Legislative News
Keep up the momentum and donate to IIPAC by the June 30 deadline
With a historic legislative session completed, ABI is working to sustain our momentum and grow on the sound policy reforms and savings Iowa employers gained in 2017. We need your help to ensure pro-jobs candidates retain their seats in the Iowa House and Senate. Please consider a $100 personal contribution to IIPAC before midnight on Friday, June 30. With more than $41 million in savings for Iowa employers and their employees this year, will you please consider a personal IIPAC investment? Click here to donate.

New laws go into effect Saturday, July 1
Each year the Iowa Legislature passes hundreds of pieces of legislation. Some of the reforms advocated for by ABI are already in effect, but you will see several new laws go into effect on Saturday, July 1 that will affect how you do business.

Workers' compensation reform ( HF 518 ): ABI's top priority bill for the 2017 session, the bill initiated major workers' compensation reform to rebalance the system. The legislation has already resulted in a 3.9 percent workers compensation rate reduction for 2017 amounting to $39 million in savings to Iowa employers. For a breakdown of this important legislation, click here.

Competitive bidding ( HF 293 ):Allows Iowa manufacturers to competitively bid for contracts from departments and agencies against Iowa Prison Industries.

Small business development ( HF 607 ): Allows craft liquor distillers to mix cocktails and pour drinks for their patrons. It allows for an increase in production of alcohol at distillers facilities. It also increases the number of bottles of product a customer may buy.

Texting while driving   (SF 234) : Makes texting while driving a primary offense, which means law enforcement officers may now pull over drivers who they suspect are using their phones to write, send or view electronic messages. Examples include: texting, browsing the internet, reading emails or taking pictures. Drivers can still use their phones to make calls and for GPS.

Requalification for unemployment benefits ( HF 542 ): Increases the amount an individual must earn annually to qualify for a second year of unemployment benefits from the lowest in the nation $250, to eight times the average weekly amount for that individual. This puts Iowa on par with many other states for requalification for a second benefit year. (Actual effective date July 2, 2017)

Jobs impact statement for rulemaking ( SF 1 ): Codifies an earlier executive order by then Gov. Terry Branstad, which requires a jobs impact statement and cost benefit analysis for every proposed rule. It also requires agencies to minimize impacts on jobs before proposing a rule.

Drug testing ( SF 32 ): Allows employers to use hair for drug testing prospective employees.

Duty of care to trespassers ( SF 260 ):  An ABI bill, this legislation codifies Iowa's common law on the duty of care owed to trespassers on land to ensure that courts cannot unilaterally expand this duty.

Asbestos trust claims ( SF 376 ): Curbs abuses and increases transparency in asbestos trust claims. Ensures those who are ill with asbestos-related illnesses are compensated first.

Property tax assessments ( HF 478 ) : Mandates new education requirements for assessors. Provides for the removal of an assessor for not adhering to proper assessment methods. Beginning January 1, 2018, prohibits assessors from using sales receipts and other financial data for commercial and industrial property assessments and shifts the burden of proof from the complainant to the assessor when the complainant offers competent evidence that the market value of the property is different than that determined by the assessor.

Theft of rental property ( SF 403 ): Makes theft of equipment rental property a crime.

Statute of repose ( SF 413 ):  Reduces the amount of time when a lawsuit can be brought for a defective condition discovered after construction to eight years for commercial property and 10 years for residential property, unless there is evidence of fraudulent concealment. If the condition is detected within one year from the expiration of the statute of repose, the period extends another year.

Medical malpractice tort reform ( SF 465 ): Caps noneconomic damages in medical
malpractice claims at $250,000 unless actual malice is shown or the jury finds the plaintiff has certain serious consequences caused by the malpractice. Sets new standards for who may qualify as an expert witness and requires a certificate of merit.

Trespassing fines ( HF 69 ): Clarifies when a trespasser has received notice and makes trespassing a criminal fine. Specifies that an officer may arrest a trespasser for refusing to leave or returning to the property.

Regulatory reform ( SF 331 ): Allows electric and gas utilities that are not required to be rate-regulated to submit federally required forms or reports to the IUB in lieu of duplicative reports.

Texting penalties  ( SF 444 ): Establishes a penalty for drivers who kill others when using their phones unlawfully. Those found guilty could receive a Class C Felony, which is punishable by up to 10 years in prison. It also creates at 24/7 sobriety program that requires those convicted of an OWI to participate in a twice daily monitoring program.

Already in effect
State preemption of wage, benefits and hiring practices ( HF 295 ): Prohibits local governments from creating a patchwork of local ordinances mandating minimum wages, worker benefits and hiring practices on businesses. Voided existing ordinances regulating these areas.

OSHA penalties ( HF 529 ) Increases OSHA penalties and includes automatic indexing. The legislation was required to conform to federal rules updating the OSHA program.

PLA prohibition ( SF 438 ): Prevents state and local governments from mandating the use of project labor agreements for public construction projects.

