HF 2304 (LSB 5262YH (4) 85)

HOUSE FILE 2304

BY  HALL

A BILL FOR

An Act relating to the property tax credit or rent reimbursement for elderly, disabled, and low-income persons and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 425.23, subsection 1, paragraph a, Code 2014, is amended by striking the paragraph and inserting in lieu thereof the following:
   a.  (1)  The tentative credit or reimbursement for a claimant described in section 425.17, subsection 2, paragraph “a”, subparagraph (1), that is a single-person household, shall be determined in accordance with the following schedule:
                Percent of property taxes

                due or rent constituting

                property taxes paid

 If the household                allowed as a credit or

 income is:                reimbursement:

 $     0    ——      26,499.99           ........ 100%

 26,500    ——      27,999.99           ........  85

 28,000    ——      29,499.99           ........  70

 29,500    ——      30,499.99           ........  55

 30,500    ——      31,999.99           ........  40

 32,000    ——      33,499.99           ........  25

   (2)  The tentative credit or reimbursement for a claimant described in section 425.17, subsection 2, paragraph “a”, subparagraph (1), that is part of a household consisting of the claimant and the claimant’s spouse, shall be determined in accordance with the following schedule:
                Percent of property taxes

                due or rent constituting

                property taxes paid

 If the household                allowed as a credit or

 income is:                reimbursement:

 $     0    ——      30,999.99           ........ 100%

 31,000    ——      32,699.99           ........  85

 32,700    ——      34,499.99           ........  70

 34,500    ——      35,999.99           ........  55

 36,000    ——      37,699.99           ........  40

 37,700    ——      39,499.99           ........  25
    Sec. 2.  Section 425.23, subsection 1, paragraph b, subparagraphs (1) and (2), Code 2014, are amended by striking the subparagraphs and inserting in lieu thereof the following:
   (1)  (a)  If the amount appropriated under section 425.40 plus any supplemental appropriation made for a fiscal year for purposes of this paragraph “b” is at least twenty-seven million dollars, the tentative credit or reimbursement for a claimant that is a single-person household shall be determined in accordance with the following schedule:
                Percent of property taxes

                due or rent constituting

                property taxes paid

 If the household                allowed as a credit or

 income is:                reimbursement:

 $     0    ——      26,499.99           ........ 100%

 26,500    ——      27,999.99           ........  85

 28,000    ——      29,499.99           ........  70

 29,500    ——      30,499.99           ........  55

 30,500    ——      31,999.99           ........  40

 32,000    ——      33,499.99           ........  25

   (b)  If the amount appropriated under section 425.40 plus any supplemental appropriation made for a fiscal year for purposes of this paragraph “b” is at least twenty-seven million dollars, the tentative credit or reimbursement for a claimant that is part of a household consisting of the claimant and the claimant’s spouse shall be determined in accordance with the following schedule:
                Percent of property taxes

                due or rent constituting

                property taxes paid

 If the household                allowed as a credit or

 income is:                reimbursement:

 $     0    ——      30,999.99           ........ 100%

 31,000    ——      32,699.99           ........  85

 32,700    ——      34,499.99           ........  70

 34,500    ——      35,999.99           ........  55

 36,000    ——      37,699.99           ........  40

 37,700    ——      39,499.99           ........  25

   (2)  (a)  If the amount appropriated under section 425.40 plus any supplemental appropriation made for a fiscal year for purposes of this paragraph “b” is less than twenty-seven million dollars, the tentative credit or reimbursement for a claimant that is a single-person household shall be determined in accordance with the following schedule:
                Percent of property taxes

                due or rent constituting

                property taxes paid

 If the household                allowed as a credit or

 income is:                reimbursement:

 $     0    ——      26,499.99           ........  50%

 26,500    ——      27,999.99           ........  42

 28,000    ——      29,499.99           ........  35

 29,500    ——      30,499.99           ........  27

 30,500    ——      31,999.99           ........  20

 32,000    ——      33,499.99           ........  12

   (b)  If the amount appropriated under section 425.40 plus any supplemental appropriation made for a fiscal year for purposes of this lettered paragraph is less than twenty-seven million dollars, the tentative credit or reimbursement for a claimant that is part of a household consisting of the claimant and the claimant’s spouse shall be determined in accordance with the following schedule:
                Percent of property taxes

                due or rent constituting

                property taxes paid

 If the household                allowed as a credit or

 income is:                reimbursement:

 $     0    ——      30,999.99           ........  50%

 31,000    ——      32,699.99           ........  42

 32,700    ——      34,499.99           ........  35

 34,500    ——      35,999.99           ........  27

 36,000    ——      37,699.99           ........  20

 37,700    ——      39,499.99           ........  12
    Sec. 3.  Section 425.23, subsection 3, paragraph a, Code 2014, is amended to read as follows:
   a.  In addition to a claim for property taxes due, claimants who have an unpaid special assessment levied against the homestead may be eligible for a special assessment credit.

