POLICY PERSPECTIVES | April 2, 2017
Click for PDI Bill Tracker

Legislative Session Update

Monday, April 3, 2017, will mark the 85th Session Day of the 2017 Legislative Session, a mere 15 days from the April 18th target adjournment date. In fact, some legislators believe they may finish even earlier - before Easter - but there is lot of heavy lifting remaining that suggests otherwise.
 
Second Funnel
This past week marked the end of the second legislative "funnel," an administrative function the Legislature uses to winnow out legislation that is not showing significant enough forward progress to have a realistic chance at enactment. By the end of the week, legislation had to have been passed by committee in both the House and the Senate. Exempt from the funnel deadline are bills before the Appropriations, Oversight or Ways & Means Committees. All other committees are essentially done with their work for the year.
 
Publication Note
At this time, it is appropriate for us to note that this publication, which typically comes out every two weeks during session, will NOT be published two weeks from now IF it looks like the Legislature could adjourn in the near future. If that is the case, we will instead wait and publish AFTER they adjourn for the year. In the mean time though, keep an eye out for timely alerts requesting you to take action.
 
The Governor's Revised Budget
With the second funnel deadline passed, the list of "must-do" legislation is getting shorter, and pieces that do not have full agreement are being thrown overboard to try again next year. Meanwhile, the Legislature has shifted fully into budget mode. The March 14th meeting of the Revenue Estimating Conference (REC) required the Governor to revise his budget recommendations for the upcoming FY 2018 budget. Those revisions were submitted on March 28.
 
To summarize, the Governor's budget numbers are pretty tough, as expected. However, we are hearing that the Legislature's numbers that we will see next week will be even tougher. Here are a few highlights of the Governor's budget proposal:
  • The Governor borrows $131.1 million from the Cash Reserve Fund to cover the shortfall in FY 17 revenue (the current fiscal year which ends on June 30, 2017).
  • The Governor proposes to repay those funds over two years - $104.8 million in FY 2018 and the remaining $26.3 million in FY 2019.
  • In FY 2018, the Governor proposes to spend $7.2836 billion from the General Fund, an increase of $24 million over the revised FY 2017 budget. (But a decrease of $173.3 million from his earlier FY 2018 budget).
  • Funding for K-12 education will increase by $40.1 million over FY 2017, per an earlier agreement.
  • Medicaid spending in the Governor's budget is increased by $34.5 million in FY 2018.
  • The Governor's Budget fully funds the backfill provided to local governments to cover shortfalls created by the Property Tax Reduction bill.
You can view the Governor's proposal HERE and the non-partisan Legislative Service Agency's assessment of the proposal HERE.
 
Of specific interest to PDI, here are some observations about the Governor's proposed budget:
  • Reduction in IEDA Administration Budget of $87,778 (on top of a $1,031,180 reduction since last Fiscal Year).
  • Puts off for another year any funding to market Home Base Iowa
  • Reduces Recreational Trail funding by $1M (to $1.5M)
  • Reduces Rail Assistance by $1M (to $1M)
  • Provides level funding for Community Attraction and Tourism ($5M), High Quality Jobs ($15.9M), Workforce Training & Economic Development Funds ($15.1M)
  • Reduces ACE Infrastructure funding by $3M (to $3M)
  • ELIMINATES  REGENTS  ECONOMIC  DEVELOPMENT  FUNDING  IN  FY 2018 - The spreadsheet shows no funding in FY 2018 for economic development programs at the Regents Universities, a CUT of $8,700,000. Some of the State funding for these programs draws down federal dollars, so they will be even more severe.
What does this mean for you? It's not time to panic, but IT IS GO TIME. In the next few days, we should see budget proposals from the Legislature and they are predicted to be LEANER than the Governor's budget numbers. NOW IS THE TIME to be reaching out to YOUR LEGISLATORS to weigh in with your thoughts. The next two weeks will be crucial. And the results of these two weeks will be FINAL for your priorities. 
Your VOICE is NEEDED!!

As the session winds down, your input into the process can mean the difference between success and failure for our legislative priorities. Please take a few moments to weigh in with your House and Senate members (Find them HERE) about the biggest remaining priorities for PDI!!
 
Priority #1A - The Budget
The IEDA Budget has seen over $1 million in reductions this Fiscal Year, and the Governor's proposed budget has a number of cuts that are outlined in the story above, including the ELIMINATION OF FUNDING FOR REGENTS ECONOMIC DEVELOPMENT. Legislators absolutely need to hear from you about how critical these programs are to your ability to retain, attract and expand businesses in your area!
 
Please call and email YOUR LEGISLATORS about these priorities today! And then, recruit a couple or your friends and neighbors to also reach out to their legislators! Time is running out!!
Bill Tracker
PDI's bill list is now at http://www.ialobby.com/billtracker/pdi/ 
Other Issues

Tax Credits / Tax Reform
In the last edition, we described to you HSB 187, legislation that would cap (collectively) all tax credit programs in Iowa, ratchet that cap down, and remove refundability from a number of tax credit programs. Since the last edition, a subcommittee was held on the bill to hear thoughts and concerns, but no further action has been taken.
 
