House File 697 - Introduced



                                       HOUSE FILE       
                                       BY  KAUFMANN and GRASSLEY


    Passed House,  Date               Passed Senate, Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to an exemption from inheritance tax of
  2    agricultural land or an interest therein passing to certain
  3    relatives under certain circumstances and including an
  4    applicability date provision.
  5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  6 TLSB 1546YH 82
  7 mg/je/5

PAG LIN



  1  1    Section 1.  Section 450.10, Code 2007, is amended by adding
  1  2 the following new subsection:
  1  3    NEW SUBSECTION.  7.  a.  Notwithstanding subsections 1
  1  4 through 5, agricultural land used in farming as defined in
  1  5 section 9H.1 or interest in such land that passes to any
  1  6 individual who is related to the decedent by blood, marriage,
  1  7 or adoption and who is not an individual designated in section
  1  8 450.9, is not taxable under this section if one of the
  1  9 following conditions applies:
  1 10    (1)  The agricultural land is used in farming by such
  1 11 individual or the individual's heirs for at least twenty
  1 12 consecutive years.
  1 13    (2)  The agricultural land is leased under a crop share
  1 14 agreement to a beginning farmer, as defined in section 175.2,
  1 15 for at least twenty consecutive years.
  1 16    (3)  The agricultural land is used or leased as provided in
  1 17 subparagraphs (1) and (2) for a combined total of at least
  1 18 twenty consecutive years.
  1 19    b.  If the conditions under paragraph "a" are not
  1 20 fulfilled, the agricultural land or the interest in such land
  1 21 which was exempt from inheritance tax pursuant to this
  1 22 subsection shall be subject to tax under this chapter.  The
  1 23 tax is due nine months from the date of the failure to fulfill
  1 24 the conditions under paragraph "a".  For purposes of computing
  1 25 the tax, the valuation of the agricultural land or interest
  1 26 therein shall be the valuation as of the date of the
  1 27 decedent's death.  The potential taxes under this paragraph
  1 28 "b" shall be considered deferred taxes until such time as the
  1 29 conditions under paragraph "a" are met and the lien provisions
  1 30 under section 450.7 shall apply.
  1 31    Sec. 2.  APPLICABILITY DATE.  This Act applies to estates
  1 32 of decedents dying on or after the effective date of this Act.
  1 33                           EXPLANATION
  1 34    This bill exempts from the inheritance tax agricultural
  1 35 land used in farming or any interest therein which passes to
  2  1 any individual related to the decedent by blood, marriage, or
  2  2 adoption except those individuals who are already exempt under
  2  3 Code section 450.9 from the inheritance tax.  However, in
  2  4 order to be exempt, one of three conditions must be met.
  2  5 These conditions are that the land is used in farming by the
  2  6 individual for at least 20 consecutive years, the land is
  2  7 leased under a crop share agreement to a beginning farmer for
  2  8 at least 20 consecutive years, or any combination of the
  2  9 preceding that lasts for at least 20 consecutive years.
  2 10    The bill applies to estates of decedents dying on or after
  2 11 the effective date.
  2 12 LSB 1546YH 82
  2 13 mg:sc/je/5