Idaho business tax-incentive bill sails, then runs aground

A last-minute opinion from the Attorney General's Office could derail the measure.

zkyle@idahostatesman.comMarch 18, 2014 

The Senate will reconsider a business-tax reimbursement bill that passed the Legislature after the Attorney General's Office called it unconstitutional.

The bill would reward businesses meeting wage and job-creation thresholds with rebates of up to 30 percent of corporate income, payroll and sales taxes. It passed the Senate 29-6 on Monday after passing the House 63-5-2 on March 4.

But shortly before the Senate adjourned Monday, Majority Leader Bart Davis, R-Idaho Falls, served notice of reconsideration, allowing the Senate to debate and vote on the bill again Tuesday.

The notice was prompted by delivery of an opinion on the legality of the bill from Attorney General Lawrence Wasden's office. The opinion said that the bill violated the Idaho Constitution because it gave the Department of Commerce too much freedom to decide which companies could receive the rebates.

The opinion called for amending the bill to include an appeal mechanism and to add specific criteria to make the approval process less arbitrary. "H546 should include some measure of review of the council's or the director's determinations," Deputy Attorney General Chelsea Kidney wrote. That could still be done within the department, she wrote.

For a bill to be reconsidered, a legislator who voted for it must give notice on the same day it passes. Davis voted for the bill.


Meanwhile, the Senate voted 18-17 to extend a tax rebate for TV and film projects established in 2008 but never used.

The law, which was scheduled to sunset in June, gives production companies a 20 percent rebate on money they spend in Idaho on construction, operations, editing, photography and other work. Companies would need to spend at least $200,000 to qualify, with a rebate cap set at $500,000. They would need to hire Idahoans to make up at least 35 percent of the crew.

The Legislature has never appropriated money to fund the rebate but could in future years. Sen. John Goedde, R-Coeur d'Alene, said a Hollywood project benefited his district in North Idaho.

"I well remember the Silver Valley filming of 'Dante's Peak,' " he said. "It was a huge shot in the arm for an economy that was really struggling. … We're going to have to give this a try and see how it works."

The House passed the bill last month.


Zach Kyle: 377-6464, Twitter: @IDS_zachkyle

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