Capitol Update: Week 17

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Senate File 359

This week we ran Senate File 359 known as the Heartbeat bill.  It is a passionate issue and constituents on both sides have been contacting me.  I believe life starts at conception.  I also believe it is very a moral, religious, and most of all, should be a family decision.  I firmly believe government should be neutral in this very personal issue, and that the family should be able to make the decision.

I did not support this bill and would like to share with you how I reached my position on this issue.  Our family recently had to make that very tough decision that affects the life of the mother.  My daughter informed us back in January that we were to be grandparents for a second time.

The week before Easter, she had an ultrasound which detected issues with the baby.  There still was a heartbeat.  After additional ultrasounds and a CVS test, the doctor informed her that the baby had a chromosome abnormality.  The missing chromosome in a baby’s DNA usually causes a miscarriage at some time during the pregnancy; some go to term but are stillborn.  Only one percent survives, but these are babies that did not have the same health issues that the ultrasounds were showing. She was told that she would miscarry at some point in the pregnancy but they could not tell her when.

When you get a diagnosis like that, everyone does some soul searching.  I believe it becomes a family issue and a family decision.  I have been a part of those discussions.  Believe me, my family shed a lot of tears and the decision was not taken lightly.  Our daughter and her husband made the decision to terminate pregnancy with the support of our family.

Medical technology has come a long way.  It gives us information to support both sides of this issue.  I have supported the 20 week legislation, waiting periods for abortions, and defunding Planned Parenthood.  They were the right decisions to protect life.  But in our situation, government was not a part of the equation and it allowed us to make a family decision that I believe protected life in our family.  I pray every day that God will bring more life to our family and I believe he will in the future.

SF 359 in its original form did not allow for families the option to make this decision.  I could not support the legislation that did not give families that option and cause a woman to carry the baby to term knowing the outcome.   An amendment did make some exceptions but I chose to keep the current law that would allow the families to make decision.

Life is precious and we need to do everything we can to encourage it but I believe we need to have some options also.

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Capitol Update: Week 16

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Increased Salaries and Lower Underemployment Reported in 2017

The median annual salary increased $4,000 to $64,000 per year and the median hourly wage increased $1 to $17 per hour based on the 2017 Statewide Laborshed Study published by Iowa Workforce Development.

In addition, the statewide estimated total underemployment rate dropped from 5.1 percent in 2016 to 4.5 percent in 2017. Total underemployment measures three categories: inadequate hours, mismatched skills and low income.

Gov. Kim Reynolds said an increase in wages and a decrease in underemployment are signs of Iowa’s strong economy.  “Jobs that pay higher wages require more skills, education and training,” said Reynolds. “As Iowans continue to train for the jobs of today and tomorrow, salaries will also rise. That’s why Future Ready Iowa is so critical to our state’s future.”

Governor Signs Children’s Mental Health Executive Order

This week, Governor Kim Reynolds signed her second executive order to create a Children’s System State Board. This Children’s Board will serve as the single point of responsibility in the development and implementation of a Children’s Mental Health System in Iowa. The Executive Order can be found here.

The Children’s Board will be co-chaired by the Directors of the Iowa Department of Human Services and the Iowa Department of Education. The Executive Order requires the Children’s Board to submit a strategic plan to the Governor by November 15, 2018.

The strategic plan is required to:

  • Analyze and identify target populations to be served in the system
  • Analyze and design a long-term sustainable funding structure for the Children’s Mental Health System
  • Establish governance expectations for the Children’s System
  • Analyze and identify any legislative, regulatory, and policy ideas that are designed to improve children’s mental health in the state

This Executive Order builds on the comprehensive mental health legislation that was passed this session to expand the state’s existing adult mental health system. The Iowa House Majority continues to support the leadership the Governor is showing in this important area, and are committed to working with the Children’s Board to improve the mental health system. No parent should feel hopeless searching for treatment for their child with mental illness, and this Executive Order is an important first step in ensuring that parents have somewhere to turn.

