Amends existing law to revise provisions regarding a certain property tax exemption for low-income housing.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 760 BY REVENUE AND TAXATION COMMITTEE AN ACT1 RELATING TO PROPERTY TAXES; AMENDING SECTION 63-602GG, IDAHO CODE, TO REVISE2 PROVISIONS REGARDING PROPERTY TAX EXEMPTIONS FOR LOW-INCOME HOUSING3 OWNED BY NONPROFIT ORGANIZATIONS; AND DECLARING AN EMERGENCY AND PRO-4 VIDING AN EFFECTIVE DATE.5

Be It Enacted by the Legislature of the State of Idaho:6

SECTION 1. That Section 63-602GG, Idaho Code, be, and the same is hereby7 amended to read as follows:8 63-602GG. PROPERTY EXEMPT FROM TAXATION -- LOW-INCOME HOUSING OWNED9 BY NONPROFIT ORGANIZATIONS. (1) As provided in this section, the board of10 county commissioners may, at its discretion, exempt all or a portion of low-11 income housing owned by nonprofit organizations shall be exempt from taxa-12 tion.13 (2) In order to qualify as a nonprofit organization under this section,14 an organization must demonstrate that:15 (a) It is organized as a nonprofit corporation pursuant to chapter 30,16 title 30, Idaho Code, or pursuant to equivalent laws in the applicable17 state of incorporation; and18 (b) It has received an exemption from taxation from the internal rev-19 enue service pursuant to section 501(c)(3) of the Internal Revenue20 Code; and.21 (c) No proceeds or tax benefits of the organization or from the low-in-22 come housing property owned by the organization shall inure to any indi-23 vidual or for-profit entity other than normal employee compensation.24 (3) In order to qualify for the exemption provided in this section,25 the low-income housing property shall meet the following qualifications:26 provided in this subsection.27 (a) Both legal and equitable title to the property is solely owned by28 the nonprofit organization seeking the exemption and is managed by the29 owner or a related nonprofit organization qualifying for the exemption30 set forth in section 63-602C, Idaho Code; and The property shall be31 owned and operated by, or shall be a wholly owned subsidiary of, a quali-32 fied nonprofit organization pursuant to subsection (2) of this section,33 or shall be owned by a limited partnership, limited liability limited34 partnership, or limited liability company in which a general partner or35 a managing member, as applicable, is a qualified nonprofit organization36 pursuant to subsection (2) of this section or a single-purpose entity37 that is wholly owned by one (1) or more qualified nonprofit organiza-38 tions pursuant to subsection (2) of this section.39 (b) Tenants shall not be evicted based upon on their inability to pay40 for a period of three (3) months if such inability is due to a cata-41 strophic event that is not under the tenant's control. For purposes42

2 of this subsection, "catastrophic event" means a medical condition or1 injury in which sudden, serious and unexpected symptoms of illness or2 injury are sufficiently severe to render the tenant unable to partici-3 pate in employment and such illness or injury has been certified by one4 (1) or more licensed physicians and/or psychiatrists or psychologists.5 The term "catastrophic event" does not apply to individuals who volun-6 tarily remove themselves from the workforce; and.7 (c) Except for a the manager's unit units, all of the housing units in8 the low-income housing property are shall be dedicated to low-income9 housing in the following manner: Fifty-five percent (55%) of the units10 and shall be rented to those earning an average of sixty percent (60%) or11 less of the area median gross income for the county in which the housing12 is located; twenty percent (20%) of the units shall be rented to those13 earning fifty percent (50%) or less of the median income of the county in14 which the housing is located; and twenty-five percent (25%) of the units15 shall be rented to those earning thirty percent (30%) or less of the me-16 dian income for the county in which the housing is located as determined17 in a manner consistent with 26 U.S.C. 42(g), and rents on such housing18 units shall meet the requirements of 26 U.S.C. 42 (g)(2).19 (d) In each year following a year in which the exemption was allowed un-20 der this section, the owner of a low-income housing property shall sub-21 mit to the county assessor of the county in which such property is lo-22 cated a statement certifying that the low-income housing property is in23 compliance with the provisions of paragraph (c) of this subsection. If24 the owner of such low-income housing property fails to submit the state-25 ment required by this paragraph, the low-income housing property shall26 not be eligible for the exemption provided in this section for the imme-27 diately succeeding tax year.28 (4) An application for the low-income property tax exemption provided29 for in this section shall be filed no later than April 15 pursuant to section30 63-602, Idaho Code, and shall include, at a minimum, the following informa-31 tion:32 (a) A general description of the low-income housing property project,33 including but not limited to the number of low-income housing units34 available and the number of units, if any, offered at market rate;35 (b) A description of the ownership interest of the applicants and the36 nonprofit organization partnering with the applicants; and37 (c) The duration of the affordability period. For the purposes of this38 section "affordability period" means the period of time in which the39 housing units in the low-income housing property are required to comply40 with the restrictions on tenant eligibility and rent levels set forth41 in a land use restrictive agreement executed with the Idaho housing42 and finance association for the purpose of qualifying for the federal43 low-income housing tax credit pursuant to 26 U.S.C. 42.44 (5)(a) In addition to the application required pursuant to subsection45 (4) of this section, the owner of a proposed low-income housing property46 project that has not received all required local land use or zoning ap-47 provals may request from the county a written preliminary determination48 as to whether the project, if developed as proposed, will qualify for49

