James Ruchti — Senator Ruchti asks whether contract employees can receive employer-provided benefits beyond wages and whether similar benefit arrangements exist in other contract-employer relationships, using his firm’s use of contract legal help as an example.
James Ruchti — Senator Ruchti explained his understanding of the right-to-control analysis and the distinction between employees, contract employees, and contract employers. He described how contract work differs from employment in terms of workers’ compensation, unemployment, and flexibility for both parties, then raised concern that the bill could blur the contractor/employee line by making workers appear to be contractors while being treated like employees. He asked for reassurance about that potential confusion.
Janie Ward-Engelking — Acknowledged in the motion to approve the minutes.
Janie Ward-Engelking — Senator Ward-Engelking first asks whether other states have adopted the same approach and whether there is a cost involved. She then moves to send House Bill 738 to the floor with a do pass recommendation, and the chair restates the motion and notes it has been seconded.
Janie Ward-Engelking — Senator Ward-Engelking questioned the voluntary portable benefit/insurance approach, expressing concern that if participation is optional, some workers may end up without coverage and could be forced to rely on emergency rooms or other uncompensated care.
James Ruchti — Mentioned as being on the minutes.
James Ruchti — He asks whether the Secretary of State's office had concerns about the bill.
Janie Ward-Engelking — Expressed opposition to the motion, citing concerns about deductibility, retirement-only accounts, and workers' compensation.
Janie Ward-Engelking — Senator Ward Engelking is recorded as voting no on the motion.
Shawn Dygert — Shawn Dygert was introduced as the sponsor of House Bill 738 and then presented the bill, explaining that it does not eliminate existing LLC formation options. He later responded to questions about the meaning of 'commercial registered agent,' saying the Secretary of State’s office indicated the term is definable even though he had not verified the exact code citation. He also confirmed that one commercial agent can serve multiple businesses.
Jim Guthrie — Senator Jim Guthrie asks whether customers would simply go to the commercial registered agent, and the discussion continues with an explanation that many home-based businesses do not want customers coming to their door because they are out doing work.
Jim Guthrie — Begins a follow-up question about how the account works.
Jim Guthrie — Asks about the paper trail and what happens to unused money in the account.
Jim Guthrie — Asks what happens to the money and how the paper trail works.
Jim Guthrie — Referenced as having raised an earlier question.
Jim Guthrie — Senator Guthrie continued questioning Ms. Wright about how portable benefits account providers would work, comparing them to third-party administrators and asking about provider fees and economies of scale. He then followed up with a tax-related question, suggesting the structure might create a double tax benefit by allowing the hiring business to deduct contributions as a business expense while also receiving another tax advantage.
Jim Guthrie — Votes no on the motion.
Dan Garner — Representative Dygert closes in support of the bill, saying it is a good effort to provide security and explaining that it would allow a commercial registered agent to be listed on the website instead of a home address while still requiring the underlying information to be provided to the Secretary of State. He responds to questions about confidentiality and disclosure, says he does not know one detail and will find out, notes that the Secretary of State helped develop the language, and adds that other states use similar systems, citing Wyoming as an example and explaining that while such a system may require court proceedings there, Idaho residents would still be able to use Idaho courts under this bill.
— Senator Nichols is identified as the member who seconded the motion.
Dave Lent — The sponsor of House Bill 645 introduces herself and presents the bill, explaining that it would create a voluntary portable benefits opportunity for contract workers in Idaho and expressing concern about separating employment from benefits.
Todd Lakey — Senator Lakey questions how the portable benefits account relates to the plan and how it would function in the marketplace, including whether it creates a competitive advantage and who benefits. The response explains that the account is essentially a pass-through owned by the worker and is viewed as a benefit for 1099 contractors.
Todd Lakey — Senator Lakey continued questioning the tax treatment of portable benefits, suggesting they operate like additional compensation paid into an independent account rather than a selected benefit. He then compared that structure to a regular employee arrangement, asking whether wages and benefits paid to an employee are treated as business expenses for the employer and seeking clarification on that point.
Todd Lakey — Senator Todd Lakey moved to send House Bill 645 to the floor with a do-pass recommendation and supported the motion by stating that the bill would enhance economic opportunity for independent contractors.
Todd Lakey — Votes aye on the motion.
Treg Bernt — Used as an example of a hired worker whose benefits account might be earmarked for health benefits.
Christy Zito — Is about to ask a follow-up question.
Christy Zito — Asked what percentage of people might participate.
Christy Zito — Is asking about possible participation numbers in Idaho.
Christy Zito — Asked about auditing and how spending from the account is verified.
Christy Zito — Asks about auditing and whether funds are spent on the six permitted insurance benefits.
Christy Zito — Asked whether the proposal conflicts with federal worker classification rules.
Christy Zito — Argues the bill reflects the constitutional right to associate and enter private contracts.
Christy Zito — Is addressed by the previous speaker and then begins speaking in support of the bill.
Christy Zito — Continues arguing that individuals should manage their own business risks and consequences through private contract.
Christy Zito — Votes aye on the motion.
Christy Zito — Recorded as voting aye.
Daniel Foreman — Senator Den Hartog is being addressed during a continuous discussion that moves from the account structure to participation rates, with no meaningful topic shift between the mentions.
Daniel Foreman — Recorded as voting nay.
Justin Rice — Introduced himself as representing the Libertus Institute and began explaining account administration.
Ms. Rice — Ms. Rice responds to the senator’s questions about the proposal, explaining that it addresses the non-traditional nature of 1099 work and the lack of a typical employer-employee relationship. She says portable benefits accounts could give independent contractors access to insurance they might not otherwise have, potentially reducing reliance on taxpayer-funded public assistance programs. She also notes that federal law prevails under the act, including on worker classification and immigration-related issues.
Ms. Rice — Ms. Rice explained that the portable benefits system would be administered by a third-party entity acting as an intermediary between the business and contractor, similar to how employers offer multiple benefit plan options through providers like Blue Cross Blue Shield or Cigna. She said the third-party entity would decide what benefits are offered and how the system operates. She also clarified that the arrangement provides separate tax benefits to both the business and the contractor: businesses can deduct their contributions as a business expense, and contractors can deduct those contributions from their taxes. When a later question was unclear, she asked for clarification.
Ms. Wright — Ms. Wright explained that the bill does not alter Idaho or federal worker-classification standards, including the Right to Control Act and the four-pronged test, which remain the prevailing framework. She then clarified that the bill’s safe-harbor language is intended to protect employers and that providing portal access or funding to portable benefits accounts does not create an employer-employee relationship. She also noted that the bill does not change existing misclassification laws or penalties, and acknowledged that bad actors already misclassify workers under current law.
Kenneth Houston — Was invited to testify next and indicated he had written copies of his testimony.
Kenny Houston — Identified himself as representing the Idaho AFL-CIO and stated opposition to House Bill 645.
Mr. Houston — Concluded his testimony by opposing the bill and offering to answer questions.
Heather Andrews — Heather Andrews, Western Regional Director for Americans for Prosperity, testified in support of House Bill 645 and concluded by urging the committee to vote yes on the bill.
Mike Moyle — The majority leader closed in support of the bill and discussed immigration, employment, and misclassification concerns.
Tammy Nichols — Supports the bill as a way to help independent workers protect themselves and manage risk.
Tammy Nichols — Says independent workers should have an opportunity to create a buffer or protection for themselves.