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H0693.....................................................by WAYS AND MEANS PROPERTY TAX - Adds to and amends existing law to provide that one hundred percent of the market value for assessment purposes of property that exceeds the index adjusted base value shall be exempt from property taxation; to provide application; to define terms; to provide to what property the act applies; to provide procedures; to provide a maximum market value for assessment purposes that is exempt from taxation pursuant to the homeowner's exemption; and to delete indexing language. 03/28 House intro - 1st rdg - to printing 03/31 Rpt prt - to W/M
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 693 BY WAYS AND MEANS COMMITTEE 1 AN ACT 2 RELATING TO PROPERTY TAXATION; AMENDING CHAPTER 6, TITLE 63, IDAHO CODE, BY 3 THE ADDITION OF A NEW SECTION 63-602FF, IDAHO CODE, TO PROVIDE THAT ONE 4 HUNDRED PERCENT OF THE MARKET VALUE FOR ASSESSMENT PURPOSES OF PROPERTY 5 THAT EXCEEDS THE INDEX-ADJUSTED BASE VALUE SHALL BE EXEMPT FROM PROPERTY 6 TAXATION, TO PROVIDE APPLICATION, TO DEFINE TERMS, TO PROVIDE TO WHAT 7 PROPERTY THE ACT APPLIES AND TO PROVIDE PROCEDURES; AMENDING SECTION 8 63-602G, IDAHO CODE, TO PROVIDE A MAXIMUM MARKET VALUE FOR ASSESSMENT PUR- 9 POSES THAT IS EXEMPT FROM TAXATION AND TO DELETE INDEXING LANGUAGE; 10 DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION. 11 Be It Enacted by the Legislature of the State of Idaho: 12 SECTION 1. That Chapter 6, Title 63, Idaho Code, be, and the same is 13 hereby amended by the addition thereto of a NEW SECTION, to be known and des- 14 ignated as Section 63-602FF, Idaho Code, and to read as follows: 15 63-602FF. PROPERTY EXEMPT FROM TAXATION. (1) One hundred percent (100%) of 16 the market value for assessment purposes of property that exceeds the index- 17 adjusted base value as established in this section, shall be exempt from prop- 18 erty taxation. This exemption shall be applied before any other property tax 19 exemptions, unless the exemptions result in the property having no taxable 20 value, and before the reduction in taxes provided in sections 63-701 through 21 63-710, Idaho Code, is applied. For the purposes of this section, the follow- 22 ing definitions shall apply: 23 (a) "Base value" means the market value for assessment purposes of tax 24 year 2008 for property last sold prior to January 1, 2009. For all other 25 property, "base value" means the greater of the most recent purchase price 26 or the market value for assessment purposes of the tax year in which the 27 most recent purchase was made. Any improvements to the property or 28 change in the property's land use classification shall result in the base 29 value being adjusted to reflect the index-adjusted base value plus the 30 value of the improvements, and plus or minus the value of the change in 31 land use classification. 32 (b) "Index" means an index calculated by the state tax commission, uti- 33 lizing monthly consumer price index for all urban consumers (CPI-U) data 34 published by the United States department of labor. For the purposes of 35 this section, the state tax commission shall calculate the index using the 36 average of the twelve (12) months of tax year 2007, or the tax year prior 37 to the most recent change in base value, whichever is more recent for the 38 property in question. 39 (c) "Index-adjusted base value" means the base value multiplied by the 40 index. 41 (2) The provisions of this section shall apply to all property in the 42 state of Idaho for which there is a market value for assessment purposes. The 43 legislature declares this exemption to be necessary and just. The state tax 2 1 commission shall adopt all rules that may be necessary to implement the provi- 2 sions of this section. In the event the market value of property declines 3 before a base value is established, a new base value shall be established to 4 reflect the change in the property's market value. 5 SECTION 2. That Section 63-602G, Idaho Code, be, and the same is hereby 6 amended to read as follows: 7 63-602G. PROPERTY EXEMPT FROM TAXATION -- HOMESTEAD. (1) During the tax 8 year 2006 and each year thereafter, subject to annual adjustment as provided 9 herein, the first seventy-five thousand dollars ($75,000) of the market value 10 for assessment purposes of the homestead as that term is defined in section 11 63-701, Idaho Code, or fifty percent (50%) of the market value for assessment 12 purposes of the homestead as that term is defined in section 63-701, Idaho 13 Code, whichever is the lesser, shall be exempt from property taxation.Begin-14ning fFor tax year 2007, the state tax commission shall publish adjustments to 15 the maximum amount subject to property tax exemption to reflect cost-of-living 16 fluctuations,. The adjustments shall effect changes in the amount subject to17tax exemption by a percentage equal as near as practicable to the annual18increase in the Idaho housing price index as determined by the United States19office of federal housing enterprise oversight. The state tax commission shall20publish the adjustments required by this subsection each and every year the21office of federal housing enterprise oversight announces a change in the Idaho22housing price index. The adjustments shall be published no later than October231 of each year and shall be effective for claims filed in and for the follow-24ing property tax year. The publication of adjustments under this subsection25shall be exempt from the provisions of chapter 52, title 67, Idaho Code, but26shall be provided to each county and to members of the public upon request and27without chargeprovided however, that the maximum amount of the market value 28 for assessment purposes of the homestead subject to property tax exemption 29 shall not exceed one hundred thousand nine hundred thirty-eight dollars 30 ($100,938). 