Amends and adds to existing law to expand the homestead property tax exemption, to increase the sales tax rate, and to direct sales tax revenue to taxing districts to replace property tax revenue lost from the homestead exemption expansion.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 961 BY WAYS AND MEANS COMMITTEE AN ACT1 RELATING TO TAXATION; AMENDING SECTION 63-602G, IDAHO CODE, TO REVISE PRO-2 VISIONS REGARDING THE HOMESTEAD PROPERTY TAX EXEMPTION; AMENDING SEC-3 TION 63-701, IDAHO CODE, TO REVISE A DEFINITION AND TO MAKE TECHNICAL4 CORRECTIONS; AMENDING SECTION 63-724, IDAHO CODE, TO REVISE A PROVI-5 SION REGARDING HOMEOWNER PROPERTY TAX RELIEF; AMENDING CHAPTER 7, TI-6 TLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 63-725, IDAHO CODE,7 TO ESTABLISH PROVISIONS REGARDING THE HOMESTEAD PROPERTY TAX REPLACE-8 MENT FUND; AMENDING SECTION 63-3619, IDAHO CODE, TO REVISE A PROVISION9 REGARDING THE IMPOSITION AND RATE OF THE SALES TAX AND TO MAKE TECHNICAL10 CORRECTIONS; AMENDING SECTION 63-3621, IDAHO CODE, TO REVISE A PROVI-11 SION REGARDING THE IMPOSITION AND RATE OF THE USE TAX; AMENDING SECTION12 63-3638, IDAHO CODE, TO REVISE A PROVISION REGARDING SALES TAX DISTRI-13 BUTION; AND DECLARING AN EMERGENCY, PROVIDING RETROACTIVE APPLICATION,14 AND PROVIDING AN EFFECTIVE DATE.15

Be It Enacted by the Legislature of the State of Idaho:16

SECTION 1. That Section 63-602G, Idaho Code, be, and the same is hereby17 amended to read as follows:18 63-602G. PROPERTY EXEMPT FROM TAXATION -- HOMESTEAD. (1) For each tax19 year, the first one hundred twenty-five thousand dollars ($125,000) of the20 market value for assessment purposes of the homestead as that term is defined21 in section 63-701, Idaho Code, or fifty percent (50%) one hundred percent22 (100%) of the market value for assessment purposes of the homestead as that23 term is defined in section 63-701, Idaho Code, whichever is the lesser, shall24 be exempt from property taxation.25 (2) The exemption allowed by this section may be granted only if:26 (a) The homestead is owner-occupied and used as the primary dwelling27 place of the owner. The homestead may consist of part of a multidwelling28 or multipurpose building and shall include all of such dwelling or29 building except any portion used exclusively for anything other than30 the primary dwelling of the owner. The presence of an office in a home-31 stead, which office is used for multiple purposes, including business32 and personal use, shall not prevent the owner from claiming the exemp-33 tion provided in this section; and34 (b) The state tax commission has certified to the board of county com-35 missioners that all properties in the county subject to appraisal by the36 county assessor have, in fact, been appraised uniformly so as to secure37 a just valuation for all property within the county; and38 (c) The owner has certified to the county assessor that:39 (i) He is making application for the exemption allowed by this40 section;41 (ii) The homestead is his primary dwelling place; and42

2 (iii) He has not made application in any other county for the ex-1 emption and has not made application for the exemption on any other2 homestead in the county.3 (d) For the purpose of this section, the definition of "owner" shall be4 the same definition set forth in section 63-701(7), Idaho Code. When an5 owner, pursuant to the provisions of section 63-701(7), Idaho Code, is6 any person who is the beneficiary of a revocable or irrevocable trust,7 or who is a partner of a limited partnership, a member of a limited lia-8 bility company, or a shareholder of a corporation, he or she may provide9 proof of the trust, limited partnership, limited liability company, or10 corporation in the manner set forth in section 63-703(4), Idaho Code.11 (e) Any owner may request in writing the return of all copies of any12 documents submitted with the affidavit set forth in section 63-703(4),13 Idaho Code, that are held by a county assessor, and the copies shall14 be returned by the county assessor upon submission of the affidavit in15 proper form.16 (f) For the purpose of this section, the definition of "primary17 dwelling place" shall be the same definition set forth in section18 63-701(8), Idaho Code.19 (g) For the purpose of this section, the definition of "occupied" shall20 be the same definition set forth in section 63-701(6), Idaho Code.21 (3) The county assessor of each county shall prescribe and make avail-22 able forms to be used by a homeowner to apply for the homestead exemption pro-23 vided in this section. The homeowner shall provide on such forms the home-24 owner's full name, date of birth, complete address, and most recent previ-25 ous complete address. The homeowner shall also provide, as applicable, such26 homeowner's Idaho state-issued driver's license number or Idaho state-is-27 sued identification card number, except that such requirement shall not ap-28 ply to a homeowner in active military service for the initial application for29 the exemption and during such time as the homeowner meets the qualifications30 provided in subsection (8) of this section. If the homeowner applying for31 the exemption provided in this section has not been domiciled in Idaho for32 at least ninety (90) days and does not have an Idaho state-issued driver's33 license or Idaho state-issued identification card, the homeowner shall pro-34 vide an Idaho state-issued driver's license number or an Idaho state-issued35 identification card number to the county assessor within ninety (90) days of36 submitting such homeowner's initial application for the exemption.37 (4) An owner need make application for the exemption described in sub-38 section (1) of this section only once, as long as all of the following condi-39 tions are met:40 (a) The owner has received the exemption during the previous year as a41 result of making a valid application as set forth in subsection (2)(c)42 of this section.43 (b) The owner or beneficiary, partner, member or shareholder, as appro-44 priate, still occupies the same homestead for which the owner made ap-45 plication.46 (c) The homestead described in paragraph (b) of this subsection is47 owner-occupied or occupied by a beneficiary, partner, member or share-48 holder, as appropriate, and used as the primary dwelling place of the49 owner or beneficiary, partner, member or shareholder, as appropriate.50

3 (5)(a) The exemption allowed by this section shall be effective on the1 date of eligibility status change provided on the approved application2 for the current tax year and must be taken before the reduction in taxes3 provided by sections 63-701 through 63-710, Idaho Code, is applied.4 (b) If the eligibility status of the property eligible for the exemp-5 tion changes during the tax year, the property taxes shall be prorated6 based on the property's eligibility status during the year. The levy7 rate shall be multiplied against the market value for assessment pur-8 poses of the property, and the resulting tax due shall be divided by9 three hundred sixty-five (365) days, or by three hundred sixty-six10 (366) days if the tax year is a leap year, for the daily tax amount and11 then multiplied by the number of days of the year such property has a12 given exemption eligibility status. For an owner who qualifies for the13 homeowner exemption, the property taxes shall be calculated using the14 market value for assessment purposes, reduced by the exemption amount15 provided in subsection (1) of this section. The levy rate shall be16 multiplied against such value and divided by three hundred sixty-five17 (365) days, or by three hundred sixty-six (366) days if the tax year is18 a leap year, and then multiplied by the number of days such person is19 eligible for the exemption.20 (c) If the eligibility status of the property changes during the tax21 year, the taxable value of the homestead or the tax amount shall be ad-22 justed in one (1) of the following ways:23 (i) If the property becomes eligible before the second Monday of24 July, the reduced taxable value shall be entered on the property25 roll pursuant to section 63-301, Idaho Code, and the homeowner26 property tax relief roll pursuant to section 63-724(4), Idaho27 Code;28 (ii) If the property becomes eligible on or after the second Mon-29 day of July, property taxes due shall be calculated as provided30 in paragraph (b) of this subsection and any reduction in property31 tax will result in a cancellation or refund as provided in section32 63-1202, Idaho Code;33 (iii) If the property becomes ineligible for the exemption before34 the second Monday of July, any additional taxable value shall be35 entered on the property roll pursuant to section 63-301, Idaho36 Code, and the homeowner property tax relief roll pursuant to sec-37 tion 63-724(4), Idaho Code;38 (iv) If the property becomes ineligible for the exemption on or39 after the second Monday of July but no later than the fourth Monday40 of November, the additional value shall be assessed and entered on41 the subsequent or missed property roll pursuant to the provisions42 of section 63-301, Idaho Code; or43 (v) If the property becomes ineligible for the exemption on or af-44 ter the fourth Monday of November, the tax on the additional value45 may be calculated as provided in paragraph (b) of this subsection46 and billed as provided for the recovery of the property tax exemp-47 tion pursuant to this subsection.48 (6) Recovery of property tax exemptions allowed by this section but im-49 properly claimed or approved:50

