Senate File 2227 - Introduced SENATE FILE 2227 BY CARLIN A BILL FOR An Act establishing a homestead adjustment property tax credit 1 for certain property of persons who have attained the age 2 of sixty-five or who are totally disabled, applying income 3 limitations, providing a penalty, making appropriations, and 4 including retroactive and other applicability provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5249XS (2) 88 md/jh
S.F. 2227 Section 1. NEW SECTION . 425B.1 Homestead adjustment credit 1 —— purpose. 2 Persons who own their homesteads and who meet the 3 qualifications provided in this chapter are eligible for a 4 homestead adjustment credit, as provided in this chapter, to 5 prevent an increase in the amount of property taxes owed. 6 Sec. 2. NEW SECTION . 425B.2 Definitions. 7 As used in this chapter, unless the context otherwise 8 requires: 9 1. “Base assessment year” means the assessment year 10 beginning in the base year. 11 2. “Base year” means the calendar year last ending before 12 the claim is filed. 13 3. “Claimant” means a person filing a claim for a credit 14 under this chapter who has either attained the age of 15 sixty-five years on or before December 31 of the base year or 16 is totally disabled as defined in section 425.17, and who is 17 domiciled in this state at the time the claim is filed or at the 18 time of the person’s death in the case of a claim filed by the 19 executor or administrator of the claimant’s estate. 20 4. “Homestead” means the same as defined in section 425.11. 21 5. “Household” , “household income” , and “income” mean the 22 same as defined in section 425.17. 23 6. “Owned” means owned by an owner as defined in section 24 425.11. 25 Sec. 3. NEW SECTION . 425B.3 Right to file a claim. 26 The right to file a claim for a homestead adjustment 27 credit under this chapter may be exercised by the claimant 28 or on behalf of a claimant by the claimant’s legal guardian, 29 spouse, or attorney, or by the executor or administrator of the 30 claimant’s estate. If a claimant dies after having filed a 31 claim for a credit, the amount of the credit shall be made as if 32 the claimant had not died. Only one claimant per household per 33 fiscal year shall be entitled to a credit under this chapter. 34 Sec. 4. NEW SECTION . 425B.4 Claim for credit. 35 -1- LSB 5249XS (2) 88 md/jh 1/ 7
S.F. 2227 1. Subject to the limitations provided in this chapter, a 1 claimant may annually claim a homestead adjustment credit for 2 the claimant’s homestead for the base assessment year. The 3 claim shall be filed with the county assessor for approval 4 between January 1 and February 15 immediately following 5 the close of the base assessment year. However, in case of 6 sickness, absence, or other disability of the claimant, or if 7 in the judgment of the county assessor good cause exists, the 8 county assessor may extend the time for filing a claim through 9 June 30 of the same calendar year. 10 2. The assessor shall remit the list of approved eligible 11 claims to the county auditor by July 6 of each year. All 12 eligible claims for credit shall be certified on or before 13 August 1, in each year, by the county auditor to the county 14 treasurer, which certificates shall list the total number of 15 homestead adjustment credits in the county and the total amount 16 of all such credits, listed by taxing district in the county. 17 The county treasurer shall certify to the department of revenue 18 the total amount of dollars, listed by taxing district in the 19 county, due for homestead adjustment credits claimed. 20 Sec. 5. NEW SECTION . 425B.5 Credit amount —— income 21 limitations. 22 1. If the income qualification specified in subsection 23 2 is met and the homestead’s actual value for the assessment 24 year for which the credit is claimed is less than two hundred 25 fifty thousand dollars, the amount of the claimant’s homestead 26 adjustment credit shall be an amount equal to the amount of 27 property taxes levied against the homestead for the base 28 assessment year following application of all applicable 29 property tax credits other than the homestead adjustment credit 30 minus the amount of property taxes levied against the homestead 31 for the assessment year preceding the base assessment year 32 following application of all property tax credits. 33 2. A claimant is eligible for a homestead adjustment 34 credit against taxes levied on the claimant’s homestead if 35 -2- LSB 5249XS (2) 88 md/jh 2/ 7
