Loading...
HomeMy WebLinkAbout2007_Schedule_Reval_Manual_Appendix1 ScheduleofValues,Standards,andRules Appendix1-StatutoryAuthorityin TheMachineryAct New Hanover County, North Carolina Effective January 1, 2007 North Carolina law requires general reappraisal of real property at least every eight years. Over a long period of time, values assessed under a given revaluation?sSchedule of Values lose a uniform relationship to the true market value, as defined by Statute. When compared to sale prices year-by-year during a revaluation?s life-cycle, some assessed values become too high while others become too low. The resulting inequity requires some property owners to pay more than their fair share of taxes, and allows some owners to pay less than their fair share. When values fall to a predetermined level with compared to actual market transactions, usually by the fourth year after a general revaluation, certain public utilities are given a reduction in assessments. This reduction continues for three years and can be reduced again in the seventh year after a general revaluation. These losses result in generally higher tax rates for everyone. In view of the above inequities of valuation and risk of lost revenue from one source becoming an additional burden on others, more frequent revaluations are desirable. From time to time the State of North Carolina may deem it necessary to add or modify guiding statute contained in The Machinery Act. All such Statutory changes and changes to Department of Revenue Rules and Regulations are hereby incorporated into this Schedule of Values. Table of Contents § 105-274. Property subject to taxation.............................................1 § 105-283. Uniform appraisal standards............................................1 § 105-284. Uniform assessment standard...........................................1 § 105-285. Date as of which property is to be listed and appraised........................2 § 105-286. Time for general reappraisal of real property...............................3 § 105-287. Changing appraised value of real property in years in which general reappraisal or horizontal adjustment is not made...........................................4 § 105-317. Appraisal of real property; adoption of schedules, standards, and rules...........5 § 105-394. Immaterial irregularities...............................................7 § 105-277.2. Agricultural, horticultural, and forestland ? Definitions.....................8 § 105-277.3. Agricultural, horticultural, and forestland ? Classifications..................11 § 105-277.4. Agricultural, horticultural and forestland ? Application; appraisal at use value; appeal; deferred taxes....................................................15 § 105-301. Place for listing real property...........................................16 § 105-302. In whose name real property is to be listed................................17 Appendix 2 - GlossaryPage 1 Article 12. Property Subject to Taxation. § 105-274. Property subject to taxation. (a)All property, real and personal, within the jurisdiction of the State shall be subject to taxation unless it is: (1)Excluded from the tax base by a statute of statewide application enacted under the classification power accordedthe General Assembly by Article V, § 2(2), of the North Carolina Constitution, or (2)Exempted from taxation by the Constitution or by a statute of statewide application enacted under the authority granted the General Assemblyby Article V, § 2(3), of the North Carolina Constitution. (b)No provision of this Subchapter shall be construed to exempt from taxation any property situated in this State belonging to any foreign corporation unless the context of the provision clearly indicates a legislative intent to grant such an exemption. (1939, c. 310, ss. 303, 1800; 1961, c. 1169, s. 8; 1967, c. 1185; 1971, c. 806, s. 1.) Article 13. Standards for Appraisal and Assessment. § 105-283. Uniform appraisal standards. All property, real and personal, shall as far as practicable be appraised or valued at its true value in money. When used in this Subchapter, the words "true value" shall be interpreted as meaning market value, that is, 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 and both having reasonable knowledge of all the uses to which the property is adapted and for which it is capable of being used. For the purposes of this section, the acquisition of an interest in land by an entity having the power of eminent domain with respect to the interest acquired shall not be considered competent evidence of the true value in money of comparable land. (1939, c. 310, s. 500; 1953, c. 970, s. 5; 1955, c. 1100, s. 2; 1959, c. 682; 1967, c. 892, s. 7; 1969, c. 945, s. 1; 1971, c. 806, s. 1; 1973, c. 695, s. 11; 1977, 2nd Sess., c. 1297.) § 105-284. Uniform assessment standard. (a)Except as otherwise provided in this section, all property, real and personal, shall be assessed for taxation at its true value or use value as determined under G.S. 105-283 or G.S. 105-277.6,and taxes levied by all counties and municipalities shall be levied uniformly on assessments determined in accordance with this section. (b)The assessed value of public service company system property subject to appraisal by the Department of Revenue under G.S. 105-335(b)(1) shall be determined by applying to the allocation of such value to each county a percentage to be established by the Department of Revenue. The percentage to be applied shall be either: (1)The median ratio established in sales assessment ratio studies of real property conducted by the Page 2New Hanover County Tax Office Department of Revenue in the county in the year the county conducts a reappraisal of real property and in the fourth and seventh years thereafter; or (2)A weighted average percentage based on the median ratio for real property established by the Department of Revenue as provided in subdivision (1) and a one hundred percent (100%) ratio for personal property. No percentage shall be applied in a year in which the median ratio for real propertyis ninety percent (90%) or greater. If the median ratio for real property in any county is below ninety percent (90%) and if the county assessor has provided information satisfactory to the Department of Revenue that the county follows accepted guidelines and practices in the assessment of business personal property, the weighted average percentage shall be applied to public service company property. In calculating the weighted average percentage, the Department shall use the assessed value figures for real and personal property reported by the county to the Local Government Commission for the preceding year. In any county which fails to demonstrate that it follows accepted guidelines and practices, the percentage to be applied shall be the median ratio for real property. The percentage established in a year in which a sales assessment ratio study is conducted shall continue to be applied until another study is conducted by the Department of Revenue. (c)Notice of the median ratio and the percentage to be applied for each county shall be given by the Department of Revenue to the chairman of the board of commissioners not later than April 15 of the year for which it is to be effective.Notice shall also be given at the same time to the public service companies whose property values are subject to adjustment under this section. Either the county or an affected public service company may challenge the real property ratio or the percentage established