Senate File 352 - IntroducedA Bill ForAn Act 1relating to the property tax exemption for forest
2reservations and fruit-tree reservations and including
3effective date, applicability, and retroactive applicability
4provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1   Section 1.  Section 427C.1, Code 2021, is amended to read as
2follows:
   3427C.1  Tax exemption — amount of exemption.
   41.  Any person who establishes a forest or fruit-tree
5reservation as provided in this chapter shall be entitled to
6the tax exemption provided by law.
   72.  a.  For assessment years beginning before January 1,
82022, the exemption for forest or fruit-tree reservations
9authorized in this chapter shall be one hundred percent of the
10actual value of the property comprising the reservation.
   11b.  For assessment years beginning on or after January 1,
122022, the exemption for forest or fruit-tree reservations
13authorized in this chapter shall be seventy-five percent of the
14actual value of the property comprising the reservation.
15   Sec. 2.  Section 427C.2, Code 2021, is amended to read as
16follows:
   17427C.2  Reservations.
   181.  On For assessment years beginning before January 1, 2022,
19on
any tract of land in the state of Iowa, the owner or owners
20may select a permanent forest reservation or reservations, each
21not less than two acres in continuous area, or a fruit-tree
22reservation or reservations, not less than one nor more than
23ten acres in total area, or both, and upon compliance with
24the provisions of this chapter, such owner or owners shall be
25entitled to the benefits provided by law.
   262.  For assessment years beginning on or after January
271, 2022, on any tract of land in the state of Iowa, the
28owner or owners may select a permanent forest reservation or
29reservations, each not less than ten acres in continuous area,
30or a fruit-tree reservation or reservations, not less than
31one nor more than ten acres in total area, or both, and upon
32compliance with the provisions of this chapter, such owner or
33owners shall be entitled to the benefits provided by law.
34   Sec. 3.  Section 427C.3, Code 2021, is amended to read as
35follows:
-1-   1427C.3  Forest reservation — duration of exemption.
   21.  A forest reservation shall contain not less than two
3hundred growing forest trees on each acre. If Except as
4provided in subsection 2, if
the area selected is a forest
5containing the required number of growing forest trees, it
6shall be accepted as a forest reservation under this chapter
 7for a period of five years provided application is made or
8on file on or before February 1 of the exemption year. If
9any buildings are standing on an area selected as a forest
10reservation under this section or a fruit-tree reservation
11under section 427C.7
, one acre of that area shall be excluded
12from the tax exemption. However, the exclusion of that acre
13shall not affect the area’s meeting the acreage requirement of
14section 427C.2.
   152.  a.  For forest reservation exemption applications filed
16on or before February 1, 2021, unless the reservation fails
17to meet the acreage requirement of section 427C.2, subsection
182, and is terminated under paragraph “b”, the period of the
19exemption ends at the conclusion of the fifth assessment year
20following the certification conducted by the department of
21natural resources under section 427C.13, subsection 2.
   22b.  For forest reservation exemption applications filed on
23or before February 1, 2021, if the reservation fails to meet
24the acreage requirement of section 427C.2, subsection 2, the
25reservation’s exemption shall terminate beginning with the
26assessment year beginning January 1, 2022.
   273.  For forest reservation exemption applications filed
28after February 1, 2021, in addition to the other requirements
29of this chapter, if the department of natural resources
30determines that the forest reservation meets the criteria for
31depredation licenses and permits, the owner shall enter into a
32depredation agreement with the department of natural resources
33under section 481C.2A for each of the remaining years of the
34exemption period following determination by the department and
35the depredation agreement shall be subject to section 481C.2A,
-2-1subsection 1, paragraph “e”.
2   Sec. 4.  Section 427C.6, Code 2021, is amended to read as
3follows:
   4427C.6  Groves.
   5The trees of a forest reservation shall be in groves not
6less than four rods wide except when the trees are growing or
7are planted in or along a gully or ditch to control erosion in
8which case any width will qualify provided the area meets the
9size acreage requirement of two acres.
10   Sec. 5.  Section 427C.7, Code 2021, is amended to read as
11follows:
   12427C.7  Fruit-tree reservation — duration of exemption.
   13A fruit-tree reservation shall contain on each acre,
14at least forty apple trees, or seventy other fruit trees,
15growing under proper care and annually pruned and sprayed.
16A reservation may be claimed as a fruit-tree reservation,
17under this chapter, for a period of eight years after planting
18provided application is made or on file on or before February
191 of the exemption year. If any buildings are standing on an
20area selected as a fruit-tree reservation under this section,
21one acre of that area shall be excluded from the tax exemption.
22However, the exclusion of that acre shall not affect the area’s
23meeting the acreage requirement of section 427C.2.

24   Sec. 6.  Section 427C.12, Code 2021, is amended to read as
25follows:
   26427C.12  Application — inspection — continuation of
27exemption — recapture of tax.
