HOUSE BILL NO. 423
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H0423...............................................by REVENUE AND TAXATION
PROPERTY TAX - Amends existing law to provide that the first $50,000 of the
market value for assessment purposes or 50% of the market value for
assessment purposes of the homestead, whichever is the lesser, shall be
exempt from property taxation; to define "homestead"; to provide for
certain annual adjustments to the maximum amount subject to property tax
exemption; to provide for publication and dissemination of adjustments; and
to provide that the publication of adjustments shall be exempt from the
provisions of the administrative procedure act.
01/19 House intro - 1st rdg - to printing
01/20 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 423
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO PROPERTY EXEMPT FROM TAXATION; AMENDING SECTION 63-602G, IDAHO
3 CODE, TO PROVIDE THAT THE FIRST FIFTY THOUSAND DOLLARS OF THE MARKET VALUE
4 FOR ASSESSMENT PURPOSES OF THE HOMESTEAD OR FIFTY PERCENT OF THE MARKET
5 VALUE FOR ASSESSMENT PURPOSES OF THE HOMESTEAD, WHICHEVER IS LESSER, SHALL
6 BE EXEMPT FROM PROPERTY TAXATION, TO DEFINE HOMESTEAD, TO PROVIDE FOR CER-
7 TAIN ANNUAL ADJUSTMENTS TO THE MAXIMUM AMOUNT SUBJECT TO PROPERTY TAX
8 EXEMPTION, TO PROVIDE FOR PUBLICATION AND DISSEMINATION OF ADJUSTMENTS, TO
9 PROVIDE THAT THE PUBLICATION OF ADJUSTMENTS SHALL BE EXEMPT FROM THE PRO-
10 VISIONS OF THE ADMINISTRATIVE PROCEDURE ACT AND TO MAKE TECHNICAL CORREC-
11 TIONS; DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.
12 Be It Enacted by the Legislature of the State of Idaho:
13 SECTION 1. That Section 63-602G, Idaho Code, be, and the same is hereby
14 amended to read as follows:
15 63-602G. PROPERTY EXEMPT FROM TAXATION -- RESIDENTIAL IMPROVEMENTS HOME-
16 STEAD. (1) During the tax year 1983 2006 and each year thereafter, subject to
17 annual adjustment as provided herein, the first fifty thousand dollars
18 ($50,000) of the market value for assessment purposes of residential improve-
19 ments the homestead as that term is defined in section 63-701, Idaho Code, or
20 fifty percent (50%) of the market value for assessment purposes of residential
21 improvements the homestead as that term is defined in section 63-701, Idaho
22 Code, whichever is the lesser, shall be exempt from property taxation. Begin-
23 ning for tax year 2007, the state tax commission shall publish adjustments to
24 the maximum amount subject to property tax exemption to reflect cost-of-living
25 fluctuations. The adjustments shall effect changes in the amount subject to
26 tax exemption by a percentage equal as near as practicable to the annual cost-
27 of-living percentage modification as determined by the secretary of health and
28 human services pursuant to 42 U.S.C. section 415(i). The state tax commission
29 shall publish the adjustments required by this subsection each and every year
30 the secretary of health and human services announces said cost-of-living per-
31 centage modification. The adjustments shall be published no later than October
32 1 of each year and shall be effective for claims filed in and for the follow-
33 ing property tax year. The publication of adjustments under this subsection
34 shall be exempt from the provisions of chapter 52, title 67, Idaho Code, but
35 shall be provided to each county and to members of the public upon request and
36 without charge.
37 (2) The exemption allowed by this section may be granted only if:
38 (a) The residential improvements are homestead is owner-occupied and used
39 as the primary dwelling place of the owner as of January 1, provided that
40 in the event the residential improvements are homestead is owner-occupied
41 after January 1 but before April 15, the owner of the property is entitled
42 to the exemption. The residential improvements homestead may consist of
43 part of a multidwelling or multipurpose building and shall include all of
1 such dwelling or building except any portion used exclusively for anything
2 other than the primary dwelling of the owner. The presence of an office in
3 a n owner-occupied residential property homestead, which office is used for
4 multiple purposes, including business and personal use, shall not prevent
5 the owner from claiming the exemption provided in this section; and
6 (b) The tax commission has certified to the board of county commissioners
7 that all properties in the county which are subject to appraisal by the
8 county assessor have, in fact, been appraised uniformly so as to secure a
9 just valuation for all property within the county; and
10 (c) The owner has certified to the county assessor by April 15 that:
11 (i) He is making application for the exemption allowed by this sec-
13 (ii) That the residential improvements are homestead is his primary
14 dwelling place; and
15 (iii) That he has not made application in any other county for the
16 exemption, and has not made application for the exemption on any
17 other residential improvements homestead in the county.
18 (d) For the purpose of this section, the definition of "owner" shall be
19 the same definition set forth in section 63-701(7), Idaho Code.
20 When an "owner," pursuant to the provisions of section 63-701(7),
21 Idaho Code, is any person who is the beneficiary of a revocable or irrevo-
22 cable trust, or who is a partner of a limited partnership, a member of a
23 limited liability company, or shareholder of a corporation, he or she may
24 provide proof of the trust, limited partnership, limited liability com-
25 pany, or corporation in the manner set forth in section 63-703(4), Idaho
27 (e) Any owner may request in writing the return of all copies of any doc-
28 uments submitted with the affidavit set forth in section 63-703(4), Idaho
29 Code, that are held by a county assessor, and the copies shall be returned
30 by the county assessor upon submission of the affidavit in proper form.