by the Department of Revenue by giving notice of exception within 30 days after the mailing of the Department's notice. Upon receipt of such notice of exception, the Department shall arrange a conference with the challenging party or parties to review the matter. Following the conference, the Department shall notifythe challenging party or parties of its final determination in the matter. Either party may appeal the Department's determination to the Property Tax Commission by giving notice of appeal within 30 days after the mailing of the Department's decision. (d) Property that is in a development financing district and that is subject to an agreement entered into pursuant to G.S. 159-108 shall be assessed at its true value or at the minimum value set out in the agreement, whichever is greater. (1939, c. 310, s. 500; 1953, c. 970, s. 5; 1955, c. 1100, s. 2; 1959, c. 682; 1967, c. 892, s. 7; 1969, c. 945, s. 1; 1971, c. 806, s. 1; 1973, c. 695, s. 12; 1985, c. 601, s. 1; 1987 (Reg. Sess., 1988), c. 1052, s. 1; 2003-403,s. 20.) Article 14. Time for Listing and Appraising Property for Taxation. § 105-285. Date as of which property is to be listed and appraised. (a)Annual Listing Required. ? All property subject to ad valorem taxation shall be listed annually. (b)Personal Property; General Rule. ? Except as otherwise provided in this Chapter, the value, ownership, and place of taxation of personal property, both tangible and intangible, shall be determined annually as of January 1. Appendix 2 - GlossaryPage 3 (c)Repealed by Session Laws 1987, c. 813, s. 12. (d)Real Property. ? The value of real propertyshall be determined as of January 1 of the years prescribed by G.S. 105-286 and G.S. 105-287. The ownership of real property shall be determined annually as of January 1, except in the following situation: When any real property is acquired after January 1, but prior to July 1, and the property was not subject to taxation on January 1 on account of its exempt status, it shall be listed for taxation by the transferee as of the date of acquisition and shall be appraised in accordance with its true value as of January 1 preceding the date of acquisition; and the property shall be taxed for the fiscal year of the taxing unit beginning on July 1 of the year in which it is acquired. The person in whose name such property is listed shall have the right to appeal the listing, appraisal, and assessment of the property in the same manner as that provided for listings made as of January 1. In the event real property exempt as of January 1 is, prior to July 1, acquired from a governmental unit that by contract is making payments in lieu of taxes to the taxing unit for the fiscal period beginning July 1 of the year in which the property is acquired, the tax on such property for the fiscal period beginning on July 1 immediately following acquisition shall be one half of the amount of the tax that would have been imposed if the property had been listed for taxation as of January 1. (1939, c. 310, s. 302; 1945, c. 973; 1971, c. 806, s. 1; 1973, c. 735; 1985, c. 656, s. 21; 1987, c. 813, s. 12; 1993, c. 485, s. 17.) § 105-286. Time for general reappraisal of real property. (a)Octennial Plan. ? Unless the date shall be advanced as provided in subdivision (a)(2), below, each county of the State, as of January 1 of the year prescribed in the schedule set out in subdivision (a)(1),below, and every eighth year thereafter,shall reappraise all real property in accordance with the provisions of G.S. 105-283 and 105-317. (1)Schedule of Initial Reappraisals. ? Division One ? 1972: Avery, Camden, Cherokee, Cleveland,Cumberland, Guilford, Harnett, Haywood, Lee, Montgomery, Northampton, and Robeson. Division Two ? 1973: Caldwell, Carteret, Columbus, Currituck, Davidson, Gaston, Greene, Hyde, Lenoir, Madison, Orange, Pamlico, Pitt, Richmond, Swain, Transylvania, and Washington. Division Three ? 1974: Ashe, Buncombe, Chowan, Franklin, Henderson, Hoke, Jones, Pasquotank, Rowan, and Stokes. Division Four ? 1975: Alleghany, Bladen, Brunswick, Cabarrus, Catawba, Dare, Halifax, Macon, New Hanover, Surry, Tyrrell, and Yadkin. Division Five ? 1976: Bertie, Caswell, Forsyth, Iredell, Jackson, Lincoln, Onslow, Person, Perquimans, Rutherford, Union, Vance, Wake, Wilson, and Yancey. Division Six ? 1977: Alamance, Durham, Edgecombe, Gates, Martin, Mitchell, Nash, Polk, Randolph, Stanly, Warren, and Wilkes. Division Seven ? 1978: Alexander, Anson, Beaufort, Clay, Craven, Davie, Duplin, and Granville. Division Eight ? 1979: Burke, Chatham, Graham, Hertford, Johnston, McDowell, Mecklenburg, Moore, Pender, Rockingham,Sampson, Scotland, Watauga, and Wayne. Page 4New Hanover County Tax Office (2)AdvancingScheduled Octennial Reappraisal. ? Any county desiring to conduct a reappraisal of real property earlier than required by this subsection (a) may do so upon adoption by the board of county commissioners of a resolution so providing. A copy of any such resolution shall be forwarded promptly to the Department of Revenue. If the scheduled date for reappraisal for any county is advanced as provided herein, real property in that county shall thereafter be reappraised every eighth year following the advanced date unless, in accordance with the provisions of this subdivision (a)(2), an earlier date shall be adopted by resolution of the board of county commissioners, in which event a new schedule of octennial reappraisals shall thereby be established for that county. (b)Fourth-Year Horizontal Adjustments. ? As of January 1 of the fourth year following a reappraisal of real property conducted under the provisions of subsection (a), above, each county shall review the appraised values of all real property and determine whether changes should be made to bring those values into line with then current true value. If it is determined that the appraised value of all real property or of defined types or categories of real property require such adjustment, the assessor shall revise the values accordingly by horizontal adjustments rather than by actual appraisal of individual properties: That is, by uniform application of percentages of increase or reduction to the appraised values of properties within defined types or categories or within defined geographic areas of the county. (c)Value to Be Assigned Real Property When Not Subject to Appraisal. ? In years in which real property within a county is not subject to appraisalor reappraisal under subsections (a) or (b), above, or under G.S. 105-287, it shall be listed at the value assigned when last appraised under this section or under G.S. 105-287. (1939, c. 310, s. 300; 1941, c. 282, ss. 1, 1 1/2; 1943, c. 634, s. 1; 1945, c. 5; 1947, c. 50; 1949, c. 109; 1951, c. 847; 1953, c. 395; 1955, c. 1273; 1957, c. 1453, s. 1; 1959, c. 704, s. 1; 1971, c. 806, s. 1; 1973, c. 476, s. 193; 1987, c. 45, s. 1.) § 105-287. Changing appraised value of real property in years in which general reappraisal or horizontal adjustment is not made. (a)In a year in which a general reappraisal or horizontal adjustment of real property in the county is not made, the assessor shall increase or decrease the appraised value of real property, as determined under G.S. 105-286, to recognize a change in the property's value resulting from one or more of the reasons listed in this subsection. The reason necessitating a change in the property's value need not be under the control of or at the request of the owner of the affected property. (1)Correct a clerical or mathematical