StateCapitol


State Capitol Report 
Issue 1 |
February 18, 2018   
Legislative Alert - Tourism Funding
 
As the deappropriations bill has evolved, the gaming funds that go toward Regional Tourism Marketing have been on the chopping block at various stages throughout the process. Most recently, we were able to get the House in their latest version to NOT CUT the regional tourism marketing funds (leaving them capped at $900,000). In order to keep that in place, we need your help!
 
Please take a moment to reach out to your legislators and thank them for not cutting the regional tourism marketing funds in the House's version of the deappropriations bill, SF 2117. Ask them to hold the line on that AND urge them to ensure those funds are UNCAPPED in FY 2019 so the industry has the resources to market the State!
 
To find out who your legislators are, click HERE
To find a list of the Senators, click HERE
To find a list of the Representatives, click HERE 
Legislative Session Update

Six weeks of the 2018 Legislative Session are now in the rear view mirror. Monday, February 19 will be day 43 of the scheduled 100-day session. Almost halfway there... In fact, we MAY already BE halfway there. In the deappropriation bills that we will talk about a little farther down, legislators have proposed trimming the legislative per diems from 100 days down to 90 or even 85 days.
 
This doesn't mean the session would end when per diems expire. Historically, the Legislature typically goes past that date. However, the end of per diems always comes with a sense of urgency about wrapping up for the year, especially since many of the legislators are forced to continue working without the help of their clerk.
 
First Funnel
We passed a major milestone of the session this past Friday when we reached the First Funnel deadline, the date by which any policy bills that have not been passed by the committee to which they were assigned become dead for the year. That doesn't mean an idea contained in a bill is dead for the year; it can still be attached to other legislation. Tax and spending bills are exempt from the funnel.
 
The first funnel week is always chaotic due to a combination of factors. First, every bill needs to be passed by a three- (or five-) person subcommittee and then be passed out of full committee by the end of the week. This means that subcommittee meetings on each individual bill are occurring every 15 minutes starting before 8am all throughout the day. There are sometimes more than ten subcommittees meeting at one time, depending on how many locations can be identified for meetings in the building. All of these subcommittee meetings are occurring with an eye toward when the next full committee meets, as they need to ensure a bill gets on that agenda to clear the funnel.
 
If that isn't bad enough, another level of chaos is that bills are continuing to be introduced during this time at a very fast pace, sometimes exceeding 80 or 100 per day. All those new bills need to enter the subcommittee/committee mix if they are to survive the funnel, so some of them will be go from just being printed to clearing the funnel in a matter of only a few hours. For those closely tracking the process, this requires a lot of focus to ensure something doesn't slip through.
 
Late in the day, after the tourists have left the building and most lobbyists have been standing on marble floors for over 12 hours, you'll often see us pulling chairs out into the rotunda while we wait for legislators to come out of caucus.
While all of this is going on, and legislators and lobbyists are running from one meeting to another, the Capitol is filled from dawn to dusk with the normal number of visitors, advocacy groups, student tour groups and others that are enjoying the beauty of the State Capitol building.
 
Deappropriations
The deappropriations bill is still a live round at the Capitol and has not yet been agreed to by the House, Senate and Governor. The Senate passed their version, SF 2117, on February 8. Since that time, the House amended SF 2117 in committee and is awaiting agreement before they pass it through the Chamber.
 
The latest version, by the House, is the lightest on overall cuts. The Governor had proposed overall budget cuts totaling $27.1 million, the Senate passed cuts totaling $31.9 million, and the House's amendment brings the overall cuts down to $20.5 million. Every one of the proposals had held K-12 education and the property tax backfill harmless, while spreading the cuts across the rest of state government.
 
