Iowa HSB 563: A bill for an act relating to state and local government taxes, budgets, and authority, by modifying provisions relating to the assessment and taxation of property, funding from the secure an advanced vision for education fund, the election of certain county officers, urban renewal areas and urban revitalization areas, establishing a rent reimbursement program, establishing a program for certain first-time homebuyers, establishing a local government shared-services grant fund, making appropriations, and including effective date, applicability, and retroactive applicability provisions.

Bill Text

House Study Bill 563 - Introduced
SENATE/HOUSE FILE _____
BY (PROPOSED GOVERNOR BILL)
A BILL FOR
An Act relating to state and local government taxes, budgets,1
and authority, by modifying provisions relating to the2
assessment and taxation of property, funding from the3
secure an advanced vision for education fund, the election4
of certain county officers, urban renewal areas and urban5
revitalization areas, establishing a rent reimbursement6
program, establishing a program for certain first-time7
homebuyers, establishing a local government shared-services8
grant fund, making appropriations, and including effective9
date, applicability, and retroactive applicability10
provisions.11
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:12
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DIVISION I1
PROPERTY TAX REVENUE LIMITATIONS —— BOND REVENUE USE2
LIMITATIONS3
Section 1. Section 11.11, Code 2026, is amended to read as4
follows:5
11.11 Scope of audits.6
The written report of the audit of a governmental7
subdivision shall include the auditor’s opinion as to whether a8
governmental subdivision’s financial statements are presented9
fairly in all material respects in conformity with generally10
accepted accounting principles or with an other another11
comprehensive basis of accounting. As a part of conducting an12
audit of a governmental subdivision, an evaluation of internal13
control and tests for compliance with laws and regulations14
shall be performed. As part of conducting an audit of a15
governmental subdivision, an examination of the governmental16
subdivision’s compliance with the reporting requirements of17
section 331.403, subsection 3, or section 384.22, subsection 2,18
if applicable, shall be performed. As part of conducting an19
audit of a governmental subdivision for fiscal years beginning20
on or after July 1, 2027, an examination of the governmental21
subdivision’s compliance with section 24.35 shall be performed,22
including verification of the circumstances resulting in actual23
reserve funds exceeding the specified limits.24
Sec. 2. Section 24.34, Code 2026, is amended to read as25
follows:26
24.34 Unliquidated obligations.27
A city, county, or other political subdivision governmental28
entity, as defined in section 24.35, may establish an29
encumbrance system for any obligation not liquidated at the30
close of the fiscal year in which the obligation has been31
encumbered assigned, committed, restricted, or specified as32
nonspendable. The encumbered obligations may be retained upon33
the books of the city, county, or other political subdivision34
until liquidated, all in accordance with generally accepted35
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governmental accounting practices principles, as established by1
the governmental accounting standards board.2
Sec. 3. NEW SECTION. 24.35 General fund reserves ——3
limitations.4
1. For purposes of this section:5
a. “Budget year” is the fiscal year beginning during the6
calendar year in which a budget is certified.7
b. “Current fiscal year” is the fiscal year ending during8
the calendar year in which a budget for the budget year is9
certified.10
c. “General fund” means a governmental entity’s fund11
designated as such by law or the governmental entity’s fund12
from which primary general operations of the governmental13
entity are funded.14
d. “Governmental entity” means any unit of government15
or other public body or public corporation, including any16
intergovernmental entity, that has the power to impose or17
certify a property tax levy. “Governmental entity” does not18
include a school district.19
e. “Unassigned” means funds that are not restricted,20
committed, assigned, or nonspendable within the meaning of21
generally accepted accounting principles, as established by the22
governmental accounting standards board.23
2. a. For budgets certified for budget years beginning24
on or after July 1, 2027, proposed unassigned reserve funds25
identified within a governmental entity’s general fund shall26
not exceed an amount equal to ten percent of the budgeted27
expenditures from the governmental entity’s general fund for28
the current fiscal year prior to budgeted transfers from such29
general fund.30
b. If the governmental entity’s budget does not comply with31
the requirements of paragraph “a”, the department of management32
shall not certify the governmental entity’s taxes back to the33
county auditor under section 24.17 and the governmental entity34
shall remedy the violation and recertify the budget.35
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3. To ensure uniformity, accuracy, and efficiency in the1
certification of governmental entity budgets according to the2
requirements of this section, the department of management3
shall prescribe the procedures to be used and instruct the4
appropriate officials of the various governmental entities on5
implementation of the procedures.6
Sec. 4. Section 24.48, Code 2026