A person who is eligible to file a claim as a single-person household for credit for property taxes due, and who has a household income of eight thousand five hundred dollars or less than twenty-six thousand five hundred dollars, and who has an unpaid special assessment levied against the homestead may file a claim for a special assessment credit with the county treasurer.  A person who is eligible to file a claim for the person and the person’s spouse for credit for property taxes due, who has a household income of less than thirty-one thousand dollars, and who has an unpaid special assessment levied against the homestead may file a claim for a special assessment credit with the county treasurer. The department shall provide to the respective treasurers the forms necessary for the administration of this subsection. The claim shall be filed not later than September 30 of each year. Upon the filing of the claim, interest for late payment shall not accrue against the amount of the unpaid special assessment due and payable. The claim filed by the claimant constitutes a claim for credit of an amount equal to the actual amount due upon the unpaid special assessment, plus interest, payable during the fiscal year for which the claim is filed against the homestead of the claimant. However, where if the claimant is an individual described in section 425.17, subsection 2, paragraph “a”, subparagraph (2), who is claiming as a single-person household, who has a household income of less than twenty-six thousand five hundred dollars, and the tentative credit is determined according to the schedule in subsection 1, paragraph “b”, subparagraph (2), of this section, the claim filed constitutes a claim for credit of an amount equal to one-half of the actual amount due and payable during the fiscal year.  If the claimant is an individual described in section 425.17, subsection 2, paragraph “a”, subparagraph (2), who is claiming on behalf of the individual and the individual’s spouse, who has a household income of less than thirty-one thousand dollars, and the tentative credit is determined according to the schedule in subsection 1, paragraph “b”, subparagraph (2), of this section, the claim filed constitutes a claim for credit of an amount equal to one-half of the actual amount due and payable during the fiscal year. The treasurer shall certify to the director of revenue not later than October 15 of each year the total amount of dollars due for claims allowed. The amount of reimbursement due each county shall be certified by the director of revenue and paid by the director of the department of administrative services by November 15 of each year, drawn upon warrants payable to the respective treasurer. There is appropriated annually from the general fund of the state to the department of revenue an amount sufficient to carry out the provisions of this subsection. The treasurer shall credit any moneys received from the department against the amount of the unpaid special assessment due and payable on the homestead of the claimant.
    Sec. 4.  Section 425.23, subsection 4, Code 2014, is amended to read as follows:
   4.  a.  For the base year beginning in the 1999 2015 calendar year and for each subsequent base year, the dollar amounts set forth in subsections 1 and 3 shall be multiplied by the cumulative adjustment factor for that base year. “Cumulative adjustment factor” means the product of the annual adjustment factor for the 1998 2014 base year and all annual adjustment factors for subsequent base years. The cumulative adjustment factor applies to the base year beginning in the calendar year for which the latest annual adjustment factor has been determined.
   b.  The annual adjustment factor for the 1998 2014 base year is one hundred percent. For each subsequent base year, the annual adjustment factor equals the annual inflation factor for the calendar year, in which the base year begins, as computed in section 422.4 for purposes of the individual income tax.
    Sec. 5.  Section 435.22, subsection 1, paragraph b, subparagraph (3), Code 2014, is amended to read as follows:
   (3)  Beginning with the 1998 base year, the income dollar amounts set forth in this paragraph “b” shall be multiplied by the cumulative adjustment factor for that base year as determined in section 425.23, subsection 4.  “Cumulative adjustment factor” means the product of the annual adjustment factor for the 1998 base year and all annual adjustment factors for subsequent base years. The cumulative adjustment factor applies to the base year beginning in the calendar year for which the latest annual adjustment factor has been determined. The annual adjustment factor for the 1998 base year is one hundred percent. For each subsequent base year, the annual adjustment factor equals the annual inflation factor for the calendar year, in which the base year begins, as computed in section 422.4 for purposes of the individual income tax.
    Sec. 6.  APPLICABILITY.  This Act applies to claims for credit under chapter 425, division II, for property taxes due and payable in fiscal years beginning on or after July 1, 2015, and to claims for reimbursement for rent constituting property taxes paid under chapter 425, division II, for base years beginning on or after January 1, 2014.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   Current Code chapter 425 provides a property tax credit for certain elderly and disabled persons in addition to the homestead property tax credit. Current Code section 425.23 provides a credit amount schedule based on specified income limitations. The amount of the credit is a percentage of property taxes paid or rent constituting property taxes paid ranging from 25 percent to 100 percent determined by income thresholds ranging from $0 to $16,499.99. Since 1999, those income thresholds have been indexed for inflation.
   This bill establishes new elderly and disabled credit amount schedules for claimants based in part on whether they are a single-person household or married. In addition, the bill increases the income thresholds for the credit amounts. For a claimant who is a single-person household, the credit is a percentage of property taxes paid or rent constituting property taxes paid ranging from 25 percent to 100 percent determined by income thresholds ranging from $0 to $33,499.99. For claimants who are married, the credit is a percentage of property taxes paid or rent constituting property taxes paid ranging from 25 percent to 100 percent determined by income thresholds ranging from $0 to $39,499.99.
   Current Code chapter 425 also establishes a similar property tax credit or reimbursement for rent constituting property taxes paid for persons who are 23 years or older or who are a head of household, but who have not attained the age of 65 or incurred the requisite disability status. The provision of these credits is triggered by an appropriation to and payment from the low-income tax credit and reimbursement fund established in Code section 425.40. An appropriation to this fund has not occurred since the fund’s creation.
   The bill makes similar changes to the credit schedules and eligibility for the credits and reimbursement specified by law to be paid from the low-income tax credit and reimbursement fund under Code section 425.40.
   The bill provides for an inflationary adjustment to the new income threshold amounts established in the bill. 
   As a result of modifying the income threshold amounts, the bill makes corresponding changes to the income limitation eligibility for filing a claim for a special assessment credit under Code section 425.23(3).
   The bill applies to claims for credit for property taxes due and payable in fiscal years beginning on or after July 1, 2015, and to claims for reimbursement for rent constituting property taxes paid for base years beginning on or after January 1, 2014.