Senate Study Bill 1033 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON BOLKCOM) A BILL FOR An Act relating to the definition of agricultural property for 1 property taxation purposes. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1492XC (2) 84 md/sc

S.F. _____ Section 1. Section 441.21, Code 2011, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 13. a. Beginning with valuations 3 established on or after January 1, 2012, as used in this 4 section, “agricultural property” shall not include any parcel 5 of real estate upon which a building that is primarily used or 6 intended for human habitation is located unless such parcel is 7 in good faith used primarily for agricultural purposes and one 8 of the following conditions are met: 9 (1) The parcel and the improvements and structures located 10 on such parcel, other than the building used or intended for 11 human habitation, are used for the production of not less than 12 ten acres of row crops. For purposes of this section, “row 13 crops” includes acres under the conservation reserve enhancement 14 program or the conservation buffer strip program under chapter 15 466 and the federal conservation reserve program, but does not 16 include acres used for hay production unless such acres are 17 part of crop rotation that includes row crops in the rotation. 18 (2) The parcel of real estate and the improvements and 19 structures located on such parcel, other than the building 20 used or intended for human habitation, produce a five-year 21 average of not less than two thousand dollars of net income per 22 year from farming or ranching. The assessor shall consider 23 initial start-up costs and other relevant short-term commodity 24 market factors when classifying a parcel of real estate that 25 has not produced a five-year average net income per year of two 26 thousand dollars or more from farming or ranching. Net income 27 produced by the parcel of real estate shall be certified to the 28 assessor on forms prescribed by the department. 29 b. Contiguous parcels that are owned by the same taxpayer 30 may be combined for determining the primary use, number of 31 acres used for the production of row crops, or net income from 32 farming or ranching under paragraph “a” . 33 c. A building primarily used or intended for human 34 habitation that is located on a parcel classified as 35 -1- LSB 1492XC (2) 84 md/sc 1/ 2

S.F. _____ agricultural property pursuant to the requirements of paragraph 1 “a” shall be valued as rural residential property pursuant to 2 subsection 6. 3 EXPLANATION 4 This bill amends the definition of agricultural property for 5 property taxation purposes. 6 The bill provides that beginning with real property 7 valuations established on or after January 1, 2012, 8 agricultural property shall not include any parcel of real 9 estate upon which a building that is primarily used or intended 10 for human habitation is located unless that parcel is in good 11 faith used primarily for agricultural purposes and the parcel 12 and the improvements and structures located on such parcel, 13 other than the building used or intended for human habitation, 14 are used for the production of not less than 10 acres of row 15 crops or produce a five-year average of not less than $2,000 16 per year of net income from farming or ranching. 17 The bill includes provisions relating to the definition 18 of row crops and requires the county assessor to consider 19 specified factors for parcels of real estate that do not meet 20 the net income requirements of the bill. 21 The bill allows contiguous parcels that are owned by the same 22 taxpayer to be combined for determining the primary use, number 23 of acres used for the production of row crops, or net income 24 from farming or ranching. 25 The bill also provides that any building located on a parcel 26 that is classified as agricultural property pursuant to the 27 requirements of the bill and that is primarily used or intended 28 for human habitation shall be classified as rural residential 29 property for property taxation purposes and assessed in the 30 same manner as all other residential property. 31 -2- LSB 1492XC (2) 84 md/sc 2/ 2