House File 45 heads to Governor Terry Branstad’s desk today after the Iowa House approved the “deappropriations” bill by a 95 to zero vote. The bill was the top legislative priority for House Republican leaders, but the Democratic-controlled Iowa Senate eliminated many of its controversial provisions last week. The full text of House File 45 is here, and the complete bill history is here. The Senate Journal for February 17 contains roll calls for votes on House File 45 and various amendments (pdf file). The final Senate version of House File 45 passed with 48 yes votes. First-term Republican Senator Mark Chelgren voted against the bill, and Republican Senator Sandy Greiner was absent.
Thanks to the Senate amendment, state funding for preschool, family planning, passenger rail, smoking cessation programs, and the core curriculum live to fight another day in the Iowa legislature. So do the Power Fund, the Office of Energy Independence, and the Grow Iowa Values Fund, all economic development programs long targeted by statehouse Republicans.
In addition, the Senate removed language from House File 45 that would have reduced funding for state universities, area education agencies, land acquisitions by the Department of Natural Resources and the Resource Enhancement and Protection fund.
The Senate’s version of House File 45 also did not include language creating a “tax relief fund” that would have collected surplus revenues after state reserve funds were filled.
After the jump I’ve posted an overview compiled by the Iowa House Democratic research staff on “major items eliminated” by the Senate amendment to House File 45. I’ve also listed some other significant points of divergence between the Senate and House versions of this bill, as well as key points on which the Senate left House File 45’s language intact.
Finally, I’ve posted the House Democratic research staff’s explanation of language that would create searchable databases on the state budget and tax rates.
Iowa House Democratic Research Staff
H-1091 Senate Amendment Summary
HF 45 FY 2011 Budget Deappropriations
February 21, 2011
The Senate amendment H-1091 is a strike after amendment that re-writes HF 45 eliminating many parts of the bill, keeping some of the government efficiency appropriations, and adding budget transparency provisions similar to the searchable budget database in HF 94. Some of the major items eliminated by the Senate Amendment:
* The creation of a tax relief fund.
* Repeal of the voluntary preschool program.
* Reduction in funding to the state universities and review of consolidated administrative functions of the universities and community colleges.
* Reduction in funding for the area education agencies.
* Reduction in funding for core curriculum and development of new standards.
* State employee health insurance premium monthly surcharge of $100.
* Reduction in funding to REAP and prohibition of land purchases by the Department of Natural
* Repeal of the Save Our Small Business Fund.
* Reduction in funding for smoking prevention and JEL [note from desmoinesdem: “Just Eliminate Lies” is a youth-oriented anti-smoking public relations campaign.]
* Reductions in eligibility and funding for family planning waivers.
* Reduction in funding for passenger rail and the Dubuque Amtrak Depot.
* Court appointed attorney fees and supplemental for indigent defense.
* Repeal of Power Fund and Office of Energy Independence.
* Repeal of the Grow Iowa Values Fund.
* Supplemental for county mental health services to eliminate waiting lists.
* Mental health and disability service system sunset and reform.
In addition, language trying to revoke $30 million in I-JOBS funding for the Disaster Prevention Grant program didn’t make it into the Senate’s version of House File 45.
I was also pleased to see that the Senate’s amendment to House File 45 did not include language repealing ten smart planning principles and thirteen comprehensive plan elements that were added to the Iowa code during the 2010 legislative session. Repealing the smart planning language would not have saved any state funds and would have impeded sustainable development at the city and county level.
House Republicans had sought to eliminate all sabbaticals at state universities for 18 months, even though doing so would cost more in grants awarded than it would save university budgets. The Senate version of House File 45 “limit [sabbaticals] to no more than 3% of the faculty staff members employed at each institution.” In effect, that will allow all the sabbaticals already approved by the Board of Regents to go forward.
Side note on cost-saving measures going nowhere: Iowa House Appropriations Committee Chairman Scott Raecker announced on February 21 that House File 84, which would have required the sale of the University of Iowa’s Jackson Pollock painting “Mural,” will not move forward this year.
