2004 Legislation
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HOUSE BILL NO. 739 – Property tax exmptn/claim in error

HOUSE BILL NO. 739

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Bill Status



H0739...............................................by REVENUE AND TAXATION
PROPERTY TAX - HOMEOWNERS EXEMPTION - Amends existing law to provide a
procedure for determination and collection of property tax moneys that were
improperly claimed or approved for the fifty-fifty homeowner's property tax
exemption; and to provide application of moneys collected to the three
percent property tax cap.
                                                                        
02/19    House intro - 1st rdg - to printing
02/20    Rpt prt - to Rev/Tax
02/25    Rpt out - rec d/p - to 2nd rdg
02/26    2nd rdg - to 3rd rdg
03/01    3rd rdg - PASSED - 67-0-3
      AYES -- Andersen, Barraclough, Barrett, Bauer, Bayer, Bedke, Bell,
      Black, Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins,
      Crow, Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth,
      Eskridge, Field(18), Field(23), Gagner, Garrett, Harwood, Henbest,
      Jaquet, Kellogg, Kulczyk, Lake, Langford, Langhorst, Martinez,
      McGeachin, McKague, Meyer, Miller, Mitchell, Moyle, Naccarato,
      Nielsen, Pasley-Stuart, Raybould, Ridinger, Ringo, Roberts, Robison,
      Rydalch, Sali, Sayler, Schaefer, Shepherd, Skippen, Smith(30),
      Smith(24), Smylie, Snodgrass, Stevenson, Trail(Bennett), Wills, Wood,
      Mr. Speaker
      NAYS -- None
      Absent and excused -- Jones, Ring, Shirley
    Floor Sponsor - Roberts
    Title apvd - to Senate
03/02    Senate intro - 1st rdg - to Loc Gov
03/09    Rpt out - rec d/p - to 2nd rdg
03/10    2nd rdg - to 3rd rdg
03/18    3rd rdg - PASSED - 31-0-4
      AYES -- Andreason, Bailey, Bunderson, Burkett, Burtenshaw,
      Calabretta, Compton, Darrington, Davis, Gannon, Geddes, Goedde, Hill,
      Ingram, Kennedy, Keough, Little, Lodge, Malepeai, Marley, McKenzie,
      McWilliams, Noble, Noh, Richardson, Sorensen, Stegner, Stennett,
      Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- Brandt, Cameron, Pearce, Schroeder
    Floor Sponsor - Malepeai
    Title apvd - to House
03/19    To enrol - Rpt enrol - Sp signed - Pres signed
03/22    To Governor
03/23    Governor signed
         Session Law Chapter 190
         Effective: 07/01/04

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 739
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO PROPERTY EXEMPT FROM TAXATION;  AMENDING  SECTION  63-602G,  IDAHO
  3        CODE,  TO PROVIDE A PROCEDURE FOR DETERMINATION AND COLLECTION OF PROPERTY
  4        TAX MONEYS THAT WERE IMPROPERLY CLAIMED OR APPROVED  FOR  THE  FIFTY-FIFTY
  5        HOMEOWNER'S  PROPERTY  TAX  EXEMPTION AND TO PROVIDE APPLICATION OF MONEYS
  6        COLLECTED TO THE THREE PERCENT PROPERTY TAX CAP.
                                                                        
  7    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  8        SECTION 1.  That Section 63-602G, Idaho Code, be, and the same  is  hereby
  9    amended to read as follows:
                                                                        
 10        63-602G.  PROPERTY  EXEMPT  FROM TAXATION -- RESIDENTIAL IMPROVEMENTS. (1)
 11    During the tax year 1983 and each year thereafter, the  first  fifty  thousand
 12    dollars  ($50,000)  of the market value for assessment purposes of residential
 13    improvements, or fifty percent (50%) of the market value for  assessment  pur-
 14    poses  of  residential  improvements, whichever is the lesser, shall be exempt
 15    from property taxation.
 16        (2)  The exemption allowed by this section may be granted only if:
 17        (a)  The residential improvements are owner-occupied and used as the  pri-
 18        mary  dwelling  place  of  the owner as of January 1, provided that in the
 19        event the residential improvements are owner-occupied after January 1  but
 20        before  April  15, the owner of the property is entitled to the exemption.
 21        The residential improvements may consist of part  of  a  multidwelling  or
 22        multipurpose  building  and shall include all of such dwelling or building
 23        except any portion used exclusively for anything other  than  the  primary
 24        dwelling of the owner. The presence of an office in an owner-occupied res-
 25        idential  property,  which office is used for multiple purposes, including
 26        business and personal use, shall not prevent the owner from  claiming  the
 27        exemption provided in this section; and
 28        (b)  The tax commission has certified to the board of county commissioners
 29        that  all  properties  in the county which are subject to appraisal by the
 30        county assessor have, in fact, been appraised uniformly so as to secure  a
 31        just valuation for all property within the county; and
 32        (c)  The owner has certified to the county assessor by April 15 that:
 33             (i)   He is making application for the exemption allowed by this sec-
 34             tion;
 35             (ii)  That  the  residential  improvements  are  his primary dwelling
 36             place; and
 37             (iii) That he has not made application in any other  county  for  the
 38             exemption,  and  has  not  made  application for the exemption on any
 39             other residential improvements in the county.
 40        (d)  For the purpose of this section, the definition of owner shall be the
 41        same definition set forth in section 63-701(7), Idaho Code.
 42             When an "owner," pursuant to the  provisions  of  section  63-701(7),
 43        Idaho Code, is any person who as grantor, or whose spouse as grantor, cre-
                                                                        
