Capitol Update: Week 8

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Private Electric Generation Equity Bill Passes House Commerce Committee

This week the House Commerce committee considered HSB 185, which proposes an equitable change to how customer use utility infrastructure and the costs associated with that use.  The goal is to make sure costs are not inequitably transferred from one customer to another. The bill moved out of committee ahead of the funnel deadline and will be eligible next week.

At its core, HSB 185 is about equity and fairness. The bill simply allows electric companies to do what RECs and municipal utilities currently have the ability to do: charge customers based on their energy usage and the demands placed on the system.  Currently, rate regulated electric companies (Mid-American and Alliant) are not able to charge all customers for their use of the infrastructure used to provide electricity to their home or business.  Private generation customers (e.g. customers who generate solar energy) do not pay for these infrastructure costs, even though they use it more than traditional customers. These customers take energy off the grid and send energy back to the grid using the distribution infrastructure more than a regular customer.

Utilities must ensure the electric grid has reliable service 24/7 for all of their customers, including private generation customers.  Private generation customers are really “super-users” because they both receive and send energy through the grid.  Private solar customers use the grid for all but about 40 seconds of an average day because they’re almost always either receiving or sending energy. This means they are not off the grid.  And since they are not off the grid it seems reasonable to expect all customers to equitably share the costs of it – whether they receive energy, send it, or both.

Many have expressed concern that HSB 185 will completely change the current structure and system. However, this legislation does not eliminate net metering.  With net metering, a customer that owns private solar can “bank” excess energy and use it to offset their bill when their energy needs are greater than the energy they produce.  Under the proposed legislation, net metering is still one of a menu of billing options solar customers could choose.  In addition, HSB 185 “grandfathers in” current solar energy customers with their existing status, maintaining the pricing and payment structure they currently have.

The Solar Industry will remain highly subsidized – over 50% of the installation cost for solar is covered by federal and state tax credits.  HSB 185 does not affect the federal, state or local tax subsidies that solar customers currently receive and which cover at least half of the cost of a typical residential solar installation.

HSB 185 is an equitable and fair solution because it stops the transference of costs from one customer onto another while making sure everyone pays their share.  Often those stuck subsidizing solar installations are customers on fixed income/low income and renters.   This bill eliminates the shifting of electric grid costs from those who can afford private solar to all other customers and gives customers more options for connecting solar to the electric grid.

Budget Priorities for FY2020

 

Children’s Mental Health

Last session, with complete bipartisan support, the legislature passed a comprehensive mental health bill to fill gaps in Iowa’s adult mental health system. House File 2456 increased access to mental health services and created new services for urban and rural communities in Iowa. By removing the statewide sub-acute bed cap and adding new services to the core list required by Iowa’s 14 Mental Health and Disability Service (MHDS) Regions, this bill helps deescalate mental health patients before crisis and wraps services around them when they are prepared to return home.

Building off of last year’s comprehensive mental health bill for adults, the legislature is now focusing on building the foundation for a children’s mental health system. This week, the House Human Resources unanimously passed House Study Bill 206. This bill develops Iowa’s first coordinated children’s mental health system. This bill ensures that there is local access and coordination to mental health services for children, and that parents have a place to turn when seeking treatment for their child.

 

Future Ready Iowa

Ensuring that Iowans have the job skills needed by Iowa’s employers is one of the biggest issues facing this state.  The House Majority has committed to fund implementation of the Future Ready Iowa program that was created last year.  This will include $15 million for assisting community college students with the Last Dollar Scholar program and $1 million for helping those who started four-year degrees in certain fields to go back to college and finish them.

 

Additional Medicaid Funding for Nursing Homes

With the growing number of nursing home residents whose care is covered by Medicaid, nursing homes are facing tighter operating budgets.  To help ensure Iowans have access to this important level of care in their local communities, the House Majority is planning to provide an additional $19 million of General Fund dollars to Iowa’s Medicaid program to increase the daily nursing home payment rate.  These funds will also help control the growth of private pay rates in nursing homes.

 

Protecting Iowan’s Safety

Iowa’s safe communities are a big drawing card for this state.  The House Majority budget will build on this by providing an additional $3.8 million for the Department of Public Safety in FY 2020.  These commitments will allow DPS to bring on additional troopers and DCI agents in the next year.

 

Expanding Access to Health Care in Rural Iowa

Having trained health care providers is necessary to having functioning hospitals and nursing homes across Iowa.  And to attract health care providers to rural communities sometimes requires additional steps to make this appealing to new practitioners.  To help more communities attract doctors, the House Majority will be taking two steps.  First, we will provide an additional $400,000 for medical residency programs and dedicating these funds to those who will practice in rural Iowa.  Also, the House Majority will increase funding for the Rural Primary Loan Repayment program by $300,000.  This program helps communities attract and retain newly-licensed doctors.

