HOUSE BILL NO. 419

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Bill Status



H0419...............................................by REVENUE AND TAXATION
PROPERTY TAX - Amends existing law to revise how new construction or change
of land use classification may be calculated for property tax revenue
purposes for a taxing district's budget; and to provide that foregone
increases may not be calculated for future increases.
                                                                        
01/19    House intro - 1st rdg - to printing
01/20    Rpt prt - to Rev/Tax

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 419
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO PROPERTY TAXATION; AMENDING SECTION 63-802, IDAHO CODE, TO  REVISE
  3        HOW  NEW  CONSTRUCTION  OR CHANGE OF LAND USE CLASSIFICATION MAY BE CALCU-
  4        LATED FOR PROPERTY TAX REVENUE PURPOSES FOR A TAXING DISTRICT'S BUDGET AND
  5        TO PROVIDE THAT FOREGONE  INCREASES  MAY  NOT  BE  CALCULATED  FOR  FUTURE
  6        INCREASES; DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.
                                                                        
  7    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  8        SECTION  1.  That  Section  63-802, Idaho Code, be, and the same is hereby
  9    amended to read as follows:
                                                                        
 10        63-802.  LIMITATION ON BUDGET REQUESTS -- LIMITATION  ON  TAX  CHARGES  --
 11    EXCEPTIONS.  (1)  Except as provided in subsection (3) of this section for tax
 12    year 1995 2006, and each year thereafter, no taxing district shall  certify  a
 13    budget  request  for  an  amount of property tax revenues to finance an annual
 14    budget that exceeds the greater of:
 15        (a)  The dollar amount of property taxes certified for its  annual  budget
 16        for  any one (1) of the three (3) tax years preceding the current tax year
 17        less any amounts in those years which include the increase in market value
 18        resulting from new construction or change of land  use  classification  as
 19        evidenced  by the value shown on the new construction roll compiled pursu-
 20        ant to section 63-301A, Idaho Code, whichever is greater, which amount may
 21        be increased by a growth factor of not to exceed three percent  (3%)  plus
 22        the  amount of revenue that would have been generated by applying the levy
 23        of the previous year for one (1) tax year only,  not  including  any  levy
 24        described  in  subsection  (4)  of this section, to any increase in market
 25        value subject to taxation resulting from new  construction  or  change  of
 26        land  use  classification  as evidenced by the value shown on the new con-
 27        struction roll compiled pursuant to section 63-301A, Idaho Code,  for  the
 28        tax  year  following  the increase in market value resulting from new con-
 29        struction or change of land use classification as evidenced by  the  value
 30        shown  on  the new construction roll compiled pursuant to section 63-301A,
 31        Idaho Code; and by the value of annexation during  the  previous  calendar
 32        year,  as certified by the state tax commission for market values of oper-
 33        ating property of public utilities and by the county assessor; or
 34        (b)  The dollar amount of property taxes certified for its  annual  budget
 35        during the last year in which a levy was made; or
 36        (c)  The  dollar  amount  of the actual budget request, if the taxing dis-
 37        trict is newly created except as may be provided in subsection  (1)(h)  of
 38        this section; or
 39        (d)  In  the  case of school districts, the restriction imposed in section
 40        33-802, Idaho Code; or
 41        (e)  In the case of a nonschool  district for which less than the  maximum
 42        allowable  increase  in  the dollar amount of property taxes is  certified
 43        for annual budget purposes in any one (1) year, such a  district  may,  in
                                                                        