31 (2) The exemption allowed by this section may be granted only if: 32 (a) The homestead is owner-occupied and used as the primary dwelling 33 place of the owner as of January 1, provided that in the event the home- 34 stead is owner-occupied after January 1 but before April 15, the owner of 35 the property is entitled to the exemption. The homestead may consist of 36 part of a multidwelling or multipurpose building and shall include all of 37 such dwelling or building except any portion used exclusively for anything 38 other than the primary dwelling of the owner. The presence of an office in 39 a homestead, which office is used for multiple purposes, including busi- 40 ness and personal use, shall not prevent the owner from claiming the 41 exemption provided in this section; and 42 (b) The tax commission has certified to the board of county commissioners 43 that all properties in the county which are subject to appraisal by the 44 county assessor have, in fact, been appraised uniformly so as to secure a 45 just valuation for all property within the county; and 46 (c) The owner has certified to the county assessor by April 15 that: 47 (i) He is making application for the exemption allowed by this sec- 48 tion; 49 (ii) That the homestead is his primary dwelling place; and 50 (iii) That he has not made application in any other county for the 51 exemption, and has not made application for the exemption on any 52 other homestead in the county. 53 (d) For the purpose of this section, the definition of "owner" shall be 3 1 the same definition set forth in section 63-701(7), Idaho Code. 2 When an "owner," pursuant to the provisions of section 63-701(7), 3 Idaho Code, is any person who is the beneficiary of a revocable or irrevo- 4 cable trust, or who is a partner of a limited partnership, a member of a 5 limited liability company, or shareholder of a corporation, he or she may 6 provide proof of the trust, limited partnership, limited liability com- 7 pany, or corporation in the manner set forth in section 63-703(4), Idaho 8 Code. 9 (e) Any owner may request in writing the return of all copies of any doc- 10 uments submitted with the affidavit set forth in section 63-703(4), Idaho 11 Code, that are held by a county assessor, and the copies shall be returned 12 by the county assessor upon submission of the affidavit in proper form. 13 (f) For the purpose of this section, the definition of "primary dwelling 14 place" shall be the same definition set forth in section 63-701(8), Idaho 15 Code. 16 (g) For the purpose of this section, the definition of "occupied" shall 17 be the same definition set forth in section 63-701(6), Idaho Code. 18 (3) An owner need only make application for the exemption described in 19 subsection (1) of this section once, as long as all of the following condi- 20 tions are met: 21 (a) The owner has received the exemption during the previous year as a 22 result of his making a valid application as defined in subsection (2)(c) 23 of this section. 24 (b) The owner or beneficiary, partner, member or shareholder, as appro- 25 priate, still occupies the same homestead for which the owner made appli- 26 cation. 27 (c) The homestead described in subsection (3)(b) of this section is 28 owner-occupied or occupied by a beneficiary, partner, member or share- 29 holder, as appropriate, and used as the primary dwelling place of the 30 owner or beneficiary, partner, member or shareholder, as appropriate, as 31 of January 1; provided however, that in the event the homestead is owner- 32 occupied after January 1, but before April 15, the owner of the property 33 is entitled to the exemption. 34 (4) The exemption allowed by this section must be taken before the reduc- 35 tion in taxes provided by sections 63-701 through 63-710, Idaho Code, is 36 applied. 37 (5) Recovery of property tax exemptions allowed by this section but 38 improperly claimed or approved: 39 (a) Upon discovery of evidence, facts or circumstances indicating any 40 exemption allowed by this section was improperly claimed or approved, the 41 county assessor shall decide whether the exemption claimed should have 42 been allowed and if not, notify the taxpayer in writing, assess a recovery 43 of property tax and notify the county treasurer of this assessment. If the 44 county assessor determined that an exemption was improperly approved as a 45 result of county error, the county assessor shall present the discovered 46 evidence, facts or circumstances from the improperly approved exemption to 47 the board of county commissioners, at which time the board may waive a 48 recovery of the property tax and notify such taxpayer in writing. 