Senate File 17 - Introduced SENATE FILE 17 BY SINCLAIR A BILL FOR An Act modifying provisions governing the taxation of forest 1 reservations and fruit-tree reservations, and including 2 effective date and retroactive applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1088XS (3) 91 jm/md
S.F. 17 Section 1. Section 427C.3, Code 2025, is amended to read as 1 follows: 2 427C.3 Forest reservation. 3 A forest reservation shall contain not less than two hundred 4 growing forest trees on each acre. If the area selected is a 5 forest containing the required number of growing forest trees, 6 it shall be accepted as a forest reservation under this chapter 7 provided a qualifying application under section 427C.12 is made 8 or on file on or before February 1 of the exemption year. If 9 any buildings are standing on an area selected as a forest 10 reservation under this section or a fruit-tree reservation 11 under section 427C.7 , one acre of that area shall be excluded 12 from the tax exemption. However, the exclusion of that acre 13 shall not affect the areas meeting the acreage requirement of 14 section 427C.2 . 15 Sec. 2. Section 427C.12, Code 2025, is amended to read as 16 follows: 17 427C.12 Application inspection continuation of 18 exemption recapture of tax. 19 1. It shall be the duty of the assessor to secure the facts 20 relative to fruit-tree and forest reservations by taking the 21 sworn statement, or affirmation, of the owner or owners making 22 an application under this chapter ; and to make special report 23 to the county auditor of all reservations made in the county 24 under the provisions of this chapter . 25 2. a. The board of supervisors shall designate the county 26 conservation board or the assessor who shall inspect the area 27 for which an application is filed for a fruit-tree or forest 28 reservation tax exemption before the application is accepted. 29 Use of aerial photographs may be substituted for on-site 30 inspection when appropriate. 31 b. The application can shall only be accepted if it meets 32 all of the criteria following conditions: 33 (1) Any criteria established by the natural resource 34 commission to be a fruit-tree or forest reservation. 35 -1- LSB 1088XS (3) 91 jm/md 1/ 3
S.F. 17 (2) The owner or owners are receiving a homestead tax credit 1 under chapter 425 at the time of the application. 2 c. Once the application has been accepted, the area shall 3 continue to receive the tax exemption during each year in which 4 the area is maintained as a fruit-tree or forest reservation 5 without the owner having to refile , if the fruit-tree or forest 6 reservation continues to meet all of the conditions under 7 paragraph b , including that the owner or owners continue to 8 receive a homestead credit for each applicable assessment year . 9 d. If the property is sold or transferred, the seller 10 shall notify the buyer that all, or part of, the property 11 is in fruit-tree or forest reservation and subject to the 12 recapture tax provisions of this section . The If the new owner 13 or owners satisfy the homestead credit requirement, the tax 14 exemption shall continue to be granted for the remainder of 15 the eight-year period for fruit-tree reservation and for the 16 following years for forest reservation or until the property no 17 longer qualifies as a fruit-tree or forest reservation. 18 e. The area may be inspected each year by the county 19 conservation board or the assessor to determine if the area is 20 maintained as a fruit-tree or forest reservation. If the owner 21 or owners fail to satisfy the homestead credit requirement 22 or the area is not maintained or is used for economic gain 23 other than as a fruit-tree reservation during any year of the 24 eight-year exemption period and any year of the following five 25 years or as a forest reservation during any year for which 26 the exemption is granted and any of the five years following 27 those exemption years, the assessor shall assess the property 28 for taxation at its fair market value as of January 1 of that 29 year and in addition the area shall be subject to a recapture 30 tax. However, the area shall not be subject to the recapture 31 tax if the owner, including one possessing under a contract 32 of sale, and the owners direct antecedents or descendants 33 have owned the area for more than ten years. The tax shall be 34 computed by multiplying the consolidated levy for each of those 35 -2- LSB 1088XS (3) 91 jm/md 2/ 3
S.F. 17 years, if any, of the five preceding years for which the area 1 received the exemption for fruit-tree or forest reservation 2 times the assessed value of the area that would have been taxed 3 but for the tax exemption. This tax shall be entered against 4 the property on the tax list for the current year and shall 5 constitute a lien against the property in the same manner as 6 a lien for property taxes. The tax when collected shall be 7 apportioned in the manner provided for the apportionment of the 8 property taxes for the applicable tax year. 9 Sec. 3. EFFECTIVE DATE. This Act, being deemed of immediate 10 importance, takes effect upon enactment. 11 Sec. 4. RETROACTIVE APPLICABILITY. This Act applies 12 retroactively to existing and new exemptions under chapter 427C 13 for assessment years beginning on or after January 1, 2025. 14 EXPLANATION 15 The inclusion of this explanation does not constitute agreement with 16 the explanations substance by the members of the general assembly. 17 This bill modifies provisions governing the taxation of 18 forest reservations and fruit-tree reservations. 19 Current Code chapter 427C authorizes a property tax 20 exemption for certain forest reservations and fruit-tree 21 reservations, if the owner meets certain criteria established 22 by the natural resource commission to be a forest or fruit-tree 23 reservation. 24 In addition to meeting the criteria established by the 25 natural resource commission to be a forest or fruit-tree 26 reservation, the bill requires the owner to also be receiving 27 the homestead tax credit under Code chapter 425 in each 28 assessment year the forest or fruit-tree tax exemption is 29 received by the owner. 30 The bill takes effect upon enactment and applies 31 retroactively to existing and new exemptions under Code chapter 32 427C for assessment years beginning on or after January 1, 33 2025. 34 -3- LSB 1088XS (3) 91 jm/md 3/ 3