Print Friendly HOUSE BILL NO. 439 – Property tax deferral act
HOUSE BILL NO. 439
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H0439...............................................by REVENUE AND TAXATION
PROPERTY TAX DEFERRAL ACT - Adds to and amends existing law to enact the
"Property Tax Deferral Act"; to provide for definitions; to provide for
application for deferral of property tax; to provide for procedures and
appeals; to provide for a deferral of property taxes and interest and liens
relating to the deferral; to provide for reimbursement by the State Tax
Commission of local taxes deferred; to provide a limit to the deferral and
payment of taxes not deferred; to provide for events terminating the
deferral; to provide for payment of deferred taxes; to provide for a tax
deed in the event of failure to pay deferred taxes; to provide for recovery
of erroneous deferrals; to provide a misdemeanor penalty for knowingly
filing a false claim; and to coordinate reimbursement payments for property
tax relief and tax deferrals.
01/23 House intro - 1st rdg - to printing
01/24 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. 439
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO PROPERTY TAXES; AMENDING CHAPTER 7, TITLE 63, IDAHO CODE, BY THE
3 ADDITION OF NEW SECTIONS 63-712, 63-713, 63-714, 63-715, 63-716, 63-717,
4 63-718, 63-719, 63-720 AND 63-721, IDAHO CODE, TO PROVIDE A SHORT TITLE,
5 TO PROVIDE FOR DEFINITIONS, TO PROVIDE FOR APPLICATION FOR DEFERRAL OF
6 PROPERTY TAX, TO PROVIDE FOR PROCEDURES AND APPEALS, TO PROVIDE FOR A
7 DEFERRAL OF PROPERTY TAXES AND INTEREST AND LIENS RELATING TO THE DEFER-
8 RAL, TO PROVIDE FOR REIMBURSEMENT BY THE STATE TAX COMMISSION OF LOCAL
9 TAXES DEFERRED AND TO PROVIDE A LIMIT TO THE DEFERRAL AND PAYMENT OF TAXES
10 NOT DEFERRED, TO PROVIDE FOR EVENTS TERMINATING THE DEFERRAL AND TO PRO-
11 VIDE FOR PAYMENT OF DEFERRED TAXES AND INTEREST AND TO PROVIDE FOR DISTRI-
12 BUTION AND APPROPRIATION OF PAYMENTS RECEIVED, TO PROVIDE FOR A TAX DEED
13 IN THE EVENT OF FAILURE TO PAY DEFERRED TAXES, TO PROVIDE FOR RECOVERY OF
14 ERRONEOUS DEFERRALS AND TO PROVIDE A MISDEMEANOR PENALTY FOR KNOWINGLY
15 FILING A FALSE CLAIM; PROVIDING FOR AN EXTENSION OF DUE TAXES UNDER SEC-
16 TION 63-706, IDAHO CODE, FOR ONE MONTH FOR 2006 ONLY; AMENDING SECTION
17 63-3638, IDAHO CODE, TO REVISE DISTRIBUTION FOR REIMBURSEMENT PAYMENTS FOR
18 PROPERTY TAX RELIEF AND TAX DEFERRALS; DECLARING AN EMERGENCY AND PROVID-
19 ING A RETROACTIVE EFFECTIVE DATE.
20 Be It Enacted by the Legislature of the State of Idaho:
21 SECTION 1. That Chapter 7, Title 63, Idaho Code, be, and the same is
22 hereby amended by the addition thereto of NEW SECTIONS, to be known and desig-
23 nated as Sections 63-712, 63-713, 63-714, 63-715, 63-716, 63-717, 63-718,
24 63-719, 63-720 and 63-721, Idaho Code, and to read as follows:
25 63-712. SHORT TITLE. The provisions of sections 63-712 through 63-721,
26 Idaho Code, shall be known and may be cited as the "Property Tax Deferral
28 63-713. DEFINITIONS. In addition to the definitions in section 63-701,
29 Idaho Code, the following definitions apply to sections 63-712 through
30 63-721, Idaho Code.
