State Capitol Report 
 Issue 2 | February 5, 2017  

Legislative Session Update

Monday, February 6, 2017, marks the 29th Session Day and the start of the fifth week of the 2017 legislative session. The Deappropriations bill that trimmed $113 million from the FY 2017 budget also trimmed 10 days from the legislative session (sort of) by cutting legislative per diems down to 100 days (instead of 110). The Legislature's target adjournment date is now April 18. The "sort of" is a reminder that the end of per diems is not a hard deadline for the end of session; they can, and often do, go past that date.
 
The first four weeks of session always contain a lot of very necessary busy work - speeches by the Governor, Chief Justice and Iowa National Guard, bill introductions by the dozen and getting freshman legislators up-to-speed on the process of committee and floor work. Because of all this, it is often difficult for the Legislature to grapple with many policy issues in the beginning of the session. This year has been no different, so they have honed in on three issues that they want/need to get done early: the deappropriations bill, school funding and legislation to remove state funding to Planned Parenthood.
 
The deappropriations bill has been signed by the Governor and is being implemented now by the Governor's team. The bill consists of about $88 million in cuts and about $25 million in fund transfers. The cuts hit most of state government - except K-12 schools and a few other areas - with a 4.5 percent reduction in the current fiscal year that ends June 30. The Governor's budget then proposes to extend that lower amount of funding to state agencies into the next two fiscal years (FY 2018 and FY 2019).
 
The fund transfer portion of the bill collects about $25 million from six pots of money at the State, the biggest of which was elimination of the $12 million Grow Iowa Value Fund, revenues remaining from the previous program. By far, the most contentious transfer (and the most talked about piece of the entire bill) was the complete elimination of the $6.135 million Iowa Cultural Trust Fund which was used to fund statewide educational programs to promote participation in, expanded support of, and local endowment building for Iowa nonprofit arts, history, and sciences and humanities organizations.  If you want to know more about the Deappropriation Bill, you can review an analysis by the non-partisan Legislative Services Agency by clicking HERE.
 
The legislation to remove state funding to Planned Parenthood has passed the Senate and awaits House approval. It would eliminate the State's Family Planning waiver, a roughly $300,000 state expenditure that draws down about $3 million in federal matching funds.
 
School funding for the upcoming year has also passed the Senate and is awaiting consideration by the House this week. The Legislature is proposing to increase funding to Iowa's K-12 schools by 1.11 percent, or $40 million.   The Governor had proposed a two percent increase, but legislators were unwilling to consider that amount. They argue that school funding has increased by $640 million over the last six years, while most other state agencies have seen cuts, some of them multiple cuts. Senate President Jack Whitver noted in his newsletter that "n early 56 percent of the entire state of Iowa budget is allocated to education spending." School officials have argued that anything less than a four percent increase will lead to layoffs and larger class sizes.
 
Those three issues have generated a lot of activity with activists on all sides at the Capitol. The building has been loaded with protestors multiple times, and legislators have been forced to continue committee work until late at night in order to continue moving those bills forward. Late night committee and floor work is typically rare early in the session.
 
Once those three issues are in the rear view mirror, the goals of the rest of the session will begin to come into focus. Other than the FY 2018 and 2019 budgets and changes to collective bargaining, many in the Capitol are anticipating the Legislature will take a "less is more" approach and try to save major policy initiatives until next year. There is a chance though that they could take up any number of other issues, such as water quality or tax reform, if they feel enough pressure from Iowans.
 
On a lighter note, legislators in the House enjoyed a brief retreat from the serious issues last week when Rep. Rob Bacon of Slater was able to get House colleagues Tom Moore and Joel Fry to collaborate on a resolution to honor Iowa's pork producers. House Resolution 3 was introduced by "Fry, Moore & Bacon" and passed on a voice vote.
 
Finally, on January 31, the full make-up of the General Assembly became complete when Monica Kurth won the Davenport special election, becoming the newest member of the Iowa House of Representatives. Rep. Kurth is a Democrat, so this does not change the makeup of the Iowa House (it remains 59 Republicans, 41 Democrats). Rep. Kurth is a Scott Community College educator and counselor. If you live in this district (House District 89), you can contact Rep. Kurth at her legislative email (monica.kurth@legis.iowa.gov).
Legislative Showcase a Success

Thank You to all those that attended the 28th Annual Legislative Showcase!! It was another great event this year, at which we hosted close to 100 of the legislators! The next morning, legislators were each given a booklet of Fast Facts about the Tourism industry and its effect on the Iowa economy.

Please take a moment this week to contact your legislators, mention the Fast Facts that arrived in their mailboxes, and ask them if they have any follow-up questions or need further information. Offer to BE A RESOURCE for them!

