December 17, 2020
LEGISLATIVE NEWS
ABI January Virtual Legislative Briefing; Legislative Reception Postponed
The ABI public policy team will once again provide ABI members a preview of the legislative session, this year in a virtual setting. Given ongoing restrictions and to ensure the health and safety of all members, last Wednesday the ABI Executive Committee voted to postpone the annual legislative reception and move the legislative briefing to a virtual format. 

The virtual Zoom legislative briefing will be held Wednesday, Jan. 13 at 4 p.m., the same time as originally scheduled. ABI members will be able to take advantage of this by registering online. There is no cost to register for the virtual briefing. If you have already registered for the reception and briefing, you will automatically be registered for the virtual briefing. Additionally, your registration will be transferred to the reception when the new date has been finalized. Stay tuned for more information in the coming weeks. A special thank you to our sponsors of this event.  

Gov. Reynolds Announces Updates to Coronavirus Proclamation; Administration Seeks Employer Input on Vaccination Deployment
On Wednesday, Dec. 16, 2020, Iowa Gov. Reynolds held a press conference and announced that bars and restaurants may return to normal hours of operation while respecting distancing and masking requirements previously prescribed. Limits on the number of persons at gatherings have been lifted, but social distancing of six feet is still required. No changes have been made to the mask requirements at this time.
 
During the press conference, IDPH/DHS Director Kelly Garcia also spoke about the Iowa Infectious Disease Advisory Council (IDAC) meetings and vaccine prioritization. Minutes from the group’s meetings will be available on the IDPH website, in addition to a dashboard with the number of Iowans who have been vaccinated. 

ABI staff begins meetings today with Department of Public Health representatives to ensure our members' interests are advanced. If you have input or questions please contact JD Davis

REC Projects Substantive Growth for FY22; FY21 Remains Steady
Last Friday, the Revenue Estimating Conference (REC) met for its December meeting and is projecting a positive outlook concerning Iowa’s budget moving forward. The REC, a three-person panel that provides budget recommendations to the Legislature and Gov. Reynolds, forecasts a budget of $8,265.7 billion for Fiscal Year (FY) 2022. This is 3.7% or $296.4 million more in revenue than the current projection for FY21. The panel also increased its budget estimate for the current fiscal year, going from $7,911.7 billion in October to $7,969.3 billion or an increase of $57.6 million in December.

Gov. Reynolds must use the December REC estimate to formulate her budget recommendations for the upcoming fiscal year, while the Legislature must use the lower estimate between December and the upcoming REC estimate in March. Iowa has had one of the most resilient budgets and economies in the country since COVID-19 and government orders shut down the economy in March. This is largely due to the governor deeming approximately 80% of Iowa’s workforce as essential, prudent budgeting by the Legislature, the $1.25 billion block grant Iowa received via the CARES Act and a diversified economy.

Tens of Thousands of Iowa Employers Will See Unemployment Tax Relief Next Year Thanks to Gov. Reynolds’ Actions
Gov. Reynolds’ Office issued a press release on Monday that included a number of different measures she has taken to provide economic relief to small businesses, farmers, healthcare providers, individual families and others through the CARES Act block grant that Iowa received earlier this year.

One action she took that will be paramount to the business community’s recovery is the infusion of $490 million into the unemployment trust fund. As unemployment claims rose throughout the spring and summer, the trust fund was being drained of resources.

The governor’s action prevented a $400 million tax increase from coming into effect next year and 40,766 Iowa employers will benefit from what she has done. Without her action, employers of all sizes across the state would have seen a massive increase in their unemployment tax payments next year. ABI strongly supports what the governor did and is grateful for her leadership on this issue.

Can Iowa Employers Require Employees to Take the COVID-19 Vaccine? In Most Cases, Yes.
As Iowa prepares to deploy and administer the COVID-19 vaccine over the coming weeks and months, companies might wonder if they can require individuals who work for them to receive the vaccine to ensure a safe working environment. According to Drake University Law School Associate Professor Denise Hill, the answer in most cases is yes.

In an article posted by WHO 13 News, Hill confirms “there is a strong case for a legal basis to do so” regarding mandated vaccines. She goes on to say the law goes back to 1905 when a smallpox outbreak occurred and confirms there would likely be exemptions for taking the vaccine including religious beliefs and medical reasons. This is just one of the critical decisions employers will have to make as the vaccine becomes more widely available to the public next year. 

DNR Air Quality Bureau Requests Feedback on Updated Communications Services
The Construction Permitting Section of the DNR Air Quality Bureau seeks comments regarding the most recent updates it has implemented concerning communications services. Some of those updates include revisions to EASY Air automated emails and an improved dashboard system, assignment of an engineer familiar with a company’s most recent project, the addition of a Project Kick-off Meeting and more. The new communications procedures started on applications in November. If you have any feedback for ABI on this issue, please send it to Brad Hartkopf by Dec. 28.

Federal Spotlight: Agreement on COVID-19 Relief Package Imminent
Leaders in the U.S. House, Senate and the White House have been furiously negotiating this week as both Democrats and Republicans have indicated they must pass another COVID-19 stimulus package before the lame-duck Congress officially adjourns for the year.

