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H0216...............................................by REVENUE AND TAXATION PROPERTY - TAX DEEDS - Adds to and amends existing law to provide for distribution of proceeds from the sale of property acquired by tax deed; and to revise the definition of "party in interest." 02/20 House intro - 1st rdg - to printing 02/21 Rpt prt - to Rev/Tax 02/27 Rpt out - rec d/p - to 2nd rdg 02/28 2nd rdg - to 3rd rdg 03/01 3rd rdg - PASSED - 43-26-1 AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bilbao, Block, Chadderdon, Clark, Collins, Crane, Eskridge, Hagedorn, Hart, Harwood, Henbest, Henderson, Kren, Labrador, Lake, LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer, Moyle, Nielsen, Nonini, Raybould, Roberts, Rusche, Schaefer, Shepherd(8), Shirley, Shively, Thayn, Vander Woude, Wills, Wood(27), Wood(35), Mr. Speaker NAYS -- Bell, Black, Bock, Bolz, Brackett, Bradford, Chavez, Chew, Durst, Edmunson, Jaquet, Killen, King, Pasley-Stuart, Patrick, Pence, Ring, Ringo, Ruchti, Sayler, Shepherd(2), Smith(30), Smith(24), Snodgrass, Stevenson, Trail Absent and excused -- Boe Floor Sponsor - Hart Title apvd - to Senate 03/02 Senate intro - 1st rdg - to Loc Gov
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature First Regular Session - 2007IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 216 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 DISTRIBUTION OF 4 PROCEEDS FROM THE SALE OF PROPERTY ACQUIRED BY TAX DEED PURSUANT TO THE 5 PROVISIONS OF SECTION 31-808A, IDAHO CODE; AMENDING CHAPTER 8, TITLE 31, 6 IDAHO CODE, BY THE ADDITION OF A NEW SECTION 31-808A, IDAHO CODE, TO PRO- 7 VIDE FOR DISTRIBUTION OF PROCEEDS FROM SALE OF PROPERTY ACQUIRED BY TAX 8 DEED; AND AMENDING SECTION 63-201, IDAHO CODE, TO REVISE THE DEFINITION OF 9 "PARTY IN INTEREST." 10 Be It Enacted by the Legislature of the State of Idaho: 11 SECTION 1. That Section 31-808, Idaho Code, be, and the same is hereby 12 amended to read as follows: 13 31-808. SALE OF COUNTY PROPERTY -- GENERAL PROCEDURE -- SALE OF PROPERTY 14 ACQUIRED THROUGH TAX DEED -- PROCEDURE AFTER ATTEMPTED AUCTION -- EXCHANGE OF 15 COUNTY PROPERTY -- SALE OF CERTAIN ODD-LOT PROPERTY -- SALE, EXCHANGE OR DONA- 16 TION OF PROPERTY TO OTHER UNITS OF GOVERNMENT. (1) A board of county commis- 17 sioners shall have the power and authority to sell or offer for sale at public 18 auction any real or personal property belonging to the county not necessary 19 for its use. However, personal property not exceeding two hundred fifty dol- 20 lars ($250) in value may be sold at private sale without notice or public auc- 21 tion. Prior to offering the property for sale, the board of county commission- 22 ers shall advertise notice of the auction in a newspaper, as defined in sec- 23 tion 60-106, Idaho Code, either published in the county or having a general 24 circulation in the county, not less than ten (10) calendar days prior to the 25 auction. If the property to be sold is real property, the notice to be pub- 26 lished shall contain the legal description as well as the street address of 27 the property. If the property is outside the corporate limits of a city and 28 does not have a street address, then the description shall also contain the 29 distance and direction of the location of the real property from the closest 30 city. If the property to be sold is acquired by tax deed, the notice required 31 to be published shall include, next to the description of the property, the 32 name of the taxpayer as it appears in the delinquent tax certificate upon 33 which the tax deed was issued. The property shall be sold to the highest bid- 34 der. However, the board of county commissioners may reserve the right to 35 reject any and all bids and shall have discretionary authority to reject or 36 accept any bid which may be made for an amount less than the total amount of 37 all delinquent taxes, late charges, costs and interest which may have accrued 38 against any property so offered for sale, including the amount specified in 39 the tax deed to the county. 40 (2) Proceeds from the sale of county property not acquired by tax deed 41 shall be paid into the county treasury for the general use of the county. If 42 the property to be sold has been acquired by tax deed, pursuant to the provi- 43 sions of chapter 10, title 63, Idaho Code, the proceeds from the sale, after2 1reimbursement to the county for the cost of advertising and sale,shall be 2apportioned to the taxing districts in which the property is situated accord-3ing to the levy applied to the year of delinquency upon which the tax deed was4issued to the countydistributed as provided in section 31-808A, Idaho Code. 5 (3) Any property sold may be carried on a recorded contract with the 6 county for a term not to exceed ten (10) years and at an interest rate not to 7 exceed the rate of interest specified in section 28-22-104(1), Idaho Code. The 8 board of county commissioners shall have the authority to cancel any contract 9 if the purchaser fails to comply with any of the terms of the contract and the 10 county shall retain all payments made on the contract. The title to all prop- 11 erty sold on contract shall be retained in the name of the county until full 12 payment has been made by the purchaser. However, the purchaser shall be 13 responsible for payment of all property taxes during the period of the con- 14 tract. 