COSMETOLOGISTS AND BARBERS
The first funnel week of the 2013 legislative session came to an end at the beginning of the month. House and Senate committees worked hard to push through numerous bills before the deadline. To add to the difficult task, new bills were still introduced in both houses throughout the week. Some were quickly voted through subcommittees while others were unable to move through the process in time. Senate leaders believe the legislature is on track for where it should be in the first year of a General Assembly, even though a number of tough issues are left to tackle, including commercial property taxes, Medicaid expansion and education funding.
One of those areas of contention, Medicaid expansion, has some legislators believing the issue could extend the session if the two parties do not soon reach a resolution. While Governor Branstad’s proposal calls for coverage of those who meet the federal poverty standards, Senate Democrats argue that this would exclude many Iowans who are in need of coverage. They also argue that the Governor’s plan is unlikely to receive federal approval.
There has been a wide variation in bill debate on the House and Senate floors this month. Both chambers have to vote on legislation still on the calendar prior to next week’s second funnel deadline, with the exception of appropriations bills, ways and means bills, and unfinished business. The Senate also has additional work on its agenda with Governor Branstad’s nominations for appointment to boards and commissions. Most of the nominees brought forth so far have easily received the necessary two-thirds vote. Senate Democrats are challenging two of Branstad’s nominations, both positions on the Board of Regents. Branstad wrote a letter to the Senate encouraging “yes” votes for both nominees, but must wait until the Senate votes in April.
SF 307 – Water Usage
SF 307 appropriates $85,000 an aquifer monitoring system, $150,000 for enhanced mapping of groundwater sources, $250,000 for technical assistance for drought planning, $475,000 for hydrologic monitoring stations capable of collecting soil moisture and weather information, and $75,000 for network or hydrologic monitoring stations. It also includes duties for the
SF 295 – Business Property Tax Credits
SF 295 creates a business property tax credit, appropriates $50 million to the DOR for the fund in the initial year and appropriates an amount annually equal to the amount the Legislature appropriated the previous year. It also appropriates an additional $50 million if the REC certifies that revenues have grown by 4%. The bill limits the total appropriation to $250 million and includes provisions on the duties of DOR and counties. It makes commercial and industrial property eligible if a permanent improvement is made on the property. SF 295 was approved by the
and Means committee and was referred to House Appropriations.
HF 609 – Property Tax Reform
HF 609 reduces the property tax assessment limitation (rollback) for agricultural and residential property to 2% and reduces the value of commercial property that is taxed by 5% annually for four years from 2013-16 until the taxed assessed value is 80%. The bill adds commercial and industrial property to the rollback as of 2017and includes provisions for RR property to be assessed like commercial property. It establishes a formula for payments to local governments to replace commercial and industrial property taxes as of FY 2015. It also establishes a formula for claims and limits future repayments to no more than paid out in FY 2018. The bill does not allow the money to be reduced by an across-the-board cut and it requires the DOR to notify counties if the amount appropriated for replacement payments are less than the reduction of all replacement claims. Passage of HF 609 was recommended by the House Appropriations committee.
Week 6: February 18 - 22
The weather forecast for Thursday resulted in a short week at the Capitol as most legislators left Wednesday to avoid the snow. This week did see the introduction of Governor Branstad’s property tax bill. The bill falls in line with his previous proposal by reducing the tax rate on commercial property to 80 percent. It would also add commercial property to the rollback and reduce the potential increase in taxes to two percent a year. Senate Democrats agree with Governor Branstad that job creation is important to
. However, their ideas differ from the Governor’s.
