HF 2287 (LSB 5842HV (1) 89)

HOUSE FILE 2287

BY  COMMITTEE ON VETERANS AFFAIRS

(SUCCESSOR TO HF 2107)

A BILL FOR

An Act relating to the disabled veteran homestead tax credit 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, Code 2022, is amended by adding the following new subsection:
   NEW SUBSECTION.  1A.  a.  For homestead credits allowed against property taxes due and payable in the fiscal year beginning July 1, 2023, if the owner of a homestead allowed a credit under this subchapter does not meet the criteria of subsection 1 and is any of the following, the amount of the credit allowed on the homestead from the homestead credit fund shall be the greater of the amount of the credit authorized under section 425.1, subsection 2, or a percentage of the entire amount of the tax levied on the homestead that is equivalent to the owner’s permanent service-connected disability rating percentage: 
   (1)  A veteran as defined in section 35.1 with a permanent service-connected disability rating that is less than one hundred percent but equal to or greater than seventy percent, as certified by the United States department of veterans affairs.
   (2)  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 less than one hundred percent but equal to or greater than seventy percent, as certified by the United States department of veterans affairs.
   b.  For homestead credits allowed against property taxes due and payable in the fiscal year beginning July 1, 2024, if the owner of a homestead allowed a credit under this subchapter does not meet the criteria of subsection 1 and is any of the following, the amount of the credit allowed on the homestead from the homestead credit fund shall be the greater of the amount of the credit authorized under section 425.1, subsection 2, or a percentage of the entire amount of the tax levied on the homestead that is equivalent to the owner’s permanent service-connected disability rating percentage: 
   (1)  A veteran as defined in section 35.1 with a permanent service-connected disability rating that is less than one hundred percent but equal to or greater than forty percent, as certified by the United States department of veterans affairs.
   (2)  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 less than one hundred percent but equal to or greater than forty percent, as certified by the United States department of veterans affairs.
   c.  For homestead credits allowed against property taxes due and payable in the fiscal years beginning on or after July 1, 2025, if the owner of a homestead allowed a credit under this subchapter does not meet the criteria of subsection 1 and is any of the following, the amount of the credit allowed on the homestead from the homestead credit fund shall be the greater of the amount of the credit authorized under section 425.1, subsection 2, or a percentage of the entire amount of the tax levied on the homestead that is equivalent to the owner’s permanent service-connected disability rating percentage: 
   (1)  A veteran as defined in section 35.1 with a permanent service-connected disability rating that is less than one hundred percent but equal to or greater than ten percent, as certified by the United States department of veterans affairs.
   (2)  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 less than one hundred percent but equal to or greater than ten percent, as certified by the United States department of veterans affairs.
    Sec. 2.  Section 425.15, subsection 2, paragraph a, Code 2022, is amended to read as follows:
   a.  For an owner described in subsection 1, paragraph “a”, “b”, or “c”, or subsection 1A, the credit allowed shall be continued to the estate of an owner who is deceased or the surviving spouse and any child, as defined in section 234.1, who are the beneficiaries of a deceased owner, so long as the surviving spouse remains unmarried. 
    Sec. 3.  Section 425.15, subsection 3, Code 2022, is amended to read as follows:
   3.  An owner or a beneficiary of an owner who elects to secure the credit provided in this section under the conditions described in subsection 1 is not eligible for any other real property tax exemption provided by law for veterans of military service.
    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 homestead credit claims filed on or after January 1, 2022, for credits allowed against property taxes due and payable in fiscal years beginning on or after July 1, 2023.
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 property 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 permanent service-connected disability rating of 100 percent or a permanent and total disability rating based on individual unemployability that is compensated at the 100 percent disability rate; (3) a former member of the national guard of any state who meets specified service requirements with a permanent service-connected disability rating of 100 percent or a permanent and total disability rating based on individual unemployability that is compensated at the 100 percent disability rate; or (4) an individual who is a surviving spouse or a child and who is receiving federal dependency and indemnity compensation.
   This bill creates two additional categories of disabled veterans who qualify for a homestead credit under Code section 425.15 that are phased in over a period of years based on the individual’s permanent service-connected disability rating. Under the bill, if the owner of a homestead does not meet the criteria under current law for a disabled veteran homestead tax credit, the amount of the credit allowed on the homestead is the greater of the amount of the regular homestead credit (an amount equal to the actual levy on the first $4,850 of actual value) or a percentage of the entire amount of the tax levied on the homestead that is equivalent to the owner’s service-connected disability rating percentage if the owner is either of the following: (1) a veteran with a permanent service-connected disability rating that is less than 100 percent but equal to or greater than the percentage applicable to the specific year of the phase in; or (2) a former member of the national guard of any state who meets specified service requirements with a permanent service-connected disability rating of less than 100 percent but equal to or greater than the percentage applicable to the specific year of the phase in.
   The bill takes effect upon enactment and applies retroactively to homestead credit claims filed on or after January 1, 2022, for credits allowed against property taxes due and payable in fiscal years beginning on or after July 1, 2023.