15 (4) Any sale of property by the county shall vest in the purchaser all of 16 the right, title and interest of the county in the property, including all 17 delinquent taxes which have become a lien on the property since the date of 18 issue of the tax deed, if any. 19 (5) In addition to the purchase price, a purchaser of county property, 20 including property acquired by tax deed, shall pay all fees required by law 21 for the transfer of property. No deed for any real estate purchased pursuant 22 to the provisions of this section shall be delivered to a purchaser until such 23 deed has been recorded in the county making the sale. 24 (6) Should the county be unable to sell at a public auction any real or 25 personal property belonging to the county, including property acquired by tax 26 deed, it may sell the property without further notice by public or private 27 sale upon such terms and conditions as the county deems necessary. Distribu- 28 tion of the proceeds of sale shall be as set forth in subsection (2) of this 29 section. 30 (7) The board of county commissioners may at its discretion, when in the 31 county's best interest, exchange and do all things necessary to exchange any 32 of the real property now or hereafter held and owned by the county for real 33 property of equal value, public or private, to consolidate county real prop- 34 erty or aid the county in the control and management or use of county real 35 property. 36 (8) The board of county commissioners may, by resolution, declare certain 37 parcels of real property as odd-lot property, all or portions of which are not 38 needed for public purposes and are excess to the needs of the county. For pur- 39 poses of this subsection, odd-lot property is defined as that property that 40 has an irregular shape or is a remnant and has value primarily to an adjoining 41 property owner. Odd-lot property may be sold to an adjacent property owner for 42 fair market value that is estimated by a land appraiser licensed to appraise 43 property in the state of Idaho. If, after thirty (30) days' written notice, an 44 adjoining property owner or owners do not desire to purchase the odd-lot prop- 45 erty, the board of county commissioners may sell the property to any other 46 interested party for not less than the appraised value. When a sale of odd-lot 47 property is agreed to, a public advertisement of the pending sale shall be 48 published in one (1) edition of the newspaper as defined in subsection (1) of 49 this section, and the public shall have fifteen (15) days to object to the 50 sale in writing. The board of county commissioners shall make the final deter- 51 mination regarding the sale of odd-lot property in an open meeting. 52 (9) In addition to any other powers granted by law, the board of county 53 commissioners may at their discretion, grant to or exchange with the federal 54 government, the state of Idaho, any political subdivision or taxing district 55 of the state of Idaho or any local historical society which is incorporated as 3 1 an Idaho nonprofit corporation which operates primarily in the county or main- 2 tains a museum in the county, with or without compensation, any real or per- 3 sonal property or any interest in such property owned by the county or 4 acquired by tax deed, after adoption of a resolution by the board of county 5 commissioners that the grant or exchange of property is in the public inter- 6 est. Notice of such grant or exchange shall be as provided in subsection (1) 7 of this section and the decision may be made at any regularly or specially 8 scheduled meeting of the board of county commissioners. The execution and 9 delivery by the county of the deed conveying an interest in the property 10 shall operate to discharge and cancel all levies, liens and taxes made or cre- 11 ated for the benefit of the state, county or any other political subdivision 12 or taxing district and to cancel all titles or claims of title including 13 claims of redemption to such real property asserted or existing at the time of 14 such conveyance. However, if the property conveyed is subject to a lien for 15 one (1) or more unsatisfied special assessments, the lien shall continue until 16 all special assessments have been paid in full. At no time shall a lien for a 17 special assessment be extinguished prior to such special assessment having 18 been paid in full. Any property conveyed to any local historical society by 19 the county shall revert to the county when the property is no longer utilized 20 for the purposes for which it was conveyed. 21 (10) When the county has title to mineral rights severed from the property 22 to which they attach, and the mineral rights have value of less than twenty- 23 five dollars ($25.00) per acre, the board of county commissioners may act to 24 return the mineral rights to the land from which they were severed in the fol- 25 lowing manner: the proposed action must appear on the agenda of a regular 26 meeting of the board of county commissioners; and the motion to make the 27 return must be adopted unanimously by the board voting in open meeting. 