News from the Hill…
This week the Iowa House passed House File 2329, which prohibits a person from knowingly acquiring, providing, receiving, transferring, or using a fetal body part in Iowa. This bill also sets up parameters where the prohibition does not apply and makes a person who violates this law guilty of a class “c” felony. This bill passed with 56 voting aye, 43 voting nay and 1 absent or not voting. I voted for this bill.
Revenue Estimating Conference…
On March 16, 10:00 AM the Revenue Estimating Conference (REC) will meet to make their projections for the General Fund and gaming revenues for fiscal years 2016, 2017 and 2018. This will be the first projection for fiscal year 2018, while the other two fiscal years will be adjustments to prior projections. There will be many interested in what changes they may make to fiscal years 2016 and 2017. Revenue has been running behind what the REC projected, and I would expect them to lower their estimate. It could be anybody’s guess on what changes may be made, if any to fiscal year 2017. There are both negative signs as well as some positive changes in the Federal Tax Code which will have a positive effect on Iowa Revenues. Stay tuned, because if the revenue projection for March is lower than the December projection, the legislature will have to base its budget on the March estimate. I plan on attending this meeting.
Log Jam Breaks Loose…
The Senate Majority and the House Majority have come to an agreement on some key items that have been the log jam to the progression of the rest of the budget. The agreed to package includes coupling with the Internal Revenue Code and replacing a rule change that will go into effect July 1, 2016, with code language to better define replacement parts and supplies. This is a great deal that may not look like much at first, but is a win to the taxpayers of Iowa. The coupling agreement is Iowa House File 2092. This part of the bill will allow Iowa small businesses to claim the section 179 coupling that they have been expecting would be available. This will keep 95.6 million dollars of their money in their pockets for reinvesting as they see fit, not as the government does. The second part dealing with replacement parts and supplies is one of the most litigated sections in the Iowa code. This language will benefit both the manufactures that this applies to and the Iowa Department of Revenue who administers the Iowa tax code. This bill will also increase the revenue amount for fiscal year 2017, which is the budget year we are preparing. The overall deal includes education funding, but those details are still being worked out. In addition, that part of the deal will not come through the Ways and Means Committee, so that language in not in this bill. This bill was HSB 642, now it is on the House Floor waiting for debate. The new number is HF 2433. I requested this bill to be drafted and will do all I can to make sure it gets signed into law.
Tax Increment Financing…
This week in the Ways and Means Committee we passed HSB 639. This bill setup some tighter parameters in which tax increment financing (TIF) can be used. The bill sets up a more collaborative report for total TIF debt and/liabilities. The bill also states that going forward TIF money cannot be used to build public buildings. Better defines a blighted area and provides for the termination of existing TIFs that do not have a statutory end date. One of the several complaints about abuses of TIF revenues are those who benefit is not necessarily the ones who pay. Under present law many of the local communities use TIF districts responsibly and beneficially to grow their communities. My concern has been that if the abuse of the present program is permitted to grow, then someday a future legislature would most likely end the program. While some will disagree, this bill goes a long way in protecting the integrity of the positive impact TIF districts can have in their local communities. By doing this there may be a short time sacrifice, but eventually all will benefit. When used correctly and appropriately, TIFs can be a useful economic tool. House Study Bill 639 puts some common sense limitations and necessary transparency into the use of TIF districts. The new number for this bill as it waits for consideration on the House Floor is HF 2435. I requested this bill to be drafted and have continued to find ways to stop what abuses that exist in the system today.
“If we ever forget that we are One Nation Under God, then we will be a nation gone under.” – Ronald Reagan
For more information on these and other bills: www.legis.iowa.gov
Until next time,
Tom Sands