GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

S	1 

SENATE BILL 152

Short Title:  Index Homestead Exemption.	(Public)
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Sponsors: Senators Speed, Cochrane, Richardson, Carpenter; Ballance, Carter, Forrester, Hunt, Murphy, Parnell, Perdue, Sands, Smith, Tally, and Warren.
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Referred to:  Finance.
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February 21, 1991

A BILL TO BE ENTITLED
AN ACT TO INDEX THE AMOUNT OF THE PROPERTY TAX HOMESTEAD EXEMPTION AND THE AMOUNT OF THE INCOME LIMIT FOR ELIGIBILITY FOR THE EXEMPTION.
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)	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 of the appraised value of a permanent residence that equals the index amount for the county in which the residence is located is excluded from taxation.
The index amount is fifteen thousand dollars ($15,000) for each county until the county's first horizontal adjustment or reappraisal of real property that is effective on or after July 1, 1992.  Upon the effective date of a county's first horizontal adjustment or reappraisal effective on or after July 1, 1992, the index amount for that county is the amount in effect before the effective date of the horizontal adjustment or reappraisal plus or minus a percentage of this amount that equals the average percentage increase or decrease in the appraised value of real property in the county resulting from the horizontal adjustment or reappraisal, rounded to the nearest one hundred dollars ($100.00).  The index amount effective upon a county's horizontal adjustment or reappraisal remains the county's index amount until the county's next horizontal adjustment of residential property or revaluation.
The Department of Revenue shall determine the percentage increase or decrease in real property values resulting from a horizontal adjustment or reappraisal from sales assessment ratio studies made under G.S. 105-289(h), shall calculate a new index amount to be in effect in a county when a horizontal adjustment or reappraisal becomes effective in the county, and shall notify the assessor of the county of the new amount by April 15 of the year in which the amount becomes effective.  
			(a1)	A ‘qualifying owner' is an owner who, as of January 1 of the taxable year for which the benefit of this section is claimed:
(1)	Was a North Carolina resident;
(2)	Was at least 65 years old or totally and permanently disabled; and
(3)	Had an aggregate household income for the immediately preceding calendar year of not more than the income eligibility amount.
The income eligibility limit is the same for every county.  Until July 1, 1992, the limit is eleven thousand dollars ($11,000).  For taxable years beginning on or after July 1, 1992, the limit is the amount for the preceding year increased by the same percentage of this amount as the percentage by which the federal government increased the benefits under Titles II and XVI of the Social Security Act during the calendar year preceding the year in which the determination of a new income limit is made, rounded to the nearest one hundred dollars ($100.00).  On or before September 1 of each year, the Department of Revenue shall determine the income eligibility amount to be in effect for the taxable year beginning the following July 1 and shall notify the assessor of each county of the amount to be in effect for that taxable year.
(b)	Definitions. – When used in this section, the following definitions shall apply:
	(1)	‘Aggregate household income' means the total disposable income of all the persons who maintain a permanent residence in the same household.
(2)	‘Disposable income' means gross income, as defined in G.S. 105-134.1(5), plus all interest on tax exempt bonds.
(2a)	An ‘owner' of property means 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 shall be entitled to the full benefit of this classification notwithstanding that only one of them meets the age or disability requirements of this section. If the residence is a manufactured home and is jointly owned by husband and wife, it shall be treated as 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 shall be 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 shall the total exclusion allowed to a qualifying residence exceed the index amount.
	 ”		(3)	‘Permanent residence' means 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 shall 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)	A ‘totally and permanently disabled person' means one who has a physical or mental impairment that substantially precludes him from obtaining gainful employment and appears reasonably certain to continue without substantial improvement throughout his lifetime.
(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. 105-309(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 (assessor insert amount, if amount known, or words "a portion", if amount not known) of the appraised value of certain property owned by North Carolina residents aged 65 or older or totally and permanently disabled whose aggregate household income does not exceed (assessor insert amount). The exclusion covers real property, or a manufactured home, occupied by the owner as his permanent residence. Aggregate household income includes all moneys received by every member of the household, other than gifts or inheritances received from a spouse, a lineal ancestor,  or a lineal descendant.
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 aggregate household 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. 3.  This act is effective for taxes imposed for taxable years beginning on or after July 1, 1991.