In the House's proposal, the biggest cuts are $8.1 million from Regents, $4.3 million from the Department of Human Services, $3.4 million from the Department of Corrections, $1.6 million from the Judicial Branch, $925k from the Department of Public Health, and on down the line hitting virtually every agency. The Senate and House each were able to cut $10 million less from their General Fund reductions because their versions both rely on a $10 million transfer out of the Iowa Economic Development Authority's High Quality Jobs Program (a cut of 60%, from $15.9 million down to $5.9 million).
 
Revenues Up
Speaking of cuts, part of the reason for the House's decision to go lighter on their cuts in the deappropriations bill could be a reaction to news from the non-partisan Legislative Services Agency that revenues appeared to be higher in January as compared to last year. The Iowa Department of Revenue implemented a series of timing changes that increased revenues, but even without factoring for that, state tax collections increased by over $133.1 million over last January.

 

A major piece of the revenue growth has been a surge in estimate payments, coming in $109.4 million higher for the months of December and January over the same months last year. The analysts believe the increase is due to the federal tax law changes that led many Iowans to pay the maximum amount of taxes they were able to prior to January 1st.  
 
What does this mean for the FY 2019 budget? And more importantly, the FY 2018 budget and deappropriations? Iowa's budget laws are set up so that fiscal years are distinct from one another. When you combine that with a restriction on the Governor's ability to transfer more than $50 million from emergency funds without legislative approval, it becomes unlikely that the Governor and legislators will decide that they no longer need to pass a deappropriations bill. Any downturn in the FY 2018 numbers as books are closing this Fall could mean the need for a special legislative session right before the November election which would look very bad for the party in power.

 

As for FY 2019, the uptick in revenues could definitely make enacting the FY 2019 budget a lot less painful, especially since the federal tax bill is expected to further increase Iowa's projected state revenues. The Legislature will still need to wait until the Revenue Estimating Conference meets in March to update their budget projections before they can proceed forward on a budget proposal. Remember that they are required by law to enact their budget based on the lower of the two estimates published in December and March.

 
Governor rolls out her tax proposal
This past Tuesday, Governor Kim Reynolds introduced her tax reform plan to make a number of changes to the Iowa tax code. The bills to enact her plan, SSB3195 and HSB671, were read into the Chambers later in the week and can now be viewed by the public.  
 
The package amounts to tax cuts totaling about $1.7 billion between now and 2023. The main pieces of the legislation include reductions in personal income tax rates, elimination of federal deductibility, elimination of the alternative minimum tax, an increase in the standard deduction, an increase in section 179 expensing for small businesses, and an expansion of the sales tax base to capture online sales. The proposal does not make any reductions in the property tax backfill for local governments. You can view the Governor's detailed press release about the proposal HERE.
 
The House and the Senate will now begin sifting through the details of the Governor's proposal and look to either introduce their own bills or to make modifications to the Governor's plans. Members in both the House and the Senate have indicated they are working on plans which include an increase in the state sales tax which would trigger the funding (IWILL) of 3/8 cent into the Natural Resources and Outdoor Recreation Trust Fund. There is clearly a long ways to go yet this session to reach consensus, and we don't expect to see much more than high level talks until the REC projections in March are released.
Tourism Industry Issues
 
School Start Date
With your help, we were able to keep School Start Date legislation from surviving the funnel.  However, there are still ways for changes to advance, so we will be watching this issue closely.  Also, we anticipate the pressure on this issue to increase as we head toward 2019 (when August 23rd falls on a Friday), so be sure to keep talking to your legislators about this issue.
 
Religious Freedom Restoration Act
Legislation that would establish a Religious Freedom exemption for business owners ( SF2154/HF2209/SSB3171) did survive the funnel in the Senate, being passed by the Senate Local Government Committee on a party line 7-4 vote. The bill was introduced by 19 Republican Senators and 23 Republican House members, and would change the burden of proof for business owners that claim a religious freedom exemption to make it harder for the state and local governments to enforce equal protection. 
 
