SF 2399 (LSB 5042XS (5) 90)

SENATE FILE 2399

BY  DRISCOLL

A BILL FOR

An Act relating to persons who qualify for the military service tax exemption, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 35.1, subsection 2, paragraph b, subparagraph (2), Code 2024, is amended to read as follows:
   (2)  Former members of the Iowa national guard who served at least twenty years in the Iowa national guard and who were discharged under honorable conditions. However, a member of the Iowa national guard who was activated for federal duty, other than training, for a minimum aggregate of ninety days eighteen months, and was discharged under honorable conditions or was retired under Tit. 10 of the United States Code shall be included as a veteran.
    Sec. 2.  Section 35.1, subsection 2, Code 2024, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  A resident of this state who is a current member of the armed forces of the United states and has served in the armed forces of the United States on federal active duty, other than training, for a minimum aggregate of eighteen months.
    Sec. 3.  Section 35.2, Code 2024, is amended to read as follows:
   35.2  Proof of veteran status for certain veterans.
   1.  In order to fulfill any eligibility requirements under Iowa law pertaining to veteran status, a veteran described in section 35.1, subsection 2, paragraph “b”, subparagraph (6) or (7), shall submit the veteran’s retirement points accounting statement issued by the armed forces of the United States, the state adjutant general, or the adjutant general of any other state, to confirm that the person has completed twenty years of service with the reserve forces or the national guard.
   2.  In order to fulfill any eligibility requirements under Iowa law pertaining to veteran status, a veteran described in section 35.1, subsection 2, paragraph “d”, shall submit a report created pursuant to the federal Servicemembers Civil Relief Act, 50 U.S.C. App. §3901 et seq., showing the person’s status as a current member of the armed forces of the United States.
    Sec. 4.  Section 426A.11, subsections 3 and 4, Code 2024, are amended to read as follows:
   3.  Where the word “veteran” appears in this chapter, it includes without limitation the members of the United States air force, army, marines, merchant marine, navy, space force, and coast guard.
   4.  For purposes of this chapter, unless the context otherwise requires, “veteran” also means a resident of this state who is a described by any of the following:
   a.  A former member of the armed forces of the United States and who served for a minimum aggregate of eighteen months and who was discharged under honorable conditions. However, “veteran” also means a resident of this state who is a
   b.  A former member of the armed forces of the United States and who, after serving fewer than eighteen months, was honorably discharged because of a service-related injury sustained by the veteran.
   c.  A current member of the armed forces of the United States who has served a minimum aggregate of eighteen months.
   d.  A current member of a reserve force of the United States or the Iowa national guard who was activated for federal duty, other than training, for a minimum aggregate of eighteen months.
    Sec. 5.  Section 426A.13, subsections 1 and 2, Code 2024, are amended to read as follows:
   1.  A person named in section 426A.11, who is a resident of and domiciled in the state of Iowa, shall receive a reduction equal to the exemption, to be made from any property owned by the person or owned by a family farm corporation of which the person is a shareholder and occupant of the property and so designated by proceeding as provided in this section. To be eligible to receive the exemption, the person claiming it shall have recorded in the office of the county recorder of the county in which is located the property designated for the exemption, evidence of property ownership by that person or the family farm corporation of which the person is a shareholder and the military certificate of satisfactory service, order transferring to inactive status, reserve, retirement, order of separation from service, honorable discharge or a copy of any of these documents of the person claiming or through whom is claimed the exemption. In the case of a person claiming the exemption as a veteran described in section 35.1, subsection 2, paragraph “b”, subparagraph (6) or (7), the person shall file the statement required by section 35.2, subsection 1.  In the case of a person claiming the exemption as a veteran described in section 35.1, subsection 2, paragraph “d”, the person shall file the report required by section 35.2, subsection 2.
   2.  The person shall file with the appropriate assessor on forms obtained from the assessor the claim for exemption for the year for which the person is first claiming the exemption. The claim shall be filed not later than July 1 of the year for which the person is claiming the exemption. The claim shall set out the fact that the person is a resident of and domiciled in the state of Iowa, and a person within the terms of section 426A.11, and shall give the volume and page on which the certificate of satisfactory service, order of separation, retirement, furlough to reserve, inactive status, or honorable discharge or certified copy thereof is recorded in the office of the county recorder, and may include the designation of the property from which the exemption is to be made, and shall further state that the claimant is the equitable or legal owner of the property designated or if the property is owned by a family farm corporation, that the person is a shareholder of that corporation and that the person occupies the property. In the case of a person claiming the exemption as a veteran described in section 35.1, subsection 2, paragraph “b”, subparagraph (6) or (7), the person shall file the statement required by section 35.2, subsection 1.  In the case of a person claiming the exemption as a veteran described in section 35.1, subsection 2, paragraph “d”, the person shall file the report required by section 35.2, subsection 2.
    Sec. 6.  IMPLEMENTATION.  Section 25B.7 shall not apply to the property tax exemption enacted in this Act.
    Sec. 7.  APPLICABILITY.  This Act applies to assessment years beginning on or after January 1, 2025.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to persons who qualify for the military service tax exemption.
   Under current law, a person may qualify as a veteran if the person served in the Iowa national guard for a period of at least 20 years and who was discharged under honorable conditions, or the person was activated for federal duty, other than training, for a minimum aggregate of 90 days, and was discharged under honorable conditions or was retired under Tit. 10 of the United States Code. The bill changes the minimum aggregate a person must be activated for federal duty to 18 months.
   The bill includes in the definition of veteran residents of this state who are current members of the armed forces of the United States and have served in the armed forces of the United States on federal active duty, other than training, for a minimum aggregate of 18 months. The bill requires persons who qualify as veterans in this manner to submit a report created pursuant to the Servicemembers Civil Relief Act, showing the person’s status as a current member of the armed forces of the United States when required to verify the person’s status as a veteran.
   The bill adds members of the United States army, marines, navy, and space force as armed forces explicitly included within the meaning of “veteran” for the purposes of Code chapter 426A (military service tax credit and exemptions).
   The military service tax exemption (MSTE) is an exemption on property value up to a maximum of $4,000 for assessment years beginning on or after January 1, 2023. The MSTE is available to veterans of the United States air force, merchant marine, and coast guard, and also to Iowa residents who were honorably discharged from armed service after a minimum of 18 months of service and Iowa residents who were honorably discharged because of a service-related injury.
   The bill adds persons who are current members of the armed forces of the United States who have served a minimum aggregate of 18 months and current members of the reserve forces or Iowa national guard who have served a minimum aggregate of 10 years as persons who are eligible for the MSTE.
   The bill makes inapplicable Code section 25B.7. Code section 25B.7 provides that for a property tax credit or exemption enacted on or after January 1, 1997, if a state appropriation made to fund the credit or exemption is not sufficient to fully fund the credit or exemption, the political subdivision shall be required to extend to the taxpayer only that portion of the credit or exemption estimated by the department of revenue to be funded by the state appropriation.
   The bill makes conforming changes to Code section 426A.13(1) and (2).
   The bill applies to assessment years beginning on or after January 1, 2025.