2006 Legislation
Print Friendly

HOUSE BILL NO. 423 – Property tax, homestead exmptn

HOUSE BILL NO. 423

View Bill Status

View Bill Text

View Statement of Purpose / Fiscal Impact



Text to be added within a bill has been marked with Bold and
Underline. Text to be removed has been marked with
Strikethrough and Italic. How these codes are actually displayed will
vary based on the browser software you are using.

This sentence is marked with bold and underline to show added text.

This sentence is marked with strikethrough and italic, indicating
text to be removed.

Bill Status



H0423...............................................by REVENUE AND TAXATION
PROPERTY TAX - Amends existing law to provide that the first $50,000 of the
market value for assessment purposes 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    House intro - 1st rdg - to printing
01/20    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. 423
                                                                        
                             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 FIFTY THOUSAND DOLLARS OF THE MARKET VALUE
  4        FOR  ASSESSMENT  PURPOSES  OF THE HOMESTEAD OR FIFTY PERCENT OF THE MARKET
  5        VALUE FOR ASSESSMENT PURPOSES OF THE HOMESTEAD, WHICHEVER IS LESSER, SHALL
  6        BE EXEMPT FROM PROPERTY TAXATION, TO DEFINE HOMESTEAD, TO PROVIDE FOR CER-
  7        TAIN ANNUAL ADJUSTMENTS TO THE MAXIMUM  AMOUNT  SUBJECT  TO  PROPERTY  TAX
  8        EXEMPTION, TO PROVIDE FOR PUBLICATION AND DISSEMINATION OF ADJUSTMENTS, TO
  9        PROVIDE  THAT THE PUBLICATION OF ADJUSTMENTS SHALL BE EXEMPT FROM THE PRO-
 10        VISIONS OF THE ADMINISTRATIVE PROCEDURE ACT AND TO MAKE TECHNICAL  CORREC-
 11        TIONS; DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.
                                                                        
 12    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 13        SECTION  1.  That  Section 63-602G, Idaho Code, be, and the same is hereby
 14    amended to read as follows:
                                                                        
 15        63-602G.  PROPERTY EXEMPT FROM TAXATION -- RESIDENTIAL IMPROVEMENTS  HOME-
 16    STEAD.  (1) During the tax year 1983 2006 and each year thereafter, subject to
 17    annual adjustment as  provided  herein,  the  first  fifty   thousand  dollars
 18    ($50,000)  of the market value for assessment purposes of residential improve-
 19    ments the homestead as that term is defined in section 63-701, Idaho Code,  or
 20    fifty percent (50%) of the market value for assessment purposes of residential
 21    improvements  the  homestead  as that term is defined in section 63-701, Idaho
 22    Code, whichever is the lesser, shall be exempt from property taxation.  Begin-
 23    ning  for tax year 2007, the state tax commission shall publish adjustments to
 24    the maximum amount subject to property tax exemption to reflect cost-of-living
 25    fluctuations. The adjustments shall effect changes in the amount  subject   to
 26    tax exemption by a percentage equal as near as practicable to the annual cost-
 27    of-living percentage modification as determined by the secretary of health and
 28    human  services pursuant to 42 U.S.C. section 415(i). The state tax commission
 29    shall publish the adjustments required by  this subsection each and every year
 30    the secretary of health and human services announces said cost-of-living  per-
 31    centage modification. The adjustments shall be published no later than October
 32    1  of each year and shall be effective for claims filed in and for the follow-
 33    ing property tax year. The publication of adjustments  under  this  subsection
 34    shall  be  exempt from the provisions of chapter 52, title 67, Idaho Code, but
 35    shall be provided to each county and to members of the public upon request and
 36    without charge.
 37        (2)  The exemption allowed by this section may be granted only if:
 38        (a)  The residential improvements are homestead is owner-occupied and used
 39        as the primary dwelling place of the owner as of January 1, provided  that
 40        in  the event the residential improvements are homestead is owner-occupied
 41        after January 1 but before April 15, the owner of the property is entitled
 42        to the exemption. The residential improvements homestead  may  consist  of
 43        part  of a multidwelling or multipurpose building and shall include all of
                                                                        