31 (f) For the purpose of this section, the definition of "primary dwelling
32 place" shall be the same definition set forth in section 63-701(8), Idaho
34 (g) For the purpose of this section, the definition of "occupied" shall
35 be the same definition set forth in section 63-701(6), Idaho Code.
36 (3) An owner need only make application for the exemption described in
37 subsection (1) of this section once, as long as all of the following condi-
38 tions are met:
39 (a) The owner has received the exemption during the previous year as a
40 result of his making a valid application as defined in subsection (2)(c)
41 of this section.
42 (b) The owner or beneficiary, partner, member or shareholder, as appro-
43 priate, still occupies the same residential improvements homestead for
44 which the owner made application.
45 (c) The residential improvements homestead described in subsection (3)(b)
46 of this section are is owner-occupied or occupied by a beneficiary, part-
47 ner, member or shareholder, as appropriate, and used as the primary dwell-
48 ing place of the owner or beneficiary, partner, member or shareholder, as
49 appropriate, as of January 1; provided however, that in the event the res-
50 idential improvements are homestead is owner-occupied after January 1, but
51 before April 15, the owner of the property is entitled to the exemption.
52 (4) The exemption allowed by this section must be taken before the reduc-
53 tion in taxes provided by sections 63-701 through 63-710, Idaho Code, is
55 (5) Recovery of property tax exemptions allowed by this section but
1 improperly claimed or approved .:
2 (a) Upon discovery of evidence, facts or circumstances indicating any
3 exemption allowed by this section was improperly claimed or approved, the
4 county assessor shall decide whether the exemption claimed should be
5 allowed and if not, notify the taxpayer in writing, assess a recovery of
6 property tax and notify the county treasurer of this assessment.
7 (b) When information indicating that an improper claim for the exemption
8 allowed by this section is discovered by the state tax commission, the
9 state tax commission may disclose this information to the appropriate
10 county assessor, board of county commissioners and county treasurer.
11 Information disclosed to county officials by the state tax commission
12 under this subsection may be used to decide the validity of any entitle-
13 ment to the exemption provided in this section and is not otherwise sub-
14 ject to public disclosure pursuant to chapter 3, title 9, Idaho Code.
15 (c) The assessment and collection of the recovery of property tax must
16 begin within the seven (7) year period beginning the date the assessment
17 notice reflecting the improperly claimed or approved exemption was
18 required to be mailed to the taxpayer.
19 (d) The taxpayer may appeal to the board of county commissioners the
20 decision by the county assessor to assess the recovery of property tax
21 within thirty (30) days of the date the county assessor sent the notice to
22 the taxpayer pursuant to this section.
23 (e) A recovery of property tax shall be for each year the exemption
24 allowed by this section was improperly claimed or approved up to the
25 lesser of a maximum of seven (7) years or until the property was trans-
26 ferred to a bona fide purchaser for value. The amount of the recovery of
27 property tax shall be calculated using the product of the amount of
28 exempted value for each year multiplied by the levy for that year plus
29 costs, late charges and interest for each year at the rates equal to those
30 provided for delinquent property taxes during that year.
31 (f) Any recovery of property tax shall be due and payable no later than
32 the date provided for property taxes in section 63-903, Idaho Code, and if
33 not timely paid, late charges and interest, beginning the first day of
34 January in the year following the year the county assessor sent the notice
35 to the taxpayer pursuant to this section, shall be calculated at the cur-
36 rent rate provided for property taxes.
37 (g) Recovered property taxes shall be billed, collected and distributed
38 in the same manner as property taxes, except each taxing district or unit
39 shall be notified of the amount of any recovered property taxes included
40 in any distribution.
41 (h) Any unpaid recovered property taxes shall become a lien upon the real
42 property in the same manner as provided for property taxes in section
43 63-206, Idaho Code, except such lien shall attach as of the first day of
44 January in the year following the year the county assessor sent the notice
45 to the taxpayer pursuant to this section.
46 (i) For purposes of the limitation provided by section 63-802, Idaho
47 Code, moneys received pursuant to this subsection as recovery of property
48 tax shall be treated as property tax revenue.
49 (6) The legislature declares that this exemption is necessary and just.
50 (7) Residential improvements A homestead having previously qualified for
51 exemption under this section in the preceding year, shall not lose such quali-
52 fication due to: the owner's, beneficiary's, partner's, member's or
53 shareholder's absence in the current year by reason of active military service
54 in a designated combat zone, as defined in section 112 of the Internal Revenue
55 Code, or because the residential improvements have homestead has been leased
1 because the owner, beneficiary, partner, member or shareholder is absent in
2 the current year by reason of active military service in a designated combat
3 zone, as defined in section 112 of the Internal Revenue Code. If an owner
4 fails to timely apply for exemption as required in this section solely by rea-
5 son of active duty in a designated combat zone by the owner, beneficiary,
6 partner, member or shareholder, as appropriate, as defined in section 112 of
7 the Internal Revenue Code, and such improvements homestead would have other-
8 wise qualified under this section, then the board of county commissioners of
9 the county in which the residential improvements are homestead is located
10 shall refund property taxes, if previously paid, in an amount equal to the
11 exemption which would otherwise have applied.
12 SECTION 2. An emergency existing therefor, which emergency is hereby
13 declared to exist, this act shall be in full force and effect on and after its
14 passage and approval, and retroactively to January 1, 2006.
STATEMENT OF PURPOSE
This legislation allows for the inclusion of the value of the
residential home site when computing property valuations for the
None to the General Fund.
There will be about a four million dollar reduction in the amount
of property tax that would otherwise go to public education. This
legislation will cause a property tax shift from owner occupied
homes to other classes of property.
Name: Rep. Lake
STATEMENT OF PURPOSE/FISCAL NOTE H 423