S.F. 2354 Section 1. NEW SECTION . 562A.9A Assistance animals —— 1 damage reimbursement —— deposits —— misrepresentation. 2 1. For purposes of this section, unless the context 3 otherwise requires: 4 a. “Assistance animal” means the same as defined in section 5 216.8B. 6 b. “Emotional support animal” means an animal that is 7 covered by the exclusion specified in 24 C.F.R. §5.303 and that 8 is not a service animal. 9 c. “Service animal” means the same as defined in section 10 216.8B. 11 d. “Therapy animal” means an animal that provides 12 therapeutic benefit but is not individually trained to perform 13 tasks for a person with a disability and is not a service 14 animal. 15 2. If a landlord suffers unreimbursed damage to a dwelling 16 unit due to a tenant’s assistance animal, emotional support 17 animal, service animal, or therapy animal, the landlord may 18 seek compensation pursuant to any of the following: 19 a. A landlord may notify the department of revenue of the 20 amount of unreimbursed damage caused to the landlord’s dwelling 21 unit by a tenant’s assistance animal, emotional support animal, 22 service animal, or therapy animal. Upon the landlord providing 23 verification of the amount of damage to the satisfaction of the 24 department of revenue, the department of revenue shall provide 25 notice to the tenant of the claim and provide the tenant 26 opportunity to dispute the amount. If, after providing notice 27 to the tenant and receiving any evidence from the tenant, the 28 department of revenue determines that the landlord’s claim is 29 substantiated, the department of revenue shall use the setoff 30 program pursuant to section 421.65 to pay over to the landlord 31 the amount owed. A landlord shall not request a setoff for the 32 same damages if the landlord is reimbursed pursuant to the tax 33 credit established pursuant to paragraph “b” or a claim under 34 the insurance pool pursuant to paragraph “c” . The department of 35 -1- LSB 6120XS (2) 91 lh/jh 1/ 6

S.F. 2354 revenue shall adopt rules to administer this paragraph. 1 b. A landlord may claim a tax credit under section 422.12R 2 for unreimbursed damage caused by an assistance animal, 3 emotional support animal, service animal, or therapy animal 4 to the extent that the landlord has not made a claim for 5 reimbursement for the same damage pursuant to paragraph “a” or 6 “c” . 7 c. (1) The director of the department of administrative 8 services may establish plans for and procure group insurance to 9 establish a state risk pool for landlords to be reimbursed for 10 damage caused by tenants’ assistance animals, emotional support 11 animals, service animals, and therapy animals. 12 (2) The funds for such plans shall be created solely from 13 the contributions of participating landlords. All landlords 14 participating in the plan shall be assessed and required to 15 pay an amount to be fixed by the director of the department 16 of administrative services. Participation in the plan is 17 optional. 18 (3) Election to participate shall be in writing on forms 19 provided by the department of administrative services. 20 (4) The director of the department of administrative 21 services may contract with any insurance company having a 22 certificate of authority to transact an insurance business in 23 this state with respect to a group insurance plan. 24 (5) The department of administrative services shall adopt 25 rules to administer this paragraph. 26 3. a. Unless prohibited by state or federal law, a landlord 27 may require a reasonable, refundable damage deposit for an 28 emotional support animal or a therapy animal. 29 b. A deposit collected under this subsection shall only be 30 used for damage beyond ordinary wear and tear. 31 c. A landlord shall not require a damage deposit for a 32 service animal. 33 4. Unless required by federal law, a landlord is not 34 required to allow a tenant to keep in the dwelling unit an 35 -2- LSB 6120XS (2) 91 lh/jh 2/ 6

S.F. 2354 emotional support animal or therapy animal as accommodation 1 that is not a dog. 2 5. a. A person who intentionally misrepresents an animal 3 as an assistance animal, therapy animal, or emotional support 4 animal is guilty of a simple misdemeanor. 5 b. A person commits the offense of intentional 6 misrepresentation of an animal as an assistance animal, therapy 7 animal, or emotional support animal if, for the purpose of 8 obtaining any of the rights or privileges set forth in state or 9 federal law, the person intentionally misrepresents an animal 10 in one’s possession as one’s assistance animal, therapy animal, 11 or emotional support animal. 12 Sec. 2. NEW SECTION . 422.12R Landlord reimbursement tax 13 credit. 14 1. For purposes of this section: 15 a. “Assistance animal” means the same as defined in section 16 216.8B. 17 b. “Dwelling unit” means the same as defined in section 18 562A.6. 19 c. “Emotional support animal” means the same as defined in 20 section 562A.9A. 21 d. “Landlord” means the same as defined in section 562A.6. 22 e. “Service animal” means the same as defined in section 23 562A.9A. 24 f. “Tenant” means the same as defined in section 562A.6. 25 g. “Therapy animal” means the same as defined in section 26 562A.9A. 27 2. The taxes imposed under this subchapter, less the credits 28 allowed under section 422.12, shall be reduced by a landlord 29 reimbursement tax credit. 30 3. The amount of the credit shall be equal to the amount of 31 verifiable damage, above normal wear and tear, to a dwelling 32 unit that was caused by an assistance animal, emotional support 33 animal, service animal, or therapy animal owned by a tenant, 34 to the extent that the damage is not compensated by a damage 35 -3- LSB 6120XS (2) 91 lh/jh 3/ 6

