GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
H	1
HOUSE BILL 916
     

 
Short Title:	Homestead Exemption Increase.	()	
Sponsors:	Representatives Shubert;  Morris, Hilton, and Warner.	
Referred to:	Rules, Calendar, and Operations of the House.	
March 29, 2001

A BILL TO BE ENTITLED
AN ACT TO EXPAND THE PROPERTY TAX HOMESTEAD EXEMPTION AND INDEX IT TO COST-OF-LIVING ADJUSTMENTS.

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  Section 2(2) of Article V of the North Carolina Constitution and is taxable as provided in this section. The amount of the appraised value of the residence equal to the exclusion amount is excluded from taxation. A qualifying owner is an owner who meets both of the following requirements as of January 1 preceding the taxable year for which the benefit is claimed:
	(2)	Has an income for the preceding calendar year of not more than the income eligibility limit.
(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.
(a2)	Exclusion Amount. – Until July 1, 2003, the exclusion amount is twenty thousand dollars ($20,000). For taxable years beginning on or after July 1, 2003, the exclusion amount is the amount for the preceding year increased or decreased by the same percentage of this amount as the percentage by which the consumer price index for housing increased or decreased for the preceding calendar year, rounded to the nearest one hundred dollars ($100.00). On or before April 1 of each year, the Department of Revenue must determine the exclusion amount to be in effect for the taxable year beginning the following July 1 and must notify the assessor of each county of the amount to be in effect for that taxable year.
(a3)	Income Eligibility Limit. – Until July 1, 2003, the income eligibility limit is twenty thousand dollars ($20,000). For taxable years beginning on or after July 1, 2003, the income eligibility limit is the amount for the preceding year increased or decreased by the same percentage of this amount as the percentage by which the consumer price index for all items increased or decreased for the preceding calendar year, rounded to the nearest one hundred dollars ($100.00). On or before April 1 of each year, the Department of Revenue must determine the income eligibility limit to be in effect for the taxable year beginning the following July 1 and must 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  apply:
(1)	Code. – The Internal Revenue Code, as defined in G.S. 105‑228.90.
(1a)	Consumer price index. – The United States Consumer Price Index for All Urban Consumers, as published by the Bureau of Labor Statistics, United States Department of Labor.
(1c)	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.
(2b)	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.
	(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.
		(d)	Multiple Ownership. – 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."
SECTION 2.  G.S. 105‑309(f) reads as rewritten:
"(f)	The notice set out below must 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.

'PROPERTY TAX  HOMESTEAD EXCLUSION.

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  whose income does not exceed  (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 (assessor insert amount), 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 3.  G.S. 105‑277.1A reads as rewritten:
"§ 105‑277.1A.  Homestead exclusion; reimbursement of localities for portion of tax lost.
(a)	On February 1 of each year, the tax collector of each county and the tax collector of each city must provide the Secretary of Revenue a list containing the name and address of each person who  qualified in the previous year for the property tax homestead exclusion provided in G.S. 105-277.1, and containing 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. Each list must be accompanied by an affidavit attesting to its accuracy and 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 must distribute to the county or city fifty percent (50%) of the total for the entire list provided pursuant to subsection (a) of this section 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 must 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 must draw from income tax collections received under Part 1 of Article 4 of this Chapter an amount equal to the reimbursement and the cost of administration."
SECTION 4.  Section 3 of this act becomes effective July 1, 2002. The remainder of this act is effective for taxes imposed for taxable years beginning on or after July 1, 2002.