The First Regular Session of the 61st Idaho Legislature adjourned sine die on the afternoon of April 8th 2011. The session lasted eighty-eight (88) legislative days, a few days longer than an average session. The state continues to struggle with low revenues. Budget cuts once again dominated the session for the third straight year. However, the original projected budget gap ended up being much smaller than anticipated and fluctuated often throughout the session. Before the session began legislators forecasted a $341 million revenue shortfall. When the governor presented his budget on January 10th he proposed cuts in Medicaid combined with other government efficiencies to reduce the shortfall to $25 million. Due to fluctuations in projected revenues the final shortfall that the legislature budgeted to was approximately $91 million. To fill the gap, the legislature looked for methods of efficiency, stretching the dollars that the state had rather than raising revenue.
To accomplish the efficiency that the budget required the two most significant categories of the General Fund – public education and Medicaid – saw major reform. Public education (including K-12 and higher education) makes up close to 62% of the overall budget, while over 23% of the budget is allocated to Health and Welfare. These two programs saw major reform as state lawmakers looked for every way to increase the efficacy of reduced funding. Health and Welfare’s Division of Medicaid took the lion’s share of the cuts with a $34 million reduction in state funding (totaling $108 million in cuts with lost matching federal funding). Meanwhile, public education saw a state budget increase of $9 million (but the overall budget was cut by $47 million with the loss of dedicated and federal funds).
When the session began, the governor asked for agencies to propose internal administrative efficiencies in an attempt to offset the impending budget cuts. These changes included increasing user fees for state parks and instituting co-pay fees for Medicaid. The largest measure of reform, however, came to public education. The session started with Governor Otter and Superintendent of Public Education Luna’s “Students Come First” plan – a plan that will significantly change the face of public education in Idaho. The plan, which was passed under Senate Bills 1108, 1110, and 1184, will remove continuing contracts (tenure) for teachers, institute merit-based pay and incentives, and increase technological improvements in classrooms throughout state’s education system.
Legislators made good on their campaign promises to balance the budget without raising taxes. Though a few “user fee” increases were enacted, no hearings were held on revenue raising measures. There were many ideas floated but none materialized including a concept that would take a step toward collecting sales tax on internet sales and a tobacco tax increase.
This session continued the gradual decrease of introduced legislation with only six hundred and ten (610) bills, proclamations, resolutions, and memorials introduced compared to eight hundred and thirty-five (835) just five years ago in the 2006 session. Though there were fewer in number, some had remarkably large implications. An early libertarian tone was set by the House with three attempts to nullify the federal Patient Protection and Affordable Care Act (PPACA). The first attempt ended in the House State Affairs Committee when the legislation was deemed constitutionally untenable by the Attorney General’s office. The second bill, which would have made it illegal for state employees to implement the federal reform, passed the house but died in the Senate State Affairs Committee. Finally, a more tame version of the first two bills, discouraging state participation in “discretionary” PPACA programs, passed both bodies and is currently awaiting signature or veto by the governor. In the same light, multiple attempts to preempt federal protection for Canadian Grey Wolves also failed before a bill authorizing the Governor to declare a state of emergency regarding wolves was pushed through in the final hours of the session.
In the last few days of the session, the legislature worked hard to finish must-pass legislation in the midst of the democratic minority attempts to slow the pace to force a hearing to consider an increase in the cigarette tax and delay the implementation of the “Students Come First” legislation. Among these must-pass reforms was legislation responding to a federal district court’s decision that Idaho’s open primary law violated the right of freedom of association. During the final days of the session a measure was passed that would not completely close primaries but would significantly increase a party’s control over who could vote in a partisan primary election.
Looking forward into the interim, a redistricting committee will be appointed to draw new legislative district lines appropriate to the growing population within the state. It is believed that this will concentrate more districts in some urban areas while increasing the geographical size of some rural districts. Census results will most likely favor Kootenai, Canyon, Ada, Valley, Lincoln, Bonneville, Teton, Madison, and Jefferson counties.
As is the case every year, there were many pieces of legislation that we tracked and engaged in on behalf of the Idaho Building Contractors Association (IBCA). Below are a few that were of particular interest to the IBCA.