3 the exemption authorized by this section. Such request may be submitted1 prior to filing any land use or zoning application.2 (b) A request for preliminary determination shall include sufficient3 information to demonstrate compliance with the requirements of this4 section, including the information described in subsection (4)(a)5 through (c) of this section.6 (c) A written preliminary determination issued pursuant to this sub-7 section shall be binding on the county, provided the project is devel-8 oped substantially in accordance with the materials submitted with the9 request. Any material change to the project, other than modifications10 required or approved through the applicable local land use approval11 process, shall require a new request for preliminary determination.12 (d) A preliminary determination issued pursuant to this subsection13 shall not relieve the owner of the obligation to file a timely appli-14 cation pursuant to subsection (4) of this section in order to receive15 the exemption for any tax year after the low-income housing property16 project is complete.17 (6)(a) Nothing in this section shall be construed to require a board of18 county commissioners to grant a property tax exemption pursuant to this19 section for low-income housing property.20 (b) A decision of the board of county commissioners to deny an applica-21 tion for the exemption provided for in this section shall be final and22 shall not be subject to judicial review.23 (c) If at any time the use of the property no longer meets the criteria24 of the exemption or the affordability period on the low-income housing25 property changes, the board of county commissioners shall remove the26 property tax exemption provided for in this section.27 (4) (7) The exemption provided in this section shall not apply: to any28 property on which financing has already closed as of July 1, 2026, or to a29 property that is already in service and housing tenants as of July 1, 2026,30 unless such property is being rehabilitated pursuant to 26 U.S.C. 42 or is31 already receiving the exemption pursuant to this section on or before July 1,32 2026.33 (a) If the project is financed after the effective date of this act and34 applicable law permits the payment of property taxes with federal or35 state funds, grants, loans or subsidies; or36 (b) If the property is receiving federal project-based assistance,37 as provided by 42 U.S.C. sections 1437f(d)(2), 1437f(f)(6) and38 1437f(o)(13); or39 (c) To any property used by a taxpayer to qualify for tax credits under40 the provisions of 26 U.S.C. chapter 42 or any successor programs until41 such time as the property is solely owned by a nonprofit organization as42 defined in this section and is no longer utilized to receive federal tax43 credits.44 (5) (8) Notwithstanding any other provision of this section, a low-in-45 come housing property shall be exempt from taxation due to undue hardship if:46 (a) The property was financed prior to the effective date of this act;47 and48 (b) Such financing was dependent upon the tax-exempt status of the49 property; and50

4 (c) The law does not allow additional federal or state revenues to be1 available for the payment of property taxes.2 (6) (9) Nothing in this section shall affect the qualification of prop-3 erties for tax-exempt status under other provisions of title 63, Idaho Code.4 (10) Property exempt under this section shall not be included on any new5 construction roll prepared by the county assessor in accordance with sec-6 tion 63-301A, Idaho Code, unless the exemption is removed or the property no7 longer qualifies for the exemption.8

SECTION 2. An emergency existing therefor, which emergency is hereby9 declared to exist, this act shall be in full force and effect on and after10 July 1, 2026.11