DOVER — A bill filed at the end of January would give disabled veterans a break on their property taxes, allowing the most severely injured to save up to $500.

Introduced by Sen. Bryan Townsend, D-Newark, Senate Bill 186 would create a special fund to give former military members a tax refund based on the disability rating severity certified by the U.S. Department of Veterans Affairs.

The idea is not applicable for those who were in the military but were not injured.

Bryan Townsend

Veterans with a disability rating of 10 percent or 20 percent would get a maximum of $200 back from their school property taxes, while someone with a rating of 30 percent, 40 percent or 50 percent would be eligible for up to $350. The highest possible refund is $500, available for anyone judged to have a disability rating of at least 60 percent.

Sen. Townsend said the proposal is something he has been working on for almost two years, spending a great deal of time drafting the legislation with a Senate attorney to ensure there were no holes.

“We sat down and tried to create a structure that would make sure that Delaware no longer is one of the very few states that (does not have) a statewide system,” he said.

The idea, he said, first came to him while door-knocking when a veteran asked why the state did not have an exemption for those who were permanently injured during service.

Delaware is the only state that does not have a tax break of some sort for disabled veterans, according to Veterans United, a home loan lender.

If the bill passes, eligible Delawareans would have to file applications with the county treasurer or receiver of taxes, with the state secretary of finance holding control over the fund from which money would be distributed.

Regardless of whether an eligible veteran owns one property or 10, he or she would only be able to receive the maximum amount for the disability rating. If multiple disabled veterans own one home, the total refund for that house would max out at $500.

Property held by either a corporation or someone who has not paid his or her full property tax bill would not be eligible.

There are currently 11,404 veterans in Delaware receiving disability compensation, according to Sen. Townsend.

The overall fiscal impact would be “relatively modest,” he said. A special fund used to pay out compensation to veterans would hold $3 million, with all unused money going to the state’s General Fund at the end of every fiscal year.

Not all the 11,404 veterans would be able to receive a refund, as property taxes are not paid by apartment renters and the bill would not overlap with an already existing tax break.

Currently, Delaware residents who are 65 or older and have lived in the state for at least three years can receive a credit of up to $500 on property taxes. Anyone benefiting from the senior tax break would not be eligible for the disabled veteran refund.

The bill has several Republican and Democratic co-sponsors and is similar to legislation filed earlier in January by Rep. Joseph Miro, R-Pike Creek Valley. Sen. Townsend’s proposal is more in-depth, however, with more provisions to avoid overlap and cover all possible scenarios.

“This is certainly going to help disabled veterans who otherwise aren’t qualified for property tax relief,” Sen. Townsend said.

The Senate bill is in the chamber’s Finance Committee.