49 (b) When information indicating that an improper claim for the exemption 50 allowed by this section is discovered by the state tax commission, the 51 state tax commission may disclose this information to the appropriate 52 county assessor, board of county commissioners and county treasurer. 53 Information disclosed to county officials by the state tax commission 54 under this subsection may be used to decide the validity of any entitle- 55 ment to the exemption provided in this section and is not otherwise sub- 4 1 ject to public disclosure pursuant to chapter 3, title 9, Idaho Code. 2 (c) The assessment and collection of the recovery of property tax must 3 begin within the seven (7) year period beginning the date the assessment 4 notice reflecting the improperly claimed or approved exemption was 5 required to be mailed to the taxpayer. 6 (d) The taxpayer may appeal to the board of county commissioners the 7 decision by the county assessor to assess the recovery of property tax 8 within thirty (30) days of the date the county assessor sent the notice to 9 the taxpayer pursuant to this section. The board may waive the collection 10 of all or part of any costs, late charges and interest, in order to facil- 11 itate the collection of the recovery of the property tax. 12 (e) For purposes of calculating the tax, the amount of the recovered 13 property tax shall be for each year the exemption allowed by this section 14 was improperly claimed or approved, up to a maximum of seven (7) years. 15 The amount of the recovery of property tax shall be calculated using the 16 product of the amount of exempted value for each year multiplied by the 17 levy for that year plus costs, late charges and interest for each year at 18 the rates equal to those provided for delinquent property taxes during 19 that year. 20 (f) Any recovery of property tax shall be due and payable no later than 21 the date provided for property taxes in section 63-903, Idaho Code, and if 22 not timely paid, late charges and interest, beginning the first day of 23 January in the year following the year the county assessor sent the notice 24 to the taxpayer pursuant to this section, shall be calculated at the cur- 25 rent rate provided for property taxes. 26 (g) Recovered property taxes shall be billed, collected and distributed 27 in the same manner as property taxes, except each taxing district or unit 28 shall be notified of the amount of any recovered property taxes included 29 in any distribution. 30 (h) Thirty (30) days after the taxpayer is notified, as provided in sub- 31 section (5)(a) of this section, the assessor shall record a notice of 32 intent to attach a lien. Upon the payment in full of such recovered prop- 33 erty taxes prior to the attachment of the lien as provided in subsection 34 (5)(i) of this section, or upon the successful appeal by the taxpayer, the 35 county assessor shall record a rescission of the intent to attach a lien 36 within seven (7) business days of receiving such payment or within seven 37 (7) business days of the county commissioners' decision granting the 38 appeal. If the real property is sold to a bona fide purchaser for value, 39 prior to the recording of the notice of the intent to attach a lien, the 40 county assessor and treasurer shall cease the recovery of such unpaid 41 recovered property tax. 42 (i) 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 (j) 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) A homestead having previously qualified for exemption under this sec- 52 tion in the preceding year, shall not lose such qualification due to: the 53 owner's, beneficiary's, partner's, member's or shareholder's absence in the 54 current year by reason of active military service in a designated combat zone, 55 as defined in section 112 of the Internal Revenue Code, or because the home- 5 1 stead has been leased because the owner, beneficiary, partner, member or 2 shareholder is absent in the current year by reason of active military service 3 in a designated combat zone, as defined in section 112 of the Internal Revenue 4 Code. If an owner fails to timely apply for exemption as required in this sec- 5 tion solely by reason of active duty in a designated combat zone by the owner, 6 beneficiary, partner, member or shareholder, as appropriate, as defined in 7 section 112 of the Internal Revenue Code, and such homestead would have other- 8 wise qualified under this section, then the board of county commissioners of 9 the county in which the homestead is located shall refund property taxes, if 10 previously paid, in an amount equal to the exemption which would otherwise 11 have applied. 12 SECTION 3. 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, 2008.
STATEMENT OF PURPOSE
RS 18150
This legislation limits property tax values from increasing and
ties it to a monthly consumer price index for all urban
consumers.
FISCAL NOTE
There is no fiscal impact to the General Fund.
Contact:
Name: Representative Mike Moyle
Representative George Eskridge
Phone: (208) 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 693