2007 Legislation
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HOUSE BILL NO. 321 – Property tax exmptn, bldg facility

HOUSE BILL NO. 321

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Bill Status



H0321...............................................by REVENUE AND TAXATION
PROPERTY TAX - EXEMPTION - Adds to and amends existing law to provide that
a board of county commissioners may declare that all or a portion of the
market value of investment in new plant and building facilities meeting
certain tax incentive criteria shall be exempt from taxation; to define
terms; to provide application procedures to the board of county
commissioners; to provide that the Legislature declares the exemption is
necessary and just; and to provide an exception to the three percent
property tax growth cap for certain property tax exemptions.
                                                                        
03/14    House intro - 1st rdg - to printing
03/15    Rpt prt - to Rev/Tax

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   First Regular Session - 2007
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 321
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO PROPERTY EXEMPT FROM TAXATION; AMENDING CHAPTER 6, TITLE 63, IDAHO
  3        CODE, BY THE ADDITION OF A NEW SECTION 63-602KK, IDAHO  CODE,  TO  PROVIDE
  4        THAT  A BOARD OF COUNTY COMMISSIONERS MAY DECLARE THAT ALL OR A PORTION OF
  5        THE MARKET VALUE OF INVESTMENT IN NEW PLANT AND BUILDING FACILITIES  MEET-
  6        ING  CERTAIN  TAX  INCENTIVE  CRITERIA,  SHALL BE EXEMPT FROM TAXATION, TO
  7        DEFINE TERMS, TO PROVIDE APPLICATION PROCEDURES TO  THE  BOARD  OF  COUNTY
  8        COMMISSIONERS  AND  TO PROVIDE THAT THE LEGISLATURE DECLARES THE EXEMPTION
  9        IS NECESSARY AND JUST; AMENDING SECTION 63-802, IDAHO CODE, TO PROVIDE  AN
 10        EXCEPTION  TO THREE PERCENT PROPERTY TAX BUDGET LIMITATION  GROWTH CAP FOR
 11        CERTAIN PROPERTY TAX EXEMPTIONS; AND PROVIDING AN EFFECTIVE DATE.
                                                                        
 12    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 13        SECTION 1.  That Chapter 6, 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 63-602KK, Idaho Code, and to read as follows:
                                                                        
 16        63-602KK.  PROPERTY EXEMPT FROM TAXATION -- CERTAIN BUSINESS PROPERTY. (1)
 17    During tax year 2008, and each year thereafter, a board of county  commission-
 18    ers may declare that all or a portion of the market value of investment in new
 19    plant  and  building  facilities  meeting tax incentive criteria as defined in
 20    subsection (2) of this section shall be exempt from property taxation.
 21        (2)  As used in this section:
 22        (a)  "Commission" means the Idaho state tax commission.
 23        (b)  "Idaho income tax act" means chapter 30, title 63, Idaho Code.
 24        (c)  "New plant and building facilities" means manufacturing  facility  or
 25        facilities, including related parking facilities, food service facilities,
 26        business  office facilities and other building facilities directly related
 27        to the manufacturing business.
 28        (d)  "Investment in new plant" means investment in new plant and  building
 29        facilities that are:
 30             (i)   Qualified investments; or
 31             (ii)  Buildings or structural components of buildings.
 32        (e)  "Project period" means the period of time beginning at the earlier of
 33        a  physical  change  to  the  project  site or the first employment of new
 34        employees or contractors located in Idaho who are related to  the  activi-
 35        ties at the project site, but no earlier than January 1, 2008.
 36        (f)  "Project site" means an area or areas at which new plant and building
 37        facilities  are  located and at which the tax incentive criteria have been
 38        or will be met and which are either:
 39             (i)   A single geographic area located in this state at which the new
 40             plant and building facilities owned or leased  by  the  taxpayer  are
 41             located; or
 42             (ii)  One  (1)  or  more  geographic  areas  located in this state if
 43             eighty percent (80%) or more of the investment required by subsection
                                                                        
