April 10, 2008

House Approves Use Tax Increase

House Subcommittee Considers City Fee Bill

Independent Contractor Bill Advances in House and Senate

TIME – 21 Moves Ahead

Senate Votes to Protect Privacy in Research Projects

Union Bargaining Bill Watch

IIPAC Auction: Billy Joel – Live in Concert

Why I Invest in IIPAC

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House Approves Use Tax Increase

On Wednesday, the House voted 59-41 to increase use taxes paid by Iowa businesses by $60 million per year in passing HF 2663. HF 2663 repeals the current school infrastructure local option (SILO) tax and replaces it with a statewide sales and use tax.  In a lengthy debate, a number of amendments to protect the new tax revenue from being scooped for non-school infrastructure were also defeated.   

The current SILO is assessed by county and excludes use taxes paid by business.  When the tax becomes statewide, the adoption of the Streamlined Sales Tax, which Iowa adopted in 2004, requires that the sales and use tax be uniform.   Despite opposition from ABI and other business groups, the bill passed on a bi-partisan vote.  Some rural legislators without commercial centers supported the measure because of the net gain their districts will receive despite declining enrollments.  The Senate is expected to take up the measure quickly.

House Subcommittee Considers City Fee Bill

A House subcommittee met Thursday morning to discuss HF 2671, a bill that would allow cities to charge a number of different local sales taxes as alternatives to property taxes.  The bill includes authorizing cities to collect franchise fees for gas and electric services up of up to 5%.  Other features of the bill would allow ten pilot cities to charge other fees by local ordinance as a means to replace property taxes.  Those fees include:

·        Local one cent sales and services tax

·        Unlimited local cigarette and tobacco tax

·        Service tax in lieu of property tax for tax exempt entities like churches and hospitals

·        Franchise fees of up to 3% (in addition to 5% authorized for all cities under the bill)

·        Local hotel/motel tax up to 2% (in addition to 7% already allowed by law)

Fees colleted would be directed to a city property tax fund fund - 70% to reduce property taxes on commercial and industrial property and the remaining 30% to be used amongst all four classes of property: residential, agricultural, industrial, and commercial.

ABI advocated in opposition to HF 2671 based on ABI’s Tax Committee property tax policy which provides in part:  “The system should provide adequate safeguards to prohibit spikes in rates and assessment, and should not rely on new taxes and fees.”

Independent Contractor Bill Advances in House and Senate

The House and Senate Ways and Means Committees approved legislation that would place additional burden on all employers, while establishing a special employee classification for individuals in the construction industry.  HF 2686 would require all employees to carry a valid Iowa (or bordering state) driver’s license or non-operator identification card.  Several businesses and groups have expressed concern as to highly skilled individuals researching in Iowa for a short amount of time and also refugees who are here legally, but have no state documentation.  A committee amendment was adopted which places penalties on all employers who knowingly hire an illegal worker.  

SF 2416 has two divisions—Division I relates to wage payment collection and the second division also encompasses the independent contractor language in HF 2686. Division I substantially changes Iowa Code Section 91A by placing punitive penalties on Iowa employers. SF 2416 was on the Senate calendar for debate, but the Senate adjourned late Thursday morning without debating the legislation.  Look for action in both chambers next week.  

TIME - 21 Moves Ahead

The Senate and House Ways and Means Committees approved two versions of the transportation infrastructure (TIME – 21) proposals this week with passage of SF 2389 and HF 2562.  Both versions include a number of fee increases including: registration fees for motor vehicles, fees charged for certificates of title and trailer registration fees.  The bills also replace the use tax on vehicles with a registration fee.  Neither version includes a fuel tax increase, limiting the total funds raised toward the $200 million goal for transportation infrastructure.  It remains to be seen whether each version will be approved before the expected April 22nd adjournment date.

Senate Votes to Protect Privacy in Research Projects

The Senate voted 42-7 to approve HF 2558—legislation protecting individuals and companies’ privacy rights when submitting applications for state grants.  The legislation helps both large and small corporations by protecting proprietary information in highly technical areas.  The Senate amended the legislation, so it will now return to the House for their approval.

Thursday morning a subcommittee met to discuss SSB 3285 which relates to energy independence initiatives, and specifies procedures for Iowa power fund applications, including authorizing allocations from the fund.  The legislation seeks to increase privacy of those individuals applying for power fund dollars, while conforming to the new open records proposal.  A question regarding penalties for individuals and/or entities who did not comply with the privacy clause was raised.  The legislation is expected to be voted out of the Senate Ways and Means Committee next week. 

Union Bargaining Bill Watch

Governor Culver has made no decision yet on HF 2645, which allows “open-scope" collective bargaining for government unions with binding arbitration – a combination that leaves taxpayers and local elected officials with little input, no recourse, and higher property taxes.  ABI was told there hasn’t been much discussion between the Governor and Legislators on the bill.  

IIPAC Auction: Billy Joel – Live in Concert

LAST CHANCE: Bidding closes Friday, April 11th, 2008 @ 12 noon.  

Bid now for a chance to spend a Memorable Evening with the Piano Man! 

Billy Joel

Tuesday, April 15 - 8:00pm

Wells Fargo Arena, Des Moines

Package includes:

Two (2) Exclusive Pre-Sale Tickets

Section 103, 4th Row

Wells Fargo   Parking Pass  

To Bid Click HERE NOW!

Why I invest in IIPAC

"My personal investment in IIPAC will help ABI raise the voice and visibility necessary to cultivate candidates with a pro-business philosophy.  Work of the Iowa Industry Political Action Committee ensures support for the right candidate for the state legislature and other state offices necessary to bolster a proactive business agenda and positive public policy for the betterment of all Iowans.  I urge everyone to invest in our IIPAC so that we can counter the substantial coffers of opposing PAC’s and raise the voice of Iowa ’s Industry."  

- Sarah McDonald Hasken
Vice President  & Corporate Secretary
A.Y. McDonald Mfg. Co.

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