The bill proposed by Labrador and Moyle would limit local government entities from approving an LID of more than $500,000 without a vote of the people who would be within the taxing authority of the LID.  Governments seeking to institute an LID could also approve the measure by constructing a petition and gathering signatures of those who would be taxed by the LID.  Local officials would be required to receive signatures from 60 percent of property owners within LID boundaries for approval.  If officials choose to put the matter up to a vote of the people affected by the LID, 60 percent voter approval would be necessary to form the LID.

On the House floor Friday, Moyle said that though the majority of LIDs are less than $500,000, he feels the measure is necessary to allow citizens to have greater control in determining which taxes they will pay.  He said that LIDs can be an effective tool for development and maintenance when used correctly, but that many city councils are abusing the practice.

“I don’t believe … LIDS should be used for streetcars like Boise is proposing to do,” said Moyle.

Labrador, in his speech to fellow lawmakers, that the legislation is a compromise from previous legislations proposed that would have forced city councils, or other local entities wishing to form an LID, to put every improvement district proposal up for a vote of the people.  He said the bill would not affect any LIDs that are currently formed.

Rep. Branden Durst, D-Boise, said it is hypocritical of lawmakers to continuously pass laws or resolutions asking the federal government to stay out of state affairs while involving the state government in local affairs.  Durst urged lawmakers to oppose the legislation because he feels that locally elected officials should have the trust of the people in planning for city.

Rep. Grant Burgoyne, D-Boise, joined Durst in opposition to the bill, saying that he believes the plan is unnecessarily preemptive in its approach to LIDs.

“I believe this is legislation looking for a problem,” said Burgoyne.  Burgoyne added that the Legislature should not involve itself in “Ada County intramural issues,” but should rather look to more clearly define the purposes and uses of LIDs.

The bill originally limited local governments to $250,000, but that bill was killed in committee because legislators felt the cap was too low.  Labrador said the increased cap would help to “to find a happy medium” among legislators.

Upon urging from chairmen Rep. Dennis Lake, R-Blackfoot, committee members voted to kill Rep. Raul Labrador’s, R-Eagle, bill to require city councils creating Local Improvement Districts (LIDs) to obtain voter approval if the project exceeded $250,000.  Labrador subsequently proposed a new bill.

The new bill, introduced unanimously, has a few tweaks in the language, which Labrador believes will help “to find a happy medium.”  The new bill increases the project amount to $500,000 and provides an alternative to obtaining voter approval for LID creation.  City leaders would, under the changes, be allowed to create a petition to circulate to all businesses or homeowners within the boundaries of the proposed taxing district for approval.  Signatures of two-thirds of the homeowners or business owners would be required for creating the LID.  City leaders would still have the ability to present their plans for a vote of the citizens, which would also require a two-thirds majority for passage.

Labrador said his bill is intended to limit the use of the special taxing districts, which, he contends, city councils have begun using for city-wide projects or economic development ventures.  He argued that those uses are inappropriate and that LIDs were never intended to be used in those manners.

The House Revenue and Taxation Committee will debate the issue further next week.

The plan, if enacted, would require city councils across the state to obtain voter approval before creating Local Improvement Districts (LIDs) for special projects above $250,000.  According to Labrador, LIDs are typically utilized when local governments need to make improvements to a targeted area in their own jurisdiction.  Labrador said that in the past governments have used the creation of LIDS to fund lighting and road projects.

The problem, according to Labrador, is city councils that wish to use LIDS for economic development, which he believes was not the original intent of LIDS.  In his testimony before the House Revenue and Taxation Committee Monday, Labrador pointed to Boise’s push for a trolley system as a misuse of the special taxing district.

The trolley, designed to be built in downtown Boise, could fall victim to Labrador’s plan.  The project, which would be partially funded by $40 million in federal stimulus dollars, would need an additional $20 million for initial start up costs.  The city of Boise has proposed creating a new LID to help pay for the construction and annual maintenance of the route.  According to some estimates, the line could cost as much as $1 million a year to maintain.

According to the city’s website for the streetcar, the LID would create a three-tier formula for taxing those within its jurisdiction, with those living farthest away from the line paying the least.  The city says the LID would cover 900 property owners.

If the Labrador plan is approved, any LID plans in excess of $250,000 would require a local government receive a vote of two-thirds or higher to proceed with the project.

The plan was introduced by a unanimous vote and will be presented for further consideration in upcoming weeks.