2004 Local Government & Taxation
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January 19, 2004
January 21, 2004
January 26, 2004
January 28, 2004

February 2, 2004
February 4, 2004
February 9, 2004
February 11, 2004
February 16, 2004
February 18, 2004
February 20, 2004
February 23, 2004
February 25, 2004
February 27, 2004

March 1, 2004
March 3, 2004
March 5, 2004
March 10, 2004
March 12, 2004
March 18, 2004

DATE: Jan 19, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Vice Chairman Hill, Senators Ingram, Sweet,
McKenzie, Gannon, Compton, Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

MINUTES: Chairman Bunderson called the meeting to order at 3:00p.m. A silent roll
call was taken. Members of the committee were welcomed. Robbin Tyrell,
Page to the committee was introduced. Nadine Winberg, Secretary to the
committee, was introduced.



Vice Chairman Hill introduced Janice Boyd, Tax Policy Specialist with the
Idaho State Tax Commission to review Income Tax Administrative Rules.

Janice Boyd Income Tax Administrative Rules

35.01.01.0301



Rule 045 Non-resident

Rule 075 Tax on individuals, estates and trusts.

Rules 076,077, 079 are deleted. Rates and brackets will be in Rule 075.

Rule 078 Tax on trusts electing small business trusts.

Discussion on whether there were substantive changes.

Ms Boyd clarified that information previously contained in Rules 076, 077,
079 and 078 will all now be reflected in the table in Rule 075
.

Rule 105 Adjustments to taxable income – additions required of all
taxpayers. Discussion on projections of fiscal impact. There are no
projections now as it would take an extensive re-computation of past tax
returns. Dan Johns will look into getting an estimate for the committee.
Commission still reviewing impact of investment tax credit.

Rule 108 adjustments to taxable income – additions required only of
individuals

Rule 120 Adjustments to taxable income – subtractions available to all
taxpayers

Rule 193 Health insurance costs and long-term care insurance.
Discussion of federal deduction. Variable federal deduction is allowed.
Idaho statute allows 50% deduction.

Rule 253 Non-resident and part-year resident individuals – additions
required in computing Idaho adjusted income.

Rule 254 Non-resident and part-year resident individuals – subtractions
allowed in computing Idaho adjusted income.

Rules 740 and 741are deleted. The natural resource conservation credit
was enacted during 1997 in SB 1186. It contained a provision that the act
would be null, void and of no force and effect on and after Jan 1, 2003,
which date was not extended by the 2003 legislature. Question about
extent of utilization of this credit. Per Dan Johns it was not widely used
.

Rule 746 Credit for qualifying new employees. Question concerning what
employers qualify for this credit. It would be a taxpayer who’s involved in a
revenue producing enterprise to convert natural resources into another
product, such as mining, farming, timber
. Discussion of Governor’s tax
credit and how it relates to this rule followed. Ted Spangler said the
proposed bill is not coming from the tax commission. It is the Governor’s
bill. Sen Bunderson let the committee know that as soon as the bill is
printed this committee will schedule hearings even if it cannot immediately
be acted on.

Rule 790 is amended to conform the transfer limitations discussed in the
rule to the legislative changes.

Rule 791 is amended to impose on the intermediary the same notification
requirements of an intended transfer that are imposed on a transferor.

Rule 793 Transfers of credit – in general. Discussion on legislation of
extension of credits and extent of the utilization of these credits. It was
said to be extensive.

Rule 799 Transfer of credit – notification of intended transfer.

Discussion on publishing of Rules and how it conforms with State Statute.
Ted Spangler explained how the proposed rules were published in non-technical language in the Idaho Bulletin. Dept of Administration publishes
the Descriptive Summary in the newspaper. Notice of adoption of
unchanged Pending Rules is not re-printed. If, because of public comment
the Rules are amended, they are printed and published.

35-0101-0302

Rule 719 Idaho investment tax credit – property tax exemption in lieu of.
Question: Do we have an assessment? No, because this credit is for
property exempted in 2004. No numbers available until next year.



35-0101-0303

Rule 872 Reporting and paying state income tax withholding.

Motion Senator Compton moved for approval of Docket 35-0101-0301 and 35-0101-0302, and 35-0101-0303. Senator McKenzie seconded the motion.
Vote By unanimous voice vote the motion passed.
Discussion of task force on sales tax exemptions, exclusions, etc. Work of
that committee not conclusive but will be documented. Report will contain
history, information, & and work of the Tax Commission. It results in
judgment of opinions of strengths and weaknesses of exclusions and
exemptions. That report will be available to the public after a review by
this committee which is expected to happen next week. Hopefully other
input will come from the public.
Vice Chairman Hill introduced James Husted, Tax Policy Specialist with
the Idaho State Tax Commission to review Sales and Use Tax
Administrative Rules.
James Husted Sales and Use Tax Administrative Rules

35-0102-0301

Rule 068 Collection of tax.



35-0102-0302

Rules 041, 047, 063,073, 110, 126 are amended because they contain
examples with the 5 % tax rate.



35-0102-0303

Rule 109 imposes a fee increase proportionate to 6% tax rate.



35-0102-0304

Rule 031 Radio and telecommunications equipment (to correct
grammatical error).

Rule 037 Aircraft and Flying Services

Rule 039 Sale and Purchase of bullion, coins, or other currency

Rule 043 Sales price or purchase price defined

Rule 058 Sales through Vending machines

Rule 105 time and imposition of tax, returns, payments and partial
payments

Rule 107 Vehicles and vessels

Rule 112 Direct Pay authority

Motion Senator Gannon moved to approve Dockets 35-0102-0301, 35-0102-0302, 35-0102-0303 and 35-0102-0304. Senator Malepeai seconded the
motion.
Vote By unanimous voice vote the motion passed

35-0110-0301

Idaho Cigarette and Tobacco Products Tax Administrative Rules

Security (bonding) for payment of Taxes. Commission proposes that the
maximum bond amount be deleted from the rule. Discussion included
request for information comparing collections with last year. Commission
indicates sales volume is down, but taxes are at about 93%, very close to
projected numbers. Also, sales on reservations statistics were requested.
They will be provided
. Black market sales were also discussed.



35-0111-0301

Idaho Unclaimed Property Tax Administrative Rules

Rule 015 Description of fee corrected to conform to Idaho Code. Question
concerning identification of persons rightfully entitled to unclaimed
property. Information is available on the inter-net and the Tax Commission
maintains a book which is available to the public. The unclaimed property
remains available to the rightful owner for a period of 7 to 10 years
depending on category.

Motion Senator Sweet moved for approval of Dockets 35-0110-0301and 35-0111-0301. Senator Ingram seconded the motion.
Vote By unanimous voice vote the motion passed
Senator Hill thanked the members of the Tax Commission for their
presentations and indicated the Rules review would be finished on
Wednesday, Jan 21.



Meeting adjourned at 4:25 p.m.






DATE: Jan 21, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Senators Ingram, Sweet, McKenzie, Gannon,
Compton, Werk
MEMBERS
ABSENT/

EXCUSED:

Vice Chairman Hill, Senator Malepeai
MINUTES: Chairman Bunderson called the meeting to order at 3:07p.m. A silent roll
call was taken. Senator Gannon moved that the minutes of January 19
be approved as written.
Senator Compton seconded the motion. By
unanimous voice vote the minutes were approved
.
RS 13651 Chairman Bunderson presented RS 13651, Energy Saving Performance
Contracting, which clears up ambiguities in the law. This change will
include cities so there will be no need for municipalities to interpret the
law to include cities. This will save legal fees.
Motion Senator Compton moved to send RS 13651 to print. Senator Werk
seconded the motion.
Vote By unanimous voice vote RS 13651 will be sent to print.
RS 13673 Senator Compton presented RS 13763, Transfer of Development Rights,
which repeals the requirement for annual reporting.

Motion Senator Werk moved to send RS 13673 to print. Senator Ingram
seconded the motion.
Vote By unanimous voice vote RS 13673 will be sent to print.
Chairman Bunderson introduced Senator Thorn who served in the
senate for 18 years and retired last year. He was welcomed and thanked
for his service.



Chairman Bunderson introduced Janice Boyd, Tax Policy Specialist with
the Idaho State Tax Commission to review Tax Commission
Administration and Enforcement Rules.

Janice Boyd Tax Commission Administration and Enforcement Rules

35-0201-0301



Rule 310 Interest Rates

Rule 400 Penalties – General Rules

Rule 704 Disclosure of information – government agencies and officials



35-0201-0302



Rule 450 Property tax exemption penalty

Motion Senator Compton moved for approval of Docket 35-0201-0301 and 35-0201-0302. Senator Ingram seconded the motion.
Vote By unanimous voice vote the motion passed.



