REVENUE AND TAXATION
LEVY AND APPORTIONMENT OF TAXES
63-802. Limitation on budget requests — Limitation on tax charges — Exceptions. (1) Except as otherwise provided in this section, no taxing district shall certify a budget request for an amount of property tax revenues to finance an annual budget that exceeds the maximum sum permitted under this section:
(a)(i) The highest dollar amount of property taxes certified for its annual budget for any one (1) of the three (3) tax years preceding the current tax year, which amount may be increased by a growth factor of not to exceed three percent (3%) plus the amount of revenue calculated as described in this subsection. The taxing district shall determine what portion of the three percent (3%) increase permitted under this subparagraph that it requires and then calculate a preliminary levy rate based on the percent chosen. In calculating the preliminary levy rate, the most current taxable market value shall be used, except that for taxable market values of centrally assessed operating property, the prior year’s valuation may be used instead of the current year’s taxable market values. The preliminary levy rate shall be multiplied by the value shown on the new construction roll compiled pursuant to section 63-301A, Idaho Code, and by ninety percent (90%) of the value of annexation during the previous calendar year, as certified by the state tax commission for taxable market values of operating property of public utilities and by the county assessor; except for a fire protection district annexing property prior to July 1, 2021, pursuant to section 31-1429, Idaho Code, the new levy rate shall be multiplied by one hundred percent (100%) of the value of any such property annexed prior to July 1, 2021.
(ii) The total budget increase calculated under this paragraph must not exceed eight percent (8%), except that any increase in the amount of property tax revenue to finance an annual budget added as a result of the termination, deannexation, or plan modification of a revenue allocation area of an urban renewal district pursuant to section 63-301A(3)(g), (j), or (k), Idaho Code, shall not be subject to such limitation.
(iii) Following the first year in which a fire protection district has annexed city property pursuant to section 31-1429, Idaho Code, the city shall subtract an amount equal to the moneys spent on fire protection services during the last full year the city provided fire protection services to its residents from its budget limitation under this section.
(b) If the taxing district has not imposed a levy for three (3) or more years, the highest dollar amount of property taxes certified for its annual budget for the purpose of paragraph (a)(i) of this subsection shall be the dollar amount of property taxes certified for its annual budget during the last year in which a levy was made.
(c) The dollar amount of the actual budget request may be substituted for the amount in paragraph (a) of this subsection if the taxing district is newly created, except as may be provided in paragraph (i) of this subsection.
(d) This section does not apply to school district levies imposed in section 33-802, Idaho Code.
(e)(i) In the case of a nonschool district for which less than the maximum allowable increase in the dollar amount of property taxes is certified for annual budget purposes in any one (1) year, such a district may, in any following year, recover the forgone increase by certifying, in addition to any increase otherwise allowed, any or all of the increase originally forgone. Provided however, that prior to budgeting any forgone increase, the district must provide notice of its intent to do so, hold a public hearing that may be in conjunction with its annual budget hearing, and certify by resolution the amount of forgone increase to be budgeted and the specific purpose for which the forgone increase is being budgeted. Upon adoption of the resolution, the clerk of the district shall file a copy of the resolution with the county clerk and the state tax commission. Said additional amount shall be included in future calculations for increases as allowed, except as provided in subparagraph (iii) of this paragraph.
(ii) If the forgone increase is budgeted for the purpose of maintenance and operations, the rate of recovering the reserved forgone moneys may increase the taxing district’s budget by no more than one percent (1%) per year.
(iii) If the forgone increase is budgeted for a capital project or projects, the rate of recovering the reserved forgone moneys may not exceed three percent (3%) of the taxing district’s budget for the year in which the forgone increase is budgeted. Forgone moneys budgeted for a capital project must be deducted from the taxing district’s forgone balance in the year in which it is budgeted. Upon completion of such a capital project, the taxing district shall certify such completion to the state tax commission and county clerk. If, upon certification, the state tax commission finds that the taxing district included forgone moneys for a capital project in calculating the increase permitted under paragraph (a) of this subsection, the state tax commission shall direct the taxing district to reduce its property tax budget for any year in which the forgone moneys were used to calculate a budget increase, in an amount equal to the forgone moneys budgeted plus any increases attributed to the forgone moneys improperly included in the taxing district’s property tax budget. For the purpose of this paragraph, a capital project includes:
1. The construction, expansion, renovation, or replacement of public facilities, including the acquisition of land and other site improvements;
2. The construction, expansion, or reconstruction of public works improvements, including roads, bridges, water systems, sewer systems, and broadband systems; and
3. The purchase of equipment with a useful life of ten (10) years or more.
(f) If a taxing district elects to budget less than the maximum allowable increase in the dollar amount of property taxes, the taxing district may reserve the right to recover all or any portion of that year’s forgone increase in a subsequent year by adoption of a resolution specifying the dollar amount of property taxes being reserved. Otherwise, that year’s forgone increase may not be recovered under paragraph (e) of this subsection. The district must provide notice of its intent to do so and hold a public hearing that may be in conjunction with its annual budget hearing, if applicable. The resolution to reserve the right to recover the forgone increase for that year shall be adopted at the annual budget hearing of the taxing district if the district has a budget hearing requirement.
