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Committee introduces RS 32518 to shift utilities property tax to per-unit rate
Summary
A legislative staff request (RS 32518) to replace centrally assessed property taxes on utilities with per-unit rates tied to kilowatt-hours and therms was introduced to the House Revenue & Taxation Committee amid discussion of recent court rulings and efforts to keep local taxing districts whole.
BOISE, Idaho — The Idaho House Revenue & Taxation Committee on Feb. 25 introduced RS 32518, a draft that would replace centrally assessed property taxation for certain utilities with per-unit rates reported to the Public Utilities Commission.
Sponsor Representative Jeff Ehlers, R-District 21, said the proposal responds to recent litigation in which utilities argued other centrally assessed operating property should receive similar treatment under federal law. Ehlers told the committee the draft creates a single replacement rate for electric utilities based on kilowatt-hours and tiered therm-based rates for gas utilities, with those rates reported to the Idaho Public Utilities Commission. “The rates were established to get, basically, the local taxing districts, to have replacement dollars,” Ehlers said.
Ehlers said the change is intended to maintain the current ‘‘size of the pie’’ for local taxing districts and to avoid future lawsuits under the statute the testimony described as the “4 R act.” The sponsor said 2025 would be the last year for the existing property-tax assessment method and the new scheme would begin in 2026.
Representative Monks moved to introduce the RS and praised Ehlers for working with utilities and counties to produce a proposal “they all can support.” Representative Birch asked for additional detail on the fiscal note and how replacing a fixed property assessment with a variable rate (kilowatt-hours or therms) will remain revenue neutral; Ehlers said that assessments can vary year to year and the draft attempts to account for that variability.
Committee members also asked whether the measure would prevent continued court challenges. Representative Shepherd asked, “Are we gonna win this in court?” Representative Ehlers and other backers said bringing all parties to the table and creating a replacement-rate system is intended to remove the need for additional litigation.
Action and next steps: Representative Monks moved to introduce RS 32518; the committee approved the motion by unanimous voice vote and the RS stands introduced. Sponsors said the RS contains administrative provisions and allocation adjustments meant to make local taxing districts whole; committee members asked for more information on the fiscal note and implementation details when the measure returns for formal bill drafting.
