Idaho Administrative Code
Title IDAPA 35 - Tax Commission, State
Rule 35.01.03 - PROPERTY TAX ADMINISTRATIVE RULES
Section 35.01.03.804 - TAX LEVY - CERTIFICATION - URBAN RENEWAL DISTRICTS
Universal Citation: ID Admin Code 35.01.03.804
Current through August 31, 2023
Sections 50-2908, 50-2033, 50-1903, 50-2903A, 50-2905A, 50-2913, 63-803, 63-811, Idaho Code
01. Definitions. (3-31-22)
a. "Urban renewal district." An urban renewal
district, as referred to in Section
63-215, Idaho Code, shall mean an
urban renewal area formed pursuant to an urban renewal plan adopted in
accordance with Section
502008, Idaho Code. Urban
renewal districts are not taxing districts. (3-31-22)
b. "Revenue allocation area (RAA)." A revenue
allocation area (RAA) as referred to in Section
502908, Idaho Code, shall be the
area defined in Section
50-2903, Idaho Code, in which base
and increment values are to be determined. A new urban renewal plan is required
when an urban renewal agency establishes a new RAA. Revenue allocation areas
(RAAs) are not taxing districts. (3-31-22)
c. "Current base value." Current base value
does not include value found on the occupancy roll. Current base value includes
the previous year's non-prorated value of current taxable property subject to
assessment under Sections
63-602Y and
63-313, Idaho Code during the year
the initial base value was established. (3-31-22)
d. "Initial base value." The initial base
value for each parcel is the sum of the taxable value of each category of
property in the parcel for the year the RAA is established. In the case of
annexation to an RAA, initial base value of each annexed parcel shall be the
value of that parcel as of January 1 of the year in which the annexation takes
place. The initial base value includes any prorated value added for property
subject to Sections
63-602Y and
63-313, Idaho Code.
(3-31-22)
e. "Increment value." The
increment value is the difference between the current equalized value of each
parcel of taxable property in the RAA and that parcel's current base value,
provided such difference is a positive value. Newly constructed improvements
with value listed on the occupancy roll within a newly formed RAA or within an
area newly annexed to an existing RAA will be added as increment value in the
year following the year of formation or annexation. (3-31-22)
f. "Revenue allocation financing provision."
A revenue allocation area (RAA) shall be considered to be a revenue allocation
financing provision. (3-31-22)
02. Establishing and Adjusting Base and Increment Values. (3-31-22)
a.
Establishing initial base value. If a parcel's legal description has changed
prior to computing initial base year value, the value that best reflects the
prior year's taxable value of the parcel's current legal description must be
determined and will constitute the initial base year value for such parcel. The
initial base value includes the taxable value, as of the effective date of the
ordinance adopting the urban renewal plan, of all otherwise taxable property,
as defined in Section
50-2903, Idaho Code. Initial base
value does not include value found on the occupancy roll. (3-31-22)
b. Adjustments to base value - general value
changes. Adjustments to base values will be calculated on a parcel by parcel
basis, each parcel being a unit and the total value of the unit being used in
the calculation of any adjustment. Base values are to be adjusted downward when
the current taxable value of any parcel in the RAA is less than the most recent
base value for such parcel. In the case of parcels containing some categories
of property which increase in value and some which decrease, the base value for
the parcel will only decrease provided the sum of the changes in category
values results in a decrease in total parcel value. Any adjustments shall be
made by category and may result in increases or decreases to base values for
given categories of property for any parcel. Adjustments to base values for any
real, personal, or operating property shall establish new base values from
which future adjustments may be made. In the following examples the parcel's
initial base value is one hundred thousand dollars ($100,000), including
Category 21 value of twenty thousand dollars ($20,000) and Category 42 value of
eighty thousand dollars ($80,000). (3-31-22)
i. Case 1: Offsetting decreases and increases
in value. One (1) year later the parcel has a one thousand dollar ($1,000)
decrease in value in Category 21 and a one thousand dollar ($1,000) increase in
Category 42 value. There is no change in the base value for the parcel.
