of the
5department of agriculture and land stewardship.
6b. The fund shall consist of moneys deposited in the
7fund pursuant to section 8.57, subsection 5, paragraph “f”,
8subparagraph (1), subparagraph division (c), moneys all of the
9following:
10(1) (a) Moneystransferred to the fund pursuant to section
11423G.6, and 461.33.
12(b) This subparagraph (1) is repealed December 31, 2051.
13(2) Moneys transferred orappropriations made to the fund
14and transfers of interest, earnings, and moneys from other
15funds as provided by law.
16 Sec. 115. Section 16.134A, subsection 2, paragraph a,
17subparagraphs (1) and (2), Code 2023, are amended to read as
18follows:
19(1) Moneys transferred to the fund pursuant to section
20423G.6 461.34.
21(2) This paragraph “a” is repealed on January 1, 2040
22 December 31, 2051.
23 Sec. 116. Section 307.24, subsection 5, paragraphs a, b, c,
24d, e, f, g, and h, Code 2023, are amended to read as follows:
25a. For department of natural resources facility roads,
26forty-five and one-half percent.
27b. a. For department of human services facility roads, six
28and one-half twelve percent.
29c. b. For department of corrections facility roads, five
30and one-half ten percent.
31d. c. For national guard facility roads, four seven and
32one-third percent.
33e. d. For state board of regents facility roads, thirty
34 fifty-five percent.
35f. e. For state fair board facility roads, two three and
-55-1two-thirds percent.
2g. f. For department of administrative services facility
3roads, one-half one percent.
4h. g. For department of education facility roads, six
5 eleven percent.
6 Sec. 117. Section 455A.17, Code 2023, is amended by striking
7the section and inserting in lieu thereof the following:
8455A.17 Regional meetings.
91. Beginning in calendar year 2024, and every four
10calendar years thereafter, the department shall arrange
11and conduct regional meetings to identify opportunities for
12regional resource enhancement and protection, and to review
13and recommend changes in resource enhancement and protection
14policies, programs, and funding. The department shall provide
15outreach and educational services to those attending, which
16shall include the distribution of information regarding
17resource enhancement and protection expenditures. The
18department shall promote attendance of interested persons for
19each regional meeting.
202. The expenses of the department in making the arrangements
21for and conducting regional meetings and providing outreach and
22educational services shall be paid from moneys credited to the
23administration fund created in section 456A.17.
24 Sec. 118. Section 455A.18, subsection 1, Code 2023, is
25amended to read as follows:
261. a. An Iowa resources enhancement and protection fund is
27created in the office of the treasurer of state.
28b. The fund consists of all revenues of the following:
29(1) (a) Moneys allocated from the natural resources and
30outdoor recreation trust fund as provided in section 461.35.
31(b) This subparagraph (1) is repealed December 31, 2051.
32(2) Revenuesand all other moneys lawfully credited or
33transferred to the fund. The director shall certify monthly
34the portions of the fund that are allocated to the various
35accounts as provided under section 455A.19. The director shall
-56-1certify before the twentieth of each month the portions of
2the fund resulting from the previous month’s receipts to be
3allocated to the various accounts.
4 Sec. 119. Section 455A.18, subsection 3, paragraph a, Code
52023, is amended by striking the paragraph.
6 Sec. 120. Section 455A.18, subsection 3, paragraph b, Code
72023, is amended to read as follows:
8b. Section 8.33 does not apply to moneys appropriated under
9this subsection credited to the fund.
10 Sec. 121. Section 461.2, Code 2023, is amended to read as
11follows:
12461.2 Definitions.
13As used in this chapter, unless the context otherwise
14requires:
151. “Authority” means the economic development authority
16created in section 15.105.
172. “Department” “Custodial department” means the department
18of agriculture and land stewardship, the department of
19management, the department of natural resources, or the
20department of transportation.
213. “Designated fund” means the water quality infrastructure
22fund created in section 8.57B, the water quality financial
23assistance fund created in section 16.134A, or the Iowa
24resources enhancement and protection fund created in section
25455A.18.
262. 4. “Fiscal year” means the state fiscal year effective
27as provided in section 3.12.
283. 5. “Initiative” includes a program, project, practice,
29strategy, or plan established or administered by an agency that
30furthers, or under the supervision or oversight of, a custodial
31department or the Iowa finance authority, if the initiative is
32supported in whole or in part by trust fund moneys to further a
33constitutional purpose as provided in section 461.3.
346. “Iowa nutrient reduction strategy” means the same as
35defined in section 455B.171.
-57- 17. “Nonpoint source” means a source of pollution other than
2a point source.
38. “Point source” means the same as defined in section
4455B.171.
59. “Public use area” means a park, preserve, recreation
6area, forest, water body, or a land or water trail owned or
7managed by the state or a political subdivision of the state.
84. 10. “Recreational purpose” includes means only hunting,;
9 trapping,; angling,; horseback riding,; swimming,; boating,;
10 camping,; picnicking,; hiking,; biking; recreational shooting;
11archery; using land or water trails; bird watching,; nature
12study,; water skiing,; snowmobiling;, other summer and winter
13sports, and viewing or enjoying historical, archaeological,
14scenic, or scientific sites.
1511. “Trust account” means the natural resources trust
16account created in section 461.32, the soil conservation and
17nonpoint source water protection trust account created in
18section 461.33, the watershed protection trust account created
19in section 461.34, the local conservation partnership trust
20account created in section 461.36, the water and land trails
21trust account created in section 461.37, or the lake and stream
22restoration trust account created in section 461.38.
235. 12. “Trust fund” means the natural resources and outdoor
24recreation trust fund created in section 461.31.
256. 13. “Trust fund moneys” means moneys originating from
26 credited to the natural resources and outdoor recreation trust
27fund or moneys allocated from the trust fund, including but not
28limited to moneys allocated to a trust account or allocated or
29transferred to a designated fund.
3014. “Water trail” means a point-to-point travel system on a
31navigable water body capable of supporting a floating vessel
32capable of carrying one or more persons on a recommended route
33connecting the points.
34 Sec. 122. Section 461.3, Code 2023, is amended to read as
35follows:
-58- 1461.3 Constitutional purpose, and implementation, and
2revenue.
31. This chapter is created for the constitutional purposes
4of protecting and enhancing water quality and natural areas
5in this state, including parks, trails, and fish and wildlife
6habitat, and conserving agricultural soils in this state.
72. This chapter is intended to implement Article VII,
8section 10, of the Constitution of the State of Iowa by
9establishing the natural resources and outdoor recreation
10trust fund, accounts in the including trust fund accounts,
11and appropriating or allocating trust fund moneys to support
12initiatives specified in subchapter IV. This chapter shall not
13be construed to require the state to appropriate, allocate,
14or transfer other moneys to support those initiatives or
15constitutional purposes.
16 Sec. 123. Section 461.11, subsection 2, Code 2023, is
17amended to read as follows:
182. The heads of each department receiving trust fund moneys
19 the custodial departments and the director of the authority
20 shall regularly meet and whenever practicable collaborate in
21decision making including by adopting rules providing for
22the administration of the trust fund and trust accounts,
23establishing funding priorities, and determining when it is
24beneficial to provide joint funding of initiatives.
25 Sec. 124. NEW SECTION. 461.20 Information regarding trust
26fund moneys.