Back to House File 45: the House Democratic research staff also noted various provisions of this bill that the Senate did not change from the House version. Those include:
Out of State Travel – The bill also prohibits out of state travel by department employees funded by the general fund, unless a waiver is approved by the Executive Council. Does not apply to the institu- tions under the Board of Regents. […]
Unauthorized Aliens – Denies any state benefits to illegal aliens un- less already covered by federal law. […]
Government Lobbyist – Amends the laws pertaining to lobbying activities by state agencies to include a prohibition on the employ- ment of a person through the use of public funds for lobbyist activi- ties. […]
Repeal – Eliminates the Generation Iowa Commission. […]
Residency Restrictions – Requires the Department of Human Services to enforce residency restrictions for any public benefits.[…]
Sale or Lease of the Iowa Communications Network – Requires the Iowa Telecommunications and Technology Commission to develop a Request for Proposal to sell or lease, or to lease capacity on the Iowa Communications Network to commence with the fiscal year begin- ning July 1, 2011. The bill prohibits public funds from being used to secure the purchase of the network. The Commission must provide the General Assembly periodic status reports every three months be- ginning on October 1, 2011, regarding progress made toward selling or leasing the ICN. The bill also authorizes the lease of network ca- pacity to users that otherwise are not authorized to use the network. […]
Finally, here is how the House Democratic Research Staff explains the “budget and tax rate database” provisions of House File 45:
Budget and Tax Rate Database – This provision included in the Senate amendment incorporates the provisions of the budget and tax rate data base from HF 94 approved earlier this year and makes some changes. An over view of the provisions is as follows:
Creates a new Code chapter – Chapter 8G. The first subchapter is to be cited as the Taxpayer Transparency Act and the second subchapter is to be cited as the Taxation Disclosure Act.
Subchapter 1 – Taxpayer Transparency Act
Intent Language – Findings Provides intent language as follows: The general assembly finds that taxpayers should be able to easily access the details on how the state is spending their tax dollars and the performance results achieved for those expenditures. Therefore, it is the intent of the general assembly to direct the department of management to create and maintain a searchable budget database and internet site detailing where tax dollars are expended, the purposes for which tax dollars are expend- ed, and the results achieved for all taxpayer investments in state government.
Searchable Budget Database and Internet Site Requires, by January 1, 2013, the director of DOM to develop and make publicly available a database internet site for searching, accessing, and pro- cessing data for the most recent state budget. The searchable internet site must allow the public, at no cost, to search and compile the information. These provisions do not apply to local governments. When gathering and receiving information, the director shall make a good faith effort to minimize the costs and disruptions to other agencies and their computer systems of providing such information. Each state agency, except the Regents, must provide the following:
1. Name of the entity or recipient of state funds. Entity or recipient is any of the following: a corporation; an association; an employee union; a limited liability company; a limited liability partner- ship; any other legal business entity, including nonprofit entities; a grant recipient; contractors; or a county, city, school district, or other local government entity. Entity or recipient does not include an individual recipient of state assistance.
2. Amount of state funds expended.
3. Funding or expending agency. Agency means a state department, office, board, commission, bureau, division, institution, or public institution of higher education. Agency includes individual state agencies and programs, as well as those programs and activities that are administered by or involve more than one agency. Agency includes all elective offices in the executive branch, the general assem- bly, and the judicial branch.
4. Funding source. Funding source means the state account or fund from which the expenditure is appropriated. Funding source does not include federal moneys or grants received by an agency.
5. Budget program or activity of the expenditure.
6. Descriptive purpose for the funding action or expenditure. Funding action or expenditure in- cludes details on the type of spending that are provided including but not limited to grants, contracts, and appropriations. Funding action or expenditure includes tax exemptions or credits. Where possible, an electronic link to the actual grants or contracts must be provided. An electronic link must be in a for- mat that is a searchable document.
7. Expected performance outcome for the funding action or expenditure, to the extent that such information is available and can be provided.
8. Past performance outcomes achieved for the funding action or expenditure, to the extent that such information is available and can be provided.
9. State audit or report relating to the entity or recipient of state funds or the budget program or activity or agency. State audit or report must include any audit or report issued by the auditor of state, department of management, legislative services agency, legislative committee, or executive body relat- ing to the entity or recipient of funds, the budget program or activity, or agency.
10. Any other relevant information specified by the director.
The Regents, in order to comply with these requirements, for each budgeted department, pro- gram, or activity, shall provide the following:
* The funding source and the amount of state funds received by the institutions.
* The amount of state funds expended by the institutions.
* The names of the entities or recipients receiving state funds from the institutions.
* The amounts paid to the entities or recipients name above.
A description of the department, program, or activity involved, including, to the extent practica- ble, the descriptive purpose and expected performance outcome of each budget program or activity.
* Past performance outcomes of the budget program or activity.
* State audit or report relating to the budget program or activity.
* Other information the institutions may deem appropriate.