Chairman Bunderson introduced Alan Dornfest, Tax Policy Supervisor
with the Idaho State Tax Commission to review Property Tax
Administrative Rules. At this time Senator Bunderson announced that Mr
Dornfest will be returning January 28, to speak to the committee on
Property taxes.

Alan Dornfest Property Tax Administrative Rules.

35-0103-0301



Rule 313 Assessment of transient personal property.

Rule 316 Compliance of continuing valuation program. Explanation of
valuation and the schedule of appraisals. Value is not being changed, just
the requirement for percentage of appraisals completed each year within
a five year period.

Rule 509 Identification of urban renewal increment and partial exemption.
values on county and school district abstracts of value.

Rule 609 Property exempt from taxation – residential improvements.

Rule 802 Budget certification relating to new construction and annexation.



35-0103-0302



Rule 803 Budget Certification – dollar certification form. Amended to
implement HB 140 changing the rule to provide directions and clarification
relating to the property tax funded budgets for library districts when library
districts consolidate with city library services. Discussion concerning
library district boundaries and non-contiguous districts especially with
regard to bonds. The issue of non-contiguous districts does create
problems in apportioning values.



35-0103-0303



Rule 988 Election of qualified property for exemption. Discussion centered
on issue of confidentiality of information. Response indicated that these
are items that if they had been reported on the investment tax credit
would have been confidential. This assures that the county will maintain
that confidentiality. Further discussion on recapture penalty procedure:
Taxpayers would be required to notify county assessors of property
movement between counties to assure penalties would not be improperly
assessed. It was noted that in the quest to do good things for economic
progress in Idaho, a monster had been created. This is a very complex
procedure that requires a lot from the taxpayer and needs to be
monitored. It was noted that the motivation for the bill was to alleviate the
economic problems some businesses were having. The bill went into
effect January 1, so there will not be information on its effectiveness for
some time. The committee would like to be informed when such
information becomes available.

Motion Senator Compton moved for approval of Docket 35-0103-0301 and 35-0103-0302 and 35-0103-0303. Senator Gannon seconded the motion.
Vote By unanimous voice vote the motion passed
Senator Bunderson announced there will be no Friday meeting.

This concludes the Rules review.



Meeting adjourned at 4:00pm.






DATE: Jan 26, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Vice Chairman Hill, Senators Ingram, Sweet,
McKenzie, Gannon, Compton, Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

MINUTES: Chairman Bunderson called the meeting to order at 3:00 p.m. A silent
roll call was taken Senator Werk moved that the minutes of January 21
be approved as written
. Senator McKenzie seconded the motion. By
unanimous voice vote the minutes were approved
. Chairman Bunderson
introduced Bonnie Tolman, Jerome County Tax Assessor to discuss
Property Tax Assessment Notices.
Bonnie Tolman The Idaho Association of County Assessors and Idaho Association of
Counties worked closely with legislators in 1997-98 to voluntarily create a
new Assessment Notice format. The present format of the assessment
notice is not governed by statute.

The IACA and IAC have agreed to make optional by county the inclusion
of “current estimated taxes” on the Assessment Notice. They are not
asking that the format be revised, however they do not want the policy to
be relaxed in those cases where reasonable estimates cannot be made. It
was agreed that every effort would be made to obtain an accurate
estimate, but when unavailable because of new bonds, levies, loss of
valuation, etc. it would be acceptable to exclude the estimate from the
Assessment Notice with some disclosure as to why the estimate is
excluded.

Motion Senator Compton moved that when reasonably accurate current year’s
estimated taxes can be made, those estimates should be included on the
assessment notice. When reasonably accurate current year’s estimated
taxes cannot be determined, the counties may exclude the estimated
amounts on the assessment notice, but disclose through the media or
other notice why such estimates cannot be made.
Senator Gannon
seconded the motion.
Vote By unanimous voice vote the motion was passed.
S 1222 Chairman Bunderson opened the discussion on S 1222, and introduced
Ken Harward who provided a summary of the bill.
Ken Harward Qualified Energy Service companies can perform audits, reports and
services with guaranteed savings to buildings occupied by and for public
entities. He then introduced Bret Hunter, Director of Chevron Energy
Solutions.
Bret Hunter Performance Contracting enables Idaho Public entities the same access
to a new bidding process which is currently available to state agencies
and facilities. This process specifies a way to finance and implement
capital energy improvements and services offered by a qualified energy
service company, with the lease/purchase options paid from the realized
savings within 25 years. The savings are guaranteed by the energy
service company. Discussion centered on savings computation, profit for
the energy company (fee based) and that 25 years for payoff seems very
long (negotiated).
Motion Senator Gannon moved to send S 1222 to the floor with a “Do Pass”
recommendation.
Senator Compton seconded the motion.
Vote By unanimous voice vote S 1222 was approved.
S1223 Senator Compton explained that a required annual report relating to
transfer of development rights has been found to be unnecessary,
burdensome and costly. This bill would remove the requirement for an
annual report. The IAC would still furnish information and generate reports
when requested.
Motion Senator Hill moved to send S 1223 to the floor with a “Do Pass”
recommendation.
Senator Werk seconded the motion.
Vote By unanimous voice vote S 1223 was approved.
Chairman Bunderson briefly discussed a study of Tax Rates and Tax
Burdens comparing Idaho to other states. Discussion of sales tax and the
effects on revenues and the progressive income tax of Idaho.



Senator Werk indicated he would be replaced Wednesday by Debbie
Spindler.



Meeting adjourned at 4:35 p.m.






DATE: Jan 28, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Vice Chairman Hill, Senators Ingram, Sweet,
McKenzie, Gannon, Compton,, Malepeai
MEMBERS
ABSENT/

EXCUSED:

Senator Werk
MINUTES: Chairman Bunderson called the meeting to order at 3:00p.m. A silent roll
call was taken. Chairman Bunderson introduced Deborah Spindler who
sat in for Senator Werk. Chairman Bunderson then introduced
Gubernatorial Appointment to the Board of Tax Appeals, Lyle Cobbs.
Lyle Cobbs Mr. Cobbs talked about the function of the State Board of Tax Appeals,
and the improvements he would like to see take place. There was a
general discussion on the appeals process and notifying people of the
options available to them.
The committee will vote on Mr. Cobbs’
appointment at the next scheduled meeting.
RS13809 Senator Compton and Chairman Bunderson will co-sponsor RS13809,
to Clarify County Authority Concerning Grants of Exclusive Franchises for
Solid Waste Disposal. Legislation has not been clear on contracts for
municipality handling of waste. This will make clear that contracts will be
exclusive. There will be a change made by Legislative services and the
RS will go forward as a C1.

Motion



Senator Compton moved to send to print with the indicated changes.
Senator Malepeai seconded the motion.
Vote By unanimous voice vote the RS 13809 will be sent to print
Chairman Bunderson introduced Alan Dornfest of the Idaho State Tax
Commission for an informational presentation on Property Taxes.
Alan Dornfest Mr. Dornfest covered the following topics:

What is property tax?

How does the property tax budget and levy system work?

What happens when property values increase/decrease?

Who pays property tax?

How much is paid?

How does Idaho compare?

Who uses property tax?

How do incentives and tax relief measures work?



Discussion pertaining to all of the planned topics of conversation was
vigorous. There was clarification of ambiguous practices and some insight
into the division of tax burden and tax distribution.



Chairman Bunderson thanked Mr.Dornfest for sharing his expertise and
said there would be other Tax related reports for the “Training and
Development” of the committee members.



There will be no Friday meeting



The meeting adjourned at 4:35 p.m.






