GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

H	1 

HOUSE BILL 1279

Short Title:  Equalize Homestead Exemption.	(Public)
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Sponsors: Representative Mavretic.
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Referred to:  Finance.
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May 10, 1991

A BILL TO BE ENTITLED
AN ACT TO EQUALIZE THE HOMESTEAD EXEMPTION AND TO PHASE OUT THE STATE REIMBURSEMENT TO LOCALITIES FOR A PORTION OF THE LOST TAX REVENUE.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-277.1 reads as rewritten:
"§ 105-277.1. Property classified for taxation at reduced valuation.
(a)	Exclusion. –Real property or a manufactured home owned and occupied by a qualifying owner as the owner's permanent residence is designated a special class of property under Article V, Sec. 2(2) of the North Carolina Constitution and is taxable in accordance with this section.  The amount by which the appraised value of a manufactured home that is a permanent residence exceeds the average appraised value of a manufactured home that is a permanent residence in the county in which the residence is located is excluded from taxation.  The amount by which the appraised value of real property that is a permanent residence exceeds the average appraised value of real property that is a permanent residence in the county in which the residence is located is excluded from taxation.  To qualify for the benefit of this section, an owner must meet all of the following requirements as of January 1 preceding the taxable year for which the benefit is claimed:
(1)	Be a North Carolina resident.
(2)	Be at least 65 years old or totally and permanently disabled.
(3)	Have an income for the immediately preceding calendar year of not more than the average State personal income, based on the most recent State personal income data compiled by the Bureau of Economic Analysis of the United States Department of Commerce.
(a1)	Average Values. – On or before January 1 of each year, the appraiser shall establish the average appraised value of a manufactured home that is a permanent residence in the county and the average appraised value of real property that is a permanent residence in the county.
			(b)	Definitions. – When used in this section, the following definitions shall apply:
	(1)	Code. – The Internal Revenue Code, as defined in G.S. 105-134.1.
(1a)	Income. – Adjusted gross income, as defined in section 62 of the Code, plus all tax-exempt interest and dividends.  For married applicants residing with their spouses, the income of both spouses must be included, whether or not the property is in both names.
(1b)	Owner. – A person who holds legal or equitable title to the property, whether individually, as a tenant by the entirety, a joint tenant, or a tenant in common, or as the holder of a life estate or an estate for the life of another. Property owned and occupied by husband and wife as tenants by the entirety is entitled to the full benefit of this classification notwithstanding that only one of them meets the age or disability requirements of this section. A manufactured home jointly owned by husband and wife is considered property held by the entirety. When property is owned by two or more persons other than husband and wife and one or more of the owners qualifies for this classification, each qualifying owner is entitled to the full amount of the exclusion not to exceed his or her proportionate share of the valuation of the property. No part of an exclusion available to one co-owner may be claimed by any other co-owner and in no event may the total exclusion allowed to a qualifying residence exceed the index amount.
	 " (2a)	Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 982, s. 20.
	(3)	Permanent residence. – A person's legal residence. It includes the dwelling, the dwelling site, not to exceed one acre, and related improvements. The dwelling may be a single family residence, a unit in a multi-family residential complex or a manufactured home. Notwithstanding the occupancy requirements of this classification, an otherwise qualified applicant does not lose the benefit of the exclusion because of a temporary absence from his or her permanent residence for reasons of health, or because of an extended absence while confined to a rest home or nursing home, so long as the residence is unoccupied or occupied by the applicant's spouse or other dependent.
(4)	Totally and permanently disabled. – A person is totally and permanently disabled if the person has a physical or mental impairment that substantially precludes him or her from obtaining gainful employment and appears reasonably certain to continue without substantial improvement throughout his or her life.
(c)	Application. –An application for the exclusion provided by this section should be filed during the regular listing period, but may be filed and must be accepted at any time up to and through April 15 preceding the tax year for which the exclusion is claimed. When property is owned by two or more persons other than husband and wife and one or more of them qualifies for this exclusion, each owner shall apply separately for his or her proportionate share of the exclusion.
(1)	Elderly Applicants. – Persons 65 years of age or older may apply for this exclusion by entering the appropriate information on a form made available by the assessor under G.S. 105-282.1.
