2006 Legislation
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SENATE BILL NO. 1280 – Property tax/homestead exmptn/incr

SENATE BILL NO. 1280

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S1280........................................by STENNETT, MARLEY, MALEPEAI,
WERK, KELLY, LANGHORST, BURKETT -  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.
                                                                        
01/19    Senate intro - 1st rdg - to printing
01/20    Rpt prt - to Loc Gov

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1280
                                                                        
               BY STENNETT, MARLEY, MALEPEAI, WERK, KELLY, LANGHORST, BURKETT
                                                                        
  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 / Fiscal Impact


                  STATEMENT OF PURPOSE
                            
                        RS 15691
                            
This legislation will update the homeowner property tax exemption by
increasing the limit of the exemption to $100,000 (from the current
limit of $50,000), include the value of land in the calculation of
property value, and index the exemption for inflation so that the value
of the exemption does not fall behind inflation.



                       FISCAL NOTE
                            
This legislation will result in a small positive impact on state
revenues by decreasing payments for the Circuit Breaker program. Local
funding for K-l2 public education will decrease by approximately $27
million in the second year following enactment of this statute although
increases in overall property valuation will likely minimize or
eliminate this effect.


Contact
Name:     Senator David Langhorst
          Senator Elliot Werk
          Senator Clint Stennett
          Senator Bert Marley
          Senator Mike Burkett
          Senator Edgar Malepeai
          Senator Kate Kelly 

Phone: 332-1130


STATEMENT OF PURPOSE/FISCAL NOTE                                 
                                                        S 1280