2006 Legislation
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HOUSE BILL NO. 482 – Property tax exmptn/value increase

HOUSE BILL NO. 482

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Bill Status



H0482...............................................by REVENUE AND TAXATION
PROPERTY TAX - EXEMPTIONS - Adds to existing law relating to property tax
exemptions to provide for an exemption from taxation of that portion of the
market value for assessment purposes of residential improvements and
residential lots that exceeds the market value for assessment purposes of
that same property for the year 2006, or the value as determined upon a
reappraisal of the property at the time of a transfer of ownership; to
require that the residential improvements be owner-occupied and used as the
primary dwelling place of the owner; to provide that the owner must apply
for the exemption; to provide for reappraisal upon a transfer of ownership
of the property and adjustment of the market value for assessment purposes;
to provide definitions; to declare that the exemption is necessary and
just; and to provide that the exemption shall be available for certain
owners who are absent by reason of active military service in a designated
combat zone.
                                                                        
01/26    House intro - 1st rdg - to printing
01/27    Rpt prt - to Rev/Tax

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 482
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO PROPERTY TAX EXEMPTIONS; AMENDING CHAPTER 6, TITLE 63, IDAHO CODE,
  3        BY THE ADDITION OF A NEW SECTION 63-602PP, IDAHO CODE, TO PROVIDE  FOR  AN
  4        EXEMPTION FROM TAXATION OF THAT PORTION OF THE MARKET VALUE FOR ASSESSMENT
  5        PURPOSES  OF RESIDENTIAL IMPROVEMENTS AND RESIDENTIAL LOT THAT EXCEEDS THE
  6        MARKET VALUE FOR ASSESSMENT PURPOSES OF THAT SAME PROPERTY  FOR  THE  YEAR
  7        2006, OR THE VALUE AS DETERMINED UPON A REAPPRAISAL OF THE PROPERTY AT THE
  8        TIME  OF A TRANSFER OF OWNERSHIP, TO REQUIRE THAT THE RESIDENTIAL IMPROVE-
  9        MENTS BE OWNER-OCCUPIED AND USED AS THE  PRIMARY  DWELLING  PLACE  OF  THE
 10        OWNER,  TO PROVIDE THAT THE OWNER MUST APPLY FOR THE EXEMPTION, TO PROVIDE
 11        FOR REAPPRAISAL UPON A TRANSFER OF OWNERSHIP OF THE PROPERTY  AND  ADJUST-
 12        MENT  OF THE MARKET VALUE FOR ASSESSMENT PURPOSES, TO PROVIDE DEFINITIONS,
 13        TO DECLARE THAT THE EXEMPTION IS NECESSARY AND JUST AND  TO  PROVIDE  THAT
 14        THE EXEMPTION SHALL BE AVAILABLE FOR CERTAIN OWNERS WHO ARE ABSENT BY REA-
 15        SON  OF ACTIVE MILITARY SERVICE IN A DESIGNATED COMBAT ZONE; AND PROVIDING
 16        AN EFFECTIVE DATE.
                                                                        
 17    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 18        SECTION 1.  That Chapter 6, Title 63, Idaho Code,  be,  and  the  same  is
 19    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 20    ignated as Section 63-602PP, Idaho Code, and to read as follows:
                                                                        
 21        63-602PP.  PROPERTY EXEMPT FROM TAXATION --  RESIDENTIAL  IMPROVEMENTS  --
 22    MARKET  VALUE  AFTER  2006.  (1) Subject to the conditions and requirements of
 23    this section, during the tax year 2007, and each year thereafter, the  follow-
 24    ing  market  value  for  assessment purposes is exempt from property taxation:
 25    that portion of the  market  value  for  assessment  purposes  of  residential
 26    improvements  and residential lot that exceeds the market value for assessment
 27    purposes of that same property for the year 2006, or that exceeds  the  market
 28    value for assessment purposes of the property as determined upon a transfer of
 29    ownership of the property as provided in subsection (3) of this section.
 30        (2)  The exemption allowed by this section may be granted only if:
 31        (a)  The  residential improvements are owner-occupied and used as the pri-
 32        mary dwelling place of the owner;
 33        (b)  The owner received the exemption provided in section  63-602G,  Idaho
 34        Code, in the year immediately preceding application for this exemption;
 35        (c)  The tax commission has certified to the board of county commissioners
 36        that  all  properties  in the county which are subject to appraisal by the
 37        county assessor have, in fact, been appraised uniformly so as to secure  a
 38        just valuation for all property within the county; and
 39        (d)  The owner has certified to the county assessor by April 15 that:
 40             (i)   He is making application for the exemption allowed in this sec-
 41             tion;
 42             (ii)  The homestead is his primary dwelling place;
 43             (iii) He  has not made application in any other county for the exemp-
                                                                        
