House File 430 - Introduced HOUSE FILE 430 BY HANSON , GASKILL , HUNTER , STUTSMAN , MASCHER , BEARINGER , OURTH , KEARNS , SMITH , LENSING , WINCKLER , BROWN-POWERS , FORBES , and MOORE A BILL FOR An Act relating to areas established as fruit-tree or forest 1 reservations for the purpose of a property tax exemption by 2 requiring the erection or maintenance of partition fences 3 to restrain livestock, and including effective date and 4 applicability provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 1989YH (11) 86 da/sc

H.F. 430 Section 1. Section 169C.6, Code 2015, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 4. The owner or owners of an area shall not 3 be granted a property tax exemption as a fruit-tree or forest 4 reservation under section 427C.12 for the period of a habitual 5 trespass or during the period that an order issued under this 6 section is outstanding. 7 Sec. 2. Section 350.4, Code 2015, is amended by adding the 8 following new subsection: 9 NEW SUBSECTION . 11. To determine whether an area qualifies 10 under chapter 427C as a fruit-tree or forest reservation 11 eligible for a property tax exemption pursuant to section 12 427C.12. 13 Sec. 3. Section 359A.8, Code 2015, is amended to read as 14 follows: 15 359A.8 Orders. 16 1. All orders and decisions made by the fence viewers shall 17 be in writing, signed by at least two of them, and filed with 18 the township clerk. 19 2. The owner or owners of an area shall not be granted a 20 property tax exemption as a fruit-tree or forest reservation 21 under section 427C.12 for the period that an order issued under 22 this chapter is outstanding. 23 Sec. 4. Section 359A.22, Code 2015, is amended to read as 24 follows: 25 359A.22 Controversies Fence viewers —— duties . 26 1. Upon the application of either owner, after notice is 27 given as prescribed in this chapter , the fence viewers shall 28 determine all controversies arising under sections 359A.18 to 29 359A.21 , inclusive, including the partition fences made sheep 30 and swine tight. 31 2. Upon request by a county assessor or county conservation 32 board pursuant to section 427C.12, subsection 2, the fence 33 viewers shall determine whether the owner or owners of an area 34 have participated in erecting and maintaining a partition fence 35 -1- LSB 1989YH (11) 86 da/sc 1/ 6

H.F. 430 as required in this chapter. 1 Sec. 5. Section 427C.10, Code 2015, is amended to read as 2 follows: 3 427C.10 Restraint of livestock and limitation on use. 4 1. Cattle, horses, mules, sheep, goats, ostriches, rheas, 5 emus, and swine Livestock as defined in section 169C.1 shall 6 not be permitted upon a fruit-tree or forest reservation. The 7 owner or owners of an area that may be or have been granted a 8 property tax exemption as a fruit-tree or forest reservation 9 under this chapter must participate in erecting and maintaining 10 a partition fence as provided in section 427C.12. 11 2. Fruit-tree and forest reservations shall not be used for 12 economic gain other than the gain from raising fruit or forest 13 trees. 14 Sec. 6. Section 427C.12, Code 2015, is amended to read as 15 follows: 16 427C.12 Application —— inspection —— continuation of 17 exemption —— recapture of tax. 18 1. It shall be the duty of the The assessor to shall secure 19 the facts relative to a fruit-tree and or forest reservations 20 reservation by taking the sworn statement, or affirmation, of 21 the owner or owners making application under this chapter ; and 22 to . The assessor shall make a special report to the county 23 auditor of all areas established as fruit-tree and forest 24 reservations made in the county under the provisions of this 25 chapter . 26 2. The board of supervisors shall designate the county 27 conservation board or the assessor who shall inspect the 28 area for which an application is filed for An application to 29 establish an area as a fruit-tree or forest reservation tax 30 exemption before the application is accepted. Use of aerial 31 shall not be accepted until all of the following applies: 32 a. The county assessor or the county conservation board, 33 as designated by the county board of supervisors, inspects the 34 area and determines that it complies with the requirements 35 -2- LSB 1989YH (11) 86 da/sc 2/ 6

H.F. 430 of this chapter. Aerial photographs may be substituted for 1 an on-site inspection when appropriate. The application can 2 only be accepted if it Upon request by the county assessor or 3 county conservation board, the fence viewers for the township 4 where the area is located must report whether the area’s owner 5 or owners have participated in erecting and maintaining a 6 partition fence as required in chapter 359A in order to prevent 7 any livestock kept on adjacent land from trespassing onto the 8 area pursuant to section 427C.10. The fence viewers may enter 9 onto the area or adjacent area in the same manner as if the 10 owner or owners of the area had made a complaint under chapter 11 359A. The application shall not be accepted if the fence 12 viewers determine any of the following apply: 13 (1) A partition fence has not been erected as required in 14 section 359A.1A. 15 (2) A partition fence that has been erected is not a lawful 16 fence as required in section 359A.18 or is not a tight fence as 17 required in sections 359A.19 or 359A.20. 18 (3) An existing partition fence is not maintained or has 19 not otherwise been kept in good repair throughout the year as 20 required in chapter 359A. 21 (4) The fence viewers are determining a controversy 22 regarding the erection or maintenance of a partition fence as 23 provided in section 359A.22. 24 (5) An order has been issued by fence viewers against the 25 owner or owners under section 359A.6 or an order has been 26 issued by fence viewers or by a board of supervisors under 27 section 169C.6. 28 (6) Livestock as described in section 427C.10 habitually 29 trespass onto the area as described in section 169C.6. 30 b. The area meets the criteria established by the natural 31 resource commission to be a fruit-tree or forest reservation. 32 Once the 33 3. a. Except as otherwise provided in paragraph “b” , once 34 an application has been accepted, the area shall continue to 35 -3- LSB 1989YH (11) 86 da/sc 3/ 6

