From the July 2001 Idaho Observer:

Recently “recodified” tax law authorizes, encourages counties to “steal” real property

McGuckin case prompts review of tax law

It appears that tax reformation bill H783 sponsors and supporters such as the Idaho Association of Counties were well aware of the implications of the provision that became 63-1015 in Idaho tax code, but most of the legislators were not. Both houses voted unanimously to pass the bill oblivious to the serious consequences to property owners. Had the full assembly of legislators and the public, whose conscience they represent, understood that the new tax code would give counties ungodly incentive to take people's property in tax foreclosure as a tremendous revenue generating scheme, this provision of the law would likely have been stricken. It is my belief, after reviewing the bill's legislative history, that the provision that allows funds in excess of taxes owed be deposited with the county treasurer to be apportioned among various state and county coffers, was intentionally not discussed or debated. Why? Because the bill's special interest proponents, namely the Idaho Association of Counties, knew the public would have been outraged to learn that the state would realize huge profits from the misfortune of Idaho property owners who fall on hard times.

by The Idaho Observer

Both the houses of the 1996 Idaho legislature unanimously passed H783 which completely revamped the state's tax law and gave birth to section 1015 of the law which states that all proceeds from the sale of real property (land) that had been foreclosed upon for nonpayment of taxes “.shall be paid into the county treasury by the tax collector...”

Bill supporters, including the Idaho Association of Counties and bill sponsor Rep. JoAn Wood (R-Rigby), claimed that ,“The purpose of this bill is to recodify Title simplify and modernize administration of the property tax system, clarify language and organize the property tax statutes in a more logical manner.”

The bill's statement of purpose explained under the heading “fiscal note” that, “There would be no impact on the general fund and no increase in taxes to taxpayers. There would be an economic benefit and potential cost savings to the counties by improving the efficiency of property tax administration.”

The high profile McGuckin incident showed that the law is a boon to county coffers at the expense of citizens whose property is sold at public auction to satisfy a delinquent property tax debt. In the McGuckin case, 40 acres of pristine property with ¼ mile of lake frontage with an estimated market value of $350,000 to $500,000 was sold for $53,000 to developers for approximately $8,000 in back taxes. Prior to the passage of H783, proceeds from the sale in excess of the tax debt would have been returned to the family. However, current state tax law demands that excess proceeds are to be deposited in the county treasury, “.to be apportioned among the several state and county funds and taxing districts.”

Section 1015 of the current tax law provides tremendous incentive to county officials to foreclose on private real property. Bonner County Commission Chairman Tom Suttmeier commented that, “The law is not fair,” and that he wants to see the law changed.

Though this provision in state law has obviously catastrophic consequences for property owners who fall on hard times, and bill proponents were undoubtedly aware of the provision as it was debated in committee and then voted into law, there was no mention of it in the bill's legislative tracking history as provided by the Idaho state Legislative Reference Library.

Ada County Treasurer Barbara Bauer, listed as a guest of the Revenue and Taxation Committee that was deliberating over the language of the bill prior to going to the floor for a vote, stated that Chapter 10 was “basically a recap” that references the collection of delinquent taxes and describes the duties of the tax collector. Bauer apparently diminished the gravity of Section 1015 by explaining to the committee that, “The last section of the chapter that had significant changes is section 63-1014.”

The last meeting of the House committee was February 26, 1996. The official meeting minutes reflect that Bauer, moments before the committee was motioned by Senator Stan Hawkins (R-Ucon) to pass the bill to the full Senate with a “do pass” recommendation, reiterated that, “The purpose of the recodification process is to increase efficiency and improve service to taxpayers.”

Simplot Corporation official and Associated Taxpayers member Tom Ryder commented prior to the unanimous vote that, “There are no changes that will make tax increases or decreases. Those who have worked on this are pleased that there are no changes that will adversely affect the taxpayers.”

The official minutes of the meeting noted that Ryder “.felt sure that there was something that may be offensive to someone, but his group could not find anything.”

By unanimous voice vote, the committee sent the bill to the Senate where it would be sponsored by Hawkins and Senator Cliff Stennett (D-Ketchum).

After being in committee during the 1996 legislative session, H783 was introduced to the House February 16 and passed 68-0 five days later with reps. M. Reed Hansen (R-Idaho Falls) and Elaine Hofman (D-Pocatello) absent. The bill hit the Senate floor February 22 and passed unanimously seven days later 31-0 with senators Grant Ipsen (R- Boise), Sue Reents (D-Boise), Bruce Sweeney (D-Lewiston and Jerry Twiggs (R-Pocatello) absent.

Governor Phil Batt signed the new tax code March 6, 1996 and it became law January 1, 1997.

Bonner County Commissioner Tom Suttmeier stated that he intended to challenge the law. He can be reached by calling: (208) 265-1438

Note: It is apparent that the dates shown wherein the bill was being passed out of committee and onto the floor for a vote do not seem to make chronological sense. However, those are the dates on documents provided to The IO from the Legislative Reference Library.

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