Iowa Legislative Network Bulletin
March 25, 2008
From the Desk of Lobbyist Craig Schoenfeld
SSB 3108 Preferred Contractor Ban AdvancesSenate Study Bill 3108 (refiled as SF 2326) was approved unanimously by the Senate Commerce Committee, despite protests from the state's insurance industry. The legislation would make it an unfair practice for an insurer to require a contractor to purchase supplies or parts only from a list specified by the insurer for covered home repairs. While there are still several hurdles to clear, the committee's action has put the insurance industry on notice that such practices are not looked on as a favorable public policy in the eyes of the Iowa Legislature. SF 2222 Measure Makes Employers Liable for Late Checks
Iowa employers would be liable for bank overdraft fees their workers incur if the employees are not paid on their regular payday. Under Senate File 2222, the overdraft charges could be the basis for a wage claim for damages. Currently, the law applies only to failures to send wages for direct deposit in a worker's bank account. The Iowa Senate approved the proposal on a 49-0 vote this week. The bill now goes to the Iowa House.
HF 2610 Flaws Exist In Worker-ID Legislation
A legislative proposal to curb illegal employment of immigrants
by requiring all new employees to obtain a Midwest-issued driver's license or
identification card likely will face multiple constitutional challenges, several Iowa
attorneys say. Lawmakers leading debate on the bill disagree. The bill, House File 2610,
could be debated in the House next week.
Recent polls show that Iowans favor the Legislature taking action on illegal immigration.
Fifty-five percent, of Iowans believe the state could most effectively deal with illegal
immigration. The issue has been debated nationally, but Congress has been unable to agree
on reforms that address how to slow illegal immigration or what to do about the estimated
10 to 12 million immigrants illegally living in the United States.
Iowa House leaders this year have already redrafted the worker ID proposal once in an
attempt to steer away from possible court challenges. The latest version, however,
continues to be dogged with flaws. The majority of the problems center on the possibility
that the proposal illegally narrows or pre-empts federal guidelines.
For example, federal rules give the employee a choice among a
number of documents to prove they are authorized to work, such as a Social Security card
or a birth certificate. The Iowa proposal would allow only a state-issued driver's license
or identification card. Originally, the proposal would allow an employer only to accept an
Iowa driver's license or state-issued ID to verify an employee's legal status. Lawmakers
have since agreed to accept IDs from surrounding states so people who live just outside
the state aren't overly burdened.
Attorneys who have reviewed the legislation say there are likely situations in which the
proposal would inhibit interstate commerce as well.
Rep. Rick Olson, a Des Moines Democrat who plans to lead discussion on the proposal, said
the legislation is legally sound. Olson noted ongoing federal rule changes that require
states to adopt stricter authentication standards in the licensing of drivers, which allow
residents to continue to use their driver's license to board planes. Olson, who is also a
lawyer, said the proposal does not pre-empt federal law because it's based on a way to
curb identity theft and applies to everyone, not just people who cannot legally work in
the United States. The plan also would not overly prohibit or slow down business, he
added.
At least 45 states last year proposed roughly 250 measures that dealt with immigrants and
employment, according to the National Conference of State Legislatures. Of those measures,
31 were enacted in 20 states. One of the most aggressive laws that began this year is
Arizona's, which requires employers to check all potential workers' legal status with a
voluntary federal program. That law is being challenged by the American Civil Liberties
Union, which says the law conflicts with federal law. In addition, ACLU officials say the
program has a high error rate that, in turn, violates the constitutional right of due
process by failing to provide any meaningful opportunity to challenge its application.
Civil rights advocates in Iowa have made similar arguments to lawmakers this year.
A lobbyist for the Iowa chapter of the ACLU has registered against House File 2610. Other
lobbyists for more than two dozen other groups or businesses including Principal Financial
Group, the Home Builders Association of Iowa and the Iowa Chamber Alliance have also
issued public opposition against the bill. Only two groups have registered in favor of the
proposal: the Central Iowa Building and Construction Trades Council and the Iowa State
Building and Construction Trades Council.