DATE: Feb 2, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Vice Chairman Hill, Senators Ingram, Sweet,
McKenzie, Compton, Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

Senator Gannon
MINUTES: Chairman Bunderson opened the meeting at 3:00p.m. A silent roll call
was taken. Minutes from both January 26 and January 28 were presented
for approval. Senator Ingram motioned to approve the minutes of Jan 26.
Senator Malepeai seconded the motion. By unanimous voice vote the
minutes were approved.
Senator Malepeai motioned to approve the
minutes of Jan 28
. Senator Compton seconded the motion. By
unanimous voice vote the minutes were approved.
Motion Senator Ingram motioned to Reappoint Lyle Cobbs to The Board of Tax
Appeals
. Senator Compton seconded the motion.
Vote By unanimous voice vote the reappointment of Lyle Cobbs was
approved
. Senator Ingram will sponsor him on the floor.
RS13806 Senator Ingram presented RS13806 which would authorize ITD Board to
allow the installation of Intra-city Light Rail Systems upon certain
highways. There was discussion concerning extent of involvement. Cities,
counties, and the state would be involved, and existing funds would be
used. Allows existing authorities to create light rail systems. It was
indicated that while the language is general and pertains to all of Idaho,
the point is revitalization of downtown, so the primary target is Boise. This
is not a mandate, it is permissive.
Motion Senator Werk motioned to send RS13806 to print. Senator Compton
seconded the motion.
Vote By unanimous voice vote the motion carried.
Jason Hancock Chairman Bunderson introduced Jason Hancock, Budget and Policy
Analyst at Legislative Services, to talk on the subject of Joint Economic
Development and Revenue Assessment Committee – Key Trends in
Idaho’s Economy and Tax Revenues.



Chairman Bunderson thanked Mr. Hancock for his presentation and
said we would take up this subject again.



Meeting adjourned at 4:30 p.m.






DATE: Feb 4, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Vice Chairman Hill, Senators Ingram, Sweet,
McKenzie, Gannon, Compton, Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

MINUTES: Chairman Bunderson called the meeting to order at 3:07p.m. A silent roll
call was taken. Senator McKenzie moved that the minutes of February 2
be approved as written
. Senator Compton seconded the motion. By
unanimous voice vote the minutes were approved
.
S1254 Chairman Bunderson introduced Ken Harward, IAC to discuss
proposed changes to S1254 allowing non-exclusive as well as exclusive
contracts for Solid Waste Disposal Contracts. The change would clarify
that counties and cities may continue to operate solid waste systems by
exclusive or non-exclusive means. Because of the changes it was
requested that this bill be held and a new RS presented at the next
committee meeting.
Motion Senator McKenzie moved to hold S1254 and hear a new RS on Monday
with the changes discussed
. Senator Werk seconded the motion.
Vote By unanimous voice vote the bill will be held.
RS13916 Senator Compton introduced RS13916, Sales and Use Tax Information
about County of Sale and Dollar Amount of Sales per County. This would
provide counties with detailed sales and use tax information which could
be used to measure growth.
Motion Senator Hill moved to send RS 13916 to print. Senator Werk seconded
the motion.
Vote By unanimous voice vote RS 13916 will be sent to print.
Chairman Bunderson reported on his presentation to the Idaho
Association of Counties and shared a comparative analysis of property
taxes by county. This can be used by the counties to create a historical
information base to assess trend analysis in evaluating public policy
decisions affecting economic development in each county.
Chairman Bunderson gave a brief review of the Transportation Bonding
Task Force meeting and distributed “Summary of Matters Discussed”
minutes of the January 23, 2004 meeting. He pointed out that many
regions of the state have transportation infrastructure needs critical to
promote local and state economic development. Cash flow from federal
and state fuel taxes is not adequate to meet many of these critical needs.

The concept being worked on is to leverage a small percentage of federal
and/or state fuel taxes to pay principal and interest on bonds. For
example, with current interest rates on a 18 year payoff, $10 million in fuel
tax revenue to provide $120 – $130 million in bond proceeds. The ability to
issue such bonds would provide ITD with another tool in its tool box to
provide cash when needed to fixing critical needs.

Senator Bunderson said that in two weeks the Task Force will produce a
white paper and proposed legislation addressing the entire matter. Albeit,
only federal fuel tax money under the Federal GARVEE law will be
considered at this time.



The meeting adjourned at 3:55p.m.






DATE: Feb 9, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Senators Ingram, Sweet, McKenzie, Gannon,
Compton, Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

Vice Chairman Hill
Chairman Bunderson called the meeting to order at 3:00p.m. Because
of time constraints the order of the meeting was changed to begin with the
Annual Report from the Tax Commission. Chairman Bunderson
introduced Dewey Hammond, Chairman of the Tax Commission, who in
turn introduced Sam Haws.
Sam Haws Ms. Haws presented information in support of the administration
efficiencies of the Tax Commission including: Implementation of Sales
and Cigarette tax increase, Providing the Sales Tax Exemption Task
Force Committee with a final report on sales tax by state, and taking over
administration of Kootenai County Local Option Tax.
Colleen Grant Ms. Grant reported that the new collections system has enabled the
department to maintain a high level of recovery even in the face of cut-backs. She reported that during the hiring freeze there was a small
downturn, but with the new compliance staff, collections have exceeded
expectations. She also discussed audit and training changes that will
enhance productivity and create more well rounded staff.
Dewey
Hammond
Mr. Hammond provided the committee with a hand out high-lighting the
overall accomplishments and changes experienced over the last year
(attch). Of special significance was New Revenue of $9,287,480 brought
in at a cost of $605,505 as a result of legislation approved July 1, 2003.
Also a letter from Larry Watson with the Tax Commission was referenced
and a copy will be provided at Wednesday’s meeting and included with
these minutes.



Chairman Bunderson thanked the commissioners for their report.

Minutes Senator McKenzie motioned to accept the minutes from Feb 4 with
corrections.
Senator Sweet seconded the motion. By unanimous voice
vote the minutes of Feb 4 were approved as corrected.
RS13941 Solid Waste Disposal Systems Contracts. New language has been
incorporated to authorize the operation and maintenance of systems by
exclusive or non-exclusive means. Discussion concerning reason for this
legislation and its effect on small business. Sen Bunderson explained that
in the past businesses have been harmed by new business coming into
an area and eroding the business base which had been grown by the
previous carrier. The new comers would take over certain profitable
portions of the business while leaving the non-profitable work. Had the
original contractor known there was no exclusivity to the contract, they
would have bid it differently. This legislation would prevent the “cherry
picking” from happening. He could not see that it would harm small
businesses as long as there was open bidding, allowing the contract to be
bid on the same terms. Per Senator Compton whether the contract is
exclusive or not will be left to the cities. It is only necessary that bidders
know what the rules are before the contract is bid.
Motion Senator Ingram moved to send RS13941 to print. Senator Werk
seconded the motion.
Vote By unanimous voice vote RS13941 will be printed.
The meeting adjourned at 3:45p.m.






DATE: February 11, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Vice Chairman Hill, Senators Ingram, McKenzie,
Gannon, Compton, Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

Senator Sweet
Chairman Bunderson called the meeting to order at 3:05 p.m. A silent
roll call was taken. Senator Noh was introduced to present RS13995.
RS13995 Senator Noh presented RS13995 which adds to Local land use planning
in wild land fire hazard areas requiring analysis to minimize risk when new
development occurs in wild fire susceptible areas. Discussion about
county review and impact to firefighting districts, insurance, etc. These
questions should be addressed when the bill comes back to the
committee for review
.
Motion Senator Compton motioned to send RS13995 to print. Senator Werk
seconded the motion.
Vote By unanimous voice vote the motion carried.
H 477 Ted Spangler of the Idaho Tax Commission presented H 477 which
makes technical amendments and updates to the property tax statues.
This bill would remove property tax codes that are no longer required and
clarify exemptions for mobile homes. Also replace the requirement for a
rule when a procedure would be more efficient.
Motion Senator Compton moved to send H477 to the floor with a “Do Pass”
recommendation
. Senator Werk seconded the motion.
Vote By unanimous voice vote H477 passed. Senator Compton will sponsor
the bill on the floor.
H 478 Dan John of  the Idaho Tax Commission presented H 478 which makes
changes to permit taxpayers to use private delivery services, changes the
month of the applicable federal rate used to index the interest rate on
taxes and refunds, requires that a foreclosure tax lien must be brought in
the county in which the property is located, and deletes obsolete
references to constables and deputies.
Motion Senator Gannon moved to send H478 to the floor with a “Do Pass”
recommendation
. Senator McKenzie seconded the motion.
Vote By unanimous voice vote H478 passed. Senator Gannon will sponsor the
bill on the floor.
H 479 Ted Spangler presented H 479 which resolves a conflict about reporting
unclaimed funds under any life or endowment insurance policy or annuity
contract, clarifies the ten-year time frame after which property escheats to
the state, and adds a requirement that the state tax commission record
the name and last known address of the person entitled to the property
within 60 days of transferring excess funds from the unclaimed property
account.
Motion Senator Werk moved to send H479 to the floor with a “Do Pass”
recommendation
. Senator Hill seconded the motion.
Vote By unanimous voice vote H479 passed. Senator Werk will sponsor the
bill on the floor.
H 481 Dan John presented H 481, which clarifies the limitation on the exclusion
for certain dividends, corrects a cross-reference to the Internal Revenue
Service, reflects changes to the federal Social Security Act, clarifies
deduction for household and dependent care services, and addresses
Lottery Commission withholding of taxes.
Motion Senator McKenzie moved to send H481 to the floor with a “Do Pass”
recommendation
. Senator Werk seconded the motion.
Vote By unanimous voice vote H481 passed. Senator McKenzie will sponsor
the bill on the floor.
Brad Foltman Chairman Bunderson introduced Brad Foltman, Administrator for the
Division of Financial Management, who gave an overview of the law
regarding spending limitations under I. C. 67-6803. Mr. Foltman explained
the difference between unadjusted and adjusted percent limitations on
Idaho’s General Fund Expenditure Limitations and the effect the
exemption of all one-time expenditures has on the General Fund
appropriations. After this overview there was a discussion of several
pending House Joint Resolutions that pertained to amending Idaho’s
Constitution. HJR 10 restricts the ability of future legislatures to create or
increase a tax rate or remove or reduce a state tax exclusion, exemption,
credit or deduction. Such change would require a two-thirds vote of the
legislature if HJR 10 is approved. We were told HJR 7, which has different
restrictions, was also still alive.
Minutes Senator Werk moved to accept the minutes Feb 9 as written. Senator
McKenzie seconded the motion. By voice vote the minutes passed as
written.



