House File 653 - Introduced HOUSE FILE 653 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HSB 217) A BILL FOR An Act relating to state taxation by modifying the disabled 1 veteran homestead tax credit, property tax exemptions 2 authorized for certain associations, institutions, and 3 societies, the definition of livestock for purposes of the 4 sales and use tax, exempting certain all-terrain vehicles 5 and off-road utility vehicles from the sales and use tax, 6 and including effective date and retroactive applicability 7 provisions. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 TLSB 1309HV (2) 86 mm/sc

H.F. 653 DIVISION I 1 SALES AND USE TAXES 2 Section 1. Section 423.1, subsection 25, Code 2015, is 3 amended to read as follows: 4 25. “Livestock” includes but is not limited to an animal 5 classified as an ostrich, rhea, emu, bison, or farm deer , or 6 preserve whitetail as defined in section 484C.1 . 7 Sec. 2. Section 423.3, subsection 8, paragraph d, Code 2015, 8 is amended to read as follows: 9 d. (1) For purposes of this subsection , the following 10 items are exempt under paragraph “a” when used primarily in 11 agricultural production: 12 (a) A diesel fuel trailer, regardless of the vehicle to 13 which it is to be attached. 14 (b) A seed tender, regardless of the vehicle to which it is 15 to be attached. 16 (c) An all-terrain vehicle. 17 (d) An off-road utility vehicle. 18 (2) For purposes of this paragraph: 19 (a) “All-terrain vehicle” means the same as defined in 20 section 321I.1. 21 (a) (b) “Fuel trailer” means a trailer that holds dyed 22 diesel fuel or diesel exhaust fluid and that is used to 23 transport such fuel or fluid to a self-propelled implement of 24 husbandry. 25 (c) “Off-road utility vehicle” means the same as defined in 26 section 321I.1. 27 (b) (d) “Seed tender” means a trailer that holds seed and 28 that is used to transport seed to an implement of husbandry and 29 load seed into an implement of husbandry. 30 Sec. 3. REFUNDS. Refunds of taxes, interest, or penalties 31 that arise from claims resulting from the amendment to section 32 423.1, subsection 25, in this division of this Act, for sales 33 occurring between July 1, 2005, and the effective date of this 34 division of this Act, shall not be allowed, notwithstanding any 35 -1- LSB 1309HV (2) 86 mm/sc 1/ 6

H.F. 653 other provision of law to the contrary. 1 Sec. 4. EFFECTIVE UPON ENACTMENT. The section of this 2 division of this Act amending section 423.1, subsection 3 25, being deemed of immediate importance, takes effect upon 4 enactment. 5 Sec. 5. RETROACTIVE APPLICABILITY. The section of this 6 division of this Act amending section 423.1, subsection 25, 7 applies retroactively to July 1, 2005. 8 DIVISION II 9 DISABLED VETERAN HOMESTEAD 10 PROPERTY TAX CREDIT APPLICATION 11 Sec. 6. 2015 Iowa Acts, House File 166, is amended by adding 12 the following new section: 13 NEW SECTION . SEC. 6. EXCEPTION TO APPLICATION FILING 14 DEADLINE. Notwithstanding the filing deadline under section 15 425.2, claims for the homestead credit authorized under section 16 425.15, as amended in this Act, filed after July 1, 2014, but 17 before July 1, 2015, shall be considered to be a claim properly 18 filed for taxes due and payable in the fiscal year beginning 19 July 1, 2015. 20 Sec. 7. EFFECTIVE UPON ENACTMENT. This division of this 21 Act, being deemed of immediate importance, takes effect upon 22 enactment. 23 Sec. 8. RETROACTIVE APPLICABILITY. This division of this 24 Act applies retroactively to March 5, 2015. 25 DIVISION III 26 PROPERTY TAX EXEMPTION FOR 27 CERTAIN INSTITUTIONS AND SOCIETIES 28 Sec. 9. Section 427.1, subsections 6 and 8, Code 2015, are 29 amended to read as follows: 30 6. Property of cemetery associations. 31 a. Burial grounds, mausoleums, buildings , and equipment 32 owned and operated by cemetery associations and used 33 exclusively for the maintenance and care of the cemeteries 34 devoted to interment of human bodies and human remains. The 35 -2- LSB 1309HV (2) 86 mm/sc 2/ 6

H.F. 653 exemption granted by this subsection shall not apply to any 1 property used for the practice of mortuary science. 2 b. Agricultural land owned by a cemetery association and 3 leased to another person for agricultural use if the revenues 4 resulting from the lease are used by the cemetery association 5 exclusively for the maintenance and care of cemeteries owned 6 by the cemetery association and devoted to interment of human 7 bodies and human remains. 8 8. Property of religious, literary, and charitable societies. 9 a. All grounds and buildings used or under construction by 10 literary, scientific, charitable, benevolent, agricultural, 11 and religious institutions and societies solely for their 12 appropriate objects, not exceeding three hundred twenty 13 acres in extent and not leased or otherwise used or under 14 construction with a view to pecuniary profit. However, 15 an organization mentioned in this subsection whose primary 16 objective is to preserve land in its natural state may own 17 or lease land not exceeding three hundred twenty acres in 18 each county for its appropriate objects. For assessment 19 years beginning on or after January 1, 2016, the exemption 20 granted by this subsection shall also apply to grounds owned 21 by a religious institution or society, not exceeding a total 22 of fifty acres, if all monetary and in-kind profits of the 23 religious institution or society resulting from use or lease of 24 the grounds are used exclusively by the religious institution 25 or society for the appropriate objects of the institution or 26 society. 27 b. All deeds or leases by which such property is held shall 28 be filed for record before the property herein described shall 29 be omitted from the assessment. All such property shall be 30 listed upon the tax rolls of the district or districts in which 31 it is located and shall have ascribed to it an actual fair 32 market value and an assessed or taxable value, as contemplated 33 by section 441.21 , whether such property be subject to a levy 34 or be exempted as herein provided and such information shall 35 -3- LSB 1309HV (2) 86 mm/sc 3/ 6