271. Each year the department of revenue shall calculate
28an estimate of the total revenue to be transferred to the
29trust fund during the following fiscal year as required
30pursuant to section 423.2A. Not later than May 1 of each
31year, the department of revenue shall submit the estimate to
32each custodial department, the authority, and the legislative
33services agency.
342. A custodial department shall at least annually notify the
35legislative services agency of transfers of trust fund moneys
-59-1from a trust account to another trust account or designated
2fund as authorized in this chapter.
3 Sec. 125. Section 461.21, Code 2023, is amended to read as
4follows:
5461.21 Audit.
61. The auditor of state or a certified public accounting
7firm appointed by the auditor of state shall conduct an annual
8 audit of the trust fund and all trust accounts and transactions
9of the trust fund and trust accounts in the same manner as
10provided for departments pursuant to chapter 11, subchapter I.
112. The auditor of state or the certified public accounting
12firm appointed by the auditor as provided in subsection 1
13shall be paid from trust fund moneys without reducing the
14percentage of trust fund moneys distributed allocated to the
15Iowa resources enhancement and protection fund or any one a
16trust account established or designated fund pursuant to this
17chapter subchapter IV.
18 Sec. 126. Section 461.22, Code 2023, is amended to read as
19follows:
20461.22 Report Trust fund report.
21The three departments department of management shall jointly
22prepare and submit to the governor and the general assembly not
23later than January 15 of each year a complete trust fund report
24in an electronic format detailing all of the following:
251. The receipts and expenditures of the trust fund and its
26trust accounts, a summary of initiatives supported by trust
27fund moneys, the results of those expenditures, any performance
28goals or measurements, and plans for future short-term or
29long-term expenditures.
302. Recommendations An evaluation of the use of trust fund
31moneys to further progress in achieving the goals of the Iowa
32nutrient reduction strategy as prepared by the department of
33agriculture and land stewardship, the department of natural
34resources, and the college of agriculture and life sciences
35of the Iowa state university of science and technology. The
-60-1evaluation shall be based on the latest credible findings and
2recommendations recognized by those entities. The evaluation
3may include recommendations to the governor and general
4assembly, including legislation proposed by one or more of the
5departments entities.
6 Sec. 127. Section 461.23, Code 2023, is amended to read as
7follows:
8461.23 Rules.
9The department of revenue, the department of agriculture and
10land stewardship, the department of management, the department
11of natural resources, and the department of transportation, the
12Iowa finance authority, and the economic development authority
13 shall adopt rules separately or jointly as necessary in order
14to implement and administer this chapter.
15 Sec. 128. Section 461.24, Code 2023, is amended by striking
16the section and inserting in lieu thereof the following:
17461.24 Public listing.
18The department of management shall publish and maintain a
19public listing of moneys credited to and allocated from the
20trust fund, trust fund moneys allocated or transferred from
21trust accounts, and trust fund moneys allocated or transferred
22to designated funds to support initiatives. This section does
23not require the disclosure of information that is confidential
24as provided by rules adopted pursuant to section 461.23.
25 Sec. 129. NEW SECTION. 461.25 Use of trust fund moneys.
261. A custodial department shall not appropriate, allocate,
27or transfer trust fund moneys except as provided in this
28chapter. However, this subsection shall not be construed to
29limit a custodial department from using trust fund moneys with
30another person, including a custodial department, when engaging
31in a joint initiative as authorized by law.
322. During any fiscal year, a custodial department shall not
33use more than five percent of trust fund moneys allocated to
34a trust account to pay for expenses incurred in administering
35trust fund moneys allocated to that trust account.
-61- 13. In administering the use of trust fund moneys allocated
2to a trust account, a custodial department shall provide a
3higher priority to supporting initiatives that further goals of
4the Iowa nutrient reduction strategy.
54. A custodial department shall administer the use of
6trust fund moneys to support an initiative having primarily
7a recreational purpose only if such use is in cooperation
8with the authority. The authority shall review, score, and
9rank applications to support such initiatives as part of a
10competitive evaluation process. The scoring criteria must
11further the economic development policy of the state as
12provided in chapter 15.
135. When making a determination to support competing
14proposed initiatives relating to a public use area that
15benefits a locality, a custodial department or the authority
16shall provide a higher priority to supporting an initiative to
17improve an existing public use area.
186. When making a determination to support a proposed
19initiative to establish, improve, or expand a land trail,
20the proposal shall not be approved unless the sponsor of the
21proposal demonstrates to the custodial department or other
22entity making the funding decision how the trail is to be
23maintained by other sources of revenue.
247. In administering the use of trust fund moneys allocated
25to a trust account to support an initiative relating to
26the management of land, this chapter does not do any of the
27following:
28a. Prohibit the farming of the land in a manner that is
29consistent with the Iowa nutrient reduction strategy.
30b. Require a separation distance between an animal feeding
31operation and a public use area that is more restrictive than
32if the land were not managed pursuant to the initiative.
338. Trust fund moneys shall not be used to support any of the
34following:
35a. An initiative that establishes, improves, or expands a
-62-1single or multipurpose athletic field, baseball or softball
2diamond, tennis court, golf course, swimming pool, or other
3group or organized sport facility.
4b. The taking of property by exercising the power of eminent
5domain, including by acquiring property as provided in chapters
66A and 6B.
7 Sec. 130. Section 461.31, Code 2023, is amended to read as
8follows:
9461.31 Natural resources and outdoor recreation trust fund
10— creation.
111. A natural resources and outdoor recreation trust fund
12is created within the state treasury. The trust fund shall be
13administered by the department of management.
142. a. The trust fund shall be composed comprised of moneys
15 all of the following:
16(1) Moneys transferred to the trust fund pursuant to section
17423.2A.
18(2) Other moneysrequired to be credited to the trust
19fund by law and moneys accepted by a custodial department for
20placement in an account established in this subchapter and the
21trust fund from any source.
22b. Trust fund moneys are exclusively appropriated by law
23to carry out the constitutional purposes provided described in
24section 461.3.
25c. Trust fund moneys shall supplement and not replace
26moneys appropriated by the general assembly to support the
27constitutional purposes provided in section 461.3.
28d. Trust fund moneys shall only be used to support voluntary
29initiatives and shall not be used for regulatory efforts,
30enforcement actions, or litigation.
313. In administering a trust fund account, a custodial
32 department may contract, sue and be sued, and authorize payment
33for costs, fees, commissions, and other reasonable expenses
34from the trust account. However, a custodial department shall
35not in any manner directly or indirectly pledge the credit of
-63-1this state.
24. a. Except as provided in paragraph “b”, the treasurer
3of state shall, each month as directed by the department of
4management, allocate all trust fund moneys that have been
5credited to the trust fund, including moneys transferred to the
6trust fund as provided in section 423.2A, to each trust account
7and designated fund as provided in this subchapter.
8b. Notwithstanding sections 461.32 through 461.38, for the
9fiscal year beginning July 1, 2025, and for each subsequent
10fiscal year, only that amount as authorized by an Act of
11the general assembly shall be allocated from the trust fund
12to a trust account or designated fund as provided in this
13subchapter. However, if for a fiscal year no Act of the
14general assembly authorizes trust fund moneys to be allocated
15from the trust fund, the trust fund moneys shall be allocated
16from the trust fund to the trust accounts and designated funds
17as provided in this subchapter by operation of law.