The meeting adjourned at 4:30 p.m.






DATE: Feb 16, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Vice Chairman Hill, Senators Ingram, Gannon,
Compton, Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

Senators Sweet, McKenzie
MINUTES: Chairman Bunderson called the meeting to order at 3:05. With only one
hour available because the senate scheduled an afternoon session, and
conflicting schedules for presenting senators, it was necessary to
rearrange the agenda. Senator Compton began with S1284.
S1284 Senator Compton presented S1284 which provides counties with
information about sales tax being collected in their counties thereby
enabling the measurement of economic growth. Speaking in favor of the
bill was Senator Noh and Kent Just of Twin Falls Chamber of
Commerce. Both indicated the need for accurate statistical information
which could reasonably be provided with current available software.
Businesses that have outlets in multiple counties are lumped into a multi
county category, and out of state businesses are lumped into an out of
state category. These groupings do not show tax information which would
be useful to the counties. Pam Eaton, President of the Idaho Retailers
Association, was concerned that there would be significant cost in
upgrading the software, and since the Streamlined Tax will likely be
implemented at some time, most retailers felt it would be more cost
effective to upgrade for both at the same time. Also, transition time would
be necessary. It was agreed that more work needs to be done on this,
and that amendments are necessary. Dan John, Idaho Tax Commission
said the commission’s estimated cost to implement this law would be
$418,000.
Motion Senator Compton moved to send S1284 to the amending order. Senator
Werk
seconded the motion
Vote By unanimous voice vote S1284 was passed to the 14th order of business.
S1269 Senator Ingram presented S1269 which would allow Intra-city light rail
systems. Phil Kushlan, CCDC discussed the favorable economic growth
which would be made possible by a mass transit system. It was noted that
the language of this bill is permissive and only sets the stage for the
possibility of implementation. A trailer bill would be necessary for actual
implementation.
Motion Senator Werk motioned to send S1269 to the floor with a Do Pass
recommendation
. Senator Hill seconded the motion.
Vote By unanimous voice vote S1269 was approved.
H554 Representative Trail presented H554 which relates to notice inviting bids
for counties. He introduced Walter Steed who discussed the present bid
notification process and the proposed shortening of bid notice
requirements for small or non-complex projects. Discussion centered on
the possibility that shorter time frames could lead to sole source
procurements which generally cost more.
Motion Senator Ingram motioned to send H554 to the floor with a Do Pass
recommendation
. Senator Werk seconded the motion.
Vote By voice vote the motion passed with Senator Gannon voting nay.
Senator Ingram will sponsor the bill.
Minutes Senator Malepeai moved to approve the minutes of February 11.
Senator Ingram seconded the motion. By unanimous voice vote the
minutes were approved
.



Chairman Bunderson indicated those items not addressed at this
meeting would be taken up Wed, Feb 18.



The meeting adjourned at 4:00p.m.






DATE: February 18, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Vice Chairman Hill, Senators Ingram, Sweet,
McKenzie, Gannon, Compton, Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

MINUTES: Chairman Bunderson called the meeting to order at 3:00p.m. A silent roll
call was taken. Senator Hill moved to accept the minutes of Feb 16 as
written. Senator Gannon seconded the motion.
H505 Susan Renfro, Director of the Board of Tax Appeals presented H505
which relates to property tax appeals. The bill now defines the time frame
for appeal from deficiency determinations and deletes reference to a
statute that is no longer applicable to tax appeals.
Motion Senator Gannon moved to send H505 to the floor with a “Do Pass”
recommendation.
Senator Ingram seconded the motion.
Vote By unanimous voice vote H505 passed. Senator Gannon will sponsor
the bill on the floor.
H506 H506 was also presented by Ms. Renfro. This bill relating to property tax
appeals, clarifies the procedure to file an appeal to district court and
provides a technical correction.
Motion Senator McKenzie moved to send H506 to the floor with a “Do Pass”
recommendation.
Senator Hill seconded the motion.
Vote By unanimous voice vote H506 passed. Senator McKenzie will sponsor
the bill on the floor.
S1298 Jerry Mason of AIC presented S1298 relating to Solid Waste Disposal
Systems which authorizes county commissioners and/or cities to operate
and maintain systems by exclusive or nonexclusive means. He
emphasized that this is not new legislation, but a clarification of existing
legislation which had been muddled by a court ruling. Then Steve Purvis,
Director of Special Projects for the City of Boise discussed the positive
aspects of long term contracts in the sanitation industry.

Chairman Bunderson asked if there was anyone present in opposition to
the bill who wished to testify. No opposition being present, Steve
Sedlacek of ISSA summarized his associations support of the bill.
Discussion centered on customer service and problem resolution, capital
investment costs, and contract management.

Motion Senator Compton moved to send S1298 to the floor with a “Do Pass”
recommendation.
Senator Hill seconded the motion.
Vote By unanimous voice vote S1298 passed. Senators Bunderson and
Compton
will sponsor the bill on the floor.
Chairman Bunderson introduced Dr. James Weatherby, Professor at
BSU, to report on the Property Tax Task Force findings. The mission of
the task force was to compile data and formulate an educational
document to be shared with the legislature and other entities seeking
property tax information. The survey focused primarily on residential
property assessment. Idaho and 17 other states and two provinces were
compared to discover whether Idaho’s property tax system was unfairly
burdensome to taxpayers. Dr. Weatherby walked the committee through
the report and answered questions. Based on the data provided by the
survey and other materials, it was concluded that Idaho’s property tax
system compares well.

Chairman Bunderson thanked Dr. Weatherby for his report.



The meeting adjourned at 4:35 p.m.






DATE: February 20, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Senators Ingram, McKenzie, Gannon, Werk,
Malepeai
MEMBERS
ABSENT/

EXCUSED:

Vice Chairman Hill, Senators Compton & Sweet
Chairman Bunderson called the meeting to order at 3:00p.m. A silent roll
call was taken. The committee presented the outgoing page, Robbin
Tyrrell
with a parting gift and a letter of recommendation. The new page,
Alena Shea was introduced.
H536 Dewey Hammond, standing in for Brian Whitlock, presented H536 which
removes the current sunsets on income tax credits for qualified research
and development expense, and the credit for qualified broadband
equipment. There was a discussion concerning the long term effects of
the decision to make sunset credits permanent.
Motion Senator Gannon moved to send H536 to the floor with a Do Pass
Recommendation.
Senator McKenzie seconded the motion.
Vote By unanimous voice vote the motion passed. Senator Gannon will
sponsor the bill on the floor.
Sub-motion Senator Werk motioned to send the bill to the 14th order for amendment.
Because of the difficulty in removing exemptions once granted
permanence, the amendment would be to provide a sunset time frame,
enabling continued monitoring. The sub-motion was seconded by
Senator Malepeai
Vote Voice vote was nay with Senators Werk and Malepeai voting aye.
Chairman Bunderson directed the committee return to the original
motion. There were no dissenting votes.
H567 Dewey Hammond presented H567 which removes the limitation and
allows the deduction for the full amount of the premiums paid for long
term care insurance for the taxpayer, the taxpayer’s spouse, or employee
if the premium is not otherwise deductible. This bill will reduce the general
fund revenue by $500,000. annually.
Motion Senator Ingram moved to send H567 to the floor with a Do Pass
Recommendation.
Senator Werk seconded the motion.
Vote By unanimous voice vote the motion passed. Senator Ingram will
sponsor the bill on the floor.
Minutes Senator Ingram moved to approve the minutes of February 18. Senator
McKenzie
seconded the motion. By unanimous voice vote the minutes
were approved.
Report Chairman Bunderson opened the discussion of The Joint Legislative
Sales Tax Exemption Task Force Report by stating that the Task Force
Report was presented as information with no recommendations as the
committee was divided in its opinion. He then introduced Dr. Stephen
Cooke
, Associate Professor of Agricultural Economics at UI. Dr. Cooke
presented various tax scenarios which were meant to be based on the
task force findings, however as these findings were inconclusive, Dr.
Cooks’ models were based to some extent on guess work. The
presentation centered on what different levels of taxation on various
services would provide in tax revenues, and what the net effect would be
on business competitiveness, and/or household income. The preliminary
results suggest that extending sales tax to services (including medical
services) and lowering the rate to 4% would close the state’s $100 million
structural deficit.



