HF 304 (LSB 1280YH (4) 85)

HOUSE FILE 304

BY  HANSON

A BILL FOR

An Act relating to the taxation of forest reservations and fruit-tree reservations and including retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 427C.12, unnumbered paragraph 2, Code 2013, is amended to read as follows:
   The board of supervisors shall designate the county conservation board or the assessor who shall inspect the area for which an application is filed for a fruit-tree or forest reservation tax exemption before the application is accepted. Use of aerial photographs may be substituted for on-site inspection when appropriate. The application can only be accepted if it meets the criteria established by the natural resource commission to be a fruit-tree or forest reservation. Once the application has been accepted, the area shall continue to receive the tax exemption during each year in which the area is maintained as a fruit-tree or forest reservation without the owner having to refile. If the property is sold or transferred, the seller shall notify the buyer that all, or part of, the property is in fruit-tree or forest reservation and subject to the recapture tax provisions of this section. The tax exemption shall continue to be granted for the remainder of the eight-year period for fruit-tree reservation and for the following years for forest reservation or until the property no longer qualifies as a fruit-tree or forest reservation. The area may be inspected each year by the county conservation board or the assessor to determine if the area is maintained as a fruit-tree or forest reservation. If the area is not maintained or is used for economic gain other than as a fruit-tree reservation during any year of the eight-year exemption period and any year of the following five years or as a forest reservation during any year for which the exemption is granted and any of the five years following those exemption years, the assessor shall assess the property for taxation at its fair market value as of January 1 of that year and in addition the area shall be subject to a recapture tax. However, the area shall not be subject to the recapture tax if the owner, including one possessing under a contract of sale, and the owner’s direct antecedents or descendants have owned the area for more than ten years. The
 
For taxes applicable to assessment years beginning before January 1, 2013, the tax shall be computed by multiplying the consolidated levy for each of those years, if any, of the five preceding years for which the area received the exemption for fruit-tree or forest reservation times the assessed value of the area that would have been taxed but for the tax exemption.

For taxes applicable to assessment years beginning on or after January 1, 2013, the tax shall be computed by multiplying the consolidated levy for each of those years, if any, of the five preceding years for which the area received the exemption for fruit-tree or forest reservation, less the amount of those levies or portions of levies specified in section 427C.12A, subsection 1, paragraphs “a” through “f”, for each of those years, times the assessed value of the area that would have been taxed but for the tax exemption. This tax shall be entered against the property on the tax list for the current year and shall constitute a lien against the property in the same manner as a lien for property taxes. The tax when collected shall be apportioned in the manner provided for the apportionment of the property taxes for the applicable tax year.
    Sec. 2.  NEW SECTION.  427C.12A  Amount of exemption.
   1.  For assessment years beginning on or after January 1, 2013, forest reservations and fruit-tree reservations fulfilling the conditions of this chapter shall be exempt from taxation except for the following tax levies:
   a.  General county services levy under section 331.423, subsection 1.
   b.  Rural county services levy under section 331.423, subsection 2.
   c.  Township levy under section 359.43.
   d.  County levy under section 331.385, if the county is exercising the powers and duties of township trustees relating to fire protection service and emergency medical service.
   e.  County hospital levies under section 347.7.

   f.  Those portions of a city’s tax levy for the city’s general fund under section 384.1 that are attributable to programs in the city budget for any of the following:
   (1)  Public safety, including the equipping of fire, police, emergency services, sanitation, street, and civil defense departments.
   (2)  The establishment, construction, reconstruction, repair, equipping, remodeling, and extension of public works, public utilities, and public transportation systems, and the acquisition of real estate needed for such purposes.
   (3)  The construction, reconstruction, or repair of streets, highways, bridges, sidewalks, pedestrian underpasses and overpasses, and street lighting fixtures, and the acquisition of real estate needed for such purposes.
   2.  The department of management shall adopt rules necessary to implement this section.
    Sec. 3.  Section 441.22, Code 2013, is amended to read as follows:
   441.22  Forest and fruit-tree reservations.
   Forest and fruit-tree reservations fulfilling the conditions of sections 427C.1 to 427C.13
 
and to the extent provided under section 427C.12A shall be exempt from taxation. In all other cases where trees are planted upon any tract of land, without regard to area, for forest, fruit, shade, or ornamental purposes, or for windbreaks, the assessor shall not increase the valuation of the property because of such improvements.
    Sec. 4.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2013, for assessment years beginning on or after that date.
EXPLANATION
   Code chapter 427C establishes a forest reservation and fruit-tree reservation property tax exemption. In order to qualify for the tax exemption, a forest reservation must have a minimum of two acres with not less than 200 trees per acre and a fruit-tree reservation must have at least 10 acres with at least 40 apple trees or 70 other fruit trees. The exemption applies in perpetuity for forest tree reservations and eight years for fruit-tree reservations. Neither reservation can be used for grazing livestock or for economic gain other than the gain from raising fruit or forest trees.
   This bill enacts new Code section 427C.12A which specifies property tax levies for which the forest reservation and fruit-tree reservation property tax exemption shall not apply. The bill provides that for assessment years beginning on or after January 1, 2013, forest reservations and fruit-tree reservations fulfilling the conditions of Code chapter 427C are exempt from taxation except for all of the following levies or portions of levies: (1) general county services levy under Code section 331.423(1); (2) rural county services levy under Code section 331.423(2); (3) township levy for fire protection and certain other emergency services under Code section 359.43; (4) county levy for emergency services under Code section 331.385; (5) county hospital levies under Code section 347.7; and (6) those portions of a city’s tax levy for the city’s general fund under Code section 384.1 that are attributable to programs in the city budget for purposes specified in the bill, including public safety, public works, and road construction and repair.
   The bill requires the department of management to adopt rules necessary to implement new Code section 427C.12A.
   The bill applies retroactively to January 1, 2013, for assessment years beginning on or after that date.