2007 Legislation
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HOUSE BILL NO. 70 – Property tax exmptn/improper apprvl

HOUSE BILL NO. 70

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Bill Status



H0070...............................................by REVENUE AND TAXATION
PROPERTY TAX EXEMPTION - Amends existing law relating to property tax
exemptions to provide procedures if a county assessor determines an
exemption was improperly approved as a result of a county error and to
provide for waiver of the property tax; to provide that the Board of County
Commissioners may waive the collection of all or part of any costs, late
charges and interest to facilitate the collection of the recovery of
property tax; and to revise procedures for recovering property tax.
                                                                        
01/30    House intro - 1st rdg - to printing
01/31    Rpt prt - to Rev/Tax
02/01    Rpt out - rec d/p - to 2nd rdg
02/02    2nd rdg - to 3rd rdg
02/06    3rd rdg - PASSED - 70-0-0
      AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
      Block, Bock, Boe, Bolz, Brackett, Bradford, Chadderdon, Chavez, Chew,
      Clark, Collins, Crane, Durst, Edmunson, Eskridge, Hagedorn, Hart,
      Harwood, Henbest, Henderson, Jaquet, Killen, King, Kren, Labrador,
      Lake, LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin,
      Mortimer, Moyle, Nielsen, Nonini, Pasley-Stuart, Patrick, Pence,
      Raybould, Ring, Ringo, Roberts, Ruchti, Rusche, Sayler, Schaefer,
      Shepherd(2), Shepherd(8), Shirley, Shively, Smith(30), Smith(24),
      Snodgrass, Stevenson, Thayn, Trail, Vander Woude, Wills, Wood(27),
      Wood(35), Mr. Speaker
      NAYS -- None
      Absent and excused -- None
    Floor Sponsor - Kren
    Title apvd - to Senate
02/07    Senate intro - 1st rdg - to Loc Gov
02/14    Rpt out - rec d/p - to 2nd rdg
02/15    2nd rdg - to 3rd rdg
02/20    3rd rdg - PASSED - 35-0-0
      AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
      Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
      Goedde, Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst,
      Little, Lodge, Malepeai, McGee, McKague, McKenzie, Pearce,
      Richardson, Schroeder, Siddoway, Stegner, Stennett, Werk
      NAYS -- None
      Absent and excused -- None
    Floor Sponsor - Heinrich
    Title apvd - to House
02/21    To enrol
02/22    Rpt enrol - Sp signed
02/23    Pres signed
02/26    To Governor
03/02    Governor signed
         Session Law Chapter 39
         Effective: 01/01/07

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   First Regular Session - 2007
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 70
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO PROPERTY EXEMPT FROM TAXATION;  AMENDING  SECTION  63-602G,  IDAHO
  3        CODE, TO PROVIDE PROCEDURES IF A COUNTY ASSESSOR DETERMINES THAT AN EXEMP-
  4        TION  WAS  IMPROPERLY  APPROVED AS A RESULT OF COUNTY ERROR AND TO PROVIDE
  5        FOR WAIVER OF THE PROPERTY TAX, TO PROVIDE THAT THE BOARD OF  COUNTY  COM-
  6        MISSIONERS  MAY  WAIVE  THE  COLLECTION  OF ALL OR PART OF ANY COSTS, LATE
  7        CHARGES AND INTEREST TO FACILITATE THE COLLECTION OF THE RECOVERY OF PROP-
  8        ERTY TAX AND TO REVISE PROCEDURES FOR RECOVERING PROPERTY  TAX;  DECLARING
  9        AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.
                                                                        
 10    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 11        SECTION  1.  That  Section 63-602G, Idaho Code, be, and the same is hereby
 12    amended to read as follows:
                                                                        
 13        63-602G.  PROPERTY EXEMPT FROM TAXATION -- HOMESTEAD. (1) During  the  tax
 14    year  2006  and each year thereafter, subject to annual adjustment as provided
 15    herein, the first seventy-five thousand dollars ($75,000) of the market  value
 16    for  assessment  purposes  of the homestead as that term is defined in section
 17    63-701, Idaho Code, or fifty percent (50%) of the market value for  assessment
 18    purposes  of  the  homestead  as that term is defined in section 63-701, Idaho
 19    Code, whichever is the lesser, shall be exempt from property taxation.  Begin-
 20    ning  for tax year 2007, the state tax commission shall publish adjustments to
 21    the maximum amount subject to property tax exemption to reflect cost-of-living
 22    fluctuations. The adjustments shall effect changes in the  amount  subject  to
 23    tax  exemption  by  a  percentage  equal  as near as practicable to the annual
 24    increase in the Idaho housing price index as determined by the  United  States
 25    office of federal housing enterprise oversight. The state tax commission shall
 26    publish  the  adjustments  required by this subsection each and every year the
 27    office of federal housing enterprise oversight announces a change in the Idaho
 28    housing price index. The adjustments shall be published no later than  October
 29    1  of each year and shall be effective for claims filed in and for the follow-
 30    ing property tax year. The publication of adjustments  under  this  subsection
 31    shall  be  exempt from the provisions of chapter 52, title 67, Idaho Code, but
 32    shall be provided to each county and to members of the public upon request and
 33    without charge.
 34        (2)  The exemption allowed by this section may be granted only if:
 35        (a)  The homestead is owner-occupied and  used  as  the  primary  dwelling
 36        place  of  the owner as of January 1, provided that in the event the home-
 37        stead is owner-occupied after January 1 but before April 15, the owner  of
 38        the  property  is  entitled to the exemption. The homestead may consist of
 39        part of a multidwelling or multipurpose building and shall include all  of
 40        such dwelling or building except any portion used exclusively for anything
 41        other than the primary dwelling of the owner. The presence of an office in
 42        a  homestead,  which office is used for multiple purposes, including busi-
 43        ness and personal use, shall not  prevent  the  owner  from  claiming  the
                                                                        