Medical cannabidiol program expansion ( HF 524 ):  Expands the state's medical cannabidiol program to authorize cannabidiol use from only those with intractable epilepsy to patients with additional medical conditions. The legislation retains the 3 percent THC limit in cannabidiol in Iowa and sunsets and replaces the existing medical cannabidiol program. It allows cannabidiol dispensaries in Iowa, allows reciprocity with Minnesota, and contains employer drug testing protections to allow employers to continue and enforce drug testing policies.

Public employment reform ( HF 291 ): A number of collective bargaining reforms for most public employees. The law reduces the number of subjects a union can bargain for. Unions now have the financial responsibility for collecting dues versus taxpayers. It also requires public workers to recertify the unions that bargain on their behalf for every new contract. These are just a few of the reforms that became law earlier this year.

Read more:

Jon Jacobsen wins House District 22 special election
Jon Jacobsen emerged victorious in a special election Tuesday to serve out the remainder of the late Rep. Greg Forristall's term representing Iowa House District 22. Jacobsen received 43.9 perent of the total vote (1,069 votes). Not far behind was Independent candidate Carol Forristall, Rep. Forristall's wife, who received 32.9 percent of the total vote (803 votes). Jacobsen is a vice president at Security National Bank in Council Bluffs and is also on the Pottawattamie GOP Central Committee.

Federal Spotlight: Senate GOP unveils health care overhaul legislation
U.S. Senate Majority Leader Mitch McConnell (R-KY) released a draft of the Senate GOP's replacement plan for the Affordable Care Act (ACA) last week. Congressional Republicans have long sought to repeal and replace the ACA, and the Better Care Reconciliation Act is the Senate GOP's mechanism to do that. Some of the highlights of the initial bill include:
  • Repealing the ACA individual mandate
  • Allowing states to waive the federal mandate on what insurers must cover
  • Keeping ACA expansion of Medicaid until 2021; then phases it out over the next few years
  • Eliminating many costly taxes associated with ACA
  • Defunding Planned Parenthood for one year
There is little room for error if Republicans are to pass a bill in the upper chamber. Democrats have lined up against it and multiple GOP Senators from both spectrums of the party have also expressed opposition. Using arcane budget rules, the GOP can only afford to lose two senators in their caucus to pass the legislation. Sen. McConnell wanted to have a vote before the July 4th recess, but that isn't going to happen because of a lack of support for the bill. Negotiations are set to continue within the Republican caucus over the break.

Federal Spotlight: EPA begins rescinding Waters of the United States rule
In a victory for businesses, farmers and other landowners, Environmental Protection Agency Administrator Scott Pruitt announced Tuesday that the EPA and the Army Corp of Engineers would begin the process of repealing the 2015 Clean Water rule, also known as Waters of the United States. The rule, established under the Obama administration, greatly expanded the definition of bodies of waters that should be protected under the 1972 Clean Water Act. Gov. Kim Reynolds praised the decision in a press release sent out on Tuesday.
Bringing Boji Back: Book your hotel by July 7
Join us Aug. 3-4 in Okoboji for a special Bringing Boji Back Connecting Statewide Leaders  event featuring an exclusive tour of Tecton Industries in Spencer, a presentation by Ro Crosbie, president and founder of Tero International, premier networking and more! Register now and book your room by July 7 to take advantage of the ABI room block. Click here for more information.
From the Desk of...
Tax considerations for selling a business

Jean Massmann, CPA, Partner

Selling a business? A transaction can be structured in a number of ways and there is usually a significant amount of negotiation that is required to agree on the structure since it has important tax, legal, and business consequences for all parties.
A variety of legal and tax issues must be considered before the sale transaction commences and throughout the process in order to maximize the available tax benefits and minimize risk. These include:

  • Preparing the company for the sale.
  • Determining whether the sale should be of an equity interest versus an asset sale.
  • Using tax mitigation strategies available, including allocation of purchase price, structuring an installment sale, arranging for contingent consideration or an earn-out, or even maintaining an equity position in the company post sale. 
To fulfill the above considerations, an important step in any transaction will be identifying a team of advisors. This may include key executives of the company, legal counsel, financial advisors and accountants. The advisor team will want to understand the reasons for deciding to sell a business as well as the purchaser's motivation for purchasing the business in order for the team to advise on the framework for the transaction.
A buyer will want to conduct his or her own due diligence on the company. Self-conducting this investigation before the purchaser conducts its own due diligence provides the seller the opportunity to cure any issues that may delay or adversely affect the sale, or formulate a strategy to negotiate around such issues.
While it may seem that the interests of buyer and seller are always opposed, the desire to complete the transaction usually provides motivation to strike a deal that satisfies everyone. Below we've outlined several tax considerations for different sale options and how they can have drastically different tax consequences for the parties involved.  Keep reading...
Top News
Reynolds visits UEA during tour to boost Iowa workforce  (The Gazette) Gov. Kim Reynolds and Lt. Gov. Adam Gregg visited ABI member United Equipment Accessories in Waverly this week where the received a tour and discussed workforce challenges with past ABI Chair Mark Hanawalt.

Musco Lighting featured in latest Iowa Entrepreneur episode (IPTV)
Musco Lighting was featured in the most recent episode of Iowa Entrepreneur, an IPTV show that highlights Iowa entrepreneurs.
Governor's Club Sponsors