error. (2)Correct an appraisal error resulting from a misapplication of the schedules, standards, and rules used in the county's most recent general reappraisal or horizontal adjustment. (2a)Recognize an increase or decrease in the value of the property resulting from a conservation or preservation agreement subject to Article 4 of Chapter 121 of the General Statutes, the Conservation and Historic Preservation Agreements Act. (2b)Recognize an increase or decrease in the value of the property resulting from a physical change to the land or to the improvementson the land, other than a change listed in subsection (b) of this section. (2c)Recognize an increase or decrease in the value of the property resulting from a change in the Appendix 2 - GlossaryPage 5 legally permitted use of the property. (3)Recognize an increase or decrease in the value of the property resulting from a factor other than one listed in subsection (b). (b)In a year in which a general reappraisal or horizontal adjustment of real property in the county is not made, the assessor may not increase or decrease the appraised value of real property, as determined under G.S. 105-286, to recognize a change in value caused by: (1)Normal, physical depreciation of improvements; (2) Inflation, deflation, or other economic changes affecting the county in general; or (3)Betterments to the property made by: a.Repainting buildings or other structures; b.Terracing or other methods of soil conservation; c.Landscape gardening; d.Protecting forests against fire; or e.Impounding water on marshland for non-commercial purposes to preserve or enhance the natural habitat of wildlife. (c)An increase or decrease in the appraised value of real property authorized by this section shall be made in accordance with the schedules, standards, and rules used in the county's most recent general reappraisal or horizontal adjustment. An increase or decrease in appraised value made under this section is effective as of January 1 of the year in which it is made and is not retroactive. This section does not modify or restrict the provisions of G.S. 105-312 concerning the appraisal of discovered property. (d)Notwithstanding subsection (a), if a tract of land has been subdivided into lots and more than five acres of the tract remain unsold by the owner of the tract, the assessor may appraise the unsold portion as land acreage rather than as lots.A tract is considered subdivided into lots when the lots are located on streets laid out and open for travel and the lots have been sold or offered for sale as lots since the last appraisal of the property. (1939, c. 310, ss. 301, 500; 1953, c. 970, s. 5; 1955, c. 901; c. 1100, s. 2; 1959, c. 682; c. 704, s. 2; 1963, c. 414; 1967, c. 892, s. 7; 1969, c. 945, s. 1; 1971, c. 806, s. 1; 1973, c. 695, s. 10; c. 790, s. 2; 1987, c. 655; 1997-226, s. 4; 2001-139, s. 2.) Article 19. Administration of Real and Personal Property Appraisal. § 105-317. Appraisal of real property; adoption of schedules, standards, and rules. (a)Whenever any real property is appraised it shall be the duty of the persons making appraisals: (1)In determining the true value of land, to consider as to each tract, parcel, or lot separately listed at least its advantages and disadvantages as to location; zoning; quality of soil; waterpower; water privileges;dedication as a nature preserve; conservation or preservation agreements; mineral, quarry, or other valuable deposits; fertility; adaptability for agricultural, timber-producing, commercial,industrial, or other uses; past income; probable future income; and any other factors Page 6New Hanover County Tax Office that may affect its value except growing crops of a seasonal or annual nature. (2)In determining the true value of a building or other improvement, to consider at least its location; type of construction; age; replacement cost; cost; adaptability for residence, commercial,industrial, or other uses; past income; probable future income; and any other factors that may affect its value. (3)To appraise partially completed buildings in accordance with the degree of completion on January 1. (b)In preparation for each revaluation of real property required by G.S. 105-286, it shall be the duty of the assessor to see that: (1)Uniform schedules of values,standards, and rules to be used in appraising real propertyat its true value and at its present-use value are prepared and are sufficiently detailed to enable those making appraisals to adhere to them in appraising real property. (2)Repealed by Session Laws 1981, c. 678, s. 1. (3)A separate property record be prepared for each tract, parcel, lot, or group of contiguous lots, which record shall show the information required for compliance with the provisions of G.S. 105-309 insofar as they deal with real property, as well as that required by this section. (The purpose of this subdivision is to require that individual propertyrecords be maintained in sufficient detail to enable property owners to ascertain the method, rules, and standards of value by which property is appraised.) (4)The property characteristics considered in appraising each lot, parcel, tract, building,structure and improvement, in accordance with the schedules of values, standards, and rules, be accurately recorded on the appropriate property record. (5)Upon the request of the owner, the board of equalization and review, or the board of county commissioners, any particular lot, parcel, tract, building, structure or improvement be actually visited and observed to verify the accuracy of property characteristics on record for that property. (6)Each lot, parcel, tract, building, structure and improvement be separately appraised by a competent appraiser, either one appointed under the provisions of G.S. 105-296 or one employedunder the provisions of G.S. 105-299. (7)Notice is given in writing to the owner that he is entitled to have an actual visitation and observation of his property to verify the accuracy of property characteristics on record for that property. (c)The values, standards, and rules required by subdivision (b)(1) shall be reviewed and approved by the board of county commissioners before January 1 of the year they are applied. The board of county commissioners may approve the schedules of values, standards,and rules to be used in appraising real property at its true value and at its present-use value either separately or simultaneously. Notice of the receipt and adoption by the board of county commissioners of either or both the true value and present-use value schedules,standards, and rules, and notice of a property owner's right to comment on and contest the schedules, standards, and rules shall be given as follows: (1)The assessor shall submit the proposed schedules, standards, and rules to the board of county commissioners not less than 21 days before the meeting at which they will be considered by the board. On the same day that they are submitted to the board for its consideration, the assessor Appendix 2 - GlossaryPage 7 shall file a copy of the proposed schedules, standards, and rules in his office where they shall remain available for public inspection. (2)Upon receipt of the proposed schedules, standards,and rules, the board of commissioners shall publish a statement in a newspaper having general circulation in the county stating: a.That the proposed schedules, standards, and rules to be used in appraising real propertyin the county have been submitted to the board of county commissioners and are available for public inspection