TIF Alert & PDI Policy Perspectives

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!!

http://www.infonetiowa.org/calendar/events/

If you know of other legislative forums that do not appear on this list, let us know at [email protected]!

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