28 SECTION 2. That Chapter 8, Title 31, Idaho Code, be, and the same is 29 hereby amended by the addition thereto of a NEW SECTION, to be known and des- 30 ignated as Section 31-808A, Idaho Code, and to read as follows: 31 31-808A. DISTRIBUTION OF PROCEEDS FROM SALE OF PROPERTY ACQUIRED BY TAX 32 DEED. (1) The proceeds of a sale of property acquired by tax deed pursuant to 33 the provisions of section 31-808, Idaho Code, shall be distributed as follows: 34 (a) Reimbursement shall first be made to the county for all reasonable 35 transaction costs including issuance of the tax deed, cost of title 36 report, advertising costs relating to sale of the property, cost of pro- 37 viding notice to the record owner or owners and any parties in interest as 38 required by section 63-1005, Idaho Code, internal costs to the county, 39 which shall be calculated using the average hourly operating cost of each 40 department affected and based on time records maintained by the county, 41 and any other reasonable transaction costs; and 42 (b) Following the distribution in subsection (1)(a) of this section, an 43 amount equal to the delinquency, including late charges and accrued inter- 44 est, shall be apportioned among the several state, county and taxing dis- 45 trict accounts in the same manner as provided by law for the apportionment 46 of property taxes. 47 (2) Any amount remaining after distribution of the proceeds as provided 48 in subsection (1) of this section shall be referred to as surplus funds, and 49 such surplus funds shall be paid into the county treasury by the tax collec- 50 tor, upon the certificate of the county auditor. Within twenty-one (21) days 51 of the date on which the surplus funds are paid into the county treasury, the 52 county treasurer shall serve written notice of surplus funds to the record 53 owner or owners and all parties in interest who were entitled to notice of the 4 1 pending issuance of the tax deed pursuant to section 63-1005, Idaho Code. The 2 notice shall clearly identify the amount of surplus funds, the names and 3 addresses of all persons on whom notice is being served, and the procedures to 4 be followed in making a claim to the surplus funds. Service of notice shall be 5 accomplished by certified mailing of the notice to the most current address of 6 the recipient reflected in the county records, including property tax records, 7 driver's license records and any other records reasonably available to the 8 county. Persons receiving such notice who wish to claim any surplus funds 9 shall submit a notarized claim to the county within ninety (90) days of the 10 date of such notice. A claim for surplus funds shall include the name of the 11 claimant, an address where the claimant receives mail, the basis of the claim 12 and the amount of the claim. 13 (3) If the aggregate of the amounts claimed by those parties to whom 14 notice was sent pursuant to subsection (2) of this section, is equal to or 15 less than the surplus funds, the county treasurer shall distribute the surplus 16 funds to the claimants in accordance with the amounts claimed within one hun- 17 dred fifty (150) days of the date on which the surplus funds were paid into 18 the county treasury. 19 (4) If the aggregate of the amounts claimed by those parties to whom 20 notice was sent pursuant to subsection (2) of this section, exceeds the sur- 21 plus funds, the county treasurer shall notify all claimants who have submitted 22 valid claims of the names and addresses of all other claimants and the basis 23 and amount of the claims asserted by each. The notice shall also state that if 24 the claimants reach unanimous agreement on distribution of the surplus funds, 25 the surplus funds shall be distributed by the county treasurer in accordance 26 with an agreement signed and acknowledged by all claimants. If the claimants 27 cannot reach unanimous agreement within sixty (60) days from the date the 28 notice in this subsection (4) was sent, the county treasurer shall have the 29 county prosecutor file a petition to refer the matter to the district court in 30 which the property sold by tax deed is located, for resolution of the dispute 31 and final distribution of surplus funds. 32 The petition shall name all claimants and shall seek an order of the dis- 33 trict court to determine the amount of surplus funds that will be distributed 34 to each claimant. At the time the petition is filed, the county prosecutor 35 shall pay all required filing fees from the surplus funds, and shall transfer 36 the remaining surplus funds to the control of the district court. Thereafter, 37 neither the county treasurer nor the county prosecutor shall have any right to 38 or interest in the funds. 39 (5) In making its order for distribution of surplus funds, the court 40 shall give priority to parties in interest in the order of their respective 41 lien priorities. Then, if any surplus funds remain, they shall be distributed 42 to the record owner or owners as their interest may appear. 