Amends and adds to existing law to provide for an initiative petition to raise or lower the property tax budgets for fire protection districts and ambulance service districts and to revise provisions regarding certain property tax budget limits.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 959 BY WAYS AND MEANS COMMITTEE AN ACT1 RELATING TO TAXATION; AMENDING CHAPTER 18, TITLE 34, IDAHO CODE, BY THE ADDI-2 TION OF A NEW SECTION 34-1801D, IDAHO CODE, TO ESTABLISH PROVISIONS RE-3 GARDING INITIATIVE PROCEDURES FOR FIRE PROTECTION DISTRICTS AND AMBU-4 LANCE SERVICE DISTRICTS; AMENDING SECTION 63-802, IDAHO CODE, TO REVISE5 PROVISIONS REGARDING LIMITATIONS OF BUDGET REQUESTS AND CERTAIN EXCEP-6 TIONS; AMENDING SECTION 31-1423, IDAHO CODE, TO PROVIDE A CORRECT CODE7 REFERENCE; AND DECLARING AN EMERGENCY, PROVIDING RETROACTIVE APPLICA-8 TION, AND PROVIDING AN EFFECTIVE DATE.9

Be It Enacted by the Legislature of the State of Idaho:10

SECTION 1. That Chapter 18, Title 34, Idaho Code, be, and the same is11 hereby amended by the addition thereto of a NEW SECTION, to be known and des-12 ignated as Section 34-1801D, Idaho Code, and to read as follows:13 34-1801D. INITIATIVE PROCEDURES FOR FIRE PROTECTION DISTRICTS AND14 AMBULANCE SERVICE DISTRICTS. Each fire protection district and ambulance15 service district shall allow direct legislation by the people through the16 initiative to increase or decrease the property tax budget of the district.17 Such districts shall follow the procedures set forth in this chapter subject18 to the following provisions:19 (1) The county prosecuting attorney of the county in which the district20 office is located shall perform those duties assigned to the attorney gen-21 eral.22 (2) The district clerk shall perform those duties assigned to the sec-23 retary of state.24 (3) District initiative elections shall be held on the Tuesday follow-25 ing the first Monday in November in odd-numbered years.26 (4) Pursuant to section 34-1809, Idaho Code, the county prosecuting at-27 torney of the county in which the district office is located shall prepare28 recommendations concerning revision of the initiative, shall issue a cer-29 tificate of review to the district clerk, and shall prepare the ballot title30 and short title.31 (5) An action brought pursuant to section 34-1809, Idaho Code, chal-32 lenging the ballot title or short title shall be brought in the district33 court in the county in which the district office is located.34 (6) To be eligible to sign a petition for a district initiative, a35 person shall be a qualified elector of the district at the time of signing36 thereon.37 (7) To perfect a petition for a district initiative, the petition shall38 have signatures from at least twenty percent (20%) of the total number of39 qualified electors voting in the most recent general district election ac-40 tually held in November of an odd-numbered year.41

2 (8) The provisions of section 34-1805, Idaho Code, relating to the num-1 ber of required signatures and geographic distribution of signatures shall2 not apply to district initiatives.3 (9) Any person who circulates a petition for a district initiative4 shall be a resident of the state of Idaho and at least eighteen (18) years of5 age and, pursuant to section 34-1807, Idaho Code, shall certify such per-6 son's belief that each signer of the petition is a qualified elector of the7 state of Idaho and the district.8 (10) A copy of all petitions and signature sheets shall be kept by the9 district clerk as a public record.10 (11) The deadline for submission of signatures to the district clerk is11 one hundred eighty (180) days after the petitioners for initiative receive12 the official ballot title from the district clerk, or April 30 of the year of13 the initiative election, whichever is earlier.14 (12) Petitioners must submit the signed initiative petitions to the15 county clerk for verification no later than the close of business on the16 first day of May in the year of the initiative election, or one hundred eighty17 (180) days after the petitioners receive the official ballot title from the18 district clerk, whichever is earlier.19 (13) The county clerk shall have sixty (60) calendar days to verify the20 signatures as provided in section 34-1802(3), Idaho Code.21 (14) The district board shall have the option to adopt the property tax22 budget reduction proposed by initiative within thirty (30) days after the23 notification pursuant to section 34-1807, Idaho Code, provided that the pe-24 tition has the required number of signatures. The district board shall hold25 a public hearing on the proposed property tax budget reduction within the26 thirty (30) day period, preceded by legal notice published once in the dis-27 trict at least seven (7) days preceding the hearing. If the property tax bud-28 get reduction is not adopted by the district board by the end of the thirty29 (30) day period, the initiative shall be put on the ballot.30 (15) As provided by sections 34-1812A through 34-1812C, Idaho Code, a31 voters' pamphlet shall be prepared by the district clerk.32 (16) To be passed into law, an initiative shall be approved by the same33 percentage of votes cast as required for the passage of a budget increase34 pursuant to section 63-802(1)(h), Idaho Code.35 (17) The district board shall issue the proclamation provided by sec-36 tion 34-1813, Idaho Code.37 (18) The district clerk shall notify the county clerk and the state tax38 commission of any property tax budget change, within thirty (30) days after:39 (a) The proclamation by the district board provided in subsection (17)40 of this section; or41 (b) The approval by the district board of a property tax budget reduc-42 tion that obviates the need to place the initiative on the ballot pur-43 suant to subsection (14) of this section.44 (19) This section does not apply to bond elections.45