The meeting adjourned at 4:20p.m.






DATE: Feb 23, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Senators Ingram, McKenzie, Gannon, Compton,
Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

Vice Chairman Hill, Senator Sweet
Chairman Bunderson called the meeting to order at 3:00p.m. A silent roll
call was taken.
S1307 Senator Noh presented S1307 which would provide that the analysis of
known wild-land fire hazards shall be a component in the comprehensive
planning process of a planning, or planning and zoning commission. This
would require local governments to address the destruction of private
property resulting from residential and commercial construction in heavily
forested areas. Bruce Alcott of the Idaho Fire Chiefs Association
discussed the cost of fighting fires compared with the cost of planning
preventative measures. Discussion indicated there was concern with the
impact to local governments in implementing this bill. Cities and Counties
both indicated they were neutral on this bill. Additional discussion
centered on the costs to local governments’ already stretched resources
and that federal guidelines exist which address this issue
.
Motion Senator Gannon moved to hold the bill in committee as it needs more
work.
Senator McKenzie seconded the motion.
Sub motion Senator Compton moved to send the bill to the 14th order for
amendment.
Senator Malepeai seconded the motion.
Vote By unanimous voice vote the substitute motion to amend S1307 passed.
Senators Compton and Malepeai will sponsor the amendment.
H542 Representative Eskridge presented H542 which provides for a greater
allocation of property taxes to cities that permit a power plant to locate
within or near such city. Discussion was primarily concerned with assuring
a fair allocation of funds where power plant facilities are built.
Motion Senator Compton moved to send H542 to the floor with a Do Pass
recommendation.
Senator Ingram seconded the motion.
Vote By unanimous voice vote the motion passed. Senator Compton will
sponsor the bill on the floor.
H610 Senator Goedde presented H610 to provide an income tax credit for
charitable contributions made to Children’s Village INC. or its foundation.
Motion Senator Gannon moved to send H610 to the floor with a Do Pass
recommendation
. Senator McKenzie seconded the motion.
Vote By unanimous voice vote the motion passed. Senator Goedde will
sponsor the bill on the floor.
H601 Ken Craft of the Blind Services Foundation presented H601 which would
permit the Blind Services Foundation to make tax exempt purchases of
low vision equipment to be given to residents of the blind and visually
impaired community. While there was no opposition, there was some
concern about adding to the already long exemption list without providing
sunset dates.
Motion Senator Ingram moved to send H601 to the floor with a Do Pas
recommendation.
Senator Gannon seconded the motion.
Vote By unanimous voice vote the motion passed. Senator Ingram will
sponsor the bill on the floor.
Minutes Senator Werk moved to approve the minutes from Feb 20 with a change
showing that the substitute motion made on H536 was for the purpose of
providing a sunset date because of the difficulty in removing permanent
exemptions.
Senator Compton seconded the motion. By unanimous
voice vote the minutes were approved with change.
The meeting adjourned at 4:10p.m.






DATE: February 25, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Vice Chairman Hill, Senators Ingram, Sweet,
McKenzie, Gannon, Compton, Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

MINUTES: Chairman Bunderson called the meeting to order at 3:00p.m. A silent roll
call was taken. Senator McKenzie moved to approve the minutes of
February 23 as written
. Senator Gannon seconded the motion. By
unanimous voice vote the minutes were approved.
S1334 Senator Ingram presented S1334 which would repeal the automatic lien
provision which requires counties to place a lien on the real property in
which fund applicants reside. Those medically needy seeking financial
assistance from the county indigency fund would no longer automatically
have a lien placed on their homes. Senator Ingram read a letter
demonstrating the difficulties faced by those without medical insurance,
and the associated devastating financial impact when medical attention is
needed. He then introduced Sharon Caylor who testified in favor of the
bill. She shared her experience with the county, wishing to set up a
payment plan, but instead being told that to get help a lien would be
placed against her property. Rather than accept the lien she had to apply
to charitable organizations. In her presentation she wondered why the lien
is immediately imposed. The standard practice is to provide care, bill the
customer, then if payment is not received, resort to the lien process. No
other state requires this turn over of property in times of medical need.
Opposition to the bill was presented by Todd Lakey, Chairman of the
Canyon County Board of Commissioners, who spoke to the issue of
personal responsibility. Discussion centered around tactics involved in
obtaining financial assistance, the foreclosure rate (none), and
compromises made in order to collect without foreclosure.
There were still
many questions to be asked and answered, and because the senate was
scheduled to return to the floor at 4:30, limited time. It was decided to
continue the discussion at Friday’s meeting.
H537 Dan John of the Idaho Tax Commission presented H537 relating to
Income Tax Withholding. This bill changes the time when Idaho
employers must file income tax withholding returns from quarterly to
annually.
Motion Senator Hill moved to send H537 to the floor with a Do Pass
recommendation
. Senator Werk seconded the motion.
Vote By unanimous voice vote the motion passed. Senator Hill will sponsor
the bill on the floor.
H538 Dan John presented H538, relating to State Replacement of Property Tax
Revenues on Agricultural Equipment. The bill will change the distribution
of an amount of state funds intended to replace revenues lost when
agricultural equipment was exempted from property tax in 2001. The
amount that was previously paid from the state refund account, will now
be paid from revenue received from the Sales Tax Act.
Motion Senator Compton moved to send H538 to the floor with a Do Pass
recommendation. The motion was seconded by
Senator Hill.
Vote By unanimous voice vote the motion passed. Senator Ingram will
sponsor the bill on the floor
Report An informational Overview of the Alcohol Beverage Business and
Structures Created by Idaho Law, Fiscal Effects and Analysis for
Proposed Legislation was presented by Dan Chadwick, IAC and Ken
Harward,
AIC and Cathy Holland Smith, Budget Analyst for LSO. They
reviewed the white paper prepared for the purpose of creating two
proposed pieces of legislation to change the method of taxing alcoholic
beverages, and to help finance issues created by alcohol abuse such as
youth protection, crime, and health costs. The first bill will change the
basis for which beer and wine excise tax is based from volume to price.
The change will not result in a change in excise revenue. The second bill
would apply a two percent surcharge on beer and wine, similar to that
which has been applied to spirits.
The meeting adjourned at 4:30.






DATE: February 27, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Senators Ingram, McKenzie, Compton, Werk,
Malepeai
MEMBERS
ABSENT/

EXCUSED:

Vice Chairman Hill, Senators Sweet, Gannon
MINUTES: Chairman Bunderson called the meeting to order at 3:05 p.m. A silent
roll call was taken. It was announced that Senator Compton will be
absent next week and will be replaced by Freeman Duncan. Senator
Malepeai
moved to accept the minutes of Feb 25 as written. Senator
Werk
seconded the motion. By unanimous voice vote the minutes were
approved.
H543 Representative Langhorst presented H543, which clarifies the definition
of those transactions which qualify for an exemption from last year’s .01
cent increase in the state sales tax. It provides for contracts entered into
prior to the effective date of the increased sales and use tax, declaring an
emergency and providing retroactive application. This bill is essentially a
trailer to H452, passed last year. H452 provided refunds to contractors,
but not to anyone else who may have entered into purchase agreements
for goods which were delivered after the tax increase went into effect.
H543 will extend the refund to these other purchase agreements. Dan
John
of the State Tax Commission answered questions about the cost of
the refund to the general fund, what the contract must specify in terms of
tax rate in order to allow the refund, and the process involved in
requesting the refund claims. Discussion centered on legislative intent.
Also discussed was the fairness, or look of fairness of retroactive tax
adjustments.
Motion Senator Compton moved to hold the bill in committee. There was no
second.
Motion Senator Malepeai moved to send H543 to the floor with a Do Pass
recommendation.
Senator Werk seconded the motion. Senator
Compton
called for a Roll Call Vote.
Vote By roll call vote the motion passed. Senators Ingram, McKenzie, Werk
and Malepeai
voted aye. Senators Bunderson and Compton voted
nay. Senator Malepeai will carry the bill on the floor.
H720 Dan John of the State Tax Commission presented H720, which is the
annual bill to update references to the Internal Revenue Code (IRC).
Senator Werk was concerned that there would be more bills based on
federal tax cuts that would cost the state money because of state
conformance to federal code.
Motion Senator Compton moved to send H720 to the floor with a Do Pass
recommendation
. Senator Werk seconded the motion.
Vote By unanimous voice vote the motion passed. Senator McKenzie will
carry the bill on the floor.



