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H0207..................................................by REVENUE AND TAXATION
PROPERTY TAX - Amends existing law to provide an additional property tax
exemption for certain homeowners.
02/07 House intro - 1st rdg - to printing
02/10 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. 207
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO PROPERTY EXEMPT FROM TAXATION; AMENDING SECTION 63-602G, IDAHO
3 CODE, TO PROVIDE AN ADDITIONAL EXEMPTION FOR CERTAIN OWNERS; AND PROVIDING
4 AN EFFECTIVE DATE.
5 Be It Enacted by the Legislature of the State of Idaho:
6 SECTION 1. That Section 63-602G, Idaho Code, be, and the same is hereby
7 amended to read as follows:
8 63-602G. PROPERTY EXEMPT FROM TAXATION -- RESIDENTIAL IMPROVEMENTS. (1)
9 During the tax year 1983 and each year thereafter, the first fifty thousand
10 dollars ($50,000) of the market value for assessment purposes of residential
11 improvements, or fifty percent (50%) of the market value for assessment pur-
12 poses of residential improvements, whichever is the lesser, shall be exempt
13 from property taxation.
14 (2) The exemption allowed by this section may be granted only if:
15 (a) The residential improvements are owner-occupied and used as the pri-
16 mary dwelling place of the owner as of January 1, provided that in the
17 event the residential improvements are owner-occupied after January 1 but
18 before April 15, the owner of the property is entitled to the exemption.
19 The residential improvements may consist of part of a multidwelling or
20 multipurpose building and shall include all of such dwelling or building
21 except any portion used exclusively for anything other than the primary
22 dwelling of the owner. The presence of an office in an owner-occupied res-
23 idential property, which office is used for multiple purposes, including
24 business and personal use, shall not prevent the owner from claiming the
25 exemption provided in this section; and
26 (b) The tax commission has certified to the board of county commissioners
27 that all properties in the county which are subject to appraisal by the
28 county assessor have, in fact, been appraised uniformly so as to secure a
29 just valuation for all property within the county; and
30 (c) The owner has certified to the county assessor by April 15 that:
31 (i) He is making application for the exemption allowed by this sec-
32 tion;
33 (ii) That the residential improvements are his primary dwelling
34 place; and
35 (iii) That he has not made application in any other county for the
36 exemption, and has not made application for the exemption on any
37 other residential improvements in the county.
38 (d) For the purpose of this section, the definition of owner shall be the
39 same definition set forth in section 63-701(7), Idaho Code.
40 When an "owner," pursuant to the provisions of section 63-701(7),
41 Idaho Code, is any person who as grantor, or whose spouse as grantor, cre-
42 ated a revocable or irrevocable trust and was named as beneficiary of that
43 trust, or who is a partner of a limited partnership, a member of a limited
2
1 liability company, or shareholder of a corporation, he or she may provide
2 proof of the trust, limited partnership, limited liability company, or
3 corporation with an affidavit stating: (i) the name of the grantor, part-
4 ner, member or shareholder; (ii) a statement that the grantor, or the
5 grantor's spouse, is the beneficiary of the trust, or the person is a
6 partner of the limited partnership, or a member of the limited liability
7 company, or a shareholder of the corporation; (iii) the grantor, the
8 grantor's spouse, partner, member or shareholder is the occupier of the
9 residential property and uses the property as the primary dwelling place
10 of the grantor, the grantor's spouse, partner, member or shareholder as of
11 January 1; and (iv) if applicable, the person holds at least a five per-
12 cent (5%) ownership in the limited partnership, limited liability company
13 or corporation.
14 The affidavit shall include the attaching of the copies of those por-
15 tions of the trust or other document which set forth the grantor, the
16 grantor or the grantor's spouse as beneficiary and the signature page of
17 the trust or other document; those portions of the articles of organiza-
18 tion or operating agreement of the limited liability company indicating
19 the person's membership in the company and the ownership percentage held
20 by such person; those portions of the limited partnership agreement or
21 other records of the limited partnership indicating that the person has
22 been admitted to the partnership and the ownership percentage held by such
23 person; or those portions of the articles of incorporation indicating that
24 the person is a shareholder of the corporation and the ownership percent-
25 age held by such person.
26 (e) Any owner may request in writing the return of all copies of any doc-
27 uments submitted with the affidavit set forth in paragraph (d) of this
28 subsection that are held by a county assessor, and the copies shall be
29 returned by the county assessor upon submission of the affidavit in proper
30 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
33 Code.
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 for which the
44 owner made application.
45 (c) The residential improvements described in subsection (3)(b) of this
46 section are owner-occupied or occupied by a beneficiary, partner, member
47 or shareholder, as appropriate, and used as the primary dwelling place of
48 the owner or beneficiary, partner, member or shareholder, as appropriate,
49 as of January 1; provided however, that in the event the residential
50 improvements are owner-occupied after January 1, but before April 15, the
51 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
54 applied.
55 (5) The legislature declares that this exemption is necessary and just.
