Senate File 2138 - Introduced SENATE FILE 2138 BY COMMITTEE ON VETERANS AFFAIRS (SUCCESSOR TO SSB 3122) A BILL FOR An Act relating to property taxes of veterans by providing an 1 additional homestead credit for certain disabled veterans, 2 modifying the military service property tax exemption 3 and credit, making penalties applicable, and including 4 applicability provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5501SV (4) 85 md/sc
S.F. 2138 Section 1. Section 25B.7, subsection 2, paragraph c, Code 1 2014, is amended to read as follows: 2 c. Military service property tax credit and exemption 3 pursuant to chapter 426A , to the extent of six dollars and 4 ninety-two cents per thousand dollars of assessed value of the 5 exempt property . 6 Sec. 2. Section 425.15, Code 2014, is amended to read as 7 follows: 8 425.15 Disabled veteran tax credit. 9 If the owner of a homestead allowed a credit under this 10 chapter is a veteran of any of the military forces of the 11 United States, who acquired the homestead under 38 U.S.C. 12 § 21.801, 21.802, prior to August 6, 1991, or 38 U.S.C. 13 § 2101 , through 2102, a veteran as defined in section 35.1 14 with a service-connected disability rating of one hundred 15 percent, as certified by the United States department of 16 veterans affairs, or a former member of the national guard 17 of any state who otherwise meets the service requirements of 18 section 35.1, subsection 2, paragraph “b” , subparagraph (2) 19 or (7), with a service-connected disability rating of one 20 hundred percent, as certified by the United States department 21 of veterans affairs, the credit allowed on the homestead from 22 the homestead credit fund shall be the entire amount of the 23 tax levied on the homestead. The credit allowed shall be 24 continued to the estate of a veteran who is deceased or the 25 surviving spouse and any child, as defined in section 234.1 , 26 who are the beneficiaries of a deceased veteran, so long as 27 the surviving spouse remains unmarried. This section is not 28 applicable to the holder of title to any homestead whose annual 29 income, together with that of the titleholder’s spouse, if 30 any, for the last preceding twelve-month income tax accounting 31 period exceeds thirty-five thousand dollars. For the purpose 32 of this section “income” means taxable income for federal 33 income tax purposes plus income from securities of state and 34 other political subdivisions exempt from federal income tax. A 35 -1- LSB 5501SV (4) 85 md/sc 1/ 7
S.F. 2138 veteran or a beneficiary of a veteran who elects to secure the 1 credit provided in this section is not eligible for any other 2 real property tax exemption provided by law for veterans of 3 military service. If a veteran acquires a different homestead, 4 the credit allowed under this section may be claimed on the 5 new homestead unless the veteran fails to meet the other 6 requirements of this section . 7 Sec. 3. Section 426A.2, Code 2014, is amended to read as 8 follows: 9 426A.2 Military service tax credit. 10 The moneys shall be apportioned each year so as to replace 11 all or a portion of the tax which would be due on property 12 eligible for military service tax exemption in the state, 13 if the property were subject to taxation , the amount of the 14 credit to be not more than six dollars and ninety-two cents 15 per thousand dollars of assessed value of property which would 16 be subject to the tax, except for the military service tax 17 exemption . 18 Sec. 4. Section 426A.11, subsection 1, Code 2014, is amended 19 by striking the subsection. 20 Sec. 5. Section 426A.11, subsections 2 and 4, Code 2014, are 21 amended to read as follows: 22 2. The property, not to exceed one thousand eight hundred 23 fifty-two the lesser of ten percent of the taxable value or 24 fifteen thousand dollars in taxable value of an honorably 25 separated, retired, furloughed to a reserve, placed on inactive 26 status, or discharged veteran, as defined in section 35.1, 27 subsection 2 , paragraph “a” or “b” or subsections 3 and 4 of 28 this section . 29 4. For purposes of this chapter , unless the context 30 otherwise requires, “veteran” also means a any of the following: 31 a. A resident of this state who is a former member of the 32 armed forces of the United States and who served for a minimum 33 aggregate of eighteen months and who was discharged under 34 honorable conditions. However, “veteran” also means a 35 -2- LSB 5501SV (4) 85 md/sc 2/ 7