Chairman Bunderson stated that S1334, The Lien Provision Bill that was
to be heard today, will be moved to Wednesday, March 3, at the request
of Senator Ingram and IAC.



The meeting adjourned at 3:55p.m.






DATE: March 1, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS

PRESENT:

Chairman Bunderson, Senators Sweet, McKenzie, Gannon, Compton,
Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

Vice Chairman Hill, Senator Ingram
MINUTES: Chairman Bunderson called the meeting to order at 3:05p.m. A silent roll
call was taken. Senator Malepeai moved to approve the minutes of
February 27 as written. Senator McKenzie seconded the motion. By
unanimous voice vote the minutes were approved.
Chairman Bunderson addressed a group from ICAN concerning the
postponement of S1334. He explained why the hearing was postponed
and that S1334 will be heard Wednesday March 3.
H649 Representative Cuddy presented H649 which allows manufactured
homes to be taxed in the same manner as stick built homes. Currently the
manufactured homes are taxed as personal property for the entire year of
the first year of occupancy. This bill will allow the first year to be taxed as
real property, and prorated for the period of occupancy just as stick built
homes are.
Motion Senator Gannon moved to send H649 to the floor with a Do Pass
recommendation.
Senator Werk seconded the motion.
Vote By unanimous voice vote the motion passed. Senator Gannon will
sponsor the bill on the floor.
H663 Representative Cuddy presented H663 which clarifies payment and use
of taxes collected on forest land which had used the forest and bare land
method of taxation. Marilyn Knighton, Gem County Treasurer, said
currently if deferred timber tax is paid upon sale of property, the money
must be held until the new buyer decides if they want to further defer
payment. If they do want to continue the deferral, the money must be
returned. The county treasurers want that money to be applied as tax
(which it is). If the new buyer wants to defer, they should apply for their
own deferral.
Motion Senator Malepeai moved to send H663 to the floor with a Do Pass
recommendation.
Senator Werk seconded the motion.
Vote By unanimous voice vote the motion passed. Senator Malepeai will
sponsor the bill on the floor.
H516 Dan John presented H516 which relates to property tax relief, making
changes to the circuit breaker and “50-50” homeowners tax reduction
provisions of the Idaho Code. The bill makes several changes to clarify
and simplify the administration of the property tax reduction procedures.
Motion Senator McKenzie moved to send H516 to the floor with a Do Pass
recommendation.
Senator Sweet seconded the motion.
Vote By unanimous voice vote the motion passed. Senator McKenzie will
sponsor the bill on the floor.



The meeting adjourned at 3:45p.m.






DATE: March 3, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Vice Chairman Hill, Senators Ingram, Sweet,
McKenzie, Gannon, Compton, Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

Chairman Bunderson called the meeting to order at 3:00 p.m. A silent
roll call was taken.
S1384, RS14220 Senator Cameron presented S1384 and RS14220 (removes references
to cities and adds constitutional references) which authorizes a county-based intermodal commerce authority. The local commerce authority shall
not have taxing authority, nor eminent domain rights. It is designed to
create, stimulate and advance commerce, economic development in the
local jurisdiction, and for all Idaho. Senator Cameron would like S1384 to
be held and RS14220 to be sent to print.

John Watts of Watco reviewed the RS emphasizing counties may enter
into intermodal commerce authorities and may acquire assets and
revenue from loans or it may issue and secure bonds, but only to the limit
of assets held by the intermodal authority and other revenue generated by
economic operations of the authority. The authority is empowered to
receive federal, state or local money including gifts, grants, direct
appropriations, and to enter into contracts, acquire, hold and lease
property only for purposes of promoting local and statewide economic
growth and commerce, maintaining facilities for commerce, commodity
shipping, transportation transfer, and storage. This bill empowers counties
only, and only within county boundaries can that power be exercised.
Discussion clarified salary (none – reimbursement only), latitude of power
(intent is to be very broad and to give the district discretion in order to
stimulate the economy) and to assure that the districts have no taxing
authority. Also discussed was constitutionality of this bill. No conflict was
seen.

Motion Senator Hill moved to send RS14220 to print and refer the subsequent
bill directly to second reading on the floor, and hold S1384. The motion
was seconded by
Senator Duncan.
Vote By unanimous voice vote the motion was approved. Senator Cameron
will sponsor the bill on the floor.






S1388 Stuart Davis presented S1388 which is intended to reduce the need for
litigation and speed the process of resolution of claims by property
owners against governmental entities for the taking of a property interest.
Mr. Davis introduced Bill Gigray with the Idaho Association of Highways,
who helped craft the bill. Mr. Gigray stated that this bill deals with the
process of inverse condemnation which he defined as the reverse of
eminent domain. This bill would provide that claims are first filed with the
government entity who must then, in a 90 day period, determine whether
it agrees that an interest in property was taken. This bill proposes to allow
the claim be made with the government entity prior to court action so that
if possible, disputes may be resolved without having to resort to court
action. The bill does not take away any private property rights or right to
litigation. Discussion centered on time constraints. It was explained in
terms of tort actions, and statutes of limitation
.
Motion Senator Werk moved that S1388 be held over for a full hearing on Friday.
Senator Malepeai seconded the motion.
Substitute
Motion
Senator Duncan offered a substitute motion to send S1388 to the floor
with a Do Pass. The motion was seconded by
Senator Gannon.
Vote By voice vote the substitute motion passed with Senator Werk voting
nay. Senator Duncan/Senator Compton will carry the bill on the floor.
H661 Representative Sheperd presented H661 which provides for an order of
dissolution of a hospital district and to provide for the property and
distribution of assets and notification of the state controller. No Idaho
hospital district has dissolved, however the Shoshone Hospital District
has declared bankruptcy and dissolution is likely. This would allow the
board of county commissioners to continue to levy the tax on the district
until the debt is paid so that other county budgets would not have to be
liable for the debt.
Motion Senator Hill moved to send H661 to the floor with a Do Pass
recommendation.
Senator Ingram seconded the motion.
Vote By unanimous voice vote the motion passed. Senator Hill will sponsor
the bill on the floor.
S1334 S1334 returned to the committee for continuation of the hearing begun
February 25. Senator Ingram opened the hearing by introducing Nicole
LeFavour
of ICAN. She began by stating that Idaho is the only state that
automatically places a lien on anyone requesting county assistance with
medical bills. She then asked Karen McWilliams to testify on her
experience with the lien process. She read the story of a woman who had
a lien placed on her address, which turned out to be a women’s homeless
shelter. She indicated the lien process prevents indigent patients from
ever being able to recover from the financial burden placed on them
because liens affect credit rating and the ability to buy or sell real
property.

Next Marina Schwarzbach testified that the lien placed against her and
her husband for her cancer treatments will be with them for the rest of
both of their lives. She was denied aid by all existing programs because
their earnings are over the poverty line. The lien attaches to Social
Security numbers, to the real and personal property of both parties and
into the future so that any future earnings or wind falls are covered by the
lien which does not go away until the entire obligation is paid.

Senator Ingram explained the history of the catastrophic health care
program and the lien procedure in current practice. He then introduced
Tony Poinelli with IAC, who went over a hand-out showing what that
process is and why it should continue. It has been the policy of Idaho that
each person is responsible for his or her own medical care. The counties
and the State Catastrophic Health Care Cost Program (CHCCP) will step
in with assistance when no other resources are available, but nothing
prevents the board of county commissioners from requiring the applicant
to reimburse the county and the CHCCP, where appropriate, for all, or a
portion of their medical expenses, when investigation determines their
ability to do so. A question was asked about the process followed in filing
the application and alternatives available to those choosing not to accept
help from the county. The answer was that the hospital has the ability to
file a third party lien on behalf of the patient with the lien remaining in
place until the bill is paid.

