Summary of SF 219 (renumbered SF 633): Forest and Fruit-Tree Reservations – Fee Structure
Overview
- Purpose: Replace Iowa’s property tax exemption for forest and fruit-tree reservations with an annual per-acre fee system, effective January 1, 2026. Fees are paid to the county treasurer where the reservation is located and deposited into the county general fund.
- Status and timeline: Introduced February 5, 2025; committee report approving the bill and renumbering to SF 633 issued April 21, 2025. Subcommittee actions occurred in February–March 2025; a fiscal note was released April 9, 2025.
- Sponsor: Klimesh (primary).
What the bill would do
- Establish a three-tier per-acre annual fee regime for forest and fruit-tree reservations that are currently exempt from property tax:
- $2 per acre per year for reservations located in a county where the owner maintains a homestead.
- $3 per acre per year for reservations located in a county contiguous to the homestead county.
- Other reservations (including those within city limits) would pay a per-acre rate determined by a formula based on the county with the most exempt acres.
- Fee calculation for the remaining category: The per-acre rate is calculated using a Department of Management formula that factors the county’s average agricultural property tax rate and its corn suitability rating (the rate is described as multiplying the average property tax per acre by 13 and dividing by the county’s average corn suitability rating).
- Rate-setting and timing: The Department of Management must determine and communicate the calculated rate by July 1 of each year.
- Payment timing: All annual fees are due by September 1 to the county treasurer where the reservation is located, with funds deposited into the county general fund.
Key provisions and requirements
- Effective date: January 1, 2026.
- Revenue use: Collected fees go to the county general fund, not to property tax exemptions.
- Administration: Department of Management is responsible for rate determinations and communications. Additional input or coordination may be expected from the Department of Natural Resources and Department of Revenue as part of the bill’s broader fiscal and regulatory context (per fiscal note).
Background and context
- Current law: Forest reservations are fully exempt from property tax; fruit-tree reservations are exempt for eight years after planting. The 1906 framework and subsequent amendments shaped the current exemption landscape.
- Rationale for change: The fiscal note indicates the exemption is valued at roughly $15.39 per acre statewide on average, with substantial variation; the bill aims to shift some of that tax relief into local fee revenue and to formalize a revenue mechanism.
Fiscal note at a glance
- Fiscal impact: Unknown in total because the distribution of acres across the three fee classes is not determinable beforehand.
- Potential local revenue: If all eligible reservations paid the minimum $2/acre, an estimated $1.7 million could accrue to local governments.
- Administrative costs: May be minimal for the Department of Management to compute and distribute the annual rate.
Who is affected
- Property owners with forest or fruit-tree reservations currently receiving property tax exemptions.
- County treasurers, counties (through the General Fund), and state agencies involved in rate-setting (Department of Management) and oversight.
Key dates and actions
- 02/05/2025: Introduced (S.F. 219), referred to Ways and Means.
- 02/11/2025 and 02/25/2025: Subcommittee hearings.
- 03/25/2025: Subcommittee recommends amendment and passage.
- 04/09/2025: Fiscal note published.
- 04/21/2025: Committee report approving bill; renumbered SF 633.
Notes
- This summary reflects the bill text and fiscal note as of the provided materials.
