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IRWA Legislative Newsletter
May 3, 2016
Issue #4

UNDER THE GOLDEN DOME

Emily Piper, Contract Specialist

Emily Piper

Contract Lobbyist
515-202-7772

Email Emily

Just over a week late, the 2016 legislature finished their work on April 29 around 6:18 p.m.   The battles of the previous session over budget priorities, policy issues and the dynamics of working with split government contributed to the delay.    The major push by House Republicans to address water quality issues by allocating funds from the Rebuild Iowa Infrastructure Fund (RIIF) and dedicating the sales tax on water to water and wastewater infrastructure failed.   In addition to simply running out of time, they also faced different proposals from the Senate including simply passing the 3/8 sales tax increase.  This House Republican proposal is expected to be the starting point for water quality discussions in the 2017 legislative session, assuming Republicans keep control of the House.   Governor Branstad is also likely to weigh in on the debate with his proposal to “share” the growth in the school infrastructure sales tax with water quality.

 

IRWA Successful in Amending House Water Quality Bill

IRWA was originally opposed to HF 2451 (the successor to HSB 654) primarily because it did not align with our major policy goal to eliminate the sales tax on water.   However IRWA did recognize that this legislation would provide those resources in the form of grants to assist our members including rural water systems.   The organization successfully worked to address its major concerns.

HF 2451 was amended on the floor to include several provisions sought by IRWA including:

  1. Ensure coverage of source water protection for grants under the wastewater and water treatment financial assistance program.
  2. Allow private financing to qualify as a match for receiving grant
  3. Provide for an earlier repeal of the water excise tax (2029)
  4. Provide for an end to the water excise tax prior to FY 2029 if other funds become available

Other provisions of the bill include:

  1. Creates a water quality infrastructure fund within the Department of Agriculture.   $5 million is transferred from the Rebuild Iowa Infrastructure Fund (RIIF) to this fund, progressively increasing the amount until $22 million a year is dedicated to the fund.   No funds are provided after FY 2029.  
    1. Funds are provided on a cost-share basis and targeted to the installation of infrastructure including conservation structures that reduce nutrient loads, associated sediment or other contaminants surface water.
    2. Municipalities and rural water systems are eligible for these funds when working in partnership with landowners.
    3. Funds are only provided for long-term, more permanent practices.
    4. Monies transferred to this fund will be allocated between the Water Quality Ag Infrastructure program and existing water quality programs within the Department of Agriculture
  2. Creates a water quality financial assistance fund within the Iowa Finance Authority.   The sales tax on water is converted to an excise tax and dedicated to three purposes within this program.  In the first year, $4 million is appropriated from the general fund.  The amount of water excise tax dedicated to the fund begins in FY 18 at $4 million and is increased by that amount each year until fully dedicated, approximately $24 million.   The water excise tax collection expires in 2029.
    1. 45% of the funds are dedicated to a new water quality financing revolving loan program.  Municipalities and rural water systems are eligible for funds for projects designed to improve water quality by addressing point and nonpoint sources of impairment. 
    2. 40% of the funds are dedicated to the Wastewater & Drinking Water Financial Assistance program.   Grants not to exceed $500,000 would be available to municipalities and rural water systems to address infrastructure needs that improve water quality.  
    3. 15% of the funds are dedicated to an existing water quality urban infrastructure program within the Department of Agriculture.

Bills of Interest – End of Session Report

HF 2352:  This bill removes the sales tax on both residential and business sales of water over a six-year period.  IRWA is registered in support of the bill which is in the House Ways and Means Committee.  This bill did not progress out of committee.

HF 2381:  This bill sunsets the underground storage tank fund by July 1, 2017 and phases out the funding source for leaky tank clean up.   Under the proposal, all requests for remediation must be submitted by December 31, 2016 and DNR and Iowa Finance Authority will prioritize the clean-up requests based on the amount of funding available.   IRWA is registered in opposition to this bill which is in the House Ways and Means Committee.  This bill did not progress out of committee.