PDI is opposed to this legislation because the cap and the removal of refundability would have a disastrous effect on economic development in Iowa, throwing uncertainty into some of the most effective and efficient programs in the nation.   We will continue to monitor this and any other proposals that would negatively affect economic development programs in Iowa.

Preemption
House File 295 (Click HERE) is now law.  The bill prevents local governments from enacting a minimum wage higher than the State minimum wage.  

TIF
Still no news on TIF legislation, which is obviously good news.

Water Quality
The shrinking session timetable is making it harder for legislators to rally around a single proposal on water quality.  While advocates on the issue are still hopeful for action, time is definitely a factor now.  If you have strong feelings about the Legislature needing to take action on the WISE Solution (HF 597) or one of the other proposals we have discussed previously, NOW is the time to call your legislators.
Bills Being Tracked for PDI

This is a list of the bills being tracked for PDI and their status at the time of publication.  The online bill list is updated constantly, so if you wish to see the updated bill list, just go to
http://www.ialobby.com/billtracker/pdi/
 
Bill# Title Status
HF203
Primary Road Fund
Summary | Details
Signed

Allows the state transportation commission to periodically allocate funds from the Primary Road Fund (PRF) to the secondary and municipal road systems in exchange for retaining all or a portion of federal aid road funds that would otherwise be allocated to counties and cities.
HF231
EDA Powers and Programs
Summary | Details
Signed

Addresses Economic Development Authority powers and programs.
HF288
Water Service Taxation
Summary | Details
House Ways & Means Committee

Exempts from the state sales tax the sales price from the sale or furnishing by a water utility of a water service in the state to consumers or users. 
HF291
Collective Bargaining
Summary | Details
Signed

Makes changes to several employment matters involving public employees, including collective bargaining, educator employment matters, personnel records and settlement agreements, and city civil service requirements.
HF295
Minimum Wage
Summary | Details
Signed

Prohibits a county or city from providing for any terms or conditions of employment that exceed or conflict with the requirements of federal or state law relating to a minimum or living wage rate, any form of employment leave, hiring practices, employment benefits, scheduling practices, or other terms or conditions of employment.
HF335
Public Recreational Use Area Tax Credit
Summary | Details
House Ways & Means Committee

Provides a tax credit and other benefits for private land owners who make land and water areas available for public recreational purposes.   
HF439
Workforce Housing Tax Incentives Program
Summary | Details
House Ways & Means Committee

Increases the maximum dollar amount that may be allocated to the Workforce Housing Tax Incentives Program.
HF478
Property Assessment Appeal Board
Summary | Details
Senate Floor with Companion

Makes changes to the property assessment appeal board.
HF517
Gun Law Changes
Summary | Details
Senate Floor

Makes several provisions related to carrying, possessing, acquiring, and using weapons, including allowing the possessing of pistols and revolvers by individuals under age 14, permitting concealed carry at the State Capitol, and justifiable use of reasonable and deadly force (stand your ground).
HF518
Workers' Compensation
Summary | Details
Signed

Makes several provisions related to workers' compensation.
HF572
IWD Board
Summary | Details
Senate Floor

Modifies IWD Board membership requirements.
HF575
Bottle Bill Repeal and Replace
Summary | Details
House Ways & Means Committee

Repeals the beverage containers control law and replaces it with new recycling, litter control, and community enhancement programs.
HF592
Homeownership Development Tax Credit
Summary | Details
House Ways & Means Committee

Creates a homeownership development tax credit for taxpayers who make charitable contributions to eligible housing developers or eligible rural housing developers.
HF597
The WISE Solution for Water Quality
Summary | Details
House Ways & Means Committee

A permanent $180-200 million/year that flows into the Natural Resources and Outdoor Recreation Trust Fund, at least 60% of which would have to be used for specific water quality.
HF603
Eminent Domain
Summary | Details
Senate Floor

Addresses the use of eminent domain and the procedures and compensation required for the use of eminent domain.
HF607
Alcoholic Beverage Control
Summary | Details
House Floor

Makes several changes concerning alcoholic beverage control and matters administered by the Alcoholic Beverages Division of the Department of Commerce.
HF612
Water Quality Programs
Summary | Details
House Appropriations Committee

Establishes new water quality programs, makes appropriations related to water quality, and creates a state water service excise tax and a related sales tax exemption.
HF621
EDA Programs and Projects
Summary | Details
House Unfinished Business Calendar

Makes changes to programs and projects administered by the Economic Development Authority.
HF90
Raceway Facility Sales and Use Tax Rebate
Summary | Details
House Ways & Means Committee

Modifies the sales and use tax rebate to the owner or operator of a raceway facility.
HSB187
State Tax Credits
Summary | Details
House Appropriations Committee

Limits the total amount of certain tax expenditures that may be claimed in a fiscal year, provides for transfers to the taxpayers trust fund, and eliminates the refundability of Iowa tax credits. 
HSB43
Local Option Sales Tax
Summary | Details
House Ways & Means Committee

