Policy Perspectives
March 6, 2016
See TIF Alert Below!!
Professional Developers of Iowa's Bill Tracker is HERE 
Reaching the halfway point
 
Monday, March 7th, will mark the 57th day of the 100-day legislative session, over the halfway mark. Monday also marks the beginning of the Second Legislative Funnel week, an important milestone in the progression of the session. By the end of the funnel week, legislation will have to have been approved by a committee in BOTH legislative chambers in order to stay alive for the year.
 
The only bills exempt from this deadline are bills assigned to the Appropriations (spending), Ways & Means (taxes) or Government Oversight committees.  This means that all of the legislative committees expect those listed in the previous sentence will meet for the LAST time this week until the next General Assembly convenes next January.
 
In addition to the funnel, the other big date on the immediate calendar is Wednesday, March 16. This is the date the Revenue Estimating Conference (REC) will meet to make their revenue predictions for the State. The REC meets at least three times a year, usually in October, December, and March or April. They last met in December and legislators announced their budget targets a while back (detailed in an Excel spreadsheet we created in an earlier update) based on those predictions.
 
If the REC lowers their projections of state revenues (which some forecasters are saying might be likely based on some signals coming from the agriculture industry), then legislative leaders will have to lower their budget targets in order to comply with 99% spending limit in Iowa law. This is going to make the budget process this session a lot more difficult.
 
If the REC raises their projections of state revenues, then legislators will typically begin to craft their budgets based on the lower December projections. In that situation, they are required to use the lower, earlier estimate, but there has been some deviation from that in previous years.
 
The looming REC meeting is definitely holding up ANY work on the FY 2017 budget, but especially education funding, which is way overdue at this point. Education funding is usually set early in the legislative session, but when the House, Senate and Governor were unable to reach agreement through the month of February, it looked unlikely they would then attempt to hammer out a compromise until after the REC reports their numbers. Hopes were raised slightly this week when a committee meeting on the subject was scheduled, but was cancelled a few hours later.
 
In addition to education and other budget bills, the pending REC is also holding up potential action on tax coupling legislation. The House unanimously passed legislation early to update the Iowa tax code to address some tax changes at the federal level. The Senate has not taken up the legislation due to a pricetag in the range of $85-90 million. If the REC reports more revenues to work with, the House will likely push harder to see this legislation enacted.

TIF ALERT !!!

Since the last edition of Policy Perspectives, Ways & Means Committee Chairman Sands' TIF bill (HSB 639) has been introduced, gained subcommittee approval, and is poised to be considered by the full House Ways & Means Committee on Monday, March 7

The bill is shorter than others he has introduced in past years.  It is an 8-page bill that contains six sections which do the following: 
  • Section 1 adds to the reporting requirement. 
  • Section 2&3 bans the use of TIF for public buildings, without exception.   
  • Section 4 alters the definition of "blighted area" for future TIF districts.
  • Section 5&6 limits economic development TIF districts to 20 years in length, and slum and blight TIFs to 25 years in length.  Any existing economic development TIF districts would expire on July 1, 2036, and existing slum and blight TIF districts would expire on July 1, 2041.
I urge you all to review the bill yourself and let legislators know what you think.  Be sure to talk with your legislators about it, especially if your legislator serves on the House Ways & Means Committee (Link HERE). You can view the bill by going  HERE.

For your reference in reaching out to your legislators, PDI has historically asked the following:
  • Public buildings - PDI has consistently argued that there should be an exception of some sort for projects that rise to a level of importance within that community.  (For example, a city-owned parking lot that becomes the linchpin for redeveloping an entire town square.)
  • Time Limits - PDI has consistently raised concerns about imposing time limits on TIF districts.  While 20 or 25 years seems like a long time, there are examples around the state of TIF districts that required twice that time to redevelop, many of which sat with little activity during the first 20-25 years.
 
Legislative Forums
Advocate with your State Senator and Representative!! Please follow that link below to find out where legislative forums are occurring in your area!!
 
 
If you know of other legislative forums that do not appear on this list, let us know at info@ialobby.com!


Other PDI Issues

Renewable Chemical Production Tax Credit 
The Renewable Chemical Production Tax Credit (SF 2285) legislation made another important move forward on Thursday, being passed 13-1 out of the Senate Ways & Means Committee.  The bill is now poised to be considered by the full Senate. 

