Bill Text: IA SF303 | 2013-2014 | 85th General Assembly | Enrolled

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Bill Title: A bill for an act relating to veterans, military service members, and certain survivor beneficiaries and including effective date and retroactive applicability provisions. (Formerly SSB 1158.) Various effective dates; see section 8 of bill.

Spectrum: Committee Bill

Status: (Passed) 2014-05-26 - Signed by Governor. S.J. 929. [SF303 Detail]

Download: Iowa-2013-SF303-Enrolled.html

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Senate File 303
AN ACT
RELATING TO VETERANS, MILITARY SERVICE MEMBERS, AND CERTAIN
SURVIVOR BENEFICIARIES AND INCLUDING EFFECTIVE DATE AND
RETROACTIVE APPLICABILITY PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
DIVISION I
RETIREMENT PAY TAX EXEMPTION
Section 1. Section 422.5, subsection 3, paragraph a, Code
2014, is amended to read as follows:
a. The tax shall not be imposed on a resident or nonresident
whose net income, as defined in section 422.7 , is thirteen
thousand five hundred dollars or less in the case of married
persons filing jointly or filing separately on a combined
return, heads of household, and surviving spouses or nine
thousand dollars or less in the case of all other persons;
but in the event that the payment of tax under this division
would reduce the net income to less than thirteen thousand five
hundred dollars or nine thousand dollars as applicable, then
the tax shall be reduced to that amount which would result
in allowing the taxpayer to retain a net income of thirteen
thousand five hundred dollars or nine thousand dollars as
applicable. The preceding sentence does not apply to estates
or trusts. For the purpose of this subsection , the entire net
income, including any part of the net income not allocated
to Iowa, shall be taken into account. For purposes of this
subsection , net income includes all amounts of pensions or

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other retirement income , except for military retirement pay
excluded under section 422.7, subsection 31A, paragraph “a” ,
or section 422.7, subsection 31B, paragraph “a” , received from
any source which is not taxable under this division as a result
of the government pension exclusions in section 422.7 , or any
other state law. If the combined net income of a husband and
wife exceeds thirteen thousand five hundred dollars, neither
of them shall receive the benefit of this subsection , and it
is immaterial whether they file a joint return or separate
returns. However, if a husband and wife file separate returns
and have a combined net income of thirteen thousand five
hundred dollars or less, neither spouse shall receive the
benefit of this paragraph, if one spouse has a net operating
loss and elects to carry back or carry forward the loss as
provided in section 422.9, subsection 3 . A person who is
claimed as a dependent by another person as defined in section
422.12 shall not receive the benefit of this subsection if
the person claiming the dependent has net income exceeding
thirteen thousand five hundred dollars or nine thousand dollars
as applicable or the person claiming the dependent and the
person’s spouse have combined net income exceeding thirteen
thousand five hundred dollars or nine thousand dollars as
applicable.
Sec. 2. Section 422.5, subsection 3B, paragraph a, Code
2014, is amended to read as follows:
a. The tax shall not be imposed on a resident or nonresident
who is at least sixty-five years old on December 31 of
the tax year and whose net income, as defined in section
422.7 , is thirty-two thousand dollars or less in the case
of married persons filing jointly or filing separately on a
combined return, heads of household, and surviving spouses or
twenty-four thousand dollars or less in the case of all other
persons; but in the event that the payment of tax under this
division would reduce the net income to less than thirty-two
thousand dollars or twenty-four thousand dollars as applicable,
then the tax shall be reduced to that amount which would result
in allowing the taxpayer to retain a net income of thirty-two
thousand dollars or twenty-four thousand dollars as applicable.
The preceding sentence does not apply to estates or trusts.
For the purpose of this subsection , the entire net income,
including any part of the net income not allocated to Iowa,
shall be taken into account. For purposes of this subsection ,
net income includes all amounts of pensions or other retirement

