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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 - 2006
IN 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 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
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