As you may recall, similar legislation last year was passed twice by the House but stalled in the Iowa Senate.  The House currently has a similar bill and is just awaiting the Senate's action on SF 2285.  With any luck, this bill might be headed to the Governor's desk for signature within the next few weeks. 

SAVE and IWILL
The Governor's SAVE proposal advanced through the funnel and is still being worked on in the House. Additionally, legislators are hearing a lot of input on IWILL, the effort to increase the state sales tax by 3/8 cent to fund the Natural Resources and Outdoor Recreation Trust Fund (60% of which would be devoted to improving water quality). Legislators and the Governor seem supportive of taking action to improve water quality, but have a long ways to go before they agree on one solution. We have provided information about SAVE in previous updates; you can learn more about IWILL HERE.
 
Enhance Iowa
Senator Dotzler's Enhance Iowa bill was moved to the Senate Appropriations Committee to keep it alive for further discussion beyond the funnel deadline. No further action, however, has been taken, and probably won't until the budget starts to come into focus.

Bills Being Tracked for PDI


Below is a table of the bills we are tracking for you. Please be sure to check the "Bill Tracker" link at the top and bottom of this message to see a more current version.

Bill# Title Status
HF2111 
Abandoned Building Program
Summary | Details 
House Appropriations Committee 
 
Makes changes to city eligibility requirements for receipt of abandoned building program funding assistance.
HF2242 
Workforce Housing Tax Incentives Program
Summary | Details 
House Ways & Means Committee 
 
Increases to $25 million from $20 million the maximum amount of tax credits that the economic development authority may annually allocate to the workforce housing tax incentives program.
HF2260 
SAVE Fund Extension
Summary | Details 
House Floor
 
Extends the Secure an Advanced Vision for Education (SAVE) fund to January 1, 2050.
HF2352 
Water Service Taxation
Summary | Details 
House Ways & Means Committee 
 
Exempts water service by a utility from the state sales tax. Creates a state excise tax on water utility sales. Allows counties to impose a local water service tax.
HF2382 
SAVE Fund
Summary | Details 
House Floor
 
Extends the state sales tax of 6% until January 1, 2050, to support the Secure and Advanced Vision for Education (SAVE) fund, and modifies use of SAVE revenues to include water quality initiatives.
HF2392 
Academic/Career Guidance & CTE Programs
Summary | Details 
Assigned to Committee
 
Modifies provisions relating to a student plan for progress toward high school graduation, which each eighth grade student enrolled in a school district must complete. Modifies provisions related to career and technical education.
HF2412 
Economic Development Authority
Summary | Details 
House Ways & Means Committee 
 
Makes changes to programs and duties of the Economic Development Authority. Modifies life cycle cost analysis provisions relating to public facilities, makes technical changes pertaining to the high quality jobs program, modifies economic development authority assistance provisions under the business outreach program, modifies provisions concerning enterprise zones, and transfers certain duties to the authority under the historic preservation and cultural entertainment district tax credit program.
HF628 
Tax Increment Financing (TIF) Changes
Summary | Details 
House Ways & Means Committee 
 
Bans the use of TIF for public buildings, limits existing TIF's without an end date by ratcheting up the base by 7.5 percent per year, limits new TIF districts to 20 years. 
HF656 
IEDA Tax Credits - Renewable Chemical
Summary | Details 
Senate Ways & Means Committee 
 
Makes changes to the administration of tax credits by the Iowa Economic Development Authority.
HJR2008 
Manufacturing Sales and Use Tax Exemptions
Summary | Details 
House Ways & Means Committee 
 
Nullifies several Department of Revenue administrative rules and amendments relating to the manufacturing sales and use tax exemptions.
HR102 
ISBDC and 2016 Award Winners Recognition
Summary | Details 
Adopted
 
Recognizes Iowa Small Business Development Centers and honors 2016 award winners.
HSB256 
IWILL, Formula Changes, AMT
Summary | Details 
House Ways & Means Committee 
 
