Fiscal Note
Fiscal Services Division
SF 2261 – Disabled Veteran Exemption from Vehicle Registration Fees (LSB5528SV)
Staff Contact: Danielle Beavers (515.725.1286) danielle.beavers@legis.iowa.gov
Fiscal Note Version – New
Description
Senate File 2261 broadens the current exemptions for paying motor vehicle registration fees
and applying for a persons with disabilities (PWD) parking permit to include veterans with a
service-related disability rating of 50.0% or higher. The Bill also amends Iowa Code section
321.105 and requires the Department of Transportation (DOT) to issue one free set of regular
vehicle or qualifying service type registration plates to veterans with a service-related disability
rating of 50.0% or higher. Service-related disability ratings are classified by the U.S.
Department of Veterans Affairs.
Background
Under current federal law 38 U.S.C. §3901 – 3904, veterans who experience the loss of
extremities, severe injury/blindness to an eye, or a severe burn injury are eligible to receive an
automobile from the federal government. Iowa Code section 321.105(5) exempts veterans
receiving an automobile or other vehicle from the federal government under 38 U.S.C. §3901 –
3904 from paying a motor vehicle registration fee and from the need to apply for a PWD parking
permit. Veterans also receive one free set of regular or qualifying service type registration
plates.
Assumptions
• As of December 2021, 22,372 Iowa veterans were classified at a 50.0% or higher disability
rating. There were 16,660 Iowa veterans classified between 50.0% and 90.0% disability for
exemption, leaving 5,712 at the 100.0% disability rating.
• Vehicles currently pay an average annual registration fee of $140.
• The 22,372 veterans who are eligible under this Bill will use the registration fee exemption.
Only one vehicle is eligible for the exemption for each eligible veteran.
• There are approximately 355 active disabled veteran plates.
• The DOT has estimated that 2.0 full-time equivalent (FTE) positions are required to process
additional applications. One FTE position is estimated to be required on a permanent basis.
Fiscal Impact
Senate File 2261 is expected to reduce revenue to the Road Use Tax Fund (RUTF) by
$3.1 million per year. The DOT may require an increase in appropriations of $92,000 and 2.0
FTE positions to process additional applications the first year the Bill is enacted. An ongoing
cost of 1.0 FTE position may be required to process additional applications in subsequent years.
The DOT operations budget is funded in the annual Transportation Appropriations Bill. The
DOT indicates that additional responsibility cannot be absorbed by the current appropriation.
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Sources
Department of Transportation, Motor Vehicle Division
Department of Veterans Affairs
/s/ Holly M. Lyons
February 16, 2022
Doc ID 1287376
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in
developing this fiscal note is available from the Fiscal Services Division of the Legislative Services
Agency upon request.
www.legis.iowa.gov
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Statutes affected:
Introduced: 321.105, 321.34