2008 Legislation
Print Friendly

HOUSE BILL NO. 594<br /> – Tax Comm, levy rate, taxing dist

HOUSE BILL NO. 594

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



H0594...............................................by REVENUE AND TAXATION
STATE TAX COMMISSION - Amends existing law to provide that the State Tax
Commission shall calculate what the current levy rate would have been for
each taxing district without the addition to the budget of any amounts
associated with new construction or change of land use classification; to
provide if this levy rate is less than the levy rate of the previous year
that was actually applied in the current year, then the difference between
the two levy rates shall be applied to the current market value subject to
taxation resulting from new construction or change of land use
classification, and the amount resulting shall be subtracted from the
taxing district's subsequent year's annual budget.

03/04    House intro - 1st rdg - to printing
03/05    Rpt prt - to Rev/Tax
03/13    Rpt out - rec d/p - to 2nd rdg
03/14    2nd rdg - to 3rd rdg
03/17    3rd rdg - PASSED - 41-27-2
      AYES -- Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black, Block,
      Bolz, Bowers, Brackett, Chadderdon, Crane, Eskridge, Hagedorn, Hart,
      Harwood, Killen, Kren, Labrador, Lake, Luker, Marriott, Mathews,
      McGeachin, Moyle, Nielsen, Patrick, Raybould, Roberts, Schaefer,
      Shepherd(08), Shirley, Snodgrass, Stevenson, Thayn, Vander Woude,
      Wills, Wood(27), Wood(35), Mr. Speaker
      NAYS -- Anderson, Bock, Boe, Chavez, Chew, Clark, Durst, Henbest,
      Henderson, Jaquet, King, LeFavour, Loertscher, Mortimer, Nonini,
      Pasley-Stuart, Pence, Ringo, Ruchti, Rusche, Sayler, Shepherd(02),
      Shively, Smith(30), Smith(24), Thomas, Trail
      Absent and excused -- Bradford, Collins
    Floor Sponsor - Mathews
    Title apvd - to Senate
03/17    Senate intro - 1st rdg - to Loc Gov

Bill Text




                                                                       
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   Second Regular Session - 2008

                                                                       

                              IN THE HOUSE OF REPRESENTATIVES

                                     HOUSE BILL NO. 594

                             BY REVENUE AND TAXATION COMMITTEE

  1                                        AN ACT
  2    RELATING TO BUDGETS OF TAXING DISTRICTS FUNDED  BY  PROPERTY  TAXES;  AMENDING
  3        SECTION 63-802, IDAHO CODE, TO PROVIDE THAT THE STATE TAX COMMISSION SHALL
  4        CALCULATE  WHAT THE CURRENT LEVY RATE WOULD HAVE BEEN FOR EACH TAXING DIS-
  5        TRICT WITHOUT THE ADDITION TO THE BUDGET OF ANY  AMOUNTS  ASSOCIATED  WITH
  6        NEW  CONSTRUCTION OR CHANGE OF LAND USE CLASSIFICATION, TO PROVIDE THAT IF
  7        THIS LEVY RATE IS LESS THAN THE LEVY RATE OF THE PREVIOUS  YEAR  THAT  WAS
  8        ACTUALLY  APPLIED IN THE CURRENT YEAR, THEN THE DIFFERENCE BETWEEN THE TWO
  9        LEVY RATES SHALL BE APPLIED TO THE CURRENT MARKET VALUE SUBJECT  TO  TAXA-
 10        TION RESULTING FROM NEW CONSTRUCTION OR CHANGE OF LAND USE CLASSIFICATION,
 11        AND  THE  AMOUNT  RESULTING SHALL BE SUBTRACTED FROM THE TAXING DISTRICT'S
 12        SUBSEQUENT YEAR'S ANNUAL BUDGET, TO PROVIDE FOR NOTIFICATION TO THE COUNTY
 13        CLERK, TO PROVIDE DUTIES OF THE COUNTY CLERK  AND  TO  DEFINE  TERMS;  AND
 14        DECLARING AN EMERGENCY.

