Property tax reform continues to lead the conversations as we approach the final weeks of the 2023 Iowa Legislature 90th General Assembly.
The common themes of reform and reduction are guiding our discussion. House File 1 was passed out of the House Ways and Means committee meeting on Thursday. It was originally introduced at the start of session. The bill was amended in committee while retaining much of its original intent and priorities.
Those priorities include reducing the $5.40 levy by $1.00 with the State funding the difference. This will deliver more than $200 million in real, immediate tax relief to Iowans.
HF 1 caps annual property tax increases per parcel to 3% for residential and agricultural properties and 8% for commercial and industrial properties. We have heard concerns on this portion of the bill which we will continue working on.
The legislation also increases transparency in the process by which local governments use multiple levies. Many of these levies are uncapped and are enacted without a vote of the taxpayer. To this final point, imagine going to a restaurant and getting your bill with only the total at the bottom. Knowing what you paid for is what you ordered might be a reason you would send the receipt back for an itemized list. This is the same idea for transparency in your property tax bill.
Current Iowa property tax laws and HF 1 proposed reforms have much greater detail and intricacies than can be explained in a paragraph. However, I want to let you know you have been heard, and we are working on it. The discussion will continue with HF 1 along with an alternate bill being worked on by Iowa Senate. This work and potential amendments will most likely continue through the 2024 90th General Assembly.
The Iowa House passed HF 351 this week which increases Iowa’s current adoption tax credit. The current adoption tax credit equals the amount of qualified adoption expenses paid or incurred by the taxpayer in connection with the adoption of a child, not to exceed $5,000 per adoption. HF 351 improves on this and phases in an increase to the maximum amount of the adoption tax credit over two years. For 2024, the bill increases the tax credit to $7,500 per adoption and is further increased to $10,000 per adoption in 2025. The increase to the tax credit is estimated to reduce the state general fund $406,000 in FY 2025 and $775,000 for FY 2026 and after. HF 351 will now go to the Senate for consideration. Representative Brian Lohse from Bondurant has worked on several pieces of adoption legislation to help families who wish to adopt. He knows the subject well as he was adopted and has an incredible story to share in his own adoption.
Last week, Governor Reynolds appointed Eric Helland to become Chair of the Iowa Utilities Board in May. The Iowa Utilities Board is a 3-member board that regulates the rates and services of investor-owned electric, natural gas, water, sanitary sewage, and storm water drainage public utilities, and has specific regulatory authority over municipal electric and natural gas utilities and electric cooperatives (RECs). The IUB also has authority over the siting and construction of electric transmission lines, intrastate natural gas pipelines, and hazardous liquid pipelines. IUB members must be confirmed by the Iowa Senate with at least 34 votes.