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LEGISLATURE
OF
THE
STATE
OF
IDAHO
Sixty-eighth
Legislature
Second
Regular
Session
-
2026
IN
THE
HOUSE
OF
REPRESENTATIVES
HOUSE
BILL
NO.
842
BY
REVENUE
AND
TAXATION
COMMITTEE
AN
ACT
1
RELATING
TO
BUDGET
LIMITS;
AMENDING
SECTION
63
-
802,
IDAHO
CODE,
TO
REVISE
2
PROVISIONS
REGARDING
LIMITATIONS
ON
BUDGET
REQUESTS
AND
EXCEPTIONS;
3
AMENDING
SECTION
31
-
1423,
IDAHO
CODE,
TO
PROVIDE
A
CORRECT
CODE
REFER
-
4
ENCE;
PROVIDING
SEVERABILITY;
AND
DECLARING
AN
EMERGENCY
AND
PROVIDING
5
RETROACTIVE
APPLICATION.
6
Be
It
Enacted
by
the
Legislature
of
the
State
of
Idaho:
7
SECTION
1.
That
Section
63
-
802,
Idaho
Code,
be,
and
the
same
is
hereby
8
amended
to
read
as
follows:
9
63
-
802.
LIMITATION
ON
BUDGET
REQUESTS
-
-
LIMITATION
ON
TAX
CHARGES
-
-
10
EXCEPTIONS.
(1)
Except
as
otherwise
provided
in
this
section,
no
taxing
dis
-
1
1
trict
shall
certify
a
budget
request
for
an
amount
of
property
tax
revenues
12
to
finance
an
annual
budget
that
exceeds
the
maximum
sum
permitted
under
this
13
section:
14
(a)(i)
The
highest
dollar
amount
of
property
taxes
certified
for
15
its
annual
budget
for
any
one
(1)
of
the
three
(3)
tax
years
preced
-
16
ing
the
current
tax
year,
which
amount
may
be
increased
by
a
growth
17
factor
of
not
to
exceed
three
percent
(3%)
plus
the
amount
of
rev
-
18
enue
calculated
as
described
in
this
subsection.
The
taxing
dis
-
19
trict
shall
determine
what
portion
of
the
three
percent
(3%)
in
-
20
crease
permitted
under
this
subparagraph
that
it
requires
and
then
21
calculate
a
preliminary
levy
rate
based
on
the
percent
chosen.
In
22
calculating
the
preliminary
levy
rate,
the
most
current
taxable
23
market
value
shall
be
used,
except
that
for
taxable
market
values
24
of
centrally
assessed
operating
property,
the
prior
year's
val
-
25
uation
may
be
used
instead
of
the
current
year's
taxable
market
26
values.
The
preliminary
previous
year's
levy
rate
shall
be
multi
-
27
plied
by
the
value
shown
on
the
new
construction
roll
compiled
pur
-
28
suant
to
section
63
-
301A,
Idaho
Code,
and
by
ninety
percent
(90%)
29
of
the
value
of
annexation
during
the
previous
calendar
year,
as
30
certified
by
the
state
tax
commission
for
taxable
market
values
of
31
operating
property
of
public
utilities
and
by
the
county
assessor;
32
except
for
a
fire
protection
district
annexing
property
prior
to
33
July
1,
2021,
pursuant
to
section
31
-
1429,
Idaho
Code,
the
new
levy
34
rate
shall
be
multiplied
by
one
hundred
percent
(100%)
of
the
value
35
of
any
such
property
annexed
prior
to
July
1,
2021.
36
(ii)
The
Except
as
provided
in
this
subparagraph,
the
total
budget
37
increase
calculated
under
this
paragraph
must
not
exceed
eight
38
percent
(8%)
,
except
.
For
cities
with
a
population
of
fewer
than
39
thirty
thousand
(30,000)
people
as
shown
in
the
most
recent
annual
40
population
estimate
reported
by
the
United
States
census
bureau,
41
and
any
fire
protection
district
or
ambulance
service
district
42
2
providing
service
to
such
a
city,
the
total
budget
increase
calcu
-
1
lated
under
this
paragraph
must
not
exceed
fifteen
percent
(15%).
