SSB 1100 (LSB 1771XC (2) 85)

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 by modifying the disabled veteran homestead tax credit, providing an additional homestead credit for certain disabled veterans, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 425.15, Code 2013, is amended to read as follows:
   425.15  Disabled veteran tax credit.
   If the owner of a homestead allowed a credit under this chapter is a veteran of any of the military forces of the United States, who acquired the homestead under 38 U.S.C. § 21.801, 21.802,
 
prior to August 6, 1991, or 38 U.S.C. § 2101,
 
through 2102,
 
or who is a veteran as defined in section 35.1 with a permanent and total service-connected disability as certified by the United States department of veterans affairs, the credit allowed on the homestead from the homestead credit fund shall be the entire amount of the tax levied on the homestead. The credit allowed shall be continued to the estate of a veteran who is deceased or the surviving spouse and any child, as defined in section 234.1, who are the beneficiaries of a deceased veteran, so long as the surviving spouse remains unmarried. This section is not applicable to the holder of title to any homestead whose annual income, together with that of the titleholder’s spouse, if any, for the last preceding twelve-month income tax accounting period exceeds thirty-five thousand dollars. For the purpose of this section “income” means taxable income for federal income tax purposes plus income from securities of state and other political subdivisions exempt from federal income tax. A veteran or a beneficiary of a veteran who elects to secure the credit provided in this section is not eligible for any other real property tax exemption provided by law for veterans of military service. If a veteran acquires a different homestead, the credit allowed under this section may be claimed on the new homestead unless the veteran fails to meet the other requirements of this section.
    Sec. 2.  NEW SECTION.  425.15A  Disabled veteran tax freeze.  
   1.  For purposes of this section, unless the context otherwise requires:
   a.  “Base year” means the fiscal year immediately preceding the first fiscal year in which the additional homestead credit under this section is allowed on the disabled veteran’s homestead.
   b.  “Disabled veteran” means a veteran, as defined in section 35.1, who has a service-connected disability rating of at least fifty percent as certified by the United States department of veterans affairs.
   2.  A disabled veteran who is eligible for the credit allowed under section 425.1 may claim an additional homestead credit pursuant to this section. To claim the credit under this section, the disabled veteran shall file on or before June 30 of the base year for which the veteran is first claiming the credit. The amount of the credit equals the amount of property taxes, less the regular homestead credit allowed under section 425.1, due and payable in the coming fiscal year that exceeds the amount of property taxes, less the regular homestead credit allowed under section 425.1, that were due and payable in the base year. The credit under this section is payable from the homestead credit fund created in section 425.1.
   3.  Upon the filing and allowance of the claim, the claim shall be allowed on the disabled veteran’s homestead for successive years without further filing as long as the property is legally and equitably owned and used as a homestead by the disabled veteran on July 1 of each of those successive years. The credit allowed shall be continued to the estate of a veteran who is deceased or the surviving spouse and any child, as defined in section 234.1, who are the beneficiaries of a deceased veteran, so long as the surviving spouse remains unmarried.
    Sec. 3.  IMPLEMENTATION.  Section 25B.7 shall not apply to the credits in this Act.
    Sec. 4.  APPLICABILITY.  This Act applies to property taxes due and payable in fiscal years beginning on or after July 1, 2014.
EXPLANATION
   This bill relates to property taxes of certain disabled veterans.
   The disabled veterans tax credit under Code section 425.15 provides a credit on the homestead of an eligible veteran who acquired the homestead under specified federal programs in an amount equal to the entire amount of the tax levied on the homestead. This bill modifies the qualifications for the disabled veterans tax credit by adding to the list of veterans who are eligible for the credit, a veteran as defined in Code section 35.1 with a permanent and total service-connected disability as certified by the United States department of veterans affairs. The bill also strikes the income limitation qualifications for the disabled veteran tax credit.
   The bill enacts new Code section 425.15A, which provides that the property tax on a disabled veteran’s homestead shall not increase from year to year. To receive this credit, the veteran must file on or before June 30 in a manner similar to filing for the regular homestead credit. Once the claim is filed and allowed, the veteran does not have to file for successive years so long as the property is still owned and used by the veteran as a homestead.
   The bill defines “disabled veteran” for the purposes of new Code section 425.15A to be a veteran as defined in Code section 35.1, who has a service-connected disability rating of at least 50 percent as certified by the United States department of veterans affairs.
   Code section 25B.7 provides that for a property tax credit or exemption enacted on or after January 1, 1997, 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 provides that Code section 25B.7 does not apply to the credits in the bill.
   The bill applies to property taxes due and payable in fiscal years beginning on or after July 1, 2014.