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IRWA Legislative Update (3/12/2015)

Emily Piper, Contract Specialist

Emily Piper

Contract Lobbyist
515-202-7772

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In January, the 2015 legislative session kicked off with new legislators, a tight budget situation and a number of ambitious priorities as outlined by legislative leadership and Governor Branstad.  The number of bills impacting Iowa’s rural water systems and small communities is relatively small as compared with past years.   As of March 6, a bill must have passed a committee in one chamber to remain alive for further consideration.   Tax and budget bills are exempt from this deadline.

IRWA Priority Issue – Removal of Sales Tax on Water

IRWA in partnership with the Iowa Association of Municipal Utilities, the Iowa Association of Water Agencies, the Iowa League of Cities and the Iowa Section -  American Waterworks Association are united in supporting a repeal of the sales tax on water.   As of this printing, SSB 1220 is introduced in the Senate and would phase out the 5 cents collected on the sale of water while maintaining the penny collected at the state level for school infrastructure and the ability of local communities to impose a local option sales tax.   Senator Joe Bolkcom (D-Iowa City), chairman of the Senate Ways and Means Committee, introduced this legislation.   Legislation is anticipated in the next few weeks from the House, introduced by House Ways and Means Chairman Tom Sands (R-Wapello).   Both bills are exempt from legislative funnel deadlines that require a bill to pass a committee in either chamber to remain alive.

Iowa is one of only twelve states that still charges sales tax on the sale of water.   Of the states surrounding Iowa, only one (Nebraska) charges sales tax on residential water bills.  The proposal to eliminate the sales tax on water provides tax relief to nearly every Iowan.   According to the Department of Natural Resources, over 90 percent of Iowans receive their water from a public water supply.

More importantly, water is the only essential service on which Iowans still pay sales tax.   Policymakers have previously determined that sales tax should not be charge on food, medicine, electric and electric and gas service.   Iowans who turn on the tap pay sales tax.   Iowans who purchase bottled water at their local Casey’s do not.   Iowa legislators should address this inconsistency.

Iowa Rural Water’s proposal would phase out the sales tax on water over a six-year period of time.    The total amount of sales tax revenue collected on the sale of water amounted to $26.6 million in FY 2014.   Of that amount, $8.3 million does not support state general fund spending.   The school infrastructure fund, monies distributed to school districts across the state, accounts for $4.4 million.   Communities that impose a local options sales tax account for $3.8 million of that amount.  If phased out over six years, the net impact to the state’s general fund budget is $3.05 million each year.  Local communities with a voter-approved local option sales tax would continue to collect and receive those revenues.

States With Sales Tax on Drinking Water

 

Bills of Interest to IRWA Members

IRWA’s position on bills is determined by the IRWA legislative committee which consists of members representing both rural water systems and community members.

HSB 144:  This bill removes the requirement that water treatment systems undergo a third party certification of the impact that the system has on removing health contaminants.   The bill was brought forth by ABI on behalf of Whirlpool who was experiencing production delays due to this requirement.   Iowa is one of the last states to move away from this requirement. IRWA is registered undecided on the bill which passed the House Judiciary Committee.

HSB 121:  This bill is in response to a recent Supreme Court decision related to transmission companies and whether or not they are considered a public utility for purposes of the railroad crossing permit statute.   The bill includes certain transmission companies in that definition.   IRWA is registered in support of this bill which passed the House Commerce Committee.  A similar bill is on the Senate debate calendar.

HSB 167:  This bill regulates the approval of cell tower siting.   It is nearly identical to language that was included in the comprehensive broadband bill last year.   Under the language, leases would be required to be a minimum of 20 years and at the fair market value rate.   Local entities would be restricted in their ability to deny an application for a siting.  IRWA is registered opposed to the bill which passed the House Commerce Committee.

HF 148:  This bill establishes an unsewered community revolving loan fund and authorizes $10 million a year for four years to be added to this fund.   IRWA is registered in support of this bill which is in the House Appropriations Committee.

HF 365:  This bill gives those entities that enter into a 28E agreement or a franchise agreement with a city to provide wastewater service the ability to recoup unpaid bills.   The entity providing the wastewater service can ask the city to shut off water service to a residence with unpaid sewer bills or impose a lien against the property.   IRWA is registered in support of the bill which passed the House Local Government Committee.

SF 236:  This bill codifies a recent Supreme Court decision related to transmission companies and whether or not they are considered a public utility for purposes of the railroad crossing permit statute.   The bill includes transmission companies in that definition.   IRWA is registered in support of this bill.

 

 

Click on photo below to view a larger image. Slideshow presentation is also available.

Iowa's delegation meeting with Senator Charles Grassley
Iowa's delegation meeting with Senator Tom Harkin
Iowa's delegation meeting with Senator
Charles Grassley

Iowa's delegation meeting with Senator
Tom Harkin


Iowa's delegation meeting with Congressman Steve King
Iowa's delegation meeting with Congressman Tom Latham
Iowa's delegation meeting with Congressman
Steve King


Iowa's delegation meeting with Congressman
Tom Latham


Iowa's delegation meeting with Congressman Dave Loebsack
 
Iowa's delegation meeting with Congressman
Dave Loebsack