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H0732...............................................by REVENUE AND TAXATION PROPERTY - TAX DEEDS - Amends existing law to provide for appointment of proceeds from the sale of property acquired by tax deed to include a remittance to the record owner or owners or any party in interest upon whom a notice of a sale was served in compliance with law of any amounts remaining after deduction of the delinquency, late charges, accrued interest, costs, fees and the costs of transacting the sale; to provide a fee to the county if the record owner or owners make no reasonable attempt to satisfy the delinquency; to provide for distribution of funds if no claim is received within two years after the date of sale of the property; and to revise the definition of "party in interest." 02/24 House intro - 1st rdg - to printing 02/27 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature Second Regular Session - 2006IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 732 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO SALE OF PROPERTY ACQUIRED BY TAX DEED AND PROPERTY TAX DEFINI- 3 TIONS; AMENDING SECTION 31-808, IDAHO CODE, TO PROVIDE FOR APPORTIONMENT 4 OF PROCEEDS FROM THE SALE OF PROPERTY ACQUIRED BY TAX DEED TO INCLUDE A 5 REMITTANCE TO THE RECORD OWNER OR OWNERS OR ANY PARTY IN INTEREST UPON 6 WHOM A NOTICE OF A SALE WAS SERVED IN COMPLIANCE WITH LAW OF ANY AMOUNTS 7 REMAINING AFTER DEDUCTION OF THE DELINQUENCY, LATE CHARGES, ACCRUED INTER- 8 EST, COSTS, FEES AND THE COSTS OF TRANSACTING THE SALE, TO PROVIDE A FEE 9 TO THE COUNTY IF THE RECORD OWNER OR OWNERS HAD MADE NO REASONABLE ATTEMPT 10 TO SATISFY THE DELINQUENCY AND TO PROVIDE FOR DISTRIBUTION OF FUNDS IF NO 11 CLAIM IS RECEIVED WITHIN TWO YEARS AFTER THE DATE OF SALE OF THE PROPERTY; 12 AND AMENDING SECTION 63-201, IDAHO CODE, TO REVISE THE DEFINITION OF 13 "PARTY IN INTEREST." 14 Be It Enacted by the Legislature of the State of Idaho: 15 SECTION 1. That Section 31-808, Idaho Code, be, and the same is hereby 16 amended to read as follows: 17 31-808. SALE OF COUNTY PROPERTY -- GENERAL PROCEDURE -- SALE OF PROPERTY 18 ACQUIRED THROUGH TAX DEED -- PROCEDURE AFTER ATTEMPTED AUCTION -- EXCHANGE OF 19 COUNTY PROPERTY -- SALE OF CERTAIN ODD-LOT PROPERTY -- SALE, EXCHANGE OR DONA- 20 TION OF PROPERTY TO OTHER UNITS OF GOVERNMENT. (1) A board of county commis- 21 sioners shall have the power and authority to sell or offer for sale at public 22 auction any real or personal property belonging to the county not necessary 23 for its use. However, personal property not exceeding two hundred fifty dol- 24 lars ($250) in value may be sold at private sale without notice or public auc- 25 tion. Prior to offering the property for sale, the board of county commission- 26 ers shall advertise notice of the auction in a newspaper, as defined in sec- 27 tion 60-106, Idaho Code, either published in the county or having a general 28 circulation in the county, not less than ten (10) calendar days prior to the 29 auction. If the property to be sold is real property, the notice to be pub- 30 lished shall contain the legal description as well as the street address of 31 the property. If the property is outside the corporate limits of a city and 32 does not have a street address, then the description shall also contain the 33 distance and direction of the location of the real property from the closest 34 city. If the property to be sold is acquired by tax deed, the notice required 35 to be published shall include, next to the description of the property, the 36 name of the taxpayer as it appears in the delinquent tax certificate upon 37 which the tax deed was issued. The property shall be sold to the highest bid- 38 der. However, the board of county commissioners may reserve the right to 39 reject any and all bids and shall have discretionary authority to reject or 40 accept any bid which may be made for an amount less than the total amount of 41 all delinquent taxes, late charges, costs and interest which may have accrued 42 against any property so offered for sale, including the amount specified in 43 the tax deed to the county. 2 1 (2) Proceeds from the sale of county property not acquired by tax deed 2 shall be paid into the county treasury for the general use of the county. If 3 the property to be sold has been acquired by tax deed, pursuant to the provi- 4 sions of chapter 10, title 63, Idaho Code, the proceeds from the sale, after 5 reimbursement to the county for the cost of advertising and sale, shall be 6 apportionedto the taxing districts in which the property is situated accord-7ing to the levy applied to the year of delinquency upon which the tax deed was8issued to the countyas provided in this subsection. 