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income , except for military retirement pay excluded under
section 422.7, subsection 31A, paragraph “a” , or section 422.7,
subsection 31B, paragraph “a” , received from any source which is
not taxable under this division as a result of the government
pension exclusions in section 422.7 , or any other state law.
If the combined net income of a husband and wife exceeds
thirty-two thousand dollars, neither of them shall receive the
benefit of this subsection , and it is immaterial whether they
file a joint return or separate returns. However, if a husband
and wife file separate returns and have a combined net income
of thirty-two thousand dollars or less, neither spouse shall
receive the benefit of this paragraph, if one spouse has a net
operating loss and elects to carry back or carry forward the
loss as provided in section 422.9, subsection 3 . A person
who is claimed as a dependent by another person as defined in
section 422.12 shall not receive the benefit of this subsection
if the person claiming the dependent has net income exceeding
thirty-two thousand dollars or twenty-four thousand dollars
as applicable or the person claiming the dependent and the
person’s spouse have combined net income exceeding thirty-two
thousand dollars or twenty-four thousand dollars as applicable.
Sec. 3. Section 422.7, Code 2014, is amended by adding the
following new subsection:
NEW SUBSECTION . 31A. a. Subtract, to the extent included,
retirement pay received by a taxpayer from the federal
government for military service performed in the armed forces,
the armed forces military reserve, or national guard.
b. The exclusion of retirement pay under this subsection is
in addition to any exclusion provided under subsection 31.
Sec. 4. Section 422.7, Code 2014, is amended by adding the
following new subsection:
NEW SUBSECTION . 31B. a. Subtract, to the extent included,
amounts received as survivor benefits by a taxpayer from the
federal government pursuant to 10 U.S.C. §1447, et seq.
b. The exclusion of survivor benefits under this subsection
is in addition to any exclusion provided under subsection 31.
Sec. 5. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to January 1, 2014, for tax years
beginning on or after that date.
DIVISION II
PROPERTY OF ASSOCIATIONS OF WAR VETERANS
Sec. 6. Section 427.1, subsection 5, Code 2014, is amended
to read as follows:

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5. Property of associations of war veterans.
a. The property of any organization composed wholly of
veterans of any war, when such property is , except as otherwise
provided in this subsection or subsection 14, devoted entirely
to its own use and not held for pecuniary profit.
b. The operation of bingo games on property of such
organization shall not adversely affect the exemption of that
property under this subsection if all proceeds, in excess
of expenses, are used for the legitimate purposes of the
organization.
c. The occasional or irregular lease or rental of all
or a portion of the property of such organization shall not
adversely affect the exemption of that property under this
subsection if the proceeds from such lease or rental do not
exceed two hundred fifty dollars per lease or rental, and the
proceeds, in excess of expenses, are used for the legitimate
purposes of the organization. In addition, the occasional
or irregular lease or rental shall be considered a use for
the appropriate objects of the organization for purposes of
subsection 14.
Sec. 7. IMPLEMENTATION OF ACT. Section 25B.7 does not apply
to this division of this Act.
Sec. 8. EFFECTIVE UPON ENACTMENT. This division of this
Act, being deemed of immediate importance, takes effect upon
enactment.
Sec. 9. RETROACTIVE APPLICABILITY. This division of this
Act applies retroactively to January 1, 2014, for assessment
years beginning on or after that date.
DIVISION III
LICENSE PLATES
Sec. 10. Section 35A.11, Code 2014, is amended to read as
follows:
35A.11 Veterans license fee fund.
1. A veterans license fee fund is created in the state
treasury under the control of the commission. Notwithstanding
section 12C.7 , interest or earnings on moneys in the veterans
license fee fund shall be credited to the veterans license fee
fund. Moneys in the fund are appropriated to the commission to
be used to fulfill the responsibilities of the commission.
2. The fund created in this section shall include the
fees credited by the treasurer of state from the sale annual
validation of the following special motor vehicle registration
plates:

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1. Veteran special plates issued pursuant to section
321.34, subsection 13 , paragraph “d” .
2. a. National guard special plates issued pursuant to
section 321.34, subsection 16 .
3. b. Pearl Harbor special plates issued pursuant to
section 321.34, subsection 17 .
4. c. Purple heart special plates issued pursuant to
section 321.34, subsection 18 .
5. d. United States armed forces retired special plates
issued pursuant to section 321.34, subsection 19 .
6. e. Silver star and bronze star special plates issued
pursuant to section 321.34, subsection 20 .
7. f. Distinguished service cross, navy cross, and air
force cross special plates issued pursuant to section 321.34,
subsection 20A .
8. g. Soldier’s medal, navy and marine corps medal, and
airman’s medal special plates issued pursuant to section
321.34, subsection 20B .
9. h. Combat infantryman badge, combat action badge,
combat action ribbon, air force combat action medal, and
combat medical badge plates issued pursuant to section 321.34,
subsection 20C .
10. i. Gold star special plates issued pursuant to section
321.34, subsection 24 .
j. United States veteran special plates issued pursuant to
section 321.34, subsection 27.
Sec. 11. Section 321.34, subsection 16, paragraph a, Code
2014, is amended to read as follows:
a. An owner referred to in subsection 12 who is a member
of the national guard, as defined in chapter 29A , may,
upon written application to the department, order special
registration plates with a national guard processed emblem
with the emblem designed by the department in cooperation with
the adjutant general which emblem signifies that the applicant
is a member of the national guard. The application shall be
approved by the department in consultation with the adjutant
general. The special plate fees collected by the director
under subsection 12 , paragraphs paragraph “a” and “c” , from
the issuance and annual validation of letter-number designated
national guard plates, and subsection 12, paragraph “c” , from
the issuance and annual validation of personalized national
guard plates shall be paid monthly to the treasurer of state
and deposited in the road use tax fund. The treasurer of state

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shall transfer monthly from the statutory allocations fund
created under section 321.145, subsection 2 , to the veterans
license fee fund created in section 35A.11 the amount of the
special fees collected under subsection 12 , paragraph “a” ,
in the previous month for national guard plates. Special
registration plates with a national guard processed emblem
shall be surrendered, as provided in subsection 12 , in exchange
for regular registration plates upon termination of the owner’s
membership in the active national guard.
Sec. 12. Section 321.34, subsection 16, Code 2014, is
amended by adding the following new paragraph:
NEW PARAGRAPH . 0b. Notwithstanding subsection 12, paragraph
“a” , an owner who is approved for special registration plates
under this subsection shall be issued one set of special
registration plates with a national guard processed emblem at
no charge.
Sec. 13. Section 321.34, subsection 17, paragraph a, Code
2014, is amended to read as follows:
a. An owner referred to in subsection 12 who was at Pearl
Harbor, Hawaii, as a member of the armed services of the United
States on December 7, 1941, may, upon written application to
the department, order special registration plates with a Pearl
Harbor processed emblem. The emblem shall be designed by the
department in consultation with service organizations. The
application is subject to approval by the department. The
special plate fees collected by the director under subsection
12 , paragraphs paragraph “a” and “c” , from the issuance and
annual validation of letter-number designated Pearl Harbor
plates, and subsection 12, paragraph “c” , from the issuance and
annual validation of personalized Pearl Harbor plates shall
be paid monthly to the treasurer of state and deposited in
the road use tax fund. The treasurer of state shall transfer
monthly from the statutory allocations fund created under
section 321.145, subsection 2 , to the veterans license fee
fund created in section 35A.11 the amount of the special fees
collected under subsection 12 , paragraph “a” , in the previous
month for Pearl Harbor plates.
Sec. 14. Section 321.34, subsection 17, Code 2014, is
amended by adding the following new paragraph:
NEW PARAGRAPH . 0b. Notwithstanding subsection 12, paragraph
“a” , an owner who is approved for special registration plates
under this subsection shall be issued one set of special
registration plates with a Pearl Harbor processed emblem at no

