2006 Legislation
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HOUSE BILL NO. 438 – Property tax, agric land, plat

HOUSE BILL NO. 438

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H0438...............................................by REVENUE AND TAXATION
PROPERTY TAX - AGRICULTURAL LAND - Amends existing law to provide that the
exemption for the speculative portion of the value of agricultural property
shall not change only because the property is included in a plat; to
provide that the exemption for land in a rural homesite development plat is
available only to property eligible for the exemption in 2005 and is lost
after the earlier of December 31, 2010, the beginning of construction of a
building, when the property is sold or transferred or when the property is
annexed into a city; to provide that an application is required only in the
case of property first eligible in 2005; to provide that the exemption is
not available for property platted on and after January 1, 2006; to define
"sold or transferred"; and to provide for reporting on the property tax
rolls the exempted value within rural home site development plats.
                                                                        
01/23    House intro - 1st rdg - to printing
01/24    Rpt prt - to Rev/Tax

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 438
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO PROPERTY TAXES; AMENDING SECTION 63-602K, IDAHO CODE,  TO  PROVIDE
  3        THAT  THE  EXEMPTION  FOR THE SPECULATIVE PORTION OF THE VALUE OF AGRICUL-
  4        TURAL PROPERTY SHALL NOT CHANGE ONLY BECAUSE THE PROPERTY IS INCLUDED IN A
  5        PLAT; AMENDING SECTION 63-602FF, IDAHO CODE, TO PROVIDE THAT THE EXEMPTION
  6        FOR LAND IN A RURAL HOME SITE DEVELOPMENT PLAT IS AVAILABLE ONLY TO  PROP-
  7        ERTY  ELIGIBLE  FOR THE EXEMPTION IN 2005 AND IS LOST AFTER THE EARLIER OF
  8        DECEMBER 31, 2010, OR THE BEGINNING OF CONSTRUCTION OF A BUILDING, OR WHEN
  9        THE PROPERTY IS SOLD OR TRANSFERRED OR WHEN THE PROPERTY IS ANNEXED INTO A
 10        CITY, TO PROVIDE THAT AN APPLICATION IS REQUIRED ONLY IN THE CASE OF PROP-
 11        ERTY FIRST ELIGIBLE IN 2005, TO PROVIDE THAT THE EXEMPTION IS  NOT  AVAIL-
 12        ABLE FOR PROPERTY PLATTED ON AND AFTER JANUARY 1, 2006 AND TO DEFINE "SOLD
 13        OR  TRANSFERRED";  AMENDING  SECTION  63-509,  IDAHO  CODE, TO PROVIDE FOR
 14        REPORTING ON THE PROPERTY TAX ROLLS THE EXEMPTED VALUE WITHIN  RURAL  HOME
 15        SITE  DEVELOPMENT  PLATS; DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE
 16        APPLICATION.
                                                                        
 17    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 18        SECTION 1.  That Section 63-602K, Idaho Code, be, and the same  is  hereby
 19    amended to read as follows:
                                                                        
 20        63-602K.  PROPERTY EXEMPT FROM TAXATION -- SPECULATIVE PORTION OF VALUE OF
 21    AGRICULTURAL LAND. (1) The speculative portion of the value of land devoted to
 22    agriculture is exempt from taxation.
 23        (2)  "Land  devoted  to  agriculture"  shall mean that property defined by
 24    section 63-604, Idaho Code.
 25        (3)  "Speculative portion" shall mean that portion of the value  of  agri-
 26    cultural  land  which  represents the excess over the actual use value of such
 27    land established by comparable sales data compared  to  value  established  by
 28    capitalization of economic rent or long-term average crop rental at a capital-
 29    ization rate which shall be the rate of interest charged by the Spokane office
 30    of the farm credit system averaged over the immediate past five (5) years plus
 31    a component for the local tax rate.
 32        (4)  The  state tax commission shall adopt rules implementing this section
 33    which shall provide the procedure by which it shall establish  economic  rent,
 34    average  crop  rental and capitalization rates and for the publication of crop
 35    prices and the discount rate to be used to determine the capitalization rate.
 36        (5)  Property otherwise qualified for the exemption in this section  shall
 37    not  be  disqualified only by reason of being included in a plat, as that term
 38    is defined in section 63-602FF, Idaho Code, if the  plat  is  not  subject  to
 39    restrictions prohibiting agricultural use, nor shall such platting cause prop-
 40    erty to become subject to the provisions of section 63-604(1)(b), Idaho Code.
                                                                        