in the assessor's office; and b.The time and place of a public hearing on the proposed schedules, standards, and rules that shall be held by the board of county commissioners at least seven days before adopting the final schedules, standards, and rules. (3)When the board of county commissioners approves the final schedules, standards,and rules, it shall issue an order adopting them. Notice of this order shall be published once a week for four successive weeks in a newspaper having general circulation in the county, with the last publication being not less than seven days before the last day for challenging the validity of the schedules, standards,and rules by appeal to the PropertyTax Commission. The notice shall state: a.That the schedules, standards, and rules to be used in the next scheduled reappraisal of real property in the county have been adopted and are open to examination in the office of the assessor; and b.That a property owner who asserts that the schedules, standards, and rules are invalid may except to the order and appeal therefrom to the Property Tax Commission within 30 days of the date when the notice of the order adopting the schedules, standards, and rules was first published. (d)Before the board of county commissioners adopts the schedules of values, standards, and rules, the assessor may collect data needed to apply the schedules, standards, and rules to each parcel in the county. (1939, c. 310, s. 501; 1959, c. 704, s. 4; 1967, c. 944; 1971, c. 806, s. 1; 1973, c. 476, s. 193; c. 695, s. 5; 1981, c. 224; c. 678, s. 1; 1985, c. 216, s. 2; c. 628, s. 4; 1987, c. 45, s. 1; c. 295, s. 1; 1997-226,s. 5.) Article 30. General Provisions. § 105-394. Immaterial irregularities. Immaterial irregularities in the listing, appraisal, or assessment of property for taxation or in the levy or collection of the property tax or in any other proceeding or requirement of this Subchapter shall not invalidate the tax imposed upon any property or any process of listing, appraisal, assessment, levy, collection, or any other proceeding under this Subchapter. The following are examples of immaterial irregularities: (1)The failure of list takers, tax supervisors, or members of boards of equalization and review to take and subscribe the oaths required of them. (2)The failure to sign the affirmation required on the abstract. Page 8New Hanover County Tax Office (3)The failure to list, appraise, or assess any property for taxation or to levy any tax within the time prescribed by law. (4)The failure of the board of equalization and review to meet or to adjourn within the time prescribed by law or to give any required notice of its meetingsand adjournment. (5)Any defect in the description upon any abstract, tax receipt, tax record, notice, advertisement, or other document, of real or personal property, if the description be sufficient to enable the tax collector or any person interested to determine what property is meant by the description. (In such cases the tax supervisor or tax collector may correct the description on the documents bearing the defective description, and the correct description shall be used in any documents later issued in tax foreclosure proceedings authorized by this Subchapter.) (6)The failure of the collector to advertise any tax lien. (7)Repealed by Session Laws 1983, c. 808, s. 11. (8)Any irregularity or informality in the order or manner in which tax liens on real property are offered for sale. (9)The failure to make or serve any notice mentioned in this Subchapter. (10)The omission of a dollar mark or other designation descriptive of the value of figures upon any document required by this Subchapter. (11)Any other immaterial informality, omission, or defect on the part of any person in any proceeding or requirement of this Subchapter. (1939, c. 310, s. 1715; 1965, c. 192, ss. 1, 2; 1971, c. 806, s. 1; 1983, c. 808, ss. 10, 11.) § 105-277.2. Agricultural, horticultural, and forestland ? Definitions. The following definitions apply in G.S. 105-277.3 through G.S. 105-277.7: (1)Agricultural land. ? Land that is a part of a farm unit that is actively engaged in the commercial production or growing of crops, plants, or animals under a sound managementprogram. Agricultural land includes woodland and wasteland that is a part of the farm unit, but the woodland and wasteland included in the unit must be appraised under the use-value schedules as woodland or wasteland. A farm unit may consist of more than one tract of agricultural land, but at least one of the tracts must meet the requirements in G.S. 105-277.3(a)(1), and each tract must be under a sound management program. If the agricultural land includes less than 20 acres of woodland, then the woodland portion is not required to be under a sound management program.Also, woodland is not required to be under a sound managementprogram if it is determined that the highest and best use of the woodland is to diminish wind erosion of adjacent agricultural land, protect water quality of adjacent agricultural land, or serve as buffers for adjacent livestock or poultry operations. (1a) Business entity. ? A corporation, a general partnership, a limited partnership, or a limited liability company. (2)Forestland. ? Land that is a part of a forest unit that is actively engaged in the commercial growing of trees under a sound managementprogram. Forestland includes wasteland that is a part of the forest unit, but the wasteland included in the unit must be appraised under the use-valueschedules as wasteland. A forest unit may consist of more than one tract of Appendix 2 - GlossaryPage 9 forestland, but at least one of the tracts must meet the requirements in G.S. 105-277.3(a)(3), and each tract must be under a sound management program. (3)(Effective for taxes imposed for taxable years beginning prior to July 1, 2005) Horticultural land. ? Land that is a part of a horticultural unit that is actively engaged in the commercial production or growing of fruits or vegetables or nursery or floral products under a sound management program. Horticultural land includes woodland and wasteland that is a part of the horticultural unit, but the woodland and wasteland included in the unit must be appraised under the use-value schedules as woodland or wasteland. A horticultural unit may consist of more than one tract of horticultural land, but at least one of the tracts must meet the requirements in G.S. 105-277.3(a)(2), and each tract must be under a sound management program. If the horticultural land includes less than 20 acres of woodland, then the woodland portion is not required to be under a sound managementprogram. Also, woodland is not required to be under a sound management program if it is determined that the highest and best use of the woodland is to diminish wind erosion of adjacent horticultural land or protect water quality of adjacent horticultural land. (3)(Effective for taxes imposed for taxable years beginning on or after July 1, 2005) Horticultural land. ? Land that is a part of a horticultural unit that is actively engaged in the commercial production or growing of fruits or vegetables or nursery or floral products under a sound management program. Horticultural land includes woodland and wasteland that is a part of the horticultural unit, but the woodland and wasteland included in the unit must be appraised under the use-value schedules as woodland or wasteland. A horticultural unit may consist of more than one tract of horticultural land, but at least one of the tracts must meet