The debate was quite contentious with supporters of the bill showing video clips of former President Bill Clinton signing the federal Religious Freedom Act into law, while opponents shared extensive quotes from conservative justice Scalia's majority opinion he penned when the Supreme Court initially struck down the law. Supporters claim that the bill would protect owners of businesses from being forced to do business with people whose own beliefs they disagree with.  Opponents, however, note that the bill is written very loosely and could set a dangerous precedent that legalizes discrimination. 
 
TFI has registered in opposition to the legislation, along with the Iowa Chamber Alliance and bunch of regional chambers, the Federation of Iowa Insurers, the Iowa Business Council, the Association of Business & Industry, and corporations such as Google, Microsoft, Principal, Meredith, Wellmark, Facebook, Apple and Amazon. While SSB 3171 did survive the funnel and will be renumbered as a new Senate file, the legislation faces an uphill battle in gaining approval in the full Senate.
 
DRAM Shop Update
The House Commerce Committee on February 14 was able to pass the DRAM Shop reform bill (HF 594) out of committee to keep it alive. However, much work needs to be done by the folks in our industry to spread the word on how crippling the current system is on Iowa businesses. The vote in committee was 13-10 with all committee Democrats and Rep. Grassley voting against the bill.
 
The Iowa Trial Attorneys are pulling out all the stops on this issue. They have been alleging that passage of this bill would make life easier for drunk drivers and are giving people the impression that DRAM is the only insurance their attorneys ever sue under after a drunk driving case. This was on full display in committee when a number of committee members - Reps. Meyer, McConkey, Kressig, Ourth and Kacena - all spoke against the bill while referencing the $175,000 caps in the bill and saying that a victim's life is worth more than that. Rep. Best, the bill's floor manager, pointed out that DRAM is only a part of the victim compensation that attorneys pursue and that the drunk driver also needs to bear responsibility.
 
We anticipate the Trial Attorneys continuing to turn up the heat on this bill, so please take some time to look at the DRAM Toolkit that the Iowa Restaurant Association put together and weigh in with your legislators! This issue has been simmering for years and we finally have a bill that is showing some significant progress. Efforts by the Trial Attorneys to convince legislators to spend more time studying the issue ring hollow when the restaurant industry has been asking for help with this issue for several years. The fact is - Iowa has the 46th best liquor liability insurance system, and by far the worst in the Midwest.
  

Post-First Funnel Bill Tracker List
Listed below in the FIRST Table are bills we are tracking for you that SURVIVED the first funnel deadline. In the SECOND table, we list the bills we are tracking for you that DIED in the funnel (though be advised a similar version may still be alive). Also, note that some bills in the Dead bill list are technically still alive because they are Ways & Means or Appropriations bills from last year that are listed there because legislators have so far not shown any interest in moving forward this year.
 
Bills Still Alive
 
HF2038 
Nonreversion/Reallocation of State Funds
Summary | Details 
House Appropriations Committee 
 
Allows state agencies to keep up to 10% of the funds appropriated that are unencumbered or unobligated at the close of the fiscal year (funds won't revert).
HF2046 
Sales Tax Collection
Summary | Details 
House Ways & Means Committee 
 
Amends definition of "retailer maintaining a place of business in this state" for the collection of sales tax from out-of-state retailers.
HF2131 
Hotel/Motel Tax Exemption
Summary | Details 
House Floor
 
Extends the length of a room rental to qualify for the state and local hotel/motel taxes from 31 consecutive days to 90 or more consecutive days.
HF2260 
Pesticide Application in Lakes
Summary | Details 
House Floor
 
Prohibits pesticide application in lakes under certain circumstances.
HF2341 
Safe Operation of Bicycles
Summary | Details 
House Floor
 
Makes several provisions for the safe operation of bicycles.
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.
HF619 
State Park Fees and Privileges
Summary | Details 
House Floor
 
Authorizes DNR to establish fees for camping, use of rental facilities, and other special privileges at state parks and recreation areas under the DNR's jurisdiction.
HSB592 
Sports Betting
Summary | Details 
House Floor
 