4 (a)(i) Prior to granting an exemption, the county assessor shall1 investigate whether an applicant for the exemption has claimed the2 exemption for another homestead and shall not grant the exemption3 where it appears the exemption has been improperly claimed. The4 applicant shall be notified of the county assessor's refusal to5 grant the exemption.6 (ii) Upon discovery of evidence, facts or circumstances indicat-7 ing any exemption allowed by this section was improperly claimed8 or approved, the county assessor shall decide whether the exemp-9 tion claimed should have been allowed and, if not, notify the tax-10 payer in writing, assess a recovery of property tax and notify the11 county treasurer of this assessment. If the county assessor de-12 termined that an exemption was improperly approved as a result of13 county error, the county assessor shall present the discovered ev-14 idence, facts or circumstances from the improperly approved ex-15 emption to the board of county commissioners, at which time the16 board may waive a recovery of the property tax and notify such tax-17 payer in writing.18 (iii) Upon the first instance of a taxpayer being discovered to19 have claimed more than one (1) homestead exemption, the taxpayer20 shall be subject to a penalty, payable to the county treasurer, in21 an amount equal to the amount of property tax recovered pursuant22 to subparagraph (ii) of this paragraph, which shall be paid in ad-23 dition to such recovery amount. The taxpayer shall be notified of24 the assessment of such penalty at the same time as the notice of the25 assessor's refusal to grant the exemption in subparagraph (i) of26 this paragraph.27 (iv) Any subsequent violation within seven (7) years of an in-28 stance pursuant to subparagraph (iii) of this paragraph shall be a29 misdemeanor, subject to the penalties provided in section 18-113,30 Idaho Code. The county assessor shall notify the county prosecut-31 ing attorney of any conduct that would constitute a misdemeanor32 pursuant to this subparagraph.33 (v) Nothing in this paragraph shall prohibit a taxpayer from34 claiming a homestead exemption after January 1 for a property that35 is not already subject to the homestead exemption, provided any36 claim for an exemption is consistent with the requirements of sub-37 section (2)(c)(iii) of this section.38 (b) Upon request by a county assessor conducting an investigation under39 paragraph (a) of this subsection, or when information indicating that40 an improper claim for the exemption allowed by this section is discov-41 ered by the state tax commission, the state tax commission shall dis-42 close relevant information to the appropriate county assessor, board43 of county commissioners, county clerk, and county treasurer and to the44 secretary of state. Information disclosed to county officials and the45 secretary of state by the state tax commission under this subsection:46 (i) May be used to decide the validity of any entitlement to the47 exemption provided in this section;48 (ii) Shall, as necessary, be used to determine a person's resi-49 dence for voting purposes under title 34, Idaho Code; and50

5 (iii) Is not otherwise subject to public disclosure pursuant to1 chapter 1, title 74, Idaho Code.2 (c) The assessment and collection of the recovery of property tax must3 begin within the seven (7) year period beginning the date the assessment4 notice reflecting the improperly claimed or approved exemption was re-5 quired to be mailed to the taxpayer.6 (d)(i) An applicant for an exemption under this section may appeal7 to the county board of equalization the county assessor's refusal8 to grant an exemption pursuant to paragraph (a) of this subsection9 within thirty (30) days of the date the county assessor sent notice10 of the refusal.11 (ii) The taxpayer may appeal to the county board of equalization12 the decision by the county assessor to assess the recovery of prop-13 erty tax within thirty (30) days of the date the county assessor14 sent the notice to the taxpayer pursuant to this section. The15 board may waive the collection of all or part of any costs, late16 charges, and interest in order to facilitate the collection of the17 recovery of the property tax.18 (iii) The taxpayer may appeal the imposition of the penalty pro-19 vided in paragraph (a)(iii) of this subsection within thirty (30)20 days of the date the county assessor sent the notice to the tax-21 payer pursuant to this section.22 (e) For purposes of calculating the tax, the amount of the recovered23 property tax shall be for each year the exemption allowed by this sec-24 tion was improperly claimed or approved, up to a maximum of seven (7)25 years. The amount of the recovery of property tax shall be calculated26 using the product of the amount of exempted value for each year multi-27 plied by the levy for that year plus costs, late charges, and interest28 for each year at the rates equal to those provided for delinquent prop-29 erty taxes during that year.30 (f) Any recovery of property tax shall be due and payable no later than31 the date provided for property taxes in section 63-903, Idaho Code, and32 if not timely paid, late charges and interest, beginning the first day33 of January in the year following the year the county assessor sent the34 notice to the taxpayer pursuant to this section, shall be calculated at35 the current rate provided for property taxes.36 (g) Recovered property taxes shall be billed, collected and dis-37 tributed in the same manner as property taxes, except each taxing dis-38 trict or unit shall be notified of the amount of any recovered property39 taxes included in any distribution.40 (h) Thirty (30) days after the taxpayer is notified, as provided in41 paragraph (a) of this subsection, the assessor shall record a notice42 of intent to attach a lien. Upon the payment in full of such recov-43 ered property taxes prior to the attachment of the lien as provided in44 paragraph (i) of this subsection, or upon the successful appeal by the45 taxpayer, the county assessor shall record a rescission of the intent to46 attach a lien within seven (7) business days of receiving such payment47 or within seven (7) business days of the county board of equalization48 decision granting the appeal. If the real property is sold to a bona49 fide purchaser for value prior to the recording of the notice of the in-50

6 tent to attach a lien, the county assessor and treasurer shall cease the1 recovery of such unpaid recovered property tax.2 (i) Any unpaid recovered property taxes shall become a lien on the real3 property in the same manner as provided for property taxes in section4 63-206, Idaho Code, except such lien shall attach as of the first day of5 January in the year following the year the county assessor sent the no-6 tice to the taxpayer pursuant to this section.7 (j) For purposes of the limitation provided by section 63-802, Idaho8 Code, moneys received pursuant to this subsection as recovery of prop-9 erty tax shall be treated as property tax revenue.10 (7) The legislature declares that this exemption is necessary and just.11 (8) A homestead that previously qualified for exemption under this sec-12 tion in the preceding year shall not lose such qualification due to: the13 owner's, beneficiary's, partner's, member's or shareholder's absence in the14 current year by reason of active military service or because the homestead15 has been leased because the owner, beneficiary, partner, member or share-16 holder is absent in the current year by reason of active military service.17 An owner subject to the provisions of this subsection must apply for the ex-18 emption with the county assessor every year on or before a deadline date as19 specified by the county assessor for the county in which the homestead is20 claimed. If an owner fails to apply on or before the established deadline,21 the county may, at its discretion, discontinue the exemption for that year.22 (9) A homestead that previously qualified for exemption under this23 section in the preceding year shall not lose such qualification due to the24 owner's, beneficiary's, partner's, member's or shareholder's death during25 the year of the owner's, beneficiary's, partner's, member's or share-26 holder's death and the tax year immediately following such death, provided27 that the homestead continues to be a part of the owner's, beneficiary's,28 partner's, member's or shareholder's estate. After such time, the new owner29 shall reapply to receive the exemption pursuant to this section and shall30 meet the qualification criteria contained in this section.31 (10) The amount by which each exemption approved under this section ex-32 ceeds one hundred thousand dollars ($100,000) may, in the discretion of the33 governing board of a taxing district, be deducted from the new construction34 roll for the following year prepared by the county assessor in accordance35 with section 63-301A, Idaho Code, but only to the extent that the amount ex-36 ceeds the same deduction made in the previous year.37 (11) By July 1, 2023, the state tax commission shall establish a data-38 base of all active exemptions claimed under this section, which database39 shall be searchable by a person's name and by the address of the homestead40 for which the exemption is claimed. The database shall be made accessible41 to officials listed in subsection (6)(b) of this section for the purpose of42 verifying that:43 (a) Multiple active exemptions have not been claimed by the same per-44 son; and45 (b) A person's residence for voting purposes is the same as the home-46 stead for which such person has an active exemption pursuant to this47 section, if an exemption is so claimed.48 (12) Increases in taxable value resulting from any change in status of49 a property formerly or newly receiving the homeowner exemption shall be in-50

7 cluded by the county assessor on the property roll or subsequent property1 roll required pursuant to section 63-301, Idaho Code.2