3
1 (6) Residential improvements having previously qualified for exemption
2 under this section in the preceding year, shall not lose such qualification
3 due to the owner's, beneficiary's, partner's, member's or shareholder's
4 absence in the current year by reason of active military service in a desig-
5 nated combat zone, as defined in section 112 of the Internal Revenue Code. If
6 an owner fails to timely apply for exemption as required in this section
7 solely by reason of active duty in a designated combat zone by the owner, ben-
8 eficiary, partner, member or shareholder, as appropriate, as defined in sec-
9 tion 112 of the Internal Revenue Code, and such improvements would have
10 otherwise qualified under this section, then the board of county commissioners
11 of the county in which the residential improvements are located shall refund
12 property taxes, if previously paid, in an amount equal to the exemption which
13 would otherwise have applied.
14 (7) Beginning in tax year 2005, owners who qualified for and received the
15 exemption provided for in subsections (1) through (6) of this section in the
16 previous tax year may be eligible to receive an additional exemption as pro-
17 vided herein. Any claim for the additional exemption under the provisions of
18 this subsection shall be filed in the office of the county assessor between
19 January 1 and April 15 of each year.
20 (a) Exemptions granted pursuant to the provisions of this subsection
21 shall exempt from property taxation for the year in which the claim is
22 granted an amount equal to the difference between:
23 (i) The market value for assessment purposes of residential
24 improvements and the land upon which the residential improvements are
25 situated for the tax year in which the claim is made; and
26 (ii) The market value for assessment purposes of residential
27 improvements and the land upon which the residential improvements are
28 situated for the tax year 2004, provided the owner has qualified for
29 the additional exemption pursuant to the provisions of this subsec-
30 tion in the year 2005 and each and every year thereafter.
31 (b) In the event that an owner fails to qualify for an additional exemp-
32 tion pursuant to the provisions of this subsection in any tax year, and
33 thereafter qualifies for such an exemption, the amount subject to exemp-
34 tion from property taxation for the year in which the claim is granted
35 shall be an amount equal to the difference between:
36 (i) The market value for assessment purposes of residential
37 improvements and the land upon which the residential improvements are
38 situated for the tax year in which the claim is made; and
39 (ii) The market value for assessment purposes of residential
40 improvements and the land upon which the residential improvements are
41 situated for the tax year preceding the tax year in which the owner
42 qualifies for the exemption under this subsection.
43 (c) Owners may qualify for an exemption pursuant to this subsection pro-
44 vided the following criteria are met:
45 (i) The owner was age sixty-five (65) or older in the previous tax
46 year, or a disabled person who is recognized as disabled pursuant to
47 title 42 of the United States Code, or by the railroad retirement
48 board pursuant to title 45 of the United States Code, or by the
49 office of management and budget pursuant to title 5 of the United
50 States Code, or a disabled veteran of any war engaged in by the
51 United States, whose disability is recognized as a service connected
52 disability of a degree of ten percent (10%) or more, or has a pension
53 for nonservice connected disabilities in accordance with laws and
54 regulations administered by the United States veterans administra-
55 tion;
4
1 (ii) The owner meets the criteria of subsection (3) of this section;
2 and
3 (iii) The owner applicant and spouse, if any, have received household
4 income, as defined in section 63-701, Idaho Code, for the previous
5 tax year totaling less than thirty-five thousand dollars ($35,000),
6 and provides evidence of income for the previous tax year to the
7 county assessor. The household income limitation shall be adjusted
8 annually for cost-of-living fluctuations as provided in section
9 63-705, Idaho Code.
10 (d) Provided the criteria set forth in this subsection continue to be
11 met, the owner may continue to apply and receive the exemption in succeed-
12 ing years.
13 (e) For purposes of this subsection, the "land," upon which the residen-
14 tial improvements are situated, shall have the same meaning as that land
15 described in section 63-701(2), Idaho Code.
16 SECTION 2. This act shall be in full force and effect on and after Janu-
17 ary 1, 2004.
Reprint Reprint Reprint Reprint Reprint Reprint
STATEMENT OF PURPOSE
RS 12572
The purpose of this legislation is to protect homeowners, over
age 65 or disabled veterans, from increased property taxes
resulting in increases in taxable value. If household income,
before taxes, is less than $35,000 and the resident qualified for
the homeowner exemption in the previous year, they could apply
with the assessor for a freeze on the taxable value of the home
and residential lot. The freeze would continue so long as they
continued to meet the qualifications and own and live in the
home.
FISCAL IMPACT
To the General fund:
No fiscal effect on the general fund in FY2004.
Reduce payments for circuit breaker relief of $775,000 in
FY2005. (Indexed thereafter.)
Reduce payment of school replacement funds in FY2006 of
$110,000.
Other effects:
Property tax reduction to eligible households in 2005 of
$1.8 million.
Reduced property tax and replacement funds to school districts
beginning in 2006 of $505,000.
No effect on other taxing districts' property tax revenues.
$1.4 million shifted to remaining tax base in 2005.
Contact
Name: Sen. Fred Kennedy
Phone: 332-1348
Name: Rep. Charles Cuddy
Phone: 332-1235
STATEMENT OF PURPOSE/FISCAL NOTE Bill No. 20