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The 2016 Idaho Legislature from the Cities’ Perspective

Posted By Justin Ruen, Tuesday, March 29, 2016

The 2016 legislative session was productive from a policymaking standpoint, but was definitely a mixed bag in terms of promoting and protecting the interests of Idaho’s cities.  This article will review the most significant issues of the session from the city perspective. 

First, we would like to thank the many city officials who responded to AIC’s legislative alerts and called, emailed and texted legislators.  AIC’s legislative advocacy efforts depend on the grassroots engagement of city officials throughout the state and your help is greatly appreciated.

Urban Renewal Reform: The urban renewal reform bill that passed the Legislature is certainly not perfect, but House Bill 606 provides clarity on an issue of critical importance for businesses and cities: resetting of the base assessment roll.   

First, a little of the backstory.  For the past several months a legislative interim committee has met 10 times and conducted an exhaustive review of Idaho’s urban renewal laws and how urban renewal is being used.  The committee’s focus has been on strengthening transparency and accountability of urban renewal agencies; requiring voter approval for construction of city halls, libraries, and other municipal buildings when tax increment revenues are used; and requiring agencies to submit plans and amendments to a portal operated by the State Tax Commission. 

One of the unanticipated issues that arose in the committee’s deliberations was the fact that there were conflicting provisions in state law—Idaho Code 50-2033 and 50-2903(4)—concerning whether an urban renewal plan amendment results in a resetting of the base assessment roll and loss of the increment revenue to the urban renewal agency.  An Attorney General’s opinion was provided to the interim committee members that confirmed the conflicting statutes and raised serious doubts about the existing interpretation of the law by the urban renewal agencies and the Tax Commission. 

Cities and urban renewal agencies have always interpreted the law to allow amendments without resetting of the base, because plan amendments allow communities to respond to economic development opportunities and resetting of the base would cripple an agency’s ability to fund the very projects that the urban renewal agency was created to bring to fruition.  The Idaho Tax Commission has long interpreted the law to mean that plan amendments do not result in a resetting of the base, but the agency has recently taken some heat from legislators for that position. 

In order to avoid litigation over the base reset issue that could endanger high profile economic development success stories throughout the state including Chobani in Twin Falls, it was necessary to have a legislative fix. 

A proposal approved by the interim committee in mid-February was a true consensus proposal supported by AIC and the Redevelopment Association of Idaho (RAI).  Unfortunately, that proposal ran into opposition in the House and was shelved while a new proposal was drafted.  AIC and RAI opposed the two subsequent proposals that were introduced—House Bills 572 and 606—and advocated for Senate amendments to allow plan amendments for unanticipated economic development opportunities.

House Bill 606 provides that urban renewal plans created on or after July 1, 2016 can only be amended for the following reasons without resulting in a base reset: (1) to make technical or ministerial plan amendments that do not increase the use of tax increment revenues; (2) to make a one-time plan amendment that increases the revenue allocation area boundary by up to 10 percent; (3) to deannex parcels from a revenue allocation area; or (4) to make a plan amendment to support growth of an existing commercial or industrial project in an existing revenue allocation area. 

House Bill 606 was sent to the House amending order at the behest of business interests to add a grandfather clause allowing all existing plans to be amended in the future without having the base reset.  While AIC supported that individual amendment, we also continued to advocate for a Senate amendment allowing for plan amendments to provide infrastructure for economic development projects.  House Bill 606 passed the House by a vote of 52-17-1 and then proceeded to the Senate Local Government & Taxation Committee.  The committee voted to send the bill to the amending order for further changes and the AIC-RAI amendment was approved and incorporated into the bill.

It became clear the following morning that the House would not pass the bill with AIC’s amendment included.  Without a legislative fix there was a high likelihood that urban renewal agencies would be sued over upcoming plan amendments, including Twin Falls, which needed to amend their plan for an expansion by Chobani.  Not wanting to risk lawsuits that could put such important projects at risk, AIC asked for the amendment to be removed from the bill.  House Bill 606 then passed the Senate 24-11-0 and passed the House 56-11-3.