SECTION 2. That Section 63-701, Idaho Code, be, and the same is hereby3 amended to read as follows:4 63-701. DEFINITIONS. As used in this chapter:5 (1) "Claimant" means a person who has filed an application under sec-6 tion 63-602G, Idaho Code, and has filed a claim under the provisions of7 sections 63-701 through 63-710, Idaho Code. Except as provided in section8 63-702(2), Idaho Code, on January 1 or before April 15 of the year in which9 the claimant first filed a claim on the homestead in question, a claimant10 must be an owner of the homestead, a claimant must have lawful presence in the11 United States pursuant to section 67-7903, Idaho Code, and on January 1 of12 said year a claimant must be:13 (a) Not less than At least sixty-five (65) years old; or14 (b) A child under the age of eighteen (18) years who is fatherless or15 motherless or who has been abandoned by any surviving parent or parents;16 or17 (c) A widow or widower; or18 (d) A disabled person who is recognized as disabled by the social se-19 curity administration pursuant to title 42 of the United States Code,20 or by the railroad retirement board pursuant to title 45 of the United21 States Code, or by the office of management and budget pursuant to title22 5 of the United States Code, or, if a person is not within the purview of,23 and is therefore not recognized as disabled by, any other entity listed24 in this paragraph, then by the public employee retirement system or pub-25 lic employee disability plan in which the person participates that may26 be of any state, local unit of government or other jurisdiction in the27 United States of America; or28 (e) A disabled veteran of any war engaged in by the United States, whose29 disability is recognized as a service-connected disability of a degree30 of ten percent (10%) or more, or who has a pension for nonservice-con-31 nected disabilities, in accordance with laws and regulations adminis-32 tered by the United States department of veterans affairs; or33 (f) A person, as specified in 42 U.S.C. 1701, who was or is entitled34 to receive benefits because he is known to have been taken by a hostile35 force as a prisoner, hostage or otherwise; or36 (g) Blind.37 (2) "Homestead" means the dwelling, owner-occupied by the claimant38 as described in this chapter and used as the primary dwelling place of the39 claimant and may be occupied by any members of the household as their home,40 and so much of the land surrounding it, not exceeding one (1) one-half (1/2)41 acre, as is reasonably necessary for the use of the dwelling as a home. It42 may consist of a part of a multidwelling or multipurpose building and part43 of the land upon on which it is built. "Homestead" does not include personal44 property such as furniture, furnishings or appliances, but a manufactured45 home may be a homestead.46 (3) "Household" means the claimant and the claimant's spouse. The term47 does not include bona fide lessees, tenants, or roomers and boarders on con-48

8 tract. "Household" includes persons described in subsection (8)(b) of this1 section.2 (4) "Household income" means all income received by the claimant and,3 if married, all income received by the claimant's spouse, in a calendar year.4 (5) "Income" means the sum of federal adjusted gross income as defined5 in the Internal Revenue Code, as defined in section 63-3004, Idaho Code, and6 to the extent not already included in federal adjusted gross income:7 (a) Alimony;8 (b) Support money;9 (c) Nontaxable strike benefits;10 (d) The nontaxable amount of any individual retirement account, pen-11 sion or annuity, including railroad retirement benefits, all payments12 received under the federal social security act except the social secu-13 rity death benefit as specified in this subsection, state unemployment14 insurance laws, and veterans disability pensions and compensation, ex-15 cluding any return of principal paid by the recipient of an annuity and16 excluding rollovers as provided in 26 U.S.C. 402 or 403, and excluding17 the nontaxable portion of a Roth individual retirement account distri-18 bution, as provided in 26 U.S.C. 408A;19 (e) Nontaxable interest received from the federal government or any of20 its instrumentalities or a state government or any of its instrumental-21 ities;22 (f) Worker's compensation; and23 (g) The gross amount of loss of earnings insurance.24 It does not include gifts from nongovernmental sources or inheritances. To25 the extent not reimbursed, the cost of medical care as defined in section26 213(d) of the Internal Revenue Code, incurred and paid by the claimant and,27 if married, the claimant's spouse, may be deducted from income. To the ex-28 tent not reimbursed, personal funeral expenses, including prepaid funeral29 expenses and premiums on funeral insurance, of the claimant and claimant's30 spouse only, may be deducted from income up to an annual maximum of five31 thousand dollars ($5,000) per claim. "Income" does not include veterans32 disability pensions received by a person described in subsection (1)(e)33 of this section who is a claimant or a claimant's spouse if the disability34 pension is received pursuant to a service-connected disability of a de-35 gree of forty percent (40%) or more. "Income" does not include dependency36 and indemnity compensation or death benefits paid to a person described in37 subsection (1) of this section by the United States department of veterans38 affairs and arising from a service-connected death or disability. "Income"39 does not include lump sum death benefits made by the social security admin-40 istration pursuant to 42 U.S.C. 402(i). Documentation of medical expenses41 may be required by the county assessor and state tax commission in such form42 as the county assessor or state tax commission shall determine. For pur-43 poses of this chapter only and in the case of a claimant who owns and whose44 homestead is a certified family home as defined in section 39-3502, Idaho45 Code, "income" does not include payments that the claimant received as an46 enrolled medicaid provider from the medical assistance program. "Income"47 shall be that received in the calendar year immediately preceding the year48 in which a claim is filed. Where a claimant and/or the claimant's spouse49 does not file a federal tax return, the claimant's and/or the claimant's50

9 spouse's federal adjusted gross income, for purposes of this section, shall1 be an income equivalent to federal adjusted gross income had the claimant2 and/or the claimant's spouse filed a federal tax return, as determined by the3 county assessor. The county assessor or state tax commission may require4 documentation of income in such form as each shall determine, including, but5 not limited to: copies of federal or state tax returns and any attachments6 thereto; and income reporting forms such as the W-2 and 1099.7 For determining income for certain married individuals living apart,8 the provisions of sections 2(c) and 7703(b) of the Internal Revenue Code9 shall apply.10 (6) "Occupied" means actual use and possession.11 (7) "Owner" means a person holding title in fee simple or holding a cer-12 tificate of motor vehicle title (either of which may be subject to mortgage,13 deed of trust or other lien) or who has retained or been granted a life estate14 or who is a person entitled to file a claim under section 63-702, Idaho Code.15 "Owner" shall also include any person who:16 (a) Is the beneficiary of a revocable or irrevocable trust which is the17 owner of such homestead and under which the claimant or the claimant's18 spouse has the primary right of occupancy of the homestead; or19 (b) Is a partner of a limited partnership, member of a limited liabil-20 ity company or shareholder of a corporation if such entity holds title21 in fee simple or holds a certificate of motor vehicle title and if the22 person holds at least a five percent (5%) ownership in such entity, as23 determined by the county assessor; or24 (c) Has retained or been granted a life estate.25 "Owner" includes a vendee in possession under a land sale contract. Any26 partial ownership shall be considered as ownership for determining initial27 qualification for property tax reduction benefits; however, the amount of28 property tax reduction under section 63-704, Idaho Code, and rules promul-29 gated pursuant to section 63-705, Idaho Code, shall be computed on the value30 of the claimant's partial ownership. "Partial ownership," for the purposes31 of this section, means any one (1) person's ownership when property is owned32 by more than one (1) person or where the homestead is held by an entity, as33 set forth in this subsection, but more than one (1) person has the right of34 occupancy of such homestead. A person holding either partial title in fee35 simple or holding a certificate of motor vehicle title together with another36 person, but who does not occupy the dwelling as his primary dwelling place,37 shall not be considered an owner for purposes of this section, if such person38 is a cosignatory of a note secured by the dwelling in question and at least39 one (1) of the other cosignatories of the note occupies the dwelling as his40 primary dwelling place. The combined community property interests of both41 spouses shall not be considered partial ownership as long as the combined42 community property interests constitute the entire ownership of the home-43 stead, including where the spouses are occupying a homestead owned by an en-44 tity, as set forth in this subsection, and the spouses have the primary right45 of occupancy of the homestead. The proportional reduction required under46 this subsection shall not apply to community property interests. Where47 title to property was held by a person who has died without timely filing a48 claim for property tax reduction, the estate of the deceased person shall be49 the "owner," provided that the time periods during which the deceased person50

