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H0293...............................................by REVENUE AND TAXATION
PROPERTY TAX - HOMEOWNER'S EXEMPTION - Amends existing law to provide that
the homeowner's tax exemption shall be available to an owner who is a
grantor of an irrevocable trust, a partner of a limited partnership, a
member of a limited liability company or a shareholder of a corporation who
has been granted or retained a life estate and occupies the property as his
residence.
02/23 House intro - 1st rdg - to printing
02/24 Rpt prt - to Rev/Tax
03/02 Rpt out - rec d/p - to 2nd rdg
03/03 2nd rdg - to 3rd rdg
03/04 3rd rdg - PASSED - 68-1-1
AYES -- Alltus, Barraclough, Barrett, Bell, Black, Boe, Bruneel,
Callister, Campbell, Chase, Clark, Crow, Cuddy, Deal, Denney,
Ellsworth, Field(13), Field(20), Gagner, Geddes, Gould, Hadley,
Hammond, Hansen(23), Hansen(29), Henbest, Hornbeck, Jaquet, Jones,
Judd, Kellogg, Kempton, Kendell, Kunz, Lake, Limbaugh, Linford,
Loertscher, Mader, Marley, McKague, Meyer, Montgomery, Mortensen,
Moyle, Pischner, Pomeroy, Reynolds, Ridinger, Ringo, Robison, Sali,
Schaefer, Sellman, Smith, Smylie, Stevenson, Stoicheff, Stone,
Taylor, Tilman, Tippets, Trail, Watson, Wheeler, Williams, Wood,
Zimmermann
NAYS -- Bieter
Absent and excused -- Mr Speaker
Floor Sponsor - Kellogg
Title apvd - to Senate
03/05 Senate intro - 1st rdg - to Loc Gov
03/11 Rpt out - rec d/p - to 2nd rdg
03/12 2nd rdg - to 3rd rdg
03/16 3rd rdg - PASSED - 34-0-1
AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Crow, Danielson, Darrington, Davis, Deide, Dunklin, Frasure, Geddes,
Hawkins, Ingram, Ipsen, Keough, King, Lee, McLaughlin, Noh,
Richardson, Riggs, Risch, Sandy, Schroeder, Sorensen, Stegner,
Stennett, Thorne, Twiggs, Wheeler, Whitworth
NAYS--None
Absent and excused--Parry
Floor Sponsor - Stegner
Title apvd - to House
03/17 To enrol
03/18 Rpt enrol - Sp signed - Pres signed
03/19 To Governor
03/26 Governor signed
Session Law Chapter 382
Effective: 07/01/99
H0293|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 293 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO THE PROPERTY OWNER'S EXEMPTION FROM TAXATION; AMENDING SECTION 3 63-602G, IDAHO CODE, TO PROVIDE THAT THE EXEMPTION SHALL BE AVAILABLE TO 4 AN OWNER WHO IS A GRANTOR OF AN IRREVOCABLE TRUST, A PARTNER OF A LIMITED 5 PARTNERSHIP, A MEMBER OF A LIMITED LIABILITY COMPANY OR SHAREHOLDER OF A 6 CORPORATION; AND AMENDING SECTION 63-701, IDAHO CODE, TO REDEFINE "OWNER," 7 TO PROVIDE A CORRECT CITATION AND TO MAKE TECHNICAL CORRECTIONS. 8 Be It Enacted by the Legislature of the State of Idaho: 9 SECTION 1. That Section 63-602G, Idaho Code, be, and the same is hereby 10 amended to read as follows: 11 63-602G. PROPERTY EXEMPT FROM TAXATION -- RESIDENTIAL IMPROVEMENTS. (1) 12 During the tax year 1983 and each year thereafter, the first fifty thousand 13 dollars ($50,000) of the market value for assessment purposes of residential 14 improvements, or fifty percent (50%) of the market value for assessment pur- 15 poses of residential improvements, whichever is the lesser, shall be exempt 16 from property taxation. 17 (2) The exemption allowed by this section may be granted only if: 18 (a) The residential improvements are owner-occupied and used as the pri- 19 mary dwelling place of the owner as of January 1. The residential improve- 20 ments may consist of part of a multidwelling or multipurpose building and 21 shall include all of such dwelling or building except any portion used 22 exclusively for anything other than the primary dwelling of the owner. The 23 presence of an office in an owner-occupied residential property, which 24 office is used for multiple purposes, including business and personal use, 25 shall not prevent the owner from claiming the exemption provided in this 26 section; and 27 (b) The tax commission has certified to the board of county commissioners 28 that all properties in the county which are subject to appraisal by the 29 county assessor have, in fact, been appraised uniformly so as to secure a 30 just valuation for all property within the county; and 31 (c) The owner has certified to the county assessor by April 15 that: 32 (i) He is making application for the exemption allowed by this sec- 33 tion; 34 (ii) That the residential improvements are his primary dwelling 35 place; and 36 (iii) That he has not made application in any other county for the 37 exemption, and has not made application for the exemption on any 38 other residential improvements in the county. 