the requirements in G.S. 105-277.3(a)(2), and each tract must be under a sound management program. If the horticultural land includes less than 20 acres of woodland, then the woodland portion is not required to be under a sound managementprogram. Also, woodland is not required to be under a sound management program if it is determined that the highest and best use of the woodland is to diminish wind erosion of adjacent horticultural land or protect water quality of adjacent horticultural land. Land used to grow horticultural and agricultural crops on a rotating basis or where the horticultural crop is set out or planted and harvested within one growing season, may be treatedas agricultural land as described in subdivision (1) of this section when there is determined to be no significant difference in the cash rental rates for the land. (4)Individually owned. ? Owned by one of the following: a.A natural person. For the purpose of this section, a natural person who is an income beneficiary of a trust that owns land may elect to treat the person's beneficial share of the land as ownedby that person. If the person's beneficial interest is not an identifiable share of land but can be established as a proportional interest in the trust income, the person's beneficial share of land is a percentage of the land owned by the trust that corresponds to the beneficiary's proportional interest in the trust income. For the purpose of this section, a natural person who is a member of a business entity, other than a corporation, that owns land may elect to treat the person's share of the land as owned by that person. The person'sshare is a percentage of the land owned by the business entity that corresponds to the person's percentage of ownership in the entity. b.(Effective for taxes imposed for taxable years beginning prior to July 1, 2004) A business entity having as its principal business one of the activities described in subdivisions (1), (2), and (3) and whose members are all natural persons who meet one or more of the Page 10New Hanover County Tax Office following conditions: 1.The member is actively engaged in the business of the entity. 2.The member is a relative of a member who is actively engaged in the business of the entity. 3.The member is a relative of, and inherited the membership interest from, a decedent who met one or both of the preceding conditions after the land qualified for classification in the hands of the business entity. b.(Effective for taxes imposed for taxable years beginning on or after July 1, 2004) A business entity having as its principal business one of the activities described in subdivisions (1), (2), and (3) and whose members are all natural persons who meet one or more of the conditions listed in this sub-subdivision. For the purpose of this sub-subdivision, the terms "having as its principal business" and "actively engaged in the business of the entity" include the leasing of the land for one of the activities described in subdivisions (1), (2), and (3) only if all membersof the business entity are relatives. 1.The member is actively engaged in the business of the entity. 2.The member is a relative of a member who is actively engaged in the business of the entity. 3.The member is a relative of, and inherited the membership interest from, a decedent who met one or both of the preceding conditions after the land qualified for classification in the hands of the business entity. c.A trust that was created by a natural person who transferred the land to the trust and each of whose beneficiaries who is currently entitled to receive income or principal meets one of the following conditions: 1.Is the creator of the trust or the creator's relative. 2.Is a second trust whose beneficiaries who are currently entitled to receive income or principal are all either the creator of the first trust or the creator's relatives. d.A testamentary trust that meets all of the following conditions: 1.It was created by a natural person who transferred to the trust land that qualified in that person's hands for classification under G.S. 105-277.3. 2.At the time of the creator's death, the creator had no relativesas defined in this section as of the date of death. 3.The trust income, less reasonable administrative expenses, is used exclusively for educational, scientific, literary, cultural, charitable, or religious purposes as defined in G.S. 105-278.3(d). e.Tenants in common, if each tenant is either a natural person or a business entity described in sub-subdivision b. of this subdivision. Tenants in common may elect to treat their individual shares as owned by them individually in accordance with G.S. 105-302(c)(9). The ownership requirements of G.S. 105-277.3(b) apply to each tenant in common who is a natural person, and the ownership requirements of G.S. 105-277.3(b1) apply to each Appendix 2 - GlossaryPage 11 tenant in common who is a business entity. (4a)Member. ? A shareholder of a corporation, a partner of a general or limited partnership, or a member of a limited liability company. (5)Present-use value. ? The value of land in its current use as agricultural land, horticultural land, or forestland, based solely on its ability to produce income and assuming an average level of management. A rate of nine percent (9%) shall be used to capitalize the expected net income of forestland. The capitalization rate for agricultural land and horticultural land is to be determined by the Use-Value Advisory Board as provided in G.S. 105-277.7. (5a)Relative. ? Any of the following: a.A spouse or the spouse's lineal ancestor or descendant. b.A lineal ancestor or a lineal descendant. c.A brother or sister, or the lineal descendant of a brother or sister. For the purposes of this sub-subdivision,the term brother or sister includes stepbrother or stepsister. d.An aunt or an uncle. e.A spouse of a person listed in paragraphs a. through d. For the purpose of this subdivision, an adoptive or adopted relative is a relative and the term "spouse" includes a surviving spouse. (6)Sound management program. ? A program of production designed to obtain the greatest net return from the land consistent with its conservation and long-term improvement. (7)(Effective for taxes imposed for taxable years beginning prior to July 1, 2005) Unit. ? One or more tracts of agricultural land, horticultural land, or forestland. Multiple tracts must be under the same ownership. If the multiple tracts are located within different counties, they must be within 50 miles of a tract qualifying under G.S. 105-277.3(a) and share one of the following characteristics: a.Type of classification. b.Use of the same equipment or labor force. (7)(Effective for taxes imposed for taxable years beginning on or after July 1, 2005) Unit. ? One or more tracts of agricultural land, horticultural land, or forestland.Multiple tracts must be under the same ownership and be of the same type of classification. If the multipletracts are located within different counties, they must be within 50 miles of a tract qualifying under G.S. 105-277.3(a). (1973, c. 709, s. 1; 1975, c. 746, s. 1; 1985, c. 628, s. 1; c. 667, ss. 1, 4; 1987, c. 698, s. 1; 1995, c. 454, s. 1; 1995 (Reg. Sess., 1996), c. 646, s. 17; 1998-98, s. 24; 2002-184, s. 1; 2004-8, s. 1; 2005-313, ss. 1, 2.) § 105-277.3. Agricultural, horticultural, and forestland ? Classifications. (a)Classes Defined. ? The following classes of property are designated special classes of property under authority of Section 2(2) of Article V of the North