10 held such title shall be attributed to the estate for the computation of any1 time periods under subsection (8)(a) or (b) of this section.2 (8)(a) "Primary dwelling place" means the claimant's dwelling place3 on January 1 or before April 15 of the year for which the claim is made.4 The primary dwelling place is the single place where a claimant has5 his true, fixed and permanent home and principal establishment, and to6 which whenever the individual is absent he has the intention of return-7 ing. A claimant must establish the dwelling to which the claim relates8 to be his primary dwelling place by clear and convincing evidence or by9 establishing that the dwelling is where the claimant resided on January10 1 or before April 15 and:11 (i) At least six (6) months during the prior year; or12 (ii) The majority of the time the claimant owned the dwelling if13 owned by the claimant less than one (1) year; or14 (iii) The majority of the time after the claimant first occupied15 the dwelling if occupied by the claimant for less than one (1)16 year. The county assessor may require written or other proof of17 the foregoing in such form as the county assessor may determine.18 (b) Notwithstanding the provisions of paragraph (a) of this subsec-19 tion, the property upon which the claimant makes application shall be20 deemed to be the claimant's primary dwelling place if the claimant is21 otherwise qualified and resides in a care facility and does not allow22 the property upon which the claimant has made application to be occu-23 pied by persons paying a consideration to occupy the dwelling. Payment24 of utilities shall not be payment of a consideration to occupy the25 dwelling. A claimant's spouse who resides in a care facility shall26 be deemed to reside at the claimant's primary dwelling place and to27 be a part of the claimant's household. A care facility is a hospital,28 nursing facility or intermediate care facility as defined in section29 39-1301, Idaho Code, or a facility as defined in section 39-3302, Idaho30 Code, or a dwelling other than the one upon which the applicant makes ap-31 plication where a claimant who is unable to reside in the dwelling upon32 which the application is made lives and receives help in daily living,33 protection and security.34

SECTION 3. That Section 63-724, Idaho Code, be, and the same is hereby35 amended to read as follows:36 63-724. HOMEOWNER PROPERTY TAX RELIEF. (1) It is the intent of the37 legislature to provide property tax relief on owner-occupied properties in38 Idaho receiving the homestead property tax exemption pursuant to section39 63-602G, Idaho Code, as of the second Monday in July each year by providing40 state moneys as replacement funding as provided in this section. This sec-41 tion does not apply to occupancy taxes levied pursuant to section 63-317,42 Idaho Code.43 (2) For the purpose of this section:44 (a) "Eligible property taxes" means all property tax levies on homes45 receiving the homestead property tax exemption pursuant to section46 63-602G, Idaho Code, as of the second Monday in July each year, ex-47 cept for bonds, school district levies, plant facility levies, and any48 voter-approved temporary levy for a specific duration. When calculat-49

11 ing the eligible property taxes for the purpose of this section, the1 taxable value of each property shall include the value of no more than2 one (1) one-half (1/2) acre.3 (b) "Homeowner property tax relief homestead" means a property receiv-4 ing the homestead property tax exemption pursuant to section 63-602G,5 Idaho Code, as of the second Monday in July each year.6 (3) There is hereby created in the state treasury the homeowner prop-7 erty tax relief account. Moneys in this account shall consist of moneys8 transferred from the general fund and are continuously appropriated for9 homeowner property tax relief pursuant to the provisions of this section.10 (4) The county assessor shall prepare a homeowner property tax relief11 roll, which shall be in addition to all other property rolls. By no later12 than the first Monday of September each year, the homeowner property tax re-13 lief roll shall be certified by the county assessor to the county auditor in14 the manner prescribed by rules promulgated by the state tax commission. The15 homeowner property tax relief roll shall show:16 (a) The name of the taxpayer;17 (b) An accurate description of the homeowner property tax relief home-18 stead; and19 (c) The property's current market value for assessment purposes.20 (5)(a) The county auditor shall complete the homeowner property tax re-21 lief roll by adding the following information:22 (i) The immediate prior year's eligible levy for the tax code area23 in which the property is situated;24 (ii) The estimated amount of eligible property taxes calculated25 by applying the levy in subparagraph (i) of this paragraph to the26 current year's market value for assessment purposes on each quali-27 fying homestead; and28 (iii) The total estimated amount of eligible property taxes on29 all properties within the county that are receiving the homestead30 property tax exemption as of the second Monday in July of the cur-31 rent year.32 (b) By no later than the second Monday of September each year, the33 county auditor shall certify the completed homeowner property tax re-34 lief roll to the state tax commission in the manner prescribed by rules35 promulgated by the state tax commission.36 (6) The state tax commission shall determine the total number of home-37 owner property tax relief homesteads to be allowed in each county, the38 dollar amount of eligible property taxes for each homeowner property tax39 relief homestead allowed, and the total dollar amount of eligible property40 taxes for all homeowner property tax relief homesteads within each county41 from the amounts certified on the homeowner property tax relief roll. Such42 amounts shall be summed for all eligible property tax relief homesteads in43 all counties to determine the total amount of estimated eligible property44 taxes. This sum shall be divided into the amount of moneys in the homeowner45 property tax relief account as of August 1 of each year. The result shall46 be multiplied by the total amount of estimated eligible property taxes on47 such homesteads in each county. This amount shall be certified to the county48 auditor and tax collector by the state tax commission no later than the third49 Monday in September. By no later than December 20 of each year, the state50

12 tax commission shall pay to the county tax collector of each county the first1 half of the amount due to each county as reimbursement for homeowner property2 tax relief as provided in this section and shall pay the second half of such3 amount by no later than June 20 of the following year.4 (7) The state tax commission may audit each and every property on the5 homeowner property tax relief roll. If the state tax commission determines6 that a homeowner property tax relief homestead credit is erroneous, the7 state tax commission shall disapprove as much of the credit as necessary in8 order to conform with statutory standards. The state tax commission shall9 provide the homeowner written notice of the state tax commission's intent10 to disapprove all or a portion of the credit. The homeowner shall have11 twenty-eight (28) days to make written protest to the state tax commission12 of the intended action. The homeowner may submit additional information and13 may request an informal hearing with the state tax commission. If the home-14 owner fails to make written protest within twenty-eight (28) days, the state15 tax commission shall provide written notice of disapproval to both the home-16 owner and the county auditor of the county in which the property is situated17 by December 20. Any homeowner whose claim is disapproved in whole or in part18 by the state tax commission may appeal such disapproval to the board of tax19 appeals or to the district court of the county of residence of the taxpayer20 within thirty (30) days.21 (8) Each county treasurer shall apply the moneys received pursuant to22 subsection (6) of this section to the eligible property taxes levied on the23 properties listed on the certified homeowner property tax relief roll that24 year. The moneys shall be designated as a line item credit against the to-25 tal of all eligible property taxes on the property tax bill for each property26 receiving the tax relief provided by this section. Such moneys shall be dis-27 tributed in the same manner as property tax revenues.28 (9) The amount of property tax relief for a homeowner's property taxes29 shall be applied after the homestead exemption pursuant to section 63-602G,30 Idaho Code, has been applied. The property tax relief amount cannot exceed31 the actual amount of current eligible property taxes due on the homeowner's32 property tax notice. No delinquent property taxes, penalties, interest, or33 fines may be paid with moneys from this program.34 (10) Nothing in this section shall prevent a homeowner from applying35 for or receiving any other property tax relief provided pursuant to this36 chapter. The property tax relief provided pursuant to this section shall be37 credited to the homeowner's property tax bill before any other property tax38 relief is applied, up to a maximum of the actual property taxes due on the39 homeowner property tax relief homestead.40 (11) Any amount of homeowner property tax relief moneys distributed by41 the state tax commission to a county that exceeds the total amount of all el-42 igible property taxes due from all homeowner property tax relief homesteads43 in the county shall revert to the state general fund. The county treasurer44 shall deposit such moneys with the state treasurer by the fourth Monday in45 July each year for the preceding property tax year.46 (12) Within three (3) years of payment, the state tax commission may re-47 cover any erroneous or incorrect payment made to any homeowner receiving re-48 lief under this section. The deficiency determination, collection, and en-49 forcement procedures provided in chapter 30, title 63, Idaho Code, shall ap-50

13 ply and be available to the state tax commission for enforcement and collec-1 tion under this section. Wherever liens or any other proceedings are defined2 as income tax liens or proceedings, they shall, when applied in enforcement3 or collection under this section, be described as tax relief liens and pro-4 ceedings. In connection with this section, a deficiency shall consist of any5 amount erroneously paid on behalf of a homeowner under this section.6

