Policy Perspectives
January 24, 2015
Professional Developers of Iowa's Bill Tracker is updated daily -bookmark this link to keep up with daily action on PDI's bills of interest.
The 86th General Assembly is Underway

The First Regular Session of the 86th Iowa General Assembly kicked off on Monday, January 12th. The session is scheduled for 110 days, with legislator per diems set to run out after May 1st. A whole host of variables will determine whether or not they are able to hit that deadline, the biggest of which will be the state budget, as always.

 

The Governor is proposing a $7.3 Billion budget for the next fiscal year (FY16) - an increase of 5%. This includes fully funding the commercial and industrial property tax replacement ($162.1 million) and business property tax replacement ($50 million). The new state revenue above what is being spent in FY 2015 is approximately $200 million, but the Governor's budget spends $346.7 million more than the FY 2015 budget.

 

According to the House, this means they need to find $146.4 million in spending reductions in order to align the budget with the ongoing revenue in FY 2016. The House Appropriations Committee pointed two other observations in their press release: 42 percent of the total state budget goes to K-12 education, and that 90 percent of Iowa's state budget goes to three areas - education receives 55 percent, health and human services receives 26 percent, and the Justice System receives 9 percent.

 

One of the hurdles encountered in the first year of every two-year General Assembly is the number of new legislators that need to be brought up to speed on the many facets of state government. This year, the Senate has seven new members among their 50, and the House boasts 16 new members with one more to be determined in a February 10th special election in House District 23 (which is comprised of Fremont, Mills and a portion of Montgomery County).

 

New Senators (7)

  • Chaz Allen (D) Newton
  • Tony Bisignano (D) Des Moines (served previously in the Senate)
  • Mark Costello (R) Imogene (served last session in the Iowa House, elected via special election to fill Joni Ernst's Iowa Senate seat)
  • Kevin Kinney (D) Oxford
  • Tim Kraayenbrink (R) Fort Dodge
  • Jason Schultz (R) Schleswig (served last session in the Iowa House)
  • Tom Shipley (R) Nodaway

New Representatives (16 - and one more to come)

  • Terry Baxter (R) Garner
  • Liz Bennett (D) Cedar Rapids
  • Brian Best (R) Glidden
  • Darrel Branhagen (R) Decorah
  • Timi Brown-Powers (D) Waterloo
  • Gary Carlson (R) Muscatine
  • Abby Finkenauer (D) Dubuque
  • Steven Holt (R) Denison
  • John Kooiker (R) Boyden (Kooiker won a Special Election to fill Dwayne Alons' seat. Alons passed away in late November, after serving 16 years in the Legislature.)
  • Charlie McConkey (D) Council Bluffs
  • Norlin Mommsen (R) Dewitt
  • Zach Nunn (R) Bondurant
  • Ross Paustian (R) Walcott (served previously in the Iowa House)
  • Ken Rizer (R) Cedar Rapids
  • Mike Sexton (R) Rockwell City (served previously in the Iowa Senate)
  • John Wills (R) Spirit Lake

In addition to the May 1st target adjournment date when per diems expire, there are a couple of other key dates this session you should be aware of:

  • February 6- The final day for individual legislators to request bills. Note that bills will continue to be introduced after that date since there will be numerous requests already submitted that will take a while to draft.
  • March 6 - The first funnel deadline. The funnel is a process the Legislature uses to eliminate bills that are not making forward progress. Any bill that has not been passed by committee by this date will be dead for the year. Spending bills and tax bills are exempt from this deadline.
  • April 3 - The second funnel deadline. Generally, bills will need to have been passed out of committee, by either the House or Senate, and then passed by committee in the other chamber in order to remain alive. Again, spending bills and tax bills are exempt from this deadline.
  • May 1 - Final day of the "scheduled" session. They can (and do) go beyond this deadline.
IEDA Proposal on Renewable Chemical production

As many of you know, in December, Governor Branstad and representatives from the Iowa Partnership for Economic Progress (IPEP) released the findings of the 2014 Battelle Report: Iowa's Re-envisioned Economic Development Roadmap. The report reviews Iowa's industry drivers and potential growth opportunities and assesses how the state has fared in advancing innovation, job attraction and retention. The executive summary of the report can be found HERE.  

 

Based on the findings of the Battelle Report, the Iowa Economic Development Authority (IEDA) is proposing legislation to implement one of the findings by creating a tax credit program for the production of certain renewable chemicals from biomass feedstocks. This bill is still in drafting, but PDI will be supporting the measure when it comes out. The bill also contains some updates to the Angel Investor Tax Credit. You can read the IEDA's summary of the bill HERE.


TIF Bill Coming 

It just wouldn't be an Iowa legislative session if we didn't have a TIF bill! 

