Public Policy Report • 2019 Table of Contents 3 Letter from IACI Board Chair 4 2019 Session Wrap-Up Tax Conformity Medicaid Expansion State Budget Workforce Development Industrial Electricians Land Use Planning Administrative Rules Campaign Finance Mining in Idaho Transportation Funding 10 New Laws Passed in 2019 18 2019 Legislation Tracking List 22 2019 Legislative Voting Records 24 Vision, Values & Mission 25 Statement of Public Policy 30 2019 IACI 45th Anniversary Conference Agenda Speakers Sponsors 2 Public Policy Report 2019 Letter from the Chair I am honored to be the current Board Chairman of the Idaho Association of Commerce & Industry (IACI), representing Employers Advocating Economic Opportunity in Idaho.® Our membership is comprised of hundreds of employers, throughout the state of Idaho, employing over 200,000 Idahoans. IACI members work together to influence good public policy to enhance Idaho’s business climate, and provide economic opportunity and certainty in its regulations. Throughout the year IACI works on critical issues, such as taxes, health care, education/workforce, environment and regulations, workers’ compensation, unemployment, employer liability, and controlling the cost and growth of government. IACI was founded in 1974, and we’re excited to be celebrating our 45th anniversary this year as a critical fixture in Idaho’s legislative and policy-making arena. IACI’s membership is comprised of employers of every size and across every industry in Idaho—making it Idaho’s broadest-based, most diverse business association, earning the respect and ear of the state’s elected and policy leaders. For those who are able to participate in our Annual Public Policy Conference in Coeur d’Alene this year, we’ve put together an excellent program focused on workforce development and education. In our robust economy with record low unemployment, it is critical for Idaho’s employers to have access to a highly skilled and trained employee base. The conference will explore how employers can work in tandem with our educational organizations and government leaders to provide access to an excellent foundation for Idahoans to enter the state’s workforce. We appreciate your interest and support of these important efforts. Sincerely, Scott Madison IACI Board Chairman, and Executive Vice President Intermountain Gas Co. Public Policy Report 2019 3 Multinational corporations doing business in Idaho are now allowed the 965 deduction for repatriated income on their 2017 taxes and can take advantage of conformance to the 100 percent participation deduction on foreign dividends moving forward in IRC § 245A. In addition, Idaho now conforms to the Foreign Derived Intangible Income (FDII) and the Global Low-Taxed Income (GILTI) provisions of IRC § 250. This was IACI’s priority legislation for 2019, and we are grateful to the many Legislators who spent a large amount of time studying the issue and the impact on Idaho companies. In addition, 2019 Session Wrap-Up Mark Wynn, VP Tax at Lamb Weston, and Mike Rodgers, Director of Federal and State Tax at Micron Technology, were incredibly accommodating in helping everyone understand The 65th Idaho State Legislature finally wrapped up its First the complex nuts and bolts of the federal tax reform. Regular Session late afternoon on April 12, 2019, the 3rd longest Session since 2000 at 95 days. The Session was defined by (1) the Medicaid expansion initiative, which sparked multiple efforts to put sideboards on the expansion as passed by Proposition 2, and (2) efforts to reform the initiative process. Following is a look at some of the action that took place, as well as an update on some of the key pieces of legislation IACI was active on this year. Medicaid Expansion This session was defined by Medicaid expansion, which the voters passed via the Proposition 2 initiative last fall with the support of IACI. The initiative expanded Medicaid to the “gap” population for individuals between 100 and 138 percent of the federal poverty level with no additional sideboards. By law, the federal government picks up 90 percent of the cost of Tax Conformity expansion while 10 percent is funded by the state. In 2018 the Idaho Legislature responded to the federal Tax Cuts and Jobs Act (TCJA), passed December 2017, by conforming Many in the Legislature argued there should be some side- to some sections of the TCJA, but excluding some sections boards on expansion, with most of the discussion centering on relating to corporate income taxation of foreign income. The a proposed work requirement. In the end, nine pieces of legisla- TCJA takes a carrot-and-stick approach to the corporate tion were introduced to address Medicaid expansion. taxation of this income. The 2018 Idaho Legislature essentially conformed to all the “stick” provisions of the Act, but did not The Senate began the effort by introducing SB 1100 from conform to any