SECTION 4. That Chapter 7, Title 63, Idaho Code, be, and the same is7 hereby amended by the addition thereto of a NEW SECTION, to be known and des-8 ignated as Section 63-725, Idaho Code, and to read as follows:9 63-725. HOMESTEAD PROPERTY TAX REPLACEMENT FUND. (1) It is the intent10 of the legislature to replace the property tax revenue lost by taxing dis-11 tricts as a result of the expansion of the homestead property tax exemption12 pursuant to section 63-602G, Idaho Code, with distributions from increased13 revenue collected from sales and use taxes.14 (2) For the purposes of this section:15 (a) "Eligible homesteads" means properties receiving the homestead16 property tax exemption pursuant to section 63-602G, Idaho Code, as of17 the second Monday in July each year.18 (b) "Estimated lost property tax revenue" means the amount of property19 taxes that would have been collected from eligible homesteads in each20 taxing district absent the homestead exemption provided in section21 63-602G, Idaho Code, as determined from the certified homestead prop-22 erty tax relief roll under section 63-724, Idaho Code.23 (3) There is hereby created in the state treasury the homestead prop-24 erty tax replacement fund. Moneys in the fund shall consist of distributions25 of sales and use tax revenues pursuant to section 63-3638, Idaho Code, and26 are continuously appropriated for distribution to taxing districts as pro-27 vided in this section.28 (4) Moneys in the homestead property tax replacement fund shall be dis-29 tributed to taxing districts as follows:30 (a) Each county assessor shall provide the certified homestead prop-31 erty tax relief roll to the county auditor in the same manner as provided32 in section 63-724, Idaho Code.33 (b) Each county auditor shall calculate the estimated lost property tax34 revenue for each taxing district in the county based on the homestead35 roll provided in section 63-724, Idaho Code, and shall certify such36 amounts to the state tax commission by no later than the second Monday of37 September each year.38 (c) The state tax commission shall determine the statewide total of es-39 timated lost property tax revenue by summing the certified amounts for40 all taxing districts in all counties. The state tax commission shall41 divide the amount of moneys in the homestead property tax replacement42 fund as of August 1 each year by such statewide total to determine a pro-43 ration factor. The state tax commission shall multiply the proration44 factor by each taxing district's certified estimated lost property tax45 revenue to determine the total annual amount payable to each taxing dis-46 trict. The state tax commission shall certify each taxing district's47 prorated amount no later than the third Monday in September each year.48

14 (d) By no later than December 20 of each year, the state tax commission1 shall pay to the county tax collector of each county one-half (1/2) of2 the total annual amount determined for all taxing districts within that3 county and shall pay the remaining one-half (1/2) by no later than June4 20 of the following year.5 (e) Within seven (7) days of receipt of moneys pursuant to paragraph (d)6 of this subsection, the county treasurer shall distribute to each tax-7 ing district within the county its proportionate share as determined by8 the state tax commission.9 (f) Funds distributed under this section shall be treated as property10 tax revenues for purposes of the budget limitations in section 63-802,11 Idaho Code.12

SECTION 5. That Section 63-3619, Idaho Code, be, and the same is hereby13 amended to read as follows:14 63-3619. IMPOSITION AND RATE OF THE SALES TAX. An excise tax is hereby15 imposed upon on each sale at retail at the rate of six percent (6%) eight per-16 cent (8%) of the sales price of all retail sales subject to taxation under17 this chapter, and such amount shall be computed monthly on all sales at re-18 tail within the preceding month.19 (a) The tax shall apply to, be computed on, and collected for all20 credit, installment, conditional or similar sales at the time of the sale or,21 in the case of rentals, at the time the rental is charged.22 (b) The tax hereby imposed shall be collected by the retailer from the23 consumer.24 (c) The state tax commission shall provide schedules for collection of25 the tax on sales which that involve a fraction of a dollar. The retailer26 shall calculate the tax upon on the entire amount of the purchases of the con-27 sumer made at a particular time and not separately upon each item purchased.28 The retailer may retain any amount collected under the bracket system pre-29 scribed which that is in excess of the amount of tax for which he is liable30 to the state during the period as compensation for the work of collecting the31 tax.32 (d) It is unlawful for any retailer to advertise or hold out or state to33 the public or to any customer, directly or indirectly, that the tax or any34 part thereof will be assumed or absorbed by the retailer or that it will not35 be added to the selling price of the property sold or that, if added, it or any36 part thereof will be refunded. Any person violating any provision of this37 section is guilty of a misdemeanor.38 (e) The state tax commission may by rule provide that the amount col-39 lected by the retailer from the customer in reimbursement of the tax be dis-40 played separately from the list price, the price advertised on the premises,41 the marked price, or other price on the sales slip or other proof of sale.42 (f) The taxes imposed by this chapter shall apply to the sales to con-43 tractors purchasing for use in the performance of contracts with the United44 States.45

SECTION 6. That Section 63-3621, Idaho Code, be, and the same is hereby46 amended to read as follows:47

15 63-3621. IMPOSITION AND RATE OF THE USE TAX -- EXEMPTIONS. (1) An ex-1 cise tax is hereby imposed on the storage, use, or other consumption in this2 state of tangible personal property acquired on or after October 1, 2006, for3 storage, use, or other consumption in this state at the rate of six percent4 (6%) eight percent (8%) of the value of the property, and a recent sales price5 shall be presumptive evidence of the value of the property unless the prop-6 erty is wireless telecommunications equipment, in which case a recent sales7 price shall be conclusive evidence of the value of the property.8 (2) Every person storing, using, or otherwise consuming, in this state,9 tangible personal property is liable for the tax. His liability is not ex-10 tinguished until the tax has been paid to this state, except that a receipt11 from a retailer maintaining a place of business in this state or engaged in12 business in this state given to the purchaser is sufficient to relieve the13 purchaser from further liability for the tax to which the receipt refers.14 A retailer shall not be considered to have stored, used, or consumed wire-15 less telecommunications equipment by virtue of giving, selling, or other-16 wise transferring such equipment at a discount as an inducement to a consumer17 to commence or continue a contract for telecommunications service.18 (3) Every retailer engaged in business in this state and making sales19 of tangible personal property for the storage, use, or other consumption in20 this state, not exempted under section 63-3622, Idaho Code, shall, at the21 time of making the sales or, if storage, use, or other consumption of the tan-22 gible personal property is not then taxable hereunder, at the time the stor-23 age, use, or other consumption becomes taxable, collect the tax from the pur-24 chaser and give to the purchaser a receipt therefor in the manner and form25 prescribed by the state tax commission.26 (4) The provisions of this section shall not apply when the retailer27 pays sales tax on the transaction and collects reimbursement for such sales28 tax from the customer.29 (5) Every retailer engaged in business in this state or maintaining a30 place of business in this state shall register with the state tax commission31 and give the name and address of all agents operating in this state the loca-32 tion of all distributions or sales houses or offices or other places of busi-33 ness in this state and such other information as the state tax commission may34 require.35 (6) For the purpose of the proper administration of this act and to36 prevent evasion of the use tax and the duty to collect the use tax, it shall37 be presumed that tangible personal property sold by any person for delivery38 in this state is sold for storage, use, or other consumption in this state.39 The burden of proving the sale is tax-exempt is on the person who makes the40 sale, unless he obtains from the purchaser a resale certificate to the effect41 that the property is purchased for resale or rental. It shall be presumed42 that sales made to a person who has completed a resale certificate for the43 seller's records are not taxable and the seller need not collect sales or44 use taxes unless the tangible personal property purchased is taxable to the45 purchaser as a matter of law in the particular instance claimed on the resale46 certificate.47 (a) A seller may accept a resale certificate from a purchaser prior to48 the time of sale, at the time of sale, or at any reasonable time after the49 sale when necessary to establish the privilege of the exemption. The50

16 resale certificate relieves the person selling the property from the1 burden of proof only if taken from a person who is engaged in the busi-2 ness of selling or renting tangible personal property and who holds the3 permit provided for by section 63-3620, Idaho Code, or who is a retailer4 not engaged in business in this state and who, at the time of purchasing5 the tangible personal property, intends to sell or rent it in the regu-6 lar course of business or is unable to ascertain at the time of purchase7 whether the property will be sold or used for some other purpose. Other8 than as provided elsewhere in this section, when a resale certificate,9 properly executed, is presented to the seller, the seller has no duty or10 obligation to collect sales or use taxes in regard to any sales trans-11 action so documented, regardless of whether the purchaser properly or12 improperly claimed an exemption. A seller so relieved of the obligation13 to collect tax is also relieved of any liability to the purchaser for14 failure to collect tax or for making any report or disclosure of infor-15 mation required or permitted under this chapter.16 (b) The resale certificate shall bear the name and address of the pur-17 chaser, shall be signed by the purchaser or his agent, shall indicate18 the number of the permit issued to the purchaser or that the purchaser19 is an out-of-state retailer, and shall indicate the general character20 of the tangible personal property sold by the purchaser in the regular21 course of business. The certificate shall be substantially in such form22 as the state tax commission may prescribe.23 (c) If a purchaser who gives a resale certificate makes any storage or24 use of the property other than retention, demonstration, or display25 while holding it for sale in the regular course of business, the storage26 or use is taxable as of the time the property is first so stored or used.27 (7) Any person violating any provision of this section is guilty of a28 misdemeanor and punishable by a fine not in excess of one hundred dollars29 ($100), and each violation shall constitute a separate offense.30 (8) It shall be presumed that tangible personal property shipped or31 brought to this state by the purchaser was purchased from a retailer for32 storage, use, or other consumption in this state.33 (9) It shall be presumed that tangible personal property delivered out-34 side this state to a purchaser known by the retailer to be a resident of this35 state was purchased from a retailer for storage, use, or other consumption in36 this state. This presumption may be controverted by evidence satisfactory37 to the state tax commission that the property was not purchased for storage,38 use, or other consumption in this state.39 (10) When the tangible personal property subject to use tax has been40 subjected to a general retail sales or use tax by another state of the United41 States in an amount equal to or greater than the amount of the Idaho tax, and42 evidence can be given of such payment, the property will not be subject to43 Idaho use tax. If the amount paid to the other state was less, the property44 will be subject to use tax to the extent that the Idaho tax exceeds the tax45 paid to the other state. For the purposes of this subsection, a registration46 certificate or title issued by another state or subdivision thereof for a ve-47 hicle or trailer or a vessel as defined in section 67-7003, Idaho Code, shall48 be sufficient evidence of payment of a general retail sales or use tax.49

