Boise State University (BSU) is in dire need of bed space for students, according to some BSU officials, and a company based in Texas wants to help remedy that problem. The House Revenue and Taxation Committee voted Thursday to send a bill to the full House allowing the private/public partnership of BSU and American Campus Communities (ACC) to operate tax-free, with certain guidelines.
Keith Saterlee, presenting on behalf of BSU and in place of former Idaho House Speaker Bruce Newcomb, said the university needs to address the lack of beds without putting additional burdens on the state by asking for an appropriation, a request which he admitted wouldn't be granted anyway during the lean economic times. He said the university is already asking the students to carry a share of BSU's developmental costs by paying for building construction out of student fees, and school officials are hesitant to ask more from students. That leaves a third option for solving the bed-crisis, said Satterlee, which is the school's partnership with ACC.
BSU and ACC have a plan in place to build a $50 million housing facility on the southern boundary of campus, which will provide an additional 854 beds for students. ACC will pay cash for the building and will be responsible for construction, as well as building maintenance upon completion of the project. Though the state owns the land for the project and will own the physical structure put in place by ACC, the company will have a 65-year agreement in which it has the right to rent living spaces to students. Once the terms of the lease are over, the state will then gain full control over the property and the renting program.
The problem with the project, Satterlee pointed out to committee members, is that Ada County is most likely required to tax ACC on the rental operation of the building. Idaho code outlines that projects used solely for educational purposes at Idaho's institutions of higher education can qualify for the tax exemption if the building remains in use only for those education purposes. The bill, sponsored by House Majority Leader Mike Moyle, R-Star, would grant ACC a tax-exempt status for its rental operations.
Rep. Ken Roberts, R-Donnelly, questioned Satterlee on the specificity of that designation, asking if businesses in the dining business would be allowed to have a tax shelter if contracted to operate an eating establishment in the new building, which is a common practice on BSU's campus.
Satterlee said any dining services in the building would be provided by the university’s in-house dining program and that if the building is at any time used for non-education purposes, the tax-exempt status would be revoked.
Rep. Grant Burgoyne, D-Boise, expressed concern about the rates the private corporation would charge students to recoup the costs of constructing the building. Satterlee said the university has no specific rates outlined in the agreement with the company, but said the rates would be comparable to those of already-existing housing owned by the school.
Though some committee members had problems with some of the language of the bill, they unanimously approved the measure be sent to the House, where it will be directed to general order for minor language corrections.