In addition to the information required to be made public on the searchable budget database, as spelled out above the following is to be included:
1. A listing and description of tax credits that are authorized/awarded by a state program – claimed for the individual income tax, corporate income tax, franchise tax, and insurance premiums tax. This includes a tax credit for which fewer than 20% of the tax filers in the applicable tax category claim the tax credit. For each category of tax, the internet site must list each of the tax credits applicable to it, the total amount of that tax credit claimed, and the number of taxpayers claiming the tax credit.
2. The estimated cost to the state of each of the 20 sales tax exemptions that account for the larg- est dollar amount share of sales tax exemptions. The cost of each exemption must be listed by county and, in addition, stated as a per capita amount for each county.
3. The information already required to be provided in the bill must also be provided for entities or recipients of the special tax credits or exemptions described in this amendment.
In providing information on tax exemptions or tax credits, the confidentiality provisions of Iowa law and federal law must apply and be adhered to.
This section does not apply to local governments.
Strikes DAS Requirement. Strikes current law, which was language added last year in the standings bill, which directs DAS to create the searchable budget database and internet site.
Amends Definition of Entity or Recipients. Adds to the current definition that DOM, through rules, must define the meaning of the term “individual recipient of state assistance.”
Adds Two Tax Definitions. Adds a definition of “tax exemption or credit” which means an ex- clusion from the operation or collection of a tax imposed in Iowa. It includes tax credits, exemptions, deductions, and rebates. It also includes sales tax refunds if such refunds are applied for an granted as a form of financial assistance, including by not limited to businesses that get a sales and use tax refund if they build within an enterprise zone and to those entities that qualify for a refund in Chapter 423.4. Adds a definition of “taxing jurisdiction” which means a political subdivision with the authority to levy taxes. These include, but are not limited to, cities, counties, school districts, and townships.
When providing tax information, the Department of Revenue must provide aggregate infor- mation for those tax exemptions or credits (see definition above) that are claimed by individual taxpay-
ers, provide all the information that is spelled out in the bill for those tax exemptions or credits that are awarded by an agency, and adhere to all applicable confidentiality provisions to the extent possible.
Internet Site Updates The bill says effective July 1, 2013, the internet site must be updated for each fiscal year not later than 60 days following the close of the fiscal year. In addition, must be updat- ed regularly as new data and information become available, not less frequently than annually within 60 days following the close of the state fiscal year. All agencies must provide to the director data that is required to be included on the internet site not later than 60 days after the data becomes available to the agency. The director is to provide guidance to agency heads or the governing body of an agency to en- sure compliance. By January 1, 2014, the DOM director is required add data for the previous budgets to the internet site. Data for previous fiscal years may be added as it becomes available and as time per- mits. The director must ensure that all data added to the internet site remain accessible to the public for a minimum of 10 years.
Noncompliance The DOM director will be out of compliance if the data required for the internet site is not available in a searchable manner and capable of being compiled, or if the public is redirected to other government internet sites unless each of those sites displays information from all agencies and each category of information required can be searched electronically by field in a single search.
Subchapter 2 – Taxation Disclosure Act
Intent Language – Findings The bill provides intent language as follows: The general assembly finds that increasing the ease of public access to state and local tax rates, particularly where the rates are currently available from disparate government sources and are difficult for the public to collect and effi- ciently aggregate, significantly contributes to governmental accountability, public participation, and the understanding of the cost of government services. Therefore, it is the intent of the general assembly to direct the department of management, in consultation with the department of revenue, to create and maintain a searchable database and internet site of each tax rate for all taxing districts in the state to make citizen access to state and local tax rates as open, transparent, and publicly accessible as is feasi- ble.
Tax Rate Database.
1. Searchable tax rate database. By January 1, 2012, the department of management, in consulta- tion with the department of revenue, must make publicly available on an internet site a searchable data- base of all tax rates in the state for all taxing jurisdictions. Individual tax levies must be further speci- fied within each tax rate. The information must include all applicable tax types imposed in the taxing jurisdiction and must be organized, presented, and accessible, to the extent possible, by county, city, and physical address for each residency or business.
2. Geographical tax rate map. In addition to searching for tax rates by zip code or physical ad- dress for each residency or business, searches must be accommodated by a geographical tax rate map of the state that is capable of being displayed with a level of specificity corresponding to each taxing dis- trict.
Updating database To facilitate DOM’s efforts in creating and maintaining this tax searchable data-base, every taxing district may report its tax rates annually to DOM and must report any changes to its tax rates within 30 days of the change.