39 (d) For the purpose of this section, the definition of owner shall be the 40 same definition set forth in section 63-701(8), Idaho Code. 41 When an "owner" is any person who as grantor created a revocable 42 or irrevocable trust and named himself or herself as benefi- 43 ciary of that trust, or who is a partner of a limited partnership, a 2 1 member of a limited liability company or shareholder of a corporation, 2 he or she may provide proof of therevocable3 trust , limited partnership, limited liability company or corporation 4 with an affidavit stating: (i) the name of the grantor , 5 partner, member or shareholder ; (ii) a statement that the grantor 6 is the beneficiary of the trust , the person is a partner of the lim- 7 ited partnership, a member of the limited liability company or shareholder 8 of the corporation ; and (iii)the trust is revo-9cable during the grantor's lifetime; and (iv)the grantor , 10 partner, member or shareholder is the owner-occupier of the resi- 11 dential property and uses the property as the primary dwelling place of 12 the owner as of January 1. 13 The affidavit shall include the attaching of the copies of those por- 14 tions of the trust which set forth the grantor, the grantor as 15 beneficiary, the revocable character of the trustand the 16 signature page of the trust ; those portions of the articles of 17 organization or operating agreement of the limited liability company indi- 18 cating the person's membership in the company; those portions of the lim- 19 ited partnership agreement or other records of the limited partnership 20 indicating that the person has been admitted to the partnership; or those 21 portions of the articles of incorporation indicating that the person is a 22 shareholder of the corporation . 23 (e) Any owner may request in writing the return of all copies of any 24revocable trust created by the ownerdocuments submit- 25 ted with the affidavit set forth in paragraph (d) of this subsection 26 that are held by a county assessor, and the copies shall be 27 returned by the county assessor upon submission of the affidavitset28forth in paragraph (d) of this subsectionin proper form. 29 (f) For the purpose of this section, the definition of "primary dwelling 30 place" shall be the same definition set forth in section 63-701(9), Idaho 31 Code. 32 (g) For the purpose of this section, the definition of "occupied" shall 33 be the same definition set forth in section 63-701(7), Idaho Code. 34 (3) An owner need only make application for the exemption described in 35 subsection (1) of this section once, as long as all of the following condi- 36 tions are met: 37 (a) The owner has received the exemption during the previous year as a 38 result of his making a valid application as defined in subsection (2)(c) 39 of this section. 40 (b) The owner still occupies the same residential improvements for which 41 he made application. 42 (c) The residential improvements described in subsection (3)(b) of this 43 section are owner-occupied and used as the primary dwelling place of the 44 owner as of January 1. 45 (4) The exemption allowed by this section must be taken before the reduc- 46 tion in taxes provided by sections 63-701 through 63-710, Idaho Code, is 47 applied. 48 (5) The legislature declares that this exemption is necessary and just. 49 (6) Residential improvements having previously qualified for exemption 50 under this section in the preceding year, shall not lose such qualification 51 due to the owner's absence in the current year by reason of active military 52 service in a designated combat zone, as defined in section 112 of the internal 53 revenue code. If an owner fails to timely apply for exemption as required in 54 this section solely by reason of active duty in a designated combat zone, as 55 defined in section 112 of the internal revenue code, and such improvements 3 1 would have otherwise qualified under this section, then the board of county 2 commissioners of the county in which the residential improvements are located 3 shall refund property taxes, if previously paid, in an amount equal to the 4 exemption which would otherwise have applied. 