House

Bill 606
2016 Freedom Index Score (0)
Analyst: Wayne Hoffman
Date: March 16, 2016
ANALYST NOTE: House Bill 606 makes several notable reforms to the state's urban renewal statutes. The bill
promises to increase government transparency and accountability, but urban renewal, by its nature, makes it
very difficult for people to fully appreciate how their tax dollars are diverted to urban renewal projects. The
bill does make an attempt to improve taxpayer oversight.

Point No. 8: Does it in any way restrict public access to information related to government activity or
otherwise compromise government transparency or accountability? Conversely, does it increase public access
to information related to government activity or increase government transparency or accountability?

ANALYSIS: The proposed 50-2006(5) allows for the members of an urban renewal board to be elected,
rather than appointed, increasing the accountability of the commissioners for an urban renewal
board. (+1) The bill also requires agencies to file reports, plans and plan modifications with the state
tax commission, and provides a consequence--the loss of tax revenue--for failure to do so. (+1)

Point No. 5: Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely,
does it eliminate or reduce any taxes, fees, or other assessments?

ANALYSIS: The bill makes an important modification to Idaho Code 50-2033, which was added as part
of an urban renewal transparency measure in 2011. That year, the Legislature prohibited certain plan
amendments to a revenue allocation area. House Bill 606 allows for plan amendments to take place
under certain conditions and stipulates whether or not a reset in the base valuation in the revenue
allocation area is to occur. The criteria are provided in the new proposed Idaho Code 50-2903A. A
base valuation reset is important in that it dictates whether the urban renewal agency is to use the
current property values in determining the tax increment or whether it is to use the values from when
the revenue allocation area was established. Requiring the use of the existing property values in
setting the base would result in less money for the urban renewal district, while keeping the base
from resetting would result in more money for the district. While allows for some minor changes to
the revenue allocation area without triggering a reset, the bill also protects the urban renewal district
from a reset when it is to accommodate an existing commercial or industrial project in a revenue
allocation area or when the urban renewal district has indebtedness that cannot be repaid before the
revenue allocation area is to expire. This has the potential of prolonging a shifting the tax burden to
other taxpayers while the debt is to be repaid. (-1)

Point No. 7: Does it increase government spending (for objectionable purposes) or debt? Conversely, does it
decrease government spending or debt?

ANALYSIS: The proposed addition of 50-2905A would prohibit urban renewal revenue from being
used to construct certain municipal buildings (spelled out in the section) without a vote of the public.
When urban renewal dollars contribute to 51 percent or more of a project's cost, a public vote with at
least 60 percent of the participating qualified electors would be needed to approve the project. While
the notion of a public vote is a good thing, the 51 percent provision would appear to be an invitation
to fund 49 percent of a project using urban renewal dollars, allowing voters to continue to be
bypassed for debt financing purposes. (-1)