HSB 150 – Commercial Property Tax
HSB 150 modifies the methodology in Code section 441.21(5) currently used to determine the percentage of actual value at which commercial property and industrial property are assessed for property tax purposes. The bill provides that for valuations established for the assessment year beginning
January 1, 2013
, the percentage of actual value at which commercial and industrial property are assessed is 95 percent. For the assessment year beginning
January 1, 2014
, the percentage of actual value at which commercial and industrial property are assessed is 90 percent. For the assessment year beginning
January 1, 2015
, the percentage of actual value at which commercial and industrial property are assessed is 85 percent. For the assessment year beginning
January 1, 2016
, the percentage of actual value at which commercial and industrial property are assessed is 80 percent.
For assessment years beginning on or after January 1, 2017, the percentage of actual value at which commercial and industrial property are assessed shall be calculated in accordance with the methodology used to determine the percentages at which commercial and industrial property are assessed for assessment years beginning before January 1, 2013, except that the percentage of permissible assessed value growth is changed from 4 percent to 2 percent.
The bill also provides that for assessment years beginning on or after January 1, 2017, in addition to the limitations on the growth in taxable value for agricultural and residential property in Code section 441.21(4) and commercial and industrial property in Code section 441.21(5), for residential, agricultural, commercial, and industrial property, the assessed value of each of these four classes of property shall be limited to the percentage increase of that class of property that is the lowest percentage increase under the allowable limit.
The bill takes effect upon enactment and applies retroactively to
January 1, 2013
, for assessment years beginning on or after that date.
SF 169 –Administrative Rules by Environmental Protection Commission
SF 169 relates to the fiscal impact on cities of administrative rules adopted by the environmental protection commission. The bill requires the department of natural resources to submit a regulatory fiscal impact on cities report to the governor and the general assembly by
January 1, 2014
. The report may be submitted in a summary format and shall provide a description of the probable quantitative and qualitative impact of each chapter of administrative rules adopted by the environmental protection commission, economic or otherwise, upon affected cities, including a description of the nature and amount of all of the different kinds of costs that would be incurred in complying with each chapter over a 10-year period.
Additionally, the bill requires the department to provide the commission with a fiscal impact statement for inclusion in a notice of intended action. The statement shall analyze the fiscal impact of the proposed rule on cities over a 10-year period.
SF 166 – Rulemaking Committees
When required by statute, this bill requires an agency to create an ad hoc negotiated rulemaking group to review draft rule proposals prior to commencing a rulemaking proceeding. Where a statute does not require this review, the bill permits an agency to create such a review group. Members are appointed by the agency and the composition must adequately represent a fair balance of the interests affected by the rule. Once such a group is created, the agency may only commence rulemaking after the group has considered the draft rule proposal in question. This provision is based on similar provisions found in the federal Administrative Procedures Act.
SF 165 – Water Usage
SF 165 creates an annual reporting requirement relating to estimated water usage and estimated water supply for water systems in the state and for permittees for the diversion, storage, and usage of water. More frequent reporting is permitted if certain water shortage-related events occur.
The bill amends the prioritization of water usage during restrictions on or suspensions of water use in relation to uses for manufacturing or other industrial processes. Additionally, money is appropriated to the department of natural resources for FY 2012-2013 for updating certain water plans, which shall include plans for droughts including conditions that would necessitate the implementation of priority allocation plans.
SSB 1135 – Business Property Tax Credits
SSB 1135 creates a business property tax credit under new Code chapter 426C for property taxes due and payable in fiscal years beginning on or after
July 1, 2014
. The bill establishes a business property tax credit fund. For the fiscal year beginning
July 1, 2014
, the bill appropriates from the general fund of the state to the department of revenue for deposit in the fund, $50 million. For the fiscal year beginning
July 1, 2015
, and each fiscal year thereafter, the bill appropriates from the general fund of the state to the department of revenue for deposit in the fund an amount equal to the total amount appropriated by the general assembly to the fund in the previous fiscal year. In addition, for fiscal years beginning on or after
July 1, 2015
, the bill appropriates an additional $50 million to the fund if the revenue estimating conference certifies that the total amount of general fund revenues has grown by at least 4 percent as compared to the previous fiscal year.