Authorizes gambling licensees to conduct sports betting.
HSB645 
Water Quality Programs
Summary | Details 
House Floor
 
Makes changes to existing water quality programs.
HSB658 
Fair Concessions Payment
Summary | Details 
House Floor
 
Allows a participant in an amusement concession at a fair to pay by credit card.
SF2069 
Forest Reservation Property Tax Exemption
Summary | Details 
Senate Ways & Means Committee 
 
Lowers the property tax exemption for forest reservations.
SF2074 
Raceway Facility Construction Sales Tax Rebate
Summary | Details 
Senate Ways & Means Committee 
 
Makes changes to sales tax rebates for construction at certain raceway facilities.
SF2080 
State General Fund Expenditure Limitation
Summary | Details 
Senate Appropriations Committee 
 
Revises calculations for the general fund expenditure limitation, increases reserve fund balances, creates a safety net fund, creates an Iowa personal income tax rate reduction fund, and provides for related state personal income tax rate reductions.
SF2117 
FY18 Deappropriation
Summary | Details 
House Floor
 
Cuts the current fiscal year (FY18) budget by $50.1 million, about $20 million more than the Governors' recommendation.  Cuts regional tourism marketing, skilled worker and job creation fund, hawk-i, autism support program fund, Regents universities, community colleges, vocational rehabilitation, autism support program, human services,
 
SF2161 
Agriculture and Natural Resources Programs
Summary | Details 
Senate Ways & Means Committee 
 
Amends several agriculture and natural resources programs.
SF2169 
DRAM Shop Revision
Summary | Details 
Senate Floor
 
Limits the liability of an alcoholic beverage licensee or permittee for certain alcohol-related injuries.
SF2292 
Vessel Registration and Title
Summary | Details 
Senate Floor
 
Modifies provisions relating to the registration and titling of vessels.
SF2310 
Alcoholic Beverage Control
Summary | Details 
Senate Floor
 
Makes changes related to alcoholic beverage control and matters under the purview of the alcoholic beverages division of the department of commerce.
SF512 
Water Quality/Wastewater Treatment
Summary | Details 
Signed
 
Modifies existing wastewater treatment program, establishes new water quality programs, and creates a water service excise tax and sales tax exemption.
SSB3076 
State Park Fees
Summary | Details 
Senate Ways & Means Committee 
 
Allows DNR to establish fees for camping and rental facilities at state parks and recreation areas.
SSB3171 
Religious Freedom Act
Summary | Details 
Senate Floor
 
Changes the burden of proof for business owners that claim a religious freedom exemption to make it harder for the state and local governments to enforce equal protection.  
SSB3195 
Tax Reform
Summary | Details 
Senate Ways & Means Committee 
 
Makes changes to income taxes, the sales and use taxes and local option sales tax, the hotel and motel excise tax, the automobile rental excise tax, the Iowa educational savings plan trust, and the Iowa ABLE savings plan trust.
 
DEAD Bills
 
HF1  
Executive Branch Program/Project Review
Summary | Details 
House State Government Committee 
 
Establishes an ongoing system of review and ongoing repeal dates for Executive Branch programs and projects.
HF106 
REAP Fund
Summary | Details 
House Natural Resources Committee 
 
Reallocates REAP funding.
HF107 
Iowa Zoo Fund
Summary | Details 
House Ways & Means Committee 
 
Creates the Iowa Zoo Fund and a $1 income tax return checkoff for the fund.
HF2096 
Midwest Interstate Passenger Rail Compact
Summary | Details 
House Transportation Committee 
 
Establishes the Midwest Interstate Passenger Rail Compact.
HF2164 
Transgender Access to Public Facilities
Summary | Details 
House Judiciary Committee 
 
Provides that educational institutions are not required to allow access to toilet facilities, locker rooms, or living facilities designated for use by persons of one sex to a person of the other sex.
 