Senator Duncan offered an explanation of general liens and suggested
that the current process may not be the best, but that removing the lien
provision in its entirety was also not the best solution. He feels the
language needs to be corrected to protect the position of priority of the
lien holder and the taxpayer’s interest, and still prevent the patient from
financial harm. With no payment protection for the service provider and
the county, and maintaining a non-entitlement system, services might not
be as widely available.

Teresa Wolf, Nez Perce Social Services, testified that counties take
responsibility for the health of indigent citizens, but that they also have a
responsibility to the tax payer. She stated that only the amounts that are
spent by the county for the patients care are subject to collection (there is
no interest), and often at reduced rates. They also set up payment plans
based on ability to pay. Each lien must be taken to the end of the process,
even if the applicant changes their mind. Again it was noted that a better
way of assuring payment could be found through a re-working of the
language of the existing law.

John Waddell testified that the liens that have been filed against him will
prevent him from ever owning anything.

Nicole LeFavour ended by noting that this process adds financial
hardship to physical injury, and should be repealed.

Chairman Bunderson then closed the hearing by indicating that there
does need to be changes made but that repeal seems to be premature.
He emphasized that changes in law would only have a prospective effect.
A new law would not impact what had happened in the past. He asked the
parties involved to continue to work with Senator Ingram to improve the
law. Senator Duncan also agreed to assist. .

Motion Senator Werk moved that S1334 be sent to the floor with a Do Pass
recommendation. The motion was seconded by
Senator Malepeai.
Vote By roll call vote with Senators Ingram, Sweet, Werk and Malepeai
voting aye and Senators Bunderson, Hill, McKenzie, Gannon and
Duncan
voting nay, S1334 failed to carry. The bill will be held in
committee.



Senator Ingram agreed to review the bill this summer with any members
that would care to participate. They will bring changes back to the
committee next session.



The meeting adjourned at 4:50 p.m.






DATE: March 5, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Vice Chairman Hill, Senators Ingram, McKenzie,
Gannon, Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

Senators Sweet, Compton
MINUTES: Chairman Bunderson called the meeting to order at 3:00p.m. A silent roll
call was taken. Senator Malepeai moved to approve the minutes of
March 1 and March 3 as written. Senator McKenzie seconded the
motion. By unanimous voice vote the minutes were approved.
H724 Jack Winderl of United Heritage presented H724, which amends and
repeals existing law to revise the rate of the premium tax, and to revise
the percentage of assets required for reduced premium taxes. The bill
simplifies the method used to compute payment of premium taxes by
insurance carriers doing business in Idaho. Current statutes impose
different premium tax rates to insurance carriers doing business in Idaho,
either at 1.4% or 2.75%. This bill modifies the present structure by
adjusting the premium tax, over a six-year time frame, to single premium
tax rate of 1.5%. This will make Idaho more competitive in its efforts to
attract insurance carriers to locate in Idaho. The premium tax credit is
currently dependent on investing 25% of reserve in Idaho investments.
This bill will lower that percentage by 5% per year over a period of six
years until it is 5% in 2009. The change to a single premium tax rate for
all insurance carriers will also eliminate legal and financial exposure to the
State created by the dual rate system. The fiscal impact to the state
general fund is estimated to be positive over the six-year implementation
period.

Senator Stegner explained the current two tier system and its negative
impact on the insurance business and Idaho’s ability to attract that
business.

Robert Baldwin of Metropolitan Life added that the lower tier of taxes is
good for economic development. Senator Werk indicated he would like a
progress report next session.

Motion Senator Hill moved to send H724 to the floor with a Do Pass
recommendation
. Senator Gannon seconded the motion.
Vote By unanimous voice vote the motion passed. Senator Stegner will carry
the bill on the floor.
H739 Representative Ken Roberts presented H739 which provides a
procedure for determination and collection of property tax moneys that
were improperly claimed or approved for the fifty-fifty homeowner’s
property tax exemption and to provide application of moneys collected to
the three percent property tax cap.
Motion Senator Malepeai moved to send H739 to the floor with a Do Pass
recommendation
. Senator Werk seconded the motion.
Vote By unanimous voice vote the motion passed. Senator Malepeai will
sponsor the bill on the floor.
H753 H753 was considered by the committee. The purpose of this legislation is
to add a credit for contributions to the Women’s and Children’s Alliance
on Idaho Income Tax Forms. The Women’s and Children’s Alliance is a
nonprofit organization that provides secure shelters, transitional homes,
counseling, case management and comprehensive supportive services to
women and children escaping domestic and/or sexual violence.
Motion Senator Malepeai moved to send H753 to the floor with a Do Pass
recommendation
. Senator McKenzie seconded the motion.
Vote The motion passed by voice vote with Senators Hill and Werk opposed.
Senator Ingram will sponsor the bill on the floor.
The meeting adjourned at 4:00p.m.






DATE: March 10, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Senators Ingram, Sweet, McKenzie, Gannon,
Compton, Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

Vice Chairman Hill
MINUTES: Chairman Bunderson called the meeting to order at 3:00p.m. A silent roll
call was taken. Senator Malepeai moved to approve the minutes of
March 5 as written. Senator McKenzie seconded the motion. By
unanimous voice vote the minutes were approved.
H651aa Brian Whitlock from the Office of the Governor, presented H651aa which
amends the Idaho income tax credit for new employees. An expanded
credit of $1,000 will be available for any business that adds new
employees whose annual earnings average $12.50 per hour or more and
who are eligible to receive employer provided coverage under an accident
or health plan. The existing credit of $500 for new employees in a natural
resource based enterprise is retained unchanged. The increased credit
will be available for employers’ taxable years beginning on and after
January 1, 2004. Discussion centered on the level of impact $12.50 (as
amended by the House) would have on the economy vs. $15.50 (as
originally proposed). The lower rate would not provide employees the
discretionary income required to purchase health benefits, and in fact,
some people earning $12.50 might still be eligible for CHIP and other
benefits available to low income earners. It was stated the intent of the bill
was to encourage employers to create higher paying jobs and by lowering
the wage to $12.50, that purpose was lost.

Roger Sherman of United Vision for Idaho, testified that he supported the
concept, but would like to see the bill amended to the original amount of
$15.50. Information from The Bureau of Labor Statics shows that below
$15.00 the uptake rate for purchasing health insurance is about 35%,
above $15.00 that rate goes to over 60%. The higher wage provides an
income sufficient to purchase the insurance that’s offered.

Mia Crosthwaite representing Catholic Charities, said that any new jobs
were preferable to none, and that at $12.50 more jobs would be available.
Further discussion indicated the bill would be most useful if those
employees benefitting from it were no longer eligible for any other state
aid.

Motion












Substitute
Motion

Senator Ingram moved to send H651aa to the floor with a Do Pass
recommendation.
There was no second.









Senator McKenzie made a substitute motion to move the bill to the 14th
order to amend the bill back to the original $15.50.
Senator Werk
seconded the motion.

Vote By voice vote the substitute motion to send the bill to the 14th order
passed
with Senators Sweet and Ingram voting nay. Senator McKenzie
will sponsor the amendment on the floor.
H756 Representative Gagner and Senator Gannon presented H756 which
relates to the Idaho Building Code Act. It would provide that local
governments that adopt building codes, accept the 2003 International
Building Code, Energy Conservation Code and the International
Mechanical & Fuel Gas Codes in addition to the codes referenced in the
existing legislation. This would keep the International Codes intact as a
family of codes. There was discussion about whether covering five to 16
unit buildings under the sprinkler requirements was going far enough, or if
three and four plex units should also be included.

Dwight Perkins, IAPMO, testified that HVAC wants to use their uniform
code as opposed to the 2003 international code required by H756.

Ken Baker, AIC, spoke in favor of the bill, but suggests education for
inspectors would be helpful.

Dennis Tanikuni, Farm Bureau, was concerned about private property
infringement.

John Eaton, Idaho Building Contractors Association, supports the bill and
feels that it provides uniformity and is a significant improvement over what
we now have. He believes the stronger issue addressed by the bill is more
life safety as opposed to building safety.

Bruce Allcott, Idaho Fire Chiefs, strongly disagrees with the exemption
for three and four unit buildings. It is true that the bill as written provides
more protection than was previously required, but sprinklers save lives
and the exemption should be removed from the bill.