Despite its shortcomings, HB 606 resolves the base reset issue legislatively and eliminates the potential for an adverse court ruling that could have a devastating effect on economic development efforts throughout the state.  The bill takes effect July 1, 2016, with the exception of section 7 of the bill on reporting to the state portal, which takes effect January 1, 2017.

Relocation of Utilities in Urban Renewal Projects: AIC and the Redevelopment Association of Idaho were able to successfully defeat House Bill 404, sponsored by Frontier Communications, that would have required urban renewal agencies to reimburse telecommunications providers for the full costs of relocating facilities during an urban renewal project.

Firefighters Occupational Presumption: After 16 years of lobbying the Legislature, the Professional Firefighters of Idaho successfully passed legislation providing an occupational presumption for certain cancers suffered by firefighters.  House Bill 554 takes effect July 1, 2016 and has a sunset clause for the bill’s provisions to expire on July 1, 2021.

Public Defense: After years of study by a legislative interim committee, the state made real progress on strengthening what has been criticized as a constitutionally deficient system of providing legal defense for indigent criminal defendants.  House Bill 504 empowers the Idaho Public Defense Commission to set standards for public defender caseloads, training, and resources, and provides $5 million for grants to help counties meet these new standards.  Another public defense bill, Senate Bill 1361, allows counties to pay the costs of public defense from the justice fund, current expense fund or indigent fund. This will provide needed flexibility to cover public defense costs.  Both bills take effect July 1, 2016.

Online Sales Tax: Progress was made this year towards charging sales tax on online purchases, but the proposal got tied into an income tax relief bill—House Bill 633—that failed to get traction in the House.  We greatly appreciate the leadership of Rep. Lance Clow of Twin Falls—a former Mayor and AIC President—on this important issue and hope that greater progress can be made next session.

Mental Health Crisis Centers: The legislative budget committee approved funding for opening two new mental health crisis centers in the Magic Valley and the Treasure Valley to complement the two existing centers in Coeur d’Alene and Idaho Falls.  These facilities provide short term assistance to people who are having mental health or substance abuse crises to help keep them out of jails and emergency rooms, saving considerable taxpayer money in the process.  AIC has strongly supported the Mental Health Crisis Centers since their inception.

Concealed Carry: Senate Bill 1389, on concealed carry of weapons passed the Legislature and was signed into law by Governor C.L. “Butch” Otter.  The bill authorizes carrying of concealed weapons within city limits by any person who is over 21 years of age, an Idaho resident, and is not disqualified by law from carrying a concealed weapon.  The bill takes effect July 1, 2016.

Protection of Easements in Tax Deed Sales: A bill that didn’t receive much public attention, but is nonetheless very important for cities is Senate Bill 1388, sponsored by Sen. Bart Davis of Idaho Falls.  The bill reverses a district court ruling that held that a private easement was extinguished when real property was transferred by tax deed.  SB 1388 provides that valid public and private easements remain in effect when real property is transferred by tax deed, which is critical for cities, counties, highway districts, irrigation districts, and private utilities.  The bill takes effect upon signature by the Governor.

Campaign Finance Reporting: AIC, in partnership with the Idaho School Boards Association and the Idaho Association of Highway Districts successfully defeated Senate Bill 1299, sponsored by Sen. Mary Souza of Coeur d’Alene and Sen. Todd Lakey of Nampa, which would have required campaign finance reporting for all candidates for local elected office and all local ballot measures.  Currently, campaign finance reporting is only required in cities with over 5,000 population.  This legislation would have had serious impacts on the smallest cities, making it even more difficult to recruit candidates for elected office and requiring part-time city clerks to learn and administer a very complicated campaign finance law.

Minimum Wage Preemption: House Bill 463, which preempts the authority of cities and counties to pass local minimum wage ordinances, was passed into law.  Currently, no cities or counties in Idaho have adopted a minimum wage ordinance, although a citizen initiative was defeated last November in the City of McCall.  The bill was sponsored by Rep. Luke Malek of Coeur d’Alene and Sen. Jim Rice of Caldwell and was strongly supported by the Idaho Retailers Association, the Northwest Grocery Association and the Idaho Freedom Foundation.   The bill takes effect July 1, 2016.

