SF 284 (LSB 1087SV (2) 86)

SENATE FILE 284

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO SF 45)

A BILL FOR

An Act relating to the disabled veteran homestead tax credit by modifying eligibility criteria and including effective date and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 425.15, subsection 1, paragraphs b, c, and d, Code 2015, are amended to read as follows:
   b.  A veteran as defined in section 35.1 with a permanent service-connected disability rating of one hundred percent, as certified by the United States department of veterans affairs, or a permanent and total disability rating based on individual unemployability that is compensated at the one hundred percent disability rate, as certified by the United States department of veterans affairs.
   c.  A former member of the national guard of any state who otherwise meets the service requirements of section 35.1, subsection 2, paragraph “b”, subparagraph (2) or (7), with a permanent service-connected disability rating of one hundred percent, as certified by the United States department of veterans affairs, or a permanent and total disability rating based on individual unemployability that is compensated at the one hundred percent disability rate, as certified by the United States department of veterans affairs.
   d.  An individual who is a surviving spouse or a child and who is receiving dependency and indemnity compensation pursuant to 38 U.S.C. §1301 et seq., as certified by the United States department of veterans affairs.
    Sec. 2.  Section 425.15, subsection 2, paragraph b, Code 2015, is amended to read as follows:
   b.  An individual described in subsection 1, paragraph “d”, is no longer eligible for the credit if the individual marries or upon termination of dependency and indemnity compensation under 38 U.S.C. §1301 et seq.
    Sec. 3.  Section 425.15, Code 2015, is amended by adding the following new subsection:
   NEW SUBSECTION.  5.  For purposes of this section, “permanent and total disability rating based on individual unemployability” means a condition under which a person has either a permanent service-connected disability rating of sixty percent or two or more permanent service-connected disability conditions in which one of the conditions has at least a forty percent rating and the combined rating for all the conditions is at least seventy percent, and the person has an administrative adjustment added to the service-connected disability rating, due to individual unemployability, such that the United States department of veterans affairs rates the veteran permanently and totally disabled for purposes of disability compensation.
    Sec. 4.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 5.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to May 26, 2014, for applications for the homestead credit under chapter 425 filed on or after that date.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   Current Code section 425.15 provides a homestead credit to the owner of a homestead for the full amount of tax levied if the owner is any of the following: (1) a veteran of any of the military forces of the United States who acquired the homestead under specified federal programs; (2) a veteran with a service-connected disability rating of 100 percent; (3) a former member of the national guard of any state who meets specified service requirements with a service-connected disability rating of 100 percent; or (4) an individual who is a surviving spouse or a child and who is receiving dependency and indemnity compensation.
   This bill amends the eligibility criteria for the credit by requiring the service-connected disability rating of 100 percent to be permanent. The bill also amends the eligibility criteria for the credit to include a veteran with a permanent and total disability rating based on individual unemployability that is compensated at the 100 percent disability rate and certain members of the national guard with a permanent and total disability rating based on individual unemployability that are compensated at the 100 percent disability rate.
   The bill defines “permanent and total disability rating based on individual unemployability” to mean a condition under which a person has either a permanent service-connected disability rating of 60 percent or two or more permanent service-connected disability conditions in which one of the conditions has at least a 40 percent rating and the combined rating for all the conditions is at least 70 percent, and the person has an administrative adjustment added to the service-connected disability rating, due to individual unemployability, such that the United States department of veterans affairs rates the veteran as permanently and totally disabled for purposes of disability compensation.
   The bill specifies that for purposes of qualifying for the credit, the receipt of dependency and indemnity compensation by an individual who is a surviving spouse or a child must be certified by the United States department of veterans affairs. The bill also removes the provision that terminates eligibility for the credit for a surviving spouse receiving dependency and indemnity compensation when the surviving spouse remarries.
   The bill takes effect upon enactment and applies retroactively to May 26, 2014, for applications for the homestead credit filed on or after that date.