2013 Legislative Session Recap
by Matthew McKinney >
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The 85th Iowa General Assembly gaveled out on May 23, 2013, twenty days after the legislators’ per diem expired on May 3, 2013. And despite legislators’ per diem expiring, significant work continued under the golden dome - often well into the night and early morning hours. Moreover, in defiance of the winds of skepticism swirling around Capitol Hill and in the media that the 2013 legislative session would end without meaningful progress on education reform, Medicaid expansion, and property tax reform, the legislature worked overtime, reached resolutions, and ultimately voted and passed new laws on all three “big-ticket items”.
Property Tax Reform
With respect to property tax reform, the new law imposes several changes across various property classifications. In general, the 2013 property tax reform law will be phased in over several years and, among other things, provides for a 10 percent rollback on industrial and commercial property taxes. To alleviate concerns expressed by cities throughout the session, the law also provides local governments with a 100 percent “backfill” for losses in revenue stemming from the 10 percent rollback. Finally, the new law establishes a property tax credit that is scheduled to reach $125 million by fiscal year 2015 for commercial and industrial properties and places a 3 percent limit on property tax assessment growth for agriculture and residential properties.
Similar to property tax reform, education reform will also be phased in over the coming years. The education reform bill passed during the 2013 session increased funding to schools by 4 percent for fiscal years 2014 and 2015 and increased beginning teacher pay to $33,500. School districts will also have the option to adopt and incorporate new “career pathways” for their teachers. The career pathways are aimed at providing opportunities for teachers to take on additional roles and responsibilities at school, including mentoring other teachers in the classroom. Finally, the law will require a new student assessment mechanism to be identified and adopted by 2016 so as to more accurately assess student achievement and growth.
During its final days, the legislature also hammered out resolutions on several important budget matters, including the Agriculture and Natural Resources budget. Notably, after the House of Representatives and Senate initially passed their separate and conflicting Agriculture and Natural Resources budget bills (bills that contained different budget items and policy issues), a conference committee of legislators from both chambers was formed in an effort to resolve differences between the conflicting bills. Eventually, the conference committee found middle ground and the House of Representatives and Senate passed an Agriculture and Natural Resources budget that includes, among other items, new appropriations for water quality and watershed improvement, nutrient research and reduction, as well as soil conservation.
While Iowa law previously required the Iowa Department of Natural Resources (“IDNR”) to administer an Agricultural Lease Program, a new law requires the IDNR to lease agricultural land that it holds or manages as wildlife habitat in each county to beginning farmers. As outlined in the new law, a beginning farmer is generally an individual, partnership, family farm corporation, or family limited liability company with a low or moderate net worth that is not engaged in farming. The law requires IDNR to execute a lease with qualifying beginning farmers that it selects to participate in the program after the beginning farmer has been certified as one that meets the requirements set forth in the new law.
Several changes were made to the Innovation Fund Tax Credit program. The new law increases the credit that one may receive from 20 percent to 25 percent of a taxpayer’s equity investment in an innovation fund. Additionally, the new law, which will be applied retroactively to January 1, 2013, eliminates a prior requirement that a taxpayer must wait three years to claim a tax credit through the program. Finally, the prior law was amended to allow a taxpayer to transfer a tax credit to another person, which was previously not permitted.
Many technical as well as a few substantive changes were incorporated into what is known as Iowa’s Business Corporation Act, a model Act adopted by the American Bar Association. A few of the many amendments to existing law include changes to laws regulating conflict of interest transactions, advancing funds to a director for legal expenses to be incurred in the course of litigation, and a shareholder’s appraisal rights.
Manure Management Certification Requirements
The legislature also passed new laws related to the application of manure on land in Iowa. In general, the changes require IDNR to establish requirements for instructional course subjects, and the curriculum primarily emphasizes practical and cost-effective methods for preventing manure spills. Further, the new law requires courses be made available online.
Starting out in the Government Oversight Committee, a new law was passed that relates to the public use of certain private lands and waters. What became known as the “Landholder Liability” bill, progressed through both chambers with the stated purpose of encouraging private landowners to open up their land and water areas to the public for recreational purposes and for urban deer control by limiting the landowners’ liability to persons who enter onto their land to pursue such activities. The new law was enacted as a result of a recent opinion published by the Iowa Supreme Court in Sallee v. Stewart (No. 11-0892) (Iowa 2013).
Unless a rare, special session is called, the Iowa Legislature will not convene in full again until 2014. If you have any questions on the foregoing summary, a specific bill or other legal issue, please contact Marc Beltrame or Matthew McKinney.
Marc T. Beltrame and Matthew H. McKinney are attorneys on BrownWinick’s Government Relations Team. They have a full-time presence at the Iowa Capitol during the legislative session, representing multiple businesses and interests. Marc can be reached at (515) 242-2449 or firstname.lastname@example.org, and Matt can be reached at (515) 242-2468 or email@example.com.