HOUSE BILL NO. 387

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Bill Status



H0387...............................................by REVENUE AND TAXATION
LIMITED LIABILITY COMPANY - Amends existing law to clarify that property of
a religious limited liability company or a fraternal, benevolent, or
charitable limited liability company is exempt from taxation.

01/23    House intro - 1st rdg - to printing
01/24    Rpt prt - to Rev/Tax
01/28    Rpt out - rec d/p - to 2nd rdg
01/29    2nd rdg - to 3rd rdg
02/04    3rd rdg - PASSED - 66-1-3
      AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
      Block, Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chavez, Chew,
      Clark, Collins, Crane, Durst, Hagedorn, Hart, Harwood, Henbest,
      Henderson, Jaquet, Killen, King, Kren, Labrador, Lake, LeFavour,
      Loertscher, Luker, Mathews, McGeachin, Mortimer, Nielsen, Nonini,
      Pasley-Stuart, Patrick, Pence, Raybould, Ringo, Roberts, Ruchti,
      Rusche, Sayler, Schaefer, Shepherd(02), Shepherd(08), Shirley,
      Shively, Smith(30), Smith(24), Snodgrass, Stevenson, Thayn, Thomas,
      Trail, Vander Woude, Wills, Wood(27), Wood(35), Mr. Speaker
      NAYS -- Marriott
      Absent and excused -- Chadderdon, Eskridge, Moyle
    Floor Sponsor - Killen
    Title apvd - to Senate
02/05    Senate intro - 1st rdg - to Loc Gov
02/13    Rpt out - rec d/p - to 2nd rdg
02/14    2nd rdg - to 3rd rdg
02/25    3rd rdg - PASSED - 33-0-2
      AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
      Cameron, Corder, Darrington, Davis, Fulcher, Geddes, Goedde, Hammond,
      Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge,
      Malepeai(Sagness), McGee, McKague, McKenzie, Pearce, Richardson,
      Schroeder, Siddoway, Stegner, Stennett, Werk
      NAYS -- None
      Absent and excused -- Coiner, Gannon
    Floor Sponsor - Werk
    Title apvd - to House
02/26    To enrol
02/27    Rpt enrol - Sp signed
02/28    Pres signed
02/29    To Governor
03/03    Governor signed
         Session Law Chapter 50
         Effective: 01/01/08

Bill Text




                                                                       
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   Second Regular Session - 2008

                                                                       

                              IN THE HOUSE OF REPRESENTATIVES

                                     HOUSE BILL NO. 387

                             BY REVENUE AND TAXATION COMMITTEE

  1                                        AN ACT
  2    RELATING TO PROPERTY EXEMPT FROM TAXATION;  AMENDING  SECTION  63-602B,  IDAHO
  3        CODE, TO CLARIFY THAT PROPERTY OF A RELIGIOUS LIMITED LIABILITY COMPANY IS
  4        EXEMPT  FROM  TAXATION;  AMENDING  SECTION 63-602C, IDAHO CODE, TO CLARIFY
  5        THAT PROPERTY OF A FRATERNAL, BENEVOLENT OR CHARITABLE  LIMITED  LIABILITY
  6        COMPANY  IS  EXEMPT  FROM TAXATION; DECLARING AN EMERGENCY AND PROVIDING A
  7        RETROACTIVE EFFECTIVE DATE.

  8    Be It Enacted by the Legislature of the State of Idaho:

  9        SECTION 1.  That Section 63-602B, Idaho Code, be, and the same  is  hereby
 10    amended to read as follows:

 11        63-602B.  PROPERTY  EXEMPT  FROM  TAXATION  -- RELIGIOUS LIMITED LIABILITY
 12    COMPANIES, CORPORATIONS OR SOCIETIES. (1) The  following  property  is  exempt
 13    from  taxation: property belonging to any religious limited liability company,
 14    corporation or society of this state, used exclusively for and  in  connection
 15    with  any  combination  of religious, educational, or recreational purposes or
 16    activities of such religious limited liability company, corporation  or  soci-
 17    ety,  including any and all residences used for or in furtherance of such pur-
 18    poses.
 19        (2)  If the entirety of any property belonging to any such religious  lim-
 20    ited  liability company, corporation or society is leased by such owner, or if
 21    such religious limited liability company,  corporation  or  society  uses  the
 22    entirety  of  such  property  for business or commercial purposes from which a
 23    revenue is derived, then the same shall be assessed and  taxed  as  any  other
 24    property. If any such property is leased in part or used in part by such reli-
 25    gious  limited  liability company, corporation or society for such business or
 26    commercial purposes, the assessor shall determine  the  value  of  the  entire
 27    exempt property, and the value of the part used or leased for such business or
 28    commercial purposes, and that part used or leased for such business or commer-
 29    cial  purposes  shall be taxed as any other property. The Idaho state tax com-
 30    mission shall promulgate rules establishing a method of determining the  value
 31    of  the  part  used or leased for such business or commercial purposes. If the
 32    value of the part used or leased for such business or commercial  purposes  is
 33    determined  to be three percent (3%) or less of the value of the entirety, the
 34    whole of said property shall remain exempt. If the value of the part  used  or
 35    leased  for such business or commercial purposes is determined to be more than
 36    three percent (3%) of the value of the entirety,  the  assessor  shall  assess
 37    such  proportionate part of such property, and shall assess the trade fixtures
 38    used in connection with the sale of all merchandise for such business or  com-
 39    mercial  purposes,  provided however, that the use or lease of any property by
 40    any such religious limited liability company, corporation or society for  ath-
 41    letic  or  recreational  facilities,  residence  halls or dormitories, meeting
 42    rooms or halls, auditoriums, or club rooms for and in connection with the pur-
 43    poses for which such religious limited liability company, corporation or soci-