Alcohol task force report
As you may recall, Governor Branstad last year asked Debi Durham, Director of the Iowa Economic Development Authority, and Stephen Larson, Administrator of the Iowa Alcoholic Beverages Division, to convene a task force to conduct a comprehensive review of Iowa's alcohol laws and determine steps that could be taken to improve the business climate for industry while not undercutting Iowa's existing three-tier system.
 
The study group consisted of 13 stakeholders that met over five months. The produced a final report (link HERE) with recommendations, some legislative and some longer term. We will be watching in the months ahead as legislation comes forth to advance some of these recommendations.
 
Tight Budget
In the weeks ahead, legislators will begin crafting the FY 2018 and 2019 budgets. For FY 2018, the House has number showing they can allocate up to $7.4555 Billion in appropriations. On the current projections, now that the FY 2017 cuts have been made, they anticipate having up to $200.9 million in new revenues. However, $84.6 million of that new revenue is already spoken for in the following five areas:
  • Medicaid - The Governor's budget calls for a $42 million more (to almost 1.35B next year)
  • The Cash Reserve Fund and the Economic Emergency Fund are, by law, to be equal to 10 percent of the General Fund budget. They anticipate needing $20.4 million to meet this requirement.
  • Increases in pharmaceutical costs in Iowa's prisons ($2.2 million)
  • Increased contribution to the Peace Officers Retirement System (to $5M, was temporarily lowered to $2.5 M last year)
  • Technology Funding ($17.5 M) that can no longer be paid for out of the Infrastructure Budget
When the proposed $40 million to schools is added in, this leaves $76.3 million in new revenues, less than the $88 million they would need if they wanted to restore the cuts that were just made. There will no doubt be a lot of pressure on legislators on how (or even if) they allocate those resources.
 
What does this mean for us?
Advocates for Tourism funding, Water Quality funding and Quality of Life initiatives are going to need to be showing up and making their voices heard!! Years of cuts and frozen budgets at the Iowa Economic Development Authority (IEDA) have taken their toll, and we should not stand by silently and watch the level of funding from the deappropriations bill become the level allocated for the next two years.

Call or email your legislators today, and tell them to increase funding for IEDA and for Tourism! We are a major revenue generator!!

Bills Being Tracked for TFI
This is a list of the bills being tracked for TFI 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/bills.cfm?ClientID=6&NoHeader=0

Bill# Title Status
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.
HF100
Environmental Protection Agency Regulations
Summary | Details
House Natural Resources Committee

Nullifies the regulations of the US Environmental Protection Agency in Iowa.
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.
HF186
Hotel/Motel Tax
Summary | Details
House Ways & Means Committee

Permits a land use district to impose the local hotel and motel tax upon the renting of any lodging within the district.
HF26
School Board Powers
Summary | Details
House Education Committee

Allows a school board to exercise any power, not inconsistent with the laws of the general assembly, related to the operation, control, and supervision of the public schools located within its district boundaries.
HF69
Trespassing Penalties
Summary | Details
House Floor

Modifies penalties for trespassing.
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.
HF91
Hotel/Motel Tax Exemption
Summary | Details
House Ways & Means Committee

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.
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.
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.
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.
HSB9
Primary Road Fund
Summary | Details
House Transportation Committee

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.
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.
SF126
Operation of Motorboats on Lake Macbride
Summary | Details
Senate Natural Resources & Environment 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.
SF127
Raceway Facility Sales and Use Tax Rebate
Summary | Details
Senate Ways & Means Committee

Modifies the sales and use tax rebate to the owner or operator of a raceway facility.
SF130
Appropriations for FY2016-17
Summary | Details
Signed

Makes appropriations reductions and reallocations for FY2016-17.
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.
SF143
Bass Fishing Tournaments
Summary | Details
Senate Natural Resources & Environment Committee

Establishes requirements for bass fishing tournaments on public waters and requires a permit to conduct such tournaments.
SF144
Hunting Restrictions
Summary | Details
Senate Natural Resources & Environment 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.
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%.
SF176
IEDA Technical Corrections
Summary | Details
Senate Floor

Makes technical corrections to IEDA programs and projects.
SF20
Fishing License Fees
Summary | Details
Senate State Government Committee

Increases fees for certain fishing licenses by 50 percent.
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.
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).
SJR1
State Spending Limit/Constitutional Amendment
Summary | Details
Senate 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).
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.
SSB1034
Water Quality/Wastewater Treatment
Summary | Details
Senate Natural Resources & Environment Committee

Modifies existing wastewater treatment program, establishes new water quality programs, and creates a water service excise tax and sales tax exemption.
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