                                       2
                                                                        
  1        exemption provided in this section; and
  2        (b)  The tax commission has certified to the board of county commissioners
  3        that  all  properties  in the county which are subject to appraisal by the
  4        county assessor have, in fact, been appraised uniformly so as to secure  a
  5        just valuation for all property within the county; and
  6        (c)  The owner has certified to the county assessor by April 15 that:
  7             (i)   He is making application for the exemption allowed by this sec-
  8             tion;
  9             (ii)  That the homestead is his primary dwelling place; and
 10             (iii) That  he  has  not made application in any other county for the
 11             exemption, and has not made application  for  the  exemption  on  any
 12             other homestead in the county.
 13        (d)  For  the  purpose of this section, the definition of "owner" shall be
 14        the same definition set forth in section 63-701(7), Idaho Code.
 15             When an "owner," pursuant to the  provisions  of  section  63-701(7),
 16        Idaho Code, is any person who is the beneficiary of a revocable or irrevo-
 17        cable  trust,  or who is a partner of a limited partnership, a member of a
 18        limited liability company, or shareholder of a corporation, he or she  may
 19        provide  proof  of  the trust, limited partnership, limited liability com-
 20        pany, or corporation in the manner set forth in section  63-703(4),  Idaho
 21        Code.
 22        (e)  Any owner may request in writing the return of all copies of any doc-
 23        uments  submitted with the affidavit set forth in section 63-703(4), Idaho
 24        Code, that are held by a county assessor, and the copies shall be returned
 25        by the county assessor upon submission of the affidavit in proper form.
 26        (f)  For the purpose of this section, the definition of "primary  dwelling
 27        place"  shall be the same definition set forth in section 63-701(8), Idaho
 28        Code.
 29        (g)  For the purpose of this section, the definition of  "occupied"  shall
 30        be the same definition set forth in section 63-701(6), Idaho Code.
 31        (3)  An  owner  need  only make application for the exemption described in
 32    subsection (1) of this section once, as long as all of  the  following  condi-
 33    tions are met:
 34        (a)  The  owner  has  received the exemption during the previous year as a
 35        result of his making a valid application as defined in  subsection  (2)(c)
 36        of this section.
 37        (b)  The  owner  or beneficiary, partner, member or shareholder, as appro-
 38        priate, still occupies the same homestead for which the owner made  appli-
 39        cation.
 40        (c)  The  homestead  described  in  subsection  (3)(b)  of this section is
 41        owner-occupied or occupied by a beneficiary,  partner,  member  or  share-
 42        holder,  as  appropriate,  and  used  as the primary dwelling place of the
 43        owner or beneficiary, partner, member or shareholder, as  appropriate,  as
 44        of  January 1; provided however, that in the event the homestead is owner-
 45        occupied after January 1, but before April 15, the owner of  the  property
 46        is entitled to the exemption.
 47        (4)  The exemption allowed by this section must be taken before the reduc-
 48    tion  in  taxes  provided  by  sections  63-701 through 63-710, Idaho Code, is
 49    applied.
 50        (5)  Recovery of property tax  exemptions  allowed  by  this  section  but
 51    improperly claimed or approved:
 52        (a)  Upon  discovery  of  evidence,  facts or circumstances indicating any
 53        exemption allowed by this section was improperly claimed or approved,  the
 54        county  assessor shall decide whether the exemption claimed should be have
 55        been allowed and if not, notify the taxpayer in writing, assess a recovery
                                                                        
