HF 561 (LSB 2368HH (4) 85)

HOUSE FILE 561

BY  KELLEY

A BILL FOR

An Act establishing a property tax exemption for property used for certain gardening activities within a city and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 427.1, subsection 2, Code 2013, is amended to read as follows:
   2.  Municipal and military property.  The property of a county, township, city, school corporation, levee district, drainage district, or the Iowa national guard, when devoted to public use and not held for pecuniary profit, except property of a municipally owned electric utility held under joint ownership and property of an electric power facility financed under chapter 28F or 476A that shall be subject to taxation under chapter 437A and facilities of a municipal utility that are used for the provision of local exchange services pursuant to chapter 476, but only to the extent such facilities are used to provide such services, which shall be subject to taxation under chapter 433, except that section 433.11 shall not apply. The exemption for property owned by a city or county also applies to property which is operated by a city or county as a library, art gallery or museum, conservatory, botanical garden or display, observatory or science museum, or as a location for holding athletic contests, sports or entertainment events, expositions, meetings or conventions, or leased from the city or county for any such purposes, or leased from the city or county by the Iowa national guard or by a federal agency for the benefit of the Iowa national guard when devoted for public use and not for pecuniary profit. Food and beverages may be served at the events or locations without affecting the exemptions, provided the city has approved the serving of food and beverages on the property if the property is owned by the city or the county has approved the serving of food and beverages on the property if the property is owned by the county. The exemption for property owned by a city or county also applies to property which is located at an airport and leased to a fixed base operator providing aeronautical services to the public.

The exemption for property owned by a city also applies to land operated by the city as a fruit or vegetable garden or leased from the city by a nonprofit corporation for use as a fruit or vegetable garden, and the sale of fruits or vegetables grown on the land by the city or the lessee shall not affect the exemption.
    Sec. 2.  Section 427.1, Code 2013, is amended by adding the following new subsection:
   NEW SUBSECTION.  39.  Nonprofit fruit and vegetable gardens.  Land owned by a nonprofit corporation and located within the corporate boundaries of a city, not exceeding five acres, if devoted to public use by the nonprofit corporation as a fruit or vegetable garden. The sale of fruits or vegetables grown on the land shall not affect the exemption. To be allowed the exemption under this subsection, the nonprofit corporation that owns the land shall have as one of its objectives or purposes the cultivation and sale of fresh fruits and vegetables to residents of the community and shall not be a political organization as defined in section 13C.1.
    Sec. 3.  IMPLEMENTATION.  Section 25B.7 does not apply to the property tax exemption enacted in this Act.
    Sec. 4.  APPLICABILITY.  This Act applies to assessment years beginning on or after January 1, 2014.
EXPLANATION
   This bill provides a property tax exemption for certain property located in a city used as a fruit or vegetable garden.
   The bill modifies the current municipal property tax exemption under Code section 427.1(2) to include land operated by the city as a fruit or vegetable garden or leased from the city by a nonprofit corporation for use as a fruit or vegetable garden. The bill provides that the sale of fruits or vegetables grown on such land by the city or the nonprofit corporation lessee shall not affect the exemption.
   The bill also establishes a property tax exemption for land owned by a nonprofit corporation and located within the corporate boundaries of a city, not exceeding five acres, if the property is devoted to public use by the nonprofit corporation as a fruit or vegetable garden. The bill provides that the sale of fruits or vegetables grown on the land shall not affect the exemption. To be allowed the exemption under the bill, the nonprofit corporation that owns the land must have as one of its objectives or purposes the cultivation and sale of fresh fruits and vegetables to residents of the community and shall not be a political organization as defined in the bill.
   Code section 25B.7 provides that for a property tax credit or exemption enacted on or after January 1, 1997, if a state appropriation made to fund the credit or exemption is not sufficient to fully fund the credit or exemption, the political subdivision shall be required to extend to the taxpayer only that portion of the credit or exemption estimated by the department of revenue to be funded by the state appropriation. The bill provides that Code section 25B.7 does not apply to the exemption in the bill.
   The bill applies to assessment years beginning on or after January 1, 2014.