 15    Be It Enacted by the Legislature of the State of Idaho:

 16        SECTION  1.  That  Section  63-802, Idaho Code, be, and the same is hereby
 17    amended to read as follows:

 18        63-802.  LIMITATION ON BUDGET REQUESTS -- LIMITATION  ON  TAX  CHARGES  --
 19    EXCEPTIONS.  (1) Except as provided in subsections (3) and (5) of this section
 20    for tax year 1995 2008, and each year thereafter,  no  taxing  district  shall
 21    certify  a budget request for an amount of property tax revenues to finance an
 22    annual budget that exceeds the greater of:
 23        (a)  The dollar amount of property taxes certified for its  annual  budget
 24        for any one (1) of the three (3) tax years preceding the current tax year,
 25        whichever  is greater, which amount may be increased by a growth factor of
 26        not to exceed three percent (3%) plus the amount  of  revenue  that  would
 27        have been generated by applying the levy of the previous year, not includ-
 28        ing  any  levy  described in subsection (4) of this section, or any school
 29        district levy reduction resulting from a distribution of state funds  pur-
 30        suant  to section 63-3638(10), Idaho Code, to any increase in market value
 31        subject to taxation resulting from new construction or change of land  use
 32        classification  as  evidenced  by  the value shown on the new construction
 33        roll compiled pursuant to section 63-301A, Idaho Code; and by the value of
 34        annexation during the previous calendar year, as certified  by  the  state
 35        tax commission for market values of operating property of public utilities
 36        and by the county assessor; or
 37        (b)  The  dollar  amount of property taxes certified for its annual budget
 38        during the last year in which a levy was made; or
 39        (c)  The dollar amount of the actual budget request, if  the  taxing  dis-
 40        trict  is  newly created except as may be provided in subsection (1)(h) of
 41        this section; or
 42        (d)  In the case of school districts, the restriction imposed  in  section
 43        33-802, Idaho Code; or

                                       2

  1        (e)  In  the  case of a nonschool district for which less than the maximum
  2        allowable increase in the dollar amount of property  taxes  is   certified
  3        for  annual  budget  purposes in any one (1) year, such a district may, in
  4        any following year, recover the foregone increase by certifying, in  addi-
  5        tion  to  any increase otherwise allowed, an amount not to exceed one hun-
  6        dred percent (100%) of the increase originally foregone.  Said  additional
  7        amount  shall be included in future calculations for increases as allowed;
  8        or
  9        (f)  In the case of cities, if the immediately preceding year's levy  sub-
 10        ject   to the limitation provided by this section, is less than 0.004, the
 11        city may increase its budget by an amount not  to  exceed  the  difference
 12        between  0.004 and actual prior year's levy multiplied by the prior year's
 13        market value for  assessment  purposes.  The  additional  amount  must  be
 14        approved by sixty percent (60%) of the voters voting on the question at an
 15        election  called  for that purpose and held on the date in May or November
 16        provided by law, and may  be included in the annual budget of the city for
 17        purposes of this section; or
 18        (g)  A taxing district may submit to the electors within the district  the
 19        question of whether the budget from property tax revenues may be increased
 20        beyond  the  amount  authorized  in  this section, but not beyond the levy
 21        authorized by statute. The additional amount must be approved by sixty-six
 22        and two-thirds percent (66 2/3%) or more of the voters voting on the ques-
 23        tion at an election called for that purpose and held on the May or  Novem-
 24        ber  dates  provided  by  section  34-106,  Idaho Code. If approved by the
 25        required minimum sixty-six and two-thirds percent (66 2/3%) of the  voters
 26        voting at the election, the new budget amount shall be the base budget for
 27        the purposes of this section; or
 28        (h)  When  a  nonschool  district consolidates with another nonschool dis-
 29        trict or dissolves and a  new  district  performing  similar  governmental
 30        functions  as the dissolved district forms with the same boundaries within
 31        three (3) years, the maximum amount of a budget of the district from prop-
 32        erty tax revenues shall not be greater than the sum of  the  amounts  that
 33        would  have been authorized by this section for the district itself or for
 34        the districts that were consolidated or dissolved and incorporated into  a
 35        new district; or
 36        (i)  In the instance or case of cooperative service agencies, the restric-
 37        tions imposed in sections 33-315 through 33-318, Idaho Code.
 38        (2)  In  the case of fire districts, during the year immediately following
 39    the election of a public utility or public utilities to consent to be provided
 40    fire protection pursuant to section 31-1425, Idaho Code, the maximum amount of
 41    property tax revenues permitted in subsection  (1)  of  this  section  may  be
 42    increased  by  an amount equal to the current year's taxable value of the con-
 43    senting public utility or public utilities multiplied by that portion  of  the
 44    prior year's levy subject to the limitation provided by subsection (1) of this
 45    section.
 46        (3)  No  board  of  county  commissioners  shall set a levy, nor shall the
 47    state tax commission approve a levy for annual budget purposes  which  exceeds
 48    the  limitation imposed in subsection (1) of this section, unless authority to
 49    exceed such  limitation  has  been  approved  by  a  majority  of  the  taxing
 50    district's electors voting on the question at an election called for that pur-
 51    pose  and  held pursuant to section 34-106, Idaho Code, provided however, that
 52    such voter approval shall be for a period of not to exceed two (2) years.
 53        (4)  The amount of property tax revenues to finance an annual budget  does
 54    not  include revenues from nonproperty tax sources, and does not include reve-
 55    nue from levies that are voter approved for bonds, override levies or  supple-