                                       2
                                                                        
  1             (2)(h)(i) of this section is made at one (1) of the areas.
  2        The project site must be identified and described to  the  county  commis-
  3        sioners  by  a  taxpayer subject to tax under the Idaho income tax act, in
  4        the form and manner prescribed by the commission.
  5        (g)  "Qualified investment" shall be defined as in section 63-3029B, Idaho
  6        Code.
  7        (h)  "Tax incentive criteria" means a taxpayer at a project  site  meeting
  8        the requirements of subparagraphs (i), (ii) and (iii) of this paragraph:
  9             (i)   During  the  project  period, making capital investments in new
 10             plant of at least three million dollars ($3,000,000) at  the  project
 11             site;
 12             (ii)  During  a period of time beginning on January 1, 2008, and end-
 13             ing at the conclusion of the project period, the project  is  located
 14             in  a  rural  development  zone  as  designated  by the United States
 15             department of agriculture  rural development program;
 16             (iii) The taxpayer can demonstrate to  the  county  that  significant
 17             economic benefits will accrue to the county.
 18        (i)  "Taxpayer," for purposes of  this section, means either:
 19             (i)   A single taxpayer; or
 20             (ii)  In  the  context  of  a  unitary group filing a combined report
 21             under section 63-3027(t), Idaho Code, all members of a unitary  group
 22             includable   in  a  combined  report  for  the tax years in which the
 23             credit provided for by this chapter may be  claimed.  For  all  other
 24             purposes,  the  terms  of  section  63-3009,  Idaho Code, and section
 25             63-3027(t)(1), Idaho Code, apply to the meaning of "taxpayer."
 26        (3)  A taxpayer must make application for the exemption described in  this
 27    section as may be provided by the board of county commissioners as long as the
 28    property continues to meet the tax incentive criteria enumerated in subsection
 29    (2) of this section.
 30        (4)  The legislature declares that this exemption is necessary and just.
                                                                        
 31        SECTION  2.  That  Section  63-802, Idaho Code, be, and the same is hereby
 32    amended to read as follows:
                                                                        
 33        63-802.  LIMITATION ON BUDGET REQUESTS -- LIMITATION  ON  TAX  CHARGES  --
 34    EXCEPTIONS.  (1)  Except as provided in subsection (3) of this section for tax
 35    year 1995, and each year thereafter, no taxing district shall certify a budget
 36    request for an amount of property tax revenues to  finance  an  annual  budget
 37    that exceeds the greater of:
 38        (a)  The  dollar  amount of property taxes certified for its annual budget
 39        for any one (1) of the three (3) tax years preceding the current tax year,
 40        whichever is greater, which amount may be increased by a growth factor  of
 41        not  to  exceed  three  percent (3%) plus the amount of revenue that would
 42        have been generated by applying the levy of the previous year, not includ-
 43        ing any levy described in subsection (4) of this section, to any  increase
 44        in  market  value  subject  to taxation resulting from new construction or
 45        change of land use classification as evidenced by the value shown  on  the
 46        new  construction  roll  compiled pursuant to section 63-301A, Idaho Code;
 47        and by the value of annexation during the previous calendar year, as  cer-
 48        tified by the state tax commission for market values of operating property
 49        of  public  utilities and by the county assessor, provided that the amount
 50        shall be reduced by the amount of any property tax exemption granted  pur-
 51        suant   to  section  63-602KK,  Idaho  Code,  by  multiplying  the  taxing
 52        district's levy rate  by the market value of the exemption granted  pursu-
 53        ant to section 63-602KK, Idaho Code; or
                                                                        