Ken Harward indicated that AIC supports the bill as written.

Ron Anderson joined in the opposition to the exemption noting that from
a fire fighter’s perspective three and four unit fires are major incidents,
especially for small districts, which are sometimes manned by volunteers.
Sprinklers would not only help save the lives of occupants, but would
make the job of fighting fires more successful.

Jack Rayne spoke in support of the bill saying that when sprinklers are
installed egress windows in sleeping rooms are not required below the
fourth floor, thereby creating a trap. Also surrounding states already are,
or soon will be, using the 2003 codes.

Jenifer Gilliland of the City of Boise also spoke in favor of the bill.

Final discussion summarized the issue as a matter of not whether the bill
is good, but whether it is as good as it could be. The bill is a positive step
forward, and nothing would preclude the fire fighters from forwarding more
inclusive legislation in the future.

Motion Senator Werk moved to send H756 to the floor with a Do Pass
recommendation
. Senator Compton seconded the motion.
Vote By unanimous voice vote the motion passed. Senator Gannon will carry
the bill on the floor.


As the Senate was scheduled to return to the floor at 4:00 p.m., the
hearing for H780 was post-poned until March 12.



The meeting adjourned at 4:20 p.m.






DATE: March 12, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Vice Chairman Hill, Senators Ingram, McKenzie,
Gannon, Compton, Werk
MEMBERS
ABSENT/

EXCUSED:

Senators Sweet, Malepeai
MINUTES: Chairman Bunderson called the meeting to order at 3:00p.m. A silent roll
call was taken. Senator McKenzie moved to approve the minutes of
March 10 as written
. Senator Ingram seconded the motion. By
unanimous voice vote the minutes were approved.
H780 Representative Denney presented H780 which amends existing law
relating to the Bond Levy Equalization Support Program to prohibit
utilization of assistance pursuant to the program for projects previously
subsidized by state grants. The existing bond equalization program is
being augmented with a loan program, offering participants a choice. This
bill allows districts to choose the program that is right for them. It also
clarifies that only one option at a time can be used (no double dipping).
Senator Cameron testified that the two options, which were created at
different times, should each be available to school districts so that they
can choose the most financially advantageous option. He had some
amendments that he would like to see incorporated. He wants to be sure
that those districts who chose to participate in the loan program, with
money being paid up front, will not be penalized for being willing to
commit to the only option available at the time. Now the bond equalization
program, which pays out over the life of the bond, is available, and it may
make more sense to some districts that chose the loan program to
change to the bond program. They should be able to choose, but not be
able to choose both. The language in his proposed amendment will clarify
that choice. It was stated that if the bill does go to the 14th order it will not
remain there.
Motion Senator Hill moved to send H780 to the 14th order for amendment.
Senator Compton seconded the motion.
Vote By unanimous voice vote H780 was sent to the 14th order. Senator
Cameron
will sponsor the amendment.
Letter of Intent Senator Compton requested that a letter of intent be sent to the Tax
Commission indicating committee support for the bill reporting taxes by
counties (S1284). The letter should indicate that annual data would be
acceptable and that the tax commission should work with the Retailers
Association, the Association of Counties, the Chambers of Commerce
and other stakeholders to develop the most practical and expeditious
implementation of county reporting of sales taxes.
Motion Senator Compton moved to have a letter of intent from the Chairman
and backed by the Committee sent to the Tax Commission
. Senator
Gannon
seconded the motion.
Vote By unanimous voice vote the motion was carried.
Closing
Business
Chairman Bunderson said that we had been directed by leadership that
this is the last official meeting of the committee. Any bills yet to be
received from the house will be heard only if the committee is instructed
by leadership. The committee page, Alena Shea, was presented with a
gift and a letter of recommendation. Senator Werk had a last minute
correction to the March 10 minutes, which was acceptable to the
committee and will be included.
The meeting adjourned subject to call of the chair at 3:30p.m.






DATE: March 18, 2004
TIME: 3:00 p.m.
PLACE: Room 426
MEMBERS
PRESENT:
Chairman Bunderson, Vice Chairman Hill, Senators Ingram, Sweet,
McKenzie, Gannon, Compton, Werk, Malepeai
MEMBERS
ABSENT/

EXCUSED:

MINUTES: Chairman Bunderson called the meeting to order at 8:00a.m. A silent roll
call was taken. Senator Hill moved to approve the minutes of March 12
as written. Senator McKenzie seconded the motion. By unanimous voice
vote the minutes were approved.
The Chairman stated the committee was
meeting to hear legislation which leadership had deemed important to be
heard prior to adjournment. H760a and H761a are in that category. The
other two bills are trailer bills to existing legislation.
H760a Senator Hill presented H760a which provides an income tax credit
against state income taxes for investments in alternative energy
generating equipment. He talked about the benefits of renewable energy
and the high costs of alternative energy generation equipment. He also
explained the concept of transferability, which would allow energy
producers not paying income taxes to transfer or sell their credits at
discounted rates to another who is required to pay taxes. He also
indicated that after discussion of the bill, he would be moving to send the
bill to the 14th order to have the transferability of the tax credits, which was
added as an amendment in the House, removed from the bill. He
explained that greater benefit is going to some counties because they
have higher unemployment rates and greater need of economic
development.

Representative Eskridge spoke about the kinds of renewable energy
equipment that would be included in the bill and that it would be power
that was available to go back into the grid. He reminded the committee
that Idaho’s power supply has been volatile, and that renewable energy
sources offer price and supply stability.

Ron Williams, who represents Idaho Consumer Owned Utilities
Association testified that the amendment allowing transferability is
important and asked that it not be removed from the bill.

Bill Eddie, who represents Advocates for the West, supports the bill but
suggests a minor change. He would like to include the word “existing” in
the low-impact hydro definition.

Russell Hendricks, representing Idaho Farm Bureau, concerned about
removal of transferability. Believes that it would be advantageous to the
small farmers to have the credit

Senator Stegner encouraged removal of the amendment. He indicated
that it was decided income tax exemptions were the best way to help in
encouraging creation of alternative energy investments, and that it makes
sense that for an exemption to be claimed, taxes must be paid. Non-profits don’t pay income taxes so they should not be allowed a credit to
sell.

Motion Senator Hill moved to send H760a to the 14th order to amend the bill,
removing transferability
. Senator Compton seconded the motion.
Substitute
motion
Senator Gannon made a substitute motion to send H760a to the floor
with a Do Pass recommendation
. Senator McKenzie seconded the
motion.
Discussion centered on whether anything was lost by transferring
the credit, or whether those who pay no tax should benefit further by
selling credits they cannot use. Chairman Bunderson directed the
committee to hear H761a before voting on both bills.
H761a Senator Hill and Representative Eskridge presented H761a which
relates to the production of electricity from the alternative energy
generated by the investments discussed in H760a. Discussion included
feelings of cautious advancement (original motion) vs desire to provide as
much incentive as possible to the investors (substitute motion).
Motion Senator Hill moved to send H761a to the 14th order to amend the bill,
removing transferability
. Senator Compton seconded the motion.
Substitute
motion
Senator Gannon made a substitute motion to send H761a to the floor
with a Do Pass recommendation
. Senator McKenzie seconded the
motion.
Vote By voice vote the substitute motions to send H760a and H761a to the
floor with a Do Pass recommendation failed with Senators Sweet,
McKenzie and Gannon
recorded as voting aye.
Vote By voice vote the motion to send H760a and H761a to the 14th order to
amend the bills removing transferability passed
with Senators Sweet,
McKenzie and Gannon
recorded as voting nay. These bills will be sent to
the 14th order.
H828 Woody Richards presented H828 which relates to insurance, revising the
rate of tax on surplus lines. It is a trailer bill to H724. H828 makes all
surplus line insurance subject to the same premium tax.
Motion Senator Compton moved to send H828 to the floor with a Do Pass
recommendation.
Senator Hill seconded the motion.
Vote By unanimous voice vote the motion passed.
H799a Dewey Hammond of the Idaho Tax Commission presented H799a, which
amends the provisions passed last year allowing a taxpayer to elect a
two-year exemption from property tax in lieu of the investment tax credit
against income taxes. This removes the penalty language, and adds
recapture terminology, making the provision less onerous. Senator Werk
again would like to see a sunset date.
Motion Senator Compton moved to send H799a to the floor with a Do Pass
recommendation.
Senator McKenzie seconded the motion.
Vote By unanimous voice vote the motion passed.
Sine Die The meeting adjourned for the final time at 9:15a.m.