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SF 555 – Volunteer First Responder, Property Tax Reduction (LSB1551SV)
Staff Contact: Jeff Robinson (515.281.4614) jeff.robinson@legis.iowa.gov
Fiscal Note Version – New
Description
Senate File 555 creates a property tax abatement for owners of homesteads who meet
minimum requirements as volunteer emergency services providers. The annual abatement is
limited to the lesser of 10.0% of the property taxes due or $500. Property taxes levied by a local
school or community college are excluded from the abatement, as well as any property taxes
levied by a taxing authority that does not approve the abatement application for its portion of the
consolidated property tax bill.
To receive the abatement, an emergency service provider must meet all the following criteria:
• Owns a homestead within the local service area of the provider’s emergency services entity.
• Earns less than $5,000 per year as a volunteer for the applicable emergency services entity.
• Has volunteered for five or more years with the emergency services entity.
• Is in good standing with the emergency services entity.
• Files a petition with the County Board of Supervisors requesting the abatement.
If a homestead owner has been a qualified volunteer for 10 or more years, the property tax
abatement is allowed for the remainder of the volunteer’s life.
The abatement also applies to special assessments owed on the property. The abatement is
first available for property taxes due during FY 2025.
Assumptions
The following assumptions were used in the development of the fiscal impact projection:
• The average assessed residential property value for assessment year (AY) 2021 was
$168,368. That amount is assumed to increase each year by the average annual Iowa
residential revaluation percentage from AY 2016 through AY 2022 (3.7%).
• The AY 2022 residential rollback is 54.6501%. This rollback is assumed for all years.
• The FY 2023 statewide average property tax rate, excluding school and community college
levies, for residential property is $18.24. This rate is assumed for all years.
• Based on the previous assumptions, a 10.0% abatement will reduce a qualified volunteer
homestead owner’s FY 2025 property taxes by $180.
• Based on the number of claimants for the Volunteer Fire Fighter and Emergency Medical
Service Personnel Tax Credit, the Department of Revenue estimates that there are 12,305
qualified volunteer emergency service providers currently operating in Iowa who could
qualify for this abatement if they own a homestead. Based on U.S. Census Bureau statistics
on Iowa home ownership, the Department estimates that 71.6% of the 12,305 own homes.
• The impact of the lifetime abatement provision is not known. For this estimate, the number
of volunteer emergency service providers who qualify for the abatement is increased 2.5%
each year to adjust for retirements of personnel who have 10 or more years of qualified
volunteer service.
Fiscal Note
Fiscal Services Division 2
• Not all who qualify will apply for the abatement, and not all local government entities will
approve abatements. This estimate is reduced by 15.0% to account for these situations.
• The Bill creates a property tax abatement, not a credit or exemption, so Iowa Code section
25B.7 (State funding of property tax credits and exemptions) does not apply.
Fiscal Impact
The property tax abatement created in the Bill to benefit qualified volunteer emergency service
providers is projected to reduce property taxes owed by taxpayers and property taxes collected
by local governments by $1.4 million in FY 2025. Due to retirements and annual property value
increases, the projected reductions are expected to increase by approximately $0.1 million per
year.
Sources
Department of Revenue
U.S. Census Bureau
Legislative Services Agency
/s/ Jennifer Acton
March 24, 2023
Doc ID 1371224
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