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H0456...............................................by REVENUE AND TAXATION
PROPERTY TAX - Amends existing law to provide that the first $100,000 of
the market value for assessment purposes of the homestead or 50% of the
market value for assessment purposes of the homestead, whichever is the
lesser, shall be exempt from property taxation; to define "homestead"; 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.
01/24 House intro - 1st rdg - to printing
01/25 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 456
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO PROPERTY EXEMPT FROM TAXATION; AMENDING SECTION 63-602G, IDAHO
3 CODE, TO PROVIDE THAT THE FIRST ONE HUNDRED THOUSAND DOLLARS OF THE MARKET
4 VALUE FOR ASSESSMENT PURPOSES OF THE HOMESTEAD OR FIFTY PERCENT OF THE
5 MARKET VALUE FOR ASSESSMENT PURPOSES OF THE HOMESTEAD, WHICHEVER IS THE
6 LESSER, SHALL BE EXEMPT FROM PROPERTY TAXATION, TO DEFINE "HOMESTEAD," TO
7 PROVIDE FOR CERTAIN ANNUAL ADJUSTMENTS TO THE MAXIMUM AMOUNT SUBJECT TO
8 PROPERTY TAX EXEMPTION, TO PROVIDE FOR PUBLICATION AND DISSEMINATION OF
9 ADJUSTMENTS, TO PROVIDE THAT THE PUBLICATION OF ADJUSTMENTS SHALL BE
10 EXEMPT FROM THE PROVISIONS OF THE ADMINISTRATIVE PROCEDURE ACT AND TO MAKE
11 TECHNICAL CORRECTIONS; DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE
12 APPLICATION.
13 Be It Enacted by the Legislature of the State of Idaho:
14 SECTION 1. That Section 63-602G, Idaho Code, be, and the same is hereby
15 amended to read as follows:
16 63-602G. PROPERTY EXEMPT FROM TAXATION -- RESIDENTIAL IMPROVEMENTS HOME-
17 STEAD. (1) During the tax year 1983 2006 and each year thereafter, subject to
18 annual adjustment as provided herein, the first fifty one hundred thousand
19 dollars ($5100,000) of the market value for assessment purposes of residential
20 improvements the homestead as that term is defined in section 63-701, Idaho
21 Code, or fifty percent (50%) of the market value for assessment purposes of
22 residential improvements the homestead as that term is defined in section
23 63-701, Idaho Code, whichever is the lesser, shall be exempt from property
24 taxation. Beginning for tax year 2007, the state tax commission shall publish
25 adjustments to the maximum amount subject to property tax exemption to reflect
26 cost-of-living fluctuations. The adjustments shall effect changes in the
27 amount subject to tax exemption by a percentage equal as near as practicable
28 to the annual cost-of-living percentage modification as determined by the sec-
29 retary of health and human services pursuant to 42 U.S.C. section 415(i). The
30 state tax commission shall publish the adjustments required by this subsec-
31 tion each and every year the secretary of health and human services announces
32 said cost-of-living percentage modification. The adjustments shall be pub-
33 lished no later than October 1 of each year and shall be effective for claims
34 filed in and for the following property tax year. The publication of adjust-
35 ments under this subsection shall be exempt from the provisions of chapter 52,
36 title 67, Idaho Code, but shall be provided to each county and to members of
37 the public upon request and without charge.
38 (2) The exemption allowed by this section may be granted only if:
39 (a) The residential improvements are homestead is owner-occupied and used
40 as the primary dwelling place of the owner as of January 1, provided that
41 in the event the residential improvements are homestead is owner-occupied
42 after January 1 but before April 15, the owner of the property is entitled
43 to the exemption. The residential improvements homestead may consist of
2
1 part of a multidwelling or multipurpose building and shall include all of
2 such dwelling or building except any portion used exclusively for anything
3 other than the primary dwelling of the owner. The presence of an office in
4 an owner-occupied residential property homestead, which office is used for
5 multiple purposes, including business and personal use, shall not prevent
6 the owner from claiming the exemption provided in this section; and
7 (b) The tax commission has certified to the board of county commissioners
8 that all properties in the county which are subject to appraisal by the
9 county assessor have, in fact, been appraised uniformly so as to secure a
10 just valuation for all property within the county; and
11 (c) The owner has certified to the county assessor by April 15 that:
12 (i) He is making application for the exemption allowed by this sec-
13 tion;
14 (ii) That the residential improvements are homestead is his primary
15 dwelling place; and
16 (iii) That he has not made application in any other county for the
17 exemption, and has not made application for the exemption on any
18 other residential improvements homestead in the county.
19 (d) For the purpose of this section, the definition of "owner" shall be
20 the same definition set forth in section 63-701(7), Idaho Code.
21 When an "owner," pursuant to the provisions of section 63-701(7),
22 Idaho Code, is any person who is the beneficiary of a revocable or irrevo-
23 cable trust, or who is a partner of a limited partnership, a member of a
24 limited liability company, or shareholder of a corporation, he or she may
25 provide proof of the trust, limited partnership, limited liability com-
26 pany, or corporation in the manner set forth in section 63-703(4), Idaho
27 Code.
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 section 63-703(4), Idaho
30 Code, that are held by a county assessor, and the copies shall be returned
31 by the county assessor upon submission of the affidavit in proper form.
32 (f) For the purpose of this section, the definition of "primary dwelling
33 place" shall be the same definition set forth in section 63-701(8), Idaho
34 Code.
35 (g) For the purpose of this section, the definition of "occupied" shall
36 be the same definition set forth in section 63-701(6), Idaho Code.
