House Study Bill 40 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED DEPARTMENT OF VETERANS AFFAIRS BILL) A BILL FOR An Act relating to the disabled veteran homestead tax credit by 1 modifying eligibility criteria and including effective date 2 and retroactive applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1174XD (2) 86 md/sc

S.F. _____ H.F. _____ Section 1. Section 425.15, subsection 1, paragraphs b, c, 1 and d, Code 2015, are amended to read as follows: 2 b. A veteran as defined in section 35.1 with a permanent 3 service-connected disability rating of one hundred percent or 4 a permanent and total disability rating based on individual 5 unemployability , as certified by the United States department 6 of veterans affairs. 7 c. A former member of the national guard of any state 8 who otherwise meets the service requirements of section 35.1, 9 subsection 2 , paragraph “b” , subparagraph (2) or (7), with a 10 permanent service-connected disability rating of one hundred 11 percent or a permanent and total disability rating based on 12 individual unemployability , as certified by the United States 13 department of veterans affairs. 14 d. An individual who is a surviving spouse or a child and 15 who is receiving dependency and indemnity compensation pursuant 16 to 38 U.S.C. §1301 et seq. , as certified by the United States 17 department of veterans affairs. 18 Sec. 2. Section 425.15, subsection 2, paragraph b, Code 19 2015, is amended to read as follows: 20 b. An individual described in subsection 1 , paragraph “d” , 21 is no longer eligible for the credit if the individual marries 22 or upon termination of dependency and indemnity compensation 23 under 38 U.S.C. §1301 et seq. 24 Sec. 3. Section 425.15, Code 2015, is amended by adding the 25 following new subsection: 26 NEW SUBSECTION . 5. For purposes of this section, “permanent 27 and total disability rating based on individual unemployability” 28 means a condition under which a person has either a permanent 29 service-connected disability rating of sixty percent or two or 30 more permanent service-connected disability conditions in which 31 one of the conditions has at least a forty percent rating and 32 the combined rating for all the conditions is at least seventy 33 percent, and the person has an administrative adjustment added 34 to the service-connected disability rating, due to individual 35 -1- LSB 1174XD (2) 86 md/sc 1/ 3

S.F. _____ H.F. _____ unemployability, such that the United States department of 1 veterans affairs rates the veteran permanently and totally 2 disabled for purposes of disability compensation. 3 Sec. 4. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 4 immediate importance, takes effect upon enactment. 5 Sec. 5. RETROACTIVE APPLICABILITY. This Act applies 6 retroactively to May 26, 2014, for applications for the 7 homestead credit under chapter 425 filed on or after that date. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanation’s substance by the members of the general assembly. 11 Current Code section 425.15 provides a homestead credit to 12 the owner of a homestead for the full amount of tax levied 13 if the owner is any of the following: (1) a veteran of any 14 of the military forces of the United States who acquired the 15 homestead under specified federal programs; (2) a veteran 16 with a service-connected disability rating of 100 percent; 17 (3) a former member of the national guard of any state who 18 meets specified service requirements with a service-connected 19 disability rating of 100 percent; or (4) an individual who is a 20 surviving spouse or a child and who is receiving dependency and 21 indemnity compensation. 22 This bill amends the eligibility criteria for the credit to 23 include a veteran with a permanent and total disability rating 24 based on individual unemployability and certain members of the 25 national guard with a permanent and total disability rating 26 based on individual unemployability. 27 The bill defines “permanent and total disability rating 28 based on individual unemployability” to mean a condition 29 under which a person has either a permanent service-connected 30 disability rating of 60 percent or two or more permanent 31 service-connected disability conditions in which one of the 32 conditions has at least a 40 percent rating and the combined 33 rating for all the conditions is at least 70 percent, and 34 the person has an administrative adjustment added to the 35 -2- LSB 1174XD (2) 86 md/sc 2/ 3

S.F. _____ H.F. _____ service-connected disability rating, due to individual 1 unemployability, such that the United States department of 2 veterans affairs rates the veteran as permanently and totally 3 disabled for purposes of disability compensation. 4 The bill specifies that for purposes of qualifying for the 5 credit, the receipt of dependency and indemnity compensation 6 by an individual who is a surviving spouse or a child must be 7 certified by the United States department of veterans affairs. 8 The bill also removes the provision that terminates eligibility 9 for the credit for a surviving spouse receiving dependency and 10 indemnity compensation when the surviving spouse remarries. 11 The bill takes effect upon enactment and applies 12 retroactively to May 26, 2014, for applications for the 13 homestead credit filed on or after that date. 14 -3- LSB 1174XD (2) 86 md/sc 3/ 3