Senate panel advances bill to let cities dissolve urban renewal districts, give fire districts opt-out

BOISE, Idaho — The Senate Local Government and Taxation Committee voted Wednesday to send House Bill 436 to the Senate floor with a do-pass recommendation after hearing competing testimony on changes to urban renewal law.

Representative James Monks, sponsor of House Bill 436, told the committee the bill would add an optional statutory process through which a city could dissolve an urban renewal agency or terminate a revenue allocation area. "They have to adopt a resolution indicating their intent to do so," Monks said, adding that the council would then meet with the urban renewal agency and prepare a plan before adopting a second resolution to effect dissolution.

The bill also would give fire and ambulance districts an option to remove their levies from existing urban renewal revenue allocation areas if there is no outstanding indebtedness or contractual obligation, and would require fire districts to opt in for new urban renewal areas, similar to current rules for road districts. Finally, Monks said the bill would allow limited extensions for revenue allocation areas tied to single-owner industrial projects, permitting a second 20-year period in narrowly defined circumstances.

The bill drew opposition from the Redevelopment Association of Idaho. Megan Conrad, an attorney representing the association, asked the committee to hold the bill or send it to the amending order, saying the measure "is a fairly significant change, and it deserves much more stakeholder input." Conrad said the draft does not adequately protect existing indebtedness or show evidence of review by bond counsel.

Local urban renewal agencies and developers also warned of legal and financial risk if a city could cut off revenue streams while obligations remain. Robin Sellers, representing the Nampa Development Corporation, said, "As currently drafted, city council could dissolve a URA, even if that agency has existing bond or contractual obligations." David Leeman of Meridian Development Corporation similarly urged amending the language that he said would create a 60-day freeze that could hamper project agreements.

Municipal and industry witnesses and some public-safety officials supported the bill. Alex Labo, president of the Idaho Association of Commerce and Industry, said the bill "is an excellent step forward" and highlighted language that could help manufacturers already invested in Idaho expand infrastructure paid for through tax-increment financing. Heather Displecone, a private citizen from Pocatello, testified that the bill "is a first step toward addressing a weakness ... the lack of enumerated oversight" of urban renewal agencies.

Fire chiefs and district leaders emphasized the fiscal impact of tax increment financing on small taxing districts. Greg Tominski, representing Middleton and Star fire districts and the Idaho Fire Chiefs Association, said fire districts are "98% reliant on property tax" and described a local example in which a building's assessed value grew from $50,000 to about $7.2 million while the district lost an estimated $200,000 in revenue because the increment was captured by an urban renewal area. Kirk Carpenter of the Nampa Fire Protection District said his district's increment totals nearly $1 million and that the bill would give districts a chance to be consulted and to plan for new stations or apparatus.

Representative Monks told the committee the bill creates options rather than mandates and said it does not automatically dissolve districts. He noted language intended to preserve funds to meet existing indebtedness.

After roughly an hour of testimony and questions, Senator Den Hartog moved to send House Bill 436 to the Senate floor with a do-pass recommendation; Senator Groh seconded. Committee members approved the motion by voice vote.

The bill will next be considered by the full Senate; members said it may still be amended on the floor or returned to the amending process for technical changes.