2004 Legislation
Print Friendly

HOUSE BILL NO. 542 – Operating property, tax assessment

HOUSE BILL NO. 542

View Bill Status

View Bill Text

View Statement of Purpose / Fiscal Impact



Text to be added within a bill has been marked with Bold and
Underline. Text to be removed has been marked with
Strikethrough and Italic. How these codes are actually displayed will
vary based on the browser software you are using.

This sentence is marked with bold and underline to show added text.

This sentence is marked with strikethrough and italic, indicating
text to be removed.

Bill Status



H0542...............................................by REVENUE AND TAXATION
OPERATING PROPERTY - TAX ASSESSMENT - Amends existing law to provide that
on and after January 1, 2004, any newly installed or constructed equipment
located within a city corporate limit or within five miles of a city
corporate limit and used for and in conjunction with the thermal generation
of electricity shall be apportioned based on physical location for
operating property purposes; and to provide that newly installed or
constructed equipment used for and in conjunction with the thermal
generation of electricity equipment shall not include the remodeling,
retrofitting, rehabilitation, refurbishing or modification of an existing
electrical generation facility or integration or transformation facilities
such as substations or transmission lines.
                                                                        
01/26    House intro - 1st rdg - to printing
01/27    Rpt prt - to Rev/Tax
02/05    Rpt out - rec d/p - to 2nd rdg
02/06    2nd rdg - to 3rd rdg
02/10    3rd rdg - PASSED - 55-7-8
      AYES -- Andersen, Barraclough, Barrett, Bauer, Bayer, Bedke, Bell,
      Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins, Crow,
      Cuddy, Deal, Denney, Eberle, Edmunson, Ellsworth, Eskridge,
      Field(18), Field(23), Harwood, Jones, Kellogg, Kulczyk, Lake,
      Langford, Martinez, McGeachin, McKague, Meyer, Mitchell, Moyle,
      Naccarato, Nielsen, Raybould, Ridinger, Ring, Ringo, Schaefer,
      Shepherd, Shirley, Skippen, Smith(30), Smylie, Snodgrass, Stevenson,
      Trail, Wills, Wood, Mr. Speaker
      NAYS -- Douglas, Henbest, Jaquet, Langhorst, Pasley-Stuart, Robison,
      Sayler
      Absent and excused -- Black, Gagner, Garrett, Miller, Roberts,
      Rydalch, Sali, Smith(24)
    Floor Sponsor - Eskridge
    Title apvd - to Senate
02/11    Senate intro - 1st rdg - to Loc Gov
02/24    Rpt out - rec d/p - to 2nd rdg
02/25    2nd rdg - to 3rd rdg
03/10    3rd rdg - PASSED - 34-0-1
      AYES -- Andreason(Andreason), Bailey, Bunderson, Burkett, Burtenshaw,
      Calabretta, Cameron, Compton, Darrington, Davis, Gannon, Geddes,
      Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge, Malepeai,
      Marley, McKenzie, McWilliams, Noble, Noh, Pearce, Richardson,
      Schroeder, Sorensen, Stegner, Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- Brandt
    Floor Sponsor - Compton
    Title apvd - to House
03/11    To enrol
03/12    Rpt enrol - Sp signed
03/15    Pres signed
03/16    To Governor
03/19    Governor signed
         Session Law Chapter 105
         Effective: 01/01/04

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 542
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO ASSESSMENT AND  TAXATION OF OPERATING PROPERTY;  AMENDING  SECTION
  3        63-405,  IDAHO  CODE,  TO  PROVIDE  THAT ON AND AFTER JANUARY 1, 2004, ANY
  4        NEWLY INSTALLED OR CONSTRUCTED EQUIPMENT LOCATED WITHIN A  CITY  CORPORATE
  5        LIMIT  OR  WITHIN FIVE MILES OF A CITY CORPORATE LIMIT AND USED FOR AND IN
  6        CONJUNCTION WITH THE THERMAL GENERATION OF  ELECTRICITY  SHALL  BE  APPOR-
  7        TIONED  BASED  ON PHYSICAL LOCATION AND TO PROVIDE THAT NEWLY INSTALLED OR
  8        CONSTRUCTED EQUIPMENT USED FOR AND IN CONJUNCTION WITH THE THERMAL GENERA-
  9        TION OF ELECTRICITY SHALL NOT INCLUDE THE REMODELING, RETROFITTING,  REHA-
 10        BILITATION, REFURBISHING OR MODIFICATION OF AN EXISTING ELECTRICAL GENERA-
 11        TION FACILITY, OR INTEGRATION OR TRANSFORMATION FACILITIES SUCH AS SUBSTA-
 12        TIONS OR TRANSMISSION LINES; DECLARING AN EMERGENCY AND PROVIDING RETROAC-
 13        TIVE APPLICATION.
                                                                        
 14    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 15        SECTION  1.  That  Section  63-405, Idaho Code, be, and the same is hereby
 16    amended to read as follows:
                                                                        