S.F. 2138 b. A resident of this state who is a former member of the 1 armed forces of the United States and who, after serving fewer 2 than eighteen months, was honorably discharged because of a 3 service-related injury sustained by the veteran. 4 c. A resident of this state who is a former member of the 5 national guard of any state who otherwise meets the service 6 requirements of section 35.1, subsection 2, paragraph “b” , 7 subparagraph (2) or (7). 8 Sec. 6. Section 426A.12, Code 2014, is amended to read as 9 follows: 10 426A.12 Exemptions to relatives. 11 1. In case any person in the foregoing classifications does 12 not claim the exemption from taxation, it shall be allowed in 13 the name of the person to the same extent on the property of any 14 one of the following persons in the order named: 15 a. The spouse, or surviving spouse remaining unmarried, 16 of a veteran, as defined in this chapter or in section 35.1, 17 subsection 2 , paragraph “a” or “b” , where they are living 18 together or were living together at the time of the death of 19 the veteran. 20 b. The parent whose spouse is deceased and who remains 21 unmarried, of a veteran, as defined in this chapter or in 22 section 35.1, subsection 2 , paragraph “a” or “b” , whether living 23 or deceased, where the parent is, or was at the time of death of 24 the veteran, dependent on the veteran for support. 25 c. The minor child, or children owning property as tenants 26 in common, of a deceased veteran, as defined in this chapter or 27 in section 35.1, subsection 2 , paragraph “a” or “b” . 28 2. No more than one tax exemption shall be allowed under 29 this section or section 426A.11 in the name of a veteran, 30 as defined in this chapter or in section 35.1, subsection 2 , 31 paragraph “a” or “b” . 32 Sec. 7. Section 426A.13, unnumbered paragraphs 1 and 2, Code 33 2014, are amended to read as follows: 34 A person named in section 426A.11 , who is a resident of 35 -3- LSB 5501SV (4) 85 md/sc 3/ 7
S.F. 2138 and domiciled in the state of Iowa, shall receive a reduction 1 equal to the exemption, to be made from any property owned 2 by the person or owned by a family farm corporation of which 3 the person is a shareholder and occupant of the property and 4 so designated by proceeding as provided in the section. To 5 be eligible to receive the exemption, the person claiming it 6 shall have recorded in the office of the county recorder of 7 the county in which is located the property designated for the 8 exemption, evidence of property ownership by that person or the 9 family farm corporation of which the person is a shareholder 10 and the military certificate of satisfactory service, order 11 transferring to inactive status, reserve, retirement, order of 12 separation from service, honorable discharge or a copy of any 13 of these documents of the person claiming or through whom is 14 claimed the exemption. In the case of a person claiming the 15 exemption as a veteran described in section 35.1, subsection 16 2 , paragraph “b” , subparagraph (6) or (7), or under section 17 426A.11, subsection 4, paragraph “c” , the person shall file the 18 statement required by section 35.2 . 19 The person shall file with the appropriate assessor on forms 20 obtained from the assessor the claim for exemption for the year 21 for which the person is first claiming the exemption. The 22 claim shall be filed not later than July 1 of the year for which 23 the person is claiming the exemption. The claim shall set out 24 the fact that the person is a resident of and domiciled in the 25 state of Iowa, and a person within the terms of section 426A.11 26 or section 426A.12 , and shall give the volume and page on which 27 the certificate of satisfactory service, order of separation, 28 retirement, furlough to reserve, inactive status, or honorable 29 discharge or certified copy thereof is recorded in the office 30 of the county recorder, and may include the designation of the 31 property from which the exemption is to be made, and shall 32 further state that the claimant is the equitable or legal owner 33 of the property designated or if the property is owned by a 34 family farm corporation, that the person is a shareholder of 35 -4- LSB 5501SV (4) 85 md/sc 4/ 7