Each person who wishes to claim a business property tax credit shall obtain the appropriate forms from the assessor and file the claim with the assessor. The assessor is required to remit the claims for credit to the county auditor with the assessor’s recommendation for allowance or disallowance. If the assessor recommends disallowance of a claim, the assessor shall submit the reasons for the recommendation, in writing, to the county auditor. The county auditor then forwards the claims to the board of supervisors. The board is required to allow or disallow the claims. Any person whose claim for credit is disallowed may appeal from the action of the board of supervisors to the district court of the county in which the parcel or property unit is located.
SSB 1134 – Credit Card Fees
This bill prohibits the imposition of credit card interchange fees on the tax or fee portion of any transaction.
Week 4: February 4-8
In a unanimous vote, the House and Senate passed legislation that will update the
internal revenue code to conform to the updated federal tax code. The bill incorporates most of the federal tax changes made in the past year, but does not include all of the changes made relating to bonus depreciation. It does extend the child tax credit to $1,000 rather than allowing it to fall to $500 and allows small businesses and farmers to expense rather than depreciate the first $500,000 of equipment cost for purchases. The bill is currently awaiting approval from Governor Branstad.
The Senate also approved a bill which changes state unemployment provisions to conform to federal law. Democrats and Republicans are split on an amendment which would require workers to wait a week before collecting unemployment. Republicans argue that because a similar law is used in 40 other states, such an amendment would attract new manufacturers to
. In the alternative, Democrats believe the proposal is unfair to workers because it would cause employees to go a week without benefits that they might otherwise be entitled to. The House is expected to see the Senate file on the floor next week.
Senate President Pam Jochum announced this week that the Senate will begin work on legislation which would expand Medicaid in the state. Senate Democrats believe that the expansion will promote Governor Branstad’s initiative to make
the healthiest state in the nation. However, Governor Branstad has been vocal in his opposition to Medicaid expansion. House Speaker Kraig Paulsen does not expect legislation on Medicaid expansion to come to the House floor this session.
HF 149 - Sick Leave
This bill, entitled the “Healthy and Safe Families and Workplace Act”, provides minimum sick and safe time, whether paid or unpaid, for all employees working part-time and full-time in the state in new Code chapter 91F. The bill declares that it is the public policy of the state to protect public health and safety and to promote the general welfare of its citizens by supporting employers in their efforts to encourage employees to work when they are healthy and by protecting the basic rights of workers who safeguard public health by remaining home when they are ill.
HSB 108 - Property Tax Replacement (Governor's Bill)
HSB 108 is the Governor's Bill that relates to school district funding by providing for school district property tax replacement payments and modifying school district funding terminology.
For each fiscal year beginning on or after
July 1, 2013
, the bill appropriates from the general fund of the state to the department of education an amount necessary to make all school district property tax replacement payments under new Code section 257.16B.
Under the bill, for each school budget year beginning on or after July 1, 2013, each school district’s property tax replacement payment amount is equal to the school district’s weighted enrollment for the budget year multiplied by the difference of the following: (1) the state cost per pupil for the budget year multiplied by 100 percent less the regular program foundation base per pupil percentage pursuant to Code section 257.1 and (2) the state cost per pupil for the budget year beginning July 1, 2012, multiplied by 100 percent less the regular program foundation base per pupil percentage pursuant to Code section 257.1.
The bill specifies the timing and manner in which school district property tax replacement payments are made by the department of education.
HSB 108 also modifies the definition of miscellaneous income under Code chapter 257 to exclude property tax replacement payments received by a school district under new Code section 257.16B. The bill also modifies the calculation for determining the amount of a school district’s additional property tax levy to reflect property tax replacement payment amounts received under new Code section 257.16B.
