1998 Legislation
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HOUSE BILL NO. 645 – Property tax exmpt, agric land

HOUSE BILL NO. 645

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Daily Data Tracking History



H0645...............................................by REVENUE AND TAXATION
PROPERTY TAX - AGRICULTURAL LAND - Amends existing law to further define
the phrase "speculative portion" as it is applied to the value of land
devoted to agriculture for purposes of property tax exemption and to
further define the phrase "land actively devoted to agriculture" as it is
applied to the value of land for purposes of property tax exemption.

02/09    House intro - 1st rdg - to printing
02/10    Rpt prt - to Rev/Tax
02/17    Rpt out - rec d/p - to 2nd rdg
02/18    Returned to Rev/Tax

Bill Text


H0645


                                                                        
 ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-fourth Legislature                 Second Regular Session - 1998
                                                                        

                             IN THE HOUSE OF REPRESENTATIVES

                                    HOUSE BILL NO. 645

                            BY REVENUE AND TAXATION COMMITTEE

 1                                        AN ACT
 2    RELATING TO PROPERTY TAXATION; AMENDING SECTION 63-602K, IDAHO CODE,  TO  FUR-
 3        THER DEFINE THE PHRASE "SPECULATIVE PORTION" AS IT IS APPLIED TO THE VALUE
 4        OF LAND DEVOTED TO AGRICULTURE FOR PURPOSES OF PROPERTY TAX EXEMPTION; AND
 5        AMENDING  SECTION  63-604,  IDAHO CODE, TO FURTHER DEFINE THE PHRASE "LAND
 6        ACTIVELY DEVOTED TO AGRICULTURE" AS IT IS APPLIED TO THE VALUE OF LAND FOR
 7        PURPOSES OF PROPERTY TAX EXEMPTION; DECLARING AN EMERGENCY  AND  PROVIDING
 8        RETROACTIVE APPLICATION.

 9    Be It Enacted by the Legislature of the State of Idaho:

10        SECTION  1.  That  Section 63-602K, Idaho Code, be, and the same is hereby
11    amended to read as follows:

12        63-602K.  PROPERTY EXEMPT FROM TAXATION -- SPECULATIVE PORTION OF VALUE OF
13    AGRICULTURAL LAND. (1) The speculative portion of the value of land devoted to
14    agriculture is exempt from taxation.
15        (2)  "Land devoted to agriculture" shall mean  that  property  defined  by
16    section 63-604, Idaho Code.
17        (3)  "Speculative  portion"  shall mean that portion of the value of 
18    agricultural  land  actively devoted to  agriculture    which
19    represents  the  excess  over the actual use value of such land established by
20    comparable sales data compared to value established by capitalization of  eco-
21    nomic  rent  or  long-term  average crop rental at a capitalization rate which
22    shall be the rate of interest charged by the Spokane office of the farm credit
23    system averaged over the immediate past five (5) years plus  a  component  for
24    the local tax rate.
25        (4)  The   state  tax  commission  shall  adopt  rules  implementing  this
26    section .   which shall establish economic rent, average  crop
27    rental and capitalization rates. 

28        SECTION  2.  That  Section  63-604, Idaho Code, be, and the same is hereby
29    amended to read as follows:

30        63-604.  LAND ACTIVELY DEVOTED TO AGRICULTURE DEFINED.  (1)  For  property
31    tax purposes, land  which  is actively devoted to agriculture 
32    shall be eligible for appraisal, assessment and taxation as agricultural prop-
33    erty  each  year  it   if the land annually  meets one (1) or
34    more of the following qualifications:
35        (a)  The total area of such land, including the  homesite,  is  more  than
36        five  (5)  contiguous  acres, and  is actively devoted to agriculture
37          the land is  not  being  developed  as  provided  in  section
38        67-8203(7), Idaho Code, in a subdivision,  which means:
39             (i)   It  is  used to produce  field  crops including, but
40             not limited to, grains, feed crops, fruits and vegetables; or
41             (ii)  It is used by the owner for the grazing of livestock to be sold


