The Idaho Supreme Court on Thursday unanimously found Attorney General Raúl Labrador could lawfully subpoena dozens of nonprofits while investigating possible fraud.
State lawmakers in 2021 and 2022 directed $72 million of federal COVID relief funds to offset learning loss and boost mental health support for students ages 5-13.
Attorney General Labrador’s office said it received reports that some of the money was being used for younger children and infants and issued subpoenas to at least 34 grant recipients in 2023.
Those organizations eventually sued to halt the civil investigative orders.
Thursday’s supreme court opinion found Labrador had the authority under Idaho law to investigate these possible civil crimes, partially reversing a lower court ruling blocking 19 of the subpoenas.
The unanimous decision from Justice Gregory Moeller stressed the court did not rule whether any nonprofit illegally used these funds.
“...nothing in this opinion should be read as implying that we have concluded that any of the Grant Recipients have violated the law because we have not been asked to address that issue,” Moeller wrote.
In a statement, Labrador said, “We will continue to defend the investigative powers the Legislature has entrusted our office.”
“Those who have worked with us understand that our goal is not to punish grant recipients but to ensure taxpayer funds were used according to state law,” he wrote.
Proceedings now return to the district court level for further action.
On Tuesday, justices issued another unanimous ruling in a separate case – this time backing the Idaho Tax Commission.
Idaho lawmakers passed a bill in 2020 allowing homeowners to apply for the state’s property tax exemption at any time and receive the full year’s benefits.
Homeowners living at their primary residence can exempt 50% of the total value of their home and one acre of land up to $125,000.
Latah and Lincoln Counties disagreed with the state tax commission’s directive in 2022 and prorated the exemption for applicants based on the date they applied.
Justices said the counties wrongly interpreted the law and reversed a lower court ruling siding with them.
The opinion found the law to be unambiguous and that the counties’ act of prorating the exemption could violate the state’s constitutional mandate to enforce a fair and uniform tax policy.
Latah County Assessor David Sutherland said his county’s legal team is currently reviewing the ruling. The Lincoln County Assessor’s office didn’t immediately respond to a request for comment.
The Idaho legislature unanimously changed the law in March to prorate the homeowner’s exemption beginning in 2026.
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