(3-31-22)
ii. Case 2: Partially
offsetting decreases and increases in value. One (1) year later the parcel has
a three thousand dollars ($3,000) decrease in value in Category 21 and a one
thousand dollars ($1,000) increase in Category 42 value. The base value
decreases two thousand dollars ($2,000) to ninety-eight thousand dollars
($98,000). (3-31-22)
iii. Case 3:
Future increase in value following decreases. One (1) year after the parcel in
Case 2 has a base value reduced to ninety-eight thousand dollars ($98,000), the
value of the parcel increases by five thousand dollars ($5,000) which is the
net of category changes. The base value remains at ninety-eight thousand
dollars ($98,000). (3-31-22)
c. Adjustments to base value - splits and
combinations. Before other adjustments can be made, the most recent base value
must be adjusted to reflect changes in each parcel's legal description. This
adjustment shall be calculated as described in the following subsections.
(3-31-22)
i. When a parcel has been split, the
most recent base year value is transferred to the new parcels, making sure that
the new total equals the most recent base year value. Proportions used to
determine the amount of base value assigned to each of the new parcels shall be
based on the value of the new parcels had they existed in the year preceding
the year for which the value of the new parcels is first established.
(3-31-22)
ii. When a parcel has
been combined with another parcel, the most recent base year values are added
together. (3-31-22)
iii. When a
parcel has been split and combined with another parcel in the same year, the
value of the split shall be calculated as set forth in Subparagraph 804.02.c.i.
and then the value of the combination will be calculated as set forth in
Subparagraph 804.02.c.ii. (3-31-22)
d. Adjustments to base values when exempt
parcels become taxable. Base values shall be adjusted as described in the
following subsections. (3-31-22)
i. Fully
exempt parcels at time of RAA establishment. When a parcel that was exempt at
the time the RAA was established becomes taxable, the base value is to be
adjusted upwards to reflect the estimated value of the formerly exempt parcel
as it existed at the time the RAA was established. (3-31-22)
ii. Partially exempt parcels losing the
speculative value exemption. When a partially exempt parcel with a speculative
value exemption that applies to farmland within the RAA becomes fully taxable,
the base value of the RAA shall be adjusted upwards by the difference between
the taxable value of the parcel for the year in which the exemption is lost and
the taxable value of the parcel included in the base value of the RAA. For
example, assume a parcel of farmland within an RAA had a taxable value of five
hundred dollars ($500) in the year the RAA base value was established. Assume
also that this parcel had a speculative value exemption of two thousand dollars
($2,000) at that time. Two (2) years later the parcel is reclassified as
industrial land, loses the speculative value exemption, and has a current
taxable value of fifty thousand dollars ($50,000). The base value within the
RAA would be adjusted upwards by forty-nine thousand five hundred dollars
($49,500), the difference between fifty thousand dollars ($50,000) and five
hundred ($500). The preceding example applies only in cases of loss of the
speculative value exemption that applies to land actively devoted to
agriculture and does not apply to timberland. Site improvements, such as roads
and utilities, that become taxable after the loss of the speculative value
exemption are not to be added to the base value. For example, if, in addition
to the fifty thousand dollars ($50,000) current taxable value of the
undeveloped land, site improvements valued at twenty-five thousand dollars
($25,000) are added, the amount reflected in the base value remains fifty
thousand dollars ($50,000), and the additional twenty-five thousand dollars
($25,000) is added to the increment value. In addition, this example applies
only to land that loses the speculative value exemption as a result of changes
occurring in 2010 or later and first affecting taxable values in 2011 or later.
Parcels that lost speculative value exemptions prior to 2010 had base value
adjustments as described in Subparagraph 804.02.d.iii. of this rule.
(3-31-22)
iii. Partially exempt
parcels other than those losing the speculative value exemption. Except as
provided in Subparagraph 804.02.d.vi. of this rule, when a partially exempt
parcel, other than one subject to the speculative value exemption that applies
to farmland, within the RAA becomes fully taxable, the base value of the RAA
shall be adjusted upwards by the difference between the value that would have
been assessed had the parcel been fully taxable in the year the RAA was
established and the taxable value of the parcel included in the base value of
the RAA. For example, assume a residential parcel within an RAA had a market
value of one hundred thousand dollars ($100,000), a homeowner's exemption of
fifty thousand dollars ($50,000), and a taxable value of fifty thousand dollars
($50,000) in the year the RAA base value was established. After five (5) years,
this parcel is no longer used for owner-occupied residential purposes and loses
its partial exemption. At that time the parcel has a taxable value of one
hundred eighty thousand dollars ($180,000). The base value within the RAA would
be adjusted upwards by fifty thousand dollars ($50,000) to one hundred thousand
($100,000) to reflect the loss of the homeowner's exemption, but not any other
value increases. (3-31-22)
iv.