9 The amount paid for the property which remains after deduction of any 10 delinquency, late charges, accrued interest, costs, fees and other costs of 11 transacting the sale, including payment of any perfected liens, shall be 12 remitted to the record owner or owners or any party in interest upon whom a 13 notice of pending tax deed was served in compliance with section 63-1005, 14 Idaho Code. The portion retained by the county shall be paid into the county 15 treasury by the tax collector, upon the certificate of the county auditor. The 16 portion retained by the county which represents the cost of the transaction 17 shall be calculated using the average hourly operating cost of each department 18 affected. The portion of receipts representing the delinquency, late charges 19 and accrued interest shall be apportioned among the several state, county and 20 taxing district accounts in the same manner as provided by law for the appor- 21 tionment of property taxes. If the record owner has made no reasonable attempt 22 to satisfy the delinquency or to sell the property prior to the tax sale, the 23 county shall be entitled to charge a three percent (3%) penalty on the gross 24 sale amount which shall be paid to the county treasury. In the event no claim 25 for the excess is received by the county treasurer within two (2) years after 26 the date of sale, the county treasurer shall, at the expiration of the two (2) 27 year period, deposit such excess in the current expense fund of the county 28 which shall extinguish all claims by any owner to the excess funds. 29 (3) Any property sold may be carried on a recorded contract with the 30 county for a term not to exceed ten (10) years and at an interest rate not to 31 exceed the rate of interest specified in section 28-22-104(1), Idaho Code. The 32 board of county commissioners shall have the authority to cancel any contract 33 if the purchaser fails to comply with any of the terms of the contract and the 34 county shall retain all payments made on the contract. The title to all prop- 35 erty sold on contract shall be retained in the name of the county until full 36 payment has been made by the purchaser. However, the purchaser shall be 37 responsible for payment of all property taxes during the period of the con- 38 tract. 39 (4) Any sale of property by the county shall vest in the purchaser all of 40 the right, title and interest of the county in the property, including all 41 delinquent taxes which have become a lien on the property since the date of 42 issue of the tax deed, if any. 43 (5) In addition to the purchase price, a purchaser of county property, 44 including property acquired by tax deed, shall pay all fees required by law 45 for the transfer of property. No deed for any real estate purchased pursuant 46 to the provisions of this section shall be delivered to a purchaser until such 47 deed has been recorded in the county making the sale. 48 (6) Should the county be unable to sell at a public auction any real or 49 personal property belonging to the county, including property acquired by tax 50 deed, it may sell the property without further notice by public or private 51 sale upon such terms and conditions as the county deems necessary. Distribu- 52 tion of the proceeds of sale shall be as set forth in subsection (2) of this 53 section. 54 (7) The board of county commissioners may at its discretion, when in the 55 county's best interest, exchange and do all things necessary to exchange any 3 1 of the real property now or hereafter held and owned by the county for real 2 property of equal value, public or private, to consolidate county real prop- 3 erty or aid the county in the control and management or use of county real 4 property. 5 (8) The board of county commissioners may, by resolution, declare certain 6 parcels of real property as odd-lot property, all or portions of which are not 7 needed for public purposes and are excess to the needs of the county. For pur- 8 poses of this subsection, odd-lot property is defined as that property that 9 has an irregular shape or is a remnant and has value primarily to an adjoining 10 property owner. Odd-lot property may be sold to an adjacent property owner for 11 fair market value that is estimated by a land appraiser licensed to appraise 12 property in the state of Idaho. If, after thirty (30) days' written notice, an 13 adjoining property owner or owners do not desire to purchase the odd-lot prop- 14 erty, the board of county commissioners may sell the property to any other 15 interested party for not less than the appraised value. When a sale of odd-lot 16 property is agreed to, a public advertisement of the pending sale shall be 17 published in one (1) edition of the newspaper as defined in subsection (1) of 18 this section, and the public shall have fifteen (15) days to object to the 19 sale in writing. The board of county commissioners shall make the final deter- 20 mination regarding the sale of odd-lot property in an open meeting. 