Highlights from Week Seven

Week seven of the session saw much movement of bills in both houses. Here are some of the highlights:

HF 2456 – Texting While Driving.
The bill passed the Senate this week with an amendment to include a prohibition on reading texts or emails while driving. The prohibition on reading texts was initially left out of the bill since there is not a corresponding prohibition on reading other things like newspapers or one’s GPS monitor. The bill as amended is sitting in the House.

SF 2246 – City Regulation of Taxi Cabs.
This bill is on its way to the Governor for signing, and allows for local authority in exercising home rule powers in the regulation of taxi cabs and limos. What it accomplishes, is that cities would be able choose what taxi cab and limo companies can operate within the city’s limits to ensure only responsible and trustworthy companies are offering services to citizens.

SF 2220 – Motor Carrier Contracts.
Another bill on its way to the Governor; this prohibits certain indemnity provisions from contracts between motor carriers and the shippers/warehouses, in which the motor carrier would be liable for damages caused by the warehouse’s negligence. This bill places the blame where due – motor carriers will no longer be responsible for the costly mistakes caused by shippers in loading or unloading goods from trucks.

HF 758 – Increases Damages for Wrongful Death.
Amendments were filed this week on this bill that was introduced last year. The bill will allow additional damages awarded to a spouse or child for loss of the decedent’s enjoyment of life. These damages are in addition to those awarded for loss of the economic productive value of the decedent had he lived. Passage of this bill would have the effect of greatly increasing the cost of insurance to motor carriers and all businesses.

The second funnel deadline is next Friday March 5, whereby House bills must be voted out of Senate committees and Senate bills out of House committees.

Texting Ban NOT a Race Issue

Early this week in the Des Moines area, an anonymous robo-call went out to an unknown number of residents urging them to contact Representative Ako Abdul-Samad (D-Des Moines) and Representative Rick Olson (D-Des Moines) and ask them to oppose the texting ban bill. The call was not opposed to the bill because it infringes on civil liberties, or the usual arguments the opposition makes, but because it will allegedly give police officers another means for racial profiling.

Click here to hear the call on WHO’s website.

John Ulczycki, of the National Safety Council, said they have seen this argument made before when other states have tried to pass a texting ban, but it simply is not true. As the robo-call speaker claims, this bill will enable officers to pull a driver over for being a certain race, but allege the driver was texting.

While this is an unlikely scenario, if racial profiling is occurring, that needs to be addressed in a separate bill. Representative Abdul-Samad agreed in saying officers who engage in racial profiling have other issues and serious “social ills.”

The proposed ban on texting, HF2456 and SF2321, will prohibit drivers from typing or sending a text message or email while driving. The goal is make roads safer for Iowans. The National Safety Council would like to see the bill include a ban on “reading” text messages as well.

“While there are many sources of driver distraction, there is heightened concern regarding the risks of texting-while-driving. The act of composing, sending or reading text messages interrupts drivers’ cognitive attention, causes vision to be directed away from the road, and compromises manual control of the vehicle.”

Naturally, if there were 200,000 accidents a year as a result of eating a BigMac while driving, laws might be promulgated for that. In the meantime, the ban on texting while driving will make our roads safer. It is not a tool for officers to engage in racial profiling.

[At 2:30pm Tuesday the HF2456 is up for debate in the House.]

Fix Your Car

Thursday, CSG, on behalf of the Iowa Collision Repair Association, asked Representative Paul Shomshor, Chairman of the Ways & Means Committee, to introduce a bill that would change the way certain materials used in auto-body repair shops are taxed.

Currently, both parts and labor that go into vehicle repair are taxed to the consumer. That tax is paid on the retail price of the parts and labor. “Parts” includes the “big” parts, like bumpers and corner panels.

“Materials” used in auto repair include things like paint, putty, sandpaper, and cleaning compounds. The costs of these materials are taxed to the auto body shop itself and not the consumer. This results in the shop paying sales tax on the wholesale price of the materials.

If the consumer were to pay the tax on these materials instead of the shop, the consumer would pay a tax on the retail price – this slight increase in taxes paid would add an estimated $1.8 million to the state’s revenue.

