S.F. 2399 Section 1. Section 35.1, subsection 2, paragraph b, 1 subparagraph (2), Code 2024, is amended to read as follows: 2 (2) Former members of the Iowa national guard who served 3 at least twenty years in the Iowa national guard and who were 4 discharged under honorable conditions. However, a member of 5 the Iowa national guard who was activated for federal duty, 6 other than training, for a minimum aggregate of ninety days 7 eighteen months , and was discharged under honorable conditions 8 or was retired under Tit. 10 of the United States Code shall be 9 included as a veteran. 10 Sec. 2. Section 35.1, subsection 2, Code 2024, is amended by 11 adding the following new paragraph: 12 NEW PARAGRAPH . d. A resident of this state who is a current 13 member of the armed forces of the United states and has served 14 in the armed forces of the United States on federal active 15 duty, other than training, for a minimum aggregate of eighteen 16 months. 17 Sec. 3. Section 35.2, Code 2024, is amended to read as 18 follows: 19 35.2 Proof of veteran status for certain veterans. 20 1. In order to fulfill any eligibility requirements under 21 Iowa law pertaining to veteran status, a veteran described in 22 section 35.1, subsection 2 , paragraph “b” , subparagraph (6) or 23 (7), shall submit the veteran’s retirement points accounting 24 statement issued by the armed forces of the United States, the 25 state adjutant general, or the adjutant general of any other 26 state, to confirm that the person has completed twenty years of 27 service with the reserve forces or the national guard. 28 2. In order to fulfill any eligibility requirements under 29 Iowa law pertaining to veteran status, a veteran described in 30 section 35.1, subsection 2, paragraph “d” , shall submit a report 31 created pursuant to the federal Servicemembers Civil Relief 32 Act, 50 U.S.C. App. §3901 et seq., showing the person’s status 33 as a current member of the armed forces of the United States. 34 Sec. 4. Section 426A.11, subsections 3 and 4, Code 2024, are 35 -1- LSB 5042XS (5) 90 dg/jh 1/ 5

S.F. 2399 amended to read as follows: 1 3. Where the word “veteran” appears in this chapter , it 2 includes without limitation the members of the United States 3 air force, army, marines, merchant marine, navy, space force, 4 and coast guard. 5 4. For purposes of this chapter , unless the context 6 otherwise requires, “veteran” also means a resident of this 7 state who is a described by any of the following: 8 a. A former member of the armed forces of the United States 9 and who served for a minimum aggregate of eighteen months 10 and who was discharged under honorable conditions. However, 11 “veteran” also means a resident of this state who is a 12 b. A former member of the armed forces of the United 13 States and who, after serving fewer than eighteen months, 14 was honorably discharged because of a service-related injury 15 sustained by the veteran. 16 c. A current member of the armed forces of the United States 17 who has served a minimum aggregate of eighteen months. 18 d. A current member of a reserve force of the United States 19 or the Iowa national guard who was activated for federal duty, 20 other than training, for a minimum aggregate of eighteen 21 months. 22 Sec. 5. Section 426A.13, subsections 1 and 2, Code 2024, are 23 amended to read as follows: 24 1. A person named in section 426A.11 , who is a resident of 25 and domiciled in the state of Iowa, shall receive a reduction 26 equal to the exemption, to be made from any property owned 27 by the person or owned by a family farm corporation of which 28 the person is a shareholder and occupant of the property and 29 so designated by proceeding as provided in this section . To 30 be eligible to receive the exemption, the person claiming it 31 shall have recorded in the office of the county recorder of 32 the county in which is located the property designated for the 33 exemption, evidence of property ownership by that person or the 34 family farm corporation of which the person is a shareholder 35 -2- LSB 5042XS (5) 90 dg/jh 2/ 5