HF 2382:  This bill extends the sales tax for school infrastructure through 2049, allows that fund to increase by $10 million a year and diverts the growth into water quality initiatives.   The money will be used to create a new state-funded revolving loan fund for water infrastructure and existing water quality programs within DNR and IDALS.   The bill was amended in committee at the request of IRWA to ensure that rural water systems were eligible for funds.   IRWA is registered as undecided on the bill which passed the House Agriculture Committee and is before the House Ways and Means Committee.  This bill did not progress out of committee.

HF 2454: This bill makes appropriations for the IDALS and DNR.   It is a status quo budget and no items of interest to IRWA members was either reduced or increased.   The bill does include some policy issues.

  1. The bill eliminates the statutory authority for the Watershed Improvement Review board  (WIRB) upon the conclusion of its existing project implementation.   It authorizes the WIRB to utilize remaining funds to pay for project over-runs.
  2. The bill establishes the Iowa Nutrient Research Fund to be funded with civil fines or penalties collected by the DNR for animal agriculture, air or water quality violations.

The bill passed both chambers and is before the governor for his signature.   Budget bills are subject to line item veto authority.

HF 2459: This bill is the standing appropriations bill.   It includes a provision of interest to IRWA members related to liens on mobile homes, modular homes or manufactured homes for unpaid water, sewer, stormwater or solid waste bills.  The language does three things:

  1. It specifies that a lien cannot be placed on one of these types of homes if owned by the tenant in a mobile home park unless the lease agreement holds the tenant directly responsible for a portion of the rates charged to the account holder (i.e. the landowner on which the mobile home is located).
  2. Narrows the definition of these types of premises to include only those that are not taxed as real estate.   This addresses situations in which the “lease” space in a mobile home park and the owner of the park is taxed as real estate.
  3. It specifies that that a lien can only be filed on the real estate (land) under a mobile home (etc.) if the owner pays for all rates and charges rather than assessing the tenant.

IRWA worked with the League of Cities and Iowa Association of Municipalities to evaluate this provision and determined that it actually clarified the options for filing liens for unpaid utility bills.  The bill passed both chambers and is before the governor for his signature.   Budget bills are subject to line item veto authority.

HF 2460:  This bill replaced the earlier effort to address the underground storage tank fund (HF 2381).   The bill extends the environmental protection charge tax on fuel for an additional 6 months (it was originally scheduled to expire on June 30, 2016) and doubles the amount dedicated to renewable fuels infrastructure fund to $1.5 million.   The bill makes no changes to the current operation of the underground storage tank cleanup program or the board that oversees that program.   The bill passed both chambers and is before the governor for his consideration.

SF 2054/SF 2067:  These bills phase out the sales tax on residential sales of water over six years.   IRWA is registered in support of both bills which are in the Senate Ways and Means Committee.  These bills did not progress out of committee.

SF 2170:  This bill increases the time period in which a public body must notice for bids on projects that exceed the competitive bid threshold from no less than 4 days to no less than 13 days.  The bill was amended to address IRWA concerns and eliminate additional public notice requirements triggered by the extended timeframe and provide an exemption from the 13-day requirement if a bid opening is delayed.  IRWA is registered as neutral on the bill.   The bill passed both chambers was signed into law by the governor on March 23.

SF 2221:  This bill allows American Water to provide sanitary sewer and stormwater services to cities under the auspices of the Iowa Utilities Board.   At IRWA’s request, the bill was amended to ensure that cities and rural water systems were not inadvertently brought under IUB regulation.   IRWA is registered as neutral on the bill which passed both chambers.   The bill was signed into law by the governor on March 23.

SF 2306:  This bill creates an exemption from certain tax, licensing and permitting requirements for out-of-state workers who come to Iowa to help in disaster recovery efforts including the repair or reconstruction of water infrastructure.   IRWA is registered as neutral on the bill.  The bill was amended to clarify the process for exemptions from construction permits in the event of a declared emergency to address IRWA concerns.  The bill passed both chambers and was signed into law by the governor on April 21.

 


 

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