185. a. Notwithstanding section 8.33, any unexpended balance
19in the trust fund or in an a trust account created within the
20trust fund at the end of each fiscal year shall be retained in
21the trust fund or the respective trust account.
22b. Notwithstanding section 12C.7, subsection 2, interest or
23earnings on investments or time deposits of the moneys in the
24trust fund and its respective trust accounts shall be credited
25to the trust fund and its respective trust accounts.
26c. The recapture of awards originating from an a trust
27 account and other repayments to an a trust account shall be
28retained in that trust account.
29 Sec. 131. Section 461.32, Code 2023, is amended to read as
30follows:
31461.32 Natural resources trust account — allocations.
321. A natural resources trust account is created in the trust
33fund. Twenty-three The trust account shall be administered by
34the department of natural resources.
352. Eighteenpercent of the moneys credited to the trust fund
-64-1shall be allocated to the trust account.
22. 3. The trust account shall be used by the department of
3natural resources to support all of the following initiatives:
4a. The establishment, restoration, or enhancement, and
5management of state parks, state preserves, state forests,
6wildlife areas, wildlife habitats, native prairies, and
7wetlands.
8(1) A higher priority shall be provided to supporting
9initiatives for the maintenance, preservation, or restoration
10of land and a lower priority shall be provided to supporting
11initiatives for the purchase or acquisition of land.
12(2) The department shall utilize an index that includes a
13comprehensive assessment mechanism to produce a statistically
14verifiable basis for determining whether to approve or
15disapprove the purchase or acquisition of the land. The
16department shall establish index criteria that justifies the
17land’s removal from private ownership and use.
18b. The construction or improvement of facilities located on
19land owned or managed by the department.
20b. c. Wildlife diversity.
21c. d. Recreational purposes.
22d. e. Technical assistance and financial incentives
23provided to private landowners to promote the management of
24forests, fisheries, recreational areas, wetlands, and wildlife.
25e. f. The improvement of water trails, rivers, and streams.
26f. g. Education and outreach that provide instruction
27regarding natural history and the outdoors. The subjects
28of such instruction may relate to opportunities involving a
29 recreational purposes purpose, outdoor safety, and or ethics.
30h. The construction, maintenance, or expansion of roads on
31state-owned land under the jurisdiction of the department of
32natural resources.
333. The department of natural resources shall to every extent
34possible consider its comprehensive plan provided in section
35456A.31 when making funding decisions.
-65-1 Sec. 132. Section 461.33, Code 2023, is amended to read as
2follows:
3461.33 Soil conservation and nonpoint source water protection
4trust account — allocations.
51. A soil conservation and nonpoint source water protection
6trust account is created in the trust fund. Twenty The trust
7account shall be administered by the department of agriculture
8and land stewardship.
92. Thirty-fourpercent of the moneys credited to the trust
10fund shall be allocated to the trust account.
113. Forty-seven percent of trust fund moneys allocated to
12the trust account shall first be transferred as directed by the
13department to any or all of the following:
14a. The water quality infrastructure fund created in section
158.57B to support water quality agriculture infrastructure
16programs created in section 466B.43 in order to reduce nutrient
17loads from nonpoint sources.
18b. The water quality financial assistance fund created
19in section 16.134A to support the water quality urban
20infrastructure program created in section 466B.44.
214. Each fiscal year, at least ten percent of the moneys
22allocated to the account shall be used to support the planting
23and maintenance of cover crops as provided in section 161A.73.
242. 5. a. The account shall be used by the department of
25agriculture and land stewardship remaining trust fund moneys
26allocated to the trust account shall be used by the department
27 to support all of the following initiatives:
28a. (1) Soil conservation and watershed protection,
29including by supporting the department’s division of
30soil conservation and water quality within the department
31of agriculture and land stewardship and soil and water
32conservation district commissioners. The department and
33commissioners may provide for the installation establishment
34 of conservation practices, management practices to control
35soil erosion on row-cropped land, and watershed protection
-66-1improvements as provided in chapters 161A, 161C, 461A, and 466,
2and 466B.
3b. (2) The conservation of highly erodible land. The
4department of agriculture and land stewardship may execute
5contracts with private landowners who agree to reserve such
6land only for uses that prevent erosion in excess of the
7applicable soil loss limits as established in section 161A.44.
8c. (3) Soil conservation or crop management practices
9used on land producing biomass for biorefineries, including
10cellulosic ethanol production.
113. b. The department of agriculture and land stewardship
12 may use unencumbered or unobligated trust fund moneys allocated
13to the trust account to provide financial incentives or
14technical assistance to landowners.
156. During a fiscal year, the department may transfer
16unencumbered or unobligated trust fund moneys allocated to
17the trust account for use by the department as is provided in
18subsection 5 to any of the following:
19a. The water quality infrastructure fund created in section
208.57B to support water quality agriculture infrastructure
21programs created in section 466B.43 in order to reduce nutrient
22loads from nonpoint sources.
23b. The water quality financial assistance fund created
24in section 16.134A to support the water quality urban
25infrastructure program created in section 466B.44.
26 Sec. 133. Section 461.34, Code 2023, is amended to read as
27follows:
28461.34 Watershed protection trust account — allocations.
291. A watershed protection trust account is created in the
30trust fund. Fourteen The trust account shall be administered
31by the department of natural resources.
322. Fifteenpercent of the moneys credited to the trust fund
33shall be allocated to the trust account.
343. Forty-seven percent of trust fund moneys allocated
35to the trust account shall first be transferred to the water
-67-1quality financial assistance fund created in section 16.134A
2for appropriation as provided in that section.
32. 4. The account Of the remaining trust fund moneys
4allocated to the trust account, fifty percent shall be used
5cooperatively distributed for use by the department of
6natural resources and the department of agriculture and land
7stewardship to support all of the following initiatives:
8a. Water water qualityresource projects administered by
9the department of natural resources to preserve watersheds,
10including but not limited to all of the following:
11(1) a. Projects to protect, restore, or enhance water
12quality in the state through the provision of financial
13assistance to communities for impairment-based, locally
14directed watershed projects. The department may use the
15account trust fund moneys to support the water resource
16restoration sponsor program as provided in section 455B.199.
17(2) b. Regional and community watershed assessment,
18planning, and prioritization efforts, including as provided in
19chapter 466B.
20c. Water quality protection programs provided in section
21466.7 that relate to any of the following:
22(1) The administration of geographic information systems
23for use in developing, monitoring, and displaying local
24watershed information.
25(2) An activity to support the collection and analysis of
26water quality monitoring.
27(3) Floodplain permitting.
28(4) Flood protection education to provide information to
29local officials regarding floodplain management.
30b. 5. Surface Of the remaining trust fund moneys allocated
31to the trust account, fifty percent shall be distributed for
32use by the department of agriculture and land stewardship
33to support surface water protection projects and practices
34administered by the department of agriculture and land
35stewardship or the department of natural resources, as
-68-1described in the Iowa nutrient reduction strategy including but
2not limited to the installation of permanent vegetation cover,
3filter strips, grass waterways, edge-of-field practices, and
4riparian forest buffers; dredging; and bank stabilization. The
5departments of agriculture and land stewardship and natural
6resources department may use the account trust fund moneys
7 to support the conservation buffer strip program provided in
8section 466.4 and the conservation reserve enhancement program
9as provided in section 466.5.
103. 6. The departments’ A decision by a department to
11prioritize initiatives may be based on the priority list of
12watersheds provided in section 456A.33A.
