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How business fared in the legislative session

Ron Freeman, former lawyer, teaching debate class at Borah High School, Boise

A debate class at Borah High School in Boise. The Idaho Legislature made some progress in education funding in its 2016 session. Education was a top priority for many advocates and lawmakers going into the session. File photo.

The Idaho Legislature ended its 2016 session March 25 after making some progress in education, which had been a priority heading into the session.

The budget for K-12 schools increased 7.7 percent in the 75-day session to $1.58 billion dollars — 48 percent of all general fund spending. Higher education institutions received additional funding for several programs including the Career-Technical Education Program, which received an additional $3.8 million, and Boise State University, which received $600,000 for material science engineering and $1 million to develop a cyber security lab. Lawmakers set aside $5 million dollars in case the residents of eastern Idaho vote to turn Eastern Idaho Technical College into a community college.

“I thought this was a workhorse session,” said House Speaker Scott Bedke, R-Oakley. “If you are an education stakeholder you have to be pretty impressed with the results.”

Employers who have trouble finding qualified workers have pressured lawmakers for years to better fund education. Some education initiatives were denied, including a plan by Gov. C.L. “Butch” Otter to lock a tuition price for incoming freshmen in an effort to protect them from rising tuition costs. Otter has since partnered with Idaho State University to try a pilot tuition lock program for this year’s freshmen, but it will not affect other schools and may not continue past this year.

A scholarship that would have helped adults return to college was also rejected.

“You can always look back and say they could have done more, but looking back at other sessions this is clearly still a big win,” said Ray Stark, senior vice president of government affairs at the Boise Metro Chamber of Commerce.

Lawmakers also refused to pass an income tax cut, drawing criticism from the Boise Metro Chamber and the Idaho Freedom Foundation. Groups such as the Idaho Retailers Association and Idaho Chamber Alliance fought unsuccessfully to get an online sales tax bill passed.

Most discouraging, though, was the failure of an initiative that would have provided health insurance coverage for  78,000 uninsured working Idahoans who make too much to qualify for Medicaid, but not enough to receive subsidies for the state exchange. Five pieces of legislation would have either extended medical coverage to the working uninsured or studied how to build a program to do so, but all were killed by the Legislature.

“I was disappointed we weren’t able to go forward with healthcare to close the gap,” Otter said. “But to those saying ‘write an executive order,’ when I make a promise I do everything to keep it and in 2010 I promised I would not take unilateral action on the insurance exchange or Medicaid expansion.”

Legislators have talked about forming work groups to study taxes and the Medicaid gap before next year, but nothing has been scheduled.

To see everything that happened this session,  visit the Legislature’s Bill Tracker Subject Index.

Here are several of the topics discussed this year that affect Idaho businesses.


HB380  — Reduces the top two corporate and individual income tax rates by a tenth of a percent and extends the grocery tax credit by $10 per exemption. The bill passed the house, but was left idle by the Senate Local Government and Taxation Committee. 

HB633 — Collects sales tax from online retailers. The bill stalled after the House Revenue and Taxation Committee added language to create an income tax reduction.

HB431 — Removes the property tax exemption index to create an exemption cap of $100,000. The bill was signed into law March 17 and will become effective July 1.

HB361 — Eliminates the sunset clause for  sales tax exemptions on aircraft repair parts at repair shops that work on out-of-state airplanes. The bill was signed into law Feb. 19.

HB386 — Extends sales tax exemptions on farm equipment to equipment used to remove food from farm storage. The bill will save farmers about $125,000 a year. It was signed into law March 17.

HB409 — Permits counties to offer property tax exemptions to businesses and individuals who contribute to county-level senior workforce development for workers over 55 who are pursuing education in a new skill. The bill was printed by the House Ways and Means Committee, but left idle.

SCR155 — A resolution to create an interim committee to study Idaho’s current tax structure and possible chances for reform. An interim committee in 2015 proposed several possible ways to change Idaho’s tax system, but none passed the Legislature. The resolution passed the Senate, but was held at the desk of the Speaker of the House.

HB511 — Restricts homeowner associations from creating new covenants, conditions or restrictions that change a homeowner’s right to rent their property. The bill was signed into law March 24.



S1221 — Grants the Idaho Department of Insurance more power to revoke and restrict licenses. Insurance provider licenses can now be revoked for serious crimes for up to five years and if an application for an insurance provider license is denied the application can’t be resubmitted until after a one-year waiting period. The bill was signed into law by the governor March 16 and will become effective July 1.

The Department of Insurance also wrote a bill that would give it the power to fine an insurance provider who broke the law in order to award damages to victims. The bill was withdrawn by the department in order to be rewritten over the summer and brought back next year.

HB421 — Dissolves the state-run health insurance exchange. Idaho’s exchange has the second highest number of residents enrolled per capita  and has one of the lowest operating budgets. The bill was assigned to the House Ways and Means Committee where it was left idle.

HB554 — Presumes that certain types of cancer are work-related for firefighters in order to make disabilities and death payable under worker’s compensation. It was delivered to the governor March 24 and awaits his signature.

HB605 — Makes mandatory health insurance costs tax deductible. The bill was printed by the House Revenue and Taxation Committee, but left idle.