House Ways & Means Chairman Tom Sands has indicated that he is working on a bill to make some changes to tax incrment financing.  Conversations with him lead us to believe he will focus the bill on the same key elements that he targeted in last year's bill that came out very late in session. Those three elements were as follows:
  • A sunset for TIF districts that do not have an expiration date
  • A prohibition on the use of TIF for public buildings
  • A limitation on the amount of TIF debt that local government can take on (separate from the constitutional debt limit)
We don't have more details right now about how each of those provisions would be structured, or if the bill may contain additional provisions.  We will be watching closely for it and will get details out when we have them.  In the mean time, talk to your legislators about how important TIF is to your community.  Find your legislators HERE.
PDI 2015 Grow Iowa Day at the Capitol
(Reprinted from the PDI Post)   
Wednesday, February 4, 2015 
Iowa State Capitol Rotunda, Des Moines, IA

Join us for the 2015 Grow Iowa Day at the Iowa State Capitol on February 4, 2015. As you know, Grow Iowa Day is PDI's best opportunity to demonstrate to legislators the strength and breadth of our membership organization. Legislators respond to their constituents which is why it is so important that our members attend in mass and dialogue with them. We realize this important event requires an investment of your time and financial resources, but our history with the Grow Iowa Day has demonstrated a tremendous return on investment with our legislators. During these economic recovery times, it is critical that we communicate to legislators that we stand ready to grow Iowa's economy, but need their help in maintaining a business friendly atmosphere.

We appreciated your support last year. Exhibit spaces are available and the application form is HERE. We are adding an additional element to the 2014 agenda through a planned, systematic unveil of PDI's legislative agenda plus participation in 'sister' organizations legislative events - all culminating in Grow Iowa Day in the Capitol rotunda. If you want more information, contact PDI Headquarters at director@pdiowa.com.

Transportation Day 2015 is January 28th  

at the Iowa Capitol

Advocates for increased transportation infrastructure revenue will descend on the Iowa Capitol THIS WEDNESDAY. Registration for the day's events begins at 8:00 am at the Wallace Building Auditorium, 502 E 9th Street, Des Moines. Governor Terry Branstad and Lt Governor Kim Reynolds will address Transportation Day participants at 8:30 am. Transportation Committee Chairs Senator Tod Bowman and Representative Josh Byrnes will also speak to participants.

 

The Iowa Department of Transportation (DOT) has stated the agency has a $215 million annual shortfall for critical needs. Without increased revenue, the consequences of the shortfall will continue to compound with Iowa roads falling into dangerous disrepair, bridges crumbling, and capacity stagnating. Cities and counties have been forced to bond for transportation infrastructure projects with bonds that will not be paid off before the projects' lifespan concludes. More information about the issue is available HERE.

The Governor's Budget

The House, Senate and Governor all need to agree on budget numbers before they become official.  It's a long process that will take the entire legislative session to sort out.  The first step, however, is the Governor submitting his budget to the Legislature for their consideration.  Governor Branstad did that on January 13, and highlighted pieces of that budget in his Condition of the State address.

 

We'll be letting you know as more details about the budget come to light. In the meantime though, here are some points that may be of interest:

  • Funding levels for the Iowa Economic Development Authority are essentially status quo. There is a $250K increase, but the Governor earmarks that for support for international trade
  • A new appropriation of $500,000 per year for FY 2016 and FY 2017 to support the Home Base Iowa marketing program
  • A new appropriation of $500,000 per year for FY 2016 and FY 2017 to support a business to business portal
  • $162.1 million, an increase of $83.7 million, to fund the payment of all commercial and industrial property tax replacement claims for FY 2016, and $152.6 million to fund claims in FY 2017
  • An increase of $50.0 million for FY 2016 and an additional $25.0 million for FY 2017 to fund the Business Property Tax Credit included in the property tax reform bill
  • An increase of $250,000 for FY 2016 from the State Workers and Job Creation Fund to provide financial assistance to the Apprenticeship Training Program
  • $20.0 million from the State Bond Repayment Fund for the IowaNext initiative in FY 2016. This initiative would be a grant-based program providing assistance for quality of life improvement projects that enhance recreational, cultural, entertainment, and other opportunities. All projects will carry a substantial local and private match requirement. In addition to the SBRF appropriation, the Governor is recommending an additional $6.1 million be made available for the Program from the Iowa Cultural Trust Fund
  • $11.3 million from the RIIF for multimodal programs including a new program named Linking Iowa's Transportation, a grant program aimed at improving Iowa's freight rail infrastructure.
  • Elimination of the Great Places Infrastructure grants ($1 million) and Community Attractions & Tourism grants ($5 million), by replacing it with the new $20 million Iowa NEXT initiative.
  • Status quo funding for Regents economic development programs
  • Status quo of $16.9 million for the High Quality Jobs Program
  • $3.5 million reduction in funding for recreational trails ($2.5 million)
  • $2 million reduction in RIIF funds to the Railroad Revolving Loan & Grant Program ($2 million)
  • Status quo funding ($5 million) for the Skilled Workforce Shortage Tuition Grant

To view the Governor's office's summary of the budget, go HERE.  Additionally, you can view an analysis of the Governor's budget by the Legislative Services Agency HERE. If you see an item that you deem as especially important to you, you should contact the Governor by going HERE. 





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