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House Study Bill 717 - IntroducedA Bill ForAn Act 1relating to the liability for recapture taxes imposed
2on certain property receiving a fruit-tree or forest
3reservation property tax exemption and including effective
4date and applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 427C.12, Code 2022, is amended to read
2as follows:
3427C.12 Application — inspection — continuation of
4exemption — recapture of tax.
51. It shall be the duty of the assessor to secure the facts
6relative to fruit-tree and forest reservations by taking the
7sworn statement, or affirmation, of the owner or owners making
8application under this chapter; and to make special report to
9the county auditor of all reservations made in the county under
10the provisions of this chapter.
112. a. The board of supervisors shall designate the county
12conservation board or the assessor who shall inspect the area
13for which an application is filed for a fruit-tree or forest
14reservation tax exemption before the application is accepted.
15b. Use of aerial photographs may be substituted for on-site
16inspection when appropriate.
17c. The application can only be accepted if it meets the
18criteria established by the natural resource commission to be a
19fruit-tree or forest reservation.
203. Once the application has been accepted, the area shall
21continue to receive the tax exemption during each year in which
22the area is maintained as a fruit-tree or forest reservation
23without the owner having to refile.
244. If the property is sold or transferred, the seller or
25transferor shall notify the buyer or transferee that all, or
26part of, the property is in fruit-tree or forest reservation
27and subject to the recapture tax provisions of this section
28subsection 5. If the seller or transferor has actual knowledge
29that the property is in fruit-tree or forest reservation and
30fails to notify the buyer or transferee that the property is in
31fruit-tree or forest reservation and subject to the recapture
32tax provisions of subsection 5, the buyer or transferee
33shall not be liable for any recapture tax entered against the
34property during the applicable period specified in subsection
355, paragraph “a”, a lien shall not be entered against the
-1-1property for the recapture tax, and the seller or transferor
2shall be liable for any such recapture tax.
35. a. The tax exemption shall continue to be granted
4for the remainder of the eight-year period for fruit-tree
5reservation and for the following years for forest reservation
6or until the property no longer qualifies as a fruit-tree or
7forest reservation.
8b. The area may be inspected each year by the county
9conservation board or the assessor to determine if the area is
10maintained as a fruit-tree or forest reservation.
116. a. If the area is not maintained or is used for economic
12gain other than as a fruit-tree reservation during any year of
13the eight-year exemption period and any year of the following
14five years or as a forest reservation during any year for which
15the exemption is granted and any of the five years following
16those exemption years, the assessor shall assess the property
17for taxation at its fair market value as of January 1 of that
18year and in addition the area shall be subject to a recapture
19tax. However, the area shall not be subject to the recapture
20tax if the owner, including one possessing under a contract of
21sale, and the owner’s direct antecedents or descendants have
22owned the area for more than ten years.
23b. The tax shall be computed by multiplying the consolidated
24levy for each of those years, if any, of the five preceding
25years for which the area received the exemption for fruit-tree
26or forest reservation times the assessed value of the area that
27would have been taxed but for the tax exemption.
28c. This The tax shall be entered against the property on
29the tax list for the current year and shall constitute a lien
30against the property in the same manner as a lien for property
31taxes. The tax when collected shall be apportioned in the
32manner provided for the apportionment of the property taxes for
33the applicable tax year.
34 Sec. 2. EFFECTIVE DATE. This Act, being deemed of immediate
35importance, takes effect upon enactment.
-2-1 Sec. 3. APPLICABILITY. This Act applies to sales and
2transfers occurring on or after the effective date of this Act.
3EXPLANATION
4The inclusion of this explanation does not constitute agreement with
5the explanation’s substance by the members of the general assembly.
6Under Code section 427C.12 governing fruit-tree reservation
7and forest reservation property tax exemptions, when a property
8is part of such a reservation and the property is sold or
9transferred, the seller is required to notify the buyer
10that the property is in a fruit-tree or forest reservation
11and subject to the recapture tax provisions of that Code
12section. The recapture tax is entered against the property if
13the property is not maintained or is used for economic gain
14other than as a fruit-tree reservation during any year of the
15eight-year exemption period and any year of the following five
16years or as a forest reservation during any year for which the
17exemption is granted and any of the five years following those
18exemption years.
19This bill provides that if the seller or transferor has
20actual knowledge that the property is in fruit-tree or forest
21reservation and fails to notify the buyer or transferee that
22the property is in fruit-tree or forest reservation and subject
23to the recapture tax provisions, the buyer or transferee is
24not liable for any recapture tax entered against the property,
25a lien shall not be entered against the property for the
26recapture tax, and the seller or transferor shall be liable for
27any such recapture tax.
