Idaho Land Law

A Blog Discussing Current Issues of Land Use, Real Estate, and Construction Law in the State of Idaho.

Urban Renewal Agency has Standing to Challenge Board of Equalization’s Grant of Tax Exemption to Landowner

An interesting land use decision from the Supreme Court of Idaho concerning whether or not the Ashton Urban Renewal Agency (“AURA”) has standing to challenge a property tax exemption granted to a landowner within AURA’s revenue allocation area.

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By way of background, Idaho’s urban renewal agencies (“URAs”) are funded through a revenue allocation system, which allows them to pay for projects and improvements within designated areas. After a geographic boundary is set for the revenue allocation area, the county assessor freezes the assessed value of the real property within the area and this “frozen value” is called the “base.” 

The actions of the urban renewal agency and the investments of other parties are intended to increase the property values in the area. The increase in property value over the base is called the increment value. The property taxes then collected on the increment value go to the URA in the manner set forth in I.C. § 50-2908. This is the primary revenue stream for a URA since it is does not have the authority to independently levy property taxes.  The increment is then used to fund projects within the urban renewal area. 

In Ashton Urban Renewal Agency v. Ashton Memorial, Inc., Ashton Memorial applied for real property and personal property tax exemption for property it owned within AURA’s urban renewal area. The Fremont County Commissioners, sitting as the Board of Equalization (“BOE”), approved a 100% tax exemption for Ashton Memorial.  Ashton Memorial’s tax exemption decreased AURA’s anticipated tax revenue by $43,477 per year and based on this anticipated loss, AURA appealed to the Idaho Board of Tax Appeals (“BTA”).  The BTA dismissed AURA’s appeal based on a lack of standing and AURA subsequently filed a petition for judicial review with the district court.

The district court reversed the BTA’s decision and remanded the matter to the BTA for consideration on the merits.  Ashton Memorial then appealed asking the Supreme Court of Idaho to determine whether or not AURA had standing to challenge the BOE’s decision.  The Supreme Court upheld the district court’s decision finding that AURA was an “aggrieved person” under the law and the case was remanded back to the BTA.

From a land use perspective, this case is interesting because it discusses in detail what constitutes an “aggrieved person” under Idaho law in respect to governmental agencies.  In addition, it raises the possibility that any governmental agency may have the standing to appeal a taxing authority’s decision depriving the agency of expected funds.  Whether or not any such appeal will be successful is another matter but for the purposes of standing, this case provides us with additional guidance on who may bring forward such a challenge.  

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