Senate Study Bill 1100 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON VETERANS AFFAIRS BILL BY CHAIRPERSON BEALL) A BILL FOR An Act relating to property taxes of certain disabled veterans 1 by modifying the disabled veteran homestead tax credit, 2 providing an additional homestead credit for certain 3 disabled veterans, and including applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1771XC (2) 85 md/sc

S.F. _____ Section 1. Section 425.15, Code 2013, is amended to read as 1 follows: 2 425.15 Disabled veteran tax credit. 3 If the owner of a homestead allowed a credit under this 4 chapter is a veteran of any of the military forces of the 5 United States, who acquired the homestead under 38 U.S.C. 6 § 21.801, 21.802, prior to August 6, 1991, or 38 U.S.C. § 2101 , 7 through 2102, or who is a veteran as defined in section 35.1 8 with a permanent and total service-connected disability as 9 certified by the United States department of veterans affairs, 10 the credit allowed on the homestead from the homestead credit 11 fund shall be the entire amount of the tax levied on the 12 homestead. The credit allowed shall be continued to the 13 estate of a veteran who is deceased or the surviving spouse 14 and any child, as defined in section 234.1 , who are the 15 beneficiaries of a deceased veteran, so long as the surviving 16 spouse remains unmarried. This section is not applicable to 17 the holder of title to any homestead whose annual income, 18 together with that of the titleholder’s spouse, if any, for 19 the last preceding twelve-month income tax accounting period 20 exceeds thirty-five thousand dollars. For the purpose of 21 this section “income” means taxable income for federal income 22 tax purposes plus income from securities of state and other 23 political subdivisions exempt from federal income tax. A 24 veteran or a beneficiary of a veteran who elects to secure the 25 credit provided in this section is not eligible for any other 26 real property tax exemption provided by law for veterans of 27 military service. If a veteran acquires a different homestead, 28 the credit allowed under this section may be claimed on the 29 new homestead unless the veteran fails to meet the other 30 requirements of this section . 31 Sec. 2. NEW SECTION . 425.15A Disabled veteran tax freeze. 32 1. For purposes of this section, unless the context 33 otherwise requires: 34 a. “Base year” means the fiscal year immediately preceding 35 -1- LSB 1771XC (2) 85 md/sc 1/ 4

S.F. _____ the first fiscal year in which the additional homestead 1 credit under this section is allowed on the disabled veteran’s 2 homestead. 3 b. “Disabled veteran” means a veteran, as defined in section 4 35.1, who has a service-connected disability rating of at least 5 fifty percent as certified by the United States department of 6 veterans affairs. 7 2. A disabled veteran who is eligible for the credit allowed 8 under section 425.1 may claim an additional homestead credit 9 pursuant to this section. To claim the credit under this 10 section, the disabled veteran shall file on or before June 30 11 of the base year for which the veteran is first claiming the 12 credit. The amount of the credit equals the amount of property 13 taxes, less the regular homestead credit allowed under section 14 425.1, due and payable in the coming fiscal year that exceeds 15 the amount of property taxes, less the regular homestead credit 16 allowed under section 425.1, that were due and payable in the 17 base year. The credit under this section is payable from the 18 homestead credit fund created in section 425.1. 19 3. Upon the filing and allowance of the claim, the claim 20 shall be allowed on the disabled veteran’s homestead for 21 successive years without further filing as long as the property 22 is legally and equitably owned and used as a homestead by 23 the disabled veteran on July 1 of each of those successive 24 years. The credit allowed shall be continued to the estate 25 of a veteran who is deceased or the surviving spouse and any 26 child, as defined in section 234.1, who are the beneficiaries 27 of a deceased veteran, so long as the surviving spouse remains 28 unmarried. 29 Sec. 3. IMPLEMENTATION. Section 25B.7 shall not apply to 30 the credits in this Act. 31 Sec. 4. APPLICABILITY. This Act applies to property taxes 32 due and payable in fiscal years beginning on or after July 1, 33 2014. 34 EXPLANATION 35 -2- LSB 1771XC (2) 85 md/sc 2/ 4

S.F. _____ This bill relates to property taxes of certain disabled 1 veterans. 2 The disabled veterans tax credit under Code section 425.15 3 provides a credit on the homestead of an eligible veteran 4 who acquired the homestead under specified federal programs 5 in an amount equal to the entire amount of the tax levied on 6 the homestead. This bill modifies the qualifications for the 7 disabled veterans tax credit by adding to the list of veterans 8 who are eligible for the credit, a veteran as defined in Code 9 section 35.1 with a permanent and total service-connected 10 disability as certified by the United States department of 11 veterans affairs. The bill also strikes the income limitation 12 qualifications for the disabled veteran tax credit. 13 The bill enacts new Code section 425.15A, which provides 14 that the property tax on a disabled veteran’s homestead shall 15 not increase from year to year. To receive this credit, the 16 veteran must file on or before June 30 in a manner similar 17 to filing for the regular homestead credit. Once the claim 18 is filed and allowed, the veteran does not have to file for 19 successive years so long as the property is still owned and 20 used by the veteran as a homestead. 21 The bill defines “disabled veteran” for the purposes of new 22 Code section 425.15A to be a veteran as defined in Code section 23 35.1, who has a service-connected disability rating of at least 24 50 percent as certified by the United States department of 25 veterans affairs. 26 Code section 25B.7 provides that for a property tax credit 27 or exemption enacted on or after January 1, 1997, if a state 28 appropriation made to fund the credit or exemption is not 29 sufficient to fully fund the credit or exemption, the political 30 subdivision shall be required to extend to the taxpayer only 31 that portion of the credit or exemption estimated by the 32 department of revenue to be funded by the state appropriation. 33 The bill provides that Code section 25B.7 does not apply to 34 the credits in the bill. 35 -3- LSB 1771XC (2) 85 md/sc 3/ 4