2
Provided,
however,
that
any
increase
in
the
amount
of
property
tax
3
revenue
to
finance
an
annual
budget
added
as
a
result
of
the
termi
-
4
nation,
deannexation,
plan
modification
of,
or
the
withdrawal
of
5
certain
taxing
districts
from,
a
revenue
allocation
area
of
an
ur
-
6
ban
renewal
district
pursuant
to
section
63
-
301A(3)(f),
(i),
(j),
7
or
(k),
Idaho
Code,
or
section
50
-
2908(1)(g),
Idaho
Code,
shall
8
not
be
subject
to
such
limitation.
9
(iii)
Following
the
first
year
in
which
a
fire
protection
district
10
has
annexed
city
property
pursuant
to
section
31
-
1429,
Idaho
Code,
1
1
the
city
shall
subtract
an
amount
equal
to
the
moneys
spent
on
fire
12
protection
services
during
the
last
full
year
the
city
provided
13
fire
protection
services
to
its
residents
from
its
budget
limita
-
14
tion
under
this
section.
15
(b)
If
the
taxing
district
has
not
imposed
a
levy
for
three
(3)
or
more
16
years,
the
highest
dollar
amount
of
property
taxes
certified
for
its
an
-
17
nual
budget
for
the
purpose
of
paragraph
(a)(i)
of
this
subsection
shall
18
be
the
dollar
amount
of
property
taxes
certified
for
its
annual
budget
19
during
the
last
year
in
which
a
levy
was
made.
20
(c)
The
dollar
amount
of
the
actual
budget
request
may
be
substituted
21
for
the
amount
in
paragraph
(a)
of
this
subsection
if
the
taxing
dis
-
22
trict
is
newly
created,
except
as
may
be
provided
in
paragraph
(i)
of
23
this
subsection.
24
(d)
This
section
does
not
apply
to
school
district
levies
imposed
in
25
section
33
-
802,
Idaho
Code.
26
(e)(i)
In
the
case
of
a
nonschool
district
for
which
less
than
the
27
maximum
allowable
increase
in
the
dollar
amount
of
property
taxes
28
is
certified
for
annual
budget
purposes
in
any
one
(1)
year
prior
29
to
property
tax
year
2026
,
such
a
district
may,
in
any
following
30
year,
recover
the
forgone
increase
by
certifying,
in
addition
to
31
any
increase
otherwise
allowed,
any
or
all
of
the
increase
origi
-
32
nally
forgone.
Provided
however,
that
prior
to
budgeting
any
for
-
33
gone
increase,
the
district
must
provide
notice
of
its
intent
to
do
34
so,
hold
a
public
hearing
that
may
be
in
conjunction
with
its
an
-
35
nual
budget
hearing,
and
certify
by
resolution
the
amount
of
for
-
36
gone
increase
to
be
budgeted
and
the
specific
purpose
for
which
the
37
forgone
increase
is
being
budgeted.
Upon
adoption
of
the
resolu
-
38
tion,
the
clerk
of
the
district
shall
file
a
copy
of
the
resolu
-
39
tion
with
the
county
clerk
and
the
state
tax
commission.
Said
ad
-
40
ditional
amount
shall
be
included
in
future
calculations
for
in
-
41
creases
as
allowed,
except
as
provided
in
subparagraph
(iii)
of
42
this
paragraph.
43
(ii)
If
the
forgone
increase
is
budgeted
for
the
purpose
of
main
-
44
tenance
and
operations,
the
rate
of
recovering
the
reserved
for
-
45
gone
moneys
may
increase
the
taxing
district's
budget
by
no
more
46
than
one
percent
(1%)
two
percent
(2%)
per
year.
47
(iii)
If
the
forgone
increase
is
budgeted
for
a
capital
project
or
48
projects,
the
rate
of
recovering
the
reserved
forgone
moneys
may
49
not
exceed
three
percent
(3%)
of
the
taxing
district's
budget
for
50
3
the
year
in
which
the
forgone
increase
is
budgeted.
Forgone
moneys
1
budgeted
for
a
capital
project
must
be
deducted
from
the
taxing
2
district's
forgone
balance
in
the
year
in
which
it
is
budgeted.
3
Upon
completion
of
such
a
capital
project,
the
taxing
district
4
shall
certify
such
completion
to
the
state
tax
commission
and
5
county
clerk.