Partially exempt properties for which the amount of the partial exemption
changes. For partially exempt properties that do not lose an exemption, but for
which the amount of the exemption changes, there shall be no adjustment to the
base value, unless the current taxable value is less than the most recent base
value for the property. For example, assume a home has a market value of two
hundred thousand dollars ($200,000) and a homeowner's exemption of one hundred
thousand dollars ($100,000), leaving a taxable value of one hundred thousand
dollars ($100,000), all of which is base value. The following year the
homeowner's exemption limit changes to ninety thousand dollars ($90,000), so
the property's taxable value increases to one hundred ten thousand dollars
($110,000). The base value remains at one hundred thousand dollars ($100,000).
Alternatively, assume the property in the preceding example increases in market
value to two hundred twenty thousand dollars ($220,000) and the homeowner's
exemption drops to ninety thousand dollars ($90,000) because of the change in
the maximum amount of this exemption. The base value remains at one hundred
thousand dollars ($100,000). Finally, assume the property decreases in value to
one hundred eighty-eight thousand dollars ($188,000) at the same time the
homeowner's exemption limit changes to ninety thousand dollars ($90,000). The
property now has a taxable value of ninety-eight thousand dollars ($98,000),
requiring an adjustment in the base value to match this amount, since it is
lower than the original base value of one hundred thousand dollars ($100,000).
(3-31-22)
v. Change of exempt
status. Except as provided in Subparagraph 804.02.d.vi. of this rule, when a
parcel that is taxable and included in the base value at the time the RAA is
established subsequently becomes exempt, the base value is reduced by the most
current value of the parcel included in the base value. If this parcel
subsequently becomes taxable, the base value is to be adjusted upward by the
same amount that was originally subtracted. For example, assume a land parcel
had a base value of twenty thousand dollars ($20,000). One (1) year later the
parcel has a value of nineteen thousand dollars ($19,000), so the base value is
reduced to nineteen thousand dollars ($19,000). Three (3) years later, an
improvement valued at one hundred thousand dollars ($100,000) was added. The
land at this later date had a value of thirty thousand dollars ($30,000). Both
land and improvements were purchased by an exempt entity. The base would be
reduced by nineteen thousand dollars ($19,000). Five (5) years later, the land
and improvement becomes taxable. The base value is to be adjusted upwards by
nineteen thousand dollars ($19,000). (3-31-22)
vi. Special case for exemption provided in
Section 63-602NN, Idaho Code. Upon loss of
the exemption, any newly taxable value in excess of the taxable value of the
property in the year immediately preceding the first year of the exemption is
to be added to the increment value provided the property was within an RAA when
the exemption was granted and remains within the RAA at the time the exemption
expires. If the parcel was annexed to an RAA during the period of the
exemption, the value that would have been added to the base value at the time
of annexation had the property not received the exemption would be added to the
base at the time the exemption expires, while any remaining taxable value would
be added to the increment. If the exemption has been granted in part, the
adjustments provided in this subparagraph shall only apply to the portion of
the property granted the exemption. (3-31-22)
e. Adjustments to base values when property
is removed. Base values are to be adjusted downward for real, personal, and
operating property removed from the RAA. Property shall be considered removed
only under the conditions described in the following subsections. (3-31-22)
i. For real property, all of the improvement
is physically removed from the RAA, provided that there is no replacement of
said improvement during the year the original improvement was removed. If said
improvement is replaced during the year of removal, the reduction in base value
will be calculated by subtracting the value of the new improvement from the
current base value of the original improvement, provided that such reduction is
not less than zero (0). (3-31-22)
ii. For personal property, all of the
personal property associated with one (1) parcel is physically removed from the
RAA or any of the personal property associated with a parcel becomes exempt. In
the case of exemption applying to personal property, the downward adjustment
will first be applied to the increment value and then, if the remaining taxable
value of the parcel is less than the most current base value, to the base
value. Assume, for example that a parcel consists entirely of personal property
with a base value of twenty thousand dollars ($20,000) and an increment value
of ninety thousand dollars ($90,000). The next year the property receives a one
hundred thousand ($100,000) personal property exemption. The increment value is
reduced to zero and the base value is reduced to ten thousand dollars
($10,000). (3-31-22)
iii. For
operating property, any of the property under a given ownership is removed from
the RAA. (3-31-22)
f.