 41        SECTION  2.  That Section 63-602FF, Idaho Code, be, and the same is hereby
 42    amended to read as follows:
                                                                        
                                           2
                                                                        
  1        63-602FF.  PARTIAL EXEMPTION FOR PARCELS OF LAND  IN  A  RURAL  HOME  SITE
  2    DEVELOPMENT  PLAT.  (1)  Each  parcel of land in a rural home site development
  3    plat previously eligible for the exemption pursuant to this  section  63-602K,
  4    Idaho  Code  as  in effect in 2005, shall continue to be eligible for the same
  5    exemption until the earlier of:
  6        (a)  December 31, 2010; or
  7        (b)  Ssuch time as improvements are a building is  being  built  upon  the
  8        parcel;.  Once  construction  of the improvements has begun, no acreage in
  9        the parcel shall  be  eligible  for  the  exemption  pursuant  to  section
 10        63-602K,  Idaho  Code,  unless the requirements of the exemption have been
 11        met or
 12        (c)  The title to the property is sold or transferred; or
 13        (d)  The property is annexed into a city.
 14        (2)  (a) In the case of property actually receiving the exemption in 2005,
 15        the exemption shall  be  reflected  on  the  valuation  assessment  notice
 16        required  by  section  63-308,  Idaho Code, without any requirement for an
 17        application.
 18        (b)  In the case of property platted in 2005, the owner  of  the  property
 19        shall  file an application with the county assessor on or before April 30,
 20        2006, establishing that the property qualifies for the exemption.
 21        (3)  No property platted on or after January 1, 2006, shall qualify for an
 22    exemption under this section.
 23        (4)  For purposes of this section, the following definitions shall apply:
 24        (a)  "Plat" means the drawing, map or plan of a subdivision or  a  replat-
 25        ting of such, including certifications, descriptions and approvals.
 26        (b)  "Rural  home  site development plat" means a subdivision plat for the
 27        development of property outside the boundaries of an incorporated  munici-
 28        pality within a county of less than one hundred thousand (100,000) popula-
 29        tion, recorded with the county recorder.
 30        (c)  "Sold  or  transferred" means a conveyance of title has occurred from
 31        the owner to another entity, except in the event of the first transfer  to
 32        a surviving spouse or child following the death of an owner.
                                                                        
 33        SECTION  3.  That  Section  63-509, Idaho Code, be, and the same is hereby
 34    amended to read as follows:
                                                                        
 35        63-509.  DELIVERY OF ROLLS TO COUNTY AUDITOR -- ABSTRACTS OF ROLLS. (1) On
 36    or before the second Monday of July the board of equalization must deliver the
 37    property rolls, with all changes, corrections  and  additions  and  exemptions
 38    from  taxation entered therein, to the county auditor. It shall be the duty of
 39    the county auditor to cause to be prepared the roll for delivery to the county
 40    tax collector on or before the first Monday of November. It shall be the  duty
 41    of  the county auditor to cause to be prepared a total of the amount and value
 42    of each category of property and prepare  an  abstract  of  all  the  property
 43    entered upon the roll in the manner and form required by the state tax commis-
 44    sion.  Such  forms must show, but need not be limited to, the market value for
 45    assessment purposes of all property by categories,  and  the  exemptions  from
 46    taxation  allowed  by categories. Any abstracts needed by and prepared for the
 47    state tax commission must be delivered by certified mail to the state tax com-
 48    mission by the fourth Monday of July. The value of exemptions  will  be  shown
 49    and  identified  for  exemptions granted pursuant to chapters 20 and 29, title
 50    50, Idaho Code, for the value in excess of the equalized assessment  valuation
 51    as  shown on the base assessment roll in any revenue allocation area, and sec-
 52    tions 63-602G, 63-602K, 63-602P, 63-602AA, 63-602X,  63-602BB,  and  63-602CC,
 53    and  63-602FF,  Idaho  Code,  as well as the net taxable value for each of the
                                                                        
                                           3
                                                                        
  1    categories. The abstracts shall be prepared and duly verified and must show  a
  2    correct  classification of all the property in accordance with the classifica-
  3    tion of such property upon the property  roll,  and  all  matters  and  things
  4    required to be shown upon the abstracts must be entered.
  5        (2)  The subsequent property roll shall be delivered to the county auditor
  6    as  soon  as  possible  after the first Monday in December. The county auditor
  7    shall deliver the subsequent property roll to the county tax collector without
  8    delay.
  9        (3)  The missed property roll shall be delivered to the county auditor  as
 10    soon  as possible, but no later than the first Monday in March of the succeed-
 11    ing year. The county auditor shall deliver the missed  property  roll  to  the
 12    county tax collector without delay.
 13        (4)  The  county  auditor  must cause to be prepared abstracts of the com-
 14    bined subsequent and missed property rolls as prescribed in subsection (1) and
 15    submit the abstracts by certified mail to  the  state  tax  commission  on  or
 16    before the first Monday in March of the succeeding year.
                                                                        
 17        SECTION  4.  An  emergency  existing  therefor,  which emergency is hereby
 18    declared to exist, this act shall be in full force and effect on and after its
 19    passage and approval, and retroactively to January 1, 2006.

Statement of Purpose / Fiscal Impact


                     STATEMENT OF PURPOSE
                          R.S. 15686

     This bill ends the rural home site development exemption
from property tax as of January 1, 2006, but extends the
exemption for properties eligible for the exemption in 2005.  For
properties protected by the extension, the exemption ends upon
the occurrence of the earlier of December 31, 2010, the beginning
of construction of a building, or the sale or transfer of the
property (except the first transfer to a surviving spouse or
child following the death of an owner). 

     The bill also provides that the exemption for the
speculative portion of the value of agricultural property shall
not change only because the property is included in a plat and
provides for reporting on the property tax rolls the exempted
value within rural subdivision plats. 

     The bill is effective for taxes for 2006 and after.  



                           FISCAL NOTE

          
     No effect to the state general fund.  
     




Contact
Name:    Brian Whitlock
Agency:  Governor's Office
Phone:   334-2100

STATEMENT OF PURPOSE/FISCAL NOTE                     H 438