If,
upon
certification,
the
state
tax
commission
6
finds
that
the
taxing
district
included
forgone
moneys
for
a
capi
-
7
tal
project
in
calculating
the
increase
permitted
under
paragraph
8
(a)
of
this
subsection,
the
state
tax
commission
shall
direct
the
9
taxing
district
to
reduce
its
property
tax
budget
for
any
year
10
in
which
the
forgone
moneys
were
used
to
calculate
a
budget
in
-
1
1
crease,
in
an
amount
equal
to
the
forgone
moneys
budgeted
plus
any
12
increases
attributed
to
the
forgone
moneys
improperly
included
in
13
the
taxing
district's
property
tax
budget.
For
the
purpose
of
this
14
paragraph,
a
capital
project
includes:
15
1.
The
construction,
expansion,
renovation,
or
replacement
16
of
public
facilities,
including
the
acquisition
of
land
and
17
other
site
improvements;
18
2.
The
construction,
expansion,
or
reconstruction
of
public
19
works
improvements,
including
roads,
bridges,
water
sys
-
20
tems,
sewer
systems,
and
broadband
systems;
and
21
3.
The
purchase
of
equipment
with
a
useful
life
of
ten
(10)
22
years
or
more.
23
(f)
If
a
taxing
district
elects
to
budget
less
than
the
maximum
allow
-
24
able
increase
in
the
dollar
amount
of
property
taxes
for
any
property
25
tax
year
prior
to
2026
,
the
taxing
district
may
reserve
the
right
to
re
-
26
cover
all
or
any
portion
of
that
year's
forgone
increase
in
a
subsequent
27
year
by
adoption
of
a
resolution
specifying
the
dollar
amount
of
prop
-
28
erty
taxes
being
reserved.
Otherwise,
that
year's
forgone
increase
may
29
not
be
recovered
under
paragraph
(e)
of
this
subsection.
The
district
30
must
provide
notice
of
its
intent
to
do
so
and
hold
a
public
hearing
that
31
may
be
in
conjunction
with
its
annual
budget
hearing,
if
applicable.
32
The
resolution
to
reserve
the
right
to
recover
the
forgone
increase
for
33
that
year
shall
be
adopted
at
the
annual
budget
hearing
of
the
taxing
34
district
if
the
district
has
a
budget
hearing
requirement.
35
(g)
In
the
case
of
cities,
if
the
immediately
preceding
year's
levy
sub
-
36
ject
to
the
limitation
provided
by
this
section
is
less
than
0.004,
the
37
city
may
increase
its
budget
by
an
amount
not
to
exceed
the
difference
38
between
0.004
and
the
actual
prior
year's
levy
multiplied
by
the
prior
39
year's
market
value
for
assessment
purposes.
The
additional
amount
40
must
be
approved
by
sixty
percent
(60%)
of
the
voters
voting
on
the
ques
-
41
tion
at
an
election
called
for
that
purpose
and
held
on
the
date
in
May
or
42
November
provided
by
law
and
may
be
included
in
the
annual
budget
of
the
43
city
for
purposes
of
this
section.
44
(h)
A
taxing
district
may
submit
to
the
electors
within
the
district
45
the
question
of
whether
the
budget
from
property
tax
revenues
may
be
46
increased
beyond
the
amount
authorized
in
this
section,
but
not
beyond
47
the
levy
authorized
by
statute.
The
additional
amount
must
be
approved
48
by
sixty
-
six
and
two
-
thirds
percent
(66
2/3%)
or
more
of
the
voters
49
voting
on
the
question
at
an
election
called
for
that
purpose
and
held
50
4
on
the
May
or
November
dates
provided
by
section
34
-
106,
Idaho
Code.
1
If
approved
by
the
required
minimum
sixty
-
six
and
two
-
thirds
percent
2
(66
2/3%)
of
the
voters
voting
at
the
election,
the
new
budget
amount
3
shall
be
the
base
budget
for
the
purposes
of
this
section.
