Policy Perspectives
April 3, 2015
Professional Developers of Iowa's Bill Tracker is HERE 
Happy Easter!

In addition to being the 82nd day of the 110-day session, Friday, April 3, marks the end of Week 12 as well as the end of the Second Funnel Week. In order for a bill to remain alive for the remainder of the session (other than taxing or spending bills), it had to have been voted out of committee in the opposite chamber from where it were introduced. (For example, a House Education Committee bill would need to be have been approved by the Senate Education Committee by Friday or else it is dead for the year).

 

Funnel weeks at the Capitol are traditionally hectic, as legislators move quickly to keep as much legislation alive as possible. During the second funnel, budget deliberations are usually heating up as the policy committees are closing out their business for the year. The pace is usually very difficult for everyone to keep up with. However, this year, the budget process is way behind schedule due to an impasse over school funding that has now entered a fourth month.

 

School Funding Impasse

Much of the progress at the Capitol has ground to a halt as legislative leaders continue to argue about school funding. The Senate passed a 4% increase for schools, while the Governor and House have argued that 1.25% is all the state can afford. When March revenue estimates showed projected state revenues coming in lower than anticipated, leaders in the House became very reluctant to negotiate above the 1.25% they had already approved. Senate Democrats offered this week to "split the difference" by proposing 2.625% - exactly halfway between 1.25% and 4% - however, the proposal was immediately rejected by the Republicans who argued it would break the budget.

 

Extended Timeline

Legislators have heard that "budget targets" - the amount of money allowed to be allocated by each appropriations subcommittee - may not be released for two to three weeks. Individual appropriations bills cannot be written until after those targets are known, which may not occur now until after the 100th day of the 110-day session. This means the current legislative session - which ends up May 1 - may go DEEP into overtime, possibly well into June.

 

A few things to be aware of with this session:

  • First, if you have a policy initiative in mind that you would still like to see move forward this year, the fact that the session will go long could work in your favor. Many legislators are facing some long waits in the next few weeks while budget negotiations come together. Sometimes, it becomes a good time to focus on other legislative proposals.
  • Second, if your main focus is on funding for certain programs, you need to be calling and emailing legislators NOW about that funding. The late timeline indicates that when there IS forward motion on budgets, it is likely to go quickly with little chance to alter whatever funding levels are in the spending bills as introduced.   You want your priorities in their minds BEFORE they begin writing those bills.
Concerns about Budget  
It is very important that you are vocal with your legislators about the projects you are working on locally and how TIF, IEDA programs, and other state programs are critical to your success.  The budget is going to be very difficult this year and legislators are looking everywhere for cuts that can be made in order to shore up other built-in increases that they must accommodate.    

 

Line items like the IEDA project demonstration fund or others are not exempt from consideration.  It's also not impossible that they would look to trim the IEDA's tax credit cap and argue that doing so created savings (even though that's necessarily the case).       

 

Bottom Line - When legislative timelines get compressed, they become unpredictable.  We have seen many instances when budgets have been backed up and budget bills began to be introduced in a form that is largely agreed to beforehand.   By calling and emailing now, it will make it harder to justify any reduction in funding for programs of interest to you.  Be proactive now!

 

TIF Bill Update  

 

As long anticipated, late last week a TIF bill (HSB 225) was introduced by House Ways & Means Committee Chairman Tom Sands. Sands assigned the bill to a subcommittee that includes himself, Rep. Josh Byrnes of Osage and Rep. Chuck Isenhart of Dubuque. The subcommittee already met this past week and will likely be forwarding the bill to the full House Ways & Means Committee for consideration.

 

True to form, HSB 225 contains largely the same provisions as Chairman Sands indicated he intended to pursue to PDI lobbyists last summer and in every conversation since then - namely public buildings, TIFs without end dates, and debt. Specifically, the bill does the following:

Section 1 - Adds some details to the reporting that the Legislative Services Agency is required to prepare for legislators, specifically tracking TIF debt and annual appropriation debt.

