NORTH CAROLINA GENERAL ASSEMBLY

1975 SESSION

 

 

CHAPTER 746

HOUSE BILL 852

 

 

AN ACT TO AMEND SECTIONS OF THE MACHINERY ACT RELATIVE TO VALUATION OF FARM LAND AT ITS PRESENT USE VALUE.

 

The General Assembly of North Carolina enacts:

 

Section 1.  G.S. 105-277.2 is hereby rewritten as follows:

"§ 105-277.2.  Agricultural, horticultural and forest land; definitions. — For the purposes of G.S. 105-277.3 through 105-277.7 the following definitions shall apply:

(1)        'Agricultural land' means land and improvements thereon constituting a farm tract actively engaged in the commercial production or growing of crops, plants or animals under a sound management program. (This definition includes woodland and wasteland which are a part of a farm tract.)

(2)        'Forest land' means land and improvements thereon constituting a forest tract actively engaged in the commercial growing of trees under a sound management program.

(3)        'Horticultural land' means land and improvements thereon constituting a horticultural tract actively engaged in the commercial production or growing of fruits, vegetables, nursery or floral products under a sound management program.

(4)        'Individually owned' means owned by:

(a)        A natural person or persons or

(b)        A corporation having as its principal business one of the activities described in subdivisions (1), (2) and (3), above, the real owners of all of the shares of such corporation being natural persons actively engaged in such activities, or the spouse, siblings or parents of such persons.

(5)        'Present use value' means the price estimated in terms of money at which the property would change hands between a willing and financially able buyer and a willing seller, neither being under any compulsion to buy or to sell, assuming that both of them have reasonable knowledge of the capability of the property to produce income in its present use and that the present use of the property is its highest and best use.

(6)        'Sound management program' means a program of production designed to obtain the greatest net return from the land consistent with its conservation and long-term improvement."

Sec. 2.  G.S. 105-277.3(b) is hereby rewritten to read as follows:

"(b)      In order to come within a classification described in subdivision (a)(1),(2) or (3), above, the property must, if owned by natural persons, also: (1) Be the owner's place of residence; or (2) Have been owned by the present owner or by the owner's spouse, siblings, or parents for the four years immediately preceding January 1 of the year for which the benefit of this section is claimed.

If owned by a corporation, the property must have been owned by the corporation or by one or more of its principal shareholders as defined in G.S. 105-277.2(4)(b) for the four years immediately preceding January 1 of the year for which the benefit of this section is claimed. Notwithstanding the provisions of G.S. 105-277.2(4)(b), above, a corporation qualifying for a classification described in G.S. 105-277.3 shall not lose the benefit of the classification by reason of the death of one of the principal shareholders provided the decedent's ownership passes to and remains in the surviving spouse or children."

Sec. 3.  G.S. 105-277.4(a) is hereby rewritten to read as follows:

"(a)       Property coming within one of the classes defined in G.S. 105-277.3 but having a greater value for other uses shall be eligible for taxation on the basis of the value of the property in its present use if a timely and proper application is filed with the tax supervisor of the county in which the property is located. The application shall clearly show that the property comes within one of the classes and shall also contain any other relevant information required by the tax supervisor to properly appraise the property at its present use value. In nonrevaluation years, the applications shall be filed during the regular or extended listing period, unless there is a change in the true value in money appraisal of a given property under G.S. 105-287. In such cases, the application may be filed within 30 days of the mailing of the notice of the new valuation.

Unless a change in the use value appraisal is required because of a change in use, acreage or ownership of a qualifying property, no additional application shall be required until the county's next general reappraisal under G.S. 105-286, at which time new applications shall be filed for all properties."

Sec. 4.  G.S. 105-277.4(b) is hereby rewritten to read as follows:

"(b)      Upon receipt of a properly executed application, the tax supervisor shall appraise the property at its present use value as established in the schedule prepared pursuant to G.S. 105‑277.6(c). In appraising the property at its present use value, the tax supervisor shall appraise the improvements located on qualifying land according to the schedules and standards used in appraising other similar improvements in the county. If all or any part of a qualifying tract of land is located within the limits of an incorporated city or town, the tax supervisor shall furnish a copy of the property record showing both the present use appraisal and the valuation upon which the property would have been taxed in the absence of this classification to the collector of the city or town. He shall also notify the tax collector of any changes in the appraisals or in the eligibility of the property for the benefit of this classification."

