Rating: –1
Bill Summary:
House Bill 329 repeals several existing statutes related to property tax assessments for rate-regulated electric and natural gas utilities and replaces them with a new energy consumption tax model. Instead of assessing property values, the state will now collect taxes based on energy usage: $0.000923 per kilowatt-hour of electricity and a proportional rate for thermal energy. These taxes will be paid by utilities but automatically passed through to customers on their utility bills, beginning in 2027.
The bill ensures that taxing districts and counties continue receiving revenue equivalent to what they received in 2025, using that year’s property tax apportionment as a permanent baseline. It maintains exemptions for electricity used for irrigation and grants the State Tax Commission authority to administer and distribute the new taxes annually. No new government agencies are created, and the law is set to take effect July 1, 2025.
Reason for Rating:
Though framed as a modernization effort, H0329 represents a stealth tax increase on working Idahoans. By shifting the tax burden from utility companies to individual ratepayers—including families, renters, and small businesses—it replaces property taxes with regressive, usage-based charges that show up as permanent increases on utility bills. These taxes are imposed without voter approval and will likely escalate over time as energy use rises.
The bill further locks in funding formulas based on 2025 tax data, removing adaptability for future demographic or economic changes and potentially disadvantaging growing rural or conservative districts. It also shields regulated utility monopolies from scrutiny by relieving them of property tax liability while guaranteeing them full cost recovery through the Public Utilities Commission. This arrangement reduces accountability, transparency, and local control, violating key Idaho Republican Party Platform values of fiscal restraint, taxpayer fairness, and opposition to government overreach.
For these reasons, House Bill 329 is appropriately rated at –1.