HF3798

Purpose

This bill changes how school district referenda are described on ballots and how related property tax questions are presented to voters. It aims to provide clearer details about project costs, tax impacts, and the duration of tax levies and revenue increases, while tightening notice and reporting requirements.

Main Provisions (Key Features)

• Capital project levy referendum

  • A district may levy a local tax rate approved by a majority of voters to fund an approved project.
  • The election must be held no more than five years before the project starts.
  • The referendum can be held separately or together with an election for issuing obligations (debt) for the project, including conjunction with bonds under chapter 475.
  • If a project is reviewed by the commissioner, and the review is not positive, at least 60% of voters must approve the referendum.
  • Ballot content must include: a general project description, estimated total cost, whether the project has received a positive or negative commissioner review, the maximum levy as a percent of net tax capacity, the first-year levy amount, and the maximum number of years the levy would apply (up to 10 years).
  • The ballot includes a Yes/No question asking to approve the capital project levy.
  • If renewing an existing capital project when the same tax rate would apply, the ballot may indicate the levy is being renewed without a rate increase.
  • If approved as a conjunction with debt issuance, the ballot must include language authorizing the issuance of obligations.
  • The district must notify the commissioner of the referendum results.

• Referendum revenue for increases in funding (per adjusted pupil unit)

  • A district may seek voter approval to increase revenue authority (per adjusted pupil unit) for up to ten years, with details set on the ballot.
  • Elections to increase funding must be held one or two years before the increased amount becomes payable; only one increase election may occur in a calendar year.
  • Unless conducted by mail, the election date is the first Tuesday after the first Monday in November.
  • Ballot must state the maximum increased revenue per adjusted pupil unit and may outline a year-to-year schedule or inflation indexing; it may also indicate that existing revenue is expiring and compare proposed vs. expiring authority.
  • The ballot describes how the revenue is calculated (revenue per adjusted pupil unit times the district’s adjusted pupil units) and the years of authorization.
  • The board must provide at least 15 days and no more than 45 days’ mailed notice to taxpayers, describing the proposed revenue and projected tax impact for common property types (residential, agricultural, apartments, commercial/industrial).
  • Notices may indicate whether the existing referendum is expiring and the expected increase in the first year.
  • The ballot may also include language about renewing an existing levy at the same per-pupil amount as the previous year.
  • A revocation or reduction referendum may be called to reduce the revenue amount, but only one revocation/reduction referendum may be held for a given year and future years.
  • A simple majority (50% plus one) is required to pass such a referendum.
  • The district must notify the commissioner and county auditors within specified timeframes after the results.

• Ballot notice requirements for property tax questions (new standard)

  • Any local government ballot question about a property tax levy or debt must include a bold notice: “BY VOTING YES ON THIS BALLOT QUESTION YOU ARE VOTING FOR A PROPERTY TAX INCREASE.”
  • This applies to counties, cities, towns, school districts, and other special districts, but not to school district bond elections if debt service is paid entirely from capital fund transfers.
  • For school districts, debt service via capital fund transfers is exempt from this bold notice.

Changes to Existing Law (Significant Shifts)

• Ballot clarity and transparency: Adds explicit, standardized language on tax impact, cost, and duration for capital project levies and revenue increases.
• Tax impact disclosures: Requires projected tax amounts by property type and, in renewal cases, whether taxes stay the same.
• Commissioner's review: Introduces a 60% approval threshold if the commissioner’s review is not positive for capital project referenda.
• Notice and reporting: Expands required notices to the commissioner and county auditors and mandates timely result reporting.
• Bold tax-increase notice: Mandates a bold, standardized statement on ballots for any property tax increase, improving voter awareness.
• Conjunctive financing: Allows combining capital levy approvals with debt issuance and requires appropriate language when doing so.
• Renewal and revocation options: Provides explicit processes for renewing or revoking/reducing levy authority, with clear per-year and per-pupil-unit calculations.

Practical Impact

• For voters: Ballots will show clearer information about how much tax is involved, how long it lasts, and how it’s calculated, plus a prominent notice indicating tax increases.
• For districts: More precise ballot language, cost estimates, and notification duties; more explicit rules about timing, debt conjugation, and potential renewal.
• For taxpayers: Better understanding of how property tax changes are calculated and how the money will be spent.

Relevant Terms

• capital project levy referendum
• capital project levy
• maximum levy (as a percent of net tax capacity)
• net tax capacity
• adjusted pupil unit
• inflationary increase / inflation indexing
• referendum revenue
• increased revenue per adjusted pupil unit
• conjunctive question (levy and debt issuance)
• obligations (chapter 475)
• positive review / negative review
• 60 percent threshold
• 275.60 ballot notice
• bold notice: "BY VOTING YES ON THIS BALLOT QUESTION YOU ARE VOTING FOR A PROPERTY TAX INCREASE"
• property tax impact notices (by property type)
• notice to commissioner and county auditors
• revocation or reduction referendum
• renewal vs. increase language

Relevant Terms