Bills › 89th General Assembly
Relating to the disabled veteran homestead tax credit by modifying eligibility criteria and including effective date and applicability provisions
Where it is now
- Done: IntroducedJanuary 27, 2021
- Done: SubcommitteeFebruary 11, 2021
- Stopped: House committeeDied when the General Assembly ended
- Next: Passes the House
- Next: Senate committee
- Next: Passes the Senate
- Next: To the Governor
- Next: Signed into law
Died when the session ended The 2022 session adjourned on May 24, 2022, the General Assembly’s last regular session. Bills that didn’t pass both chambers died. What’s a funnel?
What’s in it
15, in part, provides a homestead credit to the owner of a homestead for the full amount of tax levied if the owner is either of the following: (1) 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; 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 100 percent or a permanent and total disability rating based on individual unemployability that is compensated at the 100 percent disability rate.
Read the full explanation
This bill amends a portion of the credit qualification criteria for those categories of veterans and former members of the national guard to require a permanent service-connected disability rating of percent or higher. The bill does not amend the portion of the credit qualification criteria based on the determination of individual unemployability. The bill takes effect upon enactment and applies to applications for the disabled veteran tax credit filed on or after the effective date of the bill.
House subcommittee
Named February 11, 2021. On February 16, 2021 it recommended passage. Vote Total: 3-0.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
Fiscal note
AI summary This bill expands the Disabled Veteran Homestead Tax Credit to include veterans with a service-connected disability rating of 70.0% or higher. The State General Fund is projected to spend $13.0 million in fiscal year 2023 to reimburse local governments for the lost property tax revenue, with the cost increasing to $14.0 million by fiscal year 2027. There is no impact on local government revenue because the state provides the funding.2
Read the fiscal note
Description
House File 227 expands eligibility for the Disabled Veteran Homestead Tax Credit by decreasing the required permanent service-connected disability rating criterion from the current 100.0% rating, to 70.0% or higher. A qualified veteran or former member of the national guard of any state who applies and qualifies for this property tax credit receives a 100.0% homestead property tax exemption, with the State General Fund reimbursing the local property tax system for the revenue loss. The change is effective upon enactment and applies to credit applications filed on or after the effective date.
Assumptions
- The Disabled Veteran Homestead Tax Credit will continue to be fully funded through the existing standing unlimited State General Fund appropriation.
- Based on information provided by the Department of Veterans Affairs, the Department of Revenue estimates that 4,310 additional veterans will apply and qualify for the credit if the permanent service-connected disability rating threshold is lowered to 70.0%.
- The average assessed value of a disabled veteran’s homestead is assumed to be $154,911 for assessment year (AY) 2021, and that average is assumed to increase 2.0% each assessment year.
- The AY 2020 assessment limitation factor (rollback) for residential property is 56.4094%, and that percentage is assumed to remain constant for this projection.
- The FY 2021 (AY 2019) Iowa average residential consolidated property tax rate equals $34.44 per $1,000 of taxed value, and that tax rate is assumed to remain constant for this projection.
Fiscal Impact
The proposed expansion of the Disabled Veteran Homestead Tax Credit will exempt the homesteads of additional disabled veterans from property taxation, which will require an increase in the standing unlimited appropriation from the State General Fund. The annual amount of the appropriation increase is projected to be $13.0 million for FY 2023, and the amount is projected to increase by 2.0% per fiscal year, reaching $14.0 million by FY 2027. Since the credit is funded by the State General Fund, there is no impact on local government revenue.
Sources
- Department of Revenue
- Department of Veterans Affairs
- Department of Management published property tax rates
- Property Tax, Disabled Veterans · February 3, 2021