                                       3
                                                                        
  1        of property tax and notify the county treasurer of this assessment. If the
  2        county assessor determined that an exemption was improperly approved as  a
  3        result  of  county error, the county assessor shall present the discovered
  4        evidence, facts or circumstances from the improperly approved exemption to
  5        the board of county commissioners, at which time the  board  may  waive  a
  6        recovery of the property tax and notify such taxpayer in writing.
  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. The board may waive the  collection
 23        of all or part of any costs, late charges and interest, in order to facil-
 24        itate the collection of the recovery of the property tax.
 25        (e)  A  recovery of For purposes of calculating the tax, the amount of the
 26        recovered  property tax shall be for each year the  exemption  allowed  by
 27        this  section  was  improperly  claimed or approved, up to the lesser of a
 28        maximum of seven (7) years. or until the property  was  transferred  to  a
 29        bona  fide purchaser for value. The amount of the recovery of property tax
 30        shall be calculated using the product of the amount of exempted value  for
 31        each  year  multiplied  by the levy for that year plus costs, late charges
 32        and interest for each year at the rates equal to those provided for delin-
 33        quent property taxes during that year.
 34        (f)  Any recovery of property tax shall be due and payable no  later  than
 35        the date provided for property taxes in section 63-903, Idaho Code, and if
 36        not  timely  paid,  late  charges and interest, beginning the first day of
 37        January in the year following the year the county assessor sent the notice
 38        to the taxpayer pursuant to this section, shall be calculated at the  cur-
 39        rent rate provided for property taxes.
 40        (g)  Recovered  property  taxes shall be billed, collected and distributed
 41        in the same manner as property taxes, except each taxing district or  unit
 42        shall  be  notified of the amount of any recovered property taxes included
 43        in any distribution.
 44        (h)  Thirty (30) days after the taxpayer is notified, as provided in  sub-
 45        section  (5)(a)  of  this  section,  the assessor shall record a notice of
 46        intent to attach a lien. Upon the payment in full of such recovered  prop-
 47        erty  taxes  prior to the attachment of the lien as provided in subsection
 48        (5)(i) of this section, or upon the successful appeal by the taxpayer, the
 49        county assessor shall record a rescission of the intent to attach  a  lien
 50        within  seven  (7) business days of receiving such payment or within seven
 51        (7) business days of  the  county  commissioners'  decision  granting  the
 52        appeal.  If  the real property is sold to a bona fide purchaser for value,
 53        prior to the recording of the notice of the intent to attach a  lien,  the
 54        county  assessor  and  treasurer  shall  cease the recovery of such unpaid
 55        recovered property tax.
                                                                        
                                       4
                                                                        
  1        (i)  Any unpaid recovered property taxes shall become a lien upon the real
  2        property in the same manner as provided  for  property  taxes  in  section
  3        63-206,  Idaho  Code, except such lien shall attach as of the first day of
  4        January in the year following the year the county assessor sent the notice
  5        to the taxpayer pursuant to this section.
  6        (ij)  For purposes of the limitation provided  by  section  63-802,  Idaho
  7        Code,  moneys received pursuant to this subsection as recovery of property
  8        tax shall be treated as property tax revenue.
  9        (6)  The legislature declares that this exemption is necessary and just.
 10        (7)  A homestead having previously qualified for exemption under this sec-
 11    tion in the preceding year, shall not lose  such  qualification  due  to:  the
 12    owner's,  beneficiary's,  partner's,  member's or shareholder's absence in the
 13    current year by reason of active military service in a designated combat zone,
 14    as defined in section 112 of the Internal Revenue Code, or because  the  home-
 15    stead  has  been  leased  because  the  owner, beneficiary, partner, member or
 16    shareholder is absent in the current year by reason of active military service
 17    in a designated combat zone, as defined in section 112 of the Internal Revenue
 18    Code. If an owner fails to timely apply for exemption as required in this sec-
 19    tion solely by reason of active duty in a designated combat zone by the owner,
 20    beneficiary, partner, member or shareholder, as  appropriate,  as  defined  in
 21    section 112 of the Internal Revenue Code, and such homestead would have other-
 22    wise  qualified  under this section, then the board of county commissioners of
 23    the county in which the homestead is located shall refund property  taxes,  if
 24    previously  paid,  in  an  amount equal to the exemption which would otherwise
 25    have applied.
                                                                        
 26        SECTION 2.  An emergency existing  therefor,  which  emergency  is  hereby
 27    declared to exist, this act shall be in full force and effect on and after its
 28    passage and approval, and retroactively to January 1, 2007.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                            RS 16766

The purpose of this bill is to enable the County Assessor to
determine whether a homeowners exemption that was claimed
and granted should have been allowed. The legislation also
enables the Board of Commissioners to waive the penalty,
interest, and cost in order to facilitate the collection of
property taxes.

Finally this legislation provides that if the real property
is sold to a bona fide purchaser for value, prior to the
recording of the notice of the intent to attach a lien, the
county assessor and treasurer shall cease the recovery of 
unpaid property tax. 


                          FISCAL IMPACT

There is no impact on the state general fund and minimal impact
on political subdivisions.


Contact        
Name: Rep. Steve Kren 
Rep. Ken Roberts
Phone: 332-1000


STATEMENT OF PURPOSE/FISCAL NOTE                          H 70