Committee introduces RS 32518 to shift certain utilities from property assessments to per-unit rates

Representative Jeff Ehlers, R-District 21, introduced RS 32518 during the House Revenue and Taxation Committee meeting Tuesday, proposing to replace centrally assessed operating-property tax for certain rate-regulated utilities with per-unit rates reported to the Idaho Public Utilities Commission.

Ehlers said the proposal responds to recent litigation in which utilities argued they should receive adjustments under a federal statute referred to by witnesses as the “4 R Act,” and that courts have ruled favorably for utilities in related cases. Under the draft, electric utilities would be assessed using a single rate tied to kilowatt-hours; gas utilities would be assessed under tiered rates tied to therms. The bill is designed to produce replacement revenue so local taxing districts receive roughly the same dollars as under the current system.

“We looked at what they had received … and adjusted those rates, to estimate to get them right at the replacement rates so everybody could be made whole,” Ehlers told the committee. He said 2025 would be the last year for the current property tax and the new scheme would begin in 2026, with additional administrative provisions to implement the change.

Representative Birch asked for more detail on the fiscal note and how revenue neutrality would be achieved given that property assessments and utility consumption can both vary year to year. Ehlers responded that assessments already vary and that the drafters used historical assessment data to estimate replacement rates.

Supporters said the RS reflects lengthy negotiations with utilities and counties. Representative Monks moved to introduce RS 32518 and praised Ehlers for work with stakeholders; the motion to introduce passed unanimously.

Votes at a glance

- Motion: Introduce RS 32518. Mover: Representative Monks. Outcome: Passed (unanimous voice vote).