Senate Study Bill 1123 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON AGRICULTURE BILL BY CHAIRPERSON ZUMBACH) A BILL FOR An Act establishing a partial property tax exemption for 1 certain agricultural land planted with cover crops, 2 providing penalties, and including applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1924XC (1) 88 md/jh

S.F. _____ Section 1. NEW SECTION . 427D.1 Cover crop property tax 1 exemption —— definitions. 2 1. The owner of agricultural land, as defined in section 3 9H.1, that is planted with cover crops shall be entitled to a 4 property tax exemption as provided in this chapter. 5 2. a. “Cover crop” means the same as a cover crop under 6 section 161A.73 that would be eligible for financial incentives 7 as a soil erosion control management practice. 8 b. “Department” means the department of agriculture and land 9 stewardship. 10 Sec. 2. NEW SECTION . 427D.2 Eligibility and application. 11 1. Fifty percent of the assessed value of that portion 12 of the owner’s agricultural land planted with cover crops 13 during the growing season of the assessment year for which the 14 exemption is claimed shall be exempt from taxation. 15 2. If agricultural land for which an application is filed 16 meets the requirements of this chapter, it shall receive the 17 exemption under this chapter if the application is made or 18 on file with the department on or before February 1 of the 19 exemption year. The exemption shall be only for the assessment 20 year for which it is granted. Property may be granted 21 subsequent exemptions. 22 3. To apply for the exemption, the applicant shall deliver 23 to the department a verified statement and designation of 24 the tracts of agricultural land for which the exemption is 25 claimed on forms prescribed by the department. If approved, 26 the department shall return the statement and designation on or 27 before November 15 of each year to the appropriate assessor. 28 The department may inspect the property for compliance with 29 the requirements of this chapter. If the land fails to meet 30 the established standards for the exemption, the owner and the 31 appropriate assessor shall be given written notice of such 32 determination. 33 Sec. 3. NEW SECTION . 427D.3 False claim —— penalty. 34 If a person makes a false claim or affidavit with fraudulent 35 -1- LSB 1924XC (1) 88 md/jh 1/ 3

S.F. _____ intent to obtain the exemption under this chapter, the claim 1 shall be disallowed in full. If the exemption has been 2 provided, the amount of the exempted taxes plus interest, 3 at the rate in effect under section 421.7, from the time of 4 payment shall be collected by the county treasurer in the same 5 manner as other property taxes, penalty, and interest are 6 collected. If a claim is disallowed under this section, the 7 person shall not be eligible to claim an exemption under this 8 chapter for the succeeding five assessment years. 9 Sec. 4. NEW SECTION . 427D.4 Rules. 10 The department, in consultation with the department of 11 revenue, shall adopt rules pursuant to chapter 17A for the 12 interpretation and proper administration of the exemption 13 provided in this chapter. 14 Sec. 5. IMPLEMENTATION. Section 25B.7 shall not apply to 15 this Act. 16 Sec. 6. APPLICABILITY. This Act applies to assessment years 17 beginning on or after January 1, 2020. 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 This bill establishes a property tax exemption for 22 agricultural land that is planted with cover crops, as defined 23 in the bill. Fifty percent of the assessed value of the 24 eligible land planted with cover crops during the growing 25 season of the assessment year shall be exempt from taxation. 26 To apply for the exemption, the applicant is required to 27 deliver to the department of agriculture and land stewardship 28 (the department) a verified statement and designation of the 29 tracts of agricultural land for which the exemption is claimed 30 on forms prescribed by the department. The bill authorizes 31 the department to inspect the land for compliance with the 32 requirements for the exemption. 33 Under the bill, if a person makes a false claim or affidavit 34 with fraudulent intent to obtain the exemption, the claim 35 -2- LSB 1924XC (1) 88 md/jh 2/ 3

S.F. _____ shall be disallowed in full and if the exemption has been 1 provided, the amount of the exempted taxes plus interest shall 2 be collected by the county treasurer. In addition, the person 3 is not be eligible to claim the exemption for the succeeding 4 five assessment years. 5 The bill requires the department to, in consultation with 6 the department of revenue, adopt rules for the interpretation 7 and proper administration of the exemption provided in the 8 bill. 9 The bill makes inapplicable Code section 25B.7. Code 10 section 25B.7 provides that for a property tax credit or 11 exemption enacted on or after January 1, 1997, if a state 12 appropriation made to fund the credit or exemption is not 13 sufficient to fully fund the credit or exemption, the political 14 subdivision shall be required to extend to the taxpayer only 15 that portion of the credit or exemption estimated by the 16 department of revenue to be funded by the state appropriation. 17 The bill applies to assessment years beginning on or after 18 January 1, 2020. 19 -3- LSB 1924XC (1) 88 md/jh 3/ 3