                                           2
                                                                        
  1        any  the  following  year, recover the foregone increase by certifying, in
  2        addition to any increase otherwise allowed, an amount not  to  exceed  one
  3        hundred  percent  (100%)  of  the increase originally foregone. Said addi-
  4        tional amount shall not be included in future calculations  for  increases
  5        as allowed; or
  6        (f)  In  the case of cities, if the immediately preceding year's levy sub-
  7        ject to the limitation provided by this section, is less than  0.004,  the
  8        city  may  increase  its budget  by an amount not to exceed the difference
  9        between 0.004 and actual prior year's levy multiplied by the prior  year's
 10        market  value  for  assessment  purposes.  The  additional  amount must be
 11        approved by sixty percent (60%) of the voters voting on the question at an
 12        election called for that purpose and held on the date in May  or  November
 13        provided by law, and may  be included in the annual budget of the city for
 14        purposes of this section; or
 15        (g)  A  taxing district may submit to the electors within the district the
 16        question of whether the budget from property tax revenues may be increased
 17        beyond the amount authorized in this section,  but  not  beyond  the  levy
 18        authorized by statute. The additional amount must be approved by sixty-six
 19        and two-thirds percent (66 2/3%) or more of the voters voting on the ques-
 20        tion  at an election called for that purpose and held on the May or Novem-
 21        ber dates provided by section 34-106,  Idaho  Code.  If  approved  by  the
 22        required  minimum sixty-six and two-thirds percent (66 2/3%) of the voters
 23        voting at the election, the new budget amount shall be the base budget for
 24        the purposes of this section; or
 25        (h)  When a nonschool  district consolidates with another nonschool   dis-
 26        trict  or  dissolves  and  a  new district performing similar governmental
 27        functions as the dissolved district forms with the same boundaries  within
 28        three (3) years, the maximum amount of a budget of the district from prop-
 29        erty  tax  revenues  shall not be greater than the sum of the amounts that
 30        would have been authorized by this section for the district itself or  for
 31        the  districts that were consolidated or dissolved and incorporated into a
 32        new district; or
 33        (i)  In the instance or case of cooperative service agencies, the restric-
 34        tions imposed in sections 33-315 through 33-318, Idaho Code.
 35        (2)  In the case of fire districts, during the year immediately  following
 36    the election of a public utility or public utilities to consent to be provided
 37    fire protection pursuant to section 31-1422, Idaho Code, the maximum amount of
 38    property  tax  revenues  permitted  in  subsection  (1) of this section may be
 39    increased by an amount equal to the current year's taxable value of  the  con-
 40    senting  public  utility or public utilities multiplied by that portion of the
 41    prior year's levy subject to the limitation provided by subsection (1) of this
 42    section.
 43        (3)  No board of county commissioners shall set  a  levy,  nor  shall  the
 44    state  tax  commission approve a levy for annual budget purposes which exceeds
 45    the limitation imposed in subsection (1) of this section, unless authority  to
 46    exceed  such  limitation  has  been  approved  by  a  majority  of  the taxing
 47    district's electors voting on the question at an election called for that pur-
 48    pose and held pursuant to section 34-106, Idaho Code, provided  however,  that
 49    such voter approval shall be for a period of not to exceed two (2) years.
 50        (4)  The  amount of property tax revenues to finance an annual budget does
 51    not include revenues from nonproperty tax sources, and does not include  reve-
 52    nue  from levies that are voter approved for bonds, override levies or supple-
 53    mental levies, plant facilities reserve fund  levies,  school  emergency  fund
 54    levies or for levies applicable to newly annexed property or for levies appli-
 55    cable to new construction as evidenced by the value of property subject to the
                                                                        
                                           3
                                                                        
  1    occupancy  tax  pursuant  to section 63-317, Idaho Code, for the preceding tax
  2    year.
                                                                        
  3        SECTION 2.  An emergency existing  therefor,  which  emergency  is  hereby
  4    declared to exist, this act shall be in full force and effect on and after its
  5    passage and approval, and retroactively to January 1, 2006.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE
                             RS 15498

This legislation will eliminate the "forgone amount" concept in
developing budgets for taxing districts.  It limits the carry
over period of the unused portion of growth increase to the
following year.  When the foregone balance is taken, it will not
be used in future budget calculations.  Additionally this
legislation limits the use of new construction in the year that
it occurs and the new construction will not be used in future
years.  


                           FISCAL NOTE

There is no fiscal impact on the state General Fund.  In the
short run the budgets at the local level would not be impacted. 
In the long run this provision would limit on going budget growth
in fast growing areas.



Contact
Name: Rep. Dolores Crow 
Phone: 332-1000
Rep. Jim Clark
Rep. Mike Moyle


STATEMENT OF PURPOSE/FISCAL NOTE                         H 419