                                           2
                                                                        
  1             tion, and has not made application for the  exemption  on  any  other
  2             residential improvements in the county.
  3        (3)  The  exemption  allowed  in  this section shall continue in effect so
  4    long as the original applicant or his spouse occupies  the  property.  Upon  a
  5    transfer  of  ownership  of  the property or if new construction occurs on the
  6    property, the property shall be reappraised and the market value  for  assess-
  7    ment  purposes so determined shall become the value for property taxation pur-
  8    poses thereafter, subject to the provisions of this section. If new  construc-
  9    tion occurs on the property but the property continues to satisfy the criteria
 10    specified  in  subsection  (2)(d)  of  this section, a new application for the
 11    exemption authorized in this section shall not be required.
 12        (4)  For purposes of this section, "new construction" means  construction,
 13    installation,  modification  or  replacement  of  a house or outbuilding which
 14    exceeds ten percent (10%) of the assessed valuation of the property. New  con-
 15    struction shall not include any of the following:
 16        (a)  Replacement  of  comparable  size  and  value necessitated by fire or
 17        other natural disaster or occurrence not resulting from an intentional act
 18        of the owner;
 19        (b)  The construction or installation of any fire sprinkler system,  other
 20        fire extinguishing system, or fire detection system; or
 21        (c)  The  construction,  installation  or  modification  of any portion or
 22        structural component of a single or multiple family dwelling which is eli-
 23        gible for the exemption authorized by this section  if  the  construction,
 24        installation  or  modification  is  for the purpose of making the dwelling
 25        more accessible to a disabled person, or is for the purpose of  installing
 26        a security system.
 27        (5)  For  purposes  of  this section, "transfer of ownership" means either
 28    the sale or other transfer of title accompanied by  a  change  in  possession.
 29    Transfer  of ownership shall include the lease or possession and occupation of
 30    the property for a period of one (1) year or more measured by a  lease  or  an
 31    actual  change  of  occupation  of the property in exchange for the payment of
 32    consideration to the property owners. The term "transfer of  ownership"  shall
 33    not  include  the purchase or transfer of real property between spouses in the
 34    following circumstances:
 35        (a)  Transfers to a trustee for the beneficial use of  a  spouse,  or  the
 36        surviving spouse of a deceased transferor, or by a trustee of such a trust
 37        to the spouse of the trustor;
 38        (b)  Transfers to a spouse which take effect upon the death of a spouse;
 39        (c)  Transfers  to a spouse or former spouse in connection with a property
 40        settlement agreement or decree of divorce;
 41        (d)  The creation, transfer or termination, solely between spouses, of any
 42        co-owner's interest; or
 43        (e)  The distribution of a legal entity's property to a spouse  or  former
 44        spouse  in  exchange for the interest of the spouse in the legal entity in
 45        connection with a property settlement agreement or a decree of divorce.
 46        (6)  For purposes of this section, "owner" shall have the  meaning  stated
 47    in  section  63-701(7),  Idaho  Code,  and  includes  the spouse of the owner;
 48    "primary dwelling place" shall have the meaning stated in  section  63-701(8),
 49    Idaho Code; and "occupied" shall have the meaning stated in section 63-701(6),
 50    Idaho Code.
 51        (7)  An owner who applies for and receives tax relief as provided in chap-
 52    ter 7, title 63, Idaho Code, may not also qualify for this exemption.
 53        (8)  The legislature declares that this exemption is necessary and just.
 54        (9)  Residential improvements and residential lot having previously quali-
 55    fied  for  exemption  under this section in the preceding year, shall not lose
                                                                        
                                           3
                                                                        
  1    such qualification due to the owner's or the spouse of the owner's absence  in
  2    the  current  year by reason of active military service in a designated combat
  3    zone, as defined in section 112 of the Internal  Revenue  Code.  If  an  owner
  4    fails to timely apply for exemption as required in this section solely by rea-
  5    son  of  active  duty  in a designated combat zone by the owner or the owner's
  6    spouse, as appropriate,  as defined in section 112  of  the  Internal  Revenue
  7    Code, and such improvements would have otherwise qualified under this section,
  8    then  the board of county commissioners of the county in which the residential
  9    improvements are located shall refund property taxes, if previously  paid,  in
 10    an amount equal to the exemption which would otherwise have applied.
                                                                        
 11        SECTION  2.  This act shall be in full force and effect on and after Janu-
 12    ary 1, 2007.

Statement of Purpose / Fiscal Impact


                       STATEMENT OF PURPOSE

                             RS 15784

     This legislation enacts a new section 63-105FF to provide an
exemption from taxation for the tax year 2007, and thereafter of
that portion of the market value for assessment purposes of
residential improvements which exceeds the market value for
assessment purposes of the same property for the year 2006.  The
value remains the same for the property for taxation purposes
until a transfer of ownership occurs or major improvements are
made, at which time the property is reappraised with the new
value becoming the valuation for assessment purposes and the new
base value for the exemption.  The residential improvements must
be owner-occupied and the primary dwelling place of the owner as
of January 1, 2006, or the date of the transfer of ownership. 
The exemption is not self-executing; the owner must make
application in order to receive it.

     

                          FISCAL NOTE
                                
     There would be no fiscal impact to the state as a result of
this legislation.  There may be a potential reduction in property
taxes with a positive impact to taxpayers.




     


CONTACT:
Representative Robert Schaefer
Phone:  208-332-1000



STATEMENT OF PURPOSE/FISCAL NOTE                       H 482