SF 3273 Bill would allow cities to assess impact fees for public safety
A subcommittee of the Senate Ways & Means Committee met this week to consider legislation that would allow local governments to assess impact fees for public safety. Senate Study Bill 3273 authorizes a city or county to impose by ordinance or resolution a public safety impact fee on each night of lodging rental within the jurisdiction of the city or county. The bill provides that any fee imposed by a city or county may not exceed $1.50 per night. All fees collected under the bill would be deposited in the appropriate city or county general fund and used only for purposes related to local emergency management departments.
The subcommittee consists of state senators Rob Hogg (D-Cedar Rapids) - chair; Senator Roger Stewart (D-Preston); and Senator Larry Noble (R-Ankeny). Our association opposes the legislation for the following reasons:(1) essential government services should be paid through already assessed property taxes; the proliferation of such impact or user fees, as has been demonstrated in other states, will ultimately increase the cost of residential housing and prevent thousands of Iowans from owning their own home
(2) the fee imposed on hotels/motels is for services that should be covered by current property tax assessments (i.e. property taxes are collected for vital government services, namely police and fire protection); the implementation of the impact fee is in fact an additional tax on Iowans
(3) according to proponents of the legislation, the fees collected will not be used for property tax relief or to curb an increase in property taxes but rather the sole purpose of the fee is to create an alternative source of revenue - thus this fee will lead to expanding a local government’s base budget to pay for services for which property taxes are already assessed
(4) expansion of general operating budgets ultimately will lead to additional tax or fee increases, rather than forcing local governments to prioritize the delivery of services, to look for cost savings or to establish more efficient business practices; rising property taxes and increasing costs negatively impact the ability of Iowans to purchase affordable homes.
HF 2542 House Passes Change to Workers' CompIowa employees who are injured while working out of state would be eligible for workers' compensation under a proposal that passed the Iowa House this week. House File 2542 essentially reverses a 2003 Iowa Supreme Court decision that ruled that employees are not entitled to compensation if they're injured out of state. The proposal would allow compensation claims if the employer has a place of business in Iowa and if that employee regularly works from that place.
Some Republicans said the proposal would allow employees injured in other states to seek payment in whichever state offers the best compensation benefits. That, in turn, could cost Iowans millions of dollars every year, they said. They also worried that workers based primarily in other states could collect Iowa benefits. The proposal passed on a 54-43 vote. It now heads to the Senate. House Economic Growth Committee: Voted Out
HSB 586 INCREASED HOUSING CREDIT
Increases the tax credit to 12% for building housing projects in a designated enterprise zone if the project meets specific energy star or target finder rating performance requirements. Amended & PASSED, 20-0 HSB 604 UNEMPLOYMENT REPORTING
Creates a $50 penalty for each delinquent or insufficient unemployment report from an employer and a $30 fee, plus costs, for a faulty unemployment payment to the DWD. Makes an employer responsible for paying costs associated with a subpoena relating to unemployment law and a $250 fine for a refusal or negligent failure to honor the subpoena. Amended & PASSED, 18-0 House Transportation Committee: Voted Out:
HSB 628 TIME-21 FUNDING
Makes truck registration fees the same as car registration fees for model years from 2010. Establishes a business trade class of trucks, meeting certain requirements, that are registered for a flat fee. Does not affect trucks already registered under the current truck fee schedule. Cars: Changes the rate schedule for registrations. Makes the minimum registration fee $75 but allows owners paying a lower rate to continue to do so for that car. Other: Raises the fees for farm trucks and for trailers. PASSED, 12-7 SF 2210 ALTERNATIVE ENERGY TAX CREDIT
Creates a tax credit for small businesses that install alternative energy systems on their property, for 25% of the system and installation cost, up to $5,000. Makes definitions. Requires the business to have less than 20 employees and a gross income less than $4 million. PASSED Senate Transportation Committee: Voted Out
SSB 3267 TIME
Requires the Treasurer to credit $346 million from registration fees to the TIME-21 fund. Registration: Replaces the use-tax fee with changed registration fees. Makes truck registration fees the same as car registration fees for model years from 2010. Establishes a business trade class of trucks, meeting certain requirements, that are registered for a flat fee. Does not affect trucks already registered under the current truck fee schedule. Cars: Changes the rate schedule for registrations. Makes the minimum registration fee $75 but allows owners paying a lower rate to continue to do so for that car. Other: Raises the fees for farm trucks and for trailers. (Strikes the business class of trucks. Makes other corrections). Amended & PASSED The following legislative action took place this week in the Iowa House and Senate.