17 (11) The use tax imposed by this section shall not apply to the use by a1 nonresident of this state of a motor vehicle registered or licensed under the2 laws of the state of his residence and not used in this state more than a cu-3 mulative period of time totaling ninety (90) days in any consecutive twelve4 (12) months and if none of the buyers listed on the purchase, registration,5 or title documents are Idaho residents. A nonresident business entity will6 be held to the same requirements as a nonresident individual to qualify for7 the exemption provided in this subsection, except that the nonresident busi-8 ness entity also must not be formed under the laws of the state of Idaho. The9 use tax herein shall also not apply to any use of a motor vehicle registered10 or licensed under the laws of the state of residence of a nonresident stu-11 dent while such nonresident student is enrolled as a full-time student in an12 institution of postsecondary education that is both physically located in13 Idaho and recognized as accredited by the state board of education.14 (12) The use tax imposed by this section shall not apply to the use of15 household goods, personal effects, and personally owned vehicles or per-16 sonally owned aircraft by a resident of this state if such articles were17 acquired by such person in another state while a resident of that state and18 primarily for use outside this state and if such use was actual and substan-19 tial; however, if an article was acquired less than ninety (90) days prior20 to the time he entered this state, it will be presumed that the article was21 acquired for use in this state and that its use outside this state was not ac-22 tual and substantial. The use tax imposed by this section shall not apply to23 the use of household goods, personal effects, and personally owned vehicles24 or personally owned aircraft by active duty military personnel temporarily25 assigned in this state and spouses who accompany them if such articles were26 acquired prior to receipt of orders to transfer to Idaho or ninety (90) days27 prior to moving to Idaho, whichever time period is shorter. For purposes28 of this subsection, "resident" shall be as defined in section 63-3013 or29 63-3013A, Idaho Code. For purposes of this subsection, wherever the term30 "individual" appears in section 63-3013 or 63-3013A, Idaho Code, the term31 includes a natural person or a grantor trust as described in sections 67332 through 678 of the Internal Revenue Code.33 (13)(a) The use tax imposed by this section shall not apply to the stor-34 age, use, or other consumption of tangible personal property that is or35 will be incorporated into real property and has been donated to and has36 become the property of:37 (i) A nonprofit organization as defined in section 63-3622O,38 Idaho Code;39 (ii) The state of Idaho; or40 (iii) Any political subdivision of the state.41 (b) This exemption applies whether the tangible personal property is42 incorporated in real property by the donee, a contractor, a subcontrac-43 tor of the donee, or any other person.44 (14) The use tax imposed by this section shall not apply to tastings of45 food and beverages, including but not limited to wine and beer. For the pur-46 poses of this subsection, a tasting of wine and beer shall be defined as the47 maximum serving allowed by state or federal laws for such occasions provided48 to a potential customer, at no charge, at a location where like or similar49

18 beverages are sold. For nonalcoholic beverages and food, a tasting shall be1 defined as a sample from a unit available for sale at the tasting location.2 (15) The use tax imposed by this section shall not apply to donations3 of food or beverages, or both, to individuals or nonprofit organizations.4 For the purposes of this section, "nonprofit organization" means those non-5 profit entities currently registered with the secretary of state pursuant to6 section 30-30-102, Idaho Code.7 (16) The use tax imposed by this section shall not apply to a retailer8 supplying prepared food or beverages free of charge to its employee when that9 retailer sells prepared food or beverages in its normal course of business.10

SECTION 7. That Section 63-3638, Idaho Code, be, and the same is hereby11 amended to read as follows:12 63-3638. SALES TAX -- DISTRIBUTION. All moneys collected under this13 chapter, except as may otherwise be required in sections 63-3203, 63-3620F,14 and 63-3709, Idaho Code, shall be distributed by the state tax commission as15 follows:16 (1)(a) An amount of money shall be distributed to the state refund ac-17 count sufficient to pay current refund claims. All refunds authorized18 under this chapter by the state tax commission shall be paid through the19 state refund account, and those moneys are continuously appropriated.20 (b) Following the distribution required by paragraph (a) of this sub-21 section, an amount equal to twenty-one and seventy-five hundredths22 percent (21.75%) of the revenues collected under this chapter shall be23 distributed to the homestead property tax replacement fund, to be dis-24 tributed to taxing districts as provided in section 63-725, Idaho Code.25 (c) Following the distribution required by paragraph (a) of this26 subsection, an amount equal to three and twenty-five hundredths per-27 cent (3.25%) of the revenues collected under this chapter shall be28 distributed to the budget stabilization fund established in section29 57-814, Idaho Code. The distributions required by this paragraph shall30 be made after the distributions required by paragraph (a) of this sub-31 section and prior to any other distributions required by this section.32 (d) Following the distribution required by paragraph (a) of this sub-33 section, the distributions required by paragraphs (b) and (c) of this34 subsection shall be made prior to any other distributions required by35 this section, and all percentage-based distributions provided for in36 this section shall be calculated on the remaining revenues collected37 under this chapter after the distributions required by paragraphs (a),38 (b), and (c) of this subsection.39 (2) Five million dollars ($5,000,000) per year is continuously appro-40 priated and shall be distributed to the permanent building fund, provided by41 section 57-1108, Idaho Code.42 (3) Four million eight hundred thousand dollars ($4,800,000) per year43 is continuously appropriated and shall be distributed to the water pollution44 control fund established by section 39-3628, Idaho Code.45 (4) An amount equal to the sum required to be certified by the chair-46 man of the Idaho housing and finance association to the state tax commis-47 sion pursuant to section 67-6211, Idaho Code, in each year is continuously48 appropriated and shall be paid to any capital reserve fund established by49

19 the Idaho housing and finance association pursuant to section 67-6211, Idaho1 Code. Such amounts, if any, as may be appropriated hereunder to the capital2 reserve fund of the Idaho housing and finance association shall be repaid for3 distribution under the provisions of this section, subject to the provisions4 of section 67-6215, Idaho Code, by the Idaho housing and finance associa-5 tion, as soon as possible, from any moneys available therefor and in excess6 of the amounts the association determines will keep it self-supporting.7 (5) An amount equal to the sum required by the provisions of sections8 63-709 and 63-717, Idaho Code, after allowance for the amount appropriated9 by section 63-718(3), Idaho Code, is continuously appropriated and shall be10 paid as provided by sections 63-709 and 63-717, Idaho Code.11 (6) An amount required by the provisions of chapter 53, title 33, Idaho12 Code.13 (7) An amount required by the provisions of chapter 87, title 67, Idaho14 Code.15 (8) For fiscal year 2011 and each fiscal year thereafter, four million16 one hundred thousand dollars ($4,100,000), of which two million two hundred17 thousand dollars ($2,200,000) shall be distributed to each of the forty-four18 (44) counties in equal amounts and one million nine hundred thousand dol-19 lars ($1,900,000) shall be distributed to the forty-four (44) counties in20 the proportion that the population of the county bears to the population of21 the state. For fiscal year 2012 and for each fiscal year thereafter, the22 amount distributed pursuant to this subsection shall be adjusted annually23 by the state tax commission in accordance with the consumer price index for24 all urban consumers (CPI-U) as published by the U.S. department of labor,25 bureau of labor statistics, but in no fiscal year shall the total amount26 allocated for counties under this subsection be less than four million one27 hundred thousand dollars ($4,100,000). Any increase resulting from the ad-28 justment required in this section shall be distributed to each county in the29 proportion that the population of the county bears to the population of the30 state. Each county shall establish a special election fund to which shall31 be deposited all revenues received from the distribution pursuant to this32 subsection. All such revenues shall be used exclusively to defray the costs33 associated with conducting elections as required of county clerks by the34 provisions of section 34-1401, Idaho Code.35 (9) One dollar ($1.00) on each application for certificate of title36 or initial application for registration of a motor vehicle, snowmobile,37 all-terrain vehicle or other vehicle processed by the county assessor or the38 Idaho transportation department, excepting those applications in which any39 sales or use taxes due have been previously collected by a retailer, shall be40 a fee for the services of the assessor of the county or the Idaho transporta-41 tion department in collecting such taxes and shall be paid into the current42 expense fund of the county or state highway account established in section43 40-702, Idaho Code.44 (10) Eleven and five-tenths percent (11.5%) of revenues collected un-45 der this chapter, following any distributions required by sections 63-3203,46 63-3620F, and 63-3709, Idaho Code, and by subsection (1) of this section, is47 continuously appropriated and shall be distributed to the revenue-sharing48 account, which is hereby created in the state treasury, and the moneys in the49

