HOUSE BILL NO. 428
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H0428...............................................by REVENUE AND TAXATION
PROPERTY TAX - AGRICULTURAL LAND - Repeals and amends existing law to
repeal the law relating to a partial exemption for land in a rural homesite
development plat; and to provide that the act of platting land actively
devoted to agriculture does not, in and of itself, cause the land to lose
its status as land being actively devoted to agriculture if the land
otherwise qualifies for the exemption.
01/19 House intro - 1st rdg - to printing
01/20 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 428
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO LAND ACTIVELY DEVOTED TO AGRICULTURE; REPEALING SECTION 63-602FF,
3 IDAHO CODE, RELATING TO PARTIAL EXEMPTION FOR PARCELS OF LAND IN A RURAL
4 HOME SITE DEVELOPMENT PLAT; AMENDING SECTION 63-604, IDAHO CODE, TO DEFINE
5 "PLATTING" AND TO PROVIDE THAT THE ACT OF PLATTING LAND ACTIVELY DEVOTED
6 TO AGRICULTURE DOES NOT, IN AND OF ITSELF, CAUSE THE LAND TO LOSE ITS STA-
7 TUS AS LAND BEING ACTIVELY DEVOTED TO AGRICULTURE IF THE LAND OTHERWISE
8 QUALIFIES FOR THE EXEMPTION; DECLARING AN EMERGENCY AND PROVIDING RETROAC-
9 TIVE APPLICATION.
10 Be It Enacted by the Legislature of the State of Idaho:
11 SECTION 1. That Section 63-602FF, Idaho Code, be, and the same is hereby
13 SECTION 2. That Section 63-604, Idaho Code, be, and the same is hereby
14 amended to read as follows:
15 63-604. LAND ACTIVELY DEVOTED TO AGRICULTURE DEFINED. (1) For property
16 tax purposes, land which is actively devoted to agriculture shall be eligible
17 for appraisal, assessment and taxation as agricultural property each year it
18 meets one (1) or more of the following qualifications:
19 (a) The total area of such land, including the homesite, is more than
20 five (5) contiguous acres, and is actively devoted to agriculture which
22 (i) It is used to produce field crops including, but not limited
23 to, grains, feed crops, fruits and vegetables; or
24 (ii) It is used to produce nursery stock as defined in section
25 22-2302(11), Idaho Code; or
26 (iii) It is used by the owner for the grazing of livestock to be sold
27 as part of a for-profit enterprise, or is leased by the owner to a
28 bona fide lessee for grazing purposes; or
29 (iv) It is in a cropland retirement or rotation program.
30 (b) The area of such land is five (5) contiguous acres or less and such
31 land has been actively devoted to agriculture within the meaning of sub-
32 section (1)(a) of this section during the last three (3) growing seasons;
34 (i) It agriculturally produces for sale or home consumption the
35 equivalent of fifteen percent (15%) or more of the owner's or
36 lessee's annual gross income; or
37 (ii) It agriculturally produced gross revenues in the immediately
38 preceding year of one thousand dollars ($1,000) or more. When the
39 area of land is five (5) contiguous acres or less, such land shall be
40 presumed to be nonagricultural land until it is established that the
41 requirements of this subsection have been met.
42 (2) Land shall not be classified or valued as agricultural land which is
1 part of a platted subdivision with stated restrictions prohibiting its use for
2 agricultural purposes, whether within or without a city.
3 (3) Land utilized for the grazing of a horse or other animals kept pri-
4 marily for personal use or pleasure rather than as part of a bona fide for-
5 profit enterprise shall not be considered to be land actively devoted to agri-
7 (4) Land actively devoted to agriculture, having previously qualified for
8 exemption under this section in the preceding year, or which would have quali-
9 fied under this section during the current year, shall not lose such qualifi-
10 cation due to the owner's or lessee's absence in the current year by reason of
11 active military service in a designated combat zone, as defined in section
12 112 of the Internal Revenue Code. If an owner fails to timely apply for exemp-
13 tion as required in this section solely by reason of active duty in a desig-
14 nated combat zone, as defined in section 112 of the Internal Revenue Code, and
15 the land would otherwise qualify for exemption under this section, then the
16 board of county commissioners of the county in which the land actively devoted
17 to agriculture is located shall refund property taxes, if previously paid, in
18 an amount equal to the exemption which would otherwise have applied.
19 (5) As used in this section:
20 (a) "Contiguous" means being in actual contact or touching along a bound-
21 ary or at a point, except no area of land shall be considered not contigu-
22 ous solely by reason of a roadway or other right-of-way; and
23 (b) "For-profit" means the enterprise will, over some period of time,
24 make or attempt to make a return of income exceeding expenses.
25 (c) "Platting" means the filing of the drawing, map or plan of a subdivi-
26 sion or a replatting of such, including certification, descriptions and
27 approvals with the proper local government official.
28 (6) For purposes of this section, the act of platting land actively
29 devoted to agriculture does not, in and of itself, cause the land to lose its
30 status as land being actively devoted to agriculture if the land otherwise
31 qualifies for the exemption under this section.
32 SECTION 3. An emergency existing therefor, which emergency is hereby
33 declared to exist, this act shall be in full force and effect on and after its
34 passage and approval, and retroactively to January 1, 2006.
STATEMENT OF PURPOSE
This legislation repeals the rural development plot agricultural
exemption. Originally passed by the 2002 legislative session,
the provision is not working as intended. Instead the provision
is providing a property tax loophole for selected property tax
payers who are not farmers thereby creating an unfair tax shift
to others who must fund a higher burden to fund services.
The bill defines "platting" and provides that the act of platting
land actively devoted to agriculture, does not, in and of itself
causes the land to lose it's agriculture status.
According to the Idaho Association of County Assessors, the
exemption has grown to over $11 billion in taxable values.
Repeal will restore equity to our property tax system.
Name: Representative Wendy Jaquet
STATEMENT OF PURPOSE/FISCAL NOTE H 428