House File 803 - Introduced
HOUSE FILE
BY SWAIM
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act limiting the property tax exemption for fruit=tree and
2 forest reservations to resident landowners.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 2061HH 81
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PAG LIN
1 1 Section 1. Section 427C.1, Code 2005, is amended to read
1 2 as follows:
1 3 427C.1 TAX EXEMPTION.
1 4 Any owner or designated person who establishes a forest or
1 5 fruit=tree reservation as provided in this chapter and who is
1 6 a resident of the state shall be entitled to the tax exemption
1 7 provided by law.
1 8 Sec. 2. NEW SECTION. 427C.1A DEFINITIONS.
1 9 As used in this chapter, unless the context otherwise
1 10 requires:
1 11 1. "Designated person" means one of the following:
1 12 a. If the owner is a partnership, a partner and the
1 13 partner's spouse if the combined partnership interest owned by
1 14 them is at least fifty=one percent.
1 15 b. If the owner is a corporation, a shareholder and the
1 16 shareholder's spouse if they own at least fifty=one percent of
1 17 the stock of the corporation.
1 18 2. "Owner" means any of the following:
1 19 a. An individual who holds the fee simple title to the
1 20 land.
1 21 b. An individual who owns the land under a contract of
1 22 purchase which has been recorded in the office of the county
1 23 recorder of the county in which the land is located.
1 24 c. An individual who owns the land under a deed or
1 25 contract of purchase which conveys a divided interest, where
1 26 the divided interest constitutes at least fifty=one percent of
1 27 the ownership of the land.
1 28 d. A partnership or corporation.
1 29 Sec. 3. Section 427C.2, Code 2005, is amended to read as
1 30 follows:
1 31 427C.2 RESERVATIONS.
1 32 On any tract of land in the state of Iowa, the owner or
1 33 owners designated person who is a resident of the state may
1 34 select a permanent forest reservation or reservations, each
1 35 not less than two acres in continuous area, or a fruit=tree
2 1 reservation or reservations, not less than one nor more than
2 2 ten acres in total area, or both, and upon compliance with the
2 3 provisions of this chapter, such owner or owners designated
2 4 person shall be entitled to the benefits provided by law.
2 5 Sec. 4. Section 427C.9, Code 2005, is amended to read as
2 6 follows:
2 7 427C.9 REPLACING TREES.
2 8 When any tree or trees on a fruit=tree or forest
2 9 reservation shall be removed or die, the owner or owners
2 10 designated person of such reservation shall, within one year,
2 11 plant and care for other fruit or forest trees, in order that
2 12 the number of such trees may not fall below that required by
2 13 this chapter.
2 14 Sec. 5. Section 427C.11, Code 2005, is amended to read as
2 15 follows:
2 16 427C.11 PENALTY.
2 17 If the owner or owners designated person of a fruit=tree or
2 18 forest reservation violate violates any provision of this
2 19 chapter within the two years preceding the making of an
2 20 assessment, the assessor shall not list any tract belonging to
2 21 such owner or owners designated person, as a reservation
2 22 within the meaning of this chapter, for the ensuing two years.
2 23 Sec. 6. Section 427C.12, Code 2005, is amended to read as
2 24 follows:
2 25 427C.12 APPLICATION == INSPECTION == CONTINUATION OF
2 26 EXEMPTION == RECAPTURE OF TAX.
2 27 It shall be the duty of the assessor to secure the facts
2 28 relative to fruit=tree and forest reservations by taking the
2 29 sworn statement, or affirmation, of the owner or owners
2 30 designated person making application under this chapter; and
2 31 to make special report to the county auditor of all
2 32 reservations made in the county under the provisions of this
2 33 chapter.
2 34 The board of supervisors shall designate the county
2 35 conservation board or the assessor who shall inspect the area
3 1 for which an application is filed for a fruit=tree or forest
3 2 reservation tax exemption before the application is accepted.
3 3 Use of aerial photographs may be substituted for on=site
3 4 inspection when appropriate. The application can may only be
3 5 accepted if it meets the criteria established by the natural
3 6 resource commission to be a fruit=tree or forest reservation
3 7 and the owner or designated person declares residency in Iowa
3 8 for purposes of income taxation. Once the application has
3 9 been accepted, the area shall continue to receive the tax
3 10 exemption during each year in which the area is maintained as
3 11 a fruit=tree or forest reservation without the owner or
3 12 designated person having to refile. If the property is sold
3 13 or transferred, the seller shall notify the buyer that all, or
3 14 part of, the property is in fruit=tree or forest reservation
3 15 and subject to the recapture tax provisions of this section.
3 16 The tax exemption shall continue to be granted for the
3 17 remainder of the eight=year period for fruit=tree reservation
3 18 and for the following years for forest reservation or until
3 19 the property no longer qualifies as a fruit=tree or forest
3 20 reservation. The area may be inspected each year by the
3 21 county conservation board or the assessor to determine if the
3 22 area is maintained as a fruit=tree or forest reservation. If
3 23 the area is not maintained or is used for economic gain other
3 24 than as a fruit=tree reservation during any year of the eight=
3 25 year exemption period and any year of the following five years
3 26 or as a forest reservation during any year for which the
3 27 exemption is granted and any of the five years following those
3 28 exemption years, the assessor shall assess the property for
3 29 taxation at its fair market value as of January 1 of that year
3 30 and in addition the area shall be subject to a recapture tax.
3 31 However, the area shall not be subject to the recapture tax if
3 32 the owner, including one possessing under a contract of sale,
3 33 and the owner's direct antecedents or descendants have owned
3 34 the area for more than ten years. The tax shall be computed
3 35 by multiplying the consolidated levy for each of those years,
4 1 if any, of the five preceding years for which the area
4 2 received the exemption for fruit=tree or forest reservation
4 3 times the assessed value of the area that would have been
4 4 taxed but for the tax exemption. This tax shall be entered
4 5 against the property on the tax list for the current year and
4 6 shall constitute a lien against the property in the same
4 7 manner as a lien for property taxes. The tax when collected
4 8 shall be apportioned in the manner provided for the
4 9 apportionment of the property taxes for the applicable tax
4 10 year.
4 11 EXPLANATION
4 12 This bill requires that only owners who are residents of
4 13 the state may claim a property tax exemption for fruit=tree
4 14 and forest reservations. In the case where the land is owned
4 15 by a partnership or corporation, then a partner or shareholder
4 16 must be a resident and must own at least 51 percent of the
4 17 partnership or corporation, before the land may receive the
4 18 reservation exemption.
4 19 LSB 2061HH 81
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