By Logan Finney, Idaho Reports
After some lawmakers felt that a Treasure Valley city overreached in creating an urban renewal district with the goal of leveraging a new data center to develop an industrial park, the Idaho Senate passed a bill Thursday to tighten the rules and bring the project into line. The bill moves to the governor’s desk.
Sen. Lori Den Hartog, R-Meridian, carried House Bill 328, which adds parameters to a sales tax exemption the legislature passed in 2020 to incentivize construction of data centers in Idaho. The legislation passed on Thursday is in response to Kuna’s creation of an urban renewal area around a highly publicized Meta data center project that benefitted from the sales tax exemption.
“The discussion [in 2020] was all about providing property tax relief to the community in which that data center was being constructed,” Den Hartog said. “The whole purpose of that exemption was to provide immediate tax relief in the community.”
Property taxes are based on property values, so increased property values typically mean an increased proportion of the overall property tax burden. When a local government creates an urban renewal district, however, any taxes generated by increased property value are instead sequestered for improvements within the district.
The language in the bill mandates that any property value increases must go toward the regular property tax roll in the county if those value increases are caused by a data center that receives the sales tax exemption and is also inside an urban renewal area – but only if the urban renewal area also has no bonds issued as of May 16, 2023.
“This is about keeping our promise to the property taxpayers,” Den Hartog said.
Sen. Linda Wright Hartgen, R-Twin Falls, said she saw the bill as another attempt to chip away at local governments’ ability to operate urban renewal areas, not legislation to address data centers.
“Urban renewal has been successful in the Magic Valley for decades,” Hartgen said.
The bill passed the Senate 24-10 and advances to the governor’s desk.
Logan Finney | Associate Producer
Logan Finney is a North Idaho native with a passion for media production and boring government meetings. He grew up skiing, hunting and hiking in the mountains of Bonner County and has maintained a lifelong interest in the state’s geography, history and politics. Logan joined the Idaho Reports team in 2020 as a legislative session intern and stayed to cover the COVID-19 pandemic. He was hired as an associate producer in 2021 and they haven’t been able to get rid of him since.