                                       3
                                                                        
  1        (b)  The  dollar  amount of property taxes certified for its annual budget
  2        during the last year in which a levy was made; or
  3        (c)  The dollar amount of the actual budget request, if  the  taxing  dis-
  4        trict  is  newly created except as may be provided in subsection (1)(h) of
  5        this section; or
  6        (d)  In the case of school districts, the restriction imposed  in  section
  7        33-802, Idaho Code; or
  8        (e)  In  the  case of a nonschool district for which less than the maximum
  9        allowable increase in the dollar amount of property  taxes  is   certified
 10        for  annual  budget  purposes in any one (1) year, such a district may, in
 11        any following year, recover the foregone increase by certifying, in  addi-
 12        tion  to  any increase otherwise allowed, an amount not to exceed one hun-
 13        dred percent (100%) of the increase originally foregone.  Said  additional
 14        amount  shall be included in future calculations for increases as allowed;
 15        or
 16        (f)  In the case of cities, if the immediately preceding year's levy  sub-
 17        ject  to  the limitation provided by this section, is less than 0.004, the
 18        city may increase its budget by an amount not  to  exceed  the  difference
 19        between  0.004 and actual prior year's levy multiplied by the prior year's
 20        market value for  assessment  purposes.  The  additional  amount  must  be
 21        approved by sixty percent (60%) of the voters voting on the question at an
 22        election  called  for that purpose and held on the date in May or November
 23        provided by law, and may  be included in the annual budget of the city for
 24        purposes of this section; or
 25        (g)  A taxing district may submit to the electors within the district  the
 26        question of whether the budget from property tax revenues may be increased
 27        beyond  the  amount  authorized  in  this section, but not beyond the levy
 28        authorized by statute. The additional amount must be approved by sixty-six
 29        and two-thirds percent (66 2/3%) or more of the voters voting on the ques-
 30        tion at an election called for that purpose and held on the May or  Novem-
 31        ber  dates  provided  by  section  34-106,  Idaho Code. If approved by the
 32        required minimum sixty-six and two-thirds percent (66 2/3%) of the  voters
 33        voting at the election, the new budget amount shall be the base budget for
 34        the purposes of this section; or
 35        (h)  When  a  nonschool  district consolidates with another nonschool dis-
 36        trict or dissolves and a  new  district  performing  similar  governmental
 37        functions  as the dissolved district forms with the same boundaries within
 38        three (3) years, the maximum amount of a budget of the district from prop-
 39        erty tax revenues shall not be greater than the sum of  the  amounts  that
 40        would  have been authorized by this section for the district itself or for
 41        the districts that were consolidated or dissolved and incorporated into  a
 42        new district; or
 43        (i)  In the instance or case of cooperative service agencies, the restric-
 44        tions imposed in sections 33-315 through 33-318, Idaho Code.
 45        (2)  In  the case of fire districts, during the year immediately following
 46    the election of a public utility or public utilities to consent to be provided
 47    fire protection pursuant to section 31-1425, Idaho Code, the maximum amount of
 48    property tax revenues permitted in subsection  (1)  of  this  section  may  be
 49    increased  by  an amount equal to the current year's taxable value of the con-
 50    senting public utility or public utilities multiplied by that portion  of  the
 51    prior year's levy subject to the limitation provided by subsection (1) of this
 52    section.
 53        (3)  No  board  of  county  commissioners  shall set a levy, nor shall the
 54    state tax commission approve a levy for annual budget purposes  which  exceeds
 55    the  limitation imposed in subsection (1) of this section, unless authority to
                                                                        
                                       4
                                                                        
  1    exceed such  limitation  has  been  approved  by  a  majority  of  the  taxing
  2    district's electors voting on the question at an election called for that pur-
  3    pose  and  held pursuant to section 34-106, Idaho Code, provided however, that
  4    such voter approval shall be for a period of not to exceed two (2) years.
  5        (4)  The amount of property tax revenues to finance an annual budget  does
  6    not  include revenues from nonproperty tax sources, and does not include reve-
  7    nue from levies that are voter approved for bonds, override levies or  supple-
  8    mental  levies,  plant  facilities  reserve fund levies, school emergency fund
  9    levies or for levies applicable to newly annexed property or for levies appli-
 10    cable to new construction as evidenced by the value of property subject to the
 11    occupancy tax pursuant to section 63-317, Idaho Code, for  the  preceding  tax
 12    year.
                                                                        
 13        SECTION 3.  This act shall be in full force and effect on and after  Janu-
 14    ary 1, 2008.

Statement of Purpose / Fiscal Impact


                    STATEMENT OF PURPOSE
                              
                          RS 17171
                           
      The purpose of this legislation is to provide an
  economic development incentive for new manufacturing
  facilities construction and development in designated rural
  development areas in the state of Idaho.

     The legislation will grant the board of county
  commissioners authority to offer property tax abatement, for
  a maximum of 5 years, to a taxpayer who spends a minimum of
  $3,000,000 for new manufacturing facilities in Rural
  Development Zones as designated by the United States
  Department of Agriculture, Rural Development.  The taxpayer
  must demonstrate significant economic benefits that will
  accrue to the county from such property development.

       The legislation limits a county government from setting
  budgets based on the assessed valuation of the property,
  until such time as property taxes are actually collected on
  the project.

       This proposal will allow board of county commissioners
  an incentive to help compete more effectively, and on a more
  timely basis, with neighboring states to attract new
  development to the state and their county.

  
                       FISCAL IMPACT

  There is no fiscal impact to the general fund.



  CONTACT:
  Representative Cliff Bayer
  332-1000
  
  STATEMENT OF PURPOSE/FISCAL NOTE                       H 321