Bill Summary – FastDemocracy

Senate File 2399 - Introduced
                                  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:
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    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
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 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
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 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.
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                                        S.F. 2399
  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
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 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.
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Statutes affected: 
Introduced: 35.1, 35.2