Long-term lease bill moves to Idaho House

BOISE — Legislation that would limit a county’s ability to use long-term leases to construct new courthouse or jail facilities advanced to the House floor Wednesday.

As originally written, House Bill 575 could have disrupted Nez Perce County’s plans to use a long-term leasing mechanism to build a new courthouse.

However, the bill sponsor, Rep. Bruce Skaug, R-Nampa, modified the legislation to delay its implementation date until Jan. 1, 2023, specifically to avoid throwing a wrench in Nez Perce County’s plans.

Skaug described HB 575 as a “taxpayer defense bill.”

Under current law, he said, county commissioners can approve leases of as long as 30 years, without a vote of the people. His legislation changes that to five years; any lease term in excess of that limit would require a majority vote.

“Currently, county commissioners can do an end-run around the spirit of the Idaho Constitution by putting taxpayers in debt for up to 30 years, for unlimited amounts, without a vote,” he told the House Local Government Committee. “This bill amends the duration for county leases for jails and courthouses from 30 years to five years. Beyond five years, they need a majority vote.”

Nez Perce County wants to replace its 131-year-old courthouse with a new facility. It plans to finance the project with certificates of participation, a type of funding option in which investors pay to construct the building and then lease it back to the county. At the end of the 30-year lease, the county would own the structure.

Officials expect to finalize the financing arrangements this summer. The delayed implementation date of HB 575 allows that schedule to remain on track.

Nevertheless, Seth Grigg, executive director of the Idaho Association of Counties, testified in opposition to the bill, saying it would undermine one of the few tools available to help counties construct facilities.

Grigg noted that counties who use certificates of participation typically cover the lease costs without raising taxes. That’s also the case with Nez Perce County.

“Typically, a local government determines whether it has sufficient revenue within its existing budget to enter into one of these leases,” he said. “That’s why there hasn’t been a public vote requirement. They aren’t going to voters to ask them to tax themselves an additional amount to pay back this debt.”

That wasn’t much of a comfort to the Idaho Farm Bureau, which testified in support of the legislation.

“Our members see HB 575 as a small step toward helping close the loophole that allows counties to incur long-term debt without a vote of the people,” said Russ Hendricks, the bureau’s government affairs director. “The Idaho Constitution is really pretty clear: the intent and spirit was that long-term debt should be subject to a vote of the people. Our members feel strongly that long-term leases incur long-term debt.”

Rep. Jon Weber, R-Rexburg — a former county commissioner himself — made a motion to send HB 575 to the House floor without recommendation.

That motion failed on a 7-6 vote, with Rep. Mike Kingsley, R-Lewiston, voting in opposition.

A subsequent motion to send the bill to the floor with a favorable “do-pass” recommendation then passed on what appeared to be a party line voice vote.

Spence may be contacted at bspence@lmtribune.com or (208) 791-9168.