5 SECTION 2. That Section 63-701, Idaho Code, be, and the same is hereby 6 amended to read as follows: 7 63-701. DEFINITIONS. As used in this chapter: 8 (1) "Claimant" means a person who has filed a claim under the provisions 9 of sections 63-701 through 63-710, Idaho Code. Except as provided in section 10 63-702(2), Idaho Code, on January 1 of the year in which the claim was filed a 11 claimant must be an owner of a homestead and be: 12 (a) Not less than sixty-five (65) years old; or 13 (b) A fatherless or motherless child under the age of eighteen (18) years 14 of age; or 15 (c) A widow or widower; or 16 (d) A disabled person who is recognized as disabled pursuant to 42 USC 17 423, 45 USC 228, 45 USC 231 or 5 USC 8337; or 18 (e) A disabled veteran of any war engaged in by the United States, whose 19 disability is recognized as a service-connected disability of a degree of 20 ten percent (10%) or more, or who has a pension for nonservice-connected 21 disabilities, in accordance with laws and regulations administered by the 22 United States veterans administration; or 23 (f) A person as specified in 42 USC 1701, who was or is entitled to 24 receive benefits because he is known to have been taken by a hostile force 25 as a prisoner, hostage or otherwise; or 26 (g) Blind. 27 (2) "Homestead" means the dwelling, owner-occupied by the claimant and 28 used as the primary dwelling place of the claimant and occupied by any members 29 of the household as their home, and so much of the land surrounding it, not 30 exceeding one (1) acre, as is reasonably necessary for the use of the dwelling 31 as a home. It may consist of a part of a multidwelling or multipurpose build- 32 ing and part of the land upon which it is built. Homestead does not include 33 personal property such as furniture, furnishings or appliances, but a manufac- 34 tured home may be a homestead. 35 (3) "Household" means the claimant and any person or persons who live in 36 the same dwelling, and share its furnishings, facilities, accommodations or 37 expenses. The term includes any person owing a duty of support to the appli- 38 cant pursuant to section 32-1002, Idaho Code, unless the person qualifies as a 39 "nonhousehold member" pursuant to subsection (6) of this section. The term 40 does not include bona fide lessees, tenants, or roomers and boarders on con- 41 tract. "Household" includes persons described in subsection (9)(b) of this 42 section. 43 (4) "Household income" means all income received by all persons of a 44 household in a calendar year while members of the household. 45 (5) "Income" means the sum of federal adjusted gross income as defined in 46 the internal revenue code, as defined in section 63-3004, Idaho Code, and to 47 the extent not already included in federal adjusted gross income, alimony, 48 support money, income from inheritances, nontaxable strike benefits, the non- 49 taxable amount of any individual retirement account, pension or annuity, 50 (including railroad retirement benefits, all payments received under the fed- 51 eral social security act, state unemployment insurance laws, and veterans52'disability pensions and compensation, excluding rollovers as provided 53 in section 402 or 403 of the internal revenue code), nontaxable interest 4 1 received from the federal government or any of its instrumentalities or a 2 state government or any of its instrumentalities, worker's compensation and 3 the gross amount of loss of earnings insurance. It does not include capital 4 gains, gifts from nongovernmental sources or inheritances. To the extent not 5 reimbursed, cost of medical care as defined in section 213(d) of the internal 6 revenue code, incurred by the household may be deducted from income. "Income" 7 does not include veteran's disability pensions received by a per- 8 son described in subsection (1)(e) who is a claimant or a claimant's spouse, 9 provided however, that the disability pension is received pursuant to a ser- 10 vice-connected disability of a degree of forty percent (40%) or more. Documen- 11 tation of medical expenses may be required by the county assessor, board of 12 equalization and state tax commission. "Income" shall be that received in the 13 calendar year immediately preceding the year in which a claim is filed. Where 14 a claimant does not file a federal tax return the claimant's federal adjusted 15 gross income, for purposes of this section, shall be an income equivalent to 16 federal adjusted gross income had the claimant filed a federal tax return. 17 (6) "Nonhousehold member" means any nonspouse who lives in the claimant's 18 dwelling for the purpose of providing protective oversight, caregiving, or 19 personal care services to the claimant, or who is receiving disability bene- 20 fits pursuant to subsection (1)(d) or (e) of this section. 