31 (1) "Qualified claimant" means an individual who is a claimant who
32 applies for and properly receives property tax relief under the provisions of
33 sections 63-701 through 63-710, Idaho Code.
34 (2) "Qualified property" means property for which:
35 (a) A qualified claimant is eligible to receive benefits under the provi-
36 sions of sections 63-701 through 63-710, Idaho Code, for the year for
37 which the qualified claimant applies for a deferral of payment of property
38 tax; and
39 (b) Is owned only by the qualified claimant and his or her spouse and is
40 not subject to a trust or life estate or other ownership held by a person
41 who is not the qualified claimant or his or her spouse.
1 63-714. APPLICATION -- DEFERRAL OF PROPERTY TAX. (1) A qualified claimant
2 may elect, upon the application for property tax relief filed under section
3 63-703, Idaho Code, to defer payment of any property tax due after application
4 of all benefits available under section 63-704, Idaho Code. The state tax com-
5 mission shall prescribe the form and manner by which the election must be made
6 and may require that the application include information establishing the out-
7 standing balance of any encumbrances, proof of insurance of an amount adequate
8 for the amount of deferred tax and interest, and such other information as the
9 state tax commission reasonably determines to be necessary.
10 (2) No application for deferral of property taxes shall be granted if the
11 result would be to defer property taxes which, together with the amount of
12 property tax and interest previously deferred on the same property, would
13 exceed fifty percent (50%) of the qualified claimant's proportional share of
14 the market value of the qualified property.
15 63-715. PROCEDURES -- APPEALS. Elections for deferral of payment of prop-
16 erty tax shall be subject to the provisions of section 63-706, Idaho Code, and
17 if approved by the county board of equalization, shall be included on the
18 property tax reduction roll and processed and reviewed as provided in section
19 63-707, Idaho Code, for claims for property tax relief.
20 63-716. DEFERRAL -- INTEREST -- LIEN -- PRIORITY. (1) Upon approval by
21 both the county board of equalization and the state tax commission, payment of
22 any amount of property tax due for the year to which the election relates,
23 after application of the property tax relief available under sections 63-701
24 through 63-710, Idaho Code, and subject to the limitation in section
25 63-717(2), Idaho Code, in regard to the qualified property subject to the
26 election, shall be deferred until the deferral is terminated under section
27 63-718, Idaho Code.
28 (2) During the period of deferral, interest shall accrue on the amount
29 deferred at the annual rate of six percent (6%) annually.
30 (3) The lien imposed by section 63-206, Idaho Code, shall continue to be
31 a lien on the property in the amount of deferred taxes and interest thereon.
32 The state tax commission shall file with the county recorder of the county in
33 which the property is located a notice of lien for deferred property taxes.
34 The lien shall have the same priority as a lien for unpaid property tax.
35 63-717. REIMBURSEMENT BY STATE TAX COMMISSION. (1) By no later than
36 December 20 of each year the state tax commission shall pay to the county tax
37 collector of each county one-half (1/2) of the amount due each county as reim-
38 bursement for property taxes deferred as provided in sections 63-712 through
39 63-721, Idaho Code, as shown on the property tax reduction roll required under
40 section 63-707, Idaho Code, as modified by actions of the state tax commission
41 relating to claims approved or disapproved by the state tax commission, and
42 shall pay the second one-half (1/2) of such amount by not later than June 20
43 of the following year. The payments may be combined with payments made under
44 section 63-709, Idaho Code.
45 (2) The total amount of reimbursement payable to all counties under this
46 section shall not exceed five hundred thousand dollars ($500,000) in regard to
47 property taxes for one (1) calendar year. In the event that the amount of
48 taxes approved for deferral exceeds five hundred thousand dollars ($500,000),
49 the amount of taxes deferred for each qualifying property shall be reduced
50 proportionately and the balance of property tax not deferred shall be entered
51 on the property tax notice required by section 63-902, Idaho Code, and shall
52 be payable as required by chapter 9, title 63, Idaho Code.