Sensitive Records Relating to Critical Infrastructure: The Legislature approved broadening the existing public records exemption for facility plans and other infrastructure related records.  House Bill 447 exempts from public disclosure records relating to proposed or existing critical infrastructure when the disclosure of such records is reasonably likely to jeopardize the safety of persons, property or the public safety.  The bill was sponsored by the Idaho Consumer-Owned Utilities Association and was supported by AIC.  The legislation took effect March 23, 2016.

Underground Facilities Damage Prevention: Several years of effort by the Damage Prevention Coalition, a group including representatives of local governments, private utilities, excavators, contractors, and other stakeholders, finally came to fruition this session with the passage of House Bill 454 to strengthen Idaho’s Call Before You Dig Law.  The bill establishes a Damage Prevention Board under the state Division of Building Safety that would be responsible for adjudicating violations of the dig law and providing education on safe excavation practices.  The board will be funded by a fee paid by underground facility owners that are required to participate in a one-number notification service based on the facility owner’s number of locate calls.  The bill takes effect July 1, 2016.

Public Safety Communications Commission: The passage of Senate Bill 1212, sponsored by the Idaho Bureau of Homeland Security, will establish a new Idaho Public Safety Communications Commission.  The commission will consolidate governance for emergency and public safety communications by merging the Idaho Emergency Communications Commission and the Statewide Interoperability Executive Council.  The new commission will oversee 911, dispatch, device interoperability, and public safety wireless broadband.  The bill takes effect July 1, 2016.

Unused Cemetery Plots: AIC-sponsored legislation that provides a process for cities and cemetery districts to follow to deal with cemetery lots that were sold decades ago where there is uncertainty about whether the owner or their family intend to use the lot was passed into law.

Since the 1960s, most cemetery deeds have included reversionary clauses that provide that if the lot is not used within a specified period of time—generally 30 to 50 years—then the lot reverts to the cemetery owner.  A number of Idaho cities—including Boise, Nampa, Caldwell and Lewiston—face the challenge of dealing with cemetery lots sold decades ago before reversionary clauses became standard practice.  For example, the City of Caldwell has more than 100 cemetery lots purchased between 50 and 100 years ago that have not been used for burial where it is not clear whether the owner or their heirs have any interest in using the lot.

Under House Bill 496, in the event that a cemetery lot has not been used for burial for at least 50 years after purchase, the city or cemetery district notifies the owner or the owner’s heirs of the existence of the lot and gives them 60 days to respond in writing to express an interest in using the lot for burial.  If the owner cannot be located, then legal notice is published for three weeks in a newspaper of general circulation in the county and the notice is mailed to the owner’s last known address, if available.

If the owner or their heirs fail to notify the city or district within 60 days after notice is provided that they intend to use the lot, then it reverts to the city or district and may be sold for burial purposes.

In the event that the owner or their heir shows up at some point down the line after the lot reverted to the city or district and wants to use it for burial, they are entitled to use it if the lot has not been sold to someone else.  If the lot has been sold, the city or district must either provide another lot in the cemetery or compensate the person for the fair value of the lot at the present time.

This legislation will help public cemeteries to deal with this issue in a responsible way that respects the rights of the purchaser and their heirs.  The bill takes effect July 1, 2016.

Catering Permits for Festivals: AIC-sponsored legislation allowing catering permits to be issued for festivals and extending the duration of catering permits was passed into law.  Senate Bill 1354 provides that alcohol catering permits may be issued for festivals, which are periods or programs of festive activities, cultural events or entertainment lasting three or more consecutive days. The bill also extends the maximum duration of catering permits from three to five consecutive days and allows for a single five day permit extension. The bill also provides that the Chief of Police and Fire Chief may attach conditions for approval of catering permits to protect public safety.  The bill takes effect July 1, 2016.

Electronic Retention of Permanent Records: House Bill 443, which passed into law this session, extends to cities the authority to retain permanent records using digital media.  The bill was sponsored by AIC and was supported by the Idaho State Historical Society. 

Currently, Idaho law requires cities to retain permanent records in paper form, which can prove to be a challenge with records like commercial building plans that take up considerable space.  Retaining these records electronically will be much more user friendly and efficient than keeping them in paper form. 