SECTION 2. That Section 63-802, Idaho Code, be, and the same is hereby46 amended to read as follows:47 63-802. LIMITATION ON BUDGET REQUESTS -- LIMITATION ON TAX CHARGES --48 EXCEPTIONS. (1) Except as otherwise provided in this section, no taxing dis-49

3 trict shall certify a budget request for an amount of property tax revenues1 to finance an annual budget that exceeds the maximum sum permitted under this2 section:3 (a)(i) The highest dollar amount of property taxes certified for4 its annual budget for any one (1) of the three (3) tax years preced-5 ing the current tax year, which amount may be increased by a growth6 factor of not to exceed three percent (3%) plus the amount of rev-7 enue calculated as described in this subsection. The Except for8 fire protection districts and ambulance service districts, the9 taxing district shall determine what portion of the three percent10 (3%) increase permitted under this subparagraph that it requires11 and then calculate a preliminary levy rate based on the percent12 chosen. In calculating the preliminary levy rate, the most cur-13 rent taxable market value shall be used, except that for taxable14 market values of centrally assessed operating property, the prior15 year's valuation may be used instead of the current year's taxable16 market values. The preliminary levy rate shall be multiplied by17 the value shown on the new construction roll compiled pursuant to18 section 63-301A, Idaho Code, and by ninety percent (90%) of the19 value of annexation during the previous calendar year, as cer-20 tified by the state tax commission for taxable market values of21 operating property of public utilities and by the county assessor.22 For fire protection districts and ambulance service districts,23 the previous year's levy rate shall be multiplied by the value24 shown on the new construction roll compiled pursuant to section25 63-301A, Idaho Code, and by ninety percent (90%) of the value of26 annexation during the previous calendar year, as certified by the27 state tax commission for the taxable market values of operating28 property of public utilities and by the county assessor; except29 for a fire protection district annexing property prior to July 1,30 2021, pursuant to section 31-1429, Idaho Code, the new levy rate31 shall be multiplied by one hundred percent (100%) of the value of32 any such property annexed prior to July 1, 2021.33 (ii) The Except as provided in this subparagraph, the total budget34 increase calculated under this paragraph must not exceed eight35 percent (8%), except. For fire protection districts and ambulance36 service districts, the total budget increase calculated under37 this paragraph shall not exceed fifteen percent (15%). Provided,38 however, that any increase in the amount of property tax revenue39 to finance an annual budget added as a result of the termination,40 deannexation, plan modification of, or the withdrawal of certain41 taxing districts from, a revenue allocation area of an urban re-42 newal district pursuant to section 63-301A(3)(f), (i), (j), or43 (k), Idaho Code, or section 50-2908(1)(g), Idaho Code, shall not44 be subject to such limitation.45 (iii) Following the first year in which a fire protection district46 has annexed city property pursuant to section 31-1429, Idaho Code,47 the city shall subtract an amount equal to the moneys spent on fire48 protection services during the last full year the city provided49