   281.  It shall be the duty of the assessor to secure the facts
29relative to fruit-tree and forest reservations by taking the
30sworn statement, or affirmation, of the owner or owners making
31application under this chapter; and to make special report to
32the county auditor of all reservations made in the county under
33the provisions of this chapter.
   342.   a.  The board of supervisors shall designate the county
35conservation board or the assessor who shall inspect the area
-3-1for which an application is filed for a fruit-tree or forest
2 reservation tax exemption before the application is accepted.
   3b.  The department of natural resources shall inspect the
4area for which an application is filed for a forest reservation
5tax exemption before the application is accepted.
   6c.  Use of aerial photographs may be substituted for on-site
7inspection when appropriate.
   83.  The application can only be accepted if it meets the
9criteria established by the natural resource commission to be a
10fruit-tree or forest reservation.
   114.  Once the application has been accepted, the area shall
12continue to receive the tax exemption during each year of the
13exemption period under section 427C.3 or 427C.7
in which the
14area is maintained as a fruit-tree or forest or fruit-tree
15 reservation without the owner having to refile. If the
16property is sold or transferred, the seller shall notify the
17buyer that all, or part of, the property is in fruit-tree or
18forest reservation and subject to the recapture tax provisions
19of this section. The tax exemption shall continue to be
20granted for the remainder of the eight-year exemption period
21for fruit-tree reservation and for the following years for
22forest reservation
 under section 427C.3 or 427C.7, or until
23the property no longer qualifies as a fruit-tree or forest or
24fruit-tree
reservation.
   255.   a.  The An area that is a fruit-tree reservation may
26be inspected each year by the county conservation board or
27the assessor to determine if the area is maintained as a
28fruit-tree or forest reservation. An area that is a forest
29reservation may be inspected each year by the department of
30natural resources to determine if the area is maintained as
31forest reservation.
If the area is not maintained or is used
32for economic gain other than as a fruit-tree reservation during
33any year of the eight-year exemption period and any year of
34the following five years
 under section 427C.7 or as a forest
35reservation during any year for which of the exemption is
-4-1granted and any of the five years following those exemption
2years
 period under section 427C.3, the assessor shall assess
3the property for taxation at its fair market value as of
4January 1 of that year and in addition the area shall be
5subject to a recapture tax. However, the area shall not be
6subject to the recapture tax if the owner, including one
7possessing under a contract of sale, and the owner’s direct
8antecedents or descendants have owned the area for more than
9ten years.
   10b.  The recapture tax shall be computed by multiplying the
11consolidated levy for each of those years, if any, of the five
12preceding years for which the area received the exemption for
13fruit-tree or forest reservation times the assessed value of
14the area that would have been taxed but for the tax exemption.
15This tax shall be entered against the property on the tax list
16for the current year and shall constitute a lien against the
17property in the same manner as a lien for property taxes. The
18tax when collected shall be apportioned in the manner provided
19for the apportionment of the property taxes for the applicable
20tax year.
21   Sec. 7.  Section 427C.13, Code 2021, is amended to read as
22follows:
   23427C.13  Report to department of natural resources.
   241.  The county assessor shall keep a record of all forest
25and fruit-tree reservations in the county and submit a report
26of the reservations to the department of natural resources not
27later than June 15 of each year.
   282.  a.  Based on the reports submitted under subsection 1,
29the department of natural resources shall conduct an inspection
30of each forest reservation receiving an exemption that meets
31the acreage requirement of section 427C.2, subsection 2, and
32that was approved for an assessment year beginning before
33January 1, 2022.
   34b.  If the forest reservation meets the requirements for
35the exemption, the department shall certify the reservation’s
-5-1compliance to the county auditor of the county where the
2forest reservation is located to be used in determining the
3period of the exemption under section 427C.3, subsection 2.
4If the forest reservation fails to meet the requirements for
5the exemption, the department shall deny certification and
6shall notify the owner and the county auditor of the county
7where the forest reservation is located of the denial and the
8exemption shall cease beginning with the immediately succeeding
9assessment year.
   10c.  The certification or denial of certification by the
11director of the department of natural resources for each of
12the forest reservations identified in paragraph “a” shall be
13completed by July 1, 2026.
   143.  If, following approval of the exemption for a forest
15reservation, the department of natural resources determines
16that the area comprising the forest reservation meets the
17criteria for depredation under chapter 481C, the owner
18shall enter into an agreement as required by section 427C.3,
19subsection 3.
20   Sec. 8.  Section 441.22, Code 2021, is amended to read as
21follows:
   22441.22  Forest and fruit-tree reservations.
   23Forest and fruit-tree reservations fulfilling the conditions
24of sections 427C.1 to 427C.13 chapter 427C shall be exempt from
25taxation to the extent authorized in that chapter. In all
26other cases where trees are planted upon any tract of land,
27without regard to area, for forest, fruit, shade, or ornamental
28purposes, or for windbreaks, the assessor shall not increase
29the valuation of the property because of such improvements.
