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H0825...............................................by REVENUE AND TAXATION PROPERTY TAX - Amends existing law to provide an additional property tax exemption for certain homeowners. 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. 825 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 2006, 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 shall 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 2005, provided the owner has qualified for 29 the additional exemption pursuant to the provisions of this subsec- 30 tion in the year 2006 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 shall qualify for an exemption pursuant to this subsection 44 provided the following criteria are met: 45 (i) The owner was age sixty-five (65) years or older in the previ- 46 ous tax year, or a disabled person who is recognized as disabled pur- 47 suant to title 42 of the United States Code, or by the railroad 48 retirement board pursuant to title 45 of the United States Code, or 49 by the office of management and budget pursuant to title 5 of the 50 United States Code, or a disabled veteran of any war engaged in by 51 the United States, whose disability is recognized as a service-con- 52 nected disability of a degree of ten percent (10%) or more, or has a 53 pension for nonservice-connected disabilities in accordance with laws 54 and regulations administered by the United States veterans adminis- 55 tration; 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 provided 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, 2005.
STATEMENT OF PURPOSE RS 13530C1 The purpose of this legislation is to protect homeowners, age 65 or older, or disabled, from increased property taxes resulting from 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. This exemption would apply only to owner occupied primary residential properties. The freeze would continue so long as they continued to meet the qualifications and own and live in the home. FISCAL IMPACT There would be no fiscal impact on the general fund in FY 2005. Thereafter, the impact on the general fund would be a reduction in the amount of state funds required for the circuit breaker program, an estimated $800,000 in the first year, FY 2006. Most who qualify for this exemption now qualify for the circuit breaker. There would be a property tax reduction to eligible households of $1.8 million in 2006, about $45 per eligible household. This amount would be paid by non-eligible property taxpayers. There would be no reduction in the amount of property taxes collected by cities, counties or other local government. Annual increases for schools resulting from inflation in residential values would be less than without this change. Based on recent rates of inflation, the difference would be $410,000 starting in FY 2006. Contact Name: Sen. Fred Kennedy Phone: 332-1348 Name: Rep. Charles Cuddy Phone: 332-1235 STATEMENT OF PURPOSE / FISCAL IMPACT H 825