Print Friendly HOUSE BILL NO. 826 – Property tax/homeownr exmptn/adjust
HOUSE BILL NO. 826
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H0826...............................................by REVENUE AND TAXATION
PROPERTY TAX - Amends existing law to clarify that certain adjustments to
the maximum amount subject to property tax exemption shall be made; to
provide for certain annual adjustments to the maximum amount subject to
property tax exemption; to provide for the publication and dissemination of
adjustments; and to provide that the publication of adjustments shall be
exempt from the provisions of the Administrative Procedure Act.
03/09 House intro - 1st rdg - to printing
03/10 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 826
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 2006, 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 state tax com-
24 mission shall publish the adjustments required by this subsection each and
25 every year the secretary of health and human services announces said cost-of-
26 living percentage modification. The adjustments shall be published no later
27 than October 1 of each year and shall be effective for claims filed in and for
28 the following property tax year. The publication of adjustments under this
29 subsection shall be exempt from the provisions of chapter 52, title 67, Idaho
30 Code, but shall be provided to each county and to members of the public upon
31 request and without charge.
32 (2) The exemption allowed by this section may be granted only if:
33 (a) The residential improvements are owner-occupied and used as the pri-
34 mary dwelling place of the owner as of January 1, provided that in the
35 event the residential improvements are owner-occupied after January 1 but
36 before April 15, the owner of the property is entitled to the exemption.
37 The residential improvements may consist of part of a multidwelling or
38 multipurpose building and shall include all of such dwelling or building
39 except any portion used exclusively for anything other than the primary
40 dwelling of the owner. The presence of an office in an owner-occupied res-
41 idential property, which office is used for multiple purposes, including
42 business and personal use, shall not prevent the owner from claiming the
43 exemption provided in this section; and
1 (b) The tax commission has certified to the board of county commissioners
2 that all properties in the county which are subject to appraisal by the
3 county assessor have, in fact, been appraised uniformly so as to secure a
4 just valuation for all property within the county; and
5 (c) The owner has certified to the county assessor by April 15 that:
6 (i) He is making application for the exemption allowed by this sec-
8 (ii) That the residential improvements are his primary dwelling
9 place; and
10 (iii) That he has not made application in any other county for the
11 exemption, and has not made application for the exemption on any
12 other residential improvements in the county.
13 (d) For the purpose of this section, the definition of owner shall be the
14 same definition set forth in section 63-701(7), Idaho Code.
15 When an "owner," pursuant to the provisions of section 63-701(7),
16 Idaho Code, is any person who as grantor, or whose spouse as grantor, cre-
17 ated a revocable or irrevocable trust and was named as beneficiary of that
18 trust, or who is a partner of a limited partnership, a member of a limited
19 liability company, or shareholder of a corporation, he or she may provide
20 proof of the trust, limited partnership, limited liability company, or
21 corporation with an affidavit stating: (i) the name of the grantor, part-
22 ner, member or shareholder; (ii) a statement that the grantor, or the
23 grantor's spouse, is the beneficiary of the trust, or the person is a
24 partner of the limited partnership, or a member of the limited liability
25 company, or a shareholder of the corporation; (iii) the grantor, the
26 grantor's spouse, partner, member or shareholder is the occupier of the
27 residential property and uses the property as the primary dwelling place
28 of the grantor, the grantor's spouse, partner, member or shareholder as of
29 January 1; and (iv) if applicable, the person holds at least a five per-
30 cent (5%) ownership in the limited partnership, limited liability company
31 or corporation.
32 The affidavit shall include the attaching of the copies of those por-
33 tions of the trust or other document which set forth the grantor, the
34 grantor or the grantor's spouse as beneficiary and the signature page of
35 the trust or other document; those portions of the articles of organiza-
36 tion or operating agreement of the limited liability company indicating
37 the person's membership in the company and the ownership percentage held
38 by such person; those portions of the limited partnership agreement or
39 other records of the limited partnership indicating that the person has
40 been admitted to the partnership and the ownership percentage held by such
41 person; or those portions of the articles of incorporation indicating that
42 the person is a shareholder of the corporation and the ownership percent-
43 age held by such person.
44 (e) Any owner may request in writing the return of all copies of any doc-
45 uments submitted with the affidavit set forth in paragraph (d) of this
46 subsection that are held by a county assessor, and the copies shall be
47 returned by the county assessor upon submission of the affidavit in proper
49 (f) For the purpose of this section, the definition of "primary dwelling
50 place" shall be the same definition set forth in section 63-701(8), Idaho
52 (g) For the purpose of this section, the definition of "occupied" shall
53 be the same definition set forth in section 63-701(6), Idaho Code.
54 (3) An owner need only make application for the exemption described in
55 subsection (1) of this section once, as long as all of the following condi-
1 tions are met:
2 (a) The owner has received the exemption during the previous year as a
3 result of his making a valid application as defined in subsection (2)(c)
4 of this section.
5 (b) The owner or beneficiary, partner, member or shareholder, as appro-
6 priate, still occupies the same residential improvements for which the
7 owner made application.
8 (c) The residential improvements described in subsection (3)(b) of this
9 section are owner-occupied or occupied by a beneficiary, partner, member
10 or shareholder, as appropriate, and used as the primary dwelling place of
11 the owner or beneficiary, partner, member or shareholder, as appropriate,
12 as of January 1; provided however, that in the event the residential
13 improvements are owner-occupied after January 1, but before April 15, the
14 owner of the property is entitled to the exemption.
15 (4) The exemption allowed by this section must be taken before the reduc-
16 tion in taxes provided by sections 63-701 through 63-710, Idaho Code, is
18 (5) The legislature declares that this exemption is necessary and just.
19 (6) Residential improvements having previously qualified for exemption
20 under this section in the preceding year, shall not lose such qualification
21 due to the owner's, beneficiary's, partner's, member's or shareholder's
22 absence in the current year by reason of active military service in a desig-
23 nated combat zone, as defined in section 112 of the Internal Revenue Code. If
24 an owner fails to timely apply for exemption as required in this section
25 solely by reason of active duty in a designated combat zone by the owner, ben-
26 eficiary, partner, member or shareholder, as appropriate, as defined in sec-
27 tion 112 of the Internal Revenue Code, and such improvements would have other-
28 wise qualified under this section, then the board of county commissioners of
29 the county in which the residential improvements are located shall refund
30 property taxes, if previously paid, in an amount equal to the exemption which
31 would otherwise have applied.
32 SECTION 2. This act shall be in full force and effect on and after Janu-
33 ary 1, 2005.
STATEMENT OF PURPOSE
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 maximum 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, $100,000 market value for residential
improvements, there is no longer any mitigation for inflation.
So taxes increase at an accelerated rate. Since 1990, total
residential property taxes in Idaho have increased by 194 percent
while the total for all non-residential property has increased by
82 percent. The current maximum homeowner's exemption was
established in 1983, and has never been adjusted for inflation.
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, a
difference of about $400,000 starting in FY 2006. Eligible
homeowners would see a property tax reduction of about $1.7
million, about $16 each, in the first year, which would be paid
by non-eligible property taxpayers.
Name: Sen. Fred Kennedy
Name: Rep. Charles Cuddy
STATEMENT OF PURPOSE / FISCAL IMPACT H 826