HCR61 — Assigns a working group to determine the cost of maintaining state employee insurance plans and other benefits in order to see if it would be more cost-effective to reduce or eliminate benefits and to pay higher wages to state employees. The resolution was passed to the secretary of the state March 28 and is awaiting his signature.

S1346 — Requires state employers to offer high deductible health insurance plans paired with health savings accounts to all employees. The bill was left idle by the House Human Resources Committee after it passed the Senate.



HCR63 — Forms an interim committee to study 78,000 uninsured working Idahoans and to discuss how to form a waiver to apply for federal funds to build a plan to address those uninsured workers. The resolution was killed by a unanimous vote by the Senate Health and Welfare Committee.

HB644 — Gives $5 million to the Community Health Center Network of Idaho for two years and directs the Department of Health and Welfare to write a waiver to apply for federal funds to build a solution to expand medical coverage to 78,000 uninsured working Idahoans. The bill was killed by a party line vote in the House after it passed the Senate.

S1204 — Directs the Department of Health and Welfare to expand the definition of Medicaid eligibility to all individuals making less than 138 percent of the federal poverty line in order to expand Medicaid coverage.  The bill was printed by Senate Health and Welfare Committee, but left idle.

S1205 — Enrolls Idahoans making between 100 percent and 138 percent of the federal poverty level in the state exchange and pays their premiums with state and federal funds. The bill was left idle in the Senate Health and Welfare Committee.

HB484 — Provides primary care access to people with incomes under 100 percent of the federal poverty level who are not eligible for Medicaid.  The measure, which was supported by the governor and the director of the Department of Health and Welfare, was printed by the House Health and Welfare Committee, but left idle after the House State Affairs Committee rejected the program’s funding source.

HB579Provides funding for two new mental health crisis centers that will be built over 2017 and 2018. The centers will be located in Twin Falls and Boise and join two existing mental health crisis centers in Idaho Falls and Coeur d’Alene. The plan is to have a center in all seven of the department’s regions. The bill was signed into law March 28.

HB481 — Allows a terminally ill patient to work with manufacturers to try an investigative medication. The bill was signed into law March 23 and will become effective July 1.



S1314Creates a friend exemption in Idaho trust code. The exemption allows an individual to act as a fiduciary as a favor to a friend without requiring a license required of professional trustees. The bill was signed into law by the governor March 16 and will take effect July 1.

S1318 — Creates an oversight process for appraisal management companies. The bill places the State Board of Real Estate Appraisers over all appraisal transactions. The bill was signed into law March 23 and will take effect July 1.

minimum wage baristas

These baristas work for minimum wage. Lobbyists fought to get a public hearing for a bill that would raise minimum wage to $9.25, but legislators in the Senate and House of Representatives ignored the request. Photo by Erika Sather-Smith

HB400 — Raises the state’s minimum wage from $7.25 to $9.25 by July 1, 2017.  Lawmakers denied the bill the chance to be printed and to have a public hearing in the Senate and it was left idle in the House. The group that wrote the bill says it will bring the bill forward again next year.

HB463Bans cities and counties from establishing a local minimum wage rate. The bill became a law March 23 without the Governor’s signature.

S1288 — Extends the sunset for the Workforce Development Grant to 2022 and frees more funds up for the Department of Labor to give out. The bill was signed into law March 22.

HB487 — Shifts the burden of proof off of employers and onto employees in business competition suits. The bill was delivered to the Governor on March 23 and is awaiting his signature.



HB504 –Provides funding to counties and creates standards for public defenders and the workload they can take on. The bill was signed into law March 24 and will take effect July 1.

HB544 — Aligns the standards for movies that can be shown in a facility with a liquor license to those of facilities with beer and wine licenses. The bill was delivered to the governor March 24 and is awaiting his signature.

A rule written by the Idaho State Police that would have better defined the term “use” and made rules for facilities wishing to keep liquor licenses was  rejected. The rule would have created a minimum number of weekly sales and a minimum number of hours of operation to protect licenses from revocation. The Senate asked for the rule to be written as a bill instead, but it was not printed.


Natural Resources:

HB488– Loosens regulations concerning water pollution for suction dredge mining operations. The bill was printed by the House Resources and Conservation Committee, but left idle.

S1339 — Streamlines the permit process for drilling permits for the oil and gas industry. It also establishes application expectations for the Oil and Gas Commission such as a time frame that applications have to be reviewed within. The bill was signed into law March 16.

HB3725 Bans cities and counties  from restricting or taxing disposable plastic containers such as grocery bags. The bill was signed into law March 24 and will take effect July 1.

New regulations for the Department of Environmental Quality weaken water quality standards for many toxic substances. The rules limit the amount of fish that Idahoans can safely eat. The largest impact is on members of Idaho Indian tribes who eat more fish than the the average population. The new regulations still protect 95 percent of Idaho’s non-tribal population, but only the mean of the Nez Perce and Shoshone-Bannock tribal population.


About Benton Alexander Smith

Benton Alexander Smith is a reporter for the Idaho Business Review, covering the Idaho Legislature, new business, technology and financial services.