137. During a fiscal year, the department of natural
14resources or the department of agriculture and land stewardship
15may transfer unencumbered or unobligated trust fund moneys
16distributed to the custodial department pursuant to subsection
174 or 5 to the water quality financial assistance fund created
18in section 16.134A.
19 Sec. 134. Section 461.35, Code 2023, is amended to read as
20follows:
21461.35 Iowa resources enhancement and protection fund —
22allocation.
23Thirteen Ten percent of the moneys credited to the trust
24fund shall be allocated to the Iowa resources enhancement
25and protection fund created in section 455A.18 for further
26allocation as provided in section 455A.19.
27 Sec. 135. Section 461.36, Code 2023, is amended by striking
28the section and inserting in lieu thereof the following:
29461.36 Local conservation partnership trust account —
30allocations.
311. A local conservation partnership trust account is
32created in the trust fund. The trust account shall be
33administered by the department of natural resources.
342. Nine percent of the moneys credited to the trust fund
35shall be allocated to the trust account.
-69- 13. The department shall allocate the trust fund moneys
2credited to the account to local communities participating
3in the local conservation partnership program as provided in
4section 461.36A.
5 Sec. 136. NEW SECTION. 461.36A Local conservation
6partnership program.
71. As used in this section, unless the context otherwise
8requires:
9a. “Department” means the department of natural resources.
10b. “Local community” includes a political subdivision or
11a watershed management authority created pursuant to section
12466B.22.
132. The department shall establish and administer a local
14conservation partnership program to provide financing to local
15communities to do any of the following:
16a. Maintain and improve parks, preserves, wildlife areas,
17wildlife habitats, native prairies, forests, or wetlands.
18b. Promote wildlife diversity.
19c. Further a recreational purpose.
20d. Improve rivers and streams.
21e. Sponsor education and outreach programs and projects that
22provide instruction regarding natural history and the outdoors.
23The subjects of such instruction may relate to opportunities
24involving a recreational purpose, outdoor safety, or ethics.
25The programs and projects may assist Iowa students studying in
26fields of science, technology, engineering, and mathematics.
27f. Further any other purpose described in section 350.1.
283. As part of a local conservation partnership under the
29program, two or more local communities may enter into chapter
3028E agreements, and a local community may cooperate with
31the federal government or a nongovernmental organization.
32A nongovernmental organization shall not be eligible to
33participate in a local community partnership under the program
34unless the nongovernmental organization submits an application
35in association with a political subdivision or county
-70-1conservation board and enters into a chapter 28E agreement with
2the political subdivision or county conservation board.
34. a. A local community is not eligible to receive moneys
4from the department under the program to support a local
5conservation partnership, unless the local community finances
6a minimum percentage of the estimated or total cost of the
7initiative, whichever is less.
8b. The minimum amount of the cost-share contribution by a
9local community, as described in paragraph “a”, shall be as
10follows:
11(1) Ten percent for a local community located in a county
12having a population of fifteen thousand or less.
13(2) Twenty-five percent for a local community located in a
14county having a population of more than fifteen thousand but
15less than one hundred thousand.
16(3) Seventy-five percent for a local community located in a
17county having a population of one hundred thousand or more.
18 Sec. 137. Section 461.37, Code 2023, is amended to read as
19follows:
20461.37 Trails Water and land trails trust account —
21allocations.
221. A water and land trails trust account is created in the
23trust fund. Ten The trust account shall be administered by the
24department of transportation.
252. Fourpercent of the moneys credited to the trust fund
26shall be allocated to the trust account.
272. 3. The Of the amount of trust fund moneys allocated
28to the trust account, fifty percent shall be distributed for
29use by the department of transportation and the department of
30natural resources shall use moneys in the account to support
31initiatives related to the design, establishment, maintenance,
32improvement, and expansion of land trails.
333. 4. The Of the amount of trust fund moneys allocated to
34the trust account, fifty percent shall be distributed for use
35by the department of natural resources may use the account to
-71-1support the design, establishment, maintenance, improvement,
2and expansion of water trails. The department shall provide
3priority to stream restoration.
45. a. During a fiscal year, and pursuant to an agreement
5between the department of transportation and the department
6of natural resources, either custodial department that is
7distributed trust fund moneys for use under this section may
8transfer unencumbered or unobligated trust fund moneys to the
9other custodial department for use by the other custodial
10department as provided in this section.
11b. During a fiscal year, and pursuant to an agreement
12between the department of transportation and the department
13of natural resources, the department of transportation
14may transfer unencumbered or unobligated trust fund moneys
15allocated to the trust account and distributed for use by
16the department of transportation to another trust account
17administered by the department of natural resources for use by
18the department of natural resources.
19 Sec. 138. Section 461.38, Code 2023, is amended to read as
20follows:
21461.38 Lake and stream restoration trust account —
22allocations.
231. A lake and stream restoration trust account is created in
24the trust fund. Seven The trust account shall be administered
25by the department of natural resources.
262. Tenpercent of the moneys credited to the trust fund
27shall be allocated to the trust account.
282. 3. The department of natural resources shall use moneys
29in allocated to the trust account to support public all of the
30following:
31a. Publiclake restoration initiatives as follows:
32a. (1) An initiative shall account for a lake’s
33recreational purpose, and provide for environmental, aesthetic,
34ecological, and social value. It must improve water quality
35 further a goal of the Iowa nutrient reduction strategy.
-72- 1b. (2) The department’s A decision by the department to
2prioritize an initiative may be based on the department’s lake
3restoration plan and report as provided in section 456A.33B and
4the Iowa nutrient reduction strategy.
5b. The stabilization and restoration of stream banks.
6 Sec. 139. NEW SECTION. 461.51 Repeal.
7This chapter is repealed December 31, 2051.
8 Sec. 140. REPEAL. Section 455A.20, Code 2023, is repealed.
9 Sec. 141. CODE EDITOR DIRECTIVE.
101. The Code editor is directed to make the following
11transfers:
12a. Section 461.36A, as enacted in this division of this Act,
13to section 455A.31.
14b. Section 461.35, as amended in this division of this Act,
15to section 461.41.
162. The Code editor shall correct internal references in the
17Code and in any enacted legislation as necessary due to the
18enactment of this section.
19 Sec. 142. EFFECTIVE DATE. This division of this Act takes
20effect January 1, 2025.
21DIVISION IX
22CHARITABLE CONSERVATION CONTRIBUTION TAX CREDIT
23 Sec. 143. Section 2.48, subsection 3, paragraph e,
24subparagraph (6), Code 2023, is amended by striking the
25subparagraph.
26 Sec. 144. Section 422.11W, Code 2023, is amended by adding
27the following new subsection:
28 NEW SUBSECTION. 5. Commencing with tax years beginning
29on or after January 1, 2025, a charitable conservation
30contribution tax credit shall not be claimed against taxes as
31provided in this section, except for tax credits claimed for
32qualified real property interests conveyed prior to January 1,
332025.
34 Sec. 145. Section 422.33, subsection 25, Code 2023, is
35amended by striking the subsection and inserting in lieu
-73-1thereof the following:
225. The taxes imposed under this subchapter shall be reduced
3by a charitable conservation contribution tax credit as allowed
4under section 422.11W for each tax year the taxpayer has
5credit, in excess of tax liability, for qualified real property
6interests conveyed prior to January 1, 2025.