Carolina Constitution and must be appraised, assessed, and taxed as provided in G.S. 105-277.2 through G.S. 105-277.7. (1)(Effective for taxes imposed for taxable years beginning prior to July 1, 2005) Agricultural Page 12New Hanover County Tax Office land. ? Individually owned agricultural land consisting of one or more tracts, one of which consists of at least 10 acres that are in actual production and that, for the three years preceding January 1 of the year for which the benefit of this section is claimed, have produced an average gross income of at least one thousand dollars ($1,000).Gross income includes income from the sale of the agricultural productsproduced from the land and any payments received under a governmental soil conservation or land retirement program. Land in actual production includes land under improvementsused in the commercial production or growing of crops, plants, or animals. (1)(Effective for taxes imposed for taxable years beginning on or after July 1, 2005) Agricultural land. ? Individually owned agricultural land consisting of one or more tracts, one of which consists of at least 10 acres that are in actual production and that, for the three years preceding January 1 of the year for which the benefit of this section is claimed, have produced an average gross income of at least one thousand dollars ($1,000).Gross income includes income from the sale of the agricultural productsproduced from the land, any payments received under a governmental soil conservation or land retirement program, and the amount paid to the taxpayer during the taxable year pursuant to P.L. 108-357, Title VI, Fair and Equitable TobaccoReform Act of 2004.Land in actual production includes land under improvements used in the commercial production or growing of crops, plants, or animals. (2)Horticultural land. ? Individually owned horticultural land consisting of one or more tracts, one of which consists of at least five acres that are in actual production and that, for the three years preceding January 1 of the year for which the benefit of this section is claimed, have met the applicable minimum gross income requirement. Land in actual production includes land under improvements used in the commercial production or growing of fruits or vegetables or nursery or floral products. Land that has been used to produce evergreens intended for use as Christmas trees must have met the minimum gross income requirements established by the Department of Revenue for the land. All other horticultural land must have produced an average gross income of at least one thousand dollars ($1,000). Gross income includes income from the sale of the horticultural products produced from the land and any payments received under a governmental soil conservation or land retirement program. (3)Forestland. ? Individually owned forestland consisting of one or more tracts, one of which consists of at least 20 acres that are in actual production and are not included in a farm unit. (b)Natural Person Ownership Requirements. ? In order to come within a classification described in subsection (a) of this section, the land must, if owned by a natural person, also satisfy one of the following conditions: (1)It is the owner's place of residence. (2)It has been owned by the currentowner or a relative of the current owner for the four years preceding January 1 of the year for which the benefit of this section is claimed. (3)At the time of transfer to the current owner, it qualified for classificationin the hands of a business entity or trust that transferred the land to the current owner who was a member of the business entity or a beneficiary of the trust, as appropriate. (b1)Entity Ownership Requirements. ? In order to come within a classification described in subsection (a) of this section, the land must, if owned by a business entity or trust, have been owned by the business entity or trust or by one or moreof its members or creators, respectively, for the four years immediately preceding January 1 of the year for which the benefit of this section is claimed. Appendix 2 - GlossaryPage 13 (b2)(Effective for taxes imposed for taxableyearsbeginning prior to July 1, 2005) Exception to Ownership Requirements. ? Notwithstanding the provisions of subsections (b) and (b1) of this section, land may qualify for classification in the hands of the new owner if all of the conditions listed in this subsection are met, even if the new owner does not meet all of the ownership requirements of subsections (b) and (b1) of this section with respect to the land. If the land qualifies for classification in the hands of the new owner under the provisions of this subsection, then the deferred taxes remain a lien on the land under G.S. 105-277.4(c), the new owner becomes liable for the deferred taxes, and the deferred taxes become payable if the land fails to meet any other condition or requirement for classification. (1)The land was appraised at its present use value or was eligible for appraisal at its present use value at the time title to the land passed to the new owner. (2)At the time title to the land passed to the new owner, the new owner acquires the land for the purposes of and continues to use the land for the purposes it was classified under subsection (a) of this section while under previous ownership. (3)The new owner has timely filed an application as required by G.S. 105-277.4(a) and has certified that the new owner accepts liability for the deferred taxes and intends to continue the present use of the land. (b2)(Effective for taxes imposed for taxableyearsbeginning on or after July 1, 2005) Exception to Ownership Requirements. ? Notwithstanding the provisions of subsections (b) and (b1) of this section, land may qualify for classification in the hands of the new owner if all of the conditions listed in either subdivision of this subsection are met, even if the new owner does not meet all of the ownership requirements of subsections (b) and (b1) of this section with respect to the land. (1)Exception for assumption of deferred liability. ? If the land qualifies for classification in the hands of the new owner under the provisions of this subdivision, then the deferred taxes remain a lien on the land under G.S. 105-277.4(c), the new owner becomes liable for the deferred taxes, and the deferred taxes become payable if the land fails to meet any other condition or requirement for classification. Land qualifies for classification in the hands of the new owner if all of the following conditions are met: a.The land was appraised at its present use value at the time title to the land passed to the new owner. b.At the time title to the land passed to the new owner, the new owner acquires the land for the purposes of and continues to use the land for the purposes it was classified under subsection (a) of this section while under previous ownership. c.The new owner has timely filed an application as required by G.S. 105-277.4(a) and has certified that the new owner accepts liability for the deferred taxes and intends to continue the present use of the land. (2)Exception for expansion of existing unit. ? If deferred liability is not assumed under subdivision (1) of this subsection, the land qualifies for classification in the hands of the new owner if, at the time title passed to the new owner, the land was being used for the same purpose and was eligible for appraisal at its present-use value as other land already owned by the new owner and classifiedunder subsection (a) of this section. The