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H0427...............................................by REVENUE AND TAXATION
PROPERTY TAX - Adds to existing law to revise how the assessor arrives at
market value for certain qualified low-income housing projects.
01/25 House intro - 1st rdg - to printing
01/26 Rpt prt - to Rev/Tax
02/29 Rpt out - rec d/p - to 2nd rdg
03/01 2nd rdg - to 3rd rdg
03/03 3rd rdg - PASSED - 33-29-8
AYES -- Alltus, Barraclough, Black, Boe, Chase, Crow, Cuddy, Denney,
Field(13), Field(20), Jaquet, Judd, Kellogg, Kempton, Kunz, Linford,
Loertscher, Mader, Marley, McKague, Meyer, Mortensen, Moyle, Pomeroy,
Reynolds, Ridinger, Sali, Schaefer(Tiegs), Sellman, Stone, Taylor,
Tilman, Wood
NAYS -- Barrett, Bell, Bieter, Bruneel, Callister, Campbell,
Cheirrett, Clark, Deal, Ellsworth, Gagner, Hadley, Hammond,
Hansen(23), Henbest, Hornbeck, Jones, Kendell, Lake, Moss, Pearce,
Ringo, Robison, Shepherd, Stevenson, Stoicheff, Trail, Wheeler,
Zimmermann
Absent and excused -- Geddes, Gould, Hansen(29), Montgomery,
Pischner, Smith, Smylie, Mr Speaker
Floor Sponsor - Taylor
Title apvd - to Senate
03/06 Senate intro - 1st rdg - to Loc Gov
03/23 Rpt out - rec d/p - to 2nd rdg
03/24 2nd rdg - to 3rd rdg
04/03 3rd rdg - FAILED - 15-20-0
AYES--Boatright, Bunderson, Geddes, Hawkins, Ingram, Ipsen, Keough,
King-Barrutia, McLaughlin, Parry, Riggs, Risch, Stennett, Wheeler,
Whitworth
NAYS--Andreason, Burtenshaw, Cameron, Crow, Danielson, Darrington,
Davis, Deide, Dunklin, Frasure, Lee, Noh, Richardson, Sandy,
Schroeder, Sorensen, Stegner, Thorne, Walton (Branch), Williams.
Absent and excused--None
Floor Sponsor - Bunderson
Filed with Chief Clerk
H0427
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 427
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO PROPERTY TAXES; AMENDING CHAPTER 2, TITLE 63, IDAHO CODE, BY THE
3 ADDITION OF A NEW SECTION 63-208A, IDAHO CODE, TO PROVIDE THAT THE MARKET
4 VALUE OF LOW-INCOME HOUSING PROJECTS FOR ASSESSMENT PURPOSES SHALL BE
5 DETERMINED BY THE ASSESSOR WITHOUT CONSIDERING SECTION 42 OF THE INTERNAL
6 REVENUE CODE, HOUSING TAX CREDITS ALLOCATED BY THE IDAHO HOUSING AND
7 FINANCE ASSOCIATION, AND IF USING THE INCOME APPROACH TO VALUATION, THE
8 ASSESSOR SHALL USE RENTAL RATES ESTABLISHED BY THE RECORDED LAND USE REGU-
9 LATORY AGREEMENT OR ACTUALLY CHARGED BY THE DEVELOPER OR OWNER OF THE
10 PROPERTY; DECLARING AN EMERGENCY AND PROVIDING A RETROACTIVE EFFECTIVE
11 DATE.
12 Be It Enacted by the Legislature of the State of Idaho:
13 SECTION 1. That Chapter 2, Title 63, Idaho Code, be, and the same is
14 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
15 ignated as Section 63-208A, Idaho Code, and to read as follows:
16 63-208A. RULES PERTAINING TO MARKET VALUE OF LOW-INCOME HOUSING. The
17 assessor shall, in determining market value for assessment purposes of real
18 property which is subject to a recorded land use regulatory agreement for a
19 qualified low-income housing project and for which project the Idaho housing
20 and finance association has allocated low-income housing tax credits pursuant
21 to section 42 of the Internal Revenue Code, during the term of the recorded
22 land use regulatory agreement:
23 (1) Determine the value of the real property without including or con-
24 sidering the value of allocated low-income housing tax credits;
25 (2) Use rental rates established by the recorded land use regulatory
26 agreement or rental rates actually charged by the developer or owner of the
27 property in compliance with such agreement, if utilizing an income approach to
28 valuation; and
29 (3) The assessor shall, if comparing, for valuation purposes, a qualified
30 low-income housing project with other rental properties, make adjustments to
31 valuation to reflect actual rental rates charged by the developer or owner of
32 the qualified low-income housing project.
33 SECTION 2. An emergency existing therefor, which emergency is hereby
34 declared to exist, this act shall be in full force and effect on and after its
35 passage and approval, and retroactively to January 1, 2000.
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STATEMENT OF PURPOSE
RS 09559
The proposal clarifies existing Idaho law relating to the method of determining the
assessable value, for property tax purposes, of Section 42 low-income housing projects to which
Low Income Housing Tax Credits have been allocated pursuant to federal law and are subject to
rental rate restrictions.
The federal Low Income Housing Tax Credit program provides incentives to developers
to provide safe, affordable housing to low-income families. The program provides for credits
against federal income taxes, in return for which the project owner agrees that, for periods of not
less than 15 years, the housing units will be rented only to low income residents.
To be able to receive tax credits for a project, the developer must observe income and
rent restrictions for periods of not less than 15 years, which restrictions constitute an encumbrance
on the property through a recorded Land Use Regulatory Agreement. Tax credits may be
"recaptured" if the project owner fails to satisfy the income and rent restrictions.
This proposal codifies a decision of the Idaho Supreme Court with reference to valuation
of low-income housing as "rent-restricted low-income housing." However, in 1999, an Ada
County District Court declared tax credits to be part of the income stream from renting the
apartment complex. This proposal removes the value of the tax credits from consideration in
valuing the low-income housing development. It is needed to prevent changes in the economics
of these properties through falsely inflated valuations that would undermine the intent of
providing safe, affordable housing to families of limited income.
FISCAL NOTE
There is no revenue impact to the state general account. The impact on local revenues, if any, is
dependent on the particular development, its location, and the past county assessment practices.
CONTACT: Bill Roden
Realvest Corporation
336-7930
STATEMENT OF PURPOSE/FISCAL NOTE H 427