Text: HF00698 Text: HF00700 Text: HF00600 - HF00699 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. Section 422.7, Code 2001, is amended by adding
1 2 the following new subsection:
1 3 NEW SUBSECTION. 36. Subtract, to the extent included, the
1 4 capital gain from the sale or transfer of open space property
1 5 if the deed transferring fee simple ownership contains
1 6 restrictions qualifying as a conservation easement acquired as
1 7 provided in chapter 457A, except that the easement shall be
1 8 perpetual. This deduction only applies if the open space
1 9 property is located in or within twelve miles of a
1 10 metropolitan statistical area, according to the 2000 federal
1 11 census, and if the selling price of the property is at least
1 12 thirty percent less than its fair market value because of the
1 13 conservation easement. For purposes of this subsection, "open
1 14 space property" means real property that includes significant
1 15 river, lake, wetland, prairie, and forest areas, other
1 16 biologically significant areas, land containing significant
1 17 archaeological, historical, or cultural value, and fish or
1 18 wildlife habitats, as defined in rules adopted by the
1 19 department of natural resources or as identified as such in a
1 20 local comprehensive plan adopted pursuant to chapter 335 or
1 21 414.
1 22 SPECIAL PROVISIONS RELATING
1 23 TO CONSERVATION EASEMENTS
1 24 Sec. 2. NEW SECTION. 450B.10 DEFINITIONS.
1 25 As used in this subchapter, unless the context otherwise
1 26 requires:
1 27 1. "Qualified heir" means a qualified heir as defined in
1 28 section 2032A(e)(1) of the Internal Revenue Code and the donor
1 29 of the conservation easement.
1 30 2. "Qualified real property" means open space property the
1 31 deed for which contains restrictions qualifying as a
1 32 conservation easement as provided in chapter 457A, except that
1 33 the conservation easement shall be perpetual. The real
1 34 property must be located in or within twelve miles of a
1 35 metropolitan statistical area, according to the 2000 federal
2 1 census. "Open space property" means real property that
2 2 includes significant river, lake, wetland, prairie, and forest
2 3 areas, other biologically significant areas, land containing
2 4 significant archaeological, historical, or cultural value, and
2 5 fish or wildlife habitats, as defined in rules adopted by the
2 6 department of natural resources or as identified as such in a
2 7 local comprehensive plan adopted pursuant to chapter 335 or
2 8 414.
2 9 3. "Taxpayer" means a qualified heir liable for the
2 10 inheritance tax imposed under chapter 450 on qualified real
2 11 property.
2 12 Sec. 3. NEW SECTION. 450B.11 ALTERNATE ELECTION OF VALUE
2 13 FOR QUALIFIED USE.
2 14 1. Notwithstanding section 450.37, the value of qualified
2 15 real property for the purpose of the tax imposed under chapter
2 16 450 may, at the election of the taxpayer, be its value for the
2 17 use under which it qualifies as defined and prescribed in
2 18 section 450B.10. A taxpayer may make an election under this
2 19 section if property for which the election is made is
2 20 qualified real property.
2 21 2. The election under this section shall be made by the
2 22 taxpayer in the manner as the director of revenue and finance
2 23 may prescribe by rule. The value for the qualified use under
2 24 this section shall be the value as determined by the director
2 25 of revenue and finance.
2 26 3. The director of revenue and finance shall adopt rules
2 27 setting forth the application of this subchapter in the case
2 28 of an interest in a partnership, corporation, or trust which,
2 29 with respect to the decedent, is an interest in a closely held
2 30 business within the meaning of section 6166(b)(1) of the
2 31 Internal Revenue Code. Such regulations shall conform as
2 32 nearly as possible with the regulations promulgated by the
2 33 United States secretary of treasury in respect to such
2 34 interests.
2 35 Sec. 4. NEW SECTION. 450B.12 ADDITIONAL INHERITANCE TAX
3 1 APPLICABLE.
3 2 There is imposed upon the qualified heir an additional
3 3 inheritance tax if, after the decedent's death and before the
3 4 death of the qualified heir, the qualified heir disposes of
3 5 any interest in qualified real property for which an election
3 6 under section 450B.11 was made or removes the conservation
3 7 easement from the qualified real property before the stated
3 8 term of years has expired. The additional inheritance tax
3 9 shall be the amount computed under section 450B.13 and shall
3 10 be due six months after the date of the disposition of the
3 11 interest in the qualified real property or removal of the
3 12 conservation easement. The amount of the additional
3 13 inheritance tax shall accrue interest at the rate of ten
3 14 percent per year from nine months after the decedent's death
3 15 to the due date of the tax. The tax shall be paid to the
3 16 department of revenue and finance and shall be deposited into
3 17 the general fund of the state. Taxes not paid within the time
3 18 prescribed in this section shall draw interest at the rate of
3 19 ten percent per annum until paid.