new owner musttimely file an application as required by G.S. 105-277.4(a). (c)Repealed by Session Laws 1995, c. 454, s. 2. Page 14New Hanover County Tax Office (d)Exception for Conservation Reserve Program. ? Land enrolled in the federal Conservation Reserve Program authorized by 16 U.S.C. Chapter 58 is considered to be in actual production, and income derived from participation in the federal Conservation Reserve Program may be used in meeting the minimum gross income requirements of this section either separately or in combination with income from actual production. Land enrolled in the federal Conservation Reserve Program must be assessed as agricultural land if it is planted in vegetationother than trees, or as forestland if it is planted in trees. (d1)Exception for Easements on Qualified Conservation Lands Previously Appraised at Use Value. ? Property that is appraised at its present-use value under G.S. 105-277.4(b) shall continue to qualify for appraisal, assessment, and taxation as provided in G.S. 105-277.2 through G.S. 105-277.7 as long as the property is subject to an enforceable conservation easement that would qualify for the conservation tax credit provided in G.S. 105-130.34 and G.S. 105-151.12, without regard to actual production or income requirements of this section. Notwithstanding G.S. 105-277.3(b) and (b1), subsequent transfer of the property does not extinguish its present-use value eligibility as long as the property remains subject to an enforceable conservation easement that qualifies for the conservation tax credit provided in G.S. 105-130.34and G.S. 105-151.12. The exception provided in this subsection applies only to that part of the property that is subject to the easement. (e)Exception for Turkey Disease. ? Agricultural land that meets all of the following conditionsis considered to be in actual production and to meet the minimum gross income requirements: (1)The land was in actual production in turkey growing within the preceding two years and qualified for present use value treatment while it was in actual production. (2)The land was taken out of actual production in turkey growing solely for health and safety considerations due to the presence of Poult Enteritis Mortality Syndrome among turkeys in the same county or a neighboring county. (3)The land is otherwise eligible for present use value treatment. (f)Sound Management Program for Agricultural Land and Horticultural Land. ? If the property owner demonstrates any one of the following factors with respect to agricultural land or horticultural land, then the land is operated under a sound management program: (1)Enrollment in and compliance with an agency-administered and approved farm management plan. (2)Compliance with a set of best managementpractices. (3)Compliance with a minimum gross income per acre test. (4)Evidence of net income from the farm operation. (5)Evidence that farming is the farm operator's principal source of income. (6)Certification by a recognized agricultural or horticultural agency within the county that the land is operated under a sound management program. Operation under a sound management program may also be demonstrated by evidence of other similar factors. As long as a farm operator meets the sound managementrequirements, it is irrelevant whether the property owner received income or rent from the farm operator. (g)Sound Management Program for Forestland. ? If the owner of forestland demonstrates that the forestland complies with a written sound forest management plan for the production and sale of Appendix 2 - GlossaryPage 15 forest products, then the forestland is operated under a sound management program. (1973, c. 709, s. 1; 1975, c. 746, s. 2; 1983, c. 821; c. 826; 1985, c. 667, ss. 2, 3, 6.1; 1987, c. 698, ss. 2-5; 1987 (Reg. Sess., 1988), c. 1044, s. 13.1; 1989, cc. 99, 736, s. 1; 1989 (Reg. Sess., 1990), c. 814, s. 29; 1995, c. 454, s. 2; 1997-272, s. 1; 1998-98, s. 22; 2001-499, s. 1; 2002-184, s. 2; 2005-293, s. 1; 2005-313,s. 3.) § 105-277.4. Agricultural, horticultural and forestland ? Application; appraisal at use value; appeal; deferred taxes. (a)Application. ? Property coming within one of the classes defined in G.S. 105-277.3 is 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 assessor of the county in which the property is located. The application must clearly show that the property comes within one of the classes and must also contain any other relevant information required by the assessor to properly appraise the property at its present-use value. An initial application must be filed during the regular listing period of the year for which the benefitof this classification is first claimed, or within 30 days of the date shown on a notice of a change in valuation made pursuant to G.S. 105-286 or G.S. 105-287. A new application is not required to be submitted unless the property is transferred or becomes ineligible for use-value appraisal because of a change in use or acreage. An application required due to transfer of the land may be submitted at any time during the calendar year but must be submitted within 60 days of the date of the property's transfer. (b)Appraisal at Present-use Value. ? Upon receipt of a properly executed application, the assessor must appraise the property at its present-use value as established in the schedule prepared pursuant to G.S. 105-317. In appraising the property at its present-use value, the assessor must appraise the improvements located on qualifying land accordingto 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, or is property annexed subject to G.S. 160A-37(f1)or G.S. 160A-49(f1), the assessor must 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. The assessor must also notify the tax collector of any changes in the appraisals or in the eligibility of the property for the benefit of this classification. Upon a request for a certification pursuant to G.S. 160A-37(f1) or G.S.160A-49(f1), or any change in the certification, the assessor for the county where the land subject to the annexation is located must, within 30 days, determine if the land meets the requirements of G.S. 160A-37(f1)(2) or G.S. 160A-49(f1)(2) and report the resultsof its findings to the city. (b1)(Effective for taxes imposed for taxable years beginning prior to July 1, 2005) Appeal. ? Decisions of the assessor 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. (b1)(Effective for taxes imposed for taxable years beginning on or after July 1, 2005) Appeal. ? Decisions of the assessor 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. An appeal must be made within 60 days after the decision of the assessor. If an owner submits additional information to the assessor pursuant to G.S. 105-296(j), the Page 16New Hanover County Tax Office appeal must be made within 60 days after the assessor's decision based on the additional information. Decisions of the county board may be appealed to the Property Tax Commission. (c)Deferred Taxes. ? Land meeting the conditions for classification under G.S. 105-277.3 must be taxed on the basis of the value of the land for its present use. The difference between the taxes due on the present-use basis and the taxes that would have been payable in the absence of this classification, together with any interest, penalties, or costs that may accrue thereon, are a lien on the real property of the taxpayer as provided in G.S. 105-355(a). The difference in taxes must be carried forward in the records of the taxing unit or units as deferred taxes. The taxes