SF 2160 UNEMPLOYMENT CHARGES
Does not allow an employer who wins a benefits appeal to collect charges for benefits already paid if the employer failed to participate in the initial fact finding, except if the employee received the benefit through fraud or misrepresentation. The Senate PASSED the bill, 31-18; it now goes to the House
SF 2344 WORKERS COMP PENALTIES
Allows up to 50% of a withheld benefit to be awarded as a penalty for a benefit if the denial or delay was without reasonable or probable cause. Establishes provisions for determining what reasonable cause which require the employer to make an investigation and base the cause on what is learned during the investigation. The Senate PASSED the bill, 30-18; it now goes to the House
Senate State Government Committee: Voted Out:
HF 2410 ALARM INSTALLERS & ELECTRICIANSRequires that applicants for certification as an alarm system contractor or installer must give the DPS fingerprint samples for a criminal history check. Requires the applicant to pay for the cost. Deems the results not to be public record. Electricians: Makes corrections so that employees of investor-owned utilities, municipal utilities, and coops acting within the scope of their employment are all under a licensing exemption. Allows a local government to issue a license for an employee that is substantially equivalent to the licensing requirements for electricians. PASSED, 12-0 HF 2411 ELECTRICIAN LICENSING
Changes the requirements for granting a license to a Class B master electrician or journeyman without examination from having worked since 1990 to meeting specific requirements as to the number of hours worked. PASSED, 12-0 HF 2547 ALARM INSTALLER TECHNICAL BILL
Makes technical and other corrections regarding alarm installations and installers. PASSED, 12-0
House Floor Action:
HF 2390 PLUMBING LICENSING DATESMoves up the creation of the Plumbing and Mechanical Systems Examining Board to the enactment date of this bill. Postpones the effective date of licensing requirements until January 1, 2029. HF 2568 WORKERS COMP CALCULATIONS
Requires the calculation of workers’ comp benefits to include shift differential. The House PASSED the bill, 98-0; it now goes to the Senate HF 2589 UNEMPLOYMENT REPORTING
Creates a $35 penalty for each delinquent or insufficient unemployment report from an employer and a $30 fee, plus costs, for a faulty unemployment payment to the DWD. Makes an employer responsible for paying costs associated with a subpoena relating to unemployment law and a $250 fine for a refusal or negligent failure to honor the subpoena. The House PASSED the bill, 94-3; it now goes to the Senate The following legislation was introduced this past week in the Iowa House and Senate.