SF 138 - Administrative Rules Review
This bill relates to the review of administrative rules and the rulemaking process by requiring the following components:
- Citizens' Advisory Committee
- Rulemaking Hearings Throughout the State
- Principal Reasons For and Against the Rule
- Jobs Impacts Statement
- Negotiated Rulemaking Groups
- User-Friendly Internet Site
- Five-Year Cycle Review of all Rules
- Narrow Construction of Rules
- Federal Law Implementation
- Environmental Study
HF 179 - Property Tax Relief (House Republicans)
This bill relates to school district funding by making certain transfers and appropriations and by providing for school district property tax replacement payments. For each fiscal year beginning on or after July 1, 2013, the bill transfers from the taxpayers trust fund created in Code section 8.57E an amount necessary to lower all school district adjusted additional property tax levy rates to the statewide maximum adjusted additional property tax levy rate as provided for in Code section 257.15(4)(a), after taking into account amounts currently allocated for that purpose pursuant to Code section 257.15, subsection 4, and amounts deposited in the fund from the secure an advanced vision for education fund under Code section 423F.2, subsection 3. The bill also modifies the method of calculating a school district’s adjusted additional property tax levy under Code section 257.4 to reflect property tax replacement payments received by the school district for the same budget year pursuant to new Code section 257.16B.
The bill establishes a school district property tax replacement fund under the authority of the department of management. For each fiscal year beginning on or after July 1, 2013, and before the transfer of moneys to the property tax equity and relief fund, the bill transfers from the taxpayers trust fund under Code section 8.57E to the school district property tax replacement fund an amount necessary to make all school district property tax replacement payments under new Code section 257.16B. The bill appropriates the moneys in the replacement fund to the department of management for that purpose.
Under the bill, for each budget year beginning on or after July 1, 2013, each school district’s property tax replacement payment amount is equal to the school district’s weighted enrollment for the budget year multiplied by the difference of the following: (1) the state cost per pupil for the budget year beginning July 1, 2013, multiplied by 100 percent less the regular program foundation base per pupil percentage pursuant to Code section 257.1; and (2) the state cost per pupil for the budget year beginning July 1, 2012, multiplied by 100 percent less the regular program foundation base per pupil percentage pursuant to Code section 257.1.
The bill provides that if an amount appropriated for a fiscal year is insufficient to pay all school district replacement payments for the budget year, the director of the department of management shall prorate the payments from the fund.
Week 1: January 14-18
The 2013 legislative session kicked off on
Monday, January 14, 2013
. Much of the week is filled with ceremonial process, including the Governor’s Condition of the State Address, the Chief Justice’s State of the Judiciary, and introductory committee meetings. Although several bills were introduced this week, not much activity takes place as legislators attend these events and other welcome back receptions.
Once again, this session indicates different concerns among Democrats and Republicans. In the Senate, Democratic leaders prioritized Medicaid coverage and skilled job training while Republican leaders stressed the need to maintain fiscal discipline. House Republican leadership echoed its Senate counterparts’ thoughts, stating that fiscal discipline from past years has led to the current budget surplus. House Republicans also support property tax reform and education reform. House Democrats agree that education reform is important, but are concerned that new proposals could ignore existing obligations for growth and funding.
Governor’s Condition of the State Address
On Tuesday, the Governor delivered his Condition of the State address to members of the General Assembly and the public. This address outlined his priorities for the upcoming legislative session and briefly described his budget goals for the year. Governor Branstad’s priorities included (1) commercial and industrial property tax relief, (2) education reform, and (3) increases to health care funding.
The Governor also proposed a $6.5 billion state budget for the 2014 fiscal year. That budget would be an increase of 4.3 percent over the current fiscal year. Much of this additional spending would be devoted to property tax reform, education and human services, which is the department responsible for implementing mental health reform.
Governor Branstad has modified his previous proposals for property tax reform. This year, the proposal recommends a rollback of 80 percent for assessments of commercial and industrial properties over a five-year period. It also links all four property classes, agricultural, residential, commercial and industrial, and cuts the current cap on increases by half, from 4 percent down to 2 percent. This proposal is expected to cost $400 million.