43 (6) If no claims are filed with the county treasurer in response to the 44 notice sent pursuant to subsection (2) of this section, or if after distribu- 45 tion of the surplus funds as provided in subsection (3) of this section, any 46 surplus funds remain, such surplus funds shall be apportioned among the sev- 47 eral state, county and taxing district accounts in the same manner as provided 48 by law for the apportionment of property taxes. 49 SECTION 3. That Section 63-201, Idaho Code, be, and the same is hereby 50 amended to read as follows: 51 63-201. DEFINITIONS. As used for property tax purposes in title 63, chap- 52 ters 1 through 23, Idaho Code, the terms defined in this section shall have 53 the following meanings, unless the context clearly indicates another meaning: 5 1 (1) "Appraisal" means an estimate of property value for property tax pur- 2 poses. 3 (a) For the purpose of estimated property value to place the value on any 4 assessment roll, the value estimation must be made by the assessor or a 5 certified property tax appraiser. 6 (b) For the purpose of estimating property value to present for an appeal 7 filed pursuant to sections 63-501A, 63-407 and 63-409, Idaho Code, the 8 value estimation may be made by the assessor, a certified property tax 9 appraiser, a licensed appraiser, or a certified appraiser or any party as 10 specified by law. 11 (2) "Bargeline" means those water transportation tugs, boats, barges, 12 lighters and other equipment and property used in conjunction with waterways 13 for bulk transportation of freight or ship assist. 14 (3) "Cogenerators" means facilities which produce electric energy, and 15 steam or forms of useful energy which are used for industrial, commercial, 16 heating or cooling purposes. 17 (4) "Collection costs" are amounts authorized by law to be added after 18 the date of delinquency and collected in the same manner as property tax. 19 (5) "Delinquency" means any property tax, special assessment, fee, col- 20 lection cost, or charge collected in the same manner as property tax, that has 21 not been paid in the manner and within the time limits provided by law. 22 (6) "Improvements" means all buildings, structures, fixtures and fences 23 erected upon or affixed to the land, and all fruit, nut-bearing and ornamental 24 trees or vines not of natural growth, growing upon the land, except nursery 25 stock. 26 (7) "Late charge" means a charge of two percent (2%) of the delinquency. 27 (8) "Lawful money of the United States" means currency and coin of the 28 United States at par value and checks and drafts which are payable in dollars 29 of the United States at par value, payable upon demand or presentment. 30 (9) "Manufactured home" means a structure defined as a manufactured home 31 in section 39-4105, Idaho Code. 32 (10) "Market value" means the amount of United States dollars or equiva- 33 lent for which, in all probability, a property would exchange hands between a 34 willing seller, under no compulsion to sell, and an informed, capable buyer, 35 with a reasonable time allowed to consummate the sale, substantiated by a rea- 36 sonable down or full cash payment. 37 (11) "Operating property" means all rights-of-way accompanied by title; 38 roadbeds; tracks; pipelines; bargelines; equipment and docks; terminals; 39 rolling stock; equipment; power stations; power sites; lands; reservoirs, gen- 40 erating plants, transmission lines, distribution lines and substations; and 41 all immovable or movable property operated in connection with any public util- 42 ity, railroad or private railcar fleet, wholly or partly within this state, 43 and necessary to the maintenance and operation of such road or line, or in 44 conducting its business, and shall include all title and interest in such 45 property, as owner, lessee or otherwise. The term includes electrical genera- 46 tion plants under construction, whether or not owned by or operated in connec- 47 tion with any public utility. The term does not include personal property 48 exempt from taxation pursuant to section 63-602L, Idaho Code. 49 (12) "Party in interest" means a person who holds a properly recorded 50 mortgage, deed of trust,orsecurity interest, lien or other encumbrance. No 51 taxing district in the state of Idaho shall be construed to be a party in 52 interest with regard to any property which is subject to the authority of the 53 district to levy a property tax. 54 (13) "Person" means any entity, individual, corporation, partnership, 55 firm, association, limited liability company, limited liability partnership or 6 1 other such entities as recognized by the state of Idaho. 2 (14) "Personal property" includes all goods, chattels, stocks and bonds, 3 equities in state lands, easements, reservations, leasehold real properties 4 and all other property which the law defines, or the courts may interpret, 5 declare and hold to be personal property under the letter, spirit, intent and 6 meaning of the law, for the purposes of property taxation. For the purposes of 7 payment and collection of property taxes pursuant to chapter 9, title 63, 8 Idaho Code, collection of delinquency pursuant to chapter 10, title 63, Idaho 9 Code, and seizure and sale of personal property for taxes pursuant to chapter 10 11, title 63, Idaho Code, personal property includes manufactured homes not 11 declared as real property pursuant to section 63-304, Idaho Code. 12 (15) "Private railcar fleet" means railroad cars or