                                       2

  1    ety is organized, shall not be deemed a business or commercial  purpose,  even
  2    though fees or charges be imposed and revenue derived therefrom.

  3        SECTION  2.  That  Section 63-602C, Idaho Code, be, and the same is hereby
  4    amended to read as follows:

  5        63-602C.  PROPERTY EXEMPT FROM TAXATION -- FRATERNAL, BENEVOLENT, OR CHAR-
  6    ITABLE LIMITED LIABILITY COMPANIES, CORPORATIONS OR SOCIETIES.  The  following
  7    property is exempt from taxation: property belonging to any fraternal, benevo-
  8    lent,  or  charitable  limited  liability company, corporation or society, the
  9    World War veteran organization buildings and memorials  of  this  state,  used
 10    exclusively  for the purposes for which such limited liability company, corpo-
 11    ration or society is organized; provided, that if  any  building  or  property
 12    belonging  to  any  such  limited liability company, corporation or society is
 13    leased by such owner or if such  limited  liability  company,  corporation  or
 14    society  uses  such  property  for  business  purposes from which a revenue is
 15    derived which, in the case of  a  charitable  organization,  is  not  directly
 16    related  to  the  charitable  purposes  for which such charitable organization
 17    exists, then the same shall be assessed and taxed as any other  property,  and
 18    if any such property is leased in part or used in part by such limited liabil-
 19    ity  company,  corporation  or  society  for  such purposes the assessor shall
 20    determine the value of the entire building and the value of the part  used  or
 21    leased  for  commercial purposes. If the value of the part used for commercial
 22    purposes is determined to be three percent (3%) or less than the value of  the
 23    entirety,  the whole of said property shall remain exempt. If the value of the
 24    part used for commercial purposes is determined to be more than three  percent
 25    (3%)  of the value of the entirety, the assessor shall assess such proportion-
 26    ate part of such building including the value of the  real  estate  as  is  so
 27    leased  or used for such purposes, and shall assess the trade fixtures used in
 28    connection with the sale of all merchandise; provided however, that the  lease
 29    or  use  of any property by any such limited liability company, corporation or
 30    society for athletic or recreational facilities, residence halls  or  dormito-
 31    ries,  meeting  rooms  or halls, auditoriums or club rooms within the purposes
 32    for which such limited liability company, corporation or society is organized,
 33    shall not be deemed a business or commercial  purpose,  even  though  fees  or
 34    charges be imposed and revenue derived therefrom.

 35        SECTION  3.  An  emergency  existing  therefor,  which emergency is hereby
 36    declared to exist, this act shall be in full force and effect on and after its
 37    passage and approval, and retroactively to January 1, 2008.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                             RS 17669

This legislation enables certain religious, charitable, or
fraternal organizations to utilize the property tax exemptions
presently codified in Idaho law.  The existing language in
Sections 63-602B and 63-602C establishes the criteria by which an
entity qualifies for such exemptions, but limits the class of
eligible entities to either a "...corporation or society..."  In
1994, Idaho adopted the Limited Liability Company Act (LLC). 
Since then, this entity form has become an increasingly popular
choice for both business and non-profit organizations, including
religious, fraternal and benevolent bodies.  Local Assessors
presently do not grant exemption requests from otherwise
qualified LLCs.  The proposed legislation extends to qualified
LLCs the benefits of these exemptions.


                           FISCAL NOTE

     No fiscal impact to the general fund.




Contact
Name: Rep. Bill Killen      Senator Elliot Werk
Phone: 345-2956



STATEMENT OF PURPOSE/FISCAL NOTE                            H 387