Sections 2 and 3 - Grandfathers any existing public building projects that used TIF, but then specifically prohibits thereafter the use of TIF for public buildings, including the remodeling, maintenance or repair of public buildings.

Section 4 - Addresses all existing TIF districts that do not have an end date (Pre-1995s and slum & blight TIF districts). At the 20 year mark, the base would be increased by 7.5% per year for 20 years and then the TIF would sunset. If that TIF is already 20+ years old, the increase in the base would begin as of July 1, 2016.

Section 5 - Places a 20-year limitation on all new TIF districts.

Section 6 - Makes the bill effective upon enactment.

 

PDI is registered as opposed to the bill, along with the Iowa League of Cities and the Metropolitan Coalition. While we definitely appreciate the limited scope of Sands' TIF bill when compared to previous years, our message at the subcommittee was the need for more flexibility. In the public building provision, we suggested the bill should allow for some exceptions to an all-out ban on public projects in cases where a community believes that project is a priority, perhaps requiring a super majority city council vote or allowing a reverse referendum. On the time limit issue, we pointed out that different cities would have different needs with how best to reset the clock on existing TIFs, and suggested any bill on this issue contain a number of different options a city could utilize.

 

Please take some time to weigh in with your legislators about how you use TIF locally, and provide any feedback you can about HSB 225. We understand that Chairman Sands would like to run this bill this year, and the prolonged budget negotiations may give him a lot of time to do so. We want to ensure that legislators have heard from their local PDI members about HSB 225.
Bills Being Tracked

We realize not everyone has checked out the bill tracker, so in this issue, we are posting below the bills that appear in the bill tracker right now.   As these bills take a step forward in the legislative process, their status is updated in the tracker.

HF167
Public Improvement Projects
Summary | Details
Signed

Prohibits government entities from charging a fee for access to project contract documents when such documents are provided electronically. 

HF208
Residential Property/Municipal Improvement Districts
Summary | Details
House Ways & Means Committee

Allows residential property in an improvement district within a designated historic district.

HF576
Governor's Broadband Bill
Summary | Details
House Ways & Means Committee

Expands broadband access in Iowa. 

HF604
Alternative base income tax
Summary | Details
House Ways & Means Committee

Relates to an alternative base income tax.

HF619
Eminent domain for lakes/drinking water
Summary | Details
House Floor

Relates to use of eminent domain authority.

HSB174
Sales Tax Exemption/Manufacturing
Summary | Details
House Ways & Means Committee

Relates to the sales tax exemption for the purchase or rental of certain items used in manufacturing, research and development, data processing or storage, or recycling activities.

HSB177
Governor's Budget for Federal Block Grants
Summary | Details
House Appropriations Committee

Appropriates federal block grants and other federal funds.

HSB181
Eminent Domain Challenges
Summary | Details
House Government Oversight Committee

Addresses challenges to eminent domain authority. 

HSB183
Condemnation Permits
Summary | Details
House Government Oversight Committee

Requires condemning agency to get all necessary permits before starting process of condemnation. 

HSB184
Eminent Domain/Transmission Lines
Summary | Details
House Government Oversight Committee

Legislative permission to use of eminent domain for electric transmission lines.

HSB185
Petitions for Electric Transmission Line Franchise
Summary | Details
House Government Oversight Committee

Relates to petitions for electric transmission line franchises.

HSB212
Renewable Energy Tax Credit
Summary | Details
House Ways & Means Committee

Changes maximum amount of renewable energy tax credit.

HSB225
Tax Increment Financing (TIF) Changes
Summary | Details
House Ways & Means Committee

Relates to TIF changes.

HSB226
Sales tax exemption on certain construction machinery
Summary | Details
House Ways & Means Committee

Relates to sales taxes and exemptions for certain construction machinery.

