LEGISLATIVE UPDATE
Week Three Idaho Legislative Update for Jan. 26 – Jan. 30, 2026
The headline this week is that another big hurdle in the Legislature’s quest to balance the state’s budget has been cleared. For months, legislators, tax experts and think tanks were engaged in a high-stakes game of guessing how lawmakers would bring Idaho’s tax policy in line with the series of federal tax cuts included in President Trump’s “One Big Beautiful Bill.”
The House Revenue and Taxation Committee put an end to the speculation on Wednesday by introducing a new bill that identifies the tax cuts Idaho will adopt, when those cuts go into effect and the projected fiscal impact. Key details of HB 559 include:
An estimated revenue loss of $155 million for FY2026 and a revenue decrease of $175 million for FY27.
Making the tax cuts retroactive for 2025.
Adopting OBBB cuts for taxes on tips, overtime, social security and vehicle loan interest.
Rejection of the OBBB cuts for bonus depreciation and corporate R&E expenditures from 2022-24 that some are calling a double dip for companies that already benefit from other state-based programs.
The Legislature deals with the so-call tax conformity bill every year as the state seeks to align its tax policy with the federal government. In most years, the conformity question is a lighter lift and delivers a set of simple technical adjustment for CPAs and a softer blow to state tax coffers. But it’s a different set of circumstances this year given the broad scope of the OBBB tax provisions and the significant decline in revenue at a time when legislators are dealing with budget deficits.
The next step is for HB 559 to make its way through the House and then the Senate and finally to be signed by Governor Little. At this point in session, there is little mystery about the bill’s fate, though the noise level over the revenue estimate is likely to get loud during public hearings. With the revenue target set, members of the Joint Finance Appropriations Committee now have all the information required to begin setting maintenance budgets for state agencies, and quite possibly build a timeline for an early adjournment.
How deep JFAC cuts agency spending is anybody’s guess. But the committee’s decisions will likely be influenced by another round of spending cuts spelled out in a letter from the Governor to state agencies this week. JFAC’s co-chairs wrapped up their tour of committees, visits that were used by the leaders to urge their colleagues to find savings in the agencies and programs the oversee. The harsh realities of making harsh spending cuts have yet to set in across a House and Senate with only a handful of members who can recall the difficult days of budget cuts during the 2008-09 recession. This class of lawmakers is torn, with some bemoaning the loss of programs and support for past projects they championed while others are eager to downsize state government.
With the budget framework set, let’s shift to the general mood in the building and what we’re expecting in the next few weeks.
It’s safe to say there is an air of apprehension in the Capitol. Committees are working quickly because fewer bills are being introduced and there is scant appetite to get into drawn out debates over rules and appointments. We have yet to see any controversial legislation proposed that saps energy and patience like we did last year with school vouchers or historic tax cuts. It’s not unusual to hear folks muttering about the slower pace and the desire to wrap up business quickly to get home to campaign.
One social issue of note we expect to generate some angst the next few weeks is the evergreen question of Article V conventions. Two resolutions were introduced this week dealing with the controversial issue of Congress calling a convention of states to rewrite the U.S. Constitution. Like previous years, these resolutions bring an army of well paid lobbyists and politicos from out of state to champion a convention as a mechanism to draft amendments in favor of term limits or balanced budgets. What’s curious is that the statehouse is adorned with relics celebrating and marking our founding, including a dozen “Spuddy Buddy’s” decked out in Revolution-era garb with kitschy potato names. A massive replica of the Declaration of Independence is hanging from the rotunda in preparation for the America 250 celebrations this year. The irony is not lost on us.
There is also increasing anxiety about the May Primary Election. Many members of the House and Senate already have challengers, and those who don’t, are now expecting to have one, or more, challengers emerge as the Feb. 27 filing deadline approaches. Some of those challengers are already roaming the halls and visiting with lawmakers and lobbyists to curry support and campaign contributions. It’s all having a chilling effect of sorts on the kind of legislation incumbents are introducing or supporting. Let’s just say that so far this year, the dynamics in the Capitol are very different than a year ago.
House Bills
H0502 – Forest Products Commission– House Resources and Conservation
The legislation moves the IDAPA Rules of Administrative Procedure for the Idaho Forest Products Commission into Idaho Code. It also makes a series of technical corrections to the commission, officers, and assessments.
Sponsor: Rep Boyle (R-9)
H0511 – Wildfire Property Assessments – House Floor
Calls for an increase from $40 to up to $100 on the surcharge set for improved private forest land parcels. Revenue generated from the surcharge would be deposited in a dedicated fund to support wildfire preparedness. The Land Board would have the authority to set the surcharge. The last rate increase was in 2009.
Sponsor: Boyle (R-9)
H0565 - Code Clean-up, Fish & Game- House Resources and Conservation
To ensure that state laws are streamlined, up-to-date, and essential for the citizens of Idaho, while best serving the public health, safety, and welfare, the Legislature approved the Idaho Code Cleanup Act, H14 in the 2025 legislative session. Submitted sections of Idaho Code were reviewed for repeal consideration by the DOGE Task Force on the criteria of obsolete, outdated, and unnecessary. This bill repeals Sections 36-116, 36-715, and 36-1120, Idaho Code. These sections relate to the transition of wolf management to the state and hunting fines. Idaho has been managing wolves for years, and the fines for hunting violations are established in other sections of Idaho Code.
Sponsors: Rep. Manwaring (R-29) Sen. Bjerke (R-5)
Senate Bills
S1222- Water, domestic use-Senate Resources and Environment Committee
Relating to domestic wells. Last year there was an amendment to this section of code; however, it requires further exceptions to include certain subdivisions.
Sponsor: Senator Anthon (R-27)
S1223- Water districts-enate Resources and Environment Committee
Relating to Water Districts. An update related to who is required to pay for updates. Currently it goes to all water users in that district, and this will update it to allow the water district to bill the user it affects directly.
Sponsor: TBD
S1238- Fish & Game, public comment- Senate Resources and Environment Committee
This legislation amends Idaho Code §36-105, to provide for a 30-day public comment period prior to the Idaho Fish and Game Commission adopting, repealing, or amending any season-setting proclamation.
Sponsor: Sen. Forman (R-6)
S1241- Protection of working animals- Senate Agricultural Affairs
This legislation establishes protections for the lawful use of working animals in commerce and service, preventing state or local governments from adopting more restrictive rules that would effectively prohibit such use. It defines “working animal,” excludes cockfighting and dogfighting, and includes an emergency clause for the law to take effect July 1, 2026.
Sponsor: Sen. Shippy (R-9)
Senate Joint Memorials & Resolutions
SJM108- Grazing, depredation claims
Grazing leases or permits on federal land are a valuable property right and can be critical to the success of Idaho ranchers. A rancher should not have their grazing lease or permit be adversely impacted because they submitted a depredation claim regarding their livestock. This Memorial calls upon the federal government to adopt rules to ensure that depredation claims cannot be used as a basis for modifying or revising a federal grazing permit or lease.
Sponsor: Sen. Lakey (R-23)
SJR102 – Public Land Trust - Senate State Affairs
This resolution to amend the Constitution deals specifically with public land that may be acquired from the federal government in the future. The amendment requires that future lands acquired would be placed in a trust and managed for a balanced but varied set of purposes. Revenue from the trust would be used to maintain these lands, but also allow for compensation to counties, public access projects and supporting public education.
Sponsor: Sen. Adams (R-12)