2000 Legislation
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HOUSE BILL NO. 427 – Proprty tax assessmt/low-income hse

HOUSE BILL NO. 427

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Daily Data Tracking History



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

Bill Text


 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.

Statement of Purpose / Fiscal Impact


REPRINT     REPRINT    REPRINT    REPRINT     REPRINT    REPRINT 
                           
                           
                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