                                           2
                                                                        
  1        ated a revocable or irrevocable trust and was named as beneficiary of that
  2        trust, or who is a partner of a limited partnership, a member of a limited
  3        liability  company, or shareholder of a corporation, he or she may provide
  4        proof of the trust, limited partnership,  limited  liability  company,  or
  5        corporation  with an affidavit stating: (i) the name of the grantor, part-
  6        ner, member or shareholder; (ii) a statement  that  the  grantor,  or  the
  7        grantor's  spouse,  is  the  beneficiary  of the trust, or the person is a
  8        partner of the limited partnership, or a member  of the limited  liability
  9        company,  or  a  shareholder  of  the  corporation; (iii) the grantor, the
 10        grantor's spouse, partner, member or shareholder is the  occupier  of  the
 11        residential  property  and uses the property as the primary dwelling place
 12        of the grantor, the grantor's spouse, partner, member or shareholder as of
 13        January 1; and (iv) if applicable, the person holds at least a  five  per-
 14        cent  (5%) ownership in the limited partnership, limited liability company
 15        or corporation.
 16             The affidavit shall include the attaching of the copies of those por-
 17        tions of the trust or other document which  set  forth  the  grantor,  the
 18        grantor  or  the grantor's spouse as beneficiary and the signature page of
 19        the trust or other document; those portions of the articles  of  organiza-
 20        tion  or  operating  agreement of the limited liability company indicating
 21        the person's membership in the company and the ownership  percentage  held
 22        by  such  person;  those  portions of the limited partnership agreement or
 23        other records of the limited partnership indicating that  the  person  has
 24        been admitted to the partnership and the ownership percentage held by such
 25        person; or those portions of the articles of incorporation indicating that
 26        the  person is a shareholder of the corporation and the ownership percent-
 27        age held by such person.
 28        (e)  Any owner may request in writing the return of all copies of any doc-
 29        uments submitted with the affidavit set forth in  paragraph  (d)  of  this
 30        subsection  that  are  held  by a county assessor, and the copies shall be
 31        returned by the county assessor upon submission of the affidavit in proper
 32        form.
 33        (f)  For the purpose of this section, the definition of "primary  dwelling
 34        place"  shall be the same definition set forth in section 63-701(8), Idaho
 35        Code.
 36        (g)  For the purpose of this section, the definition of  "occupied"  shall
 37        be the same definition set forth in section 63-701(6), Idaho Code.
 38        (3)  An  owner  need  only make application for the exemption described in
 39    subsection (1) of this section once, as long as all of  the  following  condi-
 40    tions are met:
 41        (a)  The  owner  has  received the exemption during the previous year as a
 42        result of his making a valid application as defined in  subsection  (2)(c)
 43        of this section.
 44        (b)  The  owner  or beneficiary, partner, member or shareholder, as appro-
 45        priate, still occupies the same residential  improvements  for  which  the
 46        owner made application.
 47        (c)  The  residential  improvements described in subsection (3)(b) of this
 48        section are owner-occupied or occupied by a beneficiary,  partner,  member
 49        or  shareholder, as appropriate, and used as the primary dwelling place of
 50        the owner or beneficiary, partner, member or shareholder, as  appropriate,
 51        as  of  January  1;  provided  however,  that in the event the residential
 52        improvements are owner-occupied after January 1, but before April 15,  the
 53        owner of the property is entitled to the exemption.
 54        (4)  The exemption allowed by this section must be taken before the reduc-
 55    tion  in  taxes  provided  by  sections  63-701 through 63-710, Idaho Code, is
                                                                        