S.F. 2399 and the military certificate of satisfactory service, order 1 transferring to inactive status, reserve, retirement, order of 2 separation from service, honorable discharge or a copy of any 3 of these documents of the person claiming or through whom is 4 claimed the exemption. In the case of a person claiming the 5 exemption as a veteran described in section 35.1, subsection 2 , 6 paragraph “b” , subparagraph (6) or (7), the person shall file 7 the statement required by section 35.2 , subsection 1 . In the 8 case of a person claiming the exemption as a veteran described 9 in section 35.1, subsection 2, paragraph “d” , the person shall 10 file the report required by section 35.2, subsection 2. 11 2. The person shall file with the appropriate assessor on 12 forms obtained from the assessor the claim for exemption for 13 the year for which the person is first claiming the exemption. 14 The claim shall be filed not later than July 1 of the year 15 for which the person is claiming the exemption. The claim 16 shall set out the fact that the person is a resident of and 17 domiciled in the state of Iowa, and a person within the terms 18 of section 426A.11 , and shall give the volume and page on which 19 the certificate of satisfactory service, order of separation, 20 retirement, furlough to reserve, inactive status, or honorable 21 discharge or certified copy thereof is recorded in the office 22 of the county recorder, and may include the designation of the 23 property from which the exemption is to be made, and shall 24 further state that the claimant is the equitable or legal owner 25 of the property designated or if the property is owned by a 26 family farm corporation, that the person is a shareholder of 27 that corporation and that the person occupies the property. 28 In the case of a person claiming the exemption as a veteran 29 described in section 35.1, subsection 2 , paragraph “b” , 30 subparagraph (6) or (7), the person shall file the statement 31 required by section 35.2 , subsection 1 . In the case of a 32 person claiming the exemption as a veteran described in section 33 35.1, subsection 2, paragraph “d” , the person shall file the 34 report required by section 35.2, subsection 2. 35 -3- LSB 5042XS (5) 90 dg/jh 3/ 5

S.F. 2399 Sec. 6. IMPLEMENTATION. Section 25B.7 shall not apply to 1 the property tax exemption enacted in this Act. 2 Sec. 7. APPLICABILITY. This Act applies to assessment years 3 beginning on or after January 1, 2025. 4 EXPLANATION 5 The inclusion of this explanation does not constitute agreement with 6 the explanation’s substance by the members of the general assembly. 7 This bill relates to persons who qualify for the military 8 service tax exemption. 9 Under current law, a person may qualify as a veteran if 10 the person served in the Iowa national guard for a period 11 of at least 20 years and who was discharged under honorable 12 conditions, or the person was activated for federal duty, other 13 than training, for a minimum aggregate of 90 days, and was 14 discharged under honorable conditions or was retired under Tit. 15 10 of the United States Code. The bill changes the minimum 16 aggregate a person must be activated for federal duty to 18 17 months. 18 The bill includes in the definition of veteran residents of 19 this state who are current members of the armed forces of the 20 United States and have served in the armed forces of the United 21 States on federal active duty, other than training, for a 22 minimum aggregate of 18 months. The bill requires persons who 23 qualify as veterans in this manner to submit a report created 24 pursuant to the Servicemembers Civil Relief Act, showing the 25 person’s status as a current member of the armed forces of the 26 United States when required to verify the person’s status as 27 a veteran. 28 The bill adds members of the United States army, marines, 29 navy, and space force as armed forces explicitly included 30 within the meaning of “veteran” for the purposes of Code 31 chapter 426A (military service tax credit and exemptions). 32 The military service tax exemption (MSTE) is an exemption on 33 property value up to a maximum of $4,000 for assessment years 34 beginning on or after January 1, 2023. The MSTE is available 35 -4- LSB 5042XS (5) 90 dg/jh 4/ 5

S.F. 2399 to veterans of the United States air force, merchant marine, 1 and coast guard, and also to Iowa residents who were honorably 2 discharged from armed service after a minimum of 18 months 3 of service and Iowa residents who were honorably discharged 4 because of a service-related injury. 5 The bill adds persons who are current members of the armed 6 forces of the United States who have served a minimum aggregate 7 of 18 months and current members of the reserve forces or Iowa 8 national guard who have served a minimum aggregate of 10 years 9 as persons who are eligible for the MSTE. 10 The bill makes inapplicable Code section 25B.7. Code 11 section 25B.7 provides that for a property tax credit or 12 exemption enacted on or after January 1, 1997, if a state 13 appropriation made to fund the credit or exemption is not 14 sufficient to fully fund the credit or exemption, the political 15 subdivision shall be required to extend to the taxpayer only 16 that portion of the credit or exemption estimated by the 17 department of revenue to be funded by the state appropriation. 18 The bill makes conforming changes to Code section 426A.13(1) 19 and (2). 20 The bill applies to assessment years beginning on or after 21 January 1, 2025. 22 -5- LSB 5042XS (5) 90 dg/jh 5/ 5