4
(i)
When
a
nonschool
district
consolidates
with
another
nonschool
5
district
or
dissolves
and
a
new
district
performing
similar
governmen
-
6
tal
functions
as
the
dissolved
district
forms
with
the
same
boundaries
7
within
three
(3)
years,
the
maximum
amount
of
a
budget
of
the
district
8
from
property
tax
revenues
shall
not
be
greater
than
the
sum
of
the
9
amounts
that
would
have
been
authorized
by
this
section
for
the
district
10
itself
or
for
the
districts
that
were
consolidated
or
dissolved
and
in
-
1
1
corporated
into
a
new
district.
12
(j)
This
section
does
not
apply
to
cooperative
service
agency
levies
13
imposed
in
sections
33
-
317
and
33
-
317A,
Idaho
Code.
14
(k)
The
amount
of
money
received
in
the
twelve
(12)
months
immediately
15
preceding
June
30
of
the
current
tax
year
as
a
result
of
distributions
of
16
the
tax
provided
in
section
63
-
3502B(2),
Idaho
Code.
17
(2)
In
the
case
of
fire
districts,
during
the
year
immediately
follow
-
18
ing
the
election
of
a
public
utility
or
public
utilities
to
consent
to
be
pro
-
19
vided
fire
protection
pursuant
to
section
31
-
1425,
Idaho
Code,
the
maximum
20
amount
of
property
tax
revenues
permitted
in
subsection
(1)
of
this
section
21
may
be
increased
by
an
amount
equal
to
the
current
year's
taxable
value
of
the
22
consenting
public
utility
or
public
utilities
multiplied
by
that
portion
of
23
the
prior
year's
levy
subject
to
the
limitation
provided
by
subsection
(1)
of
24
this
section.
25
(3)
No
board
of
county
commissioners
shall
set
a
levy,
nor
shall
the
26
state
tax
commission
approve
a
levy
for
annual
budget
purposes,
which
ex
-
27
ceeds
the
limitation
imposed
in
subsection
(1)
of
this
section
unless
au
-
28
thority
to
exceed
such
limitation
has
been
approved
by
a
majority
of
the
tax
-
29
ing
district's
electors
voting
on
the
question
at
an
election
called
for
that
30
purpose
and
held
pursuant
to
section
34
-
106,
Idaho
Code,
provided
however,
31
that
such
voter
approval
shall
be
for
a
period
of
not
to
exceed
two
(2)
years.
32
(4)
The
amount
of
property
tax
revenues
to
finance
an
annual
budget
does
33
not
include
revenues
from
nonproperty
tax
sources
and
does
not
include
rev
-
34
enue
from
levies
for
the
payment
of
judicially
confirmed
obligations
pur
-
35
suant
to
sections
63
-
1315
and
63
-
1316,
Idaho
Code,
and
revenue
from
levies
36
that
are
voter
-
approved
for
bonds,
override
levies
or
supplemental
levies,
37
plant
facilities
reserve
fund
levies,
school
emergency
fund
levies,
or
for
38
levies
applicable
to
newly
annexed
property
or
for
levies
applicable
to
new
39
construction
as
evidenced
by
the
value
of
property
subject
to
the
occupancy
40
tax
pursuant
to
section
63
-
317,
Idaho
Code,
for
the
preceding
tax
year.
The
41
amount
of
property
tax
revenues
to
finance
an
annual
budget
does
not
include
42
any
property
taxes
that
were
collected
and
refunded
on
property
that
is
ex
-
43
empt
from
taxation,
pursuant
to
section
63
-
1305C,
Idaho
Code.
44
(5)
The
amount
of
property
tax
revenues
to
finance
an
annual
budget
45
shall
include
moneys
received
as
recovery
of
property
tax
for
a
revoked
pro
-
46
visional
property
tax
exemption
under
section
63
-
1305C,
Idaho
Code.
47
(6)
For
tax
year
2023,
before
calculating
the
amount
required
in
sub
-
48
section
(1)(a)(i)
of
this
section,
the
board
of
county
commissioners
shall
49
reduce
the
approved
property
tax
levy
portion
of
its
budget
for
the
immedi
-
50
5
ate
prior
three
(3)
years
in
an
amount
equal
to
the
amount
levied
for
indigent
1
public
defense.
The
reduced
budget
amount
shall
be
the
base
budget
for
the
2
purpose
of
subsection
(1)(a)(i)
of
this
section.
