Senate committee holds House Bill 435 after assessors warn 95–105% assessment range would strain small counties

BOISE, March 26 — The Senate Local Government and Taxation Committee on Wednesday held House Bill 435 at the call of the chair after several county assessors urged removing a provision that would narrow acceptable assessment ratios from 90'110% to 95'105% and raised concerns about staffing, data availability and timing.

Representative Jeff Ehlers, District 21 (Meridian), sponsor of the trailer bill, told the committee the measure bundles several tax-related corrections and clarifications. "This is a trailer bill all related to taxation, some corrections, clean up, and clarification," Ehlers said in opening testimony. He described provisions that would: set historic flat-tax rate dates explicitly for the tax commission; limit statute-of-limitations look-backs for sales and income tax audits to three years except in cases of fraud; clarify when the tax commission may begin charging interest after identifying a return for audit; confirm that $330,000,000 will be treated as gross revenue and remain in the base for education funding; and make clear that $100 million in property-tax relief tied to a property-tax bill will reach taxpayers in calendar year 2025 no later than Aug. 31.

The bill's most contested change would narrow the assessment ratio standard used by the Idaho State Tax Commission and assessors when testing local assessment levels. Current law and widely used appraisal standards allow a 90'110% testing band; HB 435 would change that to 95'105% for certain valuation testing, effective Jan. 1, 2026, according to testimony.

Why it matters: County assessors told the committee the tighter band could be infeasible in many smaller counties that lack sufficient sales information to run reliable ratio studies. Those assessors said failing a ratio study under a narrower band could produce more appeals and force counties to hire additional staff or divert resources from other duties.

County assessors testify

Kathleen Atkinson, Oneida County assessor, said Oneida is a smaller county with limited sales data. "Without access to sufficient amount of sales data, it is extremely difficult for us to meet the higher percentage ratios of 95 to a 5%," Atkinson said. She told the committee she had no commercial sales in six years of county data and that Idaho's nondisclosure rules limit the data available to some counties.

Tiffany Nettleton, Owyhee County assessor, said she is not opposed to the bill overall but asked the committee to restore the 90'110% range. "I'm not against the bill, I would just very much appreciate that amendment," Nettleton said, adding that her office is small and that additional appeals could require hiring staff and increasing county costs.

Holly Anne Strang, Gem County assessor and legislative chair of the Idaho Association of County Assessors, said assessors understand the policy goals but warned the change was introduced without resolving implementation issues. "I respectfully ask that you amend House Bill 4 35 by removing the changes in section 1," Strang said.

Canyon County Assessor Bridal Stender told senators that, while residential valuation in his county would likely meet the tighter band, limited sales in commercial categories would have required raising some commercial assessments roughly 4'5% to comply, creating a possible tax shift to homeowners.

Sponsor response

Representative Ehlers said the intent is to reduce opportunities for class-to-class maneuvering that can shift tax burdens and to improve accuracy. He told the committee that realtors have offered MLS access to counties and that the legislation includes other, non-controversial clarifications. "We're just asking for accurate assessments, sharpening the pencil," Ehlers said.

Committee action and next steps

After extended testimony and discussion about timing differences between county valuations and the tax commission's follow-up ratio studies, Senator Denhartau moved to "hold House Bill 435 in committee subject to the call of the chair." The motion was seconded by Senator Grohl and Senator Adams and carried on a voice vote; the chair declared the motion carried. The committee did not adopt the requested amendment removing the assessment-range change; instead members agreed to hold the bill to seek additional work and potential changes.

Key technical provisions discussed

- Assessment-range change: Test band narrowed from 90'110% to 95'105%; assessors testified an effective date of Jan. 1, 2026 was referenced.

- Statute of limitations for audits: Sales- and income-tax look-backs would be limited to three years for filed returns; fraud exceptions remain unlimited.

- Audit interest timing: Language clarifies when the tax commission can begin charging interest after identifying a return for audit.

- Education funding and revenue accounting: Testimony said the $330,000,000 designated for education from a prior special session will be clarified as gross revenue and remain in the base for the public schools educational support program.

- Property-tax relief timing: Testimony clarified the $100 million property-tax relief will be reflected on taxpayer bills in calendar year 2025; transfers must occur no later than Aug. 31 so local taxing districts can show the relief on 2025 bills.

What the committee said

Committee members expressed sympathy for both goals: improving assessment accuracy and not overburdening small counties. Several senators urged continued negotiation between the sponsor, assessors and the tax commission. The committee's decision to hold the bill leaves the bill alive for further amendment and negotiation.

Votes at a glance

- Motion: "Hold House Bill 435 in committee subject to the call of the chair." Motion by Senator Denhartau; seconds by Senator Grohl and Senator Adams. Outcome: approved (voice vote).

Ending

The committee left House Bill 435 pending while members and stakeholders pursue further conversations about the assessment-range language and technical implementation issues; no floor action was taken by the committee on the bill during this hearing.