37 (3) An owner need only make application for the exemption described in
38 subsection (1) of this section once, as long as all of the following condi-
39 tions are met:
40 (a) The owner has received the exemption during the previous year as a
41 result of his making a valid application as defined in subsection (2)(c)
42 of this section.
43 (b) The owner or beneficiary, partner, member or shareholder, as appro-
44 priate, still occupies the same residential improvements homestead for
45 which the owner made application.
46 (c) The residential improvements homestead described in subsection (3)(b)
47 of this section are is owner-occupied or occupied by a beneficiary, part-
48 ner, member or shareholder, as appropriate, and used as the primary dwell-
49 ing place of the owner or beneficiary, partner, member or shareholder, as
50 appropriate, as of January 1; provided however, that in the event the res-
51 idential improvements are homestead is owner-occupied after January 1, but
52 before April 15, the owner of the property is entitled to the exemption.
53 (4) The exemption allowed by this section must be taken before the reduc-
54 tion in taxes provided by sections 63-701 through 63-710, Idaho Code, is
55 applied.
3
1 (5) Recovery of property tax exemptions allowed by this section but
2 improperly claimed or approved.:
3 (a) Upon discovery of evidence, facts or circumstances indicating any
4 exemption allowed by this section was improperly claimed or approved, the
5 county assessor shall decide whether the exemption claimed should be
6 allowed and if not, notify the taxpayer in writing, assess a recovery of
7 property tax and notify the county treasurer of this assessment.
8 (b) When information indicating that an improper claim for the exemption
9 allowed by this section is discovered by the state tax commission, the
10 state tax commission may disclose this information to the appropriate
11 county assessor, board of county commissioners and county treasurer.
12 Information disclosed to county officials by the state tax commission
13 under this subsection may be used to decide the validity of any entitle-
14 ment to the exemption provided in this section and is not otherwise sub-
15 ject to public disclosure pursuant to chapter 3, title 9, Idaho Code.
16 (c) The assessment and collection of the recovery of property tax must
17 begin within the seven (7) year period beginning the date the assessment
18 notice reflecting the improperly claimed or approved exemption was
19 required to be mailed to the taxpayer.
20 (d) The taxpayer may appeal to the board of county commissioners the
21 decision by the county assessor to assess the recovery of property tax
22 within thirty (30) days of the date the county assessor sent the notice to
23 the taxpayer pursuant to this section.
24 (e) A recovery of property tax shall be for each year the exemption
25 allowed by this section was improperly claimed or approved up to the
26 lesser of a maximum of seven (7) years or until the property was trans-
27 ferred to a bona fide purchaser for value. The amount of the recovery of
28 property tax shall be calculated using the product of the amount of
29 exempted value for each year multiplied by the levy for that year plus
30 costs, late charges and interest for each year at the rates equal to those
31 provided for delinquent property taxes during that year.
32 (f) Any recovery of property tax shall be due and payable no later than
33 the date provided for property taxes in section 63-903, Idaho Code, and if
34 not timely paid, late charges and interest, beginning the first day of
35 January in the year following the year the county assessor sent the notice
36 to the taxpayer pursuant to this section, shall be calculated at the cur-
37 rent rate provided for property taxes.
38 (g) Recovered property taxes shall be billed, collected and distributed
39 in the same manner as property taxes, except each taxing district or unit
40 shall be notified of the amount of any recovered property taxes included
41 in any distribution.
42 (h) Any unpaid recovered property taxes shall become a lien upon the real
43 property in the same manner as provided for property taxes in section
44 63-206, Idaho Code, except such lien shall attach as of the first day of
45 January in the year following the year the county assessor sent the notice
46 to the taxpayer pursuant to this section.
47 (i) For purposes of the limitation provided by section 63-802, Idaho
48 Code, moneys received pursuant to this subsection as recovery of property
49 tax shall be treated as property tax revenue.
50 (6) The legislature declares that this exemption is necessary and just.
51 (7) Residential improvements A homestead having previously qualified for
52 exemption under this section in the preceding year, shall not lose such quali-
53 fication due to: the owner's, beneficiary's, partner's, member's or
54 shareholder's absence in the current year by reason of active military service
55 in a designated combat zone, as defined in section 112 of the Internal Revenue
4
1 Code, or because the residential improvements have homestead has been leased
2 because the owner, beneficiary, partner, member or shareholder is absent in
3 the current year by reason of active military service in a designated combat
4 zone, as defined in section 112 of the Internal Revenue Code. If an owner
5 fails to timely apply for exemption as required in this section solely by rea-
6 son of active duty in a designated combat zone by the owner, beneficiary,
7 partner, member or shareholder, as appropriate, as defined in section 112 of
8 the Internal Revenue Code, and such improvements homestead would have other-
9 wise qualified under this section, then the board of county commissioners of
10 the county in which the residential improvements are homestead is located
11 shall refund property taxes, if previously paid, in an amount equal to the
12 exemption which would otherwise have applied.
13 SECTION 2. An emergency existing therefor, which emergency is hereby
14 declared to exist, this act shall be in full force and effect on and after its
15 passage and approval, and retroactively to January 1, 2006.
STATEMENT OF PURPOSE
RS 15607C1
This legislation updates the homeowner exemption for inflation,
raises the upper limit to $100,000, indexes the homeowner
exemption and includes the lot.
FISCAL NOTE
No fiscal effect to general fund. With this legislation, the
increase in residential taxes in 2006 would be $65 million less
than it would be otherwise. In the second year after passage the
residential taxes for schools would be $16 million less than it
would be otherwise.
Contact
Name: Representative Wendy Jaquet
Phone: 332-1130
STATEMENT OF PURPOSE/FISCAL NOTE H 456