3
(7)(a)
Notwithstanding
any
other
provision
of
this
section,
the
elec
-
4
tors
of
cities
may,
if
approved
by
the
same
percentage
vote
required
for
5
passage
of
a
budget
increase
pursuant
to
subsection
(1)(g)
of
this
sec
-
6
tion,
approve
a
reduction
in
the
base
budget
of
such
city
through
the
7
initiative
process
set
forth
in
section
34
-
1801B,
Idaho
Code.
8
(b)
Notwithstanding
any
other
provision
of
this
section,
the
electors
9
of
counties
may,
if
approved
by
the
same
percentage
vote
required
for
10
passage
of
a
budget
increase
pursuant
to
subsection
(1)(h)
of
this
sec
-
1
1
tion,
approve
a
reduction
in
the
base
budget
of
such
county
through
the
12
initiative
process
set
forth
in
section
34
-
1801C,
Idaho
Code.
13
(c)
An
initiative
measure
approved
pursuant
to
this
subsection
shall
14
specify
the
dollar
amount
or
percentage
by
which
the
base
budget
shall
15
be
reduced.
The
reduced
base
budget
shall
apply
to
the
next
city
or
16
county
budget
required
to
be
certified
pursuant
to
section
63
-
803,
17
Idaho
Code,
following
the
voter
approval
of
the
initiative
and
shall
18
thereafter
constitute
the
base
budget
for
purposes
of
calculating
al
-
19
lowable
increases
under
this
section.
For
purposes
of
this
subsection,
20
"base
budget"
means
the
highest
dollar
amount
of
property
taxes
from
21
which
a
city
or
county
begins
calculating
its
allowable
annual
budget
22
pursuant
to
subsection
(1)
of
this
section,
prior
to
applying
the
growth
23
factor
or
any
other
additions
in
such
subsection.
24
SECTION
2.
That
Section
31
-
1423,
Idaho
Code,
be,
and
the
same
is
hereby
25
amended
to
read
as
follows:
26
31
-
1423.
LEVY
-
-
RECOMMENDED
LEVY
-
-
ELECTION.
(1)
Each
year,
immedi
-
27
ately
prior
to
the
annual
county
levy
of
taxes,
the
board
of
commissioners
28
of
each
fire
protection
district,
organized
and
existing
under
this
chapter,
29
may
levy
a
tax
upon
all
the
taxable
property
within
the
boundaries
of
such
30
district
sufficient
to
defray
the
cost
of
equipping
and
maintaining
the
dis
-
31
trict
of
twenty
-
four
hundredths
percent
(.24%)
of
market
value
for
assess
-
32
ment
purposes,
to
be
used
for
the
purposes
of
this
chapter
and
for
no
other
33
purpose.
The
levy
shall
be
made
by
resolution
entered
upon
the
minutes
of
the
34
board
of
commissioners
of
the
fire
protection
district,
and
it
shall
be
the
35
duty
of
the
secretary
of
the
district,
immediately
after
entry
of
the
resolu
-
36
tion
in
the
minutes,
to
transmit
to
the
county
auditor
and
the
county
asses
-
37
sor
certified
copies
of
the
resolution
providing
for
such
levy.
Said
taxes
38
shall
be
collected
as
provided
by
section
63
-
812,
Idaho
Code.
39
(2)
If
two
(2)
or
more
fire
protection
districts
consolidate
into
one
40
(1)
district,
the
provisions
of
section
63
-
802,
Idaho
Code,
shall
apply
to
41
the
consolidated
district's
budget
request.
In
addition,
the
consolidated
42
district
shall
receive
the
benefit
of
foregone
increases
accumulated
by
the
43
former
districts
under
section
63
-
802(1)(a)
63
-
802
,
Idaho
Code.
44
SECTION
3.
SEVERABILITY.
The
provisions
of
this
act
are
hereby
declared
45
to
be
severable
and
if
any
provision
of
this
act
or
the
application
of
such
46
provision
to
any
person
or
circumstance
is
declared
invalid
for
any
reason,
47
6
such
declaration
shall
not
affect
the
validity
of
the
remaining
portions
of
1
this
act.
2
SECTION
4.
An
emergency
existing
therefor,
which
emergency
is
hereby
3
declared
to
exist,
this
act
shall
be
in
full
force
and
effect
on
and
after
its
4
passage
and
approval,
and
retroactively
to
January
1,
2026.
5