HF 810 modifies Iowa's funding formula for school districts with high open enrollment (over 45% of students enrolled through open enrollment). It removes the "teacher salary supplement" from the calculation for supplemental aid, expands eligibility beyond the 2024 budget year, and requires school boards to hold public hearings before requesting aid. The bill also limits property tax increases for districts receiving aid after 2025, capping the next year's tax rate at the level of the aid year. It applies to school budget years starting July 1, 2025.
This bill creates a new "foundation property tax reduction fund" in Iowa's state treasury, funded by redirecting interest earnings from several existing state funds (including the Iowa economic emergency fund, cash reserve fund, and taxpayer relief fund) starting in 2026. The fund's primary purpose is to lower property tax levies for school districts by making direct payments to them, effectively reducing the amount homeowners and businesses would pay in property taxes. School districts and property taxpayers - particularly those with agricultural land eligible for existing tax credits - will directly benefit as the fund supplants funds that would otherwise be collected through the standard property tax system. The fund operates separately from the general state fund and is specifically designed to lower the foundation property tax levy rate under existing school finance rules.
HF 811 repeals Iowa's school tuition organization (STO) tax credit, which allowed taxpayers to reduce their individual or corporate income tax by 75% of donations to STOs. The bill ends this credit for contributions made on or after July 1, 2025, and reduces the 2025 credit cap from $20 million to $10 million. It fully repeals the tax credit provision on July 1, 2031, removing all future eligibility and references to the credit in tax law. This directly affects individuals, corporations, and STOs that previously used or issued these tax credits.
HF 141 imposes a sales tax on items containing traceable amounts of kava (piper methysticum), such as kava root products sold as beverages or supplements. The bill directly affects businesses selling these kava-containing items by requiring them to collect and remit the sales tax on the full sales price. Key provisions amend Iowa's tax code to explicitly define "piper methysticum" and exclude kava from the list of non-taxable food items. This creates a new tax category for kava products, separate from other dietary supplements or food.
This bill modifies Iowa's property tax calculation system by introducing a cap on annual tax increases for qualified properties starting in fiscal year 2026. It limits tax increases for residential and agricultural properties to 103% of the previous year's tax (108% for commercial/industrial), unless improvements occurred during the base year. A "qualified parcel" must not have changed ownership, undergone new construction, or been subject to exemptions in the base year. The cap applies only to standard annual property taxes (excluding special assessments or bond payments) and aims to prevent sudden large tax jumps for eligible property owners.
This bill modifies how Iowa school districts receive supplemental funding based on open enrollment. It sets a 35% threshold for open enrollment (students from outside the district) to qualify for aid, requires districts to hold a public hearing before applying, and caps aid at 50% of the net enrollment increase multiplied by specific per-pupil costs (like teacher salaries and professional development). Districts where over half of open-enrollment students use private online instruction are excluded. The changes apply to school budgets starting July 1, 2025, and repeal a prior tax levy limitation.
HF 682 requires Iowa state departments to recapture tax incentives (such as credits, exemptions, or rebates) from businesses that violate state or federal child labor laws (under Iowa Code chapter 92 or the Fair Labor Standards Act). It applies to businesses receiving state tax benefits and extends to their contractors, subcontractors, or third parties working at the business's facility. Beginning July 1, 2025, if a violation occurs, the business must notify the administering department within 30 days of the appeal period ending, and the state will reclaim the tax benefits using the same process as for unpaid taxes. This bill directly affects businesses receiving state tax incentives who breach child labor protections.
This bill maintains the pre-development property tax assessment for land used in housing or commercial development starting January 1, 2020, or later. It prevents local assessors from changing a lot's tax classification until the property is improved with permanent construction, sold, or five years pass after the subdivision plat is recorded - whichever happens first. The rule applies to all development activities, including zoning changes, clearing lots, or installing utilities, but excludes special assessments. It takes effect immediately and applies retroactively to tax assessments beginning January 1, 2025.
This bill caps annual rate increases for solid waste collection and disposal services by local governments (counties, cities, and municipal utilities) at either 102% of the previous year's rates or the Midwest region's Consumer Price Index (CPI) increase, whichever is lower. It excludes rate hikes for pre-July 2025 debt repayment from this cap. If rates exceed the limit, the local government must submit the increase to voters at the next general election; if rejected, all overcharged fees are refunded by January 1 following the election, and rates are immediately adjusted to the cap. The policy directly affects residents and businesses paying solid waste fees in Iowa jurisdictions governed by these entities.
This bill changes how local emergency management agencies in Iowa fund their operations. It requires their budgets to be fully covered by specific local funding sources (like property taxes) and mandates that the local commission (defined as a municipality) certifies these budgets annually by February 28. The bill prohibits any other entity from amending these certified budgets after approval. These rules apply to property tax budgets for fiscal years starting July 1, 2026, directly affecting local emergency management agencies and their governing commissions.