Implements the 3/8 cent sales tax increase for the Natural Resources and Outdoor Recreation Trust Fund.  Also contains significant changes to the Trust Fund's voter-approved funding formula and creates an Iowa Alternative Minimum Tax (AMT).
HSB639 
TIF Changes
Summary | Details 
House Ways & Means Committee 
 
This bills makes a number of changes to tax increment financing.
SF2005 
Property Tax Revenue from Wind Energy
Summary | Details 
Senate Ways & Means Committee 
 
Authorizes municipalities to provide for the division of property tax revenue (tax increment financing) collected against wind energy conversion property located within an urban renewal area.
SF2006 
Property Taxes for Wind Energy
Summary | Details 
Senate Ways & Means Committee 
 
Authorizes municipalities to provide for the division of property tax revenue (tax increment financing) collected against property located within an urban renewal area.
SF2018 
Urban Renewal Law
Summary | Details 
Senate Ways & Means Committee 
 
Prohibits urban renewal plans and projects from using TIF revenues for a tax-exempt public building.
SF2067 
Residential Metered Water
Summary | Details 
Senate Ways & Means Committee 
 
Exempts from the state sales tax the sales price from the sale or furnishing of water to residential customers and creates state and local residential water excise taxes.
SF2102 
Drug Prescribing and Dispensing Information Program
Summary | Details 
House Human Resources Committee 
 
Requires the Board of Pharmacy to implement improvements to facilitate secure access to the Iowa Prescription Monitoring Program through electronic health and pharmacy information systems.
SF2154 
Economic Development Authority
Summary | Details 
Assigned to Committee
 
Makes changes to programs and duties of the Economic Development Authority.
SF2179 
High Quality Jobs Program & Chemical Production Tax Credit Program
Summary | Details 
Senate Floor
 
Permits the Economic Development Authority to provide additional tax incentives to businesses using apprenticeship training program contractors and subcontractors for projects in which qualifying investments are made under the high quality jobs program.
SF2212 
Sales Tax Rebate
Summary | Details 
Senate Floor
 
Modifies the rebate of state sales tax to the owner or operator of a baseball and softball tournament facility and movie site.
SF2229 
Community Catalyst Building Remediation Program
Summary | Details 
House Economic Growth Committee 
 
Creates a community catalyst building remediation fund for the remediation of underutilized buildings.
SF2246 
Water Quality Initiative
Summary | Details 
Senate Appropriations Committee 
 
Redirects wagering tax receipts from the Vision Iowa fund to the water quality initiative fund beginning in FY2017-2018.  Makes an appropriation of $30.4 million from the general fund for FY 2015-2016 to the state bond repayment fund.
SF2280 
Enhance Iowa
Summary | Details 
Senate Floor
 
Creates Enhance Iowa Board, establishes Enhance Iowa Fund, and establishes sports tourism program.
SF2285 
High Quality Jobs Program & Chemical Production Tax Credit Program
Summary | Details 
Senate & House Floors
 
Relates to the administration of programs by the economic development authority (EDA) by modifying the high quality jobs program and creating a renewable chemical production tax credit program.
SF2294 
Energy Districts
Summary | Details 
Senate Local Government Committee 
 
Allows a county, a county and one or more cities within that county, or one or more cities within the same county to create an energy district through a 28E agreement. 
SSB1272 
Iowa Water & Land Legacy (IWILL)
Summary | Details 
Senate Ways & Means Committee 
 
Raises the state's sales tax to fund the Natural Resources and Outdoor Recreation Trust Fund.
SSB3051 
Governor's Transportation Budget
Summary | Details 
Senate Appropriations Committee 
 
Governor's Transportation Budget.
SSB3080 
Solar Energy Tax Credits
Summary | Details 
Senate Ways & Means Committee 
 
Increases the amount of business and residential solar energy tax credits that may be claimed annually.
SSB3162 
Governor's Infrastructure Funding Bill.
Summary | Details 
Senate Appropriations Committee 
 
Governor's infrastructure funding bill.
SSB3163 
Construction Equipment Sales Tax
Summary | Details 
Senate Ways & Means Committee 
 
Provides that the purchase of construction equipment for a subsequent lease or rental that will qualify for the construction equipment exemption will only fail to qualify for the sale-for-resale exemption if the sale is to a nonqualified dealer. 
    




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