 

Continuing Iowa’s Investment in Higher Education

Increasing support for Iowans seeking higher education will be part of the FY 2020 budget beyond what is included in Future Ready Iowa.  Increases for all three legs of Iowa’s higher education system will be part of the House Majority budget.   Community Colleges will receive an additional $7 million in FY 2020 under the House Majority plan.

Capitol Update: Week 7

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House Ag Committee Approves Beginning Farmer Tax Credit

On Tuesday, February 26, 2019, the Iowa House Agriculture Committee approved House Study Bill 173 by a unanimous 21-aye vote (2-absent).  The bill will now move to the House Ways & Means Committee for its consideration as it contains tax credits provisions.

The measure increases the annual amount of beginning farmer tax credits from $6-million to $12-million, which will restore the ability to issue new tax credits for agricultural asset transfers that has been lost since January 1, 2018, when the prior cap of $12-million expired and reverted back to a $6-million level that existed prior to January 1, 2013.  Because many of the tax credits are multi-year based on multi-year contracts, there is an excess of ongoing already authorized tax credits above the $6-million amount.  HSB 173 further restores significant autonomy of the Agricultural Development Board to approve beginning farmer loans and tax credits without also requiring the Iowa Finance Authority Board to also approve such actions and allows the Agricultural Development Board to once again promulgate administrative rules for its programs on its own accord rather than having the IFA board do so.  The Agricultural Development Division will remain under IFA oversight umbrella and will continue to be housed in that state agency.

As Chairman of the House Ways and Means Committee I look forward to taking up this important piece of legislation in the coming weeks.  It was a priority of my last session as the Ag Chair.  We need to continue to find ways to get our younger generation involved in agriculture.

Business Coupling for Section 179 Passes Ways and Means

Senate File 220 provides section 179 expensing with a maximum deduction of $70,000 for corporations, financial institutions, and partnerships and limited liability companies taxed as corporations. The investment limitation in the bill is set at $280,000.

Currently, for tax year 2018, the maximum expensing allowance deduction and investment limitations on section 179 property for such entities is limited to $25,000 and $200,000, respectively. Last year’s tax reform bill set the limit to $70,000 for individuals. With the passage of Senate File 220—these entities would be allowed the same deductions and subject to the same limits as individuals.

The bill provides that the change is effective upon enactment and applies retroactively to January 1, 2018, for tax years beginning on or after that date. The fiscal impact of Senate File 220 will be a general fund reduction of $620,000 in fiscal year 2019 and a reduction of $430,000 in fiscal year 2020.

Senate File 220 is ready for consideration on the House floor.  If it passes the floor it will head to the Governor’s desk for a signature.

Capitol Update: Week 6

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The SAVE Fund, Infrastructure Dollars, Property Tax Relief

Last week the House Education Committee approved a bill, on a bipartisan vote, extending the sunset date on the statewide penny sales tax that provides funding for school infrastructure.  The fund, in which the penny is deposited, is called the SAVE (Secure an Advanced Vision for Education) fund.

This has been a priority for schools for several years now, making sure the dollars that are used by our schools to maintain and build safe, high-quality learning environments that keep pace with changes in technology and student needs.

The original intent of SAVE was to not only save property tax payers money by providing a steady stream of revenue for infrastructure that otherwise would have fallen on property taxes through general obligation bonds, but also to provide direct property tax relief by sending 2.1% of the SAVE dollars to lower the rates for property tax payers in low-property value districts.  The bill took steps forward on this point by increasing the amount from 2.1% to 12%.  The impact of this move will be an estimated $2.4 billion in direct property tax relief over the next 30 years.  Most of the aid will go to low-value, high-rate districts, but some will go to all districts across the state for relief.

The bill also created a Career Academy Fund which will provide dollars to districts through competitive grants to create regional career academies meant to get high school students in the pipeline to high-quality, high-paying jobs through classes and experiences related to those careers.

New language this year that was not in last year’s bill is intent language to provide some measures of security in school buildings.  Before districts are allowed to use their funds for athletic facilities, the district must ensure that all school buildings are secured with locked entrances, cameras, and other security features.

Lastly, the bill also put some accountability on the use of SAVE funds.  Both the building of athletic facilities and the district use of SAVE dollars to back bonding projects will see more transparency as the school board must adopt a resolution and hold a public hearing on these two uses of SAVE funds.  Voters will then have the opportunity to petition and stop such projects if they choose.

The Senate is moving a similar bill, concurrently, which has passed their Education Committee as well.  Next up for both chambers is action through the Ways and Means committees.

House Announces Responsible Budget Plan

This week, the House Majority announced targets for the FY20 budget. The House budget plan for FY2020 spends $7.668 billion, accounting for 97.45% of on-going revenue. This is $9.5 million higher than Governor Reynolds’ FY2020 budget proposal of $7.658 billion.

