2006 Legislation
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HOUSE BILL NO. 732 – Property sale, tax deed, proceeds


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Bill Status

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

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                              IN THE HOUSE OF REPRESENTATIVES
                                     HOUSE BILL NO. 732
                             BY REVENUE AND TAXATION COMMITTEE
  1                                        AN ACT
 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:
 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.
  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    apportioned to the taxing districts in which the property is situated  accord-
  7    ing to the levy applied to the year of delinquency upon which the tax deed was
  8    issued to the county as 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
  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:
  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,
  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.
  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 / Fiscal Impact

                       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.

Name: Representative Hart 
Phone: 322-1000
Representative Bayer
Senator Sweet
Senator Jorgenson

STATEMENT OF PURPOSE/FISCAL NOTE                         H 732