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H0172..................................................by REVENUE AND TAXATION
PROPERTY TAX - Amends existing law 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.
02/06 House intro - 1st rdg - to printing
02/07 Rpt prt - to Rev/Tax
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-seventh Legislature First Regular Session - 2003
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 172
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO PROPERTY EXEMPT FROM TAXATION; AMENDING SECTION 63-602G, IDAHO
3 CODE, TO CLARIFY THAT CERTAIN ADJUSTMENTS TO THE MAXIMUM AMOUNT SUBJECT TO
4 PROPERTY TAX EXEMPTION SHALL BE MADE, TO PROVIDE FOR CERTAIN ANNUAL
5 ADJUSTMENTS TO THE MAXIMUM AMOUNT SUBJECT TO PROPERTY TAX EXEMPTION, TO
6 PROVIDE FOR PUBLICATION AND DISSEMINATION OF ADJUSTMENTS, TO PROVIDE THAT
7 THE PUBLICATION OF ADJUSTMENTS SHALL BE EXEMPT FROM THE PROVISIONS OF THE
8 ADMINISTRATIVE PROCEDURE ACT; AND PROVIDING AN EFFECTIVE DATE.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Section 63-602G, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 63-602G. PROPERTY EXEMPT FROM TAXATION -- RESIDENTIAL IMPROVEMENTS. (1)
13 During the tax year 1983 and each year thereafter, subject to annual adjust-
14 ment as provided herein, the first fifty thousand dollars ($50,000) of the
15 market value for assessment purposes of residential improvements, or fifty
16 percent (50%) of the market value for assessment purposes of residential
17 improvements, whichever is the lesser, shall be exempt from property taxation.
18 Beginning for tax year 2005, the state tax commission shall publish adjust-
19 ments to the maximum amount subject to property tax exemption to reflect cost-
20 of-living fluctuations. The adjustments shall effect changes in the amount
21 subject to tax exemption by a percentage equal as near as practicable to the
22 annual cost-of-living percentage modification as determined by the secretary
23 of health and human services pursuant to 42 U.S.C. 415(i). The tax commission
24 shall publish the adjustments required by this subsection each and every year
25 the secretary of health and human services announces said cost-of-living modi-
26 fication. The adjustments shall be published no later than October 1 of each
27 year and shall be effective for claims filed in and for the following property
28 tax year. The publication of adjustments under this subsection shall be exempt
29 from the provisions of chapter 52, title 67, Idaho Code, but shall be provided
30 to each county and to members of the public upon request and without charge.
31 (2) The exemption allowed by this section may be granted only if:
32 (a) The residential improvements are owner-occupied and used as the pri-
33 mary dwelling place of the owner as of January 1, provided that in the
34 event the residential improvements are owner-occupied after January 1 but
35 before April 15, the owner of the property is entitled to the exemption.
36 The residential improvements may consist of part of a multidwelling or
37 multipurpose building and shall include all of such dwelling or building
38 except any portion used exclusively for anything other than the primary
39 dwelling of the owner. The presence of an office in an owner-occupied res-
40 idential property, which office is used for multiple purposes, including
41 business and personal use, shall not prevent the owner from claiming the
42 exemption provided in this section; and
43 (b) The tax commission has certified to the board of county commissioners
2
1 that all properties in the county which are subject to appraisal by the
2 county assessor have, in fact, been appraised uniformly so as to secure a
3 just valuation for all property within the county; and
4 (c) The owner has certified to the county assessor by April 15 that:
5 (i) He is making application for the exemption allowed by this sec-
6 tion;
7 (ii) That the residential improvements are his primary dwelling
8 place; and
9 (iii) That he has not made application in any other county for the
10 exemption, and has not made application for the exemption on any
11 other residential improvements in the county.
12 (d) For the purpose of this section, the definition of owner shall be the
13 same definition set forth in section 63-701(7), Idaho Code.
14 When an "owner," pursuant to the provisions of section 63-701(7),
15 Idaho Code, is any person who as grantor, or whose spouse as grantor, cre-
16 ated a revocable or irrevocable trust and was named as beneficiary of that
17 trust, or who is a partner of a limited partnership, a member of a limited
18 liability company, or shareholder of a corporation, he or she may provide
19 proof of the trust, limited partnership, limited liability company, or
20 corporation with an affidavit stating: (i) the name of the grantor, part-
21 ner, member or shareholder; (ii) a statement that the grantor, or the
22 grantor's spouse, is the beneficiary of the trust, or the person is a
23 partner of the limited partnership, or a member of the limited liability
24 company, or a shareholder of the corporation; (iii) the grantor, the
25 grantor's spouse, partner, member or shareholder is the occupier of the
26 residential property and uses the property as the primary dwelling place
27 of the grantor, the grantor's spouse, partner, member or shareholder as of
28 January 1; and (iv) if applicable, the person holds at least a five per-
29 cent (5%) ownership in the limited partnership, limited liability company
30 or corporation.