HSB229
Sales tax - metered water for residential customers
Summary | Details
House Ways & Means Committee

Relates to the sale of metered water for residential customers.

HSB232
Tax credits - rural business growth funds
Summary | Details
House Ways & Means Committee

Creates a tax credit for investments through rural business growth funds.

SF104
Personal & Corporate Income Tax Reduction
Summary | Details
Senate Ways & Means Committee

Reduces both personal and corporate income tax rates by 20%.

SF211
Exempting Capital Gains from Income Taxes
Summary | Details
Senate Ways & Means Committee

Exempts net capital gains from state individual income taxes.

SF233
Economic Development Authority Bill
Summary | Details
House Ways & Means Committee

Makes changes to the programs and duties of the Iowa Economic Development Authority.

SF234
Iowa Employment Rides Initiative
Summary | Details
House Floor

Establishes an Iowa Employment Rides Initiative. 

SF249
Individual Income Tax Rate Reductions
Summary | Details
Senate Ways & Means Committee

Reduces personal income tax rates by 10%.

SF257
Gas Tax
Summary | Details
Signed

Increases the gas tax by 10 cents to pay for critical road and bridge construction projects.

SF289
Secondary Road Infrastructure Appropriations
Summary | Details
Senate Appropriations Committee

Appropriates $99 million for secondary road infrastructure projects.

SF344
Construction Trades Apprenticeship Tax Credit
Summary | Details
Senate Ways & Means Committee

Creates a construction trades apprenticeship tax credit.

SF350
IEDA Administration of Tax Credits
Summary | Details
Senate Ways & Means Committee

Makes changes to the administration of tax credits by the Iowa Economic Development Authority.

SF367
Endow Iowa Tax Credits/Gifts
Summary | Details
Senate Ways & Means Committee

Modifies the types of endowment gifts that qualify for the Endow Iowa Tax Credit.

SF41
Secondary Road Bridge Projects
Summary | Details
Senate Appropriations Committee

Appropriates $200 million for secondary road bridge projects.

SF449
Condemnation of Property
Summary | Details
House Floor

Changes the procedures and requirements for condemning property.

SF457
Public Information Board/ Closed Session Meetings
Summary | Details
House Floor

Allows the Office of the Ombudsman to get copies of the minutes and audio recordings of closed session governmental body meetings without a court order, if the purpose is to resolve complaints alleging violations of Iowa's open meetings law.

SF461
Broadband/Fiberoptic Network Infrastructure
Summary | Details
House Ways & Means Committee

Expands broadband access using a fiber optic network infrastructure and expands the duties of the Chief Information Officer in this area.

SR11
Study to Eliminate Iowa Income Tax
Summary | Details
Senate Ways & Means Committee

Establishes an interim study committee to study elimination of the income tax in Iowa.

SSB1104
Endow Iowa Tax Credits
Summary | Details
Senate Ways & Means Committee

Increases the amount of Endow Iowa Tax Credits that can be authorized by $1.5 million.

SSB1105
Aggregate Tax Credit Limits /EDA Programs
Summary | Details
Senate Ways & Means Committee

Reduces the aggregate tax credit limits for certain IEDA programs. 

SSB1261
Governor's Economic Development Budget
Summary | Details
Senate Appropriations Committee

Appropriates $44.5 million to economic development, tourism, and cultural affairs as recommended by the Governor.

SSB1266
Pollution Control Property
Summary | Details
Senate Ways & Means Committee

Does not allow exemption from property taxes for pollution-control property used as part of certain confinement feeding operations, unless the property is used in a small animal feeding operation.

 

Publication Note    

 

It is probably a little early to say this, but as we wrap up the 12th week, it is time to include in this issue (and subsequent issues) a reminder about our publication schedule. As you know, generally, we publish every two weeks. However, if the session starts to look like final adjournment may occur within the next two weeks, we may hold off until we reach final adjournment. As always though, keep an eye out for timely legislative alerts that require your advocacy.

 


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