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Wednesday, March 14, 2012

HB 495 Dies In Senate Committee Id. Land Board Will Buy Up More Businesses

Bill to stop Land Board business purchases dead after no motion in Senate panel
By Dustin Hurst March 14th, 2012

Deafening and bill-killing silence.

That’s what backers of a bill to stop the state Land Board from buying and running businesses were treated to after testimony concluded on their measure to end the practice. After two days of testimony on House Bill 495, senators killed the measure because no motion was made on the measure.

Committee chair Monty Pearce, R-New Plymouth, ruled the bill held after a few minutes of silence.

Last year, an identical bill fell on deaf ears when a House committee chair refused to hear it, saying it was not needed. This year, the measure cleared the House on a 63-3 vote before being muted in the Senate panel.

The legislation was pitched by Reps. John Vander Woude, R-Nampa, and Grant Burgoyne, D-Boise. In testimony Monday, the duo noted that when the state buys a private business, local governments, including schools, are hurt because the property is taken off tax rolls. Vander Woude, a business owner himself, said that government purchase of businesses unfairly harms the free market because government doesn't pay the same taxes and fees private companies do. “Any business will have a difficult time competing with all these disadvantages against it,” warned Vande Woude.

Vander Woude also opposed the practice on ideological grounds. “What’s the proper role of government?” he asked. “To be in direct competition with the private sector?”

The bill was spurred by the Idaho Department of Lands’ (IDL) 2010 purchase of a commercial storage rental facility in Boise. The business, Affordable Storage, cost the department $2.7 million. The legislation would have forced the agency to sell the business and not buy any more companies.

IDL director Tom Schultz, speaking on behalf of his department and the Land Board, opposed the legislation, explaining that the storage facility purchase meets the panel’s responsibility to maximize returns. While critics have argued commercial properties have returned little more than 1 percent through the last 10 years, Schultz says Affordable Storage has returned about 8 percent since its purchase.

“We’re trying to carry out our constitutional duties,” Schultz said. “The returns on this investment have outpaved anything else that we’ve done.”
The Land Board voted 3-1 last week to oppose the legislation. The panel suggested any legislative attempt to control the board’s authority might be unconstitutional. Attorney General Lawrence Wasden was there in opposition to the legislation, which is key because he could have sued the Legislature over the bill.

Schultz rebuffed criticism that the investment strategy is socialism. “We don’t directly run the businesses,” he said. “That’s all done through third parties. We pay for professional services to run those commercial assets.”
But Jason Hancock, representing Superintendent of Public Instruction Tom Luna, the lone dissenter, in the board’s vote, said that allowing the state to buy businesses could be a slippery slope that lawmakers shouldn’t pursue.
To make his point, Hancock suggested the state buy and run some McDonald’s restaurants to make some money. “They seem to make money all the time,” Hancock said. “They never go out of business.”


  1. How can any business compete with this kind of playing field? No taxes, no cost of capital and now a green light to do as they please with Endowment funds.

    Part of the proposed plan is for the Idaho Land Board to buy up farmland near cities cities expected to grow. They are going to enter into the land speculation business.

  2. Many years ago the state mental hospital was officially called the "Lunatic Asylum". Wisely the name was changed for most of the 20th century. What is becoming apparent is that it is still with us as the "Idaho State Senate". Only your vote can change that. VOTE WISELY but VOTE

  3. From Rachel Gilbert

    I AM SORELY DISAPPOINTED!!! Today the above referenced bill was heard in the Senate Resources Committee, and TAC lost it by the most cowardly act I have ever seen in my ten years in the legislature. . I was told that In a pre-arranged agreement, the senators agreed to make NO motion---nothing. The Chairman asked for a motion several times, and the committee was mute and refused to Hold, pass, or not pass. Nothing.

    Clearly, the committee members were watching each others' backs because of the up coming election. I can't tell you how disappointed I am......furious, too, because of the cowardice I saw today.

    Our presenters were great, just wonderfully great, but when you have the Land Board against you, it's tough.

    Please move this message on.


  4. You can't expect change without changing the people in elected office.

  5. Below are the names of the Idaho Senators who failed to make a motion on HB 495 despite repeated requests for a motion from the committee chair Sen. Monty Pearce:

    Chair Monty J. Pearce
    Vice Chair Steve Bair (R)
    Dean L. Cameron (R)
    Jeff C. Siddoway (R)
    Bert Brackett (R)
    Lee Heider (R)
    John Tippets (R)
    Elliot Werk (D)
    Michelle Stennett (D)

  6. Idaho House of Representatives

    Senate Resources took up HB 495 today and voted on it. The committee held the bill, effectively killing it. Chairman Pierce was the only one to vote against the motion to kill the bill. Certain members of the committee apologized for not having voted on the bill at the last hearing and standing up to be counted. I must say, the way things are done in the Senate is not as they are done in the House. I have been run over plenty in the House, but always with honesty and respect. This is not the first time I have felt that at least certain Senators seem to be lacking in those qualities.


    Rep. Grant Burgoyne

  7. Using taxpayer dollars to fund businesses is nothing new here in Nampa.
    NNUR (Nampa's first Urban Renewal project)funded a resturant at the Nampa Airport Terminal and built RV pads for the Idaho Center, both of which directly competed with private sector businesses offering the same goods and services.
    IDL purchases of privately held businesses creates a larger government footprint with no limiting "governor" to slow it down!
    "Maximizing returns" is not an affirmative defense for any government sponsored destruction of competitive enterprise and no amount of monetary return on IDL investments can justify the damage done to the collective trust of the private sector.


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