HF2217 
Turkey and Deer Hunting Licenses
Summary | Details 
House Natural Resources Committee 
 
Allows a farm owner, tenant, or family member of the farm owner or tenant to use the turkey or deer hunting licenses issued without fee during any bow or firearm season.
HF2223 
Fishing on Private Lakes and Ponds
Summary | Details 
House Natural Resources Committee 
 
Allows a person to fish on a private lake or pond without a license.
HF227 
Lake Macbride State Park
Summary | Details 
House Natural Resources Committee 
 
Regulates closing time for and use of alcoholic beverages in Lake Macbride State Park.
HF245 
Cultural Trust Fund
Summary | Details 
House Appropriations Committee 
 
Allocates $6,135,000 from the taxpayer trust fund to the Iowa cultural trust fund for FY2016-2017.
HF246 
Public Art in State Buildings
Summary | Details 
House State Government Committee 
 
Eliminates current requirements that state building designers work with the department of cultural affairs to integrate fine arts elements into building construction.
HF283 
Crossbow Deer Hunting License
Summary | Details 
House Natural Resources Committee 
 
Allows Iowa residents age 70 or older to be issued a special senior statewide antlered or any sex deer crossbow hunting license.
HF284 
Hunting/Fishing Outfitter and Guides Registration
Summary | Details 
House Natural Resources Committee 
 
Requires hunting and fishing outfitters and guides to be registered.
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. 
HF328 
Soil and Water Conservation Practice
Summary | Details 
House Agriculture Committee 
 
Exempts certain soil and water conservation practices from being considered as the practice of engineering.
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.   
HF378 
Clean Water Fund
Summary | Details 
House Agriculture Committee 
 
Establishes a clean water fund supported by a separate state assessment of agricultural commodity organizations.
 
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.
HF612 
Water Quality Programs
Summary | Details 
Withdrawn
 
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.
HF631 
Hunting, Fishing, Fur Harvesting Fees
Summary | Details 
Senate Ways & Means Committee 
 
Increases certain fees and reallocates certain revenues related to hunting, fishing, and fur harvesting. Successor to HF574.
HF655 
Local Option Sales Tax
Summary | Details 
House Floor
 
Makes changes to the process for approving and imposing a the local option sales and services tax.
HF76 
Local Option Sales Tax Rate
Summary | Details 
House Natural Resources Committee 
 
Allows an increase in the maximum local option sales tax rate to fund local natural resources and outdoor recreation projects.
HF83 
Motor Vehicles Passing Bicyclists
Summary | Details 
House Transportation Committee 
 
Prohibits motor vehicles that are passing bicyclists on a highway from bringing the vehicle within five feet of the bicycle.
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.
HJR3 
Home Rule/School Districts Constitutional Amendment
Summary | Details 
House Education Committee 
 
Amends the State Constitution to provide home rule powers and authority for school districts.
HJR4 
Right to Hunt, Fish, Trap, Harvest Wildlife Constitutional Amendment
Summary | Details 
House Natural Resources Committee 
 
Proposes a state constitutional amendment establishing the right to hunt, fish, trap, and harvest wildlife.
HSB102 
Native Wine Manufacturers
Summary | Details 
House Commerce Committee 
 
Authorizes a native wine manufacturer to sell native wine at retail for consumption on the premises of the manufacturer or in a retail establishment operated by the manufacturer.
HSB138 
Governor's Deregulation Bill
Summary | Details 
House State Government Committee 
 
Eliminates the certificate of need process for hospitals, medical providers, and birthing centers (but retains it for nursing homes).  Eliminates licensure for several professions (including mental health counselors, social workers, massage therapists, and more).
HSB179 
Alcoholic Beverage Control
Summary | Details 
House Commerce Committee 
 
Provides limitations on business interests concerning alcoholic beverage control.
HSB74 
Liquor Sales
Summary | Details 
House Commerce Committee 
 