Makes changes to the process for approving and imposing a the local option sales and services tax.
SF1
Jobs Impact Statements
Summary | Details
House Floor

Requires that every proposed rule under a notice of intended action or publication without notice contain a jobs impact statement outlining the purpose and statutory authority of the rule and analyzes and sets out in detail the impact of the proposed rule on state agencies, local governments, the public, and the regulated entities, including regulated businesses and self-employed individuals affected by the rule.
SF103
Inheritance Tax Repeal
Summary | Details
Senate Ways & Means Committee

Repeals the state inheritance tax and the state qualified use inheritance tax effective July 1, 2017.
SF104
High Quality Jobs Criteria
Summary | Details
Senate Ways & Means Committee

Alters the high quality jobs criteria to no longer allow projects that only have capital investment, but no new job creation. 
SF130
FY17 Deappropriation
Summary | Details
Signed

Deappropriates $117 million for the current fiscal year (FY2017), which ends on June 30, 2017.
SF14
Sales Tax Increase
Summary | Details
Senate Ways & Means Committee

Increases state sales tax rate from 6 percent to 6.375 percent and provides for the transfer of sales tax revenues to the natural resources and outdoor recreation trust fund.
SF16
Wind Energy Conversion Property Tax Division and Allocation
Summary | Details
Senate Ways & Means Committee

Requires property taxes collected from wind energy conversion property located in an urban renewal area be allocated to and, when collected, paid into the funds for the respective taxing districts in the same manner as all other property taxes.
SF167
State Sales and Use Tax
Summary | Details
Senate Ways & Means Committee

Increases the state sales and use tax to 6.375%, and provides for the transfer of sales tax revenues to the natural resources and outdoor recreation trust fund. Amends the transfer of use tax revenues to the SAVE fund to 15.6863%.
SF17
Property Taxes from Wind Energy Conversion
Summary | Details
Senate Ways & Means Committee

Requires property taxes collected from wind energy conversion property located in an urban renewal area be allocated to and, when collected, paid into the funds for the respective taxing districts in the same manner as all other property taxes.
SF176
IEDA Technical Corrections
Summary | Details
Senate Unfinished Business Calendar

Makes technical corrections to IEDA programs and projects.
SF179
IRS-Bonus Depreciation Provisions
Summary | Details
Senate Ways & Means Committee

Temporarily updates the Code references to the Internal Revenue Code and decouples from certain federal bonus depreciation provisions.
SF228
Certified Suppliers of Anchor Manufacturers
Summary | Details
Senate Ways & Means Committee

Creates an economic development program allowing certified suppliers of anchor manufacturers to make an adjustment to net income for state individual and corporate income tax purposes.
SF309
Individual Income Tax Exclusion
Summary | Details
Senate Ways & Means Committee

 
Excludes certain net capital gains from the individual income tax.
SF38
Individual Income & State Sales and Use Taxes
Summary | Details
Senate Ways & Means Committee

Repeals the individual income tax and increases the state sales and use tax rates.
SF394
Research Activities Tax Credits
Summary | Details
Senate Ways & Means Committee

Limits the aggregate amount of research activities tax credits that may be refunded.
SF456
Des Moines Water Works Restructuring
Summary | Details
Senate Unfinished Business Calendar

Creates a regional water authority and regional water authority board to assume the transfer of powers, duties, assets, and liabilities of a water utility.
SF482
Water Quality/Wastewater Treatment
Summary | Details
Senate Appropriations Committee

Modifies existing wastewater treatment program, establishes new water quality programs, and creates a water service excise tax and sales tax exemption.
SF493
Recreational Lake/Water District Bonding Authority
Summary | Details
House Ways & Means Committee

Gives combined benefited recreational lake and water quality districts the same power to issue bonds that cities have.
SF82
Inheritance Tax
Summary | Details
Senate Ways & Means Committee

Reduces the state inheritance tax rate over a nine-year period with the tax repealed effective July 1, 2027.
SJR9
General Fund Expenditure Limitation Constitutional Amendment
Summary | Details
House Appropriations Committee

Proposes an amendment to the Iowa Constitution that limits state spending to 99% of revenue estimates, or 104% of the revenue estimates for the current fiscal year (whichever is greater).
SSB1141
Targeted Jobs Withholding Credit Pilot Project
Summary | Details
Senate Ways & Means Committee

Extends the targeted jobs withholding credit pilot project by five years.
SSB1155
Endow Iowa Tax Credits
Summary | Details
Senate Ways & Means Committee

Increases the amount of Endow Iowa tax credits that may be authorized by the economic development authority.
SSB1181
Federal Block Grant Appropriations
Summary | Details
Senate Floor

Appropriates federal block grants for federal fiscal year 2018 & 2019.
Your Legislative Team
The Advocacy Cooperative | Campbell/Patterson Consulting LLP, PO Box 1403, Des Moines, IA 50131
Sent by craig@ialobby.com in collaboration with
Constant Contact