4 fire protection services to its residents from its budget limita-1 tion under this section.2 (b) If the taxing district has not imposed a levy for three (3) or more3 years, the highest dollar amount of property taxes certified for its an-4 nual budget for the purpose of paragraph (a)(i) of this subsection shall5 be the dollar amount of property taxes certified for its annual budget6 during the last year in which a levy was made.7 (c) The dollar amount of the actual budget request may be substituted8 for the amount in paragraph (a) of this subsection if the taxing dis-9 trict is newly created, except as may be provided in paragraph (i) of10 this subsection.11 (d) This section does not apply to school district levies imposed in12 section 33-802, Idaho Code.13 (e)(i) In the case of a fire protection district or ambulance ser-14 vice district for which less than the maximum allowable increase15 in the dollar amount of property taxes is certified for annual bud-16 get purposes in any one (1) year prior to property tax year 2026,17 or any other nonschool district for which less than the maximum al-18 lowable increase in the dollar amount of property taxes is certi-19 fied for annual budget purposes in any one (1) year, such a dis-20 trict may, in any following year, recover the forgone increase by21 certifying, in addition to any increase otherwise allowed, any or22 all of the increase originally forgone. Provided however, that23 prior to budgeting any forgone increase, the district must provide24 notice of its intent to do so, hold a public hearing that may be in25 conjunction with its annual budget hearing, and certify by resolu-26 tion the amount of forgone increase to be budgeted and the specific27 purpose for which the forgone increase is being budgeted. Upon28 adoption of the resolution, the clerk of the district shall file a29 copy of the resolution with the county clerk and the state tax com-30 mission. Said additional amount shall be included in future cal-31 culations for increases as allowed, except as provided in subpara-32 graph (iii) of this paragraph.33 (ii) If the forgone increase is budgeted for the purpose of main-34 tenance and operations, the rate of recovering the reserved for-35 gone moneys may increase the taxing district's budget by no more36 than one percent (1%) per year.37 (iii) If the forgone increase is budgeted for a capital project or38 projects, the rate of recovering the reserved forgone moneys may39 not exceed three percent (3%) of the taxing district's budget for40 the year in which the forgone increase is budgeted. Forgone moneys41 budgeted for a capital project must be deducted from the taxing42 district's forgone balance in the year in which it is budgeted.43 Upon completion of such a capital project, the taxing district44 shall certify such completion to the state tax commission and45 county clerk. If, upon certification, the state tax commission46 finds that the taxing district included forgone moneys for a capi-47 tal project in calculating the increase permitted under paragraph48 (a) of this subsection, the state tax commission shall direct the49 taxing district to reduce its property tax budget for any year50

5 in which the forgone moneys were used to calculate a budget in-1 crease, in an amount equal to the forgone moneys budgeted plus any2 increases attributed to the forgone moneys improperly included in3 the taxing district's property tax budget. For the purpose of this4 paragraph, a capital project includes:5 1. The construction, expansion, renovation, or replacement6 of public facilities, including the acquisition of land and7 other site improvements;8 2. The construction, expansion, or reconstruction of public9 works improvements, including roads, bridges, water sys-10 tems, sewer systems, and broadband systems; and11 3. The purchase of equipment with a useful life of ten (10)12 years or more.13 (f) If a fire protection district or ambulance service district elects14 to budget less than the maximum allowable increase in the dollar amount15 of property taxes for any property tax year prior to 2026, or any other16 taxing district elects to budget less than the maximum allowable in-17 crease in the dollar amount of property taxes, the taxing district may18 reserve the right to recover all or any portion of that year's forgone19 increase in a subsequent year by adoption of a resolution specifying20 the dollar amount of property taxes being reserved. Otherwise, that21 year's forgone increase may not be recovered under paragraph (e) of this22 subsection. The district must provide notice of its intent to do so and23 hold a public hearing that may be in conjunction with its annual budget24 hearing, if applicable. The resolution to reserve the right to recover25 the forgone increase for that year shall be adopted at the annual bud-26 get hearing of the taxing district if the district has a budget hearing27 requirement.28 (g) In the case of cities, if the immediately preceding year's levy sub-29 ject to the limitation provided by this section is less than 0.004, the30 city may increase its budget by an amount not to exceed the difference31 between 0.004 and the actual prior year's levy multiplied by the prior32 year's market value for assessment purposes. The additional amount33 must be approved by sixty percent (60%) of the voters voting on the ques-34 tion at an election called for that purpose and held on the date in May or35 November provided by law and may be included in the annual budget of the36 city for purposes of this section.37 (h) A taxing district may submit to the electors within the district38 the question of whether the budget from property tax revenues may be39 increased beyond the amount authorized in this section, but not beyond40 the levy authorized by statute. The additional amount must be approved41 by sixty-six and two-thirds percent (66 2/3%) or more of the voters42 voting on the question at an election called for that purpose and held43 on the May or November dates provided by section 34-106, Idaho Code.44 If approved by the required minimum sixty-six and two-thirds percent45 (66 2/3%) of the voters voting at the election, the new budget amount46 shall be the base budget for the purposes of this section.47 (i) When a nonschool district consolidates with another nonschool48 district or dissolves and a new district performing similar governmen-49 tal functions as the dissolved district forms with the same boundaries50