                                           2
                                                                        
  1        such dwelling or building except any portion used exclusively for anything
  2        other than the primary dwelling of the owner. The presence of an office in
  3        an owner-occupied residential property homestead, which office is used for
  4        multiple purposes, including business and personal use, shall not  prevent
  5        the owner from claiming the exemption provided in this section; and
  6        (b)  The tax commission has certified to the board of county commissioners
  7        that  all  properties  in the county which are subject to appraisal by the
  8        county assessor have, in fact, been appraised uniformly so as to secure  a
  9        just valuation for all property within the county; and
 10        (c)  The owner has certified to the county assessor by April 15 that:
 11             (i)   He is making application for the exemption allowed by this sec-
 12             tion;
 13             (ii)  That  the residential improvements are homestead is his primary
 14             dwelling place; and
 15             (iii) That he has not made application in any other  county  for  the
 16             exemption,  and  has  not  made  application for the exemption on any
 17             other residential improvements homestead in the county.
 18        (d)  For the purpose of this section, the definition of "owner"  shall  be
 19        the same definition set forth in section 63-701(7), Idaho Code.
 20             When  an  "owner,"  pursuant  to the provisions of section 63-701(7),
 21        Idaho Code, is any person who is the beneficiary of a revocable or irrevo-
 22        cable trust, or who is a partner of a limited partnership, a member  of  a
 23        limited  liability company, or shareholder of a corporation, he or she may
 24        provide proof of the trust, limited partnership,  limited  liability  com-
 25        pany,  or  corporation in the manner set forth in section 63-703(4), Idaho
 26        Code.
 27        (e)  Any owner may request in writing the return of all copies of any doc-
 28        uments submitted with the affidavit set forth in section 63-703(4),  Idaho
 29        Code, that are held by a county assessor, and the copies shall be returned
 30        by the county assessor upon submission of the affidavit in proper form.
 31        (f)  For  the purpose of this section, the definition of "primary dwelling
 32        place" shall be the same definition set forth in section 63-701(8),  Idaho
 33        Code.
 34        (g)  For  the  purpose of this section, the definition of "occupied" shall
 35        be the same definition set forth in section 63-701(6), Idaho Code.
 36        (3)  An owner need only make application for the  exemption  described  in
 37    subsection  (1)  of  this section once, as long as all of the following condi-
 38    tions are met:
 39        (a)  The owner has received the exemption during the previous  year  as  a
 40        result  of  his making a valid application as defined in subsection (2)(c)
 41        of this section.
 42        (b)  The owner or beneficiary, partner, member or shareholder,  as  appro-
 43        priate,  still  occupies  the  same residential improvements homestead for
 44        which the owner made application.
 45        (c)  The residential improvements homestead described in subsection (3)(b)
 46        of this section are is owner-occupied or occupied by a beneficiary,  part-
 47        ner, member or shareholder, as appropriate, and used as the primary dwell-
 48        ing  place of the owner or beneficiary, partner, member or shareholder, as
 49        appropriate, as of January 1; provided however, that in the event the res-
 50        idential improvements are homestead is owner-occupied after January 1, but
 51        before April 15, the owner of the property is entitled to the exemption.
 52        (4)  The exemption allowed by this section must be taken before the reduc-
 53    tion in taxes provided by sections  63-701  through  63-710,  Idaho  Code,  is
 54    applied.
 55        (5)  Recovery  of  property  tax  exemptions  allowed  by this section but
                                                                        