7 Sec. 146. PRESERVATION OF EXISTING RIGHTS. This division
8of this Act is not intended to and shall not limit, modify, or
9otherwise adversely affect any amount of tax credit issued,
10awarded, or allowed prior to January 1, 2025, nor shall it
11limit, modify, or otherwise adversely affect a taxpayer’s right
12to claim or redeem a tax credit issued, awarded, or allowed
13prior to January 1, 2025, including but not limited to any tax
14credit carryforward amount.
15 Sec. 147. EFFECTIVE DATE. This division of this Act takes
16effect January 1, 2025.
17 Sec. 148. APPLICABILITY. This division of this Act applies
18to tax years beginning on or after January 1, 2025.
19DIVISION X
20Property tax benefits and incentives
21 Sec. 149. NEW SECTION. 404.3C Assessment agreements —
22commercial property.
231. For revitalization areas established under this chapter
24on or after the effective date of this division of this Act
25and for first-year exemption applications for property located
26in a revitalization area in existence on the effective date
27of this division of this Act filed on or after the effective
28date of this division of this Act, commercial property shall
29not receive a tax exemption under this chapter unless the city
30or county, as applicable, and the owner of the qualified real
31estate enter into a written assessment agreement specifying a
32minimum actual value until a specified termination date for the
33duration of the exemption period.
342. a. The assessment agreement shall be presented to the
35appropriate assessor. The assessor shall review the plans and
-74-1specifications for the improvements to be made to the property
2and if the minimum actual value contained in the assessment
3agreement appears to be reasonable, the assessor shall execute
4the following certification upon the agreement:
5 The undersigned assessor, being legally responsible for the
6assessment of the above described property upon completion of
7the improvements to be made on it, certifies that the actual
8value assigned to that land and improvements upon completion
9shall not be less than $.........
10b. The assessment agreement with the certification of
11the assessor and a copy of this subsection shall be filed in
12the office of the county recorder of the county where the
13property is located. Upon completion of the improvements,
14the assessor shall value the property as required by law,
15except that the actual value shall not be less than the minimum
16actual value contained in the assessment agreement. This
17subsection does not prohibit the assessor from assigning a
18higher actual value to the property or prohibit the owner
19from seeking administrative or legal remedies to reduce the
20actual value assigned except that the actual value shall not
21be reduced below the minimum actual value contained in the
22assessment agreement. An assessor, county auditor, board of
23review, director of revenue, or court of this state shall not
24reduce or order the reduction of the actual value below the
25minimum actual value in the agreement during the term of the
26agreement regardless of the actual value which may result from
27the incomplete construction of improvements, destruction or
28diminution by any cause, insured or uninsured, except in the
29case of acquisition or reacquisition of the property by a
30public entity. Recording of an assessment agreement complying
31with this subsection constitutes notice of the assessment
32agreement to a subsequent purchaser or encumbrancer of the land
33or any part of it, whether voluntary or involuntary, and is
34binding upon a subsequent purchaser or encumbrancer.
35 Sec. 150. NEW SECTION. 404.3D Exemptions for residential
-75-1property.
2For revitalization areas established under this chapter on
3or after the effective date of this division of this Act and
4for first-year exemption applications for property located in a
5revitalization area in existence on the effective date of this
6division of this Act filed on or after the effective date of
7this division of this Act, an exemption otherwise authorized
8under this chapter shall not be authorized for or approved by a
9city or county, as applicable, for property that is residential
10property.
11 Sec. 151. EFFECTIVE DATE. This division of this Act takes
12effect July 1, 2024.
13DIVISION XI
14TAX INCREMENT FINANCING
15 Sec. 152. Section 403.19, subsection 2, paragraph a, Code
162023, is amended to read as follows:
17a. That portion of the taxes each year in excess of such
18amount shall be allocated to and when collected be paid into
19a special fund of the municipality to pay the principal of
20and interest on loans, moneys advanced to, or indebtedness,
21whether funded, refunded, assumed, or otherwise, including
22bonds issued under the authority of section 403.9, subsection
231, incurred by the municipality to finance or refinance, in
24whole or in part, an urban renewal project within the area,
25and to provide assistance for low and moderate income family
26housing as provided in section 403.22. However, except
27as provided in paragraph “b”, taxes for the regular and
28voter-approved physical plant and equipment levy of a school
29district imposed pursuant to section 298.2 and taxes for the
30instructional support program of a school district imposed
31pursuant to section 257.19, taxes for the payment of bonds
32and interest of each taxing district, and taxes imposed under
33section 346.27, subsection 22, related to joint county-city
34buildings shall be collected against all taxable property
35within the taxing district without limitation by the provisions
-76-1of this subsection. Additionally, for property taxes due and
2payable in fiscal years beginning on or after July 1, 2025,
3if the portion of the urban renewal area that is subject to a
4division of revenue under this section contains wind energy
5conversion property that is subject to special valuation under
6section 427B.26, foundation property taxes of a school district
7imposed under section 257.3 shall be collected against all
8taxable property within that portion of the urban renewal area
9without limitation by the provisions of this subsection and
10when collected be paid into the fund of the school district
11into which all other property taxes are paid.
12DIVISION XII
13transit funding
14 Sec. 153. Section 364.2, subsection 4, paragraph f,
15subparagraph (1), subparagraph division (b), Code 2023, is
16amended to read as follows:
17(b) For franchise fees assessed and collected during fiscal
18years beginning on or after July 1, 2013 2024, but before
19July 1, 2030, by a city that is the subject of a judgment,
20court-approved settlement, or court-approved compromise
21providing for payment of restitution, a refund, or a return
22described in section 384.3A, subsection 3, paragraph “j” with
23a population exceeding two hundred thousand, the rate of the
24franchise fee shall not exceed seven and one-half percent
25of gross revenues generated from sales of the franchisee in
26the city, and franchise fee amounts assessed and collected
27during such fiscal years in excess of five percent of gross
28revenues generated from sales shall be used solely for the
29purpose specified in section 384.3A, subsection 3, paragraph
30“j”. A city may assess and collect a franchise fee in excess
31of five percent of gross revenues generated from the sales
32of the franchisee pursuant to this subparagraph division (b)
33for a period not to exceed seven consecutive fiscal years
34once the franchise fee is first imposed at a rate in excess
35of five percent. An ordinance increasing the franchise fee
-77-1rate to greater than five percent pursuant to this subparagraph
2division (b) shall not become effective unless approved at
3an election. After passage of the ordinance, the council
4shall submit the proposal at a special election held on a date
5specified in section 39.2, subsection 4, paragraph “b”. If a
6majority of those voting on the proposal approves the proposal,
7the city may proceed as proposed. The complete text of the
8ordinance shall be included on the ballot and the full text
9of the ordinance posted for the voters pursuant to section
1052.25. All absentee voters shall receive the full text of the
11ordinance along with the absentee ballot. This subparagraph
12division (b) is repealed July 1, 2030.