 17        63-405.  ASSESSMENT OF OPERATING PROPERTY. (1) The  state  tax  commission
 18    must assess all operating property at a meeting of the commission convening on
 19    the  second Monday of August in each year, and must complete the assessment of
 20    such property on the fourth Monday in August.
 21        (2)  The state tax commission shall determine the system value and  calcu-
 22    late  the  allocation  and apportionment of the system value for all operating
 23    property and specifically determine:
 24        (a)  The number of miles and the value per mile of each  railroad  in  the
 25        state and for each taxing district in which such railroad may exist.
 26        (b)  The number of miles and the value per mile of each telephone corpora-
 27        tion  in  the  state  and for each taxing district in which such telephone
 28        corporation may exist.
 29        (c)  The number of miles and the value per mile of each  pipeline  in  the
 30        state and for each taxing district in which such pipeline may exist.
 31        (d)  The  number  of  miles  and  the value per mile of each water company
 32        under the jurisdiction of the public utilities commission  in  the  state,
 33        and  for  each  taxing district in which such water company may exist. The
 34        value per mile of any line included in this subsection, except  railroads,
 35        shall  be  determined  by dividing the total value of such line within the
 36        state by the number of miles of such line within the state. The value  per
 37        mile  of  railroad  line shall be determined by apportionment of the total
 38        value of line within the state. The apportionment shall  be  based  twenty
 39        percent (20%) on the ratio of line miles in the state to line miles in the
 40        county;  forty percent (40%) on the ratio of net ton miles in the state to
 41        net ton miles in the county; and forty percent (40%) on the ratio of  sta-
 42        tion  revenues in the state to station revenues in the county. All operat-
 43        ing property of railroads shall be apportioned to the counties as part  of
                                                                        
                                           2
                                                                        
  1        the  railroad  line  in the county. The apportionment for taxing districts
  2        shall be the same as the apportionment among counties.
  3        (e)  The system value, the number of miles and the value per mile of  each
  4        electric  current transmission line and each electric current distribution
  5        line in each county separately, and for each taxing district  within  said
  6        county  in  which  such transmission and distribution lines may exist. The
  7        value per mile of any line included in this subsection   shall  be  deter-
  8        mined by dividing the apportioned value of such line within each county by
  9        the number of miles of such line within said county.
 10        (f)  The  system  value  of private railcar fleets entering or standing in
 11        Idaho in the year preceding the constituted lien as  provided  in  section
 12        63-411(3), Idaho Code.
 13        (g)  The  system  value  and calculate the allocation and apportionment of
 14        the system value for all other operating property.
 15        (3)  On and after January 1, 2004,  any  newly  installed  or  constructed
 16    equipment  located within a city corporate limit or within five (5) miles of a
 17    city corporate limit and used for and in conjunction with the thermal  genera-
 18    tion  of electricity shall be apportioned based on physical location. For pur-
 19    poses of this subsection newly installed or constructed equipment used for and
 20    in conjunction with the thermal generation of electricity  shall  not  include
 21    the  remodeling, retrofitting, rehabilitation, refurbishing or modification of
 22    an existing electrical generation facility, or integration  or  transformation
 23    facilities such as substations or transmission lines.
 24        (4)  If the value of property of any company assessable under this section
 25    is  of  such a nature that it cannot reasonably be apportioned on the basis of
 26    rail, wire, pipeline mileage, such as microwave and radio relay stations,  the
 27    tax  commission  may  adopt such other method or basis of apportionment to the
 28    county and taxing districts in which the property is situate as may be  feasi-
 29    ble and proper.
                                                                        
 30        SECTION  2.  An  emergency  existing  therefor,  which emergency is hereby
 31    declared to exist, this act shall be in full force and effect on and after its
 32    passage and approval, and retroactively to January 1, 2004.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE
                             RS 13772
The purpose of this legislation is to provide an incentive to
locate thermal power plants owned by electric utilities close to
electric load.  This legislation gives an incentive to cities to
permit a power plant to locate within or near a city, by
providing that the property taxes from such a plant are
"apportioned based on the physical location of the plant." 
Currently utility owned generating assets are centrally assessed
and the property values are then apportioned throughout the
utility service area based on the situs of the utility's
transmission wire miles. 
                          FISCAL IMPACT
This legislation will have no fiscal impact on the state.  The
legislation will change the apportionment or allocation of
property taxes from an electric generating plant as among a
multitude of taxing districts with a generalized net effect of
taxing districts with nexus to the plant receiving more property
tax revenues and taxing districts without plant nexus but with
utility transmission nexus, receiving less.


Contact
Name: Rep. John A."Bert" Stevenson                332-1000 
      Rep. George Eskridge                        332-1000
      Rep. Charles D. Cuddy                       332-1000
      Sen. Brent Hill                             332-1000
      Ken Harward, Association of Idaho Cities    344-8594
      Neil Colwell, Avist Corporation             343-3821
      Ron Williams, Attorney at Law               344-6633





STATEMENT OF PURPOSE/FISCAL NOTE                  H 542