21 (9) In addition to any other powers granted by law, the board of county 22 commissioners may at their discretion, grant to or exchange with the federal 23 government, the state of Idaho, any political subdivision or taxing district 24 of the state of Idaho or any local historical society which is incorporated as 25 an Idaho nonprofit corporation which operates primarily in the county or main- 26 tains a museum in the county, with or without compensation, any real or per- 27 sonal property or any interest in such property owned by the county or 28 acquired by tax deed, after adoption of a resolution by the board of county 29 commissioners that the grant or exchange of property is in the public inter- 30 est. Notice of such grant or exchange shall be as provided in subsection (1) 31 of this section and the decision may be made at any regularly or specially 32 scheduled meeting of the board of county commissioners. The execution and 33 delivery by the county of the deed conveying an interest in the property shall 34 operate to discharge and cancel all levies, liens and taxes made or created 35 for the benefit of the state, county or any other political subdivision or 36 taxing district and to cancel all titles or claims of title including claims 37 of redemption to such real property asserted or existing at the time of such 38 conveyance. However, if the property conveyed is subject to a lien for one (1) 39 or more unsatisfied special assessments, the lien shall continue until all 40 special assessments have been paid in full. At no time shall a lien for a spe- 41 cial assessment be extinguished prior to such special assessment having been 42 paid in full. Any property conveyed to any local historical society by the 43 county shall revert to the county when the property is no longer utilized for 44 the purposes for which it was conveyed. 45 (10) When the county has title to mineral rights severed from the property 46 to which they attach, and the mineral rights have value of less than twenty- 47 five dollars ($25.00) per acre, the board of county commissioners may act to 48 return the mineral rights to the land from which they were severed in the fol- 49 lowing manner: the proposed action must appear on the agenda of a regular 50 meeting of the board of county commissioners; and the motion to make the 51 return must be adopted unanimously by the board voting in open meeting. 52 SECTION 2. That Section 63-201, Idaho Code, be, and the same is hereby 53 amended to read as follows: 4 1 63-201. DEFINITIONS. As used for property tax purposes in title 63, chap- 2 ters 1 through 23, Idaho Code, the terms defined in this section shall have 3 the following meanings, unless the context clearly indicates another meaning: 4 (1) "Appraisal" means an estimate of property value for property tax pur- 5 poses. 6 (a) For the purpose of estimated property value to place the value on any 7 assessment roll, the value estimation must be made by the assessor or a 8 certified property tax appraiser. 9 (b) For the purpose of estimating property value to present for an appeal 10 filed pursuant to sections 63-501A, 63-407 and 63-409, Idaho Code, the 11 value estimation may be made by the assessor, a certified property tax 12 appraiser, a licensed appraiser, or a certified appraiser or any party as 13 specified by law. 14 (2) "Bargeline" means those water transportation tugs, boats, barges, 15 lighters and other equipment and property used in conjunction with waterways 16 for bulk transportation of freight or ship assist. 17 (3) "Cogenerators" means facilities which produce electric energy, and 18 steam or forms of useful energy which are used for industrial, commercial, 19 heating or cooling purposes. 20 (4) "Collection costs" are amounts authorized by law to be added after 21 the date of delinquency and collected in the same manner as property tax. 22 (5) "Delinquency" means any property tax, special assessment, fee, col- 23 lection cost, or charge collected in the same manner as property tax, that has 24 not been paid in the manner and within the time limits provided by law. 25 (6) "Improvements" means all buildings, structures, fixtures and fences 26 erected upon or affixed to the land, and all fruit, nut-bearing and ornamental 27 trees or vines not of natural growth, growing upon the land, except nursery 28 stock. 