A bill for an act permitting an exchange of the cash reserve levy for another local levy within the school budget for certain school districts to correct for an extreme circumstance and including effective date provisions.(Formerly HSB 781.)
Summary
HF 2791 creates a narrow, one-time property tax adjustment option for certain Iowa school districts facing an extreme valuation correction. For the school budget year beginning July 1, 2026, a district whose taxable value for the prior year was reduced by at least $100 million because of a correction to the assessed value of a single property may raise its proposed cash reserve levy above the normal statutory limit.
The bill does not allow the district to increase total property tax collections overall. If the cash reserve levy is increased, the district must reduce one or more other local school levies by an equal or greater amount, including the district management levy if needed, so that total property tax dollars remain within the district’s combined amount under existing law. The district must notify the Department of Management, which is directed to adjust levy rates to implement the change. The act takes effect immediately upon enactment.
Impact
The bill amends the operation of Iowa Code sections governing school district property tax levies, especially the cash reserve levy under section 298.10 and the district management levy under section 298.4. It creates a special exception for a very limited class of school districts affected by a large taxable-value correction tied to a single property, while preserving the overall cap on total school property tax dollars under section 24.2A. In practical terms, it gives affected districts flexibility to shift levy authority among local school levies without increasing the district’s total property tax take.
Sentiment
The available voting history suggests broad support for the bill, with the House passing it unanimously 84-0. The bill’s framing as a response to an “extreme circumstance” and its narrow applicability likely contributed to the lack of opposition. No committee transcript is available, but the bill’s structure indicates it was designed as a technical correction rather than a broader policy change.
Contention
There is little visible contention in the available record. The main policy issue is whether a district should be allowed to exceed the normal cash reserve levy limit in response to a major property valuation correction, even if total taxes do not increase. Any concern would likely come from taxpayers or observers wary of levy flexibility, while supporters would emphasize that the bill merely reallocates levy authority to address an unusual valuation error and maintain district budgeting stability.
Related
A bill for an act permitting an increase in the cash reserve levy for certain school districts and including effective date provisions.(See HF 2791.)
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