of the “carrot” portions of the Act, which were Senator Souza (R-Coeur d’Alene) in early February, which designed to soften the blow to corporate taxpayers. The result would have required the Department of Health & Welfare was a massive tax increase on Idaho corporations, which was (H&W) to inform newly eligible Medicaid recipients of available unfair and created a competitive disadvantage with other states employment and training programs. SB 1100 also asked H&W that did conform to these provisions. to seek a waiver to provide premium assistance to those in the gap population to purchase insurance on the state health After much deliberation and study by legislators this year, insurance exchange, and asked the H&W Director to research the Legislature passed, and the governor signed, HB 183 to a potential waiver to use Medicaid funds to pay for substance conform to all the provisions of the TCJA regarding corporate abuse and mental health services in institutions for mental tax reform. Specifically, the legislation adopts new deductions in disease. Finally the legislation called for a review in 2023 and the Internal Revenue Code (IRC) Sections 245A, 250 and 965. stated that if the federal match fell below 90 percent, expansion would be null and void. Ultimately, SB 1100 did not receive a hearing, but it became a starting point for other drafts. 4 Public Policy Report 2019 then sent the bill to General Orders for further amendments. IACI could reluctantly support the amended Senate version and supported some clarifying amendments from Rep. Vander Woude to make some technical corrections. Early on it appeared there were enough votes in the House to pass some The Senate then addressed SB 1171, the Medicaid budget minimal amendments that the Senate could support. At the for H&W. SB 1171 included funding for expansion and would time, the Senate was clearly signaling they had gone as far have represented straight expansion in Idaho. The bill passed as they could and would not support additional substantive the Senate 31-3, but the House refused to vote on it until changes. Somewhere along the way a deal was cut, and the after a sideboards bill was passed. House significantly amended the bill with Senate support. Instead, the House introduced HB 249, which created a SB 1204aaS was amended to seek a waiver to make it manda- work requirement for eligibility for expanded Medicaid. IACI tory for those with an existing plan on the Exchange stay there opposed HB 249, which was quickly redrafted and replaced by unless they affirmatively choose to go on Medicaid. The work HB 277, both of which were sponsored by Rep. John Vander requirement section was amended to remove non-compliant Woude (R-Nampa). HB 277 would have required a health risk individuals from Medicaid for two months or until they got into assessment regarding substance abuse, limited retroactivity of compliance. The effect of this change would be to create anoth- Medicaid eligibility from 90 days to 30 days, created a work/ er gap population that is constantly being kicked off Medicaid. training/volunteer requirement for those between 100 and The new language was also backed up to state that, if the waiver 138 percent of FPL (that would essentially have created a new isn’t approved to allow them to be kicked off for two months, gap population), included treatment for mental disease, and then non-compliant individuals would instead have to pay declared expansion null and void if a court overturned the co-pays for 6 months. The rest of SB 1204aaS was left intact. federal Act or if federal matching dollars fell below 90 percent. SB 1204aaSaaH was then sent back to the Senate with only IACI opposed HB 277, which passed the House 45-25 and two Republicans voting no. The Senate Health & Welfare was held in the Senate Health & Welfare Committee. Committee recommended the Senate not concur in the House amendments. Just hours later, though, the full Senate then The Senate then introduced SB 1204, which was a Medicaid- voted to concur 19-16 and sent the bill to the Governor. lite bill that would have required the health risk assessment, retained the 90-day lookback, required the Director to research Governor Little reluctantly signed the legislation, but sent a waiver options to deal with mental health issues, require H&W fairly scathing transmittal letter back to the Senate. IACI could to notify participants of available employment and training not support the new version because of the creation of a new programs, and included the same voiding language as HB 277. ‘gap’ with unreimbursed care. The House amendments were IACI supported this version of SB 1204. ill-conceived and poorly written, but it appears highly likely the necessary waivers to implement it will not be approved by SB 1204 was sent to the Senate floor where it was amended to the federal government or a court of competent jurisdiction.