3 20 Sec. 5. NEW SECTION. 450B.13 RATIO OF APPLICABLE TAX.
3 21 The amount of the additional inheritance tax imposed by
3 22 section 450B.12 is the excess of what the tax imposed by
3 23 chapter 450 would have been had the election to use the
3 24 valuation under section 450B.11 not been made over the tax
3 25 paid on the real property based on the valuation under section
3 26 450B.11. However, the additional inheritance tax shall not be
3 27 computed on a value greater than the fair market value of the
3 28 qualified real property at the time the disposition of the
3 29 interest in the qualified real property or removal of the
3 30 conservation easement occurs.
3 31 Sec. 6. NEW SECTION. 450B.14 LIEN OF TAX.
3 32 A lien is created in favor of the state for the additional
3 33 inheritance tax which may be imposed by section 450B.12 on the
3 34 qualified real property for which an election has been made
3 35 under section 450B.11. The lien created by this section shall
4 1 continue until the tax has been paid or ten years after the
4 2 tax is due, whichever date occurs first. However, the lien
4 3 shall expire ten years after the decedent's death if the
4 4 qualified heir has not disposed of the interest in the
4 5 qualified real property or removed the conservation easement
4 6 from the qualified real property which would result in
4 7 imposition of the tax under section 450B.12. The department
4 8 of revenue and finance may release the lien prior to the
4 9 payment of the tax due, if any, if adequate security for
4 10 payment of the tax is given.
4 11 Unless the lien has been perfected by recording in the
4 12 office of the recorder in the county where the qualified real
4 13 property is probated, a transfer of the qualified real
4 14 property to a bona fide purchaser for value shall divest the
4 15 qualified real property of the lien. If the lien is perfected
4 16 by recording, the rights of the state under the lien have
4 17 priority over all subsequent mortgagees, purchasers, or
4 18 judgment creditors. The lien may be foreclosed by the
4 19 director of revenue and finance in the same manner as is
4 20 prescribed for the foreclosure of real estate mortgages and
4 21 upon judgment, execution shall be issued to sell as much of
4 22 the qualified real property necessary to satisfy the tax,
4 23 interest, and costs due.
4 24 Sec. 7. NEW SECTION. 450B.15 OTHER INHERITANCE TAX LAWS
4 25 APPLICABLE.
4 26 All the provisions of chapter 450 with respect to the
4 27 payment, collection, and administration of the inheritance tax
4 28 imposed under that chapter, including the confidentiality of
4 29 the tax return, are applicable to the provisions of this
4 30 subchapter to the extent the provisions are consistent. The
4 31 director of revenue and finance shall adopt rules necessary
4 32 for the enforcement and administration of this subchapter.
4 33 Sec. 8. CODIFICATION. The Code editor shall codify the
4 34 amendments to chapter 450B in this Act as subchapter II of
4 35 chapter 450B and shall make other changes necessary in chapter
5 1 450B to divide the chapter into two subchapters.
5 2 Sec. 9. RETROACTIVE AND OTHER APPLICABILITY DATES.
5 3 Section 1 of this Act applies retroactively to January 1,
5 4 2001, for tax years beginning on or after that date. Sections
5 5 2 through 7 of this Act apply to estates of decedents dying on
5 6 or after July 1, 2001.
5 7 EXPLANATION
5 8 This bill allows a deduction when computing net income for
5 9 purposes of state individual income taxation for capital gains
5 10 realized from the sale or transfer of open space property when
5 11 the deed transferring the property contains a conservation
5 12 easement. The open space property must be designated as such
5 13 by definition of the department of natural resources or by
5 14 designation as open space property in a local comprehensive
5 15 plan adopted pursuant to a zoning ordinance, the property must
5 16 be located in or within 12 miles of a metropolitan statistical
5 17 area, and the conservation easement must be perpetual. This
5 18 portion of the bill applies retroactively to January 1, 2001,
5 19 for tax years beginning on or after that date.
5 20 The bill also exempts the value of such property from
5 21 inheritance tax liability. That portion of the bill applies
5 22 to estates of decedents dying on or after July 1, 2001.
5 23 LSB 2049HH 79
5 24 sc/cf/24
Text: HF00698 Text: HF00700 Text: HF00600 - HF00699 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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