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charge.
Sec. 15. Section 321.34, subsection 18, paragraph a, Code
2014, is amended to read as follows:
a. An owner referred to in subsection 12 who was awarded
a purple heart medal by the United States government for
wounds received in military or naval combat against an armed
enemy of the United States may, upon written application to
the department and presentation of satisfactory proof of the
award of the purple heart medal, order special registration
plates with a purple heart processed emblem. The design of
the emblem shall include a representation of a purple heart
medal and ribbon. The application is subject to approval by
the department in consultation with the adjutant general. The
special plate fees collected by the director under subsection
12 , paragraphs paragraph “a” and “c” , from the issuance and
annual validation of letter-number designated purple heart
plates, and subsection 12, paragraph “c” , from the issuance and
annual validation of personalized purple heart plates shall
be paid monthly to the treasurer of state and deposited in
the road use tax fund. The treasurer of state shall transfer
monthly from the statutory allocations fund created under
section 321.145, subsection 2 , to the veterans license fee
fund created in section 35A.11 the amount of the special fees
collected under subsection 12 , paragraph “a” , in the previous
month for purple heart plates.
Sec. 16. Section 321.34, subsection 18, Code 2014, is
amended by adding the following new paragraph:
NEW PARAGRAPH . 0b. Notwithstanding subsection 12, paragraph
“a” , an owner who is approved for special registration plates
under this subsection shall be issued one set of special
registration plates with a purple heart processed emblem at no
charge.
Sec. 17. Section 321.34, subsection 19, paragraph a, Code
2014, is amended to read as follows:
a. An owner referred to in subsection 12 who is a retired
member of the United States armed forces may, upon written
application to the department and upon presentation of
satisfactory proof of membership, order special registration
plates with a United States armed forces retired processed
emblem. The emblem shall be designed by the department in
consultation with service organizations. The application is
subject to approval by the department. For purposes of this
subsection , a person is considered to be retired if the person

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is recognized by the United States armed forces as retired
from the United States armed forces. The special plate fees
collected by the director under subsection 12 , paragraphs
paragraph “a” and “c” , from the issuance and annual validation
of letter-number designated armed forces retired plates, and
subsection 12, paragraph “c” , from the issuance and annual
validation of personalized armed forces retired plates shall
be paid monthly to the treasurer of state and deposited in
the road use tax fund. The treasurer of state shall transfer
monthly from the statutory allocations fund created under
section 321.145, subsection 2 , to the veterans license fee
fund created in section 35A.11 the amount of the special fees
collected under subsection 12 , paragraph “a” , in the previous
month for armed forces retired plates.
Sec. 18. Section 321.34, subsection 19, Code 2014, is
amended by adding the following new paragraph:
NEW PARAGRAPH . 0b. Notwithstanding subsection 12, paragraph
“a” , an owner who is approved for special registration plates
under this subsection shall be issued one set of special
registration plates with an armed forces retired processed
emblem at no charge.
Sec. 19. Section 321.34, subsection 20, paragraph a, Code
2014, is amended to read as follows:
a. An owner referred to in subsection 12 who was awarded a
silver or a bronze star by the United States government, may,
upon written application to the department and presentation
of satisfactory proof of the award of the silver or bronze
star, order special registration plates with a silver or bronze
star processed emblem. The emblem shall be designed by the
department in consultation with the adjutant general. The
special plate fees collected by the director under subsection
12 , paragraphs paragraph “a” and “c” , from the issuance and
annual validation of letter-number designated silver star and
bronze star plates, and subsection 12, paragraph “c” , from the
issuance and annual validation of personalized silver star and
bronze star plates shall be paid monthly to the treasurer of
state and deposited in the road use tax fund. The treasurer
of state shall transfer monthly from the statutory allocations
fund created under section 321.145, subsection 2 , to the
veterans license fee fund created in section 35A.11 the amount
of the special fees collected under subsection 12 , paragraph
“a” , in the previous month for silver star and bronze star
plates.