The House budget plan increases spending by .63% compared to the adjusted FY2019 budget. Additionally, the budget fills all reserve accounts to the statutory requirements and leaves a healthy ending balance of $298.6 million.

This is a responsible budget plan that funds our priorities, limits spending, and puts taxpayers first. This budget plan also allows us to invest in key priorities like education, career training, health care, and public safety.

Capitol Update: Week 5

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Sports Betting Discussion Ongoing

One of the biggest issues that the Legislature is considering this session is whether the state should legalize sports betting.  This conversation became a possibility last year after the United States Supreme Court struck down a federal law that prohibited gambling on professional and college sports.

There are many factors to consider in this debate so it is important that we take our time and give all interested parties a chance to weigh in.  This is a new topic for the Legislature to consider and the House Majority wants to hear from their constituents and communities.

To thoroughly vet this topic, the House is using a transparent process and listening to all Iowans interested in the discussion.

Last week, the House State Government Committee held a two-hour subcommittee meeting on sports betting and heard arguments from Iowa’s casinos, the religious community, the Iowa Lottery, the horse racing industry, and concerned Iowa citizens, among many others.

Subcommittee members are now taking information they heard at the meeting to develop and propose legislation for the House to consider.

What have we learned so far?

Sports betting is going on regardless of whether or not it is legal.  Nationwide, it is estimated that legal and illegal gambling on sports is a $150 billion industry.  It is up to the Legislature to decide if and how they want to regulate this type of activity, bring it out of the shadows, and help those who may suffer from addiction get treatment.

Sports betting will not create a tax windfall for the state.  In the states that have already legalized this type of gaming, actual tax receipts have fallen far behind estimates.  Banking on this revenue to fund something substantial or long-term is premature.

The House Majority will continue listening to Iowans as we move forward on the issue of sports betting.

Snow Days Hitting Schools Hard – Shat are the options?

After a mild beginning to the winter season, January hit the state hard with successive snow storms that blanketed the state in snow and cold.  And with it came schools closings statewide.  At a forum last week I was asked about the state waving days missed this school year.  In the past few years, we have passed legislation that gives the school districts some options to address this issue.

The Department of Education doesn’t keep track of days called off school for weather, so hard numbers don’t exist.  In District 96 our schools have had to cancel 10-12 days to date depending on the district.

School calendars are set locally by the school board with a few parameters from the state.  Specifically those parameters are starting after August 23rd and counting the school year in either hours (1080) or days (180).

The Department of Education did put out a refresher on what options schools have now that they’re faced with longer school years because of weather-related closures.

Some of the more common ones are:

  • Can the Governor pardon or the Department waive snow days?  No, neither the Governor nor the Department have that authority.  The number of days or hours is set in state law and can’t be side-stepped.
  • Can schools use “e-learning” wherein a student accesses lessons or other school work from home through digital means?  No, this wouldn’t count as instruction.  Instruction must take place under the guidance and instruction of instructional staff at school.  E-learning can also present equity of access concerns for students without proper equipment or connections, those with disabilities, or younger students who can’t self-guide.

How can districts make up those days without going to far into the beginning of summer?  There are a few options, each depending on how the district’s calendar is currently setup and other local factors:

  • They can add time to end of the remaining school days to make up any hours missed if they are using an hours-based calendar
  • They can add weekend days, regardless of calendar type
  • They can shorten or eliminate previously planned breaks, regardless of calendar type

Keeping in mind, districts must have a public hearing to change calendar, just as they do to set the calendar before the year.

Snow and cold in Iowa are not new concepts and many districts plan their calendars accordingly.  They often build in extra days or hours to ensure that should closures occur, they can still meet the minimum requirements in law.  For those that are extended, there are other options that can be taken to ensure all students are given equal opportunity for obtaining a good education in our schools.

Capitol Update: Week 4

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Judicial Nominating Reforms

A top priority this session is bringing more fairness and accountability to Iowa’s judicial selection process.  Under the current process, nominating commissions interview candidates for open judge positions and recommend three individuals for the Governor to choose from.  These commissions are made up of people appointed by the Governor and lawyers who are elected by other lawyers.

Under the proposed reforms, the Governor will continue to select half of the members on the nominating commissions.  Legislative leaders from both parties will select the other half.  Additionally, judges will no longer serve on nominating commissions, thus eliminating any sort of perceived undue influence based on their powerful positions.

By including more elected leaders everyday Iowans will have a larger voice in the process thereby creating more accountability in the system.  These reforms will ensure a merit-based judicial selection process and that the best people become judges.

Education Funding Discussion Upcoming

The House will debate education funding in the upcoming days; therefore, I wanted to look back at the progress we have made so far on behalf of our students and our schools.

