Senate Study Bill 1106 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON BOLKCOM) A BILL FOR An Act relating to the property tax exemption for property 1 designated to be a native prairie or wetland and including 2 effective date and retroactive applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1104XC (2) 86 md/sc

S.F. _____ Section 1. Section 427.1, subsection 23, paragraph a, Code 1 2015, is amended to read as follows: 2 a. Application for the exemption shall be made on forms 3 provided by the department of revenue. Land designated as 4 a protected wetland shall be assessed at a value equal to 5 the average value of the land where the wetland is located 6 and which is owned by the person granted the exemption. The 7 application forms shall be filed with the assessing authority 8 not later than the first of February of the year for which the 9 exemption is requested. The application must be accompanied 10 by an affidavit signed by the applicant that if the exemption 11 is granted, the property will not be used for economic gain 12 during the assessment year in which the exemption is granted. 13 The receipt of payments required to be made in connection 14 with a contract, agreement, or easement under the federal 15 wetlands reserve program, formerly codified at 16 U.S.C. §3837 16 et seq., and as authorized by the federal Agricultural Act of 17 2014, Pub. L. No. 113-79, §2703(b), or the receipt of payments 18 under the federal agricultural conservation easement program 19 established under the federal Food Security Act of 1985, Tit. 20 XII, subtit. H, as enacted in the federal Agricultural Act of 21 2014, Pub. L. No. 113-79, §2301, shall not be considered a use 22 for economic gain. If the property is used for economic gain 23 during the assessment year in which the exemption is granted, 24 the property shall lose its tax exemption and shall be taxed 25 at the rate levied by the county for the fiscal year beginning 26 in that assessment year. The first annual application shall 27 be accompanied by a certificate from the department of natural 28 resources stating that the land is native prairie or protected 29 wetland. The department of natural resources shall issue a 30 certificate for the native prairie exemption if the department 31 finds that the land has never been cultivated, is unimproved, 32 is primarily a mixture of warm season grasses interspersed with 33 flowering plants, and meets the other criteria established 34 by the natural resource commission for native prairie. The 35 -1- LSB 1104XC (2) 86 md/sc 1/ 3

S.F. _____ department of natural resources shall issue a certificate for 1 the wetland exemption if the department finds the land is a 2 protected wetland, as defined under section 456B.1 , or if 3 the wetland was previously drained and cropped but has been 4 restored under a nonpermanent restoration agreement with the 5 department or other county, state, or federal agency or private 6 conservation group. A taxpayer may seek judicial review of 7 a decision of the department according to chapter 17A . The 8 natural resource commission shall adopt rules to implement this 9 subsection . 10 Sec. 2. IMPLEMENTATION OF ACT. Section 25B.7 shall 11 not apply to this Act to the extent of any insufficient 12 reimbursement of lost tax revenue from exempted protected 13 wetlands under section 427.1, subsection 23, paragraph “b”. 14 Sec. 3. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 15 immediate importance, takes effect upon enactment. 16 Sec. 4. RETROACTIVE APPLICABILITY. This Act applies 17 retroactively to January 1, 2015, for assessment years 18 beginning on or after that date. 19 EXPLANATION 20 The inclusion of this explanation does not constitute agreement with 21 the explanation’s substance by the members of the general assembly. 22 Current Code section 427.1(23) provides a property tax 23 exemption for land designated as native prairie or land 24 designated as a protected wetland by the department of natural 25 resources if the property is not used for economic gain. 26 This bill specifies that the receipt of payments under the 27 federal wetlands reserve program or the federal agricultural 28 conservation easement program shall not be considered a use for 29 economic gain. 30 Code section 25B.7 provides that for a property tax credit 31 or exemption enacted on or after January 1, 1997, if a state 32 appropriation made to fund the credit or exemption is not 33 sufficient to fully fund the credit or exemption, the political 34 subdivision shall be required to extend to the taxpayer only 35 -2- LSB 1104XC (2) 86 md/sc 2/ 3

S.F. _____ that portion of the credit or exemption estimated by the 1 department of revenue to be funded by the state appropriation. 2 Code section 25B.7 does not apply to the bill insofar 3 as state reimbursement for lost tax revenue from exempted 4 protected wetlands is insufficient. 5 The bill takes effect upon enactment and applies 6 retroactively to January 1, 2015, for assessment years 7 beginning on or after that date. 8 -3- LSB 1104XC (2) 86 md/sc 3/ 3