SF 2227 (LSB 5249XS (2) 88)

SENATE FILE 2227

BY  CARLIN

A BILL FOR

An Act establishing a homestead adjustment property tax credit for certain property of persons who have attained the age of sixty-five or who are totally disabled, applying income limitations, providing a penalty, making appropriations, and including retroactive and other applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  425B.1  Homestead adjustment credit —— purpose.
   Persons who own their homesteads and who meet the qualifications provided in this chapter are eligible for a homestead adjustment credit, as provided in this chapter, to prevent an increase in the amount of property taxes owed.
    Sec. 2.  NEW SECTION.  425B.2  Definitions.
   As used in this chapter, unless the context otherwise requires:
   1.  “Base assessment year” means the assessment year beginning in the base year.
   2.  “Base year” means the calendar year last ending before the claim is filed.
   3.  “Claimant” means a person filing a claim for a credit under this chapter who has either attained the age of sixty-five years on or before December 31 of the base year or is totally disabled as defined in section 425.17, and who is domiciled in this state at the time the claim is filed or at the time of the person’s death in the case of a claim filed by the executor or administrator of the claimant’s estate.
   4.  “Homestead” means the same as defined in section 425.11.
   5.  “Household”, “household income”, and “income” mean the same as defined in section 425.17.
   6.  “Owned” means owned by an owner as defined in section 425.11.
    Sec. 3.  NEW SECTION.  425B.3  Right to file a claim.
   The right to file a claim for a homestead adjustment credit under this chapter may be exercised by the claimant or on behalf of a claimant by the claimant’s legal guardian, spouse, or attorney, or by the executor or administrator of the claimant’s estate. If a claimant dies after having filed a claim for a credit, the amount of the credit shall be made as if the claimant had not died. Only one claimant per household per fiscal year shall be entitled to a credit under this chapter.
    Sec. 4.  NEW SECTION.  425B.4  Claim for credit.
   1.  Subject to the limitations provided in this chapter, a claimant may annually claim a homestead adjustment credit for the claimant’s homestead for the base assessment year. The claim shall be filed with the county assessor for approval between January 1 and February 15 immediately following the close of the base assessment year. However, in case of sickness, absence, or other disability of the claimant, or if in the judgment of the county assessor good cause exists, the county assessor may extend the time for filing a claim through June 30 of the same calendar year.
   2.  The assessor shall remit the list of approved eligible claims to the county auditor by July 6 of each year. All eligible claims for credit shall be certified on or before August 1, in each year, by the county auditor to the county treasurer, which certificates shall list the total number of homestead adjustment credits in the county and the total amount of all such credits, listed by taxing district in the county. The county treasurer shall certify to the department of revenue the total amount of dollars, listed by taxing district in the county, due for homestead adjustment credits claimed.
    Sec. 5.  NEW SECTION.  425B.5  Credit amount —— income limitations.
   1.  If the income qualification specified in subsection 2 is met and the homestead’s actual value for the assessment year for which the credit is claimed is less than two hundred fifty thousand dollars, the amount of the claimant’s homestead adjustment credit shall be an amount equal to the amount of property taxes levied against the homestead for the base assessment year following application of all applicable property tax credits other than the homestead adjustment credit minus the amount of property taxes levied against the homestead for the assessment year preceding the base assessment year following application of all property tax credits.
   2.  A claimant is eligible for a homestead adjustment credit against taxes levied on the claimant’s homestead if the claimant’s household income is less than thirty thousand dollars in the base year.
    Sec. 6.  NEW SECTION.  425B.6  Administration.
   1.  The director of revenue shall make available suitable forms for claiming a homestead adjustment credit with instructions for claimants. Each assessor and county treasurer shall make available the forms and instructions. The claim shall be in a form as the director may prescribe.
   2.  The homestead adjustment credit fund is created within the state treasury under the control of the department of revenue. There is appropriated annually from the general fund of the state to the department of revenue for deposit in the homestead adjustment credit fund an amount sufficient to provide all credits authorized under this chapter. The director of the department of administrative services shall issue warrants on the homestead adjustment credit fund payable to the county treasurers of the several counties of the state under this chapter. The amount due each county shall be paid in two payments on November 15 and March 15 of each fiscal year, drawn upon warrants payable to the respective county treasurers. The two payments shall be as nearly equal as possible.
   3.  Annually, the department of revenue shall certify to the county auditor of each county the credit and its amount in dollars. Each county auditor shall then enter the credit against the tax levied on each eligible homestead in each county payable during the ensuing year, designating on the tax lists the credit as being from the homestead adjustment credit fund, and credit shall then be given to the several taxing districts in which eligible homesteads are located in an amount equal to the credits allowed on the taxes of the homesteads. The amount of credits shall be apportioned by each county treasurer to the several taxing districts as provided by law, in the same manner as though the amount of the credit had been paid by the owners of the homesteads. However, the several taxing districts shall not draw the funds so credited until after the semiannual allocations have been received by the county treasurer, as provided in this chapter. Each county treasurer shall show on each tax receipt the amount of credit received from the homestead adjustment credit fund.