(g) In the case of cities, if the immediately preceding year’s levy subject to the limitation provided by this section is less than 0.004, the city may increase its budget by an amount not to exceed the difference between 0.004 and the actual prior year’s levy multiplied by the prior year’s market value for assessment purposes. The additional amount must be approved by sixty percent (60%) of the voters voting on the question at an election called for that purpose and held on the date in May or November provided by law and may be included in the annual budget of the city for purposes of this section.
(h) A taxing district may submit to the electors within the district the question of whether the budget from property tax revenues may be increased beyond the amount authorized in this section, but not beyond the levy authorized by statute. The additional amount must be approved by sixty-six and two-thirds percent (66 2/3%) or more of the voters voting on the question at an election called for that purpose and held on the May or November dates provided by section 34-106, Idaho Code. If approved by the required minimum sixty-six and two-thirds percent (66 2/3%) of the voters voting at the election, the new budget amount shall be the base budget for the purposes of this section.
(i) When a nonschool district consolidates with another nonschool district or dissolves and a new district performing similar governmental functions as the dissolved district forms with the same boundaries within three (3) years, the maximum amount of a budget of the district from property tax revenues shall not be greater than the sum of the amounts that would have been authorized by this section for the district itself or for the districts that were consolidated or dissolved and incorporated into a new district.
(j) This section does not apply to cooperative service agency levies imposed in sections 33-317 and 33-317A, Idaho Code.
(k) The amount of money received in the twelve (12) months immediately preceding June 30 of the current tax year as a result of distributions of the tax provided in section 63-3502B(2), Idaho Code.
(2) In the case of fire districts, during the year immediately following the election of a public utility or public utilities to consent to be provided fire protection pursuant to section 31-1425, Idaho Code, the maximum amount of property tax revenues permitted in subsection (1) of this section may be increased by an amount equal to the current year’s taxable value of the consenting public utility or public utilities multiplied by that portion of the prior year’s levy subject to the limitation provided by subsection (1) of this section.
(3) No board of county commissioners shall set a levy, nor shall the state tax commission approve a levy for annual budget purposes, which exceeds the limitation imposed in subsection (1) of this section unless authority to exceed such limitation has been approved by a majority of the taxing district’s electors voting on the question at an election called for that purpose and held pursuant to section 34-106, Idaho Code, provided however, that such voter approval shall be for a period of not to exceed two (2) years.
(4) The amount of property tax revenues to finance an annual budget does not include revenues from nonproperty tax sources and does not include revenue from levies for the payment of judicially confirmed obligations pursuant to sections 63-1315 and 63-1316, Idaho Code, and revenue from levies that are voter-approved for bonds, override levies or supplemental levies, plant facilities reserve fund levies, school emergency fund levies, or for levies applicable to newly annexed property or for levies applicable to new construction as evidenced by the value of property subject to the occupancy tax pursuant to section 63-317, Idaho Code, for the preceding tax year. The amount of property tax revenues to finance an annual budget does not include any property taxes that were collected and refunded on property that is exempt from taxation, pursuant to section 63-1305C, Idaho Code.
(5) The amount of property tax revenues to finance an annual budget shall include moneys received as recovery of property tax for a revoked provisional property tax exemption under section 63-1305C, Idaho Code.
(6) For tax year 2023, before calculating the amount required in subsection (1)(a)(i) of this section, the board of county commissioners shall reduce the approved property tax levy portion of its budget for the immediate prior three (3) years in an amount equal to the amount levied for indigent public defense. The reduced budget amount shall be the base budget for the purpose of subsection (1)(a)(i) of this section.
[63-802, added 2012, ch. 339, sec. 12, p. 941; am. 2015, ch. 10, sec. 2, p. 14; am. 2016, ch. 69, sec. 2, p. 243; am. 2016, ch. 189, sec. 4, p. 515; am. 2017, ch. 148, sec. 1, p. 366; am. 2018, ch. 194, sec. 4, p. 434; am. 2019, ch. 205, sec. 5, p. 628; am. 2020, ch. 41, sec. 1, p. 92; am. 2021, ch. 360, sec. 7, p. 1118; am. 2022, ch. 8, sec. 1, p. 20; am. 2022, ch. 318, sec. 54, p. 1026.]