(2)	Disabled Applicants. – Persons who are totally and permanently disabled may apply for this exclusion by (i) entering the appropriate information on a form made available by the assessor under G.S. 105-282.1 and (ii) furnishing acceptable proof of their disability. Such proof shall be in the form of a certificate from a physician licensed to practice medicine in North Carolina or from a governmental agency authorized to determine qualification for disability benefits. After a disabled applicant has qualified for this classification, he or she shall not be required to furnish an additional certificate unless the applicant's disability is reduced to the extent that the applicant could no longer be certified for the taxation at reduced valuation."
Sec. 2.  G.S. 105-277.1A reads as rewritten:
"§ 105-277.1A.  Property classified for taxation at reduced valuation; duties of tax collectors; phase out of the reimbursement of localities for portion of tax lost.
(a)	On September 1 of each year, the tax collector of each eligible county and the tax collector of each eligible city shall furnish to the Secretary of Revenue a list containing the name and address of each person who has qualified in that year for the exemption provided in G.S. 105-277.1. The list shall also contain for each name the total amount of property exempted, the tax rate the property is subject to, and the product obtained by multiplying those two numbers by each other. The lists shall be accompanied by an affidavit attesting to their accuracy, and shall all be on a form prescribed by the Secretary of Revenue.
(a1)	For the taxable year beginning on or after July 1, 1992, all counties and cities are eligible for the reimbursement provided in subsection (d).  For taxable years beginning on or after July 1, 1993, a county or city becomes ineligible to receive the reimbursement provided in subsection (d) on the effective date of its horizontal adjustment or reappraisal.  A county or city remains eligible for this reimbursement until it conducts a horizontal adjustment or general reappraisal of real property.
(b)	In addition to the list required by subsection (a) of this section, the eligible county or city may provide a supplemental list on December 1.
(c)	The Secretary of Revenue may, for cause, grant an extension for the submission of the list required by this section.
(d)	After receiving a certified list under subsections (a) through (c) of this section, the Secretary of Revenue shall, within 60 days, pay to the eligible county or city forty percent (40%) of the total for the entire list of the product obtained by multiplying the tax exemption for each taxpayer times the applicable tax rate.
(e)	Any funds received by any county or city pursuant to this section because the county or city was collecting taxes for another unit of government or special district shall be credited to the funds of that other unit or district in accordance with regulations issued by the Local Government Commission.
	(f)  In order to pay for the reimbursement under this section and the cost to the Department of Revenue for administering the reimbursement, the Secretary of Revenue shall draw from the Local Government Tax Reimbursement Reserve an amount equal to the reimbursement and the cost of administration."
Sec. 3.  G.S. 105-309(f) reads as rewritten:
"(f)	The following information shall appear on each abstract, or on an information sheet distributed with the abstract. (The abstract or sheet must include the address and telephone number of the assessor below the notice required by this subsection):
'PROPERTY TAX RELIEF FOR ELDERLY AND
PERMANENTLY DISABLED PERSONS. 
North Carolina excludes from property taxes a portion of the appraised value of certain property owned by North Carolina residents aged 65 or older or totally and permanently disabled whose income does not exceed (assessor insert amount).  The exclusion covers real property, or a manufactured home, occupied by the owner as his or her permanent residence. Income means the owner's adjusted gross income as determined for federal income tax purposes, plus all tax-exempt interest and dividends.  For married applicants residing with their spouses, the income of both spouses must be included.
If you received this exclusion in (assessor insert previous year), you do not need to apply again unless you have changed your permanent residence. If you received the exclusion in (assessor insert previous year) and your income in (assessor insert previous year) was above (assessor insert amount), you must notify the assessor. If you received the exclusion in (assessor insert previous year) because you were totally and permanently disabled and you are no longer totally and permanently disabled, you must notify the assessor. If the person receiving the exclusion in (assessor insert previous year) has died, the person required by law to list the property must notify the assessor.  Failure to make any of the notices required by this paragraph before April 15 will result in penalties and interest.
If you did not receive the exclusion in (assessor insert previous year) but are now eligible, you may obtain a copy of an application from the assessor. It must be filed by April 15.'"
Sec. 4.  This act is effective for taxes imposed for taxable years beginning on or after July 1, 1992.