H.F. 2672 Section 1. Section 427C.1, Code 2024, is amended to read as 1 follows: 2 427C.1 Tax exemption. 3 Any Subject to the provisions of section 427C.14, any person 4 who establishes a forest or fruit-tree reservation as provided 5 in this chapter shall be entitled to the tax exemption provided 6 by law. 7 Sec. 2. Section 427C.2, Code 2024, is amended to read as 8 follows: 9 427C.2 Reservations. 10 On any tract of land in the state of Iowa, the owner or 11 owners may select a permanent , subject to section 427C.14, 12 forest reservation or reservations, each not less than two 13 five acres in continuous area, or a fruit-tree reservation or 14 reservations, not less than one nor more than ten acres in 15 total area, or both, and upon compliance with the provisions 16 of this chapter , such owner or owners shall be entitled to the 17 benefits provided by law. 18 Sec. 3. Section 427C.6, Code 2024, is amended to read as 19 follows: 20 427C.6 Groves. 21 The trees of a forest reservation shall be in groves not 22 less than four rods wide except when the trees are growing or 23 are planted in or along a gully or ditch to control erosion in 24 which case any width will qualify provided the area meets the 25 size requirement of two five acres. 26 Sec. 4. Section 427C.7, Code 2024, is amended to read as 27 follows: 28 427C.7 Fruit-tree reservation —— duration of exemption. 29 A fruit-tree reservation shall contain on each acre, 30 at least forty apple trees, or seventy other fruit trees, 31 growing under proper care and annually pruned and sprayed. A 32 reservation may be claimed as a fruit-tree reservation, under 33 this chapter , for a period of eight years , subject to section 34 427C.14, after planting provided application is made or on file 35 -1- LSB 5595HV (2) 90 dg/jh 1/ 5

H.F. 2672 on or before February 1 of the exemption year. 1 Sec. 5. Section 427C.12, Code 2024, is amended to read as 2 follows: 3 427C.12 Application —— inspection —— continuation of 4 exemption —— recapture of tax. 5 1. It shall be the duty of the assessor to secure the facts 6 relative to fruit-tree and forest reservations by taking the 7 sworn statement, or affirmation, of the owner or owners making 8 application under this chapter ; and to make special report to 9 the county auditor of all reservations made in the county under 10 the provisions of this chapter . 11 2. a. The board of supervisors shall designate the county 12 conservation board or the assessor who shall inspect the area 13 for which an application is filed for a fruit-tree or forest 14 reservation tax exemption before the application is accepted. 15 b. Use of aerial photographs may be substituted for on-site 16 inspection when appropriate. 17 c. The application can only be accepted if it meets the 18 criteria established by the natural resource commission to be a 19 fruit-tree or forest reservation. 20 3. Once the application has been accepted, and subject to 21 section 427C.14, the area shall continue to receive the tax 22 exemption during each year in which the area is maintained as a 23 fruit-tree or forest reservation without the owner having to 24 refile. 25 4. If the property is sold or transferred, the seller shall 26 notify the buyer that all, or part of, the property is in 27 fruit-tree or forest reservation and subject to the recapture 28 tax provisions of this section . 29 5. The tax exemption shall continue to be granted for the 30 remainder of the eight-year period for fruit-tree reservation 31 and for the following years for forest reservation or until 32 the property no longer qualifies as a fruit-tree or forest 33 reservation. 34 6. a. The area may be inspected each year by the county 35 -2- LSB 5595HV (2) 90 dg/jh 2/ 5