Since the 2011-12 school year, investment in K-12 education has increased by $765 million, or about 30%.  Over that same time, the rate of inflation is 10.96% according to the Midwest Consumer Price Index.  Funding for schools has increased at nearly triple the rate of inflation!

This has resulted in:

  • More teachers: 3,100 new full-time teachers hired to staff Iowa classrooms
  • Smaller class sizes: A lower student-teacher ratio every year, even while enrollment has increased
  • Competitive teacher pay: Average teacher pay has increased to almost $59,000 statewide which is among the highest in the country when adjusted for cost-of-living

Building on our past commitment, this week House and Senate leaders announced an agreement on a K-12 funding package for the 2019-20 school year.

The agreement includes an additional $89.3 million in new funding for Iowa’s K-12 schools.

  • $7.8 million to reduce transportation costs for rural schools. This will ensure more dollars make their way into the classroom.
  • $2.9 million to reduce the cost per pupil gap by $5 per student. This continues to reduce a long-time inequity that has existed in the school funding formula since the 1970s.

Once this package is passed, state investment in K-12 education will top $3.3 billion per year.  The House majority will continue to look at additional opportunities for education such as extending the school infrastructure tax (SAVE), improving school safety efforts, and greater flexibility for school boards and administrators.

Capitol Update: Week 3

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Contested House Race Resolved

This week we debated whether to count 29 ballots in the election race for House District 55.  It came down to what the law says.  In order for the ballots to be counted, an absentee ballot must have a traditional postmark or an Intelligent Mail barcode (IMb).  The ballots received by the Winneshiek County Auditor’s office contained neither.  The IMb is generated within the Auditor’s office and is placed on the absentee ballot prior to it mailed to the voter.  There is a charge by the postal service to have the IMb added to the ballot.  Only 7 of 99 counties adopted the IMb tracing program and were able to count late-arriving absentee ballots that did not contain a postmark.

  • Winneshiek County did not opt in nor did they purchase the service
  • Jones County was one of the 7 counties that did pay to add the IMb.  Had these ballots been cast in Jones County and mailed before the election, they would have been counted. I commend our Auditor Janine Sulzner for taking the extra steps to insure the integrity of the elections.

In 2016, the Intelligent Mail barcode language was added to House File 2273 in amendment S-5128, and was proposed by Sen. Jeff Danielson (D-Cedar Falls).  In his floor remarks, Sen. Danielson referred specifically to the IMb Tracing program offered by the United State Postal Service:

“If an individual auditor would like to purchase this service from the postal office, barcodes will be provided and put on the return envelope for every absentee ballot”

I remember the discussion distinctly because I floor managed the bill through the legislative process in the House.  The rules cannot be changed after the fact because one party did not like the legal and certified result.  Based upon information received from the Secretary of State’s Office, there were 1,027 late-arriving ballots that were rejected across the state because they lacked a postmark or IMb.  If these 29 late-arriving ballots were to be counted, we would be treating them differently than other late-arriving ballots.

If legislative action is needed to update Iowa Code regarding late-arriving absentee ballots, which is possible, but cannot retroactively change this situation.  I do believe we need to review process and make changes so that this doesn’t occur in the future.

 

 

Capitol Update: Week 2

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Governor Reynolds Budget Priorities

Last week, Governor Reynolds released her budget plan for the 2020 Fiscal Year, which runs from July 1st, 2019 to June 30th 2020.  Her budget proposal funds a number of priorities share by the House Majority.  Budget subcommittees have already begun reviewing these recommendations are looking forward to working with Governor Reynolds to fund the priority needs of Iowans.  I appreciate that Governor Reynolds has proposed a responsible budget plan that spends less than the state is expected to collect in revenue.

Highlights of the Governor’s budget include:

Education and Workforce

  • $93.4 million increase for K-12 schools
  • $4.7 million increase for community colleges
  • $18 million increase for Regent universities
  • $1.1 million increase for Iowa Tuition Grant Program
  • $17.2 million to the College Student Aid Commission to fund the Last-Dollar Scholarship program as part of Future Ready Iowa

Health Care

  • $6 million to increase the number of regional Access Centers and for additional mobile treatment teams around the state to further implement last year’s mental health reforms
  • $3 million for training teachers to help detect students’ mental health issues

Rural Iowa Intiative

  • $10 million to expand access to broadband throughout Iowa

News from District 96

I was honored to have Justin Grawe, a senior from West Delaware and a talented musician sing the National Anthem during the Wednesday morning opening ceremonies. Justin has received many honors including two years at All-State Choir, participating in various honor choirs, and top ratings in contests.

This week I also had the opportunity to discuss agriculture issues with constituents from both the Soybean Association and Pork Producers.  I appreciate their commitment and willingness to come to Des Moines to share their thoughts.