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H0541...............................................by REVENUE AND TAXATION
PROPERTY TAX - AGRICULTURAL LAND - Amends existing law to revise criteria
as to how land can be classified as land actively devoted to agriculture
for property tax purposes; and to define "bona fide lessee."
01/26 House intro - 1st rdg - to printing
01/27 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 541
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO PROPERTY TAXATION; AMENDING SECTION 63-604, IDAHO CODE, TO REVISE
3 CRITERIA AS TO HOW LAND CAN BE LAND ACTIVELY DEVOTED TO AGRICULTURE AND
4 APPRAISED, ASSESSED AND TAXED AS AGRICULTURAL PROPERTY FOR PROPERTY TAX
5 PURPOSES AND TO DEFINE THE TERM "BONA FIDE LESSEE"; DECLARING AN EMERGENCY
6 AND PROVIDING RETROACTIVE APPLICATION.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Section 63-604, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 63-604. LAND ACTIVELY DEVOTED TO AGRICULTURE DEFINED. (1) For property
11 tax purposes, land which is actively devoted to agriculture as part of an
12 agricultural enterprise shall be eligible for appraisal, assessment and taxa-
13 tion as agricultural property each year it meets one (1) or more of the fol-
14 lowing qualifications:
15 (a) The total area of such land, including the homesite, is more than
16 five (5) contiguous acres, and is actively devoted to agriculture which
17 means:
18 (i) It is used to produce field crops including, but not limited
19 to, grains, feed crops, fruits and vegetables; or
20 (ii) It is used to produce nursery stock as defined in section
21 22-2302(11), Idaho Code; or
22 (iii) It is used by the owner for the grazing of livestock to be sold
23 as part of a net profit-making for-profit enterprise, or is leased by
24 the owner to a bona fide lessee for grazing purposes livestock to be
25 sold or used in a for-profit enterprise; or
26 (iv) It is in a cropland retirement or rotation program.
27 (b) The area of such land is five (5) contiguous acres or less and such
28 land has been actively devoted to agriculture within the meaning of sub-
29 section (1)(a) of this section during the last three (3) growing seasons;
30 and
31 (i) It agriculturally produces for sale or home consumption the
32 equivalent of fifteen percent (15%) or more of the owner's or
33 lessee's annual gross income; or
34 (ii) It agriculturally produced gross revenues in the immediately
35 preceding year of one thousand dollars ($1,000) or more. When the
36 area of land is five (5) contiguous acres or less, such land shall be
37 presumed to be nonagricultural land until it is established that the
38 requirements of this subsection have been met.
39 (2) Land shall not be classified or valued as agricultural land which is
40 part of a platted subdivision with stated restrictions prohibiting its use for
41 agricultural purposes, whether within or without a city.
42 (3) Land utilized for the grazing of a horse or other animals kept pri-
43 marily for personal use or pleasure rather than as part of a bona fide profit-
2
1 making for-profit agricultural enterprise shall not be considered to be land
2 which is actively devoted to agriculture.
3 (4) Land actively devoted to agriculture, having previously qualified for
4 exemption under this section in the preceding year, or which would have quali-
5 fied under this section during the current year, shall not lose such qualifi-
6 cation due to the owner's or lessee's absence in the current year by reason of
7 active military service in a designated combat zone, as defined in section 112
8 of the Internal Revenue Code. If an owner fails to timely apply for exemption
9 as required in this section solely by reason of active duty in a designated
10 combat zone, as defined in section 112 of the Internal Revenue Code, and the
11 land would otherwise qualify for exemption under this section, then the board
12 of county commissioners of the county in which the land actively devoted to
13 agriculture is located shall refund property taxes, if previously paid, in an
14 amount equal to the exemption which would otherwise have applied.
15 (5) As used in this section "contiguous" shall mean being in actual con-
16 tact or touching along a boundary or at a point, except no area of land shall
17 be considered not contiguous solely by reason of a roadway or other right-of-
18 way.
19 (6) As used in this section, a "bona fide lessee" shall mean a lessee
20 with a written lease agreement disclosing the following:
21 (a) A description of the subject property sufficiently particular to
22 allow identification of the property;
23 (b) The term of the lease;
24 (c) The annual consideration to be paid for the use of the property.
25 The lease agreement must be signed by both parties and a copy furnished to the
26 county assessor upon request by the county assessor.
27 (7) The lease or sale of hunting or fishing rights shall not jeopardize
28 the status of land that otherwise would qualify as land actively devoted to
29 agriculture.
30 SECTION 2. An emergency existing therefor, which emergency is hereby
31 declared to exist, this act shall be in full force and effect on and after its
32 passage and approval, and retroactively to January 1, 2004.
STATEMENT OF PURPOSE
RS 13629C1
This legislation clarifies the taxation of agricultural property
when that land is leased for grazing of livestock. The new
language defines a bona fide lessee as a for-profit business that
grazes livestock that will be sold or used in their business.
Changes also include a written lease agreement to be provided to
the county assessor.
Additional language puts into statute that any sale or lease of
hunting or fishing rights on the property does not change the tax
status of the land if it meets the definitions of 63-604, land
actively devoted to agriculture.
An emergency clause is added in Section 2 and is retroactive to
January 1, 2004 to make changes fit the property tax year.
FISCAL IMPACT
There is no fiscal impact to the state or to the counties in the
collection of property taxes.
Contact:
Name: Sen. Burtenshaw
Phone: 332-1325
Brad Hoaglun
383-4100
STATEMENT OF PURPOSE/FISCAL NOTE H 541