Adjustments to base value for annexation. When property is annexed into an RAA,
the base value in the RAA shall be adjusted upwards to reflect the value of the
annexed property as of January 1 of the year in which the annexation takes
effect. As an example, assume that parcels with current taxable value of one
million dollars ($1,000,000) are annexed into an RAA with an existing base
value of two million dollars ($2,000,000). The base value of the RAA is
adjusted upwards to three million dollars ($3,000,000). (3-31-22)
g. Adjustments to increment values. In
addition to the adjustment illustrated in Subparagraph 804.02.e.ii. of this
rule, decreases in total parcel value below the initial base value decrease the
base value for the parcel. This leads to greater increment value if the parcel
increases in value in future years. For example, if a parcel with a initial
base value of one hundred thousand dollars ($100,000) decreases in value to
ninety-five thousand dollars ($95,000), but later increases to ninety-eight
thousand dollars ($98,000), an increment value of three thousand dollars
($3,000) is generated. If the same parcel increases in value to one hundred two
thousand dollars ($102,000) after the decrease to ninety-five thousand dollars
($95,000), the increment value would be seven thousand dollars ($7,000).
(3-31-22)
h. Apportioning operating
property values. For operating property, the original base value shall be
apportioned to the RAA on the same basis as is used to apportion operating
property to taxing districts and units. The operating property base value shall
be adjusted as required under Section
50-2903, Idaho Code.
(3-31-22)
03. Levy Computation for Taxing Districts Encompassing RAAs Within Urban Renewal Districts. Beginning in 2008, levies shall be computed in one (1) of two (2) ways as follows: (3-31-22)
a. For taxing
district or taxing unit funds other than those meeting the criteria listed in
Subsection 804.05 of this rule, the
property tax levy shall be computed by dividing the dollar amount certified for
the property tax portion of the budget of the fund by the market value for
assessment purposes of all taxable property within the taxing district or unit,
including the value of each parcel on the current base assessment roll (base
value), but excluding the increment value. For example, if the taxable value of
property within a taxing district or unit is one hundred million dollars
($100,000,000) but fifteen million dollars ($15,000,000) of that value is
increment value, the levy of the taxing district must be computed by dividing
the property tax portion of the district's or unit's budget by eighty-five
million dollars ($85,000,000). (3-31-22)
b. For taxing district or taxing unit funds
meeting the criteria listed in Subsections
804.05 and
804.07 of this rule, the
property tax levy shall be computed by dividing the dollar amount certified for
the property tax portion of the budget of the fund by the market value for
assessment purposes of all taxable property within the taxing district or unit,
including the increment value. Given the values in the example in Paragraph
804.03.a. of this rule, the levy would be computed by dividing the property tax
portion of the fund by one hundred million dollars ($100,000,000).
(3-31-22)
04. Modification of an Urban Renewal Plan. Except when inapplicable as described in Paragraphs 804.04.a, b, or c, of this rule, when an authorized municipality passes an ordinance modifying an urban renewal plan containing a revenue allocation financing provision, for the tax year immediately following the year in which the modification occurs, the base value of property in the RAA shall be reset by being adjusted to reflect the current taxable value of the property. All modifications to boundaries of RAAs must comply with the provisions of Rule 225 of these rules. (3-31-22)
a. Modification by
consolidation of RAAs. If such modification involves combination or
consolidation of two (2) or more RAAs, the base value shall be determined by
adding together independently determined current base values for each of the
areas to be combined or consolidated. The current taxable value of property in
an area not previously included in any RAA shall be added to determine the
total current base value for the consolidated RAA. (3-31-22)
b. Modification by annexation. (3-31-22)
i. If an RAA is modified by annexation, the
current taxable value of property in the area annexed shall be added to the
most current base value determined for the RAA prior to the annexation.