13 Sec. 154. Section 384.3A, subsection 3, paragraph j, Code
142023, is amended to read as follows:
15j. For franchise fees assessed and collected by a city in
16excess of five percent of gross revenues generated from sales
17of the franchisee within the city pursuant to section 364.2,
18subsection 4, paragraph “f”, subparagraph (1), subparagraph
19division (b), during fiscal years beginning on or after July 1,
202013 2024, but before July 1, 2030, the adjustment, renewal,
21or extension of any part or all of the legal indebtedness of
22a city, whether evidenced by bonds, warrants, court-approved
23settlements, court-approved compromises, or judgments, or the
24funding or refunding of the same, if such legal indebtedness
25relates to restitution, a refund, or a return ordered by a
26court of competent jurisdiction for franchise fees assessed
27and collected by the city before June 20, 2013 solely for the
28reduction of property tax levies that support the operation and
29maintenance of a municipal transit system or a regional transit
30district or to maintain transportation service levels of a
31municipal transit system or a regional transit district. This
32paragraph “j” is repealed July 1, 2030.
33 Sec. 155. EFFECTIVE DATE. This division of this Act takes
34effect July 1, 2024.
35EXPLANATION
-78-1The inclusion of this explanation does not constitute agreement with
2the explanation’s substance by the members of the general assembly.
3This bill relates to state and local revenue and finances.
4DIVISION I — SALES AND USE TAX RATES AND DISTRIBUTION. An
5amendment to the Iowa Constitution was ratified on November 2,
62010, which created a natural resources and outdoor recreation
7trust fund (fund) and dedicated a portion of state revenues to
8the fund for the purposes of protecting and enhancing water
9quality and natural areas in the state including parks, trails,
10and fish and wildlife habitat, and conserving agricultural
11soils in the state (Article VII, section 10). The fund is
12codified in Code section 461.31. Pursuant to the amendment,
13the amount credited to the fund will be equal to the amount
14generated by an increase in the state sales tax rate occurring
15after the effective date of the constitutional amendment, but
16shall not exceed the amount that a state sales tax rate of
170.375 percent would generate. The state sales tax rate has not
18been increased since the effective date of the constitutional
19amendment, so no amounts have been credited to the fund. The
20bill increases the sales tax rate and the use tax rate from 6
21percent to 7 percent beginning January 1, 2025. In lieu of the
22local option and sales services tax revenue repealed in another
23division of the bill, the bill transfers a specified amount of
24the state sales and use tax revenues collected to the local
25sales and use tax fund established under Code chapter 423B,
26for allocation and expenditure in a manner similar to that
27which was provided for local sales and services tax revenues.
28However, as provided in another division of the bill, amounts
29resulting from the increase in the use tax for the period
30beginning January 1, 2025, through December 31, 2043, are
31deposited in the local use tax supplement fund to be used
32for purposes of that fund. The amount of sales tax revenues
33transferred to the local sales and use tax fund under Code
34chapter 423B for the period beginning January 1, 2025, through
35December 31, 2027, is an amount equating to a tax of 1.4
-79-1percent. The amount transferred is then reduced each year by
2an amount equating to a 0.05 percent tax until January 1, 2030.
3The amount of sales tax revenues transferred to the local sales
4and use tax fund under Code chapter 423B beginning January 1,
52030, is an amount equating to a tax of 1.25 percent. The bill,
6as the result of Article VII, section 10, of the Constitution
7of the State of Iowa, also amends the transfer of sales tax
8revenues to the secure an advanced vision for education fund in
9Code section 423.2A(2).
10DIVISION II — WATER SERVICE TAX. The bill changes the water
11service tax on the furnishing of water to consumers so that the
12rate is equal to the rate of the sales tax that is being imposed
13under Code chapter 423.
14Currently, one-half of the moneys collected from the water
15service tax are deposited into the general fund of the state
16and one-half of the moneys are deposited into the water quality
17financial assistance fund created in Code section 16.134A.
18 The bill strikes the provision requiring one-half of the
19water service tax moneys be deposited into the water quality
20financial assistance fund and requires all moneys generated
21from the water service tax be deposited into the general fund
22of the state.
23The bill also strikes the future repeal of the water service
24excise tax.
25The division takes effect January 1, 2025.
26DIVISION III — LOCAL OPTION TAXES. Code chapter 423B
27authorizes, following approval at election, the imposition of
28a local option sales and services tax at a rate not to exceed
29one percent to be administered similarly to the state sales
30and services tax and authorizes the imposition of a local
31vehicle tax. The bill strikes the authorization for the local
32vehicle tax and also strikes the authorization to impose the
33local option sales and services tax under Code chapter 423B,
34but instead authorizes cities and counties to expend specified
35state sales and use tax revenues that are deposited in the
-80-1local sales and use tax fund following the increase of the
2state sales and use taxes rates in previous sections of the
3bill.
4Under the bill, sales and services tax revenue credited to
5and deposited in each county’s account within the local sales
6and use tax fund must be expended by each recipient county
7and city as required by the jurisdiction’s revenue purpose
8statement, including a revenue purpose statement approved at
9election prior to January 1, 2025, and in effect on or set to
10take effect on or after January 1, 2025, for the use of local
11option sales and use tax revenue previously collected under
12Code chapter 423B, or be used to reduce specified property tax
13levies.
14The bill also modifies the requirements and permissible uses
15of funds received under Code chapter 423B. The bill specifies
16that for a county with a population of 400,000 or more, a
17revenue purpose statement governing the use of revenues for the
18unincorporated area of the county approved on or after January
191, 2025, shall require the use of 75 percent of such moneys
20for property tax relief. Additionally, the bill provides that
21property tax relief includes payments under a Code chapter
2228E agreement for purposes of a regional transit district if
23such payments are used to reduce the regional transit district
24levy. For a city located in whole or in part in a county with
25a population of 400,000 or more, the use of revenues received
26under Code chapter 423B for such regional transit district
27purposes shall not exceed 10 percent of the amount received
28and for a county with a population of 400,000 or more, for the
29unincorporated area, shall not exceed 25 percent.
30The board of supervisors of each county and the city
31council of each city may adopt by resolution a revenue purpose
32statement for the expenditure of funds received under Code
33chapter 423B.
34The revenues transferred to the local sales and use tax fund
35continue to be allocated to the specific county account for
-81-1the county in which the tax was collected. Additionally, all
2cities and counties are eligible to receive the allocation of
3revenues, not just those that had previously approved the local
4option tax.
5As provided in another division of the bill, specified
6amounts of use tax revenue is transferred to the local use
7tax supplement fund, as created in the bill. Moneys in the
8local use tax supplement fund are annually appropriated to the
9department of revenue to be used for supplement payments to
10cities and counties. For each year during the period beginning
11January 1, 2025, through December 31, 2043, each city or county
12for the unincorporated portion of the county shall receive a
13local use tax supplement payment equal to the difference, but
14not less than zero, between the amount of revenue received
15by the city or county under Code section 423B.7, Code 2023,
16for the period beginning January 1, 2024, and ending December
1731, 2024, minus the amount that would have been received by
18that city or county for that period if all cities and the
19county were eligible for distributions of such revenues under
20Code section 423B.7, Code 2023. If moneys in the fund are
21insufficient to pay all supplement amounts for the year, the
22director of revenue shall prorate the payment of the supplement
23payments. The supplement payment is required to be combined
24with and be used in the same manner and be subject to the same
25requirements as moneys received by the city or county under
26Code section 423B.7 for that year. The bill establishes a
27future repeal of the Code section establishing the supplement
28payments on January 1, 2044. Moneys in the fund upon the
29repeal shall be transferred to the appropriate county accounts
30for the counties from which the tax was paid.