1 63-718. EVENTS TERMINATING DEFERRAL -- PAYMENT OF DEFERRED TAX AND INTER-
2 EST. (1) A deferral of property tax payments shall terminate on the earlier
4 (a) Voluntary payment of the full amount of deferred tax and interest to
5 the state tax commission;
6 (b) The death of the qualified claimant. In the case of more than one (1)
7 qualified claimant, the death of the last surviving qualified claimant;
8 (c) A sale or other transfer of title to the property or any part of the
9 property except a transfer of title to a surviving spouse of a deceased
10 qualified claimant;
11 (d) The property no longer qualifies for the exemption provided in sec-
12 tion 63-602G, Idaho Code, for residential improvements;
13 (e) A determination by the state tax commission under section 63-720,
14 that the deferral of property tax payments was erroneously granted to a
15 person who is not a qualified claimant or in regard to property that is
16 not qualified property.
17 (2) When a deferral of property tax is terminated any unpaid amount of
18 deferred tax and interest shall be paid to the state tax commission no later
19 than one hundred eighty (180) days after the termination.
20 (3) Any payments of deferred property tax received by the state tax com-
21 mission under this section or under sections 63-719 and 63-720, Idaho Code,
22 shall be distributed to the property tax deferral recovery fund which is
23 hereby created. Amounts in the property tax deferral recovery fund are hereby
24 continuously appropriated for the purposes of section 63-3638(5), Idaho Code.
25 63-719. TAX DEED FOR DEFICIENCY IN REPAYMENT. Any amount of deferred tax
26 due under section 63-718, Idaho Code, which is not paid to the state tax com-
27 mission on the due date, is a delinquency subject to the provisions of chapter
28 10, title 63, Idaho Code, except that references to county and county offi-
29 cials in that chapter shall be taken as references to the state tax commis-
31 63-720. RECOVERY OF ERRONEOUS DEFERRALS. In addition to the provisions of
32 section 63-719, Idaho Code, the state tax commission may recover any erroneous
33 or incorrect deferrals of tax payments made under sections 63-712 through
34 63-721, Idaho Code, from any person who elected the deferral under section
35 63-714, Idaho Code, if the commission determines that a deferral was granted
36 to a person who is not a qualified claimant or in regard to property that is
37 not qualified property. The deficiency determination, collection, and enforce-
38 ment procedures provided by the Idaho income tax act, sections 63-3039,
39 63-3042, 63-3043 through 63-3064, Idaho Code, shall apply and be available to
40 the commission for enforcement and collection under sections 63-712 through
41 63-721, Idaho Code, and such sections shall, for this purpose, be considered
42 part of sections 63-712 through 63-721, Idaho Code. Wherever liens or any
43 other proceedings are defined as income tax liens or proceedings, they shall,
44 when applied in enforcement or collection under sections 63-712 through
45 63-721, Idaho Code, be described as tax deferral liens and proceedings. In
46 connection with such sections, a deficiency shall consist of any amount erro-
47 neously deferred under sections 63-712 through 63-721, Idaho Code, together
48 with any interest and penalty due thereon.
49 63-721. KNOWINGLY FILING A FALSE CLAIM A MISDEMEANOR. Every person who
50 applies for deferral of taxes under section 63-714, Idaho Code, knowing that
51 the person for whom the application is made is not a qualified claimant or
52 knowing that the property is not qualified property, is guilty of a misde-
1 meanor and on conviction thereof shall be punished as provided for misdemean-
2 ors in section 18-303, Idaho Code.
3 SECTION 2. For the year 2006 only, in Section 63-706, Idaho Code, the
4 references to April 15, May 1 and May 15, shall not apply and May 15 shall be
5 substituted for April 15, June 1 shall be substituted for May 1, and June 15
6 shall be substituted for May 15.