29 (7) "Late charge" means a charge of two percent (2%) of the delinquency. 30 (8) "Lawful money of the United States" means currency and coin of the 31 United States at par value and checks and drafts which are payable in dollars 32 of the United States at par value, payable upon demand or presentment. 33 (9) "Manufactured home" means a structure defined as a manufactured home 34 in section 39-4105, Idaho Code. 35 (10) "Market value" means the amount of United States dollars or equiva- 36 lent for which, in all probability, a property would exchange hands between a 37 willing seller, under no compulsion to sell, and an informed, capable buyer, 38 with a reasonable time allowed to consummate the sale, substantiated by a rea- 39 sonable down or full cash payment. 40 (11) "Operating property" means all rights-of-way accompanied by title; 41 roadbeds; tracks; pipelines; bargelines; equipment and docks; terminals; 42 rolling stock; equipment; power stations; power sites; lands; reservoirs, gen- 43 erating plants, transmission lines, distribution lines and substations; and 44 all immovable or movable property operated in connection with any public util- 45 ity, railroad or private railcar fleet, wholly or partly within this state, 46 and necessary to the maintenance and operation of such road or line, or in 47 conducting its business, and shall include all title and interest in such 48 property, as owner, lessee or otherwise. The term does not include personal 49 property exempt from taxation pursuant to section 63-602L, Idaho Code. 50 (12) "Party in interest" means a person who holds a properly recorded 51 mortgage, deed of trust or security interest. No taxing district in the state 52 of Idaho shall be construed to be a party in interest or to have a security 53 interest in any property which is subject to the authority of the district to 54 levy a property tax. 55 (13) "Person" means any entity, individual, corporation, partnership, 5 1 firm, association, limited liability company, limited liability partnership or 2 other such entities as recognized by the state of Idaho. 3 (14) "Personal property" includes all goods, chattels, stocks and bonds, 4 equities in state lands, easements, reservations, leasehold real properties 5 and all other property which the law defines, or the courts may interpret, 6 declare and hold to be personal property under the letter, spirit, intent and 7 meaning of the law, for the purposes of property taxation. For the purposes of 8 payment and collection of property taxes pursuant to chapter 9, title 63, 9 Idaho Code, collection of delinquency pursuant to chapter 10, title 63, Idaho 10 Code, and seizure and sale of personal property for taxes pursuant to chapter 11 11, title 63, Idaho Code, personal property includes manufactured homes not 12 declared as real property pursuant to section 63-304, Idaho Code. 13 (15) "Private railcar fleet" means railroad cars or locomotives owned by, 14 leased to, occupied by or franchised to any person other than a railroad com- 15 pany operating a line of railroad in Idaho or any company classified as a 16 railroad by the interstate commerce commission and entitled to possess such 17 railroad cars and locomotives except those possessed solely for the purpose of 18 repair, rehabilitation or remanufacturing of such locomotives or railroad 19 cars. 20 (16) "Public utility" means electrical companies, pipeline companies, nat- 21 ural gas distribution companies, or power producers included within federal 22 law, bargelines, and water companies which are under the jurisdiction of the 23 Idaho public utilities commission. The term also includes telephone corpora- 24 tions, as that term is defined in section 62-603, Idaho Code, except as here- 25 inafter provided, whether or not such telephone corporation has been issued a 26 certificate of convenience and necessity by the Idaho public utilities commis- 27 sion. 28 This term does not include cogenerators, mobile telephone service or com- 29 panies, nor does it include pager service or companies, except when such ser- 30 vices are an integral part of services provided by a certificated utility com- 31 pany nor does the term "public utility" include companies or persons engaged 32 in the business of providing solely on a resale basis, any telephone or tele- 33 communication service which is purchased from a telephone corporation or com- 34 pany. 35 (17) "Railroad" means every kind of railway, whether its line of rails or 36 tracks be at, above or below the surface of the earth, and without regard to 37 the kind of power used in moving its rolling stock, and shall be considered to 38 include every kind of street railway, suburban railway or interurban railway 39 excepting facilities established solely for maintenance and rebuilding of 40 railroad cars or locomotives. 