The leaders of both caucuses in both chambers and Treasury Secretary Steven Mnuchin are near a deal that could approach $900 billion. Some of the aspects expected to be included in the bill are a replenishing of the Paycheck Protection Program, direct payments to qualifying Americans, an unemployment benefit extension of likely $300/week through March or April, and several billion dollars for vaccine distribution, transportation, health care and more.

Two items that are not expected to be included are funding for state and local governments and liability protections for businesses and other institutions. Those two issues are the most contentious, and it appears that both parties are living to fight another day when it comes to them. Any package is expected to be attached to an omnibus spending bill that must pass by midnight on Friday or else there will be a government shutdown.       
ABI UPDATE
Iowa Manufacturers Expect Strong Start to New Year
They’re the words Iowa manufacturers have been waiting all year to hear: “Things are looking up.” 

Iowa manufacturers expect increased sales, employment and capital investments in the first quarter (January-March), according to the results of the latest ABI Quarterly Iowa Business Survey.

“The survey results are incredibly positive for Iowa’s economy,” said ABI President Mike Ralston. “This is a great way to build momentum as we begin the new year.” Read the full news release.

Highlights of media coverage:
FROM THE DESK OF...
Economics: Hit Me with Your Best Shot
Avery Shenfeld
Managing Director & Chief Economist
CIBC Capital Markets

We enter 2021 with one overriding challenge. In turn, that leaves our best shot at exiting the coming year with the strong momentum we expect resting on getting hit with your best shot—a vaccine (or vaccines) with sufficient production capacity, efficacy and public acceptance to achieve herd immunity against COVID-19. Mass vaccination around mid-2021 has been our assumed trajectory for the last several months, and it’s still looking to be on track.

That will see diminishing COVID-19 case counts in the latter part of the year, and the early stages of a revival in services consumption, although a full return to a mask-free life as we knew it will be a 2022 story.

In the near term, we’ll have to get through a few softer quarters, which could include some individual negative months for GDP. The second wave of the virus is the most obvious factor ailing growth as the weather turns colder. Research comparing US states has shown the economic response isn’t dictated solely by government-mandated shutdowns: consumers’ hesitancy to venture out as news on the illness worsens is, if anything, a greater influence.

US growth could be challenged in the near term as the CARES Act stimulus fades out before a replacement second package is enacted, although we do expect a compromise bill to emerge in either December or early after the inauguration. In both the US and Canada, after Q3’s sharp rebound, a greater share of the missing GDP and employment is concentrated in sectors where social distancing issues put major constraints on any pre-vaccine recovery.

A strong second half, and the easy base of comparison of 2020 output, will see most countries record impressive annual growth tallies next year. Bond yields will climb as investors anticipate even better days ahead, and central banks will be less aggressive in leaning against such a move with QE as jobless rates ease. Read more.
MEMBER NEWS
Attorney Tracey Deutmeyer Appointed to USPTO Trademark Public Advisory Committee
Fredrikson & Byron shareholder Tracy L. Deutmeyer has been sworn in as a member of the United States Patent and Trademark Office (USPTO) Trademark Public Advisory Committee (TPAC) for a three-year term through Dec. 1, 2023. As a committee member, Deutmeyer will advise the under secretary of commerce for intellectual property and the director of the USPTO on matters relating to the policies, goals, performance, budget and user fees of the trademark operation. Read the full news release.
Woodruff Construction Uses ESOP to Benefit Its Employees and Communities
Woodruff Construction has completed its transition from a small ownership group to an employee stock ownership plan (ESOP) company. Woodruff is now one of the larger of the 137 privately held ESOP companies in Iowa. While Don Woodruff continues to serve as company president, Woodruff Construction’s ownership has been transferred to its 129 employees. Read the full news release.

Meredith Corporation Included on Newsweek's List of America's Most Responsible Companies
Meredith Corporation has been included on Newsweek's list of America's Most Responsible Companies for 2021. The companies were selected based on publicly available key performance indicators derived from corporate social responsibility, sustainability and corporate citizenship reports, as well as an independent survey. Newsweek's list recognizes the top 400 most responsible companies in the U.S., spanning 14 industries. Read the full news release.

Turner Construction Releases Q3 2020 Market Conditions Report
Turner Construction has released its latest quarterly Market Conditions report, which shares national and regional market conditions for the construction industry. The report includes national trends and their local impact, projections for market segments and a supply chain forecast. Read the Q3 2020 Market Conditions report.

Nonqualified Plans Helping to Meet the Needs of Participants and Plan Sponsors Amid COVID-19
Despite a challenging year for workers and businesses alike, new research conducted by Principal indicated that nonqualified deferred compensation (NQDC) plansemployer-sponsored benefits plans for key employees—continued to be valuable in helping employers and key talent achieve their goals. Read the full news release.

MHCS Named One of America’s Best Tax and Accounting Firms by Forbes
McGowen Hurst Clark Smith (MHCS) was recently recognized by Forbes as one of America’s Best Tax and Accounting Firms for the second year in a row. Firms across the United States are recognized for their work in accounting and/or tax services based on survey results from industry professionals and their clients. Read the full news release.
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