Iowa is one of only a few states in the nation that require the sales tax on materials to be paid by the auto-body shop. Passage of this bill will lighten the overall tax burden on these small business owners.

Senate Study Bill 1210, in the Senate Ways & Means Committee is awaiting a fiscal impact statement before it will move. The introduction of the House bill and the momentarily static Senate version elude last week’s funnel deadline because they are Ways & Means bills.

Puppy Mill Bill Passes House

After much delay and some debate, the Puppy Mill Bill passed the Iowa House Wednesday afternoon with a vote of 77-22.

Of the hundreds of bills introduced at the state capitol this year, the so called “Puppy Mill Bill,” HF2820, is getting some of the most attention. CSG does not have an interest in the bill other than observing the furry activity surrounding it.

The bill would raise the licensing fee for breeders to fund inspections of puppy mills after receiving complaints of neglect or mistreatment.

Commercial breeders would be held to a “general standard of care,” which says that the animal must not be lacking adequate food, water, housing, sanitary control, grooming practices affecting the health of the animal, or veterinary care.

The bill creates an interesting dilemma for legislators who don’t want more government involvement in business, but also don’t want to be seen as voting against puppies.

Commercial breeders have been opposed to the bill and fear the department will receive countless complaints from people who dislike puppy farms in general. This could result in unnecessary and costly inspections. Several amendments have been added to the bill which may have changed groups' positions on it.

The Iowa Voters for Companion Animals were at the Statehouse today advocating the passage of the bill which will now move to the Senate as amended.

Life & Death at the Statehouse

The fury of activity this week at the statehouse is designed to end consideration of bills that do not have enough support to be voted out of their committee of origin. Proposals that do earn a majority of committee member votes are then advanced and placed on the debate calendar for consideration. The next deadline in the legislative “funnel” comes in three weeks when bills must be voted out of committee in the other chamber.

In other news, Republicans in both chambers employed a parliamentary procedural to attempt to force debate on a proposal to amend the constitution as it relates to the definition of marriage in Iowa. The attempt was defeated by Democrats who, with the exception of one member in each house, voted to block consideration of the measure.

Business interests became more alarmed this week after legislation to require sick leave for employees was advanced in the Iowa Senate. This follows the announcement last week that action would begin on the so called “Fair Share” legislation and a bill to require “prevailing wage” on certain construction projects.

Funnel Deadline Fast Approaching

With Friday’s first funnel deadline approaching, several bills of interest to CSG came out of committee yesterday. For a bill to survive the funnel, it must be an Appropriations, Government Oversight, Ways & Means, sponsored by leadership, or get voted out of its Senate or House standing committee. Study bills that get voted out of committees arrive on the calendar as committee bills with a new bill numbers. All other bills are done for the session.

Tuesday, the House Transportation Committee voted out HF2021 which classifies text-messaging while driving as reckless driving and HSB616 which tightens restrictions on Iowa’s graduated driver’s license system. Both bills have the support of the National Safety Council for now.

House Study Bill 650 was passed out of the House Judiciary Committee with the understanding that it would be amended on the floor. This bill will allow the DOT to grant all temporary restricted licenses (TRL) without requiring the courts to order the department to do so. It also allows repeat OWI offenders to obtain a TRL after a 45-day hard suspension of their license instead of 90 days. However, the offender must have an ignition interlock device installed in his car.

During the committee meeting, Representative Jeff Kaufman pointed out that MADD – Mothers Against Drunk Driving – supports this code change as the facts show that offenders will often drive their vehicles under a suspended license. Allowing offenders to obtain a TRL with the ignition interlock device 45 days sooner will prevent them from driving under the influence in that time period keeping our roads safer.

Dems Nod at Labor

Governor Chet Culver issued an Executive Order this week that will require state government construction projects to consider using Project Labor Agreements. Culver made his remarks to meeting of union members attending the Iowa State Building and Construction Trades Council and the AFL-CIO on Wednesday. On Thursday, House Democrats introduced two separate proposals known as “Fair Share” and “Prevailing Wage”. The first proposal allows public employee unions to charge non union workers for services provided by the union. Private companies on government projects would be required to pay the “prevailing wage” in their area.

