HF 2551 (LSB 5777HV (2) 89)

HOUSE FILE 2551

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO HF 2391)

A BILL FOR

An Act establishing an exemption for certain property classified as agricultural based on levee and drainage district assessments.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 427.1, Code 2022, is amended by adding the following new subsection:
   NEW SUBSECTION.  42.  Certain property classified as agricultural located in a levee and drainage district.  For assessment years beginning on or after January 1, 2023, a portion of the actual value of property classified as agricultural, as determined on the basis of productivity and net earning capacity as determined under section 441.21, subsection 1, paragraph “e”, located in a levee and drainage district under chapter 468, if the district is adjacent to both the Mississippi river and the Iowa river and consists of at least thirty-five thousand acres. The exemption on such property classified as agricultural shall be allowed if the property’s per-acre levee and drainage district taxes assessed under chapter 468 exceed the applicable county’s per-acre five-year average levee and drainage district tax amount. The amount of the exemption shall be an amount equal to the number of net acres comprising the property multiplied by the amount by which the property’s per-acre levee and drainage district taxes exceed the county’s per-acre five-year average levee and drainage district tax amount divided by seven percent. However, in no case shall the amount of the exemption under this subsection exceed fifty percent of the actual land value of the property.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Code section 441.21 provides that the actual value of agricultural property shall be determined on the basis of productivity and net earning capacity of the property determined on the basis of its use for agricultural purposes capitalized at a rate of 7 percent and applied uniformly among counties and among classes of property.
   Under this bill, for assessment years beginning on or after January 1, 2023, a portion of the actual value of property classified as agricultural located in a levee and drainage district that is located adjacent to both the Mississippi river and the Iowa river and consists of at least 35,000 acres shall be exempt from taxation. The exemption on such agricultural property shall be allowed if the property’s per-acre levee and drainage district taxes assessed exceed the applicable county’s per-acre five-year average levee and drainage district tax amount. The amount of the exemption shall be an amount equal to the number of net acres comprising the property multiplied by the amount by which the property’s per-acre levee and drainage district taxes exceed the county’s per-acre five-year average levee and drainage district tax amount divided by 7 percent. However, in no case shall the amount of the exemption exceed 50 percent of the actual land value of the property.