S.F. 2227 the claimant’s household income is less than thirty thousand 1 dollars in the base year. 2 Sec. 6. NEW SECTION . 425B.6 Administration. 3 1. The director of revenue shall make available suitable 4 forms for claiming a homestead adjustment credit with 5 instructions for claimants. Each assessor and county treasurer 6 shall make available the forms and instructions. The claim 7 shall be in a form as the director may prescribe. 8 2. The homestead adjustment credit fund is created within 9 the state treasury under the control of the department of 10 revenue. There is appropriated annually from the general 11 fund of the state to the department of revenue for deposit 12 in the homestead adjustment credit fund an amount sufficient 13 to provide all credits authorized under this chapter. The 14 director of the department of administrative services shall 15 issue warrants on the homestead adjustment credit fund payable 16 to the county treasurers of the several counties of the state 17 under this chapter. The amount due each county shall be paid 18 in two payments on November 15 and March 15 of each fiscal 19 year, drawn upon warrants payable to the respective county 20 treasurers. The two payments shall be as nearly equal as 21 possible. 22 3. Annually, the department of revenue shall certify to 23 the county auditor of each county the credit and its amount 24 in dollars. Each county auditor shall then enter the credit 25 against the tax levied on each eligible homestead in each 26 county payable during the ensuing year, designating on the 27 tax lists the credit as being from the homestead adjustment 28 credit fund, and credit shall then be given to the several 29 taxing districts in which eligible homesteads are located in 30 an amount equal to the credits allowed on the taxes of the 31 homesteads. The amount of credits shall be apportioned by each 32 county treasurer to the several taxing districts as provided 33 by law, in the same manner as though the amount of the credit 34 had been paid by the owners of the homesteads. However, the 35 -3- LSB 5249XS (2) 88 md/jh 3/ 7
S.F. 2227 several taxing districts shall not draw the funds so credited 1 until after the semiannual allocations have been received by 2 the county treasurer, as provided in this chapter. Each county 3 treasurer shall show on each tax receipt the amount of credit 4 received from the homestead adjustment credit fund. 5 Sec. 7. NEW SECTION . 425B.7 Proof of claim. 6 1. Every claimant shall give the department of revenue, in 7 support of the claim, reasonable proof of: 8 a. Age and total disability, if any. 9 b. Changes of homestead. 10 c. Size and nature of the property claimed as the homestead. 11 d. Household income. 12 2. The director of revenue may require any additional proof 13 necessary to support a claim. 14 Sec. 8. NEW SECTION . 425B.8 Audit —— denial. 15 If on the audit of a claim for a homestead adjustment credit 16 under this chapter, the director of revenue determines the 17 claim is not allowable, the director shall notify the claimant 18 of the denial and the reasons for it. The director shall 19 not deny a claim after three years from October 31 of the 20 year in which the claim was filed. The director shall give 21 notification to the county assessor of the denial of the claim 22 and the county assessor shall instruct the county treasurer to 23 proceed to collect the tax that would have been levied on the 24 applicable adjusted assessed value in the same manner as other 25 property taxes due and payable are collected, if the property 26 on which the credit was granted is still owned by the claimant. 27 However, if the claim was incorrectly allowed due to a clerical 28 error, error by a person other than the claimant, or an 29 innocent misrepresentation by or on behalf of the claimant, the 30 proceedings to collect the tax shall be limited to the taxes 31 due and payable in the twelve months immediately preceding the 32 disallowance. 33 Sec. 9. NEW SECTION . 425B.9 Waiver of confidentiality. 34 1. A claimant shall expressly waive any right to 35 -4- LSB 5249XS (2) 88 md/jh 4/ 7
