HSB 676 (LSB 5681HC (1) 83)

HOUSE FILE _____

BY  (PROPOSED COMMITTEE ON VETERANS AFFAIRS BILL BY CHAIRPERSON ZIRKELBACH)

A BILL FOR

An Act relating to the military service property tax exemption and credit by increasing the exemption amount, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 25B.7, subsection 2, paragraph c, Code 2009, is amended to read as follows:
   c.  Military service property tax credit and exemption pursuant to chapter 426A, to the extent of six dollars and ninety-two cents per thousand dollars of assessed value of the exempt property.
    Sec. 2.  Section 426A.2, Code 2009, is amended to read as follows:
   426A.2  Military service tax credit.

   The moneys shall be apportioned each year so as to replace all or a portion of the tax which would be due on property eligible for military service tax exemption in the state, if the property were subject to taxation, the amount of the credit to be not more than six dollars and ninety-two cents per thousand dollars of assessed value of property which would be subject to the tax, except for the military service tax exemption.
    Sec. 3.  Section 426A.11, subsections 1 and 2, Code Supplement 2009, are amended to read as follows:
   1.  The property, not to exceed two thousand seven hundred seventy-eight sixteen thousand three hundred dollars in taxable value of any veteran, as defined in section 35.1, of the First World War.
   2.  The property, not to exceed one thousand eight hundred fifty-two sixteen thousand three hundred dollars in taxable value of an honorably separated, retired, furloughed to a reserve, placed on inactive status, or discharged veteran, as defined in section 35.1.
    Sec. 4.  APPLICABILITY.  This Act applies to property taxes due and payable in fiscal years beginning on or after July 1, 2011.
EXPLANATION
   Under current law, veterans of the First World War are entitled to a property tax exemption of $2,778 and honorably discharged veterans that serve during other specific time periods are entitled to a property tax exemption of $1,852. This bill increases the exemption amount for all eligible veterans to $16,300.
   Under current law, the state provides funding to local governments for the military service property tax exemption and credit up to $6.92 per $1,000 of assessed value of the exempt property. The bill strikes this state funding limitation and makes the property tax exemption and credit funding requirements of Code section 25B.7 applicable to the increased military service exemption and credit amounts. Code section 25B.7 provides that if a state appropriation made to fund the credit or exemption is not sufficient to fully fund the credit or exemption, the political subdivision shall be required to extend to the taxpayer only that portion of the credit or exemption estimated by the department of revenue to be funded by the state appropriation.
   The bill applies to property taxes due and payable in fiscal years beginning on or after July 1, 2011.