For permanent records that are not of historical significance, House Bill 443 allows these records to be retained using digital media and then the paper original of the record can be destroyed after notice to the Idaho State Historical Society.

House Bill 443 also provides a definition of historical records and requires these records to be retained in paper form in perpetuity, either by the city or the State Archives. 

House Bill 443 takes effect July 1, 2016.

Construction Manager/General Contractor: Senate Bill 1219 was passed this session, which makes several changes to the Construction Manager/General Contractor (CM/GC) law adopted by the 2014 Idaho Legislature.  The bill mandates solicitation of bids from at least three contractors or suppliers deemed qualified by the CM/GC, allows public entities to limit CM/GC self-performance, requires all fees and compensation to be specified in written contracts, makes all bids public record, and clarifies that bidding may be done in stages.  The bill was sponsored by Sen. Todd Lakey of Nampa and Rep. Jeff Thompson of Idaho Falls, and will take effect July 1, 2016.

Levying for Foregone Tax Revenue: House Bill 474, which passed this session, provides a process that must be followed when cities decide to levy for forgone property tax revenue.  The bill requires any city, county or nonschool taxing district to pass a resolution prior to levying for forgone property taxes  stating the governing board's intent to use the forgone levying authority, the amount of forgone revenue to be included in the tax levy for that fiscal year and the purpose for which the forgone revenue will be used. The governing board is also required to hold a hearing on the forgone levy in conjunction with the annual budget hearing.  House Bill 474 was sponsored by Rep. Mike Moyle of Star.  Section 1 of the bill takes effect July 1, 2016 and Section 2 of the bill takes effect July 1, 2017.

Sexual Assault Evidence Kits: In response to media articles on major differences between Idaho cities and counties in terms of the number of sexual assault evidence kits that are sent for testing, Rep. Melissa Wintrow of Boise sponsored legislation to establish a comprehensive system for testing and tracking these kits.  House Bill 528 was passed into law and takes effect July 1, 2016. 

The bill requires testing of each sexual assault evidence kit by the Idaho State Police (ISP) Forensic Services Laboratory, with the following exceptions: (1) when there is no evidence to support a crime being committed, (2) when it is no longer being investigated as a crime, or (3) when an adult victim expressly indicates otherwise. The bill also requires ISP to promulgate rules to create a tracking process for kits in the possession of ISP and other law enforcement agencies. The bill also provides for a report within 180 days of the effective date of the legislation by ISP concerning all untested kits in Idaho, and annual reporting concerning testing of kits.

Vicious Dogs: Rep. Mike Moyle of Star led an effort to beef up Idaho’s vicious dog laws in the wake of a tragic Rottweiler attack on the 6-year old granddaughter of former Eagle Mayor and AIC President Nancy Merrill.  Moyle worked closely with the Idaho Humane Society in drafting the language and the first version of the bill—House Bill 470—included language preempting local ordinances with breed specific restrictions.  AIC consulted with Rep. Moyle as he was redrafting the bill and the breed specific preemption language was removed from the final bill—House Bill 525.  Local governments are allowed to adopt stricter regulations, including breed specific regulations, but must allow for acts of justified provocation (the victim was trespassing on private property, the dog was protecting its offspring, the victim had abused the dog in the past, etc.)  The bill was passed into law and will take effect immediately upon signature by the Governor. 

Plastic Container Preemption: Legislation that eliminates the authority of cities and counties to regulate plastic bags and bottles passed despite vocal opposition from AIC and the Idaho Association of Counties.  House Bill 372, sponsored by Rep. Clark Kauffman of Filer and Sen. Jim Patrick of Twin Falls, preempts local governments from enacting any regulation, taxation or fee applying to plastic bags and bottles at the retail, manufacturer or distributor level. The bill includes an exception for use of such containers at local events.  The bill takes effect July 1, 2016.

Piggybacking on State Contracts: House Bill 541 allows local governments to piggyback onto contracts for purchasing of personal property or services by the state Division of Purchasing or the state Department of Administration, whether or not the state contracts have been competitively bid.  The bill takes effect July 1, 2016.

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