Allows a person holding a class "C" native wine permit and a class "A" native wine permit to purchase alcoholic liquor from a class "E" liquor control licensee for sale at retail.
SF110 
Water Quality and Soil Conservation Assessment
Summary | Details 
Senate Agriculture Committee 
 
Requires commodity organizations to establish a separate state assessment for water quality and soil conservation, if approved by a majority of its members at a referendum.
SF133 
Micro-Distilled Spirits Promotion
Summary | Details 
Senate Commerce Committee 
 
Renames the Iowa Wine and Beer Promotion Board and appropriates funds for the promotion of Iowa wine, beer, and spirits.
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.
SF161 
Catfish
Summary | Details 
Senate Natural Resources & Environment Committee 
 
Allows catfish to be taken by hand fishing. 
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%.
SF20 
Fishing License Fees
Summary | Details 
Senate State Government Committee 
 
Increases fees for certain fishing licenses by 50 percent.
SF2063 
School Calendar Start Date
Summary | Details 
Senate Education Committee 
 
Allows a school district or accredited nonpublic school to start its school calendar on the Wednesday before August 23 if August 23 falls on a Thursday or Friday.
SF2064 
School Start Date
Summary | Details 
Senate Education Committee 
 
Makes the earliest school start date August 23 or the Monday following the closing day of the annual Iowa state fair, whichever occurs earlier.
SF217 
Enhance Iowa Fund
Summary | Details 
Senate Appropriations Committee 
 
Makes contingent appropriations of $25 million to the Enhance Iowa Fund.
SF2269 
Working Farm Tourist Attraction Feasibility Study
Summary | Details 
Senate Agriculture Committee 
 
Directs EDA and DALS to conduct a feasibility study regarding the establishment of a modern working farm tourist attraction.
SF258 
Hunting Restrictions
Summary | Details 
House Natural Resources Committee 
 
Prohibits the natural resource commission from restricting hunting on specific private property or for the hunting of a particular wild animal, so long as the hunter is otherwise qualified to hunt in this state, purchases the appropriate fees/licenses, and adheres to regulations.
SF259 
Operation of Motorboats on Lake Macbride
Summary | Details 
House Natural Resources Committee 
 
Allow the operation of motorboats with power units exceeding 10 horsepower at any time on Lake Macbride so long as the motorboats are operated at no-wake speed.
SF289 
Speed Limit Increase
Summary | Details 
Senate Transportation Committee 
 
Increases interstate highway speed limit to 75.
SF345 
Snowmobile Fund
Summary | Details 
Senate Transportation Committee 
 
Increases the share of the special snowmobile fund allocated to political subdivisions or private organizations; allows funds to be use for trail grooming equipment; and makes exemption from snowmobile registration requirements.
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.
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.
SF46 
Gambling License Moratorium
Summary | Details 
Senate State Government Committee 
 
Establishes a moratorium preventing the Racing and Gaming Commission from issuing a new license to conduct gambling games on an excursion gambling boat, gambling structure, or at a pari-mutuel racetrack.
SF48 
MS Support Fund
Summary | Details 
Senate State Government Committee 
 
Creates a lottery game to benefit individuals with Multiple Sclerosis (MS).
SJR4 
Right to Hunt, Fish, Trap, Harvest Wildlife Constitutional Amendment
Summary | Details 
Senate Natural Resources & Environment Committee 
 
Proposes a state constitutional amendment establishing the right to hunt, fish, trap, and harvest wildlife.
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).
SSB1154 
Minimum Wage
Summary | Details 
Senate Local Government Committee 
 
Prohibits a county or city from adopting employment terms or conditions that exceed or conflict with federal or state requirements, including minimum wage, employment leave, hiring practices, employment benefits, and scheduling practices.
SSB1162 
Hotel/Motel Tax Exemption
Summary | Details 
Senate Ways & Means Committee 
 
Modifies hotel/motel tax exemption.
  
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