31Code section 423B.10 allows a city in which a local sales
32and services tax is imposed to, by ordinance and following
33approval of the board of supervisors, to provide for the use
34of a designated amount of increased local option sales and
35services tax revenue for urban renewal purposes. The bill
-82-1modifies provisions governing this authorization to provide for
2the use of a specified amount of the applicable increased state
3sales tax revenues deposited in the local sales and use tax
4fund in lieu of the increased local option sales and services
5tax revenue. The bill allows city ordinances providing for the
6use of certain local option sales and services tax revenues for
7urban renewal purposes in effect on January 1, 2025, to remain
8in effect until expiration, amendment, or repeal.
9The bill also eliminates the authority to impose a local
10sales and services tax under the quad cities interstate
11metropolitan authority compact under Code chapter 28A beginning
12on January 1, 2025.
13The division takes effect January 1, 2025.
14DIVISION IV — HOMESTEAD PROPERTY TAX CREDIT. Code chapter
15425 establishes a homestead property tax credit in an amount
16equal to the property tax levy on the first $4,850 of actual
17value. The homestead credit is paid for from the homestead
18credit fund under Code section 425.1 for which there is an
19annual appropriation for an amount sufficient to implement the
20credit.
21The bill reduces the amount of the homestead credit over a
22period beginning with the fiscal year beginning July 1, 2025,
23until the credit is ended in the fiscal year beginning July
241, 2028, at which time the remaining moneys in the homestead
25credit fund are transferred for deposit in the general fund
26of the state. During the same period, the bill establishes
27a homestead property tax exemption. For the assessment year
28beginning January 1, 2024, the exemption amount is $2,500,
29but $4,125 for owners 65 or older. For the assessment year
30beginning January 1, 2025, the exemption amount is $5,000,
31but $8,250 for owners 65 or older. For the assessment year
32beginning January 1, 2026, the exemption amount is $7,500,
33but $12,375 for owners 65 or older. For the assessment year
34beginning January 1, 2027, and each succeeding assessment year,
35the exemption amount is $10,000, but $16,500 for owners 65 or
-83-1older.
2Code section 25B.7 provides that if a state appropriation
3made to fund a credit or exemption is not sufficient to fully
4fund the credit or exemption, the political subdivision shall
5be required to extend to the taxpayer only that portion of the
6credit or exemption estimated by the department of revenue to
7be funded by the state appropriation. The requirement for
8fully funding and the consequences of not fully funding under
9Code section 25B.7 applies to the homestead credit under Code
10chapter 425. The bill strikes the portion of Code section
1125B.7 that makes the requirement for fully funding and the
12consequences of not fully funding applicable to the homestead
13property tax credit and provides that the general requirement
14of Code section 25B.7 for property tax credits and exemptions
15on or after January 1, 1997, does not apply to the homestead
16property tax exemption established in the bill.
17The bill makes corresponding changes to various other
18provisions of the Code relating to and referencing the
19homestead property tax credit.
20The bill provides that homestead credit claims approved
21prior to and valid on the effective date of the division shall
22result in a homestead tax exemption under Code chapter 425,
23subchapter I, as enacted in the division, without further
24filing by the claimant.
25Division IV applies to assessment years beginning on or
26after January 1, 2024.
27DIVISION V — ELDERLY PROPERTY TAX CREDIT. The bill amends
28Code section 423.23 to modify part of the calculation for the
29elderly property tax credit to account for the homestead credit
30for the property under Code section 425.1. The division takes
31effect upon enactment and applies retroactively to claims for
32the credit filed on or after January 1, 2022.
33DIVISION VI — MILITARY SERVICE PROPERTY TAX EXEMPTION AND
34CREDIT. Division VII relates to the military service property
35tax exemption and credit. Under current law, veterans of World
-84-1War I are entitled to a property tax exemption of $2,778 in
2taxable value and honorably discharged veterans who served
3during other specific time periods are entitled to a property
4tax exemption of $1,852 in taxable value. The bill increases
5the exemption amount for all eligible veterans to $2,055 for
6the assessment year beginning January 1, 2024, and to $4,000
7for assessment years beginning on or after January 1, 2025.
8Under current law, the state provides funding to local
9governments for the military service property tax exemption
10and credit up to $6.92 per $1,000 of assessed value of the
11exempt property. The bill reduces the amount of the credit for
12the fiscal year beginning July 1, 2025, to $6.92 per $1,000
13of assessed value of the exempt property, but not to exceed
14$945 of assessed value and eliminates funding for the credit
15starting with the fiscal year beginning July 1, 2026.
16Code section 25B.7 provides that if a state appropriation
17made to fund a credit or exemption is not sufficient to fully
18fund the credit or exemption, the political subdivision shall
19be required to extend to the taxpayer only that portion of the
20credit or exemption estimated by the department of revenue to
21be funded by the state appropriation. The requirement for
22fully funding and the consequences of not fully funding under
23Code section 25B.7 applies to the military service property
24tax credit and exemption to the extent of $6.92 per $1,000
25of assessed value of the exempt property. The bill strikes
26the portion of Code section 25B.7 that makes the requirement
27for fully funding and the consequences of not fully funding
28applicable to the military service property tax credit and
29exemption and provides that the general requirement of Code
30section 25B.7 for property tax credits and exemptions on or
31after January 1, 1997, does not apply to the military property
32tax exemption established in the bill.
33The division applies to assessment years beginning on or
34after January 1, 2024.
35DIVISION VII — PROPERTY TAX ASSESSMENT LIMITATIONS. Code
-85-1section 441.21 establishes assessment limitations for various
2classifications of property. The bill reduces the percentage
3of actual value at which property valued by the department
4of revenue pursuant to Code chapter 438 (pipelines) shall
5be assessed by 5 percent each year from 100 percent for the
6assessment year beginning January 1, 2024, to 90 percent for
7assessment years beginning on or after January 1, 2025.
8The bill also reduces the percentage of actual value at
9which the portion of commercial, industrial, and railway
10properties that exceeds $150,000 is assessed by 5 percent each
11year from 90 percent for the assessment year beginning January
121, 2024, to 80 percent for assessment years beginning on or
13after January 1, 2026. Accordingly, the bill makes a change
14to the payments made to local governments under Code section
15441.21(5)(e) that are in part calculated using the assessment
16limitation applied to commercial and industrial property.
172018 Iowa Acts, chapter 1158, changed the assessment of
18telephone and telegraph company property under Code chapter
19433. Code chapter 433 applies to the assessment and taxation
20of telephone and telegraph company property for assessment
21years beginning before January 1, 2022. Starting with the
22assessment year beginning January 1, 2022, such property is
23assessed locally in the same manner as commercial property.
24References to Code chapter 433 are not included in the
25applicable Code section as amended in the bill for assessment
26years beginning on or after January 1, 2025.
27This division of the bill takes effect July 1, 2024.
28DIVISION VIII — NATURAL RESOURCES AND OUTDOOR RECREATION
29TRUST FUND. The bill amends provisions in Code chapter 461
30(the natural resources and outdoor recreation Act) that is
31to implement Article VII, section 10, of the Constitution
32of the State of Iowa when the sales tax is increased. The
33bill increases the sales tax in division I. The Code chapter
34establishes the natural resources and outdoor recreation trust
35fund (trust fund) and associated accounts (renamed trust
-86-1accounts) supported by a portion of state revenue generated
2by an increase in the state’s sales tax. The purpose of
3the constitutional provision is to protect and enhance water
4quality and natural areas, including parks, trails, and fish
5and wildlife habitat, and conserve agricultural soils in this
6state.