House Working to Wrap Up Legislative Session

Extra innings are fun in baseball, but not so much when it comes to the Legislative session.  However, we are still down here working hard for Iowans to come to an agreement on tax reform and appropriations.  We have run three budget bills out of eight and hopefully by next week we will run the other five and wrap up session.

Capitol Update: Week 15

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House Majority Continues to Address Managed Care Solutions

Last week the House majority passed a bill out of House Appropriations Committee to address the Medicaid managed care program. Since the implementation of managed care, there have been challenges, and the House majority has listened to Medicaid members and providers about the difficulties they have had.  These issues include communication from the managed care organizations (MCOs), timeliness of payment, prior authorizations, appeals, level of care determinations, health homes, and credentialing.

This bill (HF 2483) addresses all of these concerns and brings even stronger oversight and accountability to managed care.

Holding MCOs Accountable to Providers:

  • Require MCOs to pay providers in a timely manner and provide justification for denying a claim
  • Require evaluation of all prior authorization requirements by MCOs
  • Require a uniform credentialing process between all MCOs
  • Require mental health and substance abuse services to be paid for court committed individuals

Holding MCOs Accountable to Members:

  • Require the state to review any decrease in level of care for a LTSS member by an MCO
  • Extend services for a member that has won on appeal against an MCO
  • Require an evaluation of health home services with providers and the MCOs

Stronger Oversight of the Medicaid System:

  • Require the state to update Medicaid eligibility files promptly to provide notice to providers
  • Require an audit of small LTSS claims paid or denied by MCOs

This is the House majority’s second attempt to have this legislation passed by the Senate on managed care. The House majority remains committed to passing meaningful managed care legislation and to have it signed by the Governor this year.

The House majority is dedicated to assisting any Medicaid member or provider that is having issues navigating the managed care program. The MCOs are contractors for the state, and they should be held accountable if they are not fulfilling the obligations to the state and those it serves. Please contact me if I can assist in any way.

House Sends Campground Rental Bill to Governor

Last week, the Iowa House passed Senate File 2389 with a vote of 89-8. This bill will now be sent to the Governor for signature.

This bill allows the Iowa Department of Natural Resources to shift the way it establishes camping and special privileges (rental) fees at state parks and recreational areas. Previously, for any slight change in pricing for any state park or rental facility, the change had to go through the long administrative rules process with the Natural Resources Commission. With this bill, the DNR will have flexibility to increase, decrease, or allow for promotional packages during certain seasons or holidays.

The bill does include oversight over the DNR by requiring them to make the fees reasonably competitive with fees established in other public parks or recreation areas within 60 miles of each park, as well as explain their methodology for the fee policy. The legislature will also receive an annual report from the DNR with information about fees and occupancy rates at each camp/rental facility and special promotional events or holiday rates during the year.

Capitol Update: Week 14

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Agricultural Asset Transfer Tax Credit Moves Ahead

On Wednesday, April 11, 2018, the House Ways & Means Committee was scheduled to considered House File 495.  The bill extends the beginning farmer tax credit program established in 2013 that was scheduled to sunset on January 1, 2018 to January 1, 2023.  Since this legislation did not proceed in 2017 session, the codified automatic repeal occurred.  Consequently, the Ag Asset Transfer Tax Credit program reverted back to its form prior to the 2013 legislation and was subject to a cap of no more than $6-million a year.

I am the subcommittee chair for the bill and the floor manager.   As part of the process we created a substitute amendment that adds back to the Beginning Farmer Agricultural  Asset Transfer Tax Credit program several functions.

It reset the tax credit cap for the Agricultural Asset Tax Credit program to an annual $9-million amount.  This is $3 million higher than the current, and pre-2013 legislation level of $6-million, but below the $12-million a year cap in effect between 2013 and through 2017.