S.F. 2138 that corporation and that the person occupies the property. 1 In the case of a person claiming the exemption as a veteran 2 described in section 35.1, subsection 2 , paragraph “b” , 3 subparagraph (6) or (7), or under section 426A.11, subsection 4 4, paragraph “c” , the person shall file the statement required 5 by section 35.2 . 6 Sec. 8. APPLICABILITY. This Act applies to property taxes 7 due and payable in fiscal years beginning on or after July 1, 8 2014. 9 EXPLANATION 10 The inclusion of this explanation does not constitute agreement with 11 the explanation’s substance by the members of the general assembly. 12 This bill relates to property taxes of veterans by providing 13 an additional homestead credit for certain disabled veterans 14 and by modifying the military service property tax exemption. 15 The disabled veterans tax credit under Code section 425.15 16 provides a credit on the homestead of an eligible veteran 17 who acquired the homestead under specified federal programs 18 in an amount equal to the entire amount of the tax levied 19 on the homestead. The bill modifies the qualifications for 20 the disabled veterans tax credit by adding the following 21 to the list of veterans who are eligible for the credit: 22 (1) a veteran as defined in Code section 35.1 with a 23 service-connected disability rating of 100 percent as certified 24 by the United States department of veterans affairs; and (2) a 25 former member of the national guard of any state who otherwise 26 meets the service requirements for Iowa national guard members 27 under Code section 35.1(2)(b), subparagraph (2) or (7), with a 28 service-connected disability rating of 100 percent as certified 29 by the United States department of veterans affairs. The bill 30 also strikes the income limitation qualifications for the 31 disabled veteran tax credit. 32 Under current law, veterans of the First World War are 33 entitled to a property tax exemption of $2,778 in taxable value 34 and honorably discharged veterans who served during other 35 -5- LSB 5501SV (4) 85 md/sc 5/ 7
S.F. 2138 specific time periods are entitled to a property tax exemption 1 of $1,852 in taxable value. The bill removes the provision 2 relating to veterans of the First World War and increases the 3 exemption amount for all eligible veterans to 10 percent of the 4 taxable value of the veteran’s property or $15,000, whichever 5 is less. 6 The bill also modifies the qualifications for the military 7 service property tax exemption and credit by adding the 8 following to the list of veterans who are eligible for the 9 credit: (1) a resident of this state who is a current member of 10 the national guard, organized reserves, or regular component of 11 the armed forces of the United States; (2) a resident of this 12 state who is a former member of the national guard of any state 13 who otherwise meets the service requirements for members of the 14 Iowa national guard under Code section 35.1(2)(b), subparagraph 15 (2) or (7); and (3) a resident of this state who served on 16 federal active duty, other than training, in the armed forces 17 of the United States and who was discharged under honorable 18 conditions. 19 Current law limits the amount of the military service 20 property tax credit state payment that replaces all or a 21 portion of the property tax revenue otherwise due to local 22 governments to not more than $6.92 per $1,000 of assessed 23 value. 24 Under current law, the state provides funding to local 25 governments for the military service property tax exemption and 26 credit up to $6.92 per $1,000 of assessed value of the exempt 27 property. Code section 25B.7 provides that for a property tax 28 credit or exemption enacted on or after January 1, 1997, if a 29 state appropriation made to fund the credit or exemption is not 30 sufficient to fully fund the credit or exemption, the political 31 subdivision shall be required to extend to the taxpayer only 32 that portion of the credit or exemption estimated by the 33 department of revenue to be funded by the state appropriation. 34 The provisions of current Code section 25B.7 apply to the 35 -6- LSB 5501SV (4) 85 md/sc 6/ 7
S.F. 2138 military service property tax credit and exemption to the 1 extent of $6.92 per $1,000 of assessed value of the exempt 2 property. 3 The bill strikes the military service property tax credit 4 amount limitation of $6.92 per $1,000 of assessed value and 5 strikes the $6.92 per $1,000 of assessed value limit from Code 6 section 25B.7. 7 The bill applies to property taxes due and payable in fiscal 8 years beginning on or after July 1, 2014. 9 -7- LSB 5501SV (4) 85 md/sc 7/ 7