    Sec. 7.  NEW SECTION.  425B.7  Proof of claim.
   1.  Every claimant shall give the department of revenue, in support of the claim, reasonable proof of:
   a.  Age and total disability, if any.
   b.  Changes of homestead.
   c.  Size and nature of the property claimed as the homestead.
   d.  Household income.
   2.  The director of revenue may require any additional proof necessary to support a claim.
    Sec. 8.  NEW SECTION.  425B.8  Audit —— denial.
   If on the audit of a claim for a homestead adjustment credit under this chapter, the director of revenue determines the claim is not allowable, the director shall notify the claimant of the denial and the reasons for it. The director shall not deny a claim after three years from October 31 of the year in which the claim was filed. The director shall give notification to the county assessor of the denial of the claim and the county assessor shall instruct the county treasurer to proceed to collect the tax that would have been levied on the applicable adjusted assessed value in the same manner as other property taxes due and payable are collected, if the property on which the credit was granted is still owned by the claimant. However, if the claim was incorrectly allowed due to a clerical error, error by a person other than the claimant, or an innocent misrepresentation by or on behalf of the claimant, the proceedings to collect the tax shall be limited to the taxes due and payable in the twelve months immediately preceding the disallowance.
    Sec. 9.  NEW SECTION.  425B.9  Waiver of confidentiality.
   1.  A claimant shall expressly waive any right to confidentiality relating to all income tax information obtainable through the department of revenue including all information covered by sections 422.20 and 422.72. This waiver shall apply to information available to the county assessor who shall hold the information confidential except that it may be used as evidence to disallow the homestead adjustment credit.
   2.  The department of revenue may release information pertaining to a person’s eligibility or claim for or receipt of the credit to an employee of the department of inspections and appeals in the employee’s official conduct of an audit or investigation.
    Sec. 10.  NEW SECTION.  425B.10  False claim —— penalty.
   A person who makes a false affidavit for the purpose of obtaining a homestead adjustment credit provided for in this chapter or who knowingly receives the credit without being legally entitled to it or makes claim for the credit in more than one county in the state without being legally entitled to it is guilty of a fraudulent practice. The claim for credit shall be disallowed in full and if the claim has been paid, the amount shall be recovered in the manner provided in section 425B.8. The director of revenue shall send a notice of disallowance of the claim.
    Sec. 11.  NEW SECTION.  425B.11  Notices, appeals, and rules.  
   To the extent not otherwise contrary to the provisions of this chapter:
   1.  Section 423.39, subsection 1, shall apply to all notices under this chapter.
   2.  Any person aggrieved by an act or decision of the director of revenue or the department of revenue under this chapter shall have the same rights of appeal and review as provided in section 423.38 and the rules of the department of revenue.
   3.  A claim for credit shall be disallowed if the department finds that the claimant or a person of the claimant’s household received title to the homestead primarily for the purpose of receiving benefits under this chapter.
   4.  The department of revenue shall adopt rules pursuant to chapter 17A to administer and interpret this chapter, including rules to prevent and disallow duplication of benefits and to prevent any unreasonable hardship or advantage to any person.
    Sec. 12.  IMPLEMENTATION.  Section 25B.7 shall not apply to this Act.
    Sec. 13.  APPLICABILITY.  This Act applies retroactively to January 1, 2020, for assessment years beginning on or after that date and to the filing of claims for homestead adjustment credits on or after January 1, 2021.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill establishes a homestead adjustment credit for an owner of a homestead with an actual value of less than $250,000 if the owner is a person who is either 65 or older or totally disabled, and who has household income of less than $30,000 per year. If the qualifications established in the bill are met, the amount of the homestead adjustment credit shall be an amount equal to the amount of property taxes levied against the homestead for the base assessment year, as defined in the bill, following application of all applicable property tax credits other than the homestead adjustment credit minus the amount of property taxes levied against the homestead for the assessment year preceding the base assessment year following application of all property tax credits. Only one claimant per household per fiscal year may receive the credit under the bill.
   The bill annually appropriates from the general fund of the state to the department of revenue for deposit in the homestead adjustment credit fund, created in the bill, an amount sufficient to fund all of the homestead adjustment credits for the fiscal year.
   The bill provides that a person who makes a false affidavit for the purpose of obtaining a credit, knowingly receives a credit without being legally entitled to it, or makes claim for a credit in more than one county without being legally entitled to it is guilty of a fraudulent practice and is subject to a criminal penalty.
   The bill provides that the provisions in Code section 25B.7, relating to the obligation of the state to reimburse local jurisdictions for newly enacted property tax credits and exemptions, do not apply to the bill.
   The bill applies retroactively to January 1, 2020, for assessment years beginning on or after that date and applies to claims filed on or after January 1, 2021, for the credit.