Senate File 2233 - Introduced SENATE FILE 2233 BY HOUSER A BILL FOR An Act providing a property tax exemption for land designated 1 as a preserved wetland. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5492XS (10) 84 da/sc

S.F. 2233 Section 1. Section 427.1, subsection 23, Code Supplement 1 2011, is amended to read as follows: 2 23. Native prairie and wetland. Land designated as native 3 prairie or land designated as a protected preserved wetland 4 by the department of natural resources pursuant to section 5 456B.12 . 6 a. Application for the exemption shall be made on forms 7 provided by the department of revenue. Land designated as a 8 protected preserved wetland shall be assessed at a value equal 9 to the average value of the land where the wetland is located 10 and which is owned by the person granted the exemption. 11 (1) The application forms shall be filed with the assessing 12 authority not later than the first of February of the year for 13 which the exemption is requested. The application must be 14 accompanied by an affidavit signed by the applicant that if 15 the exemption is granted, the property land will be used in 16 compliance with this subparagraph. 17 (a) The land shall not be used for economic gain during 18 the assessment year in which the exemption is granted. If the 19 property land is used for economic gain during the assessment 20 year in which the exemption is granted, the property land shall 21 lose its tax exemption and shall be taxed at the rate levied 22 by the county for the fiscal year beginning in that assessment 23 year. 24 (b) Notwithstanding subparagraph division (a), a preserved 25 wetland may be used for economic gain that is directly related 26 to its use as habitat or is from payments made by the federal or 27 state government related to acquiring, conserving, restoring, 28 or using wetlands. 29 (2) The first annual application shall be accompanied by a 30 certificate from the department of natural resources stating 31 that the land is native prairie or protected preserved wetland. 32 b. The department of natural resources shall issue a 33 certificate for the native prairie exemption if the department 34 finds that the land has never been cultivated, is unimproved, 35 -1- LSB 5492XS (10) 84 da/sc 1/ 3

S.F. 2233 is primarily a mixture of warm season grasses interspersed with 1 flowering plants, and meets the other criteria established by 2 the natural resource commission for native prairie. 3 c. The department of natural resources shall issue a 4 certificate for the wetland exemption if the department finds 5 the land is a protected preserved wetland , as defined under 6 section 456B.1 , or if the . 7 (1) Land qualifies as a preserved wetland if it includes 8 more than two acres and it is any of the following: 9 (a) A protected wetland as defined in section 456B.1, 10 regardless of whether it is inventoried pursuant to section 11 456B.12. 12 (b) Classified as a wetland by the natural resource 13 conservation service of the United States department of 14 agriculture pursuant to section 7 C.F.R. pt. 12. 15 (c) Inundated or saturated by surface water or subsurface 16 water at a frequency or duration sufficient to support a 17 prevalence of hydrophytic vegetation typically adapted for life 18 in saturated soil conditions. 19 (2) Land qualifies as a preserved wetland even if the land 20 was previously drained and cropped but has been restored under 21 a nonpermanent restoration agreement with the department or 22 other county, state, or federal agency or private conservation 23 group. 24 d. A taxpayer may seek judicial review of a decision of 25 the department according to chapter 17A . The natural resource 26 commission shall adopt rules to implement this subsection . 27 b. e. The assessing authority each year may submit to the 28 department a claim for reimbursement of tax revenue lost from 29 the exemption. Upon receipt of the claim, the department shall 30 reimburse the assessing authority an amount equal to the lost 31 tax revenue based on the value of the protected a preserved 32 wetland as assessed by the authority, unless the department 33 reimburses the authority based upon a departmental assessment 34 of the protected preserved wetland. The authority may contest 35 -2- LSB 5492XS (10) 84 da/sc 2/ 3

S.F. 2233 the department’s assessment as provided in chapter 17A . The 1 department is not required to honor a claim submitted more than 2 sixty days after the authority has assessed land where the 3 protected preserved wetland is located and which is owned by 4 the person granted the exemption. 5 EXPLANATION 6 BACKGROUND. There are a number of different types of 7 property that are not subject to property tax, including land 8 designated as native prairie or wetland as designated by the 9 department of natural resources (Code section 427.1(23)(a)). 10 In order for a wetland to qualify for the tax exemption, 11 it must be designated as “protected”, meaning that it is a 12 type of wetland described by the United States department of 13 interior (Code section 456B.1). Such land is inventoried by 14 the department (Code section 456B.12). The wetland may be 15 restored. However, it cannot be used for economic gain. The 16 assessing authority (county) is entitled to be reimbursed 17 for lost tax revenue due to the exemption (Code section 18 427.1(23)(b)). 19 BILL’S PROVISIONS. This bill changes the name of qualifying 20 wetlands to “preserved wetlands” and provides that land 21 qualifies as a preserved wetland if it includes more than two 22 acres and is: (1) classified as a protected wetland, (2) 23 classified as a wetland by the United States natural resource 24 conservation service, or (3) is inundated or saturated by water 25 sufficient to support life adapted to wetland conditions. The 26 bill also provides that the tax exemption applies if the land 27 is used for economic gain if it is directly related to its use 28 as a habitat or if it is farm payments. 29 -3- LSB 5492XS (10) 84 da/sc 3/ 3