7 SECTION 3. That Section 63-3638, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 63-3638. SALES TAX -- DISTRIBUTION. All moneys collected under this chap-
10 ter, except as may otherwise be required in sections 63-3203 and 63-3709,
11 Idaho Code, shall be distributed by the tax commission as follows:
12 (1) An amount of money shall be distributed to the state refund account
13 sufficient to pay current refund claims. All refunds authorized under this
14 chapter by the commission shall be paid through the state refund account, and
15 those moneys are continuously appropriated.
16 (2) Five million dollars ($5,000,000) per year is continuously appropri-
17 ated and shall be distributed to the permanent building fund, provided by sec-
18 tion 57-1108, Idaho Code.
19 (3) Four million eight hundred thousand dollars ($4,800,000) per year is
20 continuously appropriated and shall be distributed to the water pollution con-
21 trol account established by section 39-3605, Idaho Code.
22 (4) An amount equal to the sum required to be certified by the chairman
23 of the Idaho housing and finance association to the state tax commission pur-
24 suant to section 67-6211, Idaho Code, in each year is continuously appropri-
25 ated and shall be paid to any capital reserve fund, established by the Idaho
26 housing and finance association pursuant to section 67-6211, Idaho Code. Such
27 amounts, if any, as may be appropriated hereunder to the capital reserve fund
28 of the Idaho housing and finance association shall be repaid for distribution
29 under the provisions of this section, subject to the provisions of section
30 67-6215, Idaho Code, by the Idaho housing and finance association, as soon as
31 possible, from any moneys available therefor and in excess of the amounts
32 which the association determines will keep it self-supporting.
33 (5) An amount equal to the sum required by the provisions of sections
34 63-709 and 63-717, Idaho Code, after allowance for the amount appropriated by
35 section 63-718(3), Idaho Code, is continuously appropriated and shall be paid
36 as provided by sections 63-709 and 63-717, Idaho Code.
37 (6) An amount required by the provisions of chapter 53, title 33, Idaho
39 (7) An amount required by the provisions of chapter 87, title 67, Idaho
41 (8) One dollar ($1.00) on each application for certificate of title or
42 initial application for registration of a motor vehicle, snowmobile, all-
43 terrain vehicle or other vehicle processed by the county assessor or the Idaho
44 transportation department excepting those applications in which any sales or
45 use taxes due have been previously collected by a retailer, shall be a fee for
46 the services of the assessor of the county or the Idaho transportation depart-
47 ment in collecting such taxes, and shall be paid into the current expense fund
48 of the county or state highway account established in section 40-702, Idaho
50 (9) Thirteen and three-quarters percent (13.75%) is continuously appro-
51 priated and shall be distributed to the revenue sharing account which is cre-
52 ated in the state treasury, and the moneys in the revenue sharing account will
1 be paid in installments each calendar quarter by the tax commission as fol-
3 (a) Twenty-eight and two-tenths percent (28.2%) shall be paid to the var-
4 ious cities as follows:
5 (i) Fifty percent (50%) of such amount shall be paid to the various
6 cities, and each city shall be entitled to an amount in the propor-
7 tion that the population of that city bears to the population of all
8 cities within the state; and
9 (ii) Fifty percent (50%) of such amount shall be paid to the various
10 cities, and each city shall be entitled to an amount in the propor-
11 tion that the preceding year's market value for assessment purposes
12 for that city bears to the preceding year's market value for assess-
13 ment purposes for all cities within the state.
