Senate File 2442 (SF 2442) was passed by the Iowa Legislature in 2024. It made changes to property tax law in Iowa, including some changes to the structure put in place in 2023 under HF 718. These included changes to the levy limit structure, based on valuation growth; taxpayer statements; and the city budget process.
Senate File 2442: Property Tax Changes | Cityscape article, July 2024
City Levy Rates
SF 2442 changes the calculation of the Combined General Fund Levy (CGFL), created by the state legislature in 2023 via HF 718, for some cities. For cities whose non-TIF taxable value growth was between 3-3.99%, a “softening of the levy limit” was implemented. A levy limit was expanded to include those cities whose same valuation growth fell between 2.75-2.99%.
The new tiers are as follows:
| Tier 1 | Annual non-TIF Taxable Value Growth = Less than 2.75% | CGFL is not impacted |
| Tier 2 | Annual non-TIF Taxable Value Growth = 2.75%-3.99% | CGFL is reduced by formula, reducing revenue growth by approximately 1% for the next budget year |
| Tier 3 | Annual non-TIF Taxable Value Growth = 4%-5.99% | CGFL is reduced by formula, reducing revenue growth by approximately 2% for the next budget year |
| Tier 4 | Annual non-TIF Taxable Value Growth = 6% or higher | CGFL is reduced by formula, reducing revenue growth by approximately 3% for the next budget year |
Annual Taxpayer Statement Notice
SF 2442 changes the date a city is required to provide the Iowa Department of Management (DOM) information that will be used by the county governments to create and mail taxpayer statements to all property owners. The new deadline is 4 p.m. on March 5 annually. The counties then have until March 15 to mail the taxpayer statements.
What happens if a city misses this deadline? If a city misses the deadline to provide the taxpayer statement notice information to DOM, they will be limited to the amount of revenue for the current fiscal year.
SF 2442 also made changes to some of the information that will be included on the taxpayer statements that are mailed to taxpayers:
- Percent change of taxes compared to the previous year will be included.
- In the examples required by HF 718 for taxes on commercial and residential properties, 110% will be used for the valuation for the current year. For commercial properties, the base valuation used for the example will go to $300,000 (instead of $100,000); residential properties will stay at the $100,000 base valuation.
- A link to a new DOM website describing the taxpayer statements and information shown will be included.
Required Public Hearing on the Annual Taxpayer Statement Mailings
This public hearing is required to be held on or after March 20, beginning with the FY 26 budget cycle.
Internet and Social Media Notice of Public Hearing of Annual Taxpayer Statement Mailings
- SF 2442 maintains a requirement to post a history of public hearing notices related to taxpayer statements. However, it strikes the requirement to include a copy of the statement in such postings.
- Makes a slight change to allow the internet and social media postings to be posted on a date no later than the date of publication (previously it required the posting and publication to be made on the same date).
City Responsibilities/Newspaper Publication
The city will not be considered as failing to publish if both a) notice was provided by the annual taxpayer statements mailed to each taxpayer, and b) the city can demonstrate to the county auditor that they submitted and provided sufficient time to the newspaper to publish the notice.
Special Case: Cities that Levied No Property Taxes in the Current Year
If a city levied $0 for the current fiscal year, and their non-TIF taxable valuation less ag value is over 102.75% of the amount in the previous year, they can levy up to $8.10 for the budget year.
If a City Misses Budget Certification Deadlines
- SF 2442 states that taxes from a city levy may be collected for a fiscal year for which no budget was certified, but that the county shall not distribute any funds collected from the levies to the city until the city certifies its budget and transmits the certified budget to the county auditor.
- Taxes levied by a city whose budget is certified after April 30 shall be limited to the taxes levied for the previous fiscal year and subject to levy rate limits. This amount shall not exceed the amount the city could otherwise collect for that year.
- DOM has the discretion to waive this limitation if the failure to certify the budget by April 30 was caused by one of the following: newspaper failure to publish a notice of hearing after the city gave sufficient time to publish, a verifiable public emergency or weather-related event which forced the cancellation of a required public hearing, or an illness or unexpected vacancy of one or more council members causing a lack of quorum necessary to hold a required hearing, or the failure of state software or process causing the council to miss the required date.
Maintaining Assessment-related Information
- SF 2442 requires that assessors maintain as confidential certain personal information related to homestead tax exemption filers aged 65 and over.
- SF 2442 specifies that valuation and revaluation information be submitted as instructed and on forms provided by DOM.
Special Case: Tax Increment Finance Timelines for Residential Housing
SF 2442 provided for a special case relating to housing TIF projects. For a municipality of 15,000 or more in population, use of tax increment financing for the purposes of housing public improvements can be extended an additional 3 years (for a total of 13 years) if all governing bodies of the taxing district affected approve the extension, and if the project for which revenues is being divided was established prior to January 1, 2018.