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Sec. 20. Section 321.34, subsection 20, Code 2014, is
amended by adding the following new paragraph:
NEW PARAGRAPH . 0b. Notwithstanding subsection 12, paragraph
“a” , an owner who is approved for special registration plates
under this subsection shall be issued one set of special
registration plates with a silver star or bronze star processed
emblem at no charge.
Sec. 21. Section 321.34, subsection 20A, paragraph a, Code
2014, is amended to read as follows:
a. An owner referred to in subsection 12 who was awarded
a distinguished service cross, a navy cross, or an air force
cross by the United States government may, upon written
application to the department and presentation of satisfactory
proof of the award, order special registration plates with
a distinguished service cross, navy cross, or air force
cross processed emblem. The emblem shall be designed by the
department in consultation with the adjutant general. The
special plate fees collected by the director under subsection
12 , paragraphs paragraph “a” and “c” , from the issuance and
annual validation of letter-number designated distinguished
service cross, navy cross, and air force cross plates, and
subsection 12, paragraph “c” , from the issuance and annual
validation of personalized distinguished service cross, navy
cross, and air force cross plates shall be paid monthly to the
treasurer of state and deposited in the road use tax fund. The
treasurer of state shall transfer monthly from the statutory
allocations fund created under section 321.145, subsection 2 ,
to the veterans license fee fund created in section 35A.11
the amount of the special fees collected under subsection 12 ,
paragraph “a” , in the previous month for distinguished service
cross, navy cross, and air force cross plates.
Sec. 22. Section 321.34, subsection 20A, Code 2014, is
amended by adding the following new paragraph:
NEW PARAGRAPH . 0b. Notwithstanding subsection 12, paragraph
“a” , an owner who is approved for special registration plates
under this subsection shall be issued one set of special
registration plates with a distinguished service cross, navy
cross, or air force cross processed emblem at no charge.
Sec. 23. Section 321.34, subsection 20B, paragraph a, Code
2014, is amended to read as follows:
a. An owner referred to in subsection 12 who was awarded a
soldier’s medal, a navy and marine corps medal, or an airman’s
medal by the United States government may, upon written

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application to the department and presentation of satisfactory
proof of the award, order special registration plates with
a soldier’s medal, navy and marine corps medal, or airman’s
medal processed emblem. The emblem shall be designed by the
department in consultation with the adjutant general. The
special plate fees collected by the director under subsection
12 , paragraphs paragraph “a” and “c” , from the issuance and
annual validation of letter-number designated soldier’s medal,
navy and marine corps medal, and airman’s medal plates, and
subsection 12, paragraph “c” , from the issuance and annual
validation of personalized soldier’s medal, navy and marine
corps medal, and airman’s medal plates shall be paid monthly
to the treasurer of state and deposited in the road use tax
fund. The treasurer of state shall transfer monthly from the
statutory allocations fund created under section 321.145,
subsection 2 , to the veterans license fee fund created in
section 35A.11 the amount of the special fees collected
under subsection 12 , paragraph “a” , in the previous month for
soldier’s medal, navy and marine corps medal, and airman’s
medal plates.
Sec. 24. Section 321.34, subsection 20B, Code 2014, is
amended by adding the following new paragraph:
NEW PARAGRAPH . 0b. Notwithstanding subsection 12, paragraph
“a” , an owner who is approved for special registration plates
under this subsection shall be issued one set of special
registration plates with a soldier’s medal, navy and marine
corps medal, or airman’s medal processed emblem at no charge.
Sec. 25. Section 321.34, subsection 20C, paragraph b, Code
2014, is amended to read as follows:
b. An owner referred to in subsection 12 who was awarded a
combat infantryman badge, combat action badge, combat action
ribbon, air force combat action medal, or combat medical
badge by the United States government may, upon written
application to the department and presentation of satisfactory
proof of the award, order special registration plates with a
combat infantryman badge, combat action badge, combat action
ribbon, air force combat action medal, or combat medical badge
processed emblem. The special plate fees collected by the
director under subsection 12 , paragraphs paragraph “a” and
“c” , from the issuance and annual validation of letter-number
designated combat infantryman badge, combat action badge,
combat action ribbon, air force combat action medal, and
combat medical badge plates, and subsection 12, paragraph