14 (b) Twenty-eight and two-tenths percent (28.2%) shall be paid to the var-
15 ious counties as follows:
16 (i) One million three hundred twenty thousand dollars ($1,320,000)
17 annually shall be distributed one forty-fourth (1/44) to each of the
18 various counties; and
19 (ii) The balance of such amount shall be paid to the various coun-
20 ties, and each county shall be entitled to an amount in the propor-
21 tion that the population of that county bears to the population of
22 the state;
23 (c) Thirty-five and nine-tenths percent (35.9%) of the amount appropri-
24 ated in this subsection (9) shall be paid to the several counties for dis-
25 tribution to the cities and counties as follows:
26 (i) Each city and county which received a payment under the provi-
27 sions of section 63-3638(e), Idaho Code, during the fourth quarter of
28 calendar year 1999, shall be entitled to a like amount during suc-
29 ceeding calendar quarters.
30 (ii) If the dollar amount of money available under this subsection
31 (9)(c) in any quarter does not equal the amount paid in the fourth
32 quarter of calendar year 1999, each city's and county's payment shall
33 be reduced proportionately.
34 (iii) If the dollar amount of money available under this subsection
35 (9)(c) in any quarter exceeds the amount paid in the fourth quarter
36 of calendar year 1999, each city and county shall be entitled to a
37 proportionately increased payment, but such increase shall not exceed
38 one hundred five percent (105%) of the total payment made in the
39 fourth quarter of calendar year 1999.
40 (iv) If the dollar amount of money available under this subsection
41 (9)(c) in any quarter exceeds one hundred five percent (105%) of the
42 total payment made in the fourth quarter of calendar year 1999, any
43 amount over and above such one hundred five percent (105%) shall be
44 paid fifty percent (50%) to the various cities in the proportion that
45 the population of the city bears to the population of all cities
46 within the state, and fifty percent (50%) to the various counties in
47 the proportion that the population of a county bears to the popula-
48 tion of the state; and
49 (d) Seven and seven-tenths percent (7.7%) of the amount appropriated in
50 this subsection (9) shall be paid to the several counties for distribution
51 to special purpose taxing districts as follows:
52 (i) Each such district which received a payment under the provi-
53 sions of section 63-3638(e), Idaho Code, during the fourth quarter of
54 calendar year 1999, shall be entitled to a like amount during suc-
55 ceeding calendar quarters.
1 (ii) If the dollar amount of money available under this subsection
2 (9)(d) in any quarter does not equal the amount paid in the fourth
3 quarter of calendar year 1999, each special purpose taxing district's
4 payment shall be reduced proportionately.
5 (iii) If the dollar amount of money available under this subsection
6 (9)(d) in any quarter exceeds the amount distributed under paragraph
7 (i) of this subsection (9)(d), each special purpose taxing district
8 shall be entitled to a share of the excess based on the proportion
9 each such district's current property tax budget bears to the sum of
10 the current property tax budgets of all such districts in the state.
11 The state tax commission shall calculate district current property
12 tax budgets to include any unrecovered foregone amounts as determined
13 under section 63-802(1)(e), Idaho Code. When a special purpose taxing
14 district is situated in more than one (1) county, the tax commission
15 shall determine the portion attributable to the special purpose tax-
16 ing district from each county in which it is situated.
17 (iv) If special purpose taxing districts are consolidated, the
18 resulting district is entitled to a base amount equal to the sum of
19 the base amounts which were received in the last calendar quarter by
20 each district prior to the consolidation.
21 (v) If a special purpose taxing district is dissolved or
22 disincorporated, the state tax commission shall continuously distrib-
23 ute to the board of county commissioners an amount equal to the last
24 quarter's distribution prior to dissolution or disincorporation. The
25 board of county commissioners shall determine any redistribution of
26 moneys so received.
27 (vi) Taxing districts formed after January 1, 2001, are not entitled
28 to a payment under the provisions of this subsection (9)(d).
29 (vii) For purposes of this subsection (9)(d), a special purpose tax-
30 ing district is any taxing district which is not a city, a county or
31 a school district.