S.F. 2354 deposit or setoff or reimbursement from the risk pool pursuant 1 to section 562A.9A. 2 4. A landlord may claim the credit under this section by 3 providing the department with evidence of the damage caused by 4 the animal to the satisfaction of the department. 5 5. An individual may claim the tax credit allowed a 6 partnership, S corporation, limited liability company, estate, 7 or trust electing to have the income taxed directly to the 8 individual. The amount claimed by the individual shall be 9 based upon the pro rata share of the individual’s earnings of a 10 partnership, S corporation, limited liability company, estate, 11 or trust. 12 6. Any credit in excess of the tax liability is refundable. 13 In lieu of claiming a refund, the taxpayer may elect to have 14 the overpayment shown on the taxpayer’s final, completed return 15 credited to the tax liability for the following tax year. 16 7. The director shall adopt rules to implement this section. 17 Sec. 3. EFFECTIVE DATE. This Act takes effect July 1, 2027. 18 EXPLANATION 19 The inclusion of this explanation does not constitute agreement with 20 the explanation’s substance by the members of the general assembly. 21 This bill relates to landlord reimbursement for damage 22 to dwelling units caused by a tenant’s assistance animal, 23 emotional support animal, service animal, or therapy animal, 24 including a refundable income tax credit and a landlord 25 insurance risk pool. 26 The bill provides that if a landlord suffers unreimbursed 27 damage to a dwelling unit due to a tenant’s assistance 28 animal, emotional support animal, service animal, or therapy 29 animal, the landlord may seek compensation through one of 30 three methods. First, the landlord may notify the department 31 of revenue of the amount of unreimbursed damage. Upon 32 satisfactory verification, the department of revenue must 33 notify the tenant and provide an opportunity to dispute the 34 claim. If the claim is substantiated, the department must use 35 -4- LSB 6120XS (2) 91 lh/jh 4/ 6

S.F. 2354 the income tax refund setoff program under Code section 421.65 1 (setoff procedures) to pay the landlord the amount owed. A 2 landlord may not seek a setoff for damages that are reimbursed 3 through the tax credit or insurance risk pool established in 4 the bill. The department of revenue is required to adopt rules 5 to administer these procedures. 6 Second, the landlord may claim a refundable income tax 7 credit for unreimbursed damage under the bill, to the extent 8 the landlord has not received reimbursement for the same damage 9 through the setoff process or the insurance risk pool. The 10 credit equals the amount of verifiable damage above normal wear 11 and tear to a dwelling unit caused by a tenant’s assistance 12 animal, emotional support animal, service animal, or therapy 13 animal, to the extent the damage is not compensated by a 14 damage deposit, setoff, or reimbursement from the risk pool. 15 Taxpayers claiming the credit must provide evidence of the 16 damage to the satisfaction of the department of revenue. The 17 credit may be claimed by individuals and by pass-through entity 18 owners based on the individual’s pro rata share of earnings. 19 Any excess credit may be refunded or applied to the following 20 tax year. The director of revenue is required to adopt rules 21 to implement the tax credit. 22 Third, the bill authorizes the director of the department 23 of administrative services to establish and procure group 24 insurance plans to create a voluntary state risk pool to 25 reimburse landlords for damage caused by such animals. The 26 risk pool is funded solely by contributions from participating 27 landlords, who must elect to participate in writing and pay 28 assessments determined by the director. The director may 29 contract with authorized insurers and must adopt rules to 30 administer the program. 31 The bill provides that, unless prohibited by state or 32 federal law, a landlord may require a reasonable, refundable 33 damage deposit for an emotional support animal or therapy 34 animal. The deposit may be used only for damage beyond 35 -5- LSB 6120XS (2) 91 lh/jh 5/ 6

S.F. 2354 ordinary wear and tear. A landlord may not require a damage 1 deposit for a service animal. 2 The bill provides that, unless required by federal law, a 3 landlord is not required to allow a tenant to keep an emotional 4 support animal or therapy animal that is not a dog as a housing 5 accommodation. 6 Current law provides that a person who intentionally 7 misrepresents an animal as a service animal or a 8 service-animal-in-training for the purpose of obtaining 9 rights or privileges under state or federal law is guilty 10 of a simple misdemeanor. The bill creates a new criminal 11 offense, punishable as a simple misdemeanor, when a person 12 intentionally misrepresents an animal as an assistance animal, 13 therapy animal, or emotional support animal for the purpose of 14 obtaining rights or privileges under state or federal law. 15 The bill takes effect July 1, 2027. 16 -6- LSB 6120XS (2) 91 lh/jh 6/ 6