BOISE - A tax incentive being pushed by Gov. Butch Otter to reward employers who add to their payrolls over the next three years sailed through the Idaho House on Wednesday and is now headed for the Senate.

The Hire One Act drew the backing of top Republicans and Democrats who made a case the time is ripe to encourage businesses to hire new workers, help make Idaho more attractive to relocating companies and do something to help pull the state out of the economic doldrums.

The bill would give employers a series of tax credits worth between 2 percent and 6 percent of a new employee's annual wage and sets eligibility thresholds based on wages and an employer's standing with the Idaho Department of Labor for unemployment insurance payments.

Like any tax incentive, this one involves a trade-off for the state.

The Governor's Office projects the bill could draw up to $8 million from the general fund starting in 2013, but generate an estimated $25 million more in new tax revenue.

Republican Majority Leader Mike Moyle said the state has a responsibility to help employers put people back to work at a time when Idaho is suffering from its highest unemployment in decades.

"This bill is fertilizer to grow jobs," Moyle said before the chamber endorsed the bill in a 61-9 vote. "We've got to incentivize businesses to come to this state. This bill is a step in the right direction to bring those jobs to Idaho."

The version approved by the House would be retroactive to Jan. 1 and expire in 2013, giving lawmakers a chance to weigh the costs and benefits of extending it.

It's also designed to help counties hardest hit by unemployment. For example, employers in counties with an unemployment rate greater than 10 percent would have to pay at least $12 per hour to qualify; businesses in counties below 10 percent unemployment would have to dish out $15 per hour for any new job.

Rep. Janice McGeachin, R-Idaho Falls, was one of several Republicans who voted against the bill. She said the bill is too narrow and complained that its eligibility requirements pick winners and losers. Others said the state makes a mistake when it directs tax dollars into incentives for employers.

"If someone is going to hire an employee, they're probably going to do it anyway, and we'll end up paying for it," said Rep. Lynn Luker, R-Boise. "This is just not a good way to do business."