32 (10) Amounts calculated in accordance with section 2, chapter 356, Laws of
33 2001, for annual distribution to counties and other taxing districts beginning
34 in October 2001 for replacement of property tax on farm machinery and equip-
35 ment exempted pursuant to section 63-602EE, Idaho Code. For nonschool dis-
36 tricts, the state tax commission shall distribute one-fourth (1/4) of this
37 amount certified quarterly to each county. For school districts, the state tax
38 commission shall distribute one-fourth (1/4) of the amount certified quarterly
39 to each school district. For nonschool districts, the county auditor shall
40 distribute to each district within thirty (30) calendar days from receipt of
41 moneys from the tax commission. Moneys received by each taxing district for
42 replacement shall be utilized in the same manner and in the same proportions
43 as revenues from property taxation. The moneys remitted to the county trea-
44 surer for replacement of property exempt from taxation pursuant to section
45 63-602EE, Idaho Code, may be considered by the counties and other taxing dis-
46 tricts and budgeted at the same time, in the same manner and in the same year
47 as revenues from taxation on personal property which these moneys replace. If
48 taxing districts are consolidated, the resulting district is entitled to an
49 amount equal to the sum of the amounts which were received in the last calen-
50 dar quarter by each district pursuant to this subsection prior to the consoli-
51 dation. If a taxing district is dissolved or disincorporated, the state tax
52 commission shall continuously distribute to the board of county commissioners
53 an amount equal to the last quarter's distribution prior to dissolution or
54 disincorporation. The board of county commissioners shall determine any redis-
55 tribution of moneys so received. If a taxing district annexes territory, the
1 distribution of moneys received pursuant to this subsection shall be unaf-
2 fected. Taxing districts formed after January 1, 2001, are not entitled to a
3 payment under the provisions of this subsection. School districts shall
4 receive an amount determined by multiplying the sum of the year 2000 school
5 district levy plus .001 times the market value on December 31, 2000, in the
6 district of the property exempt from taxation pursuant to section 63-602EE,
7 Idaho Code. For school districts, beginning January 1, 2002, only the portion
8 of property tax replacement received to replace property exempt from taxation
9 pursuant to section 63-602EE, Idaho Code, based on the tax year 2000 tax
10 charges for maintenance and operation as limited by sections 33-802 2. and
11 33-1002D, Idaho Code, shall not be subtracted from the maximum school district
12 maintenance and operation property taxes permitted in accordance with section
13 33-802 2., Idaho Code. For purposes of the limitation provided by section
14 63-802, Idaho Code, moneys received pursuant to this section as property tax
15 replacement for property exempt from taxation pursuant to section 63-602EE,
16 Idaho Code, shall be treated as property tax revenues.
17 (11) Any moneys remaining over and above those necessary to meet and
18 reserve for payments under other subsections of this section shall be distrib-
19 uted to the general fund.
20 SECTION 4. An emergency existing therefor, which emergency is hereby
21 declared to exist, this act shall be in full force and effect on and after its
22 passage and approval, and retroactively to January 1, 2006.
STATEMENT OF PURPOSE
This bill would allow individual homeowners with low incomes
who are elderly, disabled or widowed and who qualify for "circuit
breaker" property tax relief to postpone payment of property
taxes on their homes. To qualify, the homeowner must own at
least half the equity in the home and the home must not be co-
owned by other persons (other than a spouse) or be held in trust
or subject to a life estate. The taxes and interest (at 6%)
would become payable when both the homeowner and the spouse have
died or the property is sold or it no longer qualifies for the
homeowner's exemption. The state will reimburse counties and
local governments for the tax that is not collected in the
current year, up to an annual maximum of $500,000. Repayment,
when due, is to the state. The payments are deposited in a
dedicated fund to be used for financing future property tax
deferrals. Until the tax is paid, the state is protected by the
continuation of the existing property tax lien on the property.
The maximum annual cost to the general fund is $500,000.
Name: Brian Whitlock
Agency: Governor's Office
STATEMENT OF PURPOSE/FISCAL NOTE H 439