                                          2

 1             as part of a net profit-making enterprise, or is leased by the  owner
 2             to a bona fide lessee for grazing purposes; or
 3             (iii) It is in a cropland retirement or rotation program.
 4        (b)  The area of such land is five (5) acres or less  and the land is
 5        not  being  developed  as provided in section 67-8203(7), Idaho Code, in a
 6        subdivision,  and such land has been actively devoted to agriculture
 7        within the meaning of subsection (1)(a) of this section during  the  
 8        last  three (3)   previous  growing season s ;
 9        and
10             (i)  It agriculturally produces for  sale  or  home  consumption  the
11             equivalent  of  fifteen  percent (15%) or more of the owners' or les-
12             sees' annual gross income; or
13             (ii) It agriculturally produced gross  revenues  in  the  immediately
14             preceding   year   season  of one thousand dol-
15             lars ($1,000) or more. When the area of land is  five  (5)  acres  or
16             less,  such   the  land shall be presumed to be
17             nonagricultural land until it is established that the requirements of
18             this subsection have been met.
19        (2)    Lease  income  may be considered in determining qualifications
20    only if the lease terms are defined, the carrying capacity is shown,  and  the
21    rent is consistent with the market rent.
22        (3)  An application for exemption shall be required if the area of land is
23    five  (5)  contiguous acres or less or the land is not being developed as pro-
24    vided in section 67-8203(7), Idaho Code, or is in a subdivision. The  form  of
25    the  application  shall  be  prescribed by the Idaho state tax commission. The
26    application must be received by the assessor of the county in which  the  land
27    is located by March 15. 
28          (4)    Land shall not be classified or valued as agricultural
29    land which is part of a platted subdivision with stated restrictions prohibit-
30    ing its use for agricultural purposes, whether within or without a city.
31        ( 3  5 )  Land utilized for the grazing of    a
32    horse  or  other    animals  kept primarily for personal use or pleasure
33    rather than as part of a bona fide profit-making agricultural enterprise shall
34    not be considered to be land which is actively devoted to agriculture.
35        ( 4  6 )  Land actively devoted to agriculture, hav-
36    ing previously qualified for exemption under this  section  in  the  preceding
37    year,  or  which  would  have  qualified under this section during the current
38    year, shall not lose such qualification due to the owner's or lessee's absence
39    in the current year by reason of active military service in a designated  com-
40    bat  zone, as defined in section 112 of the internal revenue code. If an owner
41    fails to timely apply for exemption as required in this section solely by rea-
42    son of active duty in a designated combat zone, as defined in section  112  of
43    the  internal revenue code, and the land would otherwise qualify for exemption
44    under this section, then the board of county commissioners of  the  county  in
45    which  the  land actively devoted to agriculture is located shall refund prop-
46    erty taxes, if previously paid, in an amount  equal  to  the  exemption  which
47    would otherwise have applied.
48          (7)  The  state  tax commission shall adopt rules implementing this
49    section pursuant to chapter 52, title 67, Idaho Code. 

50        SECTION 3.  An emergency existing  therefor,  which  emergency  is  hereby
51    declared to exist, this act shall be in full force and effect on and after its
52    passage and approval, and retroactively to January 1, 1998.

Statement of Purpose / Fiscal Impact


    





                           STATEMENT OF PURPOSE
    
                                 RS 07766
    
    The purpose of this legislation is to update and clarify the 
    definition of which properties qualify for the agricultural 
    exemption for property tax purposes by amending Sections 63-602k 
    and 63-604K, Idaho Code. It provides that when development takes 
    place in a subdivision that has been receiving an agricultural 
    exemption then that agricultural exemption would be removed.
    
    Population concentration and land development creates a 
    definite need to update current law to provide for equitable 
    assessment and taxation in these areas.
    
    The proposed legislation will provide for statewide 
    uniformity among counties in the determination of which 
    properties qualify for
    
    agricultural 
    exemptions.
    
                       FISCAL NOTE
    There will be a cost to the State Tax Commission of 
    $3,000-
    
   $5,000 for the rule preparation and publications as well as for 
    information distribution to counties. There may be a slight 
    positive impact for local taxing districts, including school 
    districts due to parcels losing the exemption when improvements are 
    added and being included on the new construction roll. It is also 
    anticipated that with more clarity, there may be additional 
    applications for exemption.
    
    CONTACT: Idaho Association of Counties 
    Phone: 345-9126
    
    Dan Chadwick, Tony Poinelli, Lorna Jorgenson
    
    STATEMENT OF PURPOSE/ FISCAL NOTE
    
    Bill No. H 645