An Iowa Senate committee approved a proposal Thursday detailing specific management actions the owners of forest reserves would have to take to keep their property tax exemptions.
The Ways and Means Committee voted to amend Senate Study Bill 1253, which makes extensive tax changes including a proposal to tighten the property tax exemption for forest reserves.
The committee approved an amendment that defines some of the forestry management practices such as control of wildlife and invasive species that a property owner would need to demonstrate starting Jan. 1, 2022, in order to qualify for or keep the tax exemption. It would be up to the Department of Natural Resources to oversee a new application and renewal process for the tax breaks.
“If the landowner doesn’t want to comply with the act of management, don’t take the tax credit. It’s that simple,” Sen. Amy Sinclair said. “What we’re trying to do here is, if you’ll pardon my pun, weed out the bad actors in a system that is otherwise is working well.”
Sinclair, R-Allerton, said she proposed the change because of problems with forest reserves, including wildlife overrunning the area and invasive species that affect neighboring properties. “That’s important to note because if you’re expecting your neighbors to pick up the additional cost of the essential services, you ought not be harming their property values in the process,” she said.
She noted that owners of tax-exempt properties are not fully contributing to “essential services” in communities such as fire and police protection, hospitals, schools and roads.
The amendment also reinforces a provision in current law that prevents the owner of tax-exempted forest from being paid to allow hunting on the property, Sinclair said.
Rep. Joe Bolkcom, D-Iowa City, said the provision “undermines all the people that are managing forests and woodlands in Iowa, now (they) are going to come under this new regulatory red tape regime that’s going to have them jumping through all these hoops after we’ve lost a fourth of Iowa’s timber to the most expensive thunderstorm in the country’s history last August.”
He characterized the issue as a parochial fight in southern Iowa over locals losing hunting privileges on acreages purchased by Missouri residents.
The fight over forest tax breaks is just one of numerous controversial elements of the bill, which replaces mental health property taxes with state aid, eliminates property-tax replacement money to cities and counties and accelerates state income-tax cuts, among other provisions. Ways and Means Chairman Dan Dawson, R-Council Bluffs, said he expects more changes when the bill reaches the Senate floor.