31 The affidavit shall include the attaching of the copies of those por-
32 tions of the trust or other document which set forth the grantor, the
33 grantor or the grantor's spouse as beneficiary and the signature page of
34 the trust or other document; those portions of the articles of organiza-
35 tion or operating agreement of the limited liability company indicating
36 the person's membership in the company and the ownership percentage held
37 by such person; those portions of the limited partnership agreement or
38 other records of the limited partnership indicating that the person has
39 been admitted to the partnership and the ownership percentage held by such
40 person; or those portions of the articles of incorporation indicating that
41 the person is a shareholder of the corporation and the ownership percent-
42 age held by such person.
43 (e) Any owner may request in writing the return of all copies of any doc-
44 uments submitted with the affidavit set forth in paragraph (d) of this
45 subsection that are held by a county assessor, and the copies shall be
46 returned by the county assessor upon submission of the affidavit in proper
47 form.
48 (f) For the purpose of this section, the definition of "primary dwelling
49 place" shall be the same definition set forth in section 63-701(8), Idaho
50 Code.
51 (g) For the purpose of this section, the definition of "occupied" shall
52 be the same definition set forth in section 63-701(6), Idaho Code.
53 (3) An owner need only make application for the exemption described in
54 subsection (1) of this section once, as long as all of the following condi-
55 tions are met:
3
1 (a) The owner has received the exemption during the previous year as a
2 result of his making a valid application as defined in subsection (2)(c)
3 of this section.
4 (b) The owner or beneficiary, partner, member or shareholder, as appro-
5 priate, still occupies the same residential improvements for which the
6 owner made application.
7 (c) The residential improvements described in subsection (3)(b) of this
8 section are owner-occupied or occupied by a beneficiary, partner, member
9 or shareholder, as appropriate, and used as the primary dwelling place of
10 the owner or beneficiary, partner, member or shareholder, as appropriate,
11 as of January 1; provided however, that in the event the residential
12 improvements are owner-occupied after January 1, but before April 15, the
13 owner of the property is entitled to the exemption.
14 (4) The exemption allowed by this section must be taken before the reduc-
15 tion in taxes provided by sections 63-701 through 63-710, Idaho Code, is
16 applied.
17 (5) The legislature declares that this exemption is necessary and just.
18 (6) Residential improvements having previously qualified for exemption
19 under this section in the preceding year, shall not lose such qualification
20 due to the owner's, beneficiary's, partner's, member's or shareholder's
21 absence in the current year by reason of active military service in a desig-
22 nated combat zone, as defined in section 112 of the Internal Revenue Code. If
23 an owner fails to timely apply for exemption as required in this section
24 solely by reason of active duty in a designated combat zone by the owner, ben-
25 eficiary, partner, member or shareholder, as appropriate, as defined in sec-
26 tion 112 of the Internal Revenue Code, and such improvements would have other-
27 wise qualified under this section, then the board of county commissioners of
28 the county in which the residential improvements are located shall refund
29 property taxes, if previously paid, in an amount equal to the exemption which
30 would otherwise have applied.
31 SECTION 2. This act shall be in full force and effect on and after Janu-
32 ary 1, 2004.
STATEMENT OF PURPOSE
RS 12571
The purpose of this legislation is to provide for an annual cost of
living adjustment on the $50,000 upper limit of the homeowner property
tax exemption. The percentage used for adjustment would match that used
for the income threshold for the circuit breaker, the national Consumer
Price Index. If the CPI was two percent in the first year, the upper
limit on the exemption would increase by $1,000. There would be no
change in the percentage of the exemption, 50 percent of the assessed
value of residential improvements. Residential values have been rising
faster than the values of other kinds of property. Once the homeowner
reaches the upper limit, at about $120,000 market value, there is no
longer mitigation for inflation. So taxes increase at an accelerated
rate. Since 1990, total residential property taxes in Idaho have
increased by 164.5 percent while the total for all non-residential
property has increased by 77.3 percent. The current maximum homeowner s
exemption was established in 1983 and has never been adjusted for
inflation.
FISCAL IMPACT
There would be no fiscal impact on the general fund. Cities, counties
and other local taxing districts could collect the same amount under
the budget cap. Annual increases in property tax collections going to
schools as a result of inflation in residential values would be less
than without this change. If the market value of a home affected by
this change increases by five percent, the increase in taxable value
would be $5,500 rather than $6,500 and the increase in money for
schools would be $16.50 rather than $19.50. If it increases by 10
percent, the increase for schools would be $33 rather than $39.
Contact
Name: Sen. Fred Kennedy
Phone: 332-1348
Name: Rep. Charles Cuddy
Phone: 332-1235
STATEMENT OF PURPOSE/FISCAL NOTE H 172