                                           3
                                                                        
  1    improperly claimed or approved.:
  2        (a)  Upon discovery of evidence, facts  or  circumstances  indicating  any
  3        exemption  allowed by this section was improperly claimed or approved, the
  4        county assessor shall decide  whether  the  exemption  claimed  should  be
  5        allowed  and  if not, notify the taxpayer in writing, assess a recovery of
  6        property tax and notify the county treasurer of this assessment.
  7        (b)  When information indicating that an improper claim for the  exemption
  8        allowed  by  this  section  is discovered by the state tax commission, the
  9        state tax commission may disclose  this  information  to  the  appropriate
 10        county  assessor,  board  of  county  commissioners  and county treasurer.
 11        Information disclosed to county officials  by  the  state  tax  commission
 12        under  this  subsection may be used to decide the validity of any entitle-
 13        ment to the exemption provided in this section and is not  otherwise  sub-
 14        ject to public disclosure pursuant to chapter 3, title 9, Idaho Code.
 15        (c)  The  assessment  and  collection of the recovery of property tax must
 16        begin within the seven (7) year period beginning the date  the  assessment
 17        notice  reflecting  the  improperly  claimed  or  approved  exemption  was
 18        required to be mailed to the taxpayer.
 19        (d)  The  taxpayer  may  appeal  to  the board of county commissioners the
 20        decision by the county assessor to assess the  recovery  of  property  tax
 21        within thirty (30) days of the date the county assessor sent the notice to
 22        the taxpayer pursuant to this section.
 23        (e)  A  recovery  of  property  tax  shall  be for each year the exemption
 24        allowed by this section was improperly  claimed  or  approved  up  to  the
 25        lesser  of  a  maximum of seven (7) years or until the property was trans-
 26        ferred to a bona fide purchaser for value. The amount of the  recovery  of
 27        property  tax  shall  be  calculated  using  the  product of the amount of
 28        exempted value for each year multiplied by the levy  for  that  year  plus
 29        costs, late charges and interest for each year at the rates equal to those
 30        provided for delinquent property taxes during that year.
 31        (f)  Any  recovery  of property tax shall be due and payable no later than
 32        the date provided for property taxes in section 63-903, Idaho Code, and if
 33        not timely paid, late charges and interest, beginning  the  first  day  of
 34        January in the year following the year the county assessor sent the notice
 35        to  the taxpayer pursuant to this section, shall be calculated at the cur-
 36        rent rate provided for property taxes.
 37        (g)  Recovered property taxes shall be billed, collected  and  distributed
 38        in  the same manner as property taxes, except each taxing district or unit
 39        shall be notified of the amount of any recovered property  taxes  included
 40        in any distribution.
 41        (h)  Any unpaid recovered property taxes shall become a lien upon the real
 42        property  in  the  same  manner  as provided for property taxes in section
 43        63-206, Idaho Code, except such lien shall attach as of the first  day  of
 44        January in the year following the year the county assessor sent the notice
 45        to the taxpayer pursuant to this section.
 46        (i)  For  purposes  of  the  limitation  provided by section 63-802, Idaho
 47        Code, moneys received pursuant to this subsection as recovery of  property
 48        tax shall be treated as property tax revenue.
 49        (6)  The legislature declares that this exemption is necessary and just.
 50        (7)  Residential  improvements A homestead having previously qualified for
 51    exemption under this section in the preceding year, shall not lose such quali-
 52    fication  due  to:  the  owner's,  beneficiary's,   partner's,   member's   or
 53    shareholder's absence in the current year by reason of active military service
 54    in a designated combat zone, as defined in section 112 of the Internal Revenue
 55    Code,  or  because the residential improvements have homestead has been leased
                                                                        
                                           4
                                                                        
  1    because the owner, beneficiary, partner, member or shareholder  is  absent  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, beneficiary,
  6    partner, member or shareholder, as appropriate, as defined in section  112  of
  7    the  Internal  Revenue Code, and such improvements homestead would have other-
  8    wise qualified under this section, then the board of county  commissioners  of
  9    the  county  in  which  the  residential improvements are homestead is located
 10    shall refund property taxes, if previously paid, in an  amount  equal  to  the
 11    exemption which would otherwise have applied.
                                                                        
 12        SECTION  2.  An  emergency  existing  therefor,  which emergency is hereby
 13    declared to exist, this act shall be in full force and effect on and after its
 14    passage and approval, and retroactively to January 1, 2006.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE
                           RS 15509C1

This legislation allows for the inclusion of the value of the
residential home site when computing property valuations for the
homeowners exemption.
          


                          FISCAL IMPACT

None to the General Fund. 
There will be about a four million dollar reduction in the amount
of property tax that would otherwise go to public education. This
legislation will cause a property tax shift from owner occupied
homes to other classes of property.



Contact
Name:  Rep. Lake 
       Sen. Keough
Phone: 332-1000


STATEMENT OF PURPOSE/FISCAL NOTE                         H 423