East Side Hwy Dist v. Kootenai County
51332
| Idaho | Jul 9, 2025Background
- Several Kootenai County highway districts and cities (taxing districts) sued Kootenai County after the county decided to retain all late charges and interest from delinquent property tax collections, instead of apportioning them among the taxing districts.
- Historically, Kootenai County distributed these funds proportionally to all taxing districts, in line with their share of the underlying taxes.
- In 2022, the County Treasurer announced the county would keep all late charges and interest to cover its collection costs, a change that would significantly reduce revenue to local districts.
- Respondents sought declaratory relief and a writ of mandamus to compel the county to apportion the funds accordingly. The district court granted summary judgment for the districts, ordering the county to distribute the charges and interest proportionally after deducting reasonable collection costs.
- The district court also awarded attorney’s fees to the respondents (taxing districts/cities) under Idaho Code section 12-117(4). Kootenai County appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to late charges and interest on delinquent taxes | Funds should be proportionally distributed to all taxing districts per Idaho law. | County may retain all these funds to cover its collection costs. | Late charges and interest must be proportionally distributed; county may keep only collection costs. |
| Statutory interpretation of apportionment statutes | Statutes, read together, unambiguously require distribution to districts. | Statutes are ambiguous and allow county to keep funds. | Statutory scheme is unambiguous; supports proportional distribution. |
| Award of attorney fees under Idaho Code sec. 12-117(4) | Prevailing public entities are entitled to fees, no reasonableness limitation. | Fees should be given only if losing party lacked reasonable basis. | No such limitation exists; prevailing public entities are entitled to attorney fees. |
| Applicability of Public Depository Law to late charges | Not material to requested relief; not argued below. | Funds are idle and County may retain them under depository law. | Issue not properly before the court and not reached in decision. |
Key Cases Cited
- Hamilton v. Vill. of McCall, 90 Idaho 253 (Idaho 1965) (County acts as agent in collecting taxes for districts)
- Bagley v. Gilbert, 63 Idaho 494 (Idaho 1942) (Tax collection as agency relationship)
- Lunneborg v. My Fun Life, 163 Idaho 856 (Idaho 2018) (Abuse of discretion standard)
- Verska v. Saint Alphonsus Reg’l Med. Ctr., 151 Idaho 889 (Idaho 2011) (Courts must apply statutes as written)
- City of Idaho Falls v. H-K Contractors, Inc., 163 Idaho 579 (Idaho 2018) (Statutory interpretation starts with plain language)