HF 2640 WORKERS COMP COST OF LIVING (Successor to HSB 673) Requires an annual cost-of-living increase for workers’ comp payments for permanent disabilities based on the increase for federal disability payments. HF 2641 UNEMPLOYMENT CHANGES (Successor to HF 2375) Makes a number of changes to increase eligibility and payments for unemployment. HF 2654 WATER PERMIT FEES (Successor to HSB 691) Authorizes the EPC to set fees for water use and establishes the criteria for setting the fees. Requires that fees be set so that no more than $500,000 is raised in a year. Limits the uses of the fees for reviewing applications, issuing permits, giving technical assistance to applicants and for ensuring compliance. Requires the EPC to review the fund balances and anticipated expenses annually. HF 2656 ENERGY EFFICIENCY (Successor to HSB 742) Establishes an energy efficiency standard of a 1.5 % reduction in energy use for all gas and electric utilities as a statewide average goal. Directs the IUB to work with utilities on the goal. Allows groups of utilities to work together. Establishes a goal for electric utilities of purchasing 25 % of their total annual Iowa retail electric sales from alternative energy facilities by 2025. Establishes a commission on energy efficiency standards and practices in the DPS with Building Code Commissioner, the director of the Office of Energy Independence, and members from the construction industry, utilities, and counties. Gives the commission the duties of developing energy efficiency standards for buildings. Requires a report by 2011. HF 2659 PROPERTY TAXES County Tax Changes: Requires new state mandates after July, 2009 be fully funded in order for local governments to be required to carry out such mandates. Does not include schools and AEAS, and does not include various exemptions for mandates that must be carried out without funding. Increases the regular program foundation base to 95% and reduces the $5.40 levy to $4.32. Limits the amount of school property tax levies, other than foundation and additional property taxes, to no more than 0.25% of the taxable value of residential and agricultural land, and 0.75% of the commercial property, and 0.5 of industrial property. Enacts transition provisions to phase these changes in over several years. Requires that if a county ending balance exceeds 25% that the excess must be explicitly reserved. Allows a county or city to impose a service charge. Increases the base year expenditure percentage for the state MH/MR/DD formula to 75%. Strikes the square footage tax on mobile homes and manufactured homes and replaces it with the ad valorem tax on th www.legis.state.ia.us e residence. Assess the real estate of a mobile home park as improved residential property. Limits increases for city and county property taxes for all classes of property to no more than the CPI unless the increase is approved at an election as of 2013. Lowers the tax rate on delinquent taxes to 1.5%, effective as of July, 2008. Assessments and Ag Land: Makes the sale price for a property the market price unless the sale is to an immediate family member. Allows counties to share in the employment of a county assessor. Requires an assessor to use the replacement cost method for new construction if the assessor is unable to establish fair market value. Strikes the various assessment limitations on the different classes of property and requires all property to be valued at its fair market value, with reductions allowed for some improved residential property, improved commercial and improved industrial property. Makes agricultural land held for commercial development or with a confinement operation not operated by the owner as commercial property. Allows the owner of a commercial property with a fair market value of less than $500,000 to elect to have the property valued on the basis of net earning capacity, except for confinement operations. Values agricultural property that is not valued as commercial property or is not owned by an active farmer to be valued at a five-year average of the fair market value. Allows a reduction in actual value. Gives a court discretion to award attorney fees in assessment protests for the plaintiff, or if the assessment protest was frivolous, to the county. Requires assessors to keep certain financial records confidential. Increases to six years the time that sub-divided property shall be assessed as acreage or unimproved property. Credits: Changes the various individual property tax credits to exemptions from assessed value. Limits the value of an exemption for pollution-control equipment. Makes land in a forest reservation exempt from school levies and requires the owner to use proper management techniques. Strikes the family farm and the agricultural land credit. Other: Establishes various effective dates for different provisions in the bill. Establishes a study committee to report on the implementation of the bill as of July 2010. SSB 3286 EMPLOYEE CLASSIFICATIONS Changes provisions on payment of employees, including that employee or independent contractor status is determined by FLSA. Creates a rebuttable presumption that an employer who does not keep appropriate records has not paid minimum wage. Strikes requirements that limit the entry into the workplace of the Labor Commissioner. Establishes additional instances where an action against an employee is retaliatory. Increases civil penalties for that failure to pay wages. Prohibits knowingly transporting goods produced in violation of wage standards and allows a party suffering from unfair competition seek injunctive relief. Makes the largest shareholders in a corporation responsible for unpaid wages. Independent Contractors: Establishes a new Code section on classification of individuals as employees or independent contractors. Makes definitions. Establishes the duties of the Labor Commissioner on notice and enforcement. Allows the Commissioner and employees to be indemnified for damages and legal expenses related to the enforcement of the provisions. Establishes provisions on civil penalties and judicial review. Establishes criminal and civil penalties for contractors who violate the provisions. Includes other related provisions. Other: Makes the provisions severable. Effective, January, 2009.
Remember that Legislative Bulletins are posted on our web site, www.nlassn.org. For full details of the legislation, please visit www.legis.state.ia.us.
Regards,
Paula Siewert, CAE
President
Northwestern Lumber Association
800-469-9078