Panel kills bill giving land sale money to tax delinquents

BOISE – Rep. Phil Hart, of Athol, lost a 10-8 vote Monday on his bill to try to give some of the proceeds from land sales for delinquent taxes back to the property owners.

“I need to work on it more,” Hart said after his bill, HB 732, was killed in the House Revenue and Taxation Committee.

Hart said that if he’s re-elected, he’ll bring the idea back next year. “I think it violates the rights of the people,” he said. “It’s taking their property without just compensation.”

The bill was prompted in part by the McGuckin case in Bonner County several years ago. JoAnn McGuckin’s 40 acres on Garfield Bay were sold at auction for unpaid taxes after a standoff in 2001. Her children and pack of dogs held off law enforcement for five days.

The past-due taxes added up to just a fraction of the home’s value.

Opponents of Hart’s bill, including county treasurers and the Idaho Association of Counties, noted that in that case, the McGuckin family had transferred ownership of the property to a third party, which complicated the issue.

Dan Chadwick, executive director of the counties association, told lawmakers the current system works.

Donna Peterson, Payette County treasurer, said delinquent property taxpayers receive at least nine notices before their property is taken – after it’s three years past due on taxes – and even then they can pay the taxes and redeem it for a year before it’s sold.

“It’s not the Legislature’s responsibility to continually baby-sit the taxpayers when they make poor decisions,” Peterson told the committee. “I believe this bill would be a slap in the face to all those who pay their taxes.”

Hart said counties and other taxing districts keep the full proceeds when they sell a piece of property for past-due taxes. He maintained that they should instead cover the delinquency and costs of sale, then refund the rest to the delinquent owner.

But finding a way to make that work proved complicated, and Hart offered extensive amendments to his bill Monday based on input from bankers and the American Civil Liberties Union.

John Eaton, government affairs director for the Idaho Association of Realtors, said the bill essentially would make counties into real estate agents who would be marketing and selling properties to try to pay off the delinquent owner and various lien-holders. He said owners can hire real estate agents and sell the property, getting back their full equity, before the county takes it for past-due taxes. Or owners can sell property without an agent, he said.

“We’re now having the government come in and compete with our industry,” Eaton said.

Hart said property sold for back taxes usually sells for only about half its market value, and owners wouldn’t choose that over selling it themselves. “You’d be a fool to do that if you’re going to lose half the value of your property,” he said.

Rep. Jim Clark, R-Hayden Lake, moved to kill the bill, calling it “not ready for prime time.”

He said, “The issue will be back – this is only its third year. Some of these take five years, even 10.”

Rep. Lenore Barrett, R-Challis, said acidly, “I guess if you lose your property, you have at least experienced property tax relief.”

The bill was co-sponsored by Sen. Mike Jorgenson, R-Hayden Lake.

Clark was joined in voting against it by Rep. George Sayler, D-Coeur d’Alene.