7ALLOCATIONS OF TRUST FUND MONEYS. The bill alters the
8percentage of moneys to be allocated from the trust fund
9(trust fund moneys) to its trust accounts, including the
10natural resources trust account administered by the department
11of natural resources (DNR), the soil conservation and water
12protection trust account (renamed the soil conservation and
13nonpoint source water protection trust account) administered
14by the department of agriculture and land stewardship (DALS),
15the watershed protection trust account administered by DNR
16in cooperation with DALS, the local conservation partnership
17trust account administered by DNR, the trails trust account
18(renamed the water and land trails trust account) administered
19by DOT in cooperation with DNR, and the lake restoration
20trust account (renamed the lake and stream restoration trust
21account) administered by DNR. It also reduces the allocations
22of trust fund moneys to the Iowa resources enhancement and
23protection (REAP) fund administered by DNR. It transfers
24trust fund moneys allocated to the renamed soil conservation
25and nonpoint source water protection trust account and the
26watershed protection trust account to the water quality
27infrastructure fund used to support nonpoint water quality
28programs administered by DALS; and to the water quality
29financial assistance fund administered by the Iowa finance
30authority (IFA) to support the wastewater and drinking water
31treatment financial assistance program (administered by IFA),
32the water quality financing program (administered by IFA), and
33the water quality urban infrastructure program (administered by
34DALS). The bill revises provisions in the local conservation
35partnership trust account as a program to be administered
-87-1by DNR. The bill provides that trust fund moneys may be
2transferred from the renamed soil conservation and nonpoint
3source water protection trust account to the water quality
4infrastructure fund and from the watershed protection trust
5account to the water quality financial assistance fund upon
6direction by the custodial department. The bill eliminates
7current funding sources, including the annual appropriation
8to the REAP fund from the general fund which is due to expire
9on June 30, 2026, and both a tax on the sales price on water
10service, which another division of the bill repeals, and the
11use of wagering tax receipts, which would otherwise expire on
12July 1, 2039.
13Code section 312.2(2) requires the treasurer of state
14to allocate from the road use tax fund an amount equal to
15sixty-five hundredths of one percent of all road use tax funds
16for the purposes of carrying out Code section 307.24(5). Code
17section 307.24(5) requires such funds to be used to construct,
18reconstruct, improve, and maintain state institutional roads
19and state park roads which are part of the state park, state
20institution, and other specified state land road systems, and
21bridges on such roads, roads located on state fairgrounds,
22and the roads and bridges located on property of community
23colleges, upon the request of the state board, department,
24or commission which has jurisdiction over such roads. The
25bill strikes the statutory allocation of such funding for
26department of natural resources facility roads and reallocates
27that portion of the funding to the remaining entities that
28receive allocations under Code section 307.24(5). The bill
29authorizes the department of natural resources to use moneys in
30the natural resources trust account created within the natural
31resources trust fund under Code section 461.32, as amended
32in the bill, to support the construction, maintenance, or
33expansion of roads on state-owned land under the jurisdiction
34of the department of natural resources.
35ADMINISTRATION. The bill provides that the legislative
-88-1council is to appoint a committee to review the trust fund and
2its allocations. The bill requires the economic development
3authority to be involved in decisions that use trust fund
4moneys to support initiatives with a recreational purpose. In
5making decisions to expend trust fund moneys, a higher priority
6is given to supporting an initiative that furthers a goal of
7the Iowa nutrient reduction strategy. A higher priority is
8provided to maintaining or preserving existing public use lands
9rather than acquiring new land. Several provisions place
10restrictions upon the use of trust fund moneys for support
11relating to certain initiatives, including athletic fields or
12facilities. Trust fund moneys cannot be used to support an
13exercise of eminent domain powers.
14REPEAL. Code chapter 461 is repealed December 31, 2051.
15EFFECTIVE DATE. The division of the bill takes effect
16January 1, 2025.
17DIVISION IX — CHARITABLE CONSERVATION CONTRIBUTION
18TAX CREDIT. The bill prohibits a charitable conservation
19contribution tax credit from being claimed against the
20individual or corporate income tax, except for qualified real
21property interests conveyed prior to January 1, 2025. The bill
22allows the credit in excess of tax liability to carry forward
23for qualified real property interests conveyed prior to January
241, 2025. The bill preserves existing rights and is intended to
25not limit, modify, or otherwise adversely affect any amount of
26the tax credit issued, awarded, or allowed prior to the repeal
27date of any tax credit. The division takes effect January 1,
282025, and applies to tax years beginning on or after that date.
29DIVISION X — PROPERTY TAX BENEFITS AND INCENTIVES. The bill
30amends Code chapter 404 (urban revitalization areas) to provide
31that for revitalization areas established on or after the
32effective date of the division and for first-year property tax
33exemption applications for property located in a revitalization
34area in existence on the effective date of the division filed
35on or after the effective date of the division, commercial
-89-1property shall not receive a tax exemption under Code chapter
2404 unless the city or county, as applicable, and the owner
3of the qualified real estate enter into a written assessment
4agreement specifying a minimum actual value until a specified
5termination date for the duration of the exemption period.
6The bill also establishes limitations on exemptions for
7residential property within revitalization areas. For
8revitalization areas established on or after the effective date
9of the division and for first-year exemption applications for
10property located in a revitalization area in existence on the
11effective date of the division filed on or after the effective
12date of the division, an exemption otherwise authorized under
13Code chapter 404 shall not be authorized for or approved by a
14city or county, as applicable, for property that is residential
15property.
16Division X of the bill takes effect July 1, 2024.
17DIVISION XI — TAX INCREMENT FINANCING. Code section 403.19
18authorizes municipalities to provide by ordinance for the
19division of property tax revenue (tax increment financing)
20collected against property located within an urban renewal
21area. The bill provides that for property taxes due and
22payable in fiscal years beginning on or after July 1, 2025,
23if the portion of the urban renewal area that is subject
24to a division of property tax revenue contains wind energy
25conversion property that is subject to special valuation under
26Code section 427B.26, foundation property taxes of a school
27district imposed under Code section 257.3 in that portion of
28the urban renewal area shall not be subject to the division of
29property tax revenue and shall instead be paid to the school
30district.
31DIVISION XII — TRANSIT FUNDING. Cities may grant various
32types of franchises for specified services under Code section
33362.4 and may generally impose a franchise fee based upon
34a percentage of gross revenues generated from sales of the
35franchisee within the city not to exceed 5 percent. An
-90-1exception allowing for a franchise fee up to 7.5 percent exists
2in specified circumstances for a period of fiscal years ending
3July 1, 2030, if approved at election. The bill strikes
4the provisions providing for that exception and establishes
5conditions under which a city with a population that exceeds
6200,000 may impose a franchise fee of up to 7.5 percent for
7fiscal years beginning on or after July 1, 2024. The bill
8requires that franchise fee amounts collected during such
9fiscal years in excess of 5 percent of gross revenues generated
10from sales shall be used solely for the reduction of property
11tax levies used to support the operation and maintenance of a
12municipal transit system or a regional transit district or to
13maintain transportation service levels of a municipal transit
14system or a regional transit district.
15The division of the bill takes effect July 1, 2024.
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