                                       3

  1    mental  levies,  plant  facilities  reserve fund levies, school emergency fund
  2    levies or for levies applicable to newly annexed property or for levies appli-
  3    cable to new construction as evidenced by the value of property subject to the
  4    occupancy tax pursuant to section 63-317, Idaho Code, for  the  preceding  tax
  5    year.
  6        (5)  The  state  tax commission shall calculate what the current levy rate
  7    would have been for each taxing district without the addition to the budget of
  8    any amounts associated with new construction or change of land use   classifi-
  9    cation,  pursuant to subsection (1) of this section. If this levy rate is less
 10    than the levy rate of the previous year that was actually applied in the  cur-
 11    rent year, then the difference between the two (2) levy rates shall be applied
 12    to  the  current market value subject to taxation resulting from new construc-
 13    tion or change of land use classification, and the amount resulting  shall  be
 14    subtracted  from  the taxing district's subsequent year's annual budget, prior
 15    to any calculations made pursuant to subsection (1) of this section. After the
 16    state tax commission calculates the amounts resulting from this provision,  it
 17    shall notify each county clerk, who shall notify each taxing district in their
 18    county  of the effect of its budget authority. For the purpose of defining the
 19    first year of implementation of this subsection, the  terms  "previous  year,"
 20    "current year" and "subsequent year" shall mean tax years 2006, 2007 and 2008,
 21    respectively.

 22        SECTION  2.  An  emergency  existing  therefor,  which emergency is hereby
 23    declared to exist, this act shall be in full force and effect on and after its
 24    passage and approval.

Statement of Purpose / Fiscal Impact


    REPRINT   REPRINT     REPRINT     REPRINT      REPRINT   
 
                       STATEMENT OF PURPOSE

                             RS 18026

     The purpose of this legislation is to prevent the addition of
new construction from causing an inadvertent tax shift to other
properties.  Currently, when new construction property is added to
the budgets of local taxing districts, it is added at the previous
year's levy rate.  If the current year's levy rate is declining,
this means that the new construction adds extra money to the
budget, based on the previous year's higher rate.  This increased
budget is then paid by all property taxpayers.  Moreover, this
shift effect is cumulative.
     If enacted, this legislation prevents this tax shift from
accumulating, by causing the extra, tax-shifted money to be
subtracted from the next year's budget, before any budget increase
calculations are made.


                           FISCAL NOTE

     There is no impact to the general fund as a result of this
legislation.





Contact
Name: Rep. Russ Mathews 
Phone: 208.332.1000
Rep. Mike Moyle     Rep. Cliff Bayer
Rep. Scott Bedke    Rep. Janice McGeachin
Rep. Ken Roberts    Rep. JoAn Wood
Rep. Lenore Barrett


STATEMENT OF PURPOSE/FISCAL NOTE                        H 594    

    REPRINT     REPRINT        REPRINT         REPRINT