1999 Legislation
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HOUSE BILL NO. 293 – Property tax, 50/50 exmpt, trusts


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Daily Data Tracking History

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

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,
      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
      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

Bill Text


 ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-fifth Legislature                 First Regular Session - 1999

                             IN THE HOUSE OF REPRESENTATIVES

                                    HOUSE BILL NO. 293

                            BY REVENUE AND TAXATION COMMITTEE

 1                                        AN ACT

 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:

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


 1        member of a limited liability company or shareholder of    a  corporation,
 2          he  or  she  may  provide  proof  of  the    revocable 
 3        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-
 9        cable 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 trust    and   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
24          revocable trust created by the owner   documents 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 affidavit  set
28        forth in paragraph (d) of this subsection  in 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


 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 veterans
52    '  disability pensions and compensation, excluding rollovers as provided
53    in  section  402  or  403  of  the internal revenue code), nontaxable interest


 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


 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(1 5  6 ), 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 / Fiscal Impact

                      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