1998 Legislation
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HOUSE BILL NO. 755 – Property tax exmpt, agric land

HOUSE BILL NO. 755

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Daily Data Tracking History



H0755...............................................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.

02/19    House intro - 1st rdg - to printing
02/20    Rpt prt - to 2nd rdg
02/23    2nd rdg - to 3rd rdg
02/24    3rd rdg - PASSED - 65-0-5
      AYES -- Alltus, Barraclough, Barrett, Bell, Bieter, Bivens,
      Black(15), Black(23), Boe, Bruneel, Callister, Campbell, Chase,
      Clark, Crane, Crow, Deal, Denney, Ellsworth, Field(13), Field(20),
      Gagner, Hadley, Hansen, Henbest, Hornbeck, Jaquet, Jones(9),
      Jones(22), Jones(20), Judd, Kellogg, Kempton, Kendell, Kjellander,
      Kunz, Lake, Linford, Loertscher, Mader, Marley, McKague, Meyer,
      Miller, Mortensen, Pischner, Pomeroy, Reynolds, Richman, Ridinger,
      Robison, Sali, Schaefer, Stevenson, Stoicheff, Stone, Stubbs, Taylor,
      Tilman, Tippets, Trail, Watson, Wheeler, Zimmermann, Mr Speaker
      NAYS -- None
      Absent and excused -- Cuddy, Geddes, Gould, Newcomb, Wood
    Floor Sponsor - Bivens
    Title apvd - to Senate
02/25    Senate intro - 1st rdg - to Loc Gov
03/05    Rpt out - rec d/p - to 2nd rdg
03/06    2nd rdg - to 3rd rdg
03/16    Returned to Loc Gov

Bill Text


H0755


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

                             IN THE HOUSE OF REPRESENTATIVES

                                    HOUSE BILL NO. 755

                            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; AND PROVIDING AN EFFECTIVE DATE.

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

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

11        63-602K.  PROPERTY EXEMPT FROM TAXATION -- SPECULATIVE PORTION OF VALUE OF
12    AGRICULTURAL LAND. (1) The speculative portion of the value of land devoted to
13    agriculture is exempt from taxation.
14        (2)  "Land  devoted  to  agriculture"  shall mean that property defined by
15    section 63-604, Idaho Code.
16        (3)  "Speculative portion" shall mean that portion of the value  of  
17    agricultural    land   actively devoted to agriculture  which
18    represents the excess over the actual use value of such  land  established  by
19    comparable  sales data compared to value established by capitalization of eco-
20    nomic rent or long-term average crop rental at  a  capitalization  rate  which
21    shall be the rate of interest charged by the Spokane office of the farm credit
22    system  averaged  over  the immediate past five (5) years plus a component for
23    the local tax rate.
24        (4)  The  state  tax  commission  shall  adopt  rules  implementing   this
25    section  .   which shall establish economic rent, average crop
26    rental and capitalization rates. 

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

29        63-604.  LAND  ACTIVELY  DEVOTED  TO AGRICULTURE DEFINED. (1) For property
30    tax purposes, land  which  is actively devoted to agriculture 
31    shall be eligible for appraisal, assessment and taxation as agricultural prop-
32    erty each year it   if the land annually  meets  one  (1)  or
33    more of the following qualifications:
34        (a)  The  total  area  of  such land, including the homesite, is more than
35        five (5) contiguous acres, and  is actively  devoted  to  agriculture
36            the  land  is  not  being  developed as provided in section
37        67-8203(7), Idaho Code, in a subdivision,  which means:
38             (i)   It is used to produce  field  crops  including,  but
39             not limited to, grains, feed crops, fruits and vegetables; or
40             (ii)  It is used by the owner for the grazing of livestock to be sold
41             as  part of a net profit-making enterprise, or is leased by the owner


                                          2

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

51        SECTION 3.  This act shall be in full force and effect on and after  Janu-
52    ary 1, 1999.

Statement of Purpose / Fiscal Impact


    





                            STATEMENT OF PURPOSE
                                 RS 08123C1
    
    The purpose of this legislation is to update and clarify the 
    definition of which properties that qualify for the agricultural 
    exemption for property tax purposes by amending Sections 63-602K and 
    63-604, 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 more 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 $3,0005,000 
    for rule preparation and publications as well as for information 
    distribution to counties. There may be a more significant positive 
    impact in high growth areas, 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 345-9126
             Dan Chadwick, Tony Poinelli, Lorna Jorgensen
    
    STATEMENT OF PURPOSE/FISCAL NOTE
    
    H 755