                                           3
                                                                        
  1    applied.
  2        (5)  Recovery of property tax  exemptions  allowed  by  this  section  but
  3    improperly claimed or approved.
  4        (a)  Upon  discovery  of  evidence,  facts or circumstances indicating any
  5        exemption allowed by this section was improperly claimed or approved,  the
  6        county  assessor  shall  decide  whether  the  exemption claimed should be
  7        allowed and if not, notify the taxpayer in writing, assess a  recovery  of
  8        property tax and notify the county treasurer of this assessment.
  9        (b)  When  information indicating that an improper claim for the exemption
 10        allowed by this section is discovered by the  state  tax  commission,  the
 11        state  tax  commission  may  disclose  this information to the appropriate
 12        county assessor, board  of  county  commissioners  and  county  treasurer.
 13        Information  disclosed  to  county  officials  by the state tax commission
 14        under this subsection may be used to decide the validity of  any  entitle-
 15        ment  to  the exemption provided in this section and is not otherwise sub-
 16        ject to public disclosure pursuant to chapter 3, title 9, Idaho Code.
 17        (c)  The assessment and collection of the recovery of  property  tax  must
 18        begin  within  the seven (7) year period beginning the date the assessment
 19        notice  reflecting  the  improperly  claimed  or  approved  exemption  was
 20        required to be mailed to the taxpayer.
 21        (d)  The taxpayer may appeal to the  board  of  county  commissioners  the
 22        decision  by  the  county  assessor to assess the recovery of property tax
 23        within thirty (30) days of the date the county assessor sent the notice to
 24        the taxpayer pursuant to this section.
 25        (e)  A recovery of property tax shall  be  for  each  year  the  exemption
 26        allowed  by  this  section  was  improperly  claimed or approved up to the
 27        lesser of a maximum of seven (7) years or until the  property  was  trans-
 28        ferred  to a bona fide purchaser for value.  The amount of the recovery of
 29        property tax shall be calculated  using  the  product  of  the  amount  of
 30        exempted  value  for  each  year multiplied by the levy for that year plus
 31        costs, late charges and interest for each year at the rates equal to those
 32        provided for delinquent property taxes during that year.
 33        (f)  Any recovery of property tax shall be due and payable no  later  than
 34        the date provided for property taxes in section 63-903, Idaho Code, and if
 35        not  timely  paid,  late  charges and interest, beginning the first day of
 36        January in the year following the year the county assessor sent the notice
 37        to the taxpayer pursuant to this section, shall be calculated at the  cur-
 38        rent rate provided for property taxes.
 39        (g)  Recovered  property  taxes shall be billed, collected and distributed
 40        in the same manner as property taxes, except each taxing district or  unit
 41        shall  be  notified of the amount of any recovered property taxes included
 42        in any distribution.
 43        (h)  Any unpaid recovered property taxes shall become a lien upon the real
 44        property in the same manner as provided  for  property  taxes  in  section
 45        63-206,  Idaho  Code, except such lien shall attach as of the first day of
 46        January in the year following the year the county assessor sent the notice
 47        to the taxpayer pursuant to this section.
 48        (i)  For purposes of the limitation  provided  by  section  63-802,  Idaho
 49        Code,  moneys received pursuant to this subsection as recovery of property
 50        tax shall be treated as property tax revenue.
 51        (6)  The legislature declares that this exemption is necessary and just.
 52        (67)  Residential improvements having previously qualified  for  exemption
 53    under  this  section  in the preceding year, shall not lose such qualification
 54    due to  the  owner's,  beneficiary's,  partner's,  member's  or  shareholder's
 55    absence  in  the current year by reason of active military service in a desig-
                                                                        
                                           4
                                                                        
  1    nated combat zone, as defined in section 112 of the Internal Revenue Code.  If
  2    an  owner  fails  to  timely  apply  for exemption as required in this section
  3    solely by reason of active duty in a designated combat zone by the owner, ben-
  4    eficiary, partner, member or shareholder, as appropriate, as defined  in  sec-
  5    tion 112 of the Internal Revenue Code, and such improvements would have other-
  6    wise  qualified  under this section, then the board of county commissioners of
  7    the county in which the residential  improvements  are  located  shall  refund
  8    property  taxes, if previously paid, in an amount equal to the exemption which
  9    would otherwise have applied.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE
                             RS 13605

The purpose of this bill is to amend Section 63-602G, Idaho Code,
to provide authority and procedures for determination and
collection of homeowner's exemptions from property tax in
situations where the exemption is improperly claimed and allowed
as a result of error, misstatement or misunderstanding.


                          FISCAL IMPACT
None.


Contact
Name: Rep. Ken Roberts  
Phone: (208) 332-1000




STATEMENT OF PURPOSE/FISCAL NOTE                     H 739