Today, the Idaho House of Representatives passed House Bill 606—the urban renewal reform bill sponsored by the legislative Urban Renewal Interim Committee—by a vote of 52-17-1. The bill will be up for hearing before the Senate Local Government & Taxation Committee at 1:00 p.m. on Wednesday, March 23.
We encourage city officials to be in attendance to testify and if possible, find representatives of local businesses and Chambers of Commerce to testify as well.
We appreciate the tremendous work that the Interim Committee has invested in the process and in this legislative proposal. AIC's concern is that provisions of the bill requiring a base reset in the case of future plan amendments will tie the hands of local officials who work hard to attract new businesses and jobs to Idaho communities. Protecting urban renewal as a vital tool for economic growth and job creation is integral to the future success of our state and communities.
It is very important for legislators to hear real life examples of economic development opportunities that required plan amendments like those that would be prohibited for future urban renewal plans if House Bill 606 is passed without amendment.
If you are unable to attend the hearing in person, we ask that you email members of the committee. Again, it is very helpful to identify urban renewal projects in your community that required plan amendments and how these projects have benefitted your community.
Contact information for the Senate Local Government and Taxation Committee is as follows:
Sen. Jeff Siddoway, Terreton, Chair: firstname.lastname@example.org
Sen. Jim Guthrie, Inkom, Vice Chair: email@example.com
Sen. Curt McKenzie, Nampa: firstname.lastname@example.org
Sen. Dan Johnson, Lewiston: email@example.com
Sen. Jim Rice, Caldwell: firstname.lastname@example.org
Sen. Steve Vick, Dalton Gardens: email@example.com
Sen. Clifford Bayer, Meridian: firstname.lastname@example.org
Sen. Michelle Stennett, Ketchum: email@example.com
Sen. Grant Burgoyne, Boise: firstname.lastname@example.org
SUMMARY OF HOUSE BILL 606A
Section 1: Amends Section 50-2006, Idaho Code, relating to urban renewal agency governance.
1. Authorizes the city council to remove an urban renewal commissioner from office for inefficiency, neglect of duty, or misconduct.
2. Removes provisions of Idaho law that authorize the urban renewal board to fill board vacancies by appointment. That authority is now given to the mayor with the consent of the council.
3. Prohibits a majority of the city council from serving on an urban renewal commission. City councilors and the mayor may serve on the urban renewal board, provided that they do not constitute a majority of the commission.
4. Allows a city council to insert itself as the urban renewal commission by ordinance for only up to one (1) year.
5. Authorizes the city council to enact an ordinance requiring urban renewal commissioners to stand for election. The election would be governed by municipal election law.
6. Requires that urban renewal commissioners must at minimum reside within the political boundaries of the county in which the agency is located.
Section 2: Amends Section 50-2033, Idaho Code, to set forth basic conditions in which urban renewal plans can be amended.
1. Clarifies the scenarios in which an urban renewal plan can be amended for boundary changes.
Section 3: Amends Section 50-2903, Idaho Code, to add code references to other code sections.
1. Adds references to new code sections created pursuant to this bill.
2. Provides for a grandfather clause to allow urban renewal plans created before July 1, 2016 to be amended for any purpose without resulting in a base reset.
Section 4: Creates a new Section 50-2903A, Idaho Code, to set forth the conditions under which an urban renewal plan can be amended without resetting the base assessment value.
1. Establishes that an urban renewal plan created on or after July 1, 2016 can be only amended for the following reasons without resulting in a base reset:
a. To make technical or ministerial plan amendments,
b. To make a plan amendment that increases the revenue allocation area boundary by up to 10%,
c. To de-annex parcels from a revenue allocation area, or
d. To make a plan amendment to support growth of an existing commercial or industrial project in an existing revenue allocation area.
2. Importantly, the most negative impact, should this bill become law, any urban renewal plan amendment to accommodate a new economic development project will result in a resetting of the base assessment value and loss of existing tax increment (as noted below, any outstanding debt will be protected and will not lose the increment necessary to meet debt obligations).
3. Requires that the state tax commission, the county clerk, and the county assessor be notified of any urban renewal plan amendments.
4. If plan modifications are deemed to have occurred for a non-approved reason (other than a-d above), the base assessment value will be reset and accrued tax increment will be lost.
5. If the base assessed value is reset and there is any indebtedness that cannot be repaid, the urban renewal agency will continue to receive any tax increment necessary to meet debt obligations.
6. Any tax increment in excess of what is necessary to meet debt obligations will be returned to eligible taxing districts and go into their respective base budgets.
Section 5: Amends Section 50-2905, Idaho Code, relating to the content of revenue allocation area plans.
1. Requires that a revenue allocation area plan must state with specificity details about the types of projects that are contemplated.
2. Requires that any changes to an urban renewal plan be noticed and completed in an open public meeting.
Section 6: Creates a new Section 50-2905A, Idaho Code relating to the expenditure of certain urban renewal funds for public buildings.
1. Allows for up to 51% of the project costs of certain public buildings to be paid for by urban renewal revenues.
2. If more than 51% of project costs for specified public buildings are to be spent on the building, the proposal must be approved by 60% of city voters.
3. The voting provisions only apply to the following public buildings: an administrative building, a city hall, a library, a courthouse, a public safety building, a fire station, a jail or detention facility, or a judicial building.
4. All other types of buildings, infrastructure, or other public improvements not listed under the term “municipal building” may be funded 100% without the need of voter approval.
Section 7: Creates a new Section 50-2913, to establish urban renewal reporting requirements and penalties for non-compliance.
1. Establishes a central repository to be managed by the state tax commission for urban renewal agencies to upload urban renewal plans and urban renewal plan amendments.
2. Urban renewal agencies that fail to comply with reporting requirements will experience a onetime loss of new increment and a temporary loss of property tax replacement revenues.
3. There are no protections for any debt for which repayment is reliant upon the new increase in increment revenues which may jeopardize any debt obligations and make it more difficult to secure financing for future projects.
4. The online reporting requirements will be effective January 1, 2017.
Section 8: Amends Section 63-301A, Idaho Code, relating to the new construction roll.
1. Clarifies that in the event of a base reset due to a prohibited plan amendment, any lost increment revenues will go to the respective taxing districts and be included in their respective base budgets.
2. Clarifies that in the event of an amendment to de-annex parcels, any increment revenues associated with the de-annexation will go to the respective taxing districts and be included in their respective base budgets.