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H0503...............................................by REVENUE AND TAXATION
PROPERTY TAX - EXEMPTION - Adds to existing law to provide for a property
tax exemption for property owned by qualified persons; to provide for
application of the exemption to residential improvements and the
residential lot; to provide that the exemption shall continue for spouses
under certain circumstances; to provide conditions for the exemption; to
provide that an owner is required to make application for the exemption
only once if certain conditions are met; to declare the exemption 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.
01/30 House intro - 1st rdg - to printing
01/31 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. 503
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 63-602LL, IDAHO CODE, TO PROVIDE FOR A
4 TAX EXEMPTION FOR PROPERTY OWNED BY QUALIFIED PERSONS, TO PROVIDE FOR
5 APPLICATION OF THE EXEMPTION TO RESIDENTIAL IMPROVEMENTS AND THE RESIDEN-
6 TIAL LOT, TO PROVIDE THAT THE EXEMPTION SHALL CONTINUE FOR SPOUSES UNDER
7 CERTAIN CIRCUMSTANCES, TO PROVIDE CONDITIONS FOR THE EXEMPTION, TO PROVIDE
8 THAT AN OWNER IS REQUIRED TO MAKE APPLICATION FOR THE EXEMPTION ONLY ONCE
9 IF CERTAIN CONDITIONS ARE MET, TO DECLARE THAT THE EXEMPTION IS NECESSARY
10 AND JUST AND TO PROVIDE THAT THE EXEMPTION SHALL BE AVAILABLE FOR CERTAIN
11 OWNERS WHO ARE ABSENT BY REASON OF ACTIVE MILITARY SERVICE IN A DESIGNATED
12 COMBAT ZONE; DECLARING AN EMERGENCY AND PROVIDING A RETROACTIVE EFFECTIVE
13 DATE.
14 Be It Enacted by the Legislature of the State of Idaho:
15 SECTION 1. That Chapter 6, Title 63, Idaho Code, be, and the same is
16 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
17 ignated as Section 63-602LL, Idaho Code, and to read as follows:
18 63-602LL. PROPERTY EXEMPT FROM TAXATION -- QUALIFIED PERSONS. (1) During
19 the tax year 2006 and each year thereafter, owners of owner-occupied resi-
20 dences and who qualify for the exemption provided in section 63-602G, Idaho
21 Code, shall also receive an exemption for any increases in the taxable value
22 of the residential improvements and residential lot. The taxable value shall
23 be no greater than the taxable value of the base year which shall be increased
24 by a growth factor of not more than three percent (3%) per year from the base
25 year so long as the owner-occupant qualifies for the exemption provided in
26 section 63-602G, Idaho Code. When title to the real property changes by sale
27 or inheritance, then the real property shall acquire a new taxable value equal
28 to the market value at the time of the transfer. The base year shall be either
29 tax year 2005 or in the case of transfer of ownership the tax year prior to
30 the year in which the owner first applies for and receives the exemption pur-
31 suant to section 63-602G, Idaho Code.
32 (a) This exemption applies to both residential improvements and the resi-
33 dential lot on which the improvements are located.
34 (b) To qualify to receive this exemption in tax year 2006 or any year
35 thereafter, an owner must have qualified for and received the exemption
36 provided in section 63-602G, Idaho Code, in the previous year.
37 (c) An owner who applies for and receives tax relief as provided in chap-
38 ter 7, title 63, Idaho Code, may not also qualify for this exemption.
39 (2) If the home is a duplex, triplex or fourplex, the exemption shall
40 apply to that portion of the residential improvements occupied by the owner
41 and/or the owner's spouse and the respective portion of the residential lot.
42 (3) The exemption shall continue for a spouse if the owner resides in a
43 residential care home or a nursing home or becomes deceased.
2
1 (4) The exemption allowed by this section may be granted only if:
2 (a) The residential improvements are owner-occupied and used as the pri-
3 mary dwelling place of the owner and/or the owner's spouse. The residen-
4 tial improvements may consist of part of a multidwelling or multipurpose
5 building and shall include all of such dwelling or building except any
6 portion used exclusively for anything other than the primary dwelling of
7 the owner. The presence of an office in an owner-occupied residential
8 property, which office is used for multiple purposes, including business
9 and personal use, shall not prevent the owner from claiming the exemption
10 provided in this section; and
11 (b) The tax commission has certified to the board of county commissioners
12 that all properties in the county which are subject to appraisal by the
13 county assessor have, in fact, been appraised uniformly so as to secure a
14 just valuation for all property within the county; and
15 (c) The owner has certified to the county assessor that:
16 (i) He is making application for the exemption allowed by this sec-
17 tion;
18 (ii) The residential improvements are his or his spouse's primary
19 dwelling place; and
20 (iii) He has not made application in any other county for the exemp-
21 tion, and has not made application for the exemption on any other
22 residential improvements or residential lots in the county.
23 (d) For the purpose of this section, the definition of "owner" shall be
24 the same definition set forth in section 63-701(7), Idaho Code.
25 (e) For the purpose of this section, the definition of "primary dwelling
26 place" shall be the same definition set forth in section 63-701(8), Idaho
27 Code.
28 (f) For the purpose of this section, the definition of "occupied" shall
29 be the same definition set forth in section 63-701(6), Idaho Code.
30 (5) An owner need only make application for the exemption described in
31 subsection (1) of this section once, as long as all of the following condi-
32 tions are met:
33 (a) The owner has received the exemption during the previous year as a
34 result of his making a valid application as defined in subsection (4)(c)
35 of this section.
36 (b) The owner and/or the owner's spouse still occupies the same residen-
37 tial improvements for which the owner made application.
38 (c) The residential improvements described in subsection (4)(a) of this
39 section are owner-occupied or occupied by the spouse of the owner, and
40 used as the primary dwelling place of the owner or spouse, as appropriate.
41 (6) The legislature declares that this exemption is necessary and just.
42 (7) Residential improvements having previously qualified for exemption
43 under this section in the preceding year shall not lose such qualification due
44 to the owner's or the spouse of the owner's absence in the current year by
45 reason of active military service in a designated combat zone, as defined in
46 section 112 of the Internal Revenue Code. If an owner fails to timely apply
47 for exemption as required in this section solely by reason of active duty in a
48 designated combat zone by the owner or the owner's spouse, as appropriate, as
49 defined in section 112 of the Internal Revenue Code, and such improvements
50 would have otherwise qualified under this section, then the board of county
51 commissioners of the county in which the residential improvements are located
52 shall refund property taxes, if previously paid, in an amount equal to the
53 exemption which would otherwise have applied.
54 SECTION 2. An emergency existing therefor, which emergency is hereby
3
1 declared to exist, this act shall be in full force and effect on and after its
2 passage and approval, and retroactively to January 1, 2006.
STATEMENT OF PURPOSE
RS 15740
This legislation puts a 3% cap on increases in valuation on
residential property used as a primary residence.
FISCAL NOTE
This legislation has no impact on state general funds, however,
the state tax commission estimates a reduction in 2005 taxable
values by $2.9 billion, resulting in a tax shift of about $42.5
million in taxes the first year and a reduction in the school M&0
of about $10 million in the second year.
Contact:
Name: Rep. George Eskridge, Sen. Shawn Keough
Phone: 322-1270
Rep. Eric Anderson
Rep. Bill Deal
Rep. Frank Henderson
Rep. Bob Nonini
Rep. Clifford Bayer
Sen. Joyce Broadsword
STATEMENT OF PURPOSE/FISCAL NOTE H 503