locomotives owned by, 13 leased to, occupied by or franchised to any person other than a railroad com- 14 pany operating a line of railroad in Idaho or any company classified as a 15 railroad by the interstate commerce commission and entitled to possess such 16 railroad cars and locomotives except those possessed solely for the purpose of 17 repair, rehabilitation or remanufacturing of such locomotives or railroad 18 cars. 19 (16) "Public utility" means electrical companies, pipeline companies, nat- 20 ural gas distribution companies, or power producers included within federal 21 law, bargelines, and water companies which are under the jurisdiction of the 22 Idaho public utilities commission. The term also includes telephone corpora- 23 tions, as that term is defined in section 62-603, Idaho Code, except as here- 24 inafter provided, whether or not such telephone corporation has been issued a 25 certificate of convenience and necessity by the Idaho public utilities commis- 26 sion. 27 This term does not include cogenerators, mobile telephone service or com- 28 panies, nor does it include pager service or companies, except when such ser- 29 vices are an integral part of services provided by a certificated utility com- 30 pany nor does the term "public utility" include companies or persons engaged 31 in the business of providing solely on a resale basis, any telephone or tele- 32 communication service which is purchased from a telephone corporation or com- 33 pany. 34 (17) "Railroad" means every kind of railway, whether its line of rails or 35 tracks be at, above or below the surface of the earth, and without regard to 36 the kind of power used in moving its rolling stock, and shall be considered to 37 include every kind of street railway, suburban railway or interurban railway 38 excepting facilities established solely for maintenance and rebuilding of 39 railroad cars or locomotives. 40 (18) "Real property" means land, and all standing timber thereon, includ- 41 ing standing timber owned separately from the ownership of the land upon 42 which the same may stand, except as modified in chapter 17, title 63, Idaho 43 Code, and all buildings, structures and improvements, or other fixtures of 44 whatsoever kind on land, including water ditches constructed for mining, manu- 45 facturing or irrigation purposes, water and gas mains, wagon and turnpike toll 46 roads, and toll bridges, and all rights and privileges thereto belonging, or 47 any way appertaining, all quarries and fossils in and under the land, and all 48 other property which the law defines, or the courts may interpret, declare and 49 hold to be real property under the letter, spirit, intent and meaning of the 50 law, for the purposes of property taxation. Manufactured homes constitute real 51 property when located on taxable land, and after a statement of intent to 52 declare as real property has been recorded, provided said statement has not 53 been revoked. Timber, forest, forest land, and forest products shall be 54 defined as provided in chapter 17, title 63, Idaho Code. 55 (19) "Record owner" means the person or persons in whose name or names the 7 1 property stands upon the records of the county recorder's office. Where the 2 record owners are husband and wife at the time of notice of pending issue of 3 tax deed, notice to one (1) shall be deemed and imputed as notice to the other 4 spouse. 5 (20) "Special assessment" means a charge imposed upon property for a spe- 6 cific purpose, collected and enforced in the same manner as property taxes. 7 (21) "System value" means the market value for assessment purposes of the 8 operating property when considered as a unit. 9 (22) "Tax code area" means a geographical area made up of one (1) or more 10 taxing districts with one (1) total levy within the geographic area, except as 11 otherwise provided by law. 12 (23) "Taxing district" means any entity or unit with the statutory author- 13 ity to levy a property tax. 14 (24) "Taxable value" means market value for assessment purposes, less 15 applicable exemptions or other statutory provisions. 16 (25) "Transient personal property" is personal property, specifically such 17 construction, logging or mining machinery and equipment which is kept, moved, 18 transported, shipped, hauled into or remaining for periods of not less than 19 thirty (30) days, in more than one (1) county in the state during the same 20 year. 21 (26) "Warrant of distraint" means a warrant ordering the seizure of per- 22 sonal property to enforce payment of property tax, special assessment, 23 expense, fee, collection cost or charge collected in the same manner as per- 24 sonal property tax.
STATEMENT OF PURPOSE RS 17055 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. It also provides that the remaining proceeds shall be distributed to the state, county, and taxing district accounts if no claim has been made for the funds within a period of time including a 21 day period plus a 90 day period. Any surplus funds will then be apportioned among the taxing districts serving the property in the same manner property taxes are apportioned. 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 Representative Moyle Senator Jorgenson STATEMENT OF PURPOSE/FISCAL NOTE H 216