A veteran beginning farmer incentive is recreated on the ag asset transfer tax credit of 1% for the first year of an agreement.  Hence for the first year of an agreement for cash rents non-veterans earn 5% and 6% for veterans but all participants earn 5% in subsequent years.  Likewise for commodity share basis leases agreements veterans qualify for 16% for the first year of the agreement and non-veterans earn 15% as do veterans in second and subsequent years of the agreement.

The aggregate amount that a taxpayer could receive each year is reduced from $50,000 to $25,000.

Public Hearing on Governor’s Tax Bill

This week as part of the House Ways and Means Committee I listened to comments from the general public in a hearing held on Monday night in the old Supreme Court chamber. The hearing was on House Study Bill 671—the Governor’s tax reform proposal.

The bill proposes to cut individual income taxes starting next year by reducing rates and increasing the standard deduction. It also couples with provisions in federal tax code related to 529 plans and teacher education expenses. The Governor’s proposal includes future tax rate cuts that are tied to revenue triggers and the phasing out of federal deductibility.

The House tax bill reduces Iowan’s income taxes by $139 million in Tax Year 2019 and $298 million in Tax Year 2020.  An average Iowa taxpayer will see their income tax reduced by 8.9% an 90% of middle-class Iowans that will see their state income tax liability reduced.

House Study Bill 671 also proposes to modernize the sales tax code and tax things like ride sharing, online marketplaces, and subscription and streaming services.

The public hearing attracted speakers on different parts of the bill—but an overwhelming amount of comments came from people representing banks and credit unions. Neither one of those groups were directly affected by the proposal, but numerous showed up to give comments.

News from District 96

This week both John Harms and Joe Yedlik were here with the County Fair Associations.  I enjoyed seeing both of them and visiting about issues important to the Jones County Fair.

Capitol Update: Week 13

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Federal Tax Code Changes Makes Changes to Iowa Tax Code Necessary

I sit on the Ways & Means Committee which is working on tax reform this session.  Due to some of the changes made in the Federal Tax Reform Act that passed late last year, we need to review our tax policies also. The goal is to more money in the taxpayer’s pocket and does so in a fiscally responsible way.

Due to tax reform at the national level, Iowans will pay $1.8 billion less in federal taxes in tax year 2018.  However, due to the fact that Iowa has federal deductibility, Iowans will pay additional state taxes totaling $107 million in tax year 2018 and grow to $153 million in tax year 2019.

One of the changes at the Federal level was like-kind exchanges.  They are now limited to real property. For example, farmers can still swap land for other land tax-free, but equipment trade-ins will no longer be a tax-free event.   This is a pretty drastic change that is not being discussed.   Let’s assume a farmer buys $500,000 of equipment but trades in $350,000 of equipment.   The used equipment that is being traded in still has $50,000 remaining in basis to be depreciated.   Under old law the $150,000 would treated as the purchase and the $50,000 remaining will be added to the basis so that $200,000 can be depreciated.   This would eligible for Section 179 and / or bonus depreciation.   Under old law the whole amount could be written off on the Federal return and only $25,000 plus normal depreciation on the Iowa return.

Under new law and without any changes to the Iowa tax code the $350,000 is now considered a sale (recapture and or capital gains on $300,000) and the $500,000 is a new capital purchase.   The taxpayer will not be hurt at all in regards to the Federal return as they can use section 179 or bonus depreciation.  However, under Iowa tax code, the taxpayer will only get a ¼ or ½ life first year depreciation (no bonus or Section 179 as they purchased over the $200,000 phase out limit) and will only receive normal depreciation of around $35,715.   Thus, the taxpayers difference in income between the federal and the state in this example is $265,000.  This would result in approximately $24,000 of extra taxes paid to the state of Iowa.

Small business across Iowa, not just farmers, will be affected by those changes. This is just one of the reasons why it is necessary to make changes to Iowa’s tax code.

Governor Reynolds Signs Future Ready Iowa Act

Gov. Kim Reynolds signed House File 2458, the Future Ready Iowa Act, on Tuesday at the Future Ready Iowa Summit in Des Moines.