H.F. 2672 conservation board or the assessor to determine if the area is 1 maintained as a fruit-tree or forest reservation. 2 b. If the area is not maintained , no longer meets the 3 requirements applicable to the type of exemption granted 4 for the area, or is used for economic gain other than as a 5 fruit-tree reservation during any year of the eight-year 6 exemption period and any year of the following five years or as 7 a forest reservation during any year for which the exemption 8 is granted and any of the five years following those exemption 9 years, the assessor shall assess the property for taxation 10 at its fair market value as of January 1 of that year and 11 in addition the area shall be subject to a recapture tax. 12 However, the 13 c. The area shall not be subject to the recapture tax if the 14 owner, including one possessing under a contract of sale, and 15 the owner’s direct antecedents or descendants have owned the 16 area for more than ten years. 17 7. a. The tax due after a county conservation board or 18 assessor determines, pursuant to subsection 6, paragraph “b” , 19 that an area is no longer entitled to an exemption shall be 20 computed by multiplying the consolidated levy for each of those 21 years, if any, of the five preceding years for which the area 22 received the exemption for fruit-tree or forest reservation 23 times the assessed value of the area that would have been taxed 24 but for the tax exemption. 25 b. This tax shall be entered against the property on the tax 26 list for the current year and shall constitute a lien against 27 the property in the same manner as a lien for property taxes. 28 c. The tax when collected shall be apportioned in the manner 29 provided for the apportionment of the property taxes for the 30 applicable tax year. 31 Sec. 6. Section 427C.13, Code 2024, is amended to read as 32 follows: 33 427C.13 Report to department of natural resources. 34 The county assessor shall keep a record of all forest and 35 -3- LSB 5595HV (2) 90 dg/jh 3/ 5

H.F. 2672 fruit-tree reservations in the county and submit a report of 1 the reservations to the department of natural resources not 2 later than June 15 of each year. This section shall not apply 3 to counties which have an ordinance passed pursuant to section 4 427C.14, subsection 1, in effect. 5 Sec. 7. NEW SECTION . 427C.14 Availability of exemptions 6 within county. 7 1. A county board of supervisors may discontinue exemptions 8 pursuant to this chapter in the county by ordinance. 9 2. Areas within a county designated as a forest or 10 fruit-tree reservation pursuant to this chapter prior to the 11 passage of such an ordinance shall no longer be designated as a 12 forest or fruit-tree reservation on January 1 of the assessment 13 year after passage of the ordinance. 14 3. An application for an exemption pursuant to this chapter 15 that has not been processed by January 1 of the assessment 16 year after the passage of an ordinance pursuant to subsection 17 1 shall be disallowed. 18 4. a. If a county previously passed an ordinance pursuant 19 to subsection 1, the board may reinstate exemptions pursuant 20 to this chapter by ordinance. 21 b. An owner of an area previously designated as a forest or 22 fruit-tree reservation shall be required to reapply in order to 23 receive a forest or fruit-tree reservation exemption upon the 24 passage of an ordinance pursuant to this subsection. 25 EXPLANATION 26 The inclusion of this explanation does not constitute agreement with 27 the explanation’s substance by the members of the general assembly. 28 Current Code chapter 427C authorizes a property tax 29 exemption for certain forest reservations and fruit-tree 30 reservations. This bill sets a new minimum required acreage 31 for forest reservations and authorizes county boards of 32 supervisors (boards) to determine whether the boards’ 33 respective county permits forest and fruit-tree reservation tax 34 exemptions. 35 -4- LSB 5595HV (2) 90 dg/jh 4/ 5

H.F. 2672 Under current law, a forest reservation must be not less than 1 two acres in continuous area to receive an exemption. The bill 2 increases this minimum size to five acres. 3 The bill allows a board to discontinue any exemptions for 4 establishing a forest or fruit-tree reservation by ordinance. 5 The bill removes all designations of areas within a county as a 6 forest or fruit-tree reservation on January 1 of the assessment 7 year following the passage of an ordinance to discontinue the 8 exemptions in the county. Any applications which have not 9 yet been processed for a forest or fruit-tree reservation 10 exemption upon January 1 of the assessment year following 11 the passage of an ordinance to discontinue the exemptions 12 are disallowed. A board may reinstate forest and fruit-tree 13 reservation exemptions by ordinance. An owner of an area 14 previously designated as a forest or fruit-tree reservation 15 must reapply in order to receive the exemption upon the passage 16 of an ordinance reinstating the exemptions. 17 The bill allows county assessors to assess land designated 18 as a forest or fruit-tree reservation at the land’s fair market 19 value as of January 1 of any year in which the land no longer 20 meets the requirements applicable to the type of exemption 21 granted to the land. 22 The bill makes conforming changes. 23 -5- LSB 5595HV (2) 90 dg/jh 5/ 5