H.F. 430 receive the tax exemption during each year in which the area is 1 maintained as a fruit-tree or forest reservation without the 2 owner or owners having to refile an application . 3 b. Upon evidence that the owner or owners of the area are 4 not participating in erecting or maintaining a partition fence 5 in order to prevent livestock from trespassing from adjacent 6 land where such livestock are kept, the county assessor may 7 require the owner or owners to refile the application in the 8 succeeding year in the same manner as an initial application in 9 subsection 2. The county auditor may require that the owner or 10 owners refile the application for each succeeding year until 11 the fence viewers are satisfied that the requirements set forth 12 in subsection 2 are being satisfied. 13 4. If all or part of the property area is sold or 14 transferred, the seller shall notify the buyer that all, or 15 part of, the property area is in established as a fruit-tree 16 or forest reservation and subject to the recapture tax 17 provisions of this section . The tax exemption shall continue 18 to be granted for the remainder of the eight-year period for 19 fruit-tree reservation and for the following years for forest 20 reservation or until the property area no longer qualifies as a 21 fruit-tree or forest reservation. The area may be inspected 22 each year by the county conservation board or the assessor to 23 determine if the area is maintained as a fruit-tree or forest 24 reservation. 25 5. If the area is not maintained or is used for economic 26 gain other than as a fruit-tree reservation during any year of 27 the eight-year exemption period and any year of the following 28 five years or as a forest reservation during any year for which 29 the exemption is granted and any of the five years following 30 those exemption years, the assessor shall assess the property 31 area for taxation at its fair market value as of January 1 32 of that year and in addition the area shall be subject to a 33 recapture tax. However, the area shall not be subject to the 34 recapture tax if the owner, including one possessing under 35 -4- LSB 1989YH (11) 86 da/sc 4/ 6

H.F. 430 a contract of sale, and the owner’s direct antecedents or 1 descendants have owned the area for more than ten years. The 2 tax shall be computed by multiplying the consolidated levy for 3 each of those years, if any, of the five preceding years for 4 which the area received the exemption for fruit-tree or forest 5 reservation times multiplied by the assessed value of the area 6 that would have been taxed but for the tax exemption. This tax 7 shall be entered against the property on the tax list for the 8 current year and shall constitute a lien against the property 9 in the same manner as a lien for property taxes. The tax when 10 collected shall be apportioned in the manner provided for the 11 apportionment of the property taxes for the applicable tax 12 year. 13 Sec. 7. EFFECTIVE DATE. This Act takes effect January 1, 14 2016. 15 Sec. 8. APPLICABILITY. This Act applies to property taxes 16 due and payable in fiscal years beginning on or after July 1, 17 2016. 18 EXPLANATION 19 The inclusion of this explanation does not constitute agreement with 20 the explanation’s substance by the members of the general assembly. 21 BILL’S PROVISIONS. This bill requires that the owner of 22 land seeking to have the area classified as a fruit-tree or 23 forest reservation (reservation) exempt from property taxes 24 participate in erecting and maintaining a partition fence that 25 borders adjacent land, if the owner of the adjacent land keeps 26 livestock there. The county assessor or county conservation 27 board, as designated by the county board of supervisors, may 28 request an inspection performed by the appropriate township 29 trustees acting as fence viewers. The fence viewers must 30 determine whether any partition fence is required to be erected 31 to keep livestock from trespassing onto the area, that any 32 erected fence complies with Iowa’s fence law (Code chapter 33 359A), and that the livestock are not habitually trespassing 34 onto the area (Code chapter 169C). After the tax exemption 35 -5- LSB 1989YH (11) 86 da/sc 5/ 6

H.F. 430 is granted, the fence viewers may be requested to make a new 1 inspection to determine whether the exemption should continue 2 in a subsequent year. The bill takes effect January 1, 2016, 3 and applies to property taxes due and payable for fiscal years 4 beginning on or after July 1, 2016. 5 BACKGROUND —— RESERVATIONS. A fruit-tree or forest 6 reservation is granted a 100 percent exemption from property 7 taxation. However, it cannot be used to keep livestock and 8 cannot be used for economic gain (Code section 427C.10). It 9 also must meet the criteria established by the natural resource 10 commission (Code section 427C.12). A fruit-tree reservation 11 must not be less than one and not more than 10 acres and a 12 forest reservation cannot be less than two acres (Code section 13 427C.2). A fruit-tree reservation may be exempt from property 14 taxes for eight years (Code section 427C.7). There is not a 15 time limitation for a forest reservation exemption. 16 BACKGROUND —— IOWA FENCE LAW AND LIVESTOCK TRESPASS. An 17 owner of land must participate in erecting and maintaining a 18 partition fence or contribute to its erection or maintenance, 19 upon receiving a written request by the owner of adjacent land 20 (Code section 359A.1A). There are a number of different types 21 of fences, including a lawful fence (Code section 359A.18) and 22 a tight fence (Code sections 359A.19 and 359A.20) designed to 23 keep livestock from trespassing onto neighboring land. Fence 24 viewers may intervene by deciding controversies (Code section 25 359A.3) and may issue orders to erect or maintain a partition 26 fence (Code sections 359A.6 and 359A.8). Special remedies are 27 available to neighbors suffering from the habitual trespass of 28 livestock (Code section 169C.6). In order for trespass to be 29 considered habitual, livestock must stray onto neighboring land 30 on three or more separate occasions within a 12-month period. 31 -6- LSB 1989YH (11) 86 da/sc 6/ 6