H.F. 653 be open to public inspection. 1 Sec. 10. IMPLEMENTATION. Section 25B.7 shall not apply to 2 this division of this Act. 3 EXPLANATION 4 The inclusion of this explanation does not constitute agreement with 5 the explanation’s substance by the members of the general assembly. 6 This bill relates to the policy administration of the tax and 7 related laws by the department of revenue. 8 DIVISION I —— SALES AND USE TAXES. Division I exempts 9 the sales price of all-terrain vehicles and off-road utility 10 vehicles used primarily in agricultural production from the 11 sales and use tax. Under current law, such vehicles are not 12 exempt from sales and use tax unless they are directly and 13 primarily used in production of agricultural products. 14 “All-terrain vehicle” means a motorized vehicle with not 15 less than three and not more than six nonhighway tires that 16 is limited in engine displacement to less than 1,000 cubic 17 centimeters and in total dry weight to less than 1,200 pounds 18 and that has a seat or saddle designed to be straddled by the 19 operator and handlebars for steering control. 20 “Off-road utility vehicle” means a motorized vehicle with 21 not less than four and not more than eight nonhighway tires or 22 rubberized tracks that has a seat that is of bucket or bench 23 design, not intended to be straddled by the operator, and a 24 steering wheel or control levers for control. 25 Division I also amends the definition of “livestock” 26 for purposes of the sales and use tax to include preserve 27 whitetail as defined in Code section 484C.1. The definition 28 of “livestock” affects several sales tax exemptions, including 29 but not limited to the sale of agricultural breeding livestock 30 under Code section 423.3(3), the sale of food and certain 31 other products used in the health promotion of livestock under 32 Code section 423.3(5), the sale of fuel for providing heat or 33 cooling for livestock buildings under Code section 423.3(6), 34 the sale of certain bedding materials used in the production 35 -4- LSB 1309HV (2) 86 mm/sc 4/ 6

H.F. 653 of agricultural livestock under Code section 423.3(9), the 1 sale of certain farm machinery and equipment used directly 2 and primarily in livestock production under Code section 3 423.3(11), the sale of certain packaging materials used in 4 livestock production under Code section 423.3(15), and the 5 sale of livestock ear tags by certain nonprofit organizations 6 under Code section 423.3(30). The amendment to the definition 7 of “livestock” takes effect upon enactment and applies 8 retroactively to July 1, 2005. The bill prohibits refunds of 9 taxes, interest, or penalties arising from claims resulting 10 from this provision for sales occurring between July 1, 2005, 11 and the effective date of the provision. 12 By operation of Code section 423.6, an item exempt from the 13 imposition of the sales tax is also exempt from the use tax 14 imposed in Code section 423.5. 15 DIVISION II —— DISABLED VETERAN HOMESTEAD PROPERTY TAX 16 CREDIT APPLICATION. Code section 425.2 establishes the filing 17 deadline for the homestead credit available to certain disabled 18 veterans under Code section 425.15. The bill provides that, 19 notwithstanding the filing deadline under section 425.2, claims 20 for the homestead credit authorized under Code section 425.15, 21 as amended by 2015 Acts, House File 166, filed after July 1, 22 2014, but before July 1, 2015, shall be considered to be a 23 claim properly filed for taxes due and payable in the fiscal 24 year beginning July 1, 2015. 25 Division II of the bill takes effect upon enactment and 26 applies retroactively to March 5, 2015. 27 DIVISION III —— PROPERTY TAX EXEMPTION FOR CERTAIN 28 INSTITUTIONS AND SOCIETIES. The bill establishes a property 29 tax exemption for agricultural land owned by a cemetery 30 association and leased to another person for agricultural 31 use if the revenues resulting from the lease are used by the 32 cemetery association exclusively for the maintenance and care 33 of cemeteries owned by the cemetery association and devoted to 34 interment of human bodies and human remains. 35 -5- LSB 1309HV (2) 86 mm/sc 5/ 6

H.F. 653 The bill also amends the property tax exemption for 1 literary, scientific, charitable, benevolent, agricultural, 2 and religious institutions and societies. Under the bill, for 3 assessment years beginning on or after January 1, 2016, the 4 exemption shall also apply to grounds owned by a religious 5 institution or society, not exceeding a total of 50 acres, if 6 all monetary and in-kind profits of the religious institution 7 or society resulting from use or lease of the grounds are used 8 exclusively by the religious institution or society for the 9 appropriate objects of the institution or society. 10 Division III of the bill makes inapplicable Code section 11 25B.7. Code section 25B.7 provides that for a property tax 12 credit or exemption enacted on or after January 1, 1997, if a 13 state appropriation made to fund the credit or exemption is not 14 sufficient to fully fund the credit or exemption, the political 15 subdivision shall be required to extend to the taxpayer only 16 that portion of the credit or exemption estimated by the 17 department of revenue to be funded by the state appropriation. 18 -6- LSB 1309HV (2) 86 mm/sc 6/ 6