21 (7) "Occupied" means actual use and possession. 22 (8) "Owner" means a person holding title in fee simple or holding a cer- 23 tificate of motor vehicle title (either of which may be subject to mortgage, 24 deed of trust or other lien) or who has retained or been granted a life estate 25 or who is a person entitled to file a claim under section 63-702, Idaho Code. 26 "Owner" shall also include any person who as grantor created a revocable 27 or irrevocable trust and named himself as beneficiary of that 28 trust , or who is a partner of a limited partnership, member of a lim- 29 ited liability company or shareholder of a corporation which holds title in 30 fee simple or holds a certificate of motor vehicle title and who has retained 31 or been granted a life estate . "Owner" shall not include any person 32 that otherwise occupies property as beneficiary of a trust. "Owner" includes a 33 vendee in possession under a land sale contract. Any partial ownership shall 34 be considered ownership for determining qualification for property tax reduc- 35 tion benefits, however, the amount of property tax reduction under section 36 63-704, Idaho Code, and rules promulgated pursuant to section 63-705, Idaho 37 Code, shall be computed on the value of the claimant's partial ownership. 38 "Partial ownership," for the purposes of this section, means any one (1) 39 person's ownership when property is owned by more than one (1) person. The 40 combined community property interests of both spouses shall not be considered 41 partial ownership. The proportional reduction required under this subsection 42 shall not apply to community property interests. Where title to property is 43 held by a person who has died without timely filing a claim for property tax 44 reduction, the estate shall be the "owner." 45 (9) (a) "Primary dwelling place" means the claimant's dwelling place on 46 January 1 of the year for which the claim is made. The primary dwelling 47 place is the single place where a claimant has his true, fixed and perma- 48 nent home and principal establishment, and to which whenever the individ- 49 ual is absent he has the intention of returning. A claimant must establish 50 the dwelling to which the claim relates as his primary dwelling place by 51 clear and convincing evidence or by establishing that the dwelling is 52 where the claimant resided on January 1 and: 53 (i) At least six (6) months during the prior year; or 54 (ii) The majority of the time the claimant owned the dwelling if 55 owned by the claimant less than one (1) year; or 5 1 (iii) The majority of the time after the claimant first occupied the 2 dwelling if occupied by the claimant less than one (1) year. 3 (b) Notwithstanding the provisions of paragraph (a) of this subsection, 4 the property upon which the claimant makes application shall be deemed to 5 be the claimant's primary dwelling place if the claimant is otherwise 6 qualified and resides in a care facility and does not allow the property 7 upon which the claimant has made application to be occupied by persons 8 paying a consideration to occupy the dwelling. A claimant's spouse who 9 resides in a care facility shall be deemed to reside at the claimant's 10 primary dwelling place and to be a part of the claimant's household. A 11 care facility is a hospital, skilled nursing facility, intermediate care 12 facility or intermediate care facility for the mentally retarded as 13 defined in section 39-1301, Idaho Code, or a facility as defined in sec- 14 tion 39-3302(156 ), Idaho Code, or a dwelling 15 other than the one (1) upon which the applicant makes appli- 16 cation where a claimant who is unable to reside in the dwelling upon which 17 the application is made lives and receives help in daily living, protec- 18 tion and security.
STATEMENT OF PURPOSE
RS 09055
The purpose of this legislation is to allow individuals to
transfer ownership of their primary residence to an irrevocable
trust, a partnership, limited liability company, or a
corporation and not lose their homeowner's exemption. Many
individuals transfer ownership of their primary residence to one
of these legal entities for estate planning purposes but intend
to continue to use the residence as their primary residence.
Under current law an individual loses his homeowner's exemption
if he transfers his primary residence to such an entity.
FISCAL NOTE
No fiscal impact.
CONTACT: Representative Hilde Kellogg
332-1000
STATEMENT OF PURPOSE/FISCAL NOTE Bill No. H 293