2006 Legislation
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HOUSE BILL NO. 429 – Schools, property tax replacemt cap

HOUSE BILL NO. 429

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Bill Status



H0429...............................................by REVENUE AND TAXATION
SCHOOLS - Amends existing law to remove the $75,000,000 cap for property
tax replacement for school districts.
                                                                        
01/19    House intro - 1st rdg - to printing
01/20    Rpt prt - to Rev/Tax

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 429
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO PROPERTY TAX REPLACEMENT  FOR  PUBLIC  SCHOOLS;  AMENDING  SECTION
  3        33-1002D,  IDAHO  CODE,  TO REMOVE THE SEVENTY-FIVE MILLION DOLLAR CAP FOR
  4        PROPERTY TAX REPLACEMENT.
                                                                        
  5    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  6        SECTION 1.  That Section 33-1002D, Idaho Code, be, and the same is  hereby
  7    amended to read as follows:
                                                                        
  8        33-1002D.  PROPERTY  TAX  REPLACEMENT.  The  purpose of this section is to
  9    replace a portion of the authorized school maintenance and operation  property
 10    tax  levy  with  state  sales  tax receipts. As used in this section, the term
 11    "property tax computation ratio" shall mean a ratio determined by dividing the
 12    district's certified property tax maintenance  and  operation  budget  by  the
 13    actual or adjusted market value for assessment purposes as such values existed
 14    on  December  31  of  the  previous calendar year, together with the increment
 15    value, as defined in section 50-2903, Idaho Code, if applicable under the cir-
 16    cumstance described in section 33-802 2., Idaho Code, relating to  termination
 17    of a revenue allocation area.
 18        (1)  (a) In the case of a school district that had a property tax computa-
 19        tion  ratio  of not less than four-tenths of one percent (.4%) in tax year
 20        1994, that school district shall receive from the appropriations made  for
 21        that  purpose,  an amount equal to the greater of the district's actual or
 22        adjusted market value for assessment purposes as such valuation existed on
 23        December 31 of the previous calendar year,  together  with  the  increment
 24        value,  as defined in section 50-2903, Idaho Code, if applicable under the
 25        circumstance described in section 33-802 2., Idaho Code, relating to  ter-
 26        mination of a revenue allocation area, multiplied by one-tenth of one per-
 27        cent (.1%).
 28        (b)  In  the case of a school district that had a property tax computation
 29        ratio of less than four-tenths of one percent (.4%) in tax year 1994,  the
 30        greater  of  the  1992,  1993  or 1994 property tax computation ratio less
 31        three-tenths of one percent (.3%) shall be designated the district's  base
 32        multiplier.  In  no  case shall the base multiplier be less than zero (0).
 33        Four-tenths of one percent (.4%) less the greater of the district's  1992,
 34        1993  or  1994  property  tax  computation  ratio  shall be designated the
 35        district's adjustment factor. In no case shall the  adjustment  factor  be
 36        greater  than  one-tenth  of one percent (.1%) or less than zero (0). Each
 37        school district's actual multiplier shall be the base multiplier plus one-
 38        fifth (1/5) of the adjustment factor in tax year 1995, the base multiplier
 39        plus two-fifths (2/5) of the adjustment factor in tax year 1996, the  base
 40        multiplier  plus  three-fifths  (3/5) of the adjustment factor in tax year
 41        1997, the base multiplier plus four-fifths (4/5) of the adjustment  factor
 42        in  tax  year  1998, and the base multiplier plus the adjustment factor in
 43        tax year 1999 and beyond. Each school district  shall  receive,  from  the
                                                                        
                                           2
                                                                        
  1        appropriations  made  for  that purpose, an amount equal to the district's
  2        actual or adjusted market value for assessment purposes as such  valuation
  3        existed  on  December  31 of the previous calendar year, together with the
  4        increment value, as defined in section 50-2903, Idaho Code, if  applicable
  5        under  the circumstance described in section 33-802 2., Idaho Code, relat-
  6        ing to termination  of  a  revenue  allocation  area,  multiplied  by  the
  7        district's actual multiplier.
  8        (c)  The  preceding  provisions of this subsection notwithstanding, appro-
  9        priations  from the state for the value of one-tenth of one percent  (.1%)
 10        of  the  greater  of  the  district's  actual or adjusted market value for
 11        assessment purposes as such valuation existed on December 31 of the previ-
 12        ous calendar year, together with the increment value, as defined  in  sec-
 13        tion  50-2903,  Idaho Code, if applicable under the circumstance described
 14        in section 33-802 2., Idaho Code, relating to  termination  of  a  revenue
 15        allocation   area,   shall   not   exceed   seventy-five  million  dollars
 16        ($75,000,000) in any fiscal year. If the  amount  school  districts  would
 17        otherwise  be  entitled to receive pursuant to the preceding provisions of
 18        this subsection exceeds seventy-five million dollars  ($75,000,000),  then
 19        each  school district shall receive its share of seventy-five million dol-
 20        lars ($75,000,000) based on the formulas contained in this section.
 21        (2)  (a) Participation in this property tax reduction program is voluntary
 22        for a charter district. If a charter district participates, in addition to
 23        the provisions of subsection (1) of this section it shall not have a prop-
 24        erty tax computation ratio that is above three-tenths of one percent (.3%)
 25        or the district's property tax computation ratio in tax  year  1994,  less
 26        one-tenth of one percent (.1%), whichever is greater.
 27        (b)  If  in any year the charter district's property tax computation ratio
 28        used to calculate its maintenance and operation budget is increased  above
 29        the  limit specified in this subsection the district shall not be eligible
 30        for the distribution pursuant to subsection (1) of this section  for  that
 31        year.
 32        (3)  Limitations imposed upon a school district's property tax computation
 33    ratio  under  the provisions of this section do not apply to any levy approved
 34    by electors of the school district as provided by law.
 35        (4)  Distributions calculated as provided in this section shall be made to
 36    school districts of this state in two (2) equal installments on the due  dates
 37    as  specified  in  section 63-903(1), Idaho Code, for the property taxes being
 38    replaced.
 39        (5)  For purposes of section 33-1002, Idaho Code, moneys distributed  pur-
 40    suant to this section shall not be included in determining total state funds.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE
                             RS 15608

This legislation repeals the $75 million dollar cap placed in
fiscal year 2005 on Governor Batt's property tax replacement
legislation/statute of 1995. The statute authorized the state of
Idaho to compensate Idaho school districts 1/10th of 1% of market
value for district maintenance and operations (M&O). Tied to
market value, with the rapidly escalating home values across
Idaho, districts have been unable to access additional dollars
from property tax replacement because of the cap.


                           FISCAL NOTE

In the current fiscal year districts would have received
$83,911,452 instead of the $75,000,000




Contact
Name:  Representative Wendy Jaquet 
Phone: 208-332-1130


STATEMENT OF PURPOSE/FISCAL NOTE                         H 429