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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
|||| 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.
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