S.F. 2227 confidentiality relating to all income tax information 1 obtainable through the department of revenue including all 2 information covered by sections 422.20 and 422.72. This waiver 3 shall apply to information available to the county assessor who 4 shall hold the information confidential except that it may be 5 used as evidence to disallow the homestead adjustment credit. 6 2. The department of revenue may release information 7 pertaining to a person’s eligibility or claim for or receipt 8 of the credit to an employee of the department of inspections 9 and appeals in the employee’s official conduct of an audit or 10 investigation. 11 Sec. 10. NEW SECTION . 425B.10 False claim —— penalty. 12 A person who makes a false affidavit for the purpose of 13 obtaining a homestead adjustment credit provided for in this 14 chapter or who knowingly receives the credit without being 15 legally entitled to it or makes claim for the credit in more 16 than one county in the state without being legally entitled 17 to it is guilty of a fraudulent practice. The claim for 18 credit shall be disallowed in full and if the claim has been 19 paid, the amount shall be recovered in the manner provided in 20 section 425B.8. The director of revenue shall send a notice 21 of disallowance of the claim. 22 Sec. 11. NEW SECTION . 425B.11 Notices, appeals, and 23 rules. 24 To the extent not otherwise contrary to the provisions of 25 this chapter: 26 1. Section 423.39, subsection 1, shall apply to all notices 27 under this chapter. 28 2. Any person aggrieved by an act or decision of the 29 director of revenue or the department of revenue under this 30 chapter shall have the same rights of appeal and review as 31 provided in section 423.38 and the rules of the department of 32 revenue. 33 3. A claim for credit shall be disallowed if the department 34 finds that the claimant or a person of the claimant’s household 35 -5- LSB 5249XS (2) 88 md/jh 5/ 7
S.F. 2227 received title to the homestead primarily for the purpose of 1 receiving benefits under this chapter. 2 4. The department of revenue shall adopt rules pursuant to 3 chapter 17A to administer and interpret this chapter, including 4 rules to prevent and disallow duplication of benefits and to 5 prevent any unreasonable hardship or advantage to any person. 6 Sec. 12. IMPLEMENTATION. Section 25B.7 shall not apply to 7 this Act. 8 Sec. 13. APPLICABILITY. This Act applies retroactively to 9 January 1, 2020, for assessment years beginning on or after 10 that date and to the filing of claims for homestead adjustment 11 credits on or after January 1, 2021. 12 EXPLANATION 13 The inclusion of this explanation does not constitute agreement with 14 the explanation’s substance by the members of the general assembly. 15 This bill establishes a homestead adjustment credit for an 16 owner of a homestead with an actual value of less than $250,000 17 if the owner is a person who is either 65 or older or totally 18 disabled, and who has household income of less than $30,000 19 per year. If the qualifications established in the bill are 20 met, the amount of the homestead adjustment credit shall be an 21 amount equal to the amount of property taxes levied against the 22 homestead for the base assessment year, as defined in the bill, 23 following application of all applicable property tax credits 24 other than the homestead adjustment credit minus the amount of 25 property taxes levied against the homestead for the assessment 26 year preceding the base assessment year following application 27 of all property tax credits. Only one claimant per household 28 per fiscal year may receive the credit under the bill. 29 The bill annually appropriates from the general fund of the 30 state to the department of revenue for deposit in the homestead 31 adjustment credit fund, created in the bill, an amount 32 sufficient to fund all of the homestead adjustment credits for 33 the fiscal year. 34 The bill provides that a person who makes a false affidavit 35 -6- LSB 5249XS (2) 88 md/jh 6/ 7
S.F. 2227 for the purpose of obtaining a credit, knowingly receives a 1 credit without being legally entitled to it, or makes claim for 2 a credit in more than one county without being legally entitled 3 to it is guilty of a fraudulent practice and is subject to a 4 criminal penalty. 5 The bill provides that the provisions in Code section 6 25B.7, relating to the obligation of the state to reimburse 7 local jurisdictions for newly enacted property tax credits and 8 exemptions, do not apply to the bill. 9 The bill applies retroactively to January 1, 2020, for 10 assessment years beginning on or after that date and applies to 11 claims filed on or after January 1, 2021, for the credit. 12 -7- LSB 5249XS (2) 88 md/jh 7/ 7