become due and payable when the land fails to meet any condition or requirement for classification. Failure to have an application approved is ground for disqualification. The tax for the fiscal year that opens in the calendar year in which deferred taxes become due is computed as if the land had not been classified for that year, and taxes for the preceding three fiscal years that have been deferred are immediately payable, together with interest as provided in G.S. 105-360 for unpaid taxes. Interest accrues on the deferred taxes due as if they had been payable on the dates on which they originally became due. If only a part of the qualifying tract of land fails to meet a condition or requirement for classification, the assessor must determine the amount of deferred taxes applicable to that part and that amount becomes payable with interest as provided above. Upon the payment of any taxes deferred in accordance with this section for the three years immediately preceding a disqualification, all liens arising under this subsection are extinguished. The deferred taxes for any given year may be paid in that year without the qualifying tract of land becoming ineligible for deferred status. (d)Exceptions. ? Notwithstanding the provisions of subsection (c) of this section, if propertyloses its eligibility for present use value classification solely due to one of the following reasons, no deferred taxes are due and the lien for the deferred taxes is extinguished: (1)There is a change in income caused by enrollment of the property in the federal conservation reserve program established under 16 U.S.C. Chapter 58. (2)The property is conveyed by gift to a nonprofit organization and qualifies for exclusion from the tax base pursuant to G.S. 105-275(12) or G.S. 105-275(29). (3)The property is conveyed by gift to the State, a political subdivision of the State, or the United States. (e)Repealed by Session Laws 1997-270, s. 3, effective July 3, 1997. (1973, c. 709, s. 1; c. 905; c. 906, ss. 1, 2; 1975, c. 62; c. 746, ss. 3-7; 1981, c. 835; 1985, c. 518, s. 1; c. 667, ss. 5, 6; 1987, c. 45, s. 1; c. 295, s. 5; c. 698, s. 6; 1987 (Reg. Sess., 1988), c. 1044, s. 13.2; 1995, c. 443, s. 4; c. 454, s. 3; 1997-270, s. 3; 1998-98, s. 23; 1998-150, s. 1; 2001-499, s. 2; 2002-184, s. 3; 2005-313,s. 4.) Article 17. Administration of Listing. § 105-301. Place for listing real property. All taxable real property that is not required by this Subchapter to be appraised originally by the Department of Revenue shall be listed in the county in which it is situated. If all or part of the real property is situated within the boundaries of a municipal corporation, this fact shall be specified on the Appendix 2 - GlossaryPage 17 abstract as required by G.S. 105-309. Nothing in this section shall be construed to conflict with the provisions of G.S. 105-326 through 105-328. (1939, c. 310, s. 700; 1971, c. 806, s. 1; 1973, c. 476, s. 193.) § 105-302. In whose name real property is to be listed. (a)Taxable real property shall be listed in the name of the owner, and it shall be the owner's duty to list it unless the board of county commissioners shall have adopted a permanent listing system as provided in G.S. 105-303(b). For purposes of this section, the board of county commissioners may require that real property be listed in the name of the owner of record as of the day as of which property is to be listed under G.S. 105-285. (b)If real property is listed in the name of one other than the person in whose name it should be listed, and the name of the proper person is later ascertained, the abstract and tax records shall be corrected to list the property in the name of the person in whose name it should have been listed. The corrected listing shall have the same force and effect as if the real property had been listed in the name of the proper person in the first instance. (c)For purposes of this Subchapter: (1)The owner of the equity of redemption in real property subject to a mortgage or deed of trust shall be considered the owner of the property, and such real property shall be listed in the name of the owner of the equity of redemption. (2)Real property owned by a corporation shall be listed in the name of the corporation. (3)Real property owned by an unincorporated association shall be listed in the name of the association. (4)Real property owned by a partnership shall be listed in thename of the partnership. (5)Real property held in connection with a sole proprietorship shall be listed in the name of the owner, and the name and address of the proprietorship shall be noted on the abstract. (6)Real property of which a decedent died possessed, if not under the control of an executor or administrator, shall be listed in the names of the heirs or devisees if known, but such property may be listed as property of "the heirs" or "the devisees" of the decedent, without naming them, until they have given the assessor notice of their names and of the division of the estate. It shall be the duty of an executor or administrator having control of real propertyto list it in his fiduciary capacity, as required by subdivision (c)(7), below, until he is divested of control of the property. However, the right of an administrator or executor of a deceased person to petition for the sale of real property to make assets shall not be considered control of the real property for the purposes of this subdivision. (7)Real property, the title to which is held by a trustee, guardian, or other fiduciary, shall be listed by the fiduciary in his fiduciary capacity except as otherwise provided in this section. (8)A life tenant or tenant for the life of another shall be considered the owner of real property, and it shall be his duty to list the property for taxation, indicating on the abstract that he is a life tenant or tenant for the life of another named individual. (9)Upon request to and with the approval of the assessor, undivided interests in real property ownedby tenants in common who are not copartners may be listed by the respective owners in Page 18New Hanover County Tax Office accordance with their respective undivided interests. Otherwise, real property held by tenants in common shall be listed in the names of all the owners. (10)Real property owned by husband and wife as tenants by the entirety shall be listed on a single abstract in the names of both tenants, and the nature of their ownership shall be indicated thereon. (11)When land is owned by one party and improvements thereon or special rights (such as mineral, timber, quarry, waterpower, or similar rights) therein are owned by another party, the parties shall list their interests separately unless, in accordance with contractual relations between them, both the land and the improvementsand special rights are listed in the name of the owner of the land. (12) If the person in whose name real property should be listed is unknown, or if title to real property is in dispute, the property shall be listed in the name of the occupant or, if there be no occupant, in the name of "unknown owner." Such a listing shall not affect the validity of the lien for taxes created by G.S. 105-355. When the name of the owner is later ascertained, the provisions of subsection (b), above, shall apply. (13)Real property, owned under a time-sharingarrangement but managed by a homeowners association or other managing entity, shall be listed in the name of the managing entity. (1939, c. 310, s. 701; 1971, c. 806, s. 1; 1983, c. 785, s. 1; 1987, c. 45, s. 1.)