GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

S	1 

SENATE BILL 967

Short Title:  Property Tax Homestead Exclusion.	(Public)

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Sponsors: Senator Clodfelter.

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Referred to:  Finance.

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April 15, 1999

A BILL TO BE ENTITLED
AN ACT TO PROVIDE PROPERTY TAX RELIEF TO LOW-INCOME ELDERLY AND DISABLED HOMEOWNERS.
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. –A permanent residence owned and occupied by a qualifying owner 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 the residence equal to the exclusion amount for the county in which the residence is located is excluded from taxation.  The exclusion amount for each county is the greater of twenty-five thousand dollars ($25,000) or an amount equal to one-third of the median appraised value of owner-occupied single-family homes in the county, determined as of the effective date of the most recent horizontal adjustment or reappraisal of real property.  A qualifying owner is an owner who meets all of the following requirements as of January 1 preceding the taxable year for which the benefit is claimed:
(1)	Is at least 65 years of age or totally and permanently disabled.
(2)	Has an income for the preceding calendar year of not more than eighty percent (80%) of the median income for the county in which the residence is located, based on the latest available data published by a State or federal agency generally recognized as having expertise concerning the data.
(3)	Is a North Carolina resident.
(a1)	Temporary Absence. – An otherwise qualifying owner does not lose the benefit of this 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 owner's spouse or other dependent.
(b)	Definitions. –The following definitions apply in this section:
(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 moneys received from every source other than gifts or inheritances received 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, 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. A manufactured home jointly owned by husband and wife is considered property held by the entirety.
(2)	Repealed by Session Laws 1993, c. 360, s. 1.
(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.
(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. The 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.
(d)	Multiple Ownership. – A permanent residence owned and occupied by husband and wife as tenants by the entirety is entitled to the full benefit of this exclusion notwithstanding that only one of them meets the age or disability requirements of this section. When a permanent residence is owned and occupied by two or more persons other than husband and wife and one or more of the owners qualifies for this exclusion, 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 for a permanent residence exceed the exclusion amount provided in this section.
(e)	Duties of Assessor. – The assessor of each county shall determine annually the income threshold and the exclusion amount for the county, as defined in subsection (a) of this section.  The assessor shall publish this information to affected taxpayers in the county each year."
Section 2. G.S. 105-277.1A reads as rewritten:
"§ 105-277.1A.  Partial reimbursement to local governments for property tax homestead exclusion.
(a)	On September 1 of each year, the tax collector of each county and the tax collector of each 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 the accuracy of the list and shall all be on a form prescribed by the Secretary of Revenue.
	(b)	Repealed by Session Laws 1996, Second Extra Session, c. 18, s. 15.1(c).
(c)	The Secretary of Revenue may, for cause, grant an extension for the submission of a list required by this section.
(d)	Before May 31 of each year, the Secretary of Revenue shall distribute to the county or city the total for the entire list provided pursuant to subsection (a) of this section of the product obtained by multiplying the first twenty-five thousand dollars ($25,000) of the tax exemption for each taxpayer times the applicable tax rate, plus fifty percent (50%) of the total for the entire list of the product obtained by multiplying the excess of each taxpayer's tax exemption above twenty-five thousand dollars ($25,000) 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 of administering the reimbursement, the Secretary of Revenue shall draw from collections received under Part 1 of Article 4 of this Chapter an amount equal to the reimbursement and the cost of administration."
Section 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. The notice shall read as follows: 

"PROPERTY TAX HOMESTEAD EXCLUSION FOR ELDERLY AND
                   PERMANENTLY DISABLED PERSONS.

North Carolina excludes from property taxes the first (assessor insert amount) in appraised value of a permanent residence owned and occupied by North Carolina residents aged 65 or older or totally and permanently disabled whose income does not exceed an income threshold of (assessor insert amount). Income means the owner's adjusted gross income as determined for federal income tax purposes, plus all moneys received other than gifts or inheritances received from a spouse, lineal ancestor or 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 income in (assessor insert previous year) was above the income threshold, 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."
Section 4.  This act is effective for taxes imposed for taxable years beginning on or after July 1, 2000.