(3-31-22)
ii. For levies described
in Paragraphs 804.05.b., c., or d. of this rule approved prior to December 31,
2007, and included within the boundaries of a revenue allocation area by a
change in the boundaries of either the revenue allocation area or the area
subject to the levy by the taxing district or unit fund after December 31,
2007, the property tax levy shall be computed by dividing the dollar amount
certified for the property tax portion of the budget of the fund by the market
value for assessment purposes of all taxable property within the taxing
district or unit, including the increment value. The example below shows the
value to be used for setting levies for various funds within an urban renewal
district "A" that annexes area "B" within a school district. Area (B) was
annexed after December 31, 2007. Therefore, the Area (B) increment was added
back to the base for all funds shown except the tort fund. The Area (A)
increment value was added back to the base for the bond and override funds
which were certified or passed after December 31, 2007.
|
2009 Value Table |
School District (base only) |
$500 Million |
|
RAA (A) increment |
$40 Million |
|
|
RAA annexation (B) increment |
$10 Million |
(3-31-22)
iii. An annexation permitted pursuant to
section 50-2033, Idaho Code, to an RAA in
existence prior to July 1, 2016 shall not change the status of the urban
renewal agency or the RAA and its related plan regarding inapplicability of the
base reset or attestation provisions found in section
50-2903A, Idaho Code.
(3-31-22)
c. Other
modifications - attestation requirements. Modification resulting in adjustment
of base value to reflect the current taxable value of the property within the
RAA shall not be deemed to have occurred when the urban renewal agency attests
to having made no modifications to a plan or is not required to attest to plan
modifications. Certain urban renewal agencies are required to attest annually
to having made or not made plan modifications. These include: (3-31-22)
i. Urban renewal agencies that establish new
RAAs on or after July 1, 2016, provided however that such agencies are only
required to attest to having made or not made modifications with regard to any
new RAA. (3-31-22)
ii. Urban
renewal agencies that enact new plans including an RAA on or after July 1,
2016. (3-31-22)
d.
Modifications when there is outstanding indebtedness. When any urban renewal
agency attests to having had a plan modification that is not an exception
identified in Paragraphs 804.04.a. or b. or c. of this rule or fails to provide
the required attestation, the base value will be determined without regard to
the modification, provided that the agency certifies to the State Tax
Commission by June 30 of the tax year that there is outstanding indebtedness as
defined in Section
50-2903A(2),
Idaho Code. In this case, the allocation of revenue to the urban renewal agency
shall be limited to the amount certified as necessary to pay the indebtedness.
Any additional revenue shall be distributed to each taxing district or unit in
the same manner as property taxes. Such revenue shall be treated as property
tax revenue for the purpose of the limitations in Section
63-802, Idaho Code. The county
clerk will notify the Tax Commission of the amount so distributed for each year
beginning July 1 of the prior year and ending June 30 of the current tax year.
(3-31-22)
e. Failure to submit
attestation regarding plan modification. For any urban renewal agency subject
to the requirements of Section
50-2903A, Idaho Code, attestation
of plan modification or attestation that there has been no plan modification is
required to be made to the State Tax Commission by the first Monday of June
each year. Except as provided in Paragraph 804.04.d. of this rule, if such
agency fails to provide the required attestation, the State Tax Commission will
proceed to reset the base value or limit allocation of property tax to the
urban renewal agency as otherwise required in Section
50-2903A, Idaho Code. Provided
there is no new plan, an urban renewal agency with a plan including one or more
revenue allocation financing provisions (RAAs) in existence prior to July 1,
2016 shall only be required to provide this attestation or be subject to base
resetting or other limitations for failure to submit this attestation with
respect to new RAAs formed on or after July 1, 2016. If such an agency develops
a new plan, on or after July 1, 2016, or provides for a new RAA under an
existing plan, the agency shall be subject to the attestation requirements and
other provisions of Section
50-2903A, Idaho Code, with respect
to any RAAs formed July 1, 2016 or later. (3-31-22)
f. Notice of actions related to base reset or
revenue allocation limitations. (3-31-22)
i.