Sec. 5.  G.S. 105-277.4(c) is hereby rewritten to read as follows:

"(c)       Decisions of the tax supervisor regarding the qualification or appraisal of property under this section may be appealed to the county board of equalization and review or, if that board is not in session, to the board of county commissioners. Decisions of the county board may be appealed to the Property Tax Commission as provided in G.S. 105-324."

Sec. 6.  G.S. 105-277.4 is further amended by adding a new subsection (d) thereto to read as follows:

"(d)      Property meeting the conditions herein set forth shall be taxed on the basis of the value of the property for its present use. The difference between the taxes due on the present use basis and the taxes which would have been payable in the absence of this classification, together with any interest, penalties or costs that may accrue thereon, shall be a lien on the real property of the taxpayer as provided in G.S. 105-355(a). The difference in taxes shall be carried forward in the records of the taxing unit or units as deferred taxes, but shall not be payable, unless and until (i) the owner conveys the property to anyone other than a spouse, child or sibling of the owner, or (ii) ownership of the property passes to anyone other than such an enumerated family member by will or intestacy, or(iii) ownership of the property passes to a corporation as defined in G.S. 105-277.2(4)(b) from anyone other than its principal shareholders or from such a corporation to anyone other than its principal shareholders, or (iv) the property loses its eligibility for the benefit of this classification for some other reason. The tax for the fiscal year that opens in the calendar year in which a disqualification occurs shall be computed as if the property had not been classified for that year, and taxes for the preceding three fiscal years which have been deferred as provided herein, shall immediately be payable, together with interest thereon as provided in G.S. 105-360 for unpaid taxes which shall accrue on the deferred taxes due herein as if they had been payable on the dates on which they originally became due. If only a part of a qualifying tract of land loses its eligibility, a determination shall be made of the amount of deferred taxes applicable to that part and that amount shall become payable with interest as provided above."

Sec. 7.  Chapter 62 of the Session Laws of 1975 is hereby amended by changing the statutory citation from G.S. 105-277.4(c) to G.S. 105-277.4(d).

Sec. 8.  G.S. 105-277.5 is hereby rewritten to read as follows:

"§ 105-277.5.  Agricultural, horticultural and forest land; notice of change in use. — Not later than the close of the listing period following a change which would disqualify all or a part of a tract of land receiving the benefit of this classification, the property owner shall furnish the tax supervisor with complete information regarding such change. Any property owner who fails to notify the tax supervisor of changes as aforesaid regarding land receiving the benefit of this classification shall be subject to a penalty of ten percent (10%) of the total amount of the deferred taxes and interest thereon for each listing period for which the failure to report continues."

Sec. 9.  G.S. 105-277.6(a) is hereby amended by deleting the last sentence thereof.

Sec. 10.  G.S. 105-277.6(c) is hereby rewritten to read as follows:

"(c)       To insure uniform appraisal of the classes of property herein defined in each county, the tax supervisor, at the time of the general reappraisal of all real property as required by G.S. 105-286, shall also prepare a schedule of land values, standards and rules which, when properly applied, will result in the appraisal of the property at its present use value. Such schedule, standards and rules shall be used by the tax supervisor to appraise property receiving the benefit of this classification until the next general revaluation of real property in the county as required by G.S. 105-286. For the year 1976, the tax supervisor of each county shall prepare a new present use value schedule as herein described and shall use such schedule to appraise property receiving the benefit of this classification until that county's next general revaluation. The schedule of values, standards and rules shall be subject to all of the conditions set forth in G.S. 105-317(c), (c)(1) and (c)(2) relating to the adoption of schedules, standards and rules in revaluation years."

Sec. 11.  G.S. 105-277.7 is hereby rewritten to read as follows:

"§ 105-277.7.  Agricultural, horticultural and forest land; Department of Revenue assistance. — To insure reasonable uniformity among the counties of the State in making appraisals as prescribed herein, the Department of Revenue shall prepare rules, regulations and standards to assist the tax supervisor in administering the provisions of this section."

Sec. 12.  G.S. 105-324(a) is hereby rewritten to read as follows:

"(a)       The provisions of this section shall govern appeals from listing and valuation decisions of boards of equalization and review and boards of county commissioners made under the provisions of G.S. 105-286, G.S. 105-287, G.S.105-322, G.S. 105-325, G.S. 105-312 and G.S. 105-277.4."

Sec. 13.  If any provision of this act or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the act which can be given effect without the invalid provision or application, and to this end the provisions of this act are declared to be severable.

Sec. 14.  This act shall become effective July 1, 1975.

In the General Assembly read three times and ratified, this the 24th day of June, 1975.