30   Sec. 9.  Section 481C.2A, subsection 1, Code 2021, is amended
31by adding the following new paragraph:
32   NEW PARAGRAPH.  e.  For a depredation agreement entered into
33for land that is a forest reservation under section 427C.3, the
34number of licenses issued each year under this subsection to
35persons other than the landowner or a family member shall not
-6-1be less than twenty-five percent of the total licenses issued
2under this subsection for that year.
3   Sec. 10.  SAVINGS PROVISION.  Except as provided in this
4Act, this Act, pursuant to section 4.13, does not affect the
5operation of, or prohibit the application of, prior provisions
6of chapter 427C or section 441.22, or rules adopted under
7chapter 17A to administer prior provisions of chapter 427C
8or section 441.22, for assessment years beginning before
9January 1, 2022, and for duties, powers, protests, appeals,
10proceedings, actions, or remedies attributable to an assessment
11year beginning before January 1, 2022.
12   Sec. 11.  EFFECTIVE DATE.  This Act, being deemed of
13immediate importance, takes effect upon enactment.
14   Sec. 12.  APPLICABILITY.  This Act applies to assessment
15years beginning on or after January 1, 2022.
16   Sec. 13.  RETROACTIVE APPLICABILITY.  The following apply
17retroactively to February 1, 2021, for forest reservation
18property tax exemption applications filed on or after that
19date:
   201.  The section of this Act amending section 427C.3.
   212.  The provision of this Act enacting section 427C.12,
22subsection 2, paragraph “b”.
23EXPLANATION
24The inclusion of this explanation does not constitute agreement with
25the explanation’s substance by the members of the general assembly.
   26Current Code chapter 427C authorizes a property tax
27exemption for certain forest reservations and fruit-tree
28reservations. To qualify for the exemption as a forest
29reservation, the property must be at least two acres in
30continuous area and meet certain tree density requirements.
   31This bill provides that for assessment years beginning on or
32after January 1, 2022, the exemption for forest reservations
33and fruit-tree reservations is 75 percent of the actual
34value of the property comprising the forest or fruit-tree
35reservation.
-7-
   1Current law requires each forest reservation to be not
2less than two acres in continuous area. For assessment
3years beginning on or after January 1, 2022, each forest
4reservation must be not less than 10 acres in continuous area
5and the period of the exemption is for a period of five years.
6However, the bill establishes provisions to governing forest
7reservation exemption applications filed on or before February
81, 2021. For forest reservation exemption applications filed
9on or before February 1, 2021, unless the reservation fails
10to meet the 10-acre requirement, the period of the exemption
11ends at the conclusion of the fifth assessment year following
12the certification conducted by the department of natural
13resources as provided in the bill. For forest reservation
14exemption applications filed on or before February 1, 2021,
15if the reservation fails to meet the 10-acre requirement,
16the reservation’s exemption terminates beginning with the
17assessment year beginning January 1, 2022.
   18The bill provides that for forest reservation exemption
19applications filed after February 1, 2022, if, following
20approval of the exemption, the department of natural resources
21determines that the forest reservation meets the criteria for
22depredation under Code chapter 481C, the owner must enter
23into a depredation agreement with the department of natural
24resources for each of the remaining years of the exemption
25period. For each such depredation agreement, the number of
26licenses issued each year to persons other than the landowner
27or a family member shall not be less than 25 percent of the
28total licenses issued for that year.
   29The bill also requires the department of natural resources
30to inspect the area for which an application is filed for a
31forest reservation tax exemption before the application is
32accepted. Additionally, an area that is a forest reservation
33may be inspected each year by the department of natural
34resources to determine if the area is maintained as forest
35reservation. The bill also directs the department of natural
-8-1resources to conduct an inspection of each forest reservation
2receiving an exemption that meets the 10-acre requirement that
3was approved for an assessment year beginning before January
41, 2022. If the forest reservation meets the requirements for
5the exemption, the department shall certify the reservation’s
6compliance to the county auditor of the county where the
7forest reservation is located to be used in determining the
8period of the exemption. If the forest reservation fails to
9meet the requirements for the exemption, the department shall
10deny certification and shall notify the owner and the county
11auditor of the county where the forest reservation is located
12of the denial and the exemption shall cease beginning with the
13immediately succeeding assessment year. The certification or
14denial of certification by the director of the department of
15natural resources for each of the forest reservations shall be
16completed by July 1, 2026.
   17Except as provided in the bill does not affect the operation
18of, or prohibit the application of, prior provisions of
19Code chapter 427C or Code section 441.22, or rules adopted
20to administer prior provisions of Code chapter 427C or
21Code section 441.22, for assessment years beginning before
22January 1, 2022, and for duties, powers, protests, appeals,
23proceedings, actions, or remedies attributable to an assessment
24year beginning before January 1, 2022.
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