41 (18) "Real property" means land, and all standing timber thereon, includ- 42 ing standing timber owned separately from the ownership of the land upon 43 which the same may stand, except as modified in chapter 17, title 63, Idaho 44 Code, and all buildings, structures and improvements, or other fixtures of 45 whatsoever kind on land, including water ditches constructed for mining, manu- 46 facturing or irrigation purposes, water and gas mains, wagon and turnpike toll 47 roads, and toll bridges, and all rights and privileges thereto belonging, or 48 any way appertaining, all quarries and fossils in and under the land, and all 49 other property which the law defines, or the courts may interpret, declare and 50 hold to be real property under the letter, spirit, intent and meaning of the 51 law, for the purposes of property taxation. Manufactured homes constitute real 52 property when located on taxable land, and after a statement of intent to 53 declare as real property has been recorded, provided said statement has not 54 been revoked. Timber, forest, forest land, and forest products shall be 55 defined as provided in chapter 17, title 63, Idaho Code. 6 1 (19) "Record owner" means the person or persons in whose name or names the 2 property stands upon the records of the county recorder's office. Where the 3 record owners are husband and wife at the time of notice of pending issue of 4 tax deed, notice to one (1) shall be deemed and imputed as notice to the other 5 spouse. 6 (20) "Special assessment" means a charge imposed upon property for a spe- 7 cific purpose, collected and enforced in the same manner as property taxes. 8 (21) "System value" means the market value for assessment purposes of the 9 operating property when considered as a unit. 10 (22) "Tax code area" means a geographical area made up of one (1) or more 11 taxing districts with one (1) total levy within the geographic area, except as 12 otherwise provided by law. 13 (23) "Taxing district" means any entity or unit with the statutory author- 14 ity to levy a property tax. 15 (24) "Taxable value" means market value for assessment purposes, less 16 applicable exemptions or other statutory provisions. 17 (25) "Transient personal property" is personal property, specifically such 18 construction, logging or mining machinery and equipment which is kept, moved, 19 transported, shipped, hauled into or remaining for periods of not less than 20 thirty (30) days, in more than one (1) county in the state during the same 21 year. 22 (26) "Warrant of distraint" means a warrant ordering the seizure of per- 23 sonal property to enforce payment of property tax, special assessment, 24 expense, fee, collection cost or charge collected in the same manner as per- 25 sonal property tax.
STATEMENT OF PURPOSE RS 16066 The purpose of this legislation is to provide for the distribution of the proceeds of a tax deed sale that is equitable and in conformance with common sense and fair play. As the law currently stands, when a property is sold at tax deed, 100 percent of the proceeds are distributed among the various taxing districts associated with the property. None of the proceeds are distributed to the record owner and the record owner loses his entire equity. This bill would provide that after the various taxing districts are made whole for any delinquent taxes and fees, and after any perfected liens have been paid, that the record owner would receive any funds that remain. The legislation also provides for a 3 percent penalty on the gross sale amount to be paid to the county if the record owner had made no reasonable attempt to cure the delinquency or to sell the property prior to the tax deed sale. It also provides that the remaining proceeds shall be distributed to the county if no claim has been made for the funds within a 2 year period of the sale. This legislation will define "party in interest" such that a taxing district will be barred from redeeming and taking ownership of tax deed properties by paying only the delinquent taxes. FISCAL NOTE There is no fiscal impact to the state general fund. Contact Name: Representative Hart Phone: 322-1000 Representative Bayer Senator Sweet Senator Jorgenson STATEMENT OF PURPOSE/FISCAL NOTE H 732