6 within three (3) years, the maximum amount of a budget of the district1 from property tax revenues shall not be greater than the sum of the2 amounts that would have been authorized by this section for the district3 itself or for the districts that were consolidated or dissolved and in-4 corporated into a new district.5 (j) This section does not apply to cooperative service agency levies6 imposed in sections 33-317 and 33-317A, Idaho Code.7 (k) The amount of money received in the twelve (12) months immediately8 preceding June 30 of the current tax year as a result of distributions of9 the tax provided in section 63-3502B(2), Idaho Code.10 (2) In the case of fire districts, during the year immediately follow-11 ing the election of a public utility or public utilities to consent to be pro-12 vided fire protection pursuant to section 31-1425, Idaho Code, the maximum13 amount of property tax revenues permitted in subsection (1) of this section14 may be increased by an amount equal to the current year's taxable value of the15 consenting public utility or public utilities multiplied by that portion of16 the prior year's levy subject to the limitation provided by subsection (1) of17 this section.18 (3) No board of county commissioners shall set a levy, nor shall the19 state tax commission approve a levy for annual budget purposes, which ex-20 ceeds the limitation imposed in subsection (1) of this section unless au-21 thority to exceed such limitation has been approved by a majority of the tax-22 ing district's electors voting on the question at an election called for that23 purpose and held pursuant to section 34-106, Idaho Code, provided however,24 that such voter approval shall be for a period of not to exceed two (2) years.25 (4) The amount of property tax revenues to finance an annual budget does26 not include revenues from nonproperty tax sources and does not include rev-27 enue from levies for the payment of judicially confirmed obligations pur-28 suant to sections 63-1315 and 63-1316, Idaho Code, and revenue from levies29 that are voter-approved for bonds, override levies or supplemental levies,30 plant facilities reserve fund levies, school emergency fund levies, or for31 levies applicable to newly annexed property or for levies applicable to new32 construction as evidenced by the value of property subject to the occupancy33 tax pursuant to section 63-317, Idaho Code, for the preceding tax year. The34 amount of property tax revenues to finance an annual budget does not include35 any property taxes that were collected and refunded on property that is ex-36 empt from taxation, pursuant to section 63-1305C, Idaho Code.37 (5) The amount of property tax revenues to finance an annual budget38 shall include moneys received as recovery of property tax for a revoked pro-39 visional property tax exemption under section 63-1305C, Idaho Code.40 (6) For tax year 2023, before calculating the amount required in sub-41 section (1)(a)(i) of this section, the board of county commissioners shall42 reduce the approved property tax levy portion of its budget for the immedi-43 ate prior three (3) years in an amount equal to the amount levied for indigent44 public defense. The reduced budget amount shall be the base budget for the45 purpose of subsection (1)(a)(i) of this section.46

SECTION 3. That Section 31-1423, Idaho Code, be, and the same is hereby47 amended to read as follows:48

7 31-1423. LEVY -- RECOMMENDED LEVY -- ELECTION. (1) Each year, immedi-1 ately prior to the annual county levy of taxes, the board of commissioners2 of each fire protection district, organized and existing under this chapter,3 may levy a tax upon all the taxable property within the boundaries of such4 district sufficient to defray the cost of equipping and maintaining the dis-5 trict of twenty-four hundredths percent (.24%) of market value for assess-6 ment purposes, to be used for the purposes of this chapter and for no other7 purpose. The levy shall be made by resolution entered upon the minutes of the8 board of commissioners of the fire protection district, and it shall be the9 duty of the secretary of the district, immediately after entry of the resolu-10 tion in the minutes, to transmit to the county auditor and the county asses-11 sor certified copies of the resolution providing for such levy. Said taxes12 shall be collected as provided by section 63-812, Idaho Code.13 (2) If two (2) or more fire protection districts consolidate into one14 (1) district, the provisions of section 63-802, Idaho Code, shall apply to15 the consolidated district's budget request. In addition, the consolidated16 district shall receive the benefit of foregone increases accumulated by the17 former districts under section 63-802(1)(a), Idaho Code.18

SECTION 4. An emergency existing therefor, which emergency is hereby19 declared to exist, Section 2 of this act shall be in full force and effect20 on and after passage and approval and retroactively to January 1, 2026, and21 Sections 1 and 3 of this act shall be in full force and effect on and after22 July 1, 2026.23