28The bill takes effect upon enactment and applies to sales and
29transfers occurring on or after the effective date of the bill.
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2on certain property receiving a fruit-tree or forest
3reservation property tax exemption and including effective
4date and applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 427C.12, Code 2022, is amended to read
2as follows:
3427C.12 Application — inspection — continuation of
4exemption — recapture of tax.
51. It shall be the duty of the assessor to secure the facts
6relative to fruit-tree and forest reservations by taking the
7sworn statement, or affirmation, of the owner or owners making
8application under this chapter; and to make special report to
9the county auditor of all reservations made in the county under
10the provisions of this chapter.
112. a. The board of supervisors shall designate the county
12conservation board or the assessor who shall inspect the area
13for which an application is filed for a fruit-tree or forest
14reservation tax exemption before the application is accepted.
15b. Use of aerial photographs may be substituted for on-site
16inspection when appropriate.
17c. The application can only be accepted if it meets the
18criteria established by the natural resource commission to be a
19fruit-tree or forest reservation.
203. Once the application has been accepted, the area shall
21continue to receive the tax exemption during each year in which
22the area is maintained as a fruit-tree or forest reservation
23without the owner having to refile.
244. If the property is sold or transferred, the seller or
25transferor shall notify the buyer or transferee that all, or
26part of, the property is in fruit-tree or forest reservation
27and subject to the recapture tax provisions of this section
28subsection 5. If the seller or transferor has actual knowledge
29that the property is in fruit-tree or forest reservation and
30fails to notify the buyer or transferee that the property is in
31fruit-tree or forest reservation and subject to the recapture
32tax provisions of subsection 5, the buyer or transferee
33shall not be liable for any recapture tax entered against the
34property during the applicable period specified in subsection
355, paragraph “a”, a lien shall not be entered against the
-1-1property for the recapture tax, and the seller or transferor
2shall be liable for any such recapture tax.
35. a. The tax exemption shall continue to be granted
4for the remainder of the eight-year period for fruit-tree
5reservation and for the following years for forest reservation
6or until the property no longer qualifies as a fruit-tree or
7forest reservation.
8b. The area may be inspected each year by the county
9conservation board or the assessor to determine if the area is
10maintained as a fruit-tree or forest reservation.
116. a. If the area is not maintained or is used for economic
12gain other than as a fruit-tree reservation during any year of
13the eight-year exemption period and any year of the following
14five years or as a forest reservation during any year for which
15the exemption is granted and any of the five years following
16those exemption years, the assessor shall assess the property
17for taxation at its fair market value as of January 1 of that
18year and in addition the area shall be subject to a recapture
19tax. However, the area shall not be subject to the recapture
20tax if the owner, including one possessing under a contract of
21sale, and the owner’s direct antecedents or descendants have
22owned the area for more than ten years.
23b. The tax shall be computed by multiplying the consolidated
24levy for each of those years, if any, of the five preceding
25years for which the area received the exemption for fruit-tree
26or forest reservation times the assessed value of the area that
27would have been taxed but for the tax exemption.
28c. This The tax shall be entered against the property on
29the tax list for the current year and shall constitute a lien
30against the property in the same manner as a lien for property
31taxes. The tax when collected shall be apportioned in the
32manner provided for the apportionment of the property taxes for
33the applicable tax year.
34 Sec. 2. EFFECTIVE DATE. This Act, being deemed of immediate
35importance, takes effect upon enactment.
-2-1 Sec. 3. APPLICABILITY. This Act applies to sales and
2transfers occurring on or after the effective date of this Act.
3EXPLANATION
4The inclusion of this explanation does not constitute agreement with
5the explanation’s substance by the members of the general assembly.
6Under Code section 427C.12 governing fruit-tree reservation
7and forest reservation property tax exemptions, when a property
8is part of such a reservation and the property is sold or
9transferred, the seller is required to notify the buyer
10that the property is in a fruit-tree or forest reservation
11and subject to the recapture tax provisions of that Code
12section. The recapture tax is entered against the property if
13the property is not maintained or is used for economic gain
14other than as a fruit-tree reservation during any year of the
15eight-year exemption period and any year of the following five
16years or as a forest reservation during any year for which the
17exemption is granted and any of the five years following those
18exemption years.
19This bill provides that if the seller or transferor has
20actual knowledge that the property is in fruit-tree or forest
21reservation and fails to notify the buyer or transferee that
22the property is in fruit-tree or forest reservation and subject
23to the recapture tax provisions, the buyer or transferee is
24not liable for any recapture tax entered against the property,
25a lien shall not be entered against the property for the
26recapture tax, and the seller or transferor shall be liable for
27any such recapture tax.
28The bill takes effect upon enactment and applies to sales and
29transfers occurring on or after the effective date of the bill.
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