Next week, bills must be passed out of their assigned committees to receive further consideration this year. However, many bills are exempt from this requirement and “live rounds” can be amended. These primarily include bills in Appropriations, Ways and Means, and Government Oversight committees, Bills cosponsored by Majority and Minority Leaders of one House, Companion Bills sponsored by the Majority Leaders of both Houses after consultation with the respective Minority Leaders, Conference Committee Reports. (see Iowa Code Sec. 17A.8(9)).

Submitted by Scott Weiser, President of CSG

Combined Reporting Resurfaces in Subcommitee

The Senate subcommittee on combined reporting, SSB3122, met this morning in an information gathering session. The committee consists of Senator Pam Jochum (D-Dubuque), Senator Herman Quirmbach (D-Ames), and Senator Randy Feenstra (R-Hull).

Combined reporting would require corporations with entities outside the state of Iowa to combine their total incomes from all those entities on their Iowa state income taxes. In theory, this would increase state corporate income tax revenue $42-109 million dollars said Jim McNaulty of the Iowa Department of Revenue. Eight to ten-thousand corporations in Iowa would be adversely impacted by this.

Currently, Iowa only imposes income taxes on corporations within the state’s borders. It is one of the key benefits to doing business in the state of Iowa. Ed Wallace, president of the Iowa Taxpayers Association, which represents 154 Iowa companies, said ITA is adamantly opposed to combined reporting as it frustrates stability and predictability in an already shaky economy. Increasing corporations’ tax burdens does nothing good in this economic climate, and when companies see combine reporting, the decision to move or expand elsewhere is easily made.

Combined reporting is the equivalent of anti-economic development John Gilliland, representing the Iowa Association of Business and Industry, stated. ABI is comprised of 1,400 companies and over 300,000 employees statewide. ABI members are united in their belief that combined reporting is not good for the state. Iowa should aspire to have more business growth not less Mr. Gilliland concluded.

The only advocate to speak for the bill was from the Child and Family Policy Center. Their representative, Mr. Elias, expressed the group’s desire to raise revenues for Iowans by closing the “significant tax loopholes.” Companies consider “more important” things than the corporate tax structure of state when considering whether to do business there, he claimed.

Senator Feenstra, responded to the comment by Mr. Elias, by asking what is the number one reason corporations move in or out of a state. Government interference, Senator Feenstra stated. A study by Ernst & Young found that combined reporting negatively impacts states’ economic climates. Maryland recently withdrew its combined reporting statute after finding they did not take in the expected increase in revenue. Senator Feenstra, a small business owner himself, concluded by saying that he was really disappointed that this bill was even coming forward.

Senator Quirmbach ended the subcommittee meeting by exclaiming he could not be “more diametrically opposed” to Senator Feenstra. The current unitary tax system discriminates against small business in Iowa and it is small businesses that provide for the bulk of employment. Senator Quirmbach made the diabolical reference to the “Walmarts” of the world who shift around their income taxes to avoid paying corporate taxes at all, as the claim goes.

CSG sides with ABI and ITA in being adamantly opposed to combined reporting reporting legislation.

Bill Legalizing Sports Betting Moves Forward

Senate File 2129, legalizing sports betting in Iowa, was passed out of its subcommittee this morning. The Senate subcommittee met at 8:15 this morning in Senate President Jack Kibbie’s office. The bill was amended to specify betting on professional sports only as opposed to college sports.

Senator Kibbie (D-Emmetsburg) pointed out that we know sports betting goes on, so we might as well legalize it. Billions of dollars are bet on professional sports world wide – why not in Iowa?

However, the legalization of sports betting in Iowa hinges on the passage of federal legislation legalizing it first. Currently, four states already have professional sports betting as their laws were grandfathered in by the courts.

Senator James Seymour (R-Woodbine) spoke against the bill, stating that there are ample opportunities for gambling already in Iowa, and in the current state of the economy, more don’t need to be added.

The bill will now move to the full committee of State Government for consideration.