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H 406

PROPERTY TAXES – Amends existing law to revise provisions regarding a property tax exemption for certain low-income housing owned by nonprofit organizations.

68th Legislature, 1st Regular Session (2025)

House Bill 406 boosts affordable housing by allowing nonprofits to partner with for-profits for tax exemptions, ensuring low-income units without burdening local taxpayers.

Reported Printed and Referred to Revenue & Taxation
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Bill Summary · H 406

Summary of House Bill 406 (H 406)

Purpose and Intent

House Bill 406 aims to amend existing Idaho law regarding property tax exemptions for low-income housing owned by nonprofit organizations. The bill seeks to enhance the availability of affordable housing by allowing nonprofit organizations to collaborate with for-profit entities and access federal incentives for development. It also aims to ensure that the construction of new workforce housing does not adversely affect local property taxpayers.

Key Provisions

The bill proposes several significant changes to Section 63-602GG of the Idaho Code:

  1. Eligibility for Nonprofit Organizations:

    • Nonprofits must be organized under Idaho law or equivalent laws from other states.
    • They must have received a tax exemption under section 501(c)(3) of the Internal Revenue Code.
    • Tax benefits must not inure to individuals or for-profit entities, except for normal employee compensation.

  2. Property Ownership and Management:

    • The property must be solely owned by the nonprofit or a related qualifying organization.
    • Tenants cannot be evicted for three months due to inability to pay rent caused by a certified catastrophic event.

  3. Income Requirements for Tenants:

    • At least 55% of units must be rented to individuals earning 60% or less of the area median income.
    • 20% of units must be rented to those earning 50% or less, and 25% to those earning 30% or less.

  4. Compliance Certification:

    • Property owners must submit an annual compliance statement to the county assessor to maintain exemption eligibility.

  5. Exemption Limitations:

    • The exemption does not apply to properties financed before July 1, 2025, unless they are being rehabilitated or already receiving the exemption.
    • Properties receiving federal project-based assistance or tax credits under certain federal laws are also excluded until they are solely owned by a nonprofit.

  6. Emergency Clause:

    • The bill includes an emergency declaration, making it effective on July 1, 2025.

Impact

  • Affected Parties: The bill primarily impacts nonprofit organizations involved in low-income housing, for-profit entities partnering with them, and local property taxpayers.
  • Fiscal Note: The proposed changes are expected to have no negative fiscal impact on the state General Fund or local governments, as they apply only to future properties.

Legislative Timeline

  • Introduced: March 13, 2025
  • Reported Printed and Referred to Revenue & Taxation: March 14, 2025

This bill represents a proactive approach to addressing the affordable housing crisis in Idaho by facilitating partnerships and ensuring that new developments do not place an undue burden on existing taxpayers.

Compiled from official sources — confirm details with the bill’s official record.

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