Senate File 303, p. 11
“c” , from the issuance and annual validation of personalized
combat infantryman badge, combat action badge, combat action
ribbon, air force combat action medal, and combat medical badge
plates shall be paid monthly to the treasurer of state and
deposited in the road use tax fund. The treasurer of state
shall transfer monthly from the statutory allocations fund
created under section 321.145, subsection 2 , to the veterans
license fee fund created in section 35A.11 the amount of the
special fees collected under subsection 12 , paragraph “a” , in
the previous month for combat infantryman badge, combat action
badge, combat action ribbon, air force combat action medal, and
combat medical badge plates.
Sec. 26. Section 321.34, subsection 20C, Code 2014, is
amended by adding the following new paragraph:
NEW PARAGRAPH . 0c. Notwithstanding subsection 12, paragraph
“a” , an owner who is approved for special registration plates
under this subsection shall be issued one set of special
registration plates with a combat infantryman badge, combat
action badge, combat action ribbon, air force combat action
medal, and combat medical badge distinguishing processed emblem
at no charge.
Sec. 27. Section 321.34, subsection 24, Code 2014, is
amended to read as follows:
24. Gold star plates.
a. An owner referred to in subsection 12 who is the
surviving spouse, parent, child, or sibling of a deceased
member of the United States armed forces who died while serving
on active duty during a time of military conflict or who died
as a result of such service may order special registration
plates bearing a gold star emblem upon written application
to the department accompanied by satisfactory supporting
documentation as determined by the department. The gold star
emblem shall be designed by the department in cooperation with
the commission of veterans affairs. The special plate fees
collected by the director under subsection 12 , paragraphs
paragraph “a” and “c” , from the issuance and annual validation
of letter-number designated gold star plates, and subsection
12, paragraph “c” , from the issuance and annual validation of
personalized gold star plates shall be paid monthly to the
treasurer of state and deposited in the road use tax fund. The
treasurer of state shall transfer monthly from the statutory
allocations fund created under section 321.145, subsection 2 ,
to the veterans license fee fund created in section 35A.11

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the amount of the special fees collected under subsection 12 ,
paragraph “a” , in the previous month for gold star plates.
b. Notwithstanding subsection 12, paragraph “a” , an owner
who is approved for special registration plates under this
subsection shall be issued one set of special registration
plates bearing a gold star emblem at no charge.
Sec. 28. Section 321.34, Code 2014, is amended by adding the
following new subsection:
NEW SUBSECTION . 27. United States veteran plates.
a. An owner referred to in subsection 12 who served in the
armed forces of the United States and was discharged under
honorable conditions may, upon written application to the
department and upon presentation of satisfactory proof of
military service and discharge under honorable conditions,
order special registration plates bearing a distinguishing
processed emblem depicting the word “veteran” below an image
of the American flag. The application is subject to approval
by the department. The special plate fees collected by the
director under subsection 12, paragraph “a” , from the annual
validation of letter-number designated United States veteran
plates, and subsection 12, paragraph “c” , from the issuance and
annual validation of personalized United States veteran plates,
shall be paid monthly to the treasurer of state and deposited
in the road use tacreated under section 321.145, subsection
2, to the veterans license fee fund created in section 35A.11
the amount of the special fees collected under subsection 12,
paragraph “a” , in the previous month for United States veteran
plates.
b. Notwithstanding subsection 12, paragraph “a” , an owner
who is approved for a special registration plate under this
subsection shall be issued one set of special registration
plates bearing a distinguishing processed emblem depicting
the word “veteran” below an image of the American flag at no
charge.
DIVISION IV
VETERANS PREFERENCE
Sec. 29. NEW SECTION . 35.3 Veterans preference in private
employment permitted.
1. A private employer may grant preference in hiring and
promotion to an individual who is a veteran.
2. a. A private employer may grant preference in hiring
and promotion to the spouse of a veteran who has sustained
a permanent, compensable service-connected disability as

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adjudicated by the United States veterans administration or by
the retirement board of one of the armed forces of the United
States.
b. A private employer may grant preference in hiring and
promotion to the surviving spouse of a deceased member of the
United States armed forces who died while serving on active
duty during a time of military conflict or who died as a result
of such service.
3. Granting a hiring or promotion preference under this
section does not violate any state law or local ordinance
regarding equal employment opportunity, including but not
limited to chapter 216.
4. The hiring and promotion preferences allowable
under this section shall only be granted if consistent with
applicable federal laws and regulations.
DIVISION V
POSTSECONDARY EDUCATION REPORTING
Sec. 30. Section 260C.14, Code 2014, is amended by adding
ection 260C.14, Code 2014, is amended by adding