Future Ready Iowa is the Governor’s plan to train Iowans for the jobs of today and tomorrow. The goal of Future Ready Iowa is for 70 percent of Iowa workers to have education or training beyond high school by 2025. In order to reach that goal, another 127,700 Iowans need to earn post-secondary degrees or other credentials.

This bill changes lives by helping Iowans earn credentials that prepare them for rewarding careers in advanced manufacturing, computer science, finance, health care and many other fields. It also helps employers hire the skilled workers they need to grow, which means Iowa communities will be even more prosperous.

The Governor called on the legislature to pass the Future Ready Iowa Act in her Condition of the State address in January. The bill passed both the Iowa House and Iowa Senate with unanimous, bipartisan support. It passed the Iowa House on March 13, 98-0 and the Iowa Senate on March 19, 47-0.

Capitol Update: Week 12

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Skyrocketing Cost of Backfilling Local TIF’s with State Dollars

The House Appropriations Committee is beginning to look at a subject not easily understood and rarely discussed in the Iowa Capitol – the cost of the Tax Increment Financing program to the state budget.

The TIF program was established in 1992 as a method to help local communities finance community improvement projects.   Under the program, when a municipality (city or county) decides to set up a TIF project – known as an urban renewal area – the property tax from parcels within the project do not go to the levying authorities (school district, county, city, etc) but instead are used by the city or county establishing the TIF district to pay for the improvements made to the urban renewal area.  Local officials and economic development professionals are ardent supporters of TIF’s and the development fostered by their use.

However, it is important to note that there is little incentive on the part of certain local officials to support or oppose any local TIF project.  A school board or county board of supervisors that is not originating the TIF district does not have a vote to approve the use of their property tax revenue for this project.  Furthermore, schools are held harmless by the state, which replaces the lost property tax revenue through the school finance formula .  This means schools receive their property tax revenue regardless.

The cost of backfilling the schools’ lost property taxes is something not easily found, as there is no budget line item for it.  The funds needed to backfill the lost revenue are taken out of the General Fund before any action is taken on the budget.  It is not accounted for in a manner like normal spending or even the oft discussed tax credits.  If you don’t ask the right questions, one would never know it had any impact on state spending at all.  But it does, and that impact is growing every year.

When TIF started in 1992, it had a relatively small impact on the state budget of $5.2 million in backfill payments.  But as the use of TIF has proliferated across the state, the hidden impact on the budget has grown significantly.

In FY 2018, the state will send $59.5 million to local school districts to replace property tax revenue diverted to TIF projects.  Fiscal Year 2018 also was a milestone in the program, as the annual growth rate in the program was in single digits for the first time ever.

As a response to the skyrocketing cost of backfilling local TIF’s, House Study Bill 681 makes significant revisions to Iowa’s Tax Increment Financing program.  In order for a TIF district to retain property tax revenue of a school district or county under House Study Bill 681, the school board or county board of supervisors would have to take a vote to transfer the revenue to city or county organizing the TIF district.  Or, in other words, they would have to formally support the project.  If a school district agrees to transfer its property tax revenue, that amount would no longer be replaced by the state through the school finance formula.  After all, if a project is good for the community, widespread support should be a large hurdle to clear.

The changes implemented by House Study Bill 681 would be applied to TIF districts that are established after July 1, 2019 or to property that is annexed or otherwise included into an existing TIF after July 1, 2019.  This bill is still working its’ way through the process and has not been passed.

Improved Prescription Monitoring Program Launches April 4

The Iowa Board of Pharmacy will be launching an improved Prescription Monitoring Program (PMP) on April 4th. AWARxE was selected as the winning response to Iowa’s RFP regarding an updated PMP. This new platform will allow prescribers to have an easier way to find timely information on preventing patient misuse and abuse of opioids. Practitioners that wish to apply for a PMP account may complete online registration through the new website.

