Public Education - Property Tax Reform – House File 718

By Attorneys Beth Grob and Jim Wainwright

The Legislature passed House File 718 which the Governor signed on May 4, 2023 (“HF718”). HF718 contains many provisions which affect how school districts conduct business and which also will require advance planning. Some important provisions:

General Obligation Bond Elections: General Obligation Bond elections may only be held one time per year, on the first Tuesday after the first Monday in November. The Commissioner of Elections must mail a notice of election that includes the full text of the public measure to each registered voter not less than ten but not more than 20 days prior to the election.

Sales Tax Bond Election: If district receives a valid petition requesting an election be held on the issuance of Sales Tax Revenue bonds, the election may only be on the first Tuesday after the first Monday in November.

PERL: Elections to approve the Public Education and Recreation Levy are no longer allowed (effective upon enactment).

Budget and Levy Certification Date: The Certification Date has been moved to April 30 (See Budget Process below).

NEW Procedure during Budget Process: County Auditors are now required to send Budget Statements to all property owners or taxpayers in the district not later than March 20. Each district must now file a report by March 15 with the Department of Management that contains all the information necessary to include in the Budget Statements. The Budget Statements must include:

1. The sum of the current fiscal year’s actual property taxes certified for levy for all of the district’s levies and the combined property tax rate per $1,000 for such tax amount for the current fiscal year;
2. The combined effective property tax rate for the district calculated using the sum of the current fiscal year’s actual property tax certified for levy of all of the district’s levies above;
3. The combined amount of the property tax dollars to be certified for all of the district’s levies for the budget year and the proposed combined property tax rate per $1,000 for such levies;
4. If the proper property tax dollars specified under (3) exceeds the current fiscal year’s actual property tax dollars certified for levy specified in (1), a detailed statement of the major reasons for the increase, including the specific purposes or programs for which the district is proposing an increase;
5. An example comparing the amount of property taxes on a residential property with an actual value of $100,000 in the current fiscal year and such amount on the residential property using the proposed property tax dollars for the budget year, including the percentage difference in such amounts;
6. An example comparing the amount of property taxes on a commercial property with an actual value of $100,000 in the current fiscal year and such amount on the commercial property using the proposed property tax dollars for the budget year, including the percentage difference in such amounts;
7. The district’s percentage of total property taxes certified for levy in the owner’s or taxpayer’s taxing district in the current fiscal year among all taxing authorities;
8. The date, time, and location of the district’s public hearing on the information contained in the Budget Statements. This is an additional hearing required and different than the hearing already required under Iowa Code section 24.9. This hearing must be separate from any other meeting of the district including a meeting or public hearing relating to the district’s budget and other business of the district not related to the proposed property tax amounts and the information in the Budget Statements may NOT be conducted at the meeting at which this public hearing is held. Notice of the public hearing must be published not less than ten but not more than twenty days prior to the hearing in a newspaper published in the district or, if none, in a newspaper of general circulation in the district. NOTICE MUST ALSO BE POSTED AND CLEARLY IDENTIFIED ON THE DISTRICT’S INTERNET SITE ALONG WITH COPIES OF THE BUDGET STATEMENT AND PRIOR YEARS’ NOTICES. THE NOTICE ALSO MUST BE POSTED ON ALL SOCIAL MEDIA ACCOUNTS OF THE DISTRICT. THE INTERNET AND SOCIAL MEDIA POSTS SHALL BE POSTED ON THE SAME DAY AS THE PUBLICATION OF THE NOTICE; and
9. Information on how to access on the district’s internet site, which must include the district’s Budget Statement and other budget documents for prior fiscal years.

Districts may not certify or levy any tax in any fiscal year unless and until the Budget Statements have been mailed and the public hearing (see 8 above) has been held.

This article is only a summary of the property tax reform law. If you have questions about the impact of the law or want advice generally on this topic, please contact an attorney in the Ahlers & Cooney’s Education Finance Area or by visiting the Firm's website at www.ahlerslaw.com. 

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