20 revenue-sharing account will be paid in installments each calendar quarter1 by the state tax commission as follows:2 (a) Forty-five and two-tenths percent (45.2%) shall be paid to the var-3 ious cities as follows:4 (i) The revenue-sharing amount calculated by the state tax com-5 mission for the various cities for each quarter of fiscal year 20206 shall be the base amount for current quarterly revenue distribu-7 tion amounts. The state tax commission shall calculate the per8 capita distribution for each city resulting from the previous fis-9 cal year's distributions.10 (ii) If there is no change in the amount of the revenue-sharing11 account from the same quarter of the previous fiscal year, then the12 various cities shall receive the same amount received for the same13 quarter of the previous fiscal year.14 (iii) If the balance of the revenue-sharing account for the cur-15 rent quarter is greater than the balance of the revenue-sharing16 account for the same quarter of the previous fiscal year, then:17 1. If the distributions made to the cities during the same18 quarter of the previous fiscal year were below the base19 amount established in fiscal year 2020, then the various20 cities shall first receive a proportional increase up to the21 base amount for each city and up to a one-percent (1%) in-22 crease over such base amount. Any remaining moneys shall be23 distributed to cities with a below-average per capita dis-24 tribution in the proportion that the population of that city25 bears to the population of all cities with below-average per26 capita distributions within the state.27 2. If the distributions made to the cities during the same28 quarter of the previous fiscal year were at or above the29 base amount established in fiscal year 2020, then the cities30 shall receive the same distribution they received during the31 same quarter of the previous fiscal year plus a proportional32 increase up to one percent (1%). Any remaining moneys shall33 be distributed to the cities with a below-average per capita34 distribution in the proportion that the population of that35 city bears to the population of all cities with a below-aver-36 age per capita distribution within the state.37 (iv) If the balance of the revenue-sharing account for the cur-38 rent quarter is less than the balance of the revenue-sharing ac-39 count for the same quarter of the previous fiscal year, then the40 cities shall first receive a proportional reduction down to the41 base amount established in fiscal year 2020. If further reduc-42 tions are necessary, the cities shall receive reductions based on43 the proportion that each city's population bears to the population44 of all cities within the state.45 (b) Forty-seven and one-tenth percent (47.1%) shall be paid to the var-46 ious counties as follows:47 (i) Fifty-nine and eight-tenths percent (59.8%) of the amount to48 be distributed under this paragraph (b) of this subsection shall49 be distributed as follows:50

21 1. One million three hundred twenty thousand dollars1 ($1,320,000) annually shall be distributed one forty-fourth2 (1/44) to each of the various counties; and3 2. The balance of such amount shall be paid to the various4 counties, and each county shall be entitled to an amount in5 the proportion that the population of that county bears to6 the population of the state; and7 (ii) Forty and two-tenths percent (40.2%) of the amount to be dis-8 tributed under this paragraph (b) of this subsection shall be dis-9 tributed as follows:10 1. Each county that received a payment under the provisions11 of section 63-3638(e), Idaho Code, as that subsection ex-12 isted immediately prior to July 1, 2000, during the fourth13 quarter of calendar year 1999, shall be entitled to a like14 amount during succeeding calendar quarters.15 2. If the dollar amount of money available under this sub-16 section (10)(b)(ii) in any quarter does not equal the amount17 paid in the fourth quarter of calendar year 1999, each18 county's payment shall be reduced proportionately.19 3. If the dollar amount of money available under this sub-20 section (10)(b)(ii) in any quarter exceeds the amount paid21 in the fourth quarter of calendar year 1999, each county22 shall be entitled to a proportionately increased payment,23 but such increase shall not exceed one hundred five percent24 (105%) of the total payment made in the fourth quarter of25 calendar year 1999.26 4. If the dollar amount of money available under this sub-27 section (10)(b)(ii) in any quarter exceeds one hundred five28 percent (105%) of the total payment made in the fourth quar-29 ter of calendar year 1999, any amount over and above such30 one hundred five percent (105%) shall be paid to the various31 counties in the proportion that the population of the county32 bears to the population of the state; and33 (c) Seven and seven-tenths percent (7.7%) of the amount appropriated in34 this subsection shall be paid to the several counties for distribution35 to special purpose taxing districts as follows:36 (i) Each such district that received a payment under the provi-37 sions of section 63-3638(e), Idaho Code, as such subsection ex-38 isted immediately prior to July 1, 2000, during the fourth quarter39 of calendar year 1999, shall be entitled to a like amount during40 succeeding calendar quarters.41 (ii) If the dollar amount of money available under this subsec-42 tion (10)(c) in any quarter does not equal the amount paid in the43 fourth quarter of calendar year 1999, each special purpose taxing44 district's payment shall be reduced proportionately.45 (iii) If the dollar amount of money available under this subsec-46 tion (10)(c) in any quarter exceeds the amount distributed under47 paragraph (c)(i) of this subsection, each special purpose taxing48 district shall be entitled to a share of the excess based on the49 proportion each such district's current property tax budget bears50

22 to the sum of the current property tax budgets of all such dis-1 tricts in the state. Each year, starting with the distribution2 for the quarter ending December 31, the state tax commission shall3 calculate this distribution based on the district's current prop-4 erty tax budgets, including any unrecovered forgone amounts as de-5 termined under section 63-802(1)(e), Idaho Code. When a special6 purpose taxing district is situated in more than one (1) county,7 the state tax commission shall determine the portion attributable8 to the special purpose taxing district from each county in which it9 is situated.10 (iv) If special purpose taxing districts are consolidated, the11 resulting district is entitled to a base amount equal to the sum of12 the base amounts received in the last calendar quarter by each dis-13 trict prior to the consolidation.14 (v) If a special purpose taxing district is dissolved or disin-15 corporated, the state tax commission shall continuously distrib-16 ute to the board of county commissioners an amount equal to the17 last quarter's distribution prior to dissolution or disincorpora-18 tion. The board of county commissioners shall determine any re-19 distribution of moneys so received.20 (vi) Taxing districts formed after January 1, 2001, are not en-21 titled to a payment under the provisions of this paragraph (c) of22 this subsection.23 (vii) For purposes of this paragraph (c) of this subsection, a spe-24 cial purpose taxing district is any taxing district that is not a25 city, a county, or a school district.26 (viii) Special purpose taxing districts shall use funds received27 under the provisions of this subsection only for the purposes for28 which the special purpose taxing districts were formed.29 (11) Amounts calculated in accordance with section 2, chapter 356, laws30 of 2001, for annual distribution to counties and other taxing districts be-31 ginning in October 2001 for replacement of property tax on farm machinery and32 equipment exempted pursuant to section 63-602EE, Idaho Code. For nonschool33 districts, the state tax commission shall distribute one-fourth (1/4) of34 this amount certified quarterly to each county. For school districts, the35 state tax commission shall distribute one-fourth (1/4) of the amount cer-36 tified quarterly to each school district. For nonschool districts, the37 county auditor shall distribute such amounts to each district within thirty38 (30) calendar days from receipt of moneys from the state tax commission.39 Moneys received by each taxing district for replacement shall be utilized40 in the same manner and in the same proportions as revenues from property41 taxation. The moneys remitted to the county treasurer for replacement of42 property exempt from taxation pursuant to section 63-602EE, Idaho Code, may43 be considered by the counties and other taxing districts and budgeted at the44 same time, in the same manner, and in the same year as revenues from taxation45 on personal property, which these moneys replace. If taxing districts are46 consolidated, the resulting district is entitled to an amount equal to the47 sum of the amounts received in the last calendar quarter by each district48 pursuant to this subsection prior to the consolidation. If a taxing district49 is dissolved or disincorporated, the state tax commission shall continu-50

