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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
]]]] 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
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