GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	1 

HOUSE BILL 1417

Short Title:  Expand Homestead Exemption.	(Public)
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Sponsors: Representatives McLaughlin; Warner, Black, Bowman, Jack Hunt, Wilkins, and Griffin.
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Referred to:  Finance.
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May 17, 1993

A BILL TO BE ENTITLED
AN ACT TO INDEX THE HOMESTEAD EXEMPTION AMOUNT FOR INDIVIDUALS SEVENTY-FIVE YEARS OLD AND OLDER, TO INCREASE THE INCOME LIMIT FOR ELIGIBILITY FOR THE EXEMPTION FOR INDIVIDUALS SEVENTY-FIVE YEARS OLD AND OLDER, AND TO EXPAND THE SIZE OF THE HOMESTEAD TO WHICH THE EXEMPTION APPLIES.
The General Assembly of North Carolina enacts:
Section 1. G.S. 105-277.1 reads as rewritten:
"§ 105-277.1. Property tax homestead exclusion.
(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.  If the owner is under 75 years old, the first twelve thousand dollars ($12,000) in assessed value of the permanent residence is excluded from taxation.  If the owner is 75 years old or older, 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.  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 following amounts:
a.	If the owner is under 75 years old, eleven thousand dollars ($11,000).
b.	If the owner is 75 years old or older, twenty thousand dollars ($20,000).
(a1)	Index Amount. – 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 January 1, 1994.  Upon the effective date of a county's first horizontal adjustment or reappraisal effective on or after January 1, 1994, the index amount for that county is the previous year's amount 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 reappraisal.
The Department of Revenue 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 by April 1 of the new amount to be in effect for the taxable year beginning the following July 1.  The Department shall use the sales assessment ratio studies made under G.S. 105-289(h)	to determine the percentage increase or decrease in real property values resulting from a horizontal adjustment or reappraisal.
			(b)	Definitions. – When used in this section, the following definitions shall apply:
	(1)	Code. – The Internal Revenue Code, as defined in G.S. 105-228.90.
(1a)	Income. – Adjusted gross income, as defined in section 62 of the Code, plus all other money received from every source other than gifts and inheritances from a spouse, lineal ancestor, or lineal descendant.  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 twelve thousand dollars ($12,000) if the owner is under 75 years old or the index amount if the owner is 75 years old or older.
	(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 10 acres, 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. 105-309(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 HOMESTEAD EXCLUSION FOR ELDERLY AND
PERMANENTLY DISABLED PERSONS. 
North Carolina excludes from property taxes the first twelve thousand dollars ($12,000) or (assessor insert amount, if amount known, or word 'more', if amount not known), depending on the age of the owner, 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 a maximum of eleven thousand dollars ($11,000) if the owner is under 75 years old or twenty thousand dollars ($20,000) if the owner is 75 years old or older.  The exclusion covers real property, or a manufactured home, occupied by the owner as his or her permanent residence. Income includes all moneys received other than gifts or inheritances received from a spouse, lineal ancestors, or lineal descendants.
If you received this exclusion in (assessor insert previous year), you do not need to apply again unless you have changed your permanent residence or have reached the age of 75. If you received the exclusion in (assessor insert previous year) and your income in (assessor insert previous year) was above the maximum amount for your age group, 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, 1993.  Notwithstanding the provisions of G.S. 105-282.1(a), an application for the benefit provided in this act for the 1993-94 tax year shall be considered timely if it is filed on or before September 1, 1993.