23 ously distribute to the board of county commissioners an amount equal to the1 last quarter's distribution prior to dissolution or disincorporation. The2 board of county commissioners shall determine any redistribution of moneys3 so received. If a taxing district annexes territory, the distribution of4 moneys received pursuant to this subsection shall be unaffected. Taxing5 districts formed after January 1, 2001, are not entitled to a payment under6 the provisions of this subsection. School districts shall receive an amount7 determined by multiplying the sum of the year 2000 school district levy mi-8 nus .004 times the market value on December 31, 2000, in the district of the9 property exempt from taxation pursuant to section 63-602EE, Idaho Code, pro-10 vided that the result of these calculations shall not be less than zero (0).11 The result of these school district calculations shall be further increased12 by six percent (6%). For purposes of the limitation provided by section13 63-802, Idaho Code, moneys received pursuant to this section as property tax14 replacement for property exempt from taxation pursuant to section 63-602EE,15 Idaho Code, shall be treated as property tax revenues.16 (12) Amounts necessary to pay refunds as provided in section 63-3641,17 Idaho Code, to a developer of a retail complex shall be remitted to the demon-18 stration pilot project fund created in section 63-3641, Idaho Code.19 (13) Amounts calculated in accordance with section 63-602KK(4), Idaho20 Code, for annual distribution to counties and other taxing districts for21 replacement of property tax on personal property tax exemptions pursuant22 to section 63-602KK(2), Idaho Code, which amounts are continuously ap-23 propriated unless the legislature enacts a different appropriation for a24 particular fiscal year. For purposes of the limitation provided by section25 63-802, Idaho Code, moneys received pursuant to this section as property tax26 replacement for property exempt from taxation pursuant to section 63-602KK,27 Idaho Code, shall be treated as property tax revenues. If taxing districts28 are consolidated, the resulting district is entitled to an amount equal to29 the sum of the amounts that were received in the last calendar year by each30 district pursuant to this subsection prior to the consolidation. If a taxing31 district or revenue allocation area annexes territory, the distribution of32 moneys received pursuant to this subsection shall be unaffected. Taxing33 districts and revenue allocation areas formed after January 1, 2022, are not34 entitled to a payment under the provisions of this subsection.35 (14) For fiscal year 2023 only, a sum of thirty-four million dollars36 ($34,000,000) shall be distributed each year by the state tax commission to37 the forty-four (44) counties in the proportion that the expenditures of each38 county for indigent defense services during county fiscal year 2021, exclud-39 ing any state funding or grants, bear to the expenditures of all counties40 in the state for indigent defense services during county fiscal year 2021,41 excluding any state funding or grants. No later than July 1, 2022, the state42 public defense commission shall certify to the state tax commission each43 county's proportionate share of all counties' indigent defense expenses in44 county fiscal year 2021, excluding any state funding or grants.45 (15) For fiscal year 2024 and each fiscal year thereafter, two and46 twenty-five hundredths percent (2.25%) of revenues collected under this47 chapter, following any distributions required by sections 63-3203,48 63-3620F, and 63-3709, Idaho Code, and by subsections (1), (10), and (16)49 of this section, is continuously appropriated and shall be distributed an-50

24 nually to the homeowner property tax relief account established in section1 63-724, Idaho Code.2 (16)(a) Prior to July 1, 2025, four and five-tenths percent (4.5%) of3 revenues collected under this chapter, following any distributions re-4 quired by sections 63-3620F and 63-3709, Idaho Code, and by subsections5 (1) and (10) of this section, but no less than eighty million dol-6 lars ($80,000,000) and no more than one hundred forty million dollars7 ($140,000,000), shall be distributed as follows:8 (i) Eighty million dollars ($80,000,000) is continuously appro-9 priated and shall be distributed to the transportation expansion10 and congestion mitigation fund established in section 40-720,11 Idaho Code; and12 (ii) The remaining moneys in excess of eighty million dollars13 ($80,000,000) provided for in this subsection is continuously ap-14 propriated and shall be apportioned to local units of government15 for local highway projects in the same percentages provided for in16 section 40-709(1) through (3), Idaho Code. Local units of govern-17 ment may pool funds allocated to them pursuant to this paragraph18 for local highway projects.19 (b) From July 1, 2025, through June 30, 2026, one hundred forty-five20 million dollars ($145,000,000) of revenues collected under this chap-21 ter, following any distributions required by sections 63-3620F and22 63-3709, Idaho Code, and by subsections (1) and (10) of this section23 shall be distributed as follows:24 (i) One hundred million dollars ($100,000,000) is continuously25 appropriated and shall be distributed first to the transportation26 expansion and congestion mitigation fund established in section27 40-720, Idaho Code; and28 (ii) The remaining forty-five million dollars ($45,000,000) pro-29 vided for in this paragraph is continuously appropriated and shall30 be apportioned to local units of government for local highway31 projects in the same percentages provided for in section 40-709(1)32 through (3), Idaho Code. Local units of government may pool funds33 allocated to them pursuant to this subparagraph for local highway34 projects.35 (c) From July 1, 2026, through June 30, 2027, one hundred sixty-five36 million dollars ($165,000,000) of revenues collected under this chap-37 ter, following any distributions required by sections 63-3620F and38 63-3709, Idaho Code, and by subsections (1) and (10) of this section39 shall be distributed as follows:40 (i) One hundred twenty million dollars ($120,000,000) is contin-41 uously appropriated and shall be distributed first to the trans-42 portation expansion and congestion mitigation fund established in43 section 40-720, Idaho Code; and44 (ii) The remaining forty-five million dollars ($45,000,000) pro-45 vided for in this paragraph is continuously appropriated and shall46 be apportioned to local units of government for local highway47 projects in the same percentages provided for in section 40-709(1)48 through (3), Idaho Code. Local units of government may pool funds49

25 allocated to them pursuant to this subparagraph for local highway1 projects.2 (d) Commencing July 1, 2027, and for each fiscal year thereafter, one3 hundred eighty-five million dollars ($185,000,000) of revenues col-4 lected under this chapter, following any distributions required by5 sections 63-3620F and 63-3709, Idaho Code, and by subsections (1) and6 (10) of this section shall be distributed as follows:7 (i) One hundred forty million dollars ($140,000,000) is contin-8 uously appropriated and shall be distributed first to the trans-9 portation expansion and congestion mitigation fund established in10 section 40-720, Idaho Code; and11 (ii) The remaining forty-five million dollars ($45,000,000) pro-12 vided for in this paragraph is continuously appropriated and shall13 be apportioned to local units of government for local highway14 projects in the same percentages provided for in section 40-709(1)15 through (3), Idaho Code. Local units of government may pool funds16 allocated to them pursuant to this subparagraph for local highway17 projects.18 (17) Beginning in fiscal year 2024 and each fiscal year thereafter,19 three hundred thirty million dollars ($330,000,000) shall be distributed20 annually to the general fund specifically for the public schools educa-21 tional support program, and eighty million dollars ($80,000,000) shall be22 distributed annually to the in-demand careers fund established in section23 72-1206, Idaho Code. The state tax commission shall make such transfers in24 quarterly installments.25 (18) For fiscal year 2024 and each fiscal year thereafter, three26 and twenty-five hundredths percent (3.25%) of revenues collected under27 this chapter, following any distributions required by sections 63-3203,28 63-3620F, and 63-3709, Idaho Code, and by subsections (1), (10), and (16) of29 this section, is continuously appropriated and shall be distributed annu-30 ally to the school district facilities fund established pursuant to section31 33-911, Idaho Code.32 (19) One hundred twenty-five million dollars ($125,000,000) collected33 under this chapter, following any distributions required by sections34 63-3620F and 63-3709, Idaho Code, and by subsections (1), (10), (15), (16),35 and (18) of this section is continuously appropriated and shall be dis-36 tributed to the school modernization facilities fund established in section37 33-912, Idaho Code. The state tax commission shall make such transfers in38 quarterly installments.39 (20) Any moneys remaining over and above those necessary to meet and40 reserve for payments under other subsections of this section shall be dis-41 tributed to the general fund.42

SECTION 8. An emergency existing therefor, which emergency is hereby43 declared to exist, Sections 1 through 3 of this act shall be in full force44 and effect on and after passage and approval and retroactively to January 1,45 2026, and Sections 4 through 7 of this act shall be in full force and effect on46 and after July 1, 2026.47