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H0419...............................................by REVENUE AND TAXATION
PROPERTY TAX - Amends existing law to revise how new construction or change
of land use classification may be calculated for property tax revenue
purposes for a taxing district's budget; and to provide that foregone
increases may not be calculated for future increases.
01/19 House intro - 1st rdg - to printing
01/20 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 419
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO PROPERTY TAXATION; AMENDING SECTION 63-802, IDAHO CODE, TO REVISE
3 HOW NEW CONSTRUCTION OR CHANGE OF LAND USE CLASSIFICATION MAY BE CALCU-
4 LATED FOR PROPERTY TAX REVENUE PURPOSES FOR A TAXING DISTRICT'S BUDGET AND
5 TO PROVIDE THAT FOREGONE INCREASES MAY NOT BE CALCULATED FOR FUTURE
6 INCREASES; DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Section 63-802, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 63-802. LIMITATION ON BUDGET REQUESTS -- LIMITATION ON TAX CHARGES --
11 EXCEPTIONS. (1) Except as provided in subsection (3) of this section for tax
12 year 1995 2006, and each year thereafter, no taxing district shall certify a
13 budget request for an amount of property tax revenues to finance an annual
14 budget that exceeds the greater of:
15 (a) The dollar amount of property taxes certified for its annual budget
16 for any one (1) of the three (3) tax years preceding the current tax year
17 less any amounts in those years which include the increase in market value
18 resulting from new construction or change of land use classification as
19 evidenced by the value shown on the new construction roll compiled pursu-
20 ant to section 63-301A, Idaho Code, whichever is greater, which amount may
21 be increased by a growth factor of not to exceed three percent (3%) plus
22 the amount of revenue that would have been generated by applying the levy
23 of the previous year for one (1) tax year only, not including any levy
24 described in subsection (4) of this section, to any increase in market
25 value subject to taxation resulting from new construction or change of
26 land use classification as evidenced by the value shown on the new con-
27 struction roll compiled pursuant to section 63-301A, Idaho Code, for the
28 tax year following the increase in market value resulting from new con-
29 struction or change of land use classification as evidenced by the value
30 shown on the new construction roll compiled pursuant to section 63-301A,
31 Idaho Code; and by the value of annexation during the previous calendar
32 year, as certified by the state tax commission for market values of oper-
33 ating property of public utilities and by the county assessor; or
34 (b) The dollar amount of property taxes certified for its annual budget
35 during the last year in which a levy was made; or
36 (c) The dollar amount of the actual budget request, if the taxing dis-
37 trict is newly created except as may be provided in subsection (1)(h) of
38 this section; or
39 (d) In the case of school districts, the restriction imposed in section
40 33-802, Idaho Code; or
41 (e) In the case of a nonschool district for which less than the maximum
42 allowable increase in the dollar amount of property taxes is certified
43 for annual budget purposes in any one (1) year, such a district may, in
2
1 any the following year, recover the foregone increase by certifying, in
2 addition to any increase otherwise allowed, an amount not to exceed one
3 hundred percent (100%) of the increase originally foregone. Said addi-
4 tional amount shall not be included in future calculations for increases
5 as allowed; or
6 (f) In the case of cities, if the immediately preceding year's levy sub-
7 ject to the limitation provided by this section, is less than 0.004, the
8 city may increase its budget by an amount not to exceed the difference
9 between 0.004 and actual prior year's levy multiplied by the prior year's
10 market value for assessment purposes. The additional amount must be
11 approved by sixty percent (60%) of the voters voting on the question at an
12 election called for that purpose and held on the date in May or November
13 provided by law, and may be included in the annual budget of the city for
14 purposes of this section; or
15 (g) A taxing district may submit to the electors within the district the
16 question of whether the budget from property tax revenues may be increased
17 beyond the amount authorized in this section, but not beyond the levy
18 authorized by statute. The additional amount must be approved by sixty-six
19 and two-thirds percent (66 2/3%) or more of the voters voting on the ques-
20 tion at an election called for that purpose and held on the May or Novem-
21 ber dates provided by section 34-106, Idaho Code. If approved by the
22 required minimum sixty-six and two-thirds percent (66 2/3%) of the voters
23 voting at the election, the new budget amount shall be the base budget for
24 the purposes of this section; or
25 (h) When a nonschool district consolidates with another nonschool dis-
26 trict or dissolves and a new district performing similar governmental
27 functions as the dissolved district forms with the same boundaries within
28 three (3) years, the maximum amount of a budget of the district from prop-
29 erty tax revenues shall not be greater than the sum of the amounts that
30 would have been authorized by this section for the district itself or for
31 the districts that were consolidated or dissolved and incorporated into a
32 new district; or
33 (i) In the instance or case of cooperative service agencies, the restric-
34 tions imposed in sections 33-315 through 33-318, Idaho Code.
35 (2) In the case of fire districts, during the year immediately following
36 the election of a public utility or public utilities to consent to be provided
37 fire protection pursuant to section 31-1422, Idaho Code, the maximum amount of
38 property tax revenues permitted in subsection (1) of this section may be
39 increased by an amount equal to the current year's taxable value of the con-
40 senting public utility or public utilities multiplied by that portion of the
41 prior year's levy subject to the limitation provided by subsection (1) of this
42 section.
43 (3) No board of county commissioners shall set a levy, nor shall the
44 state tax commission approve a levy for annual budget purposes which exceeds
45 the limitation imposed in subsection (1) of this section, unless authority to
46 exceed such limitation has been approved by a majority of the taxing
47 district's electors voting on the question at an election called for that pur-
48 pose and held pursuant to section 34-106, Idaho Code, provided however, that
49 such voter approval shall be for a period of not to exceed two (2) years.
50 (4) The amount of property tax revenues to finance an annual budget does
51 not include revenues from nonproperty tax sources, and does not include reve-
52 nue from levies that are voter approved for bonds, override levies or supple-
53 mental levies, plant facilities reserve fund levies, school emergency fund
54 levies or for levies applicable to newly annexed property or for levies appli-
55 cable to new construction as evidenced by the value of property subject to the
3
1 occupancy tax pursuant to section 63-317, Idaho Code, for the preceding tax
2 year.
3 SECTION 2. An emergency existing therefor, which emergency is hereby
4 declared to exist, this act shall be in full force and effect on and after its
5 passage and approval, and retroactively to January 1, 2006.
STATEMENT OF PURPOSE
RS 15498
This legislation will eliminate the "forgone amount" concept in
developing budgets for taxing districts. It limits the carry
over period of the unused portion of growth increase to the
following year. When the foregone balance is taken, it will not
be used in future budget calculations. Additionally this
legislation limits the use of new construction in the year that
it occurs and the new construction will not be used in future
years.
FISCAL NOTE
There is no fiscal impact on the state General Fund. In the
short run the budgets at the local level would not be impacted.
In the long run this provision would limit on going budget growth
in fast growing areas.
Contact
Name: Rep. Dolores Crow
Phone: 332-1000
Rep. Jim Clark
Rep. Mike Moyle
STATEMENT OF PURPOSE/FISCAL NOTE H 419