House Bill 148 was a bill brought forward by a coalition of agricultural interests with the desire to protect agricultural land. We were able to insert the IBCA into the drafting process of this bill and sponsors were able to use language that we recommended to accomplish their goals. H. 148 would provide that a local government’s comprehensive plan would include an analysis of the role of agriculture in the communities within that plan and that the economic benefits of agriculture and agribusiness be considered. The bill was passed and was signed by the governor on March 16th.
http://www.legislature.idaho.gov/legislation/2011/H0148Bookmark.htm
The Department of Environmental Quality (DEQ) is required by the federal Clean Water Act to have a plan to implement the State’s anti-degradation policy which includes construction storm water run-off. Last year under threat of a lawsuit, DEQ undertook negotiated rulemaking to revise its water quality standards to include procedures for implementing that policy. House Bill 153 replaced portions of the administrative rule that were rejected by the legislature to allow for the implementation of an acceptable anti-degradation plan. H. 153 was signed into law on March 22nd.
http://www.legislature.idaho.gov/legislation/2011/H0153Bookmark.htm
House Bill 200 was a measure brought forward by the Idaho Association of Counties to address concerns of some county assessors regarding the new construction occupancy tax exemption. H. 200 provided the county assessor the ability to make the assumption that a property was occupied if the owner of the property did not notify the county that the property was unoccupied. The property owner would then lose the ability to claim the occupancy tax exemption. After our discussions with legislators and sponsors of the bill it was made clear that this was a poorly conceived idea and the counties decided to withdraw the legislation from consideration.
http://www.legislature.idaho.gov/legislation/2011/H0200Bookmark.htm
House Bill 207a was introduced to address concerns regarding the Idaho building code requirements for renovated buildings. The law would make clear that upon renovating a building the unaffected parts of existing structures would be grandfathered from having to meet more stringent building code requirements than were in existence at the time of the original construction. Although the IBCA did not take an official position on the bill we did provide input during the drafting the bill. The bill was signed into law on April 6th.
http://www.legislature.idaho.gov/legislation/2011/H0207Bookmark.htm
House Bill 256 was a measure introduced to create a statewide plumbing code throughout Idaho. While this bill was held in committee in the final days of the session we helped insert language that would have removed the requirement of water softener loops in new construction except in homes with finished basements or “slab on grade” construction. Although the bill failed in the Senate this session, we can expect the issue to resurface.
http://www.legislature.idaho.gov/legislation/2011/H0256Bookmark.htm
Once again the IBCA took a position of support for the annual GARVEE bonding authorization. House Bill 285 authorized the Idaho Transportation Department to bond for $162 million to complete the remaining projects in the GARVEE program. These dollars will be used for the construction of a 12 mile section of Highway 95 in North Idaho along the Garwood to Sagle corridor from Chilco to Granite and the extension of Highway 16 from State Highway 44 to US 20/26, crossing the Boise River in the Treasure Valley. The bill passed more easily than expected and is the final phase in the original GARVEE plan. H. 285 was signed by the governor on April 5th.
http://www.legislature.idaho.gov/legislation/2011/H0285Bookmark.htm
As in recent years the legislature again introduced a wide range of urban renewal bills. House Bill 95a, after multiple amendments, finally met approval of both bodies and now awaits the governor’s signature. H. 95a calls for a citywide election to create a district, increases the time for public comment, caps the district existence and revenue allocation to 20 years, and prohibits annexation to the district. There are many members of the legislature that have significant issues with the urban renewal law. These changes will hopefully put some of their concerns to rest.
http://www.legislature.idaho.gov/legislation/2011/H0095Bookmark.htm
The IBCA also helped in the passage of Senate Bills 1006 and 1007. S. 1006, or the “Open Access to Work Act,” makes it unlawful for the state or any political subdivision to require project labor agreements, collective bargaining agreements, or organized labor membership as a condition of bidding on a construction project. The bill was overwhelmingly supported and is now signed into law.
http://www.legislature.idaho.gov/legislation/2011/S1006Bookmark.htm
Senate Bill 1007 was a companion bill of S. 1006 titled the “Fairness in Contracting Act.” The act would make the use of “job targeting funds” illegal in the state of Idaho. Many labor organizations used wage subsidies to help union contractors secure jobs. They will no longer be allowed to use union dues or assessments for this purpose. S. 1007 was also a well received bill and has been signed by the Governor.
http://www.legislature.idaho.gov/legislation/2011/S1007Bookmark.htm
Senate Bill 1123a was introduced to solve a problem that is happening throughout the country regarding third party transfer fee covenants. In some states private parties are imposing transfer fees on properties that unknowing purchasers are paying every time a property sells. These third party fees are transferred to a separate private account and are separate from association fees, realtor commissions, real estate closing costs and other normal fees paid by the purchaser of a property. S. 1123a was passed by both houses and was signed by the governor on March 22nd.
http://www.legislature.idaho.gov/legislation/2011/S1123Bookmark.htm
If you have any questions or would like to know more about any of the bills on this report please contact me and I will be glad to get that information for you.
Benjamin J. Davenport
Government Affairs Liaison
RISCH • PISCA, PLLC
LAW AND POLICY
407 W. Jefferson
Boise, Idaho 83702
(208) 345-9929 Phone