The Board also recently announced that effective May 16 dispensers will be required to report to the PMP no later than the next business day following dispensing the prescription. The change in reporting frequency will provide health care providers with more timely information when utilizing the PMP in their prescribing.

News from District 96

Thursday I had a visit from the eighth grade class of the Anamosa School District.  We had the chance to visit for about 45 minutes and I was very impressed with their questions.  They asked questions that directly related to them, such as school safety, and I shared information about bills we passed here in the House.  One of these bills requires an active shooter emergency plan to created and maintained by school district.

The students also took an interest in the legislative process asking about the daily life of a legislator.  One of the most impressive questions was what determines my votes on the floor, ie., do I look at issues as it impacts the entire state of Iowa or Delaware and Jones County.  Voting is continuously a balance of these two, but more often than not what is good for House District 96 is good for Iowa.

I also attended the Celebration of Ag banquet in Cedar Rapids on Wednesday night where President Wendy Wintersteen of Iowa State was the keynote speaker.  I enjoyed her remarks and the event.

 

Capitol Update: Week 11

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Ensuring Schools Have High Quality Security Plans

The House took another step this week in passing legislation to help protect our schools.  Following on the heels of several other pieces of legislation that provided districts with options for school security, the bill this week, Senate File 2364, requires school districts and nonpublic schools to develop security plans for response to active shooter scenarios and natural disasters.

An informal survey of districts done in 2015 found that of 249 respondent school districts, roughly 85% of them had an Emergency Operations Plan (EOP) in place.  But the findings from the emergency management association doing the survey found that only 24 of those districts, or 9.6%, had plans that met the federal FEMA guidelines for what constitutes a “high quality” EOP.  A follow-up survey determined that the number rose slightly, to 11.2%, but this is still not sufficient.

The plans that local districts are to develop would take into consideration recommendations from the Department of Education for what makes a plan high quality.  These elements come from the federal guidelines and consist primarily of 5 concepts:  Prevention, Protection, Mitigation, Response, and Recovery.  The districts would also have to consult and work with their local emergency management organizations and local law enforcement agencies in the development.  Plans are required to be reviewed annually and districts shall conduct annual training and drills.

The bill passed the House with bipartisan support and will return to the Senate with a small amendment for final consideration before moving to the Governor for signing into law.

Iowa House Passes Affordable Health Options for Iowans

In January, the Commerce committee heard from the Insurance Commissioner on the state of the individual health insurance market in the state of Iowa. There was and continues to be an immediate concern for 20,000 Iowans who have no health insurance because they are priced out of the individual health insurance federal exchange market.

In February, the House Commerce committee took a first step to provide Iowans with some relief from unaffordable health care products on the individual market. The committee considered legislation which would provide the option of purchasing a health benefit plan. These plans would be sponsored and administered by Iowa based organizations. Health benefit plans act like insurance and are subject to oversight by the Insurance Commissioner. It is estimated that for individuals who do not qualify for a federal subsidy, these plans would be less than half the cost of plans available on the individual federal exchange.

There are currently proposed changes to the Department of Labor rules that will allow more types of employers to group together and form associations for the purposes creating a larger risk pool for the purpose of obtaining health insurance.  Some of the changes in the proposed rules include allowing sole proprietors to be considered an employer.  Multiple Employer Welfare Arrangements (MEWAs) offered in Iowa would be subject to the insurance regulations in the state and must comply with regulations and oversight from the insurance commissioner.

The Iowa House passed these proposals this week. They provide Iowans, who are unable to afford health insurance, additional options to cover their healthcare needs.

News from House District 96

This week I had the chance to visit with several groups when they came to the Capitol. Delaware County Farm Bureau and Jones County Farm Bureau Members as well as Iowa Corn Growers were here to discuss issues important to Iowa agriculture.  Iowa Bankers Association was also at the Capitol to chat about concerns of Iowa’s banking industry.