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H0361...............................................by REVENUE AND TAXATION
LOW-INCOME HOUSING - Amends existing law to provide a property tax
exemption for certain low-income housing solely owned and operated by a
fraternal, benevolent or charitable corporation or society.
03/12 House intro - 1st rdg - to printing
03/13 Rpt prt - to Rev/Tax
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 361
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO PROPERTY EXEMPT FROM TAXATION BELONGING TO FRATERNAL, BENEVOLENT
3 OR CHARITABLE CORPORATIONS OR SOCIETIES; AMENDING SECTION 63-602C, IDAHO
4 CODE, TO PROVIDE THAT CERTAIN LOW-INCOME HOUSING IS EXEMPT FROM TAXATION,
5 TO PROVIDE THAT THE LEASE OR USE OF ANY PROPERTY BY ANY SUCH CORPORATION
6 OR SOCIETY FOR LOW-INCOME HOUSING SHALL NOT BE DEEMED A BUSINESS OR COM-
7 MERCIAL PURPOSE, EVEN THOUGH FEES OR CHARGES BE IMPOSED AND REVENUE
8 DERIVED THEREFROM IF THE LOW-INCOME HOUSING SHALL BE OR SHALL HAVE BEEN
9 INSURED, FINANCED OR ASSISTED IN WHOLE OR IN PART THROUGH A FEDERAL OR
10 STATE HOUSING PROGRAM ADMINISTERED BY THE DEPARTMENT OF HEALTH AND WEL-
11 FARE, THE IDAHO HOUSING AND FINANCE ASSOCIATION, THE IDAHO HEALTH FACILI-
12 TIES AUTHORITY OR THE FEDERAL DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
13 OR THE FEDERAL DEPARTMENT OF AGRICULTURE, AND THE CORPORATION OR SOCIETY
14 SHALL BE EXEMPT FROM TAXATION PURSUANT TO SECTION 501(c)(3) OF THE INTER-
15 NAL REVENUE CODE; DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE APPLI-
16 CATION.
17 Be It Enacted by the Legislature of the State of Idaho:
18 SECTION 1. That Section 63-602C, Idaho Code, be, and the same is hereby
19 amended to read as follows:
20 63-602C. PROPERTY EXEMPT FROM TAXATION -- FRATERNAL, BENEVOLENT, OR CHAR-
21 ITABLE CORPORATIONS OR SOCIETIES. The following property is exempt from taxa-
22 tion: property belonging to any fraternal, benevolent, or charitable corpora-
23 tion or society, low-income housing as provided below, the World War veteran
24 organization buildings and memorials of this state, used exclusively for the
25 purposes for which such corporation or society is organized; provided, that if
26 any building or property belonging to any such corporation or society is
27 leased by such owner or if such corporation or society uses such property for
28 business purposes from which a revenue is derived which, in the case of a
29 charitable organization, is not directly related to the charitable purposes
30 for which such charitable organization exists, then the same shall be assessed
31 and taxed as any other property, and if any such property is leased in part or
32 used in part by such corporation or society for such purposes the assessor
33 shall determine the value of the entire building and the value of the part
34 used or leased for commercial purposes. If the value of the part used for com-
35 mercial purposes is determined to be three percent (3%) or less than the value
36 of the entirety, the whole of said property shall remain exempt. If the value
37 of the part used for commercial purposes is determined to be more than three
38 percent (3%) of the value of the entirety, the assessor shall assess such pro-
39 portionate part of such building including the value of the real estate as is
40 so leased or used for such purposes, and shall assess all merchandise kept for
41 sale, and the trade fixtures used in connection with the sale of such merchan-
42 dise; provided however, that the lease or use of any property by any such cor-
43 poration or society for athletic or recreational facilities, residence halls
2
1 or dormitories, low-income housing, meeting rooms or halls, auditoriums or
2 club rooms within the purposes for which such corporation or society is orga-
3 nized, shall not be deemed a business or commercial purpose, even though fees
4 or charges be imposed and revenue derived therefrom. To receive an exemption
5 pursuant to this section, the low-income housing shall be solely owned and
6 operated by a fraternal, benevolent or charitable corporation or society which
7 is exempt from taxation pursuant to section 501(c)(3) of the Internal Revenue
8 Code and has been or is insured, financed or assisted in whole or in part
9 through a federal or state housing program administered by the department of
10 health and welfare, the Idaho housing and finance association, the Idaho
11 health facilities authority, or the federal department of housing and urban
12 development or the federal department of agriculture.
13 SECTION 2. An emergency existing therefor, which emergency is hereby
14 declared to exist, this act shall be in full force and effect on and after its
15 passage and approval, and retroactively to January 1, 2000.
STATEMENT OF PURPOSE
RS 11243
This legislation would clarify the property tax exempt status of
low income rental property that is owned and operated exclusively
by non-profit charitable corporations or societies, specifically
IRS 501(c)(3) qualified organizations. Currently, the law is being
interpreted differently and inconsistently by counties throughout
the state. Low income housing units owned and operated by non-profit
charitable organizations are being taxed by some counties and not by
other counties. This legislation establishes qualifications for both
the property and the charitable organization to ensure uniform
application of the exemption across the state.
FISCAL IMPACT
There would be not fiscal impact on the General Fund of the State of
Idaho. There would be a property tax shift from taxes currently being
paid by charitable organizations for this type of property to all other
property tax payers in the same jurisdiction. Currently, $460,171 is
paid in property taxes by non-profit charitable organizations in this
state for this type of property.
Contact: Senator Joe Stegner 332-1342
Representative Robert Schaeffer 332-1156
STATEMENT OF PURPOSE/FISCAL NOTE H 361