The Tax Commission will notify any urban renewal agency within thirty (30) days
of the time the Tax Commission receives an attestation that an urban renewal
plan has been modified, or by July 30 in any year in which an attestation is
required but none is received, of the Tax Commission's intent to initiate the
process to reset the base value in the following tax year. Said notice will be
provided to affected county commissioners and city officials.
(3-31-22)
ii. In the case of base
reset due to failure to attest to a modification or to having made no
modification in an urban renewal plan, despite being required to provide this
attestation, the agency and county and city officials will be so notified and
will be given an opportunity to provide the necessary attestation. This further
notice will provide that, if the Tax Commission has not received the
attestation by December 31 of the tax year, the base will be reset in the
immediate following year. (3-31-22)
iii. In the case of a revenue allocation
limitation pursuant to Section
50-2913, Idaho Code, notice will
be provided to the agency, county, and city officials including the county
assessor and county clerk, within thirty (30) days of the due date of the plan
or plan update. (3-31-22)
iv. In
the case of a revenue allocation limitation due to a plan modification but
outstanding indebtedness, notice will be provided to the agency and county and
city officials, including the county assessor and county clerk, within thirty
(30) days of receipt by the Tax Commission of the certification of the amount
needed to repay the indebtedness. (3-31-22)
v. Once decisions about base reset or revenue
allocation limitations are final, additional notice will be sent to the agency
and county and city officials, including the county assessor and county clerk,
within thirty (30) days of any such final decision. Said notice will include an
identification of the year in which the reset or revenue allocation limitation
will take effect and the amount of any revenue allocation limitation.
(3-31-22)
05. Criteria for Determining Whether Levies for Funds Are to Be Computed Using Base Value or Market Value for Assessment Purposes. Beginning in 2008, levies to be certified for taxing district or unit funds meeting the following criteria or used for any of the following purposes will be computed as described in Paragraph 804.03.b. of this rule. (3-31-22)
a. Refunds or credits pursuant to Section
63-1305, Idaho Code, and any
school district judgment pursuant to Section
33-802(1), Idaho
Code, provided the refunds, credits, or judgments were pursuant to actions
taken no earlier than January 1, 2008; (3-31-22)
b. Voter approved overrides of the limits
provided in Section
63-802, Idaho Code, provided such
overrides are for a period not to exceed two (2) years and were passed after
December 31, 2007, or earlier as provided in the criteria found in Paragraph
804.05.e.; (3-31-22)
c. Voter
approved bonds and plant facilities reserve funds passed after December 31,
2007, or earlier as provided in the criteria found in Paragraph 804.05.e.;
(3-31-22)
d. Voter approved school
or charter school district temporary supplemental maintenance and operation
levies passed after December 31, 2007; or (3-31-22)
e. Levies described in Paragraphs 804.05.b.,
c., or d. approved prior to December 31, 2007, and included within the
boundaries of a revenue allocation area by a change in the boundaries of either
the revenue allocation area or the area subject to the levy by the taxing
district or unit fund after December 31, 2007; (3-31-22)
f. Levies authorized by Section
33-317A, Idaho Code, known as the
cooperative service agency school plant facility levy. (3-31-22)
g. Levies authorized by Section
33-909, Idaho Code, known as the
state-authorized plant facility levy. (3-31-22)
h. Levies authorized by Section
33-805, Idaho Code, known as
school emergency fund levy. (3-31-22)
06. Setting Levies When There is a De-annexation From an RAA. In any de-annexation from an RAA, levies will be set using the base value and, as indicated in Subsection 804.05 of this rule, the appropriate amount of increment value associated with the parcels and operating property remaining in the RAA after the deannexation, provided that the de-annexation is in effect no later than September 1 of the current tax year and provided further that the de-annexation is approved by the Tax Commission in accordance with Section 225 of these rules. (3-31-22)
07. Setting Levies When There is a Refinancing of Bonded Indebtedness. Refinancing of bonded indebtedness in existence as of December 31, 2007 does not create new bonded indebtedness for any taxing district with respect to the levy setting criteria in Subsection 804.05 of this rule. (3-31-22)
08. Cross Reference. The county auditor shall certify the full market value by taxing district as specified in Rule 995 of these rules. See also Rule 802 of these rules for calculation of new construction given deannexation from an RAA and see Rule 805 of these rules for penalties for failure to submit plans. (3-31-22)
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