The House Taxation Committee on Thursday considered House Bill 25, sponsored by Representative Essman, which would change reporting requirements tied to leased publicly owned property and clarify when lessees may be taxable for property tax purposes. Committee members debated an amendment that clarified what information the Department of Revenue (DOR) would collect and which properties might be exempt.

A combined amendment (HB 0025001.003) that incorporated a department-requested clarification passed unanimously in committee by voice and proxy votes recorded 21–0. Committee discussion and staff explanation focused on whether the bill changes tax liability or only the reporting mechanism.

Miss Moore, committee counsel, explained the effect of the amendment and the bill’s reporting shift: "The current law requires the user to report, and those are the entities that are not reporting. So this would require the owner of the property to report." She said the amendment clarifies what information the Department of Revenue would like to receive and that the amendment reflected the department’s requested clarifications.

Supporters said the bill implements a legislative audit recommendation aimed at ensuring accurate reporting about nonexempt users of public property. Representative Estman and Representative Ekstrom said the change responds to audit findings that reporting by the user side had been inconsistent and that an owner-side report could provide the department the information it needs.

Opponents warned of unintended consequences for small jurisdictions and local public–private arrangements. Representative Marler said the proposal risked complicating small local concession arrangements and could harm small private businesses that operate under contract with local governments. Representative Ellipro also cited examples where small towns lease services and cautioned the reporting change could chill such arrangements.

Committee votes and disposition

- Amendment HB 0025001.003: passed 21–0 (voice/proxy recorded).
- Final motion on House Bill 25, once amended: failed in committee, 9 in favor and 12 opposed.
- Substitute motion to table the bill (allowing it to be brought back later): passed 21–0 (proxies recorded). The committee recorded that representatives Lehr, Fitzpatrick and Zolnikoff voted aye by proxy on the motion to table.

Fiscal and implementation notes

Committee staff noted an existing fiscal note was filed for the bill showing $0 fiscal impact, but that the amendment could change the fiscal effect and a revised fiscal note could be requested. Staff and several members anticipated the reporting-only change would not require additional FTEs at DOR but that follow-up rulemaking or future statutory changes could prompt further analysis.

Next steps

Because the substitute motion to table carried, House Bill 25 is placed on the committee table and may be taken from the table later in the session for further consideration.