State Legislative Issues FY 06
City Of Dubuque
State Legislative Issues
For The 2006 Session
State BudQet
In response to a revenue shortfall during the 2003 and 2004 session the State of
Iowa implemented across-the-board cuts in expenses. Some of these cuts
reduced revenues to cities, with no relief to cities for state-mandated programs.
Concerns remain over the impact of the reduced revenue to cities and that
similar action will be taken in the 2006 session. Reduced state revenues
negatively impact property taxes.
Requested Action: The state should restore revenues to cities that were cut in
2003 and 2004 in an effort to make cities whole and to help reduce the burden on
property tax payers.
State Mandates
Cities are often faced with implementing mandates from the state and federal
governments without receiving the necessary funds for implementation
Requested action: Enact legislation that exempts local government from
providing any new service or engaging in any new activities mandated by the
state if the state does not provide full funding.
Homestead Tax Credit
Each year the City of Dubuque tries to minimize the tax asking for the average
homeowner by not increasing and in some years, decreasing the City's property
tax rate. The State of Iowa has created a partially unfunded mandate through
the establishment of the Homestead Tax Credit. The cost for the lack of full
funding of this credit is passed onto taxpayers and diminishes the City of
Dubuque's efforts to keep property tax rates low. The credit was funded by the
State at 85% in 2003-2004, 81 % in 2004-2005 and 78% in 2005-2006.
Requested action: Reinstate full funding for the Homestead Tax Credit.
Tax Increment FinancinQ (00
The Iowa Code provide that cities can use TIF for certain public and private
economic development purposes once an urban renewal plan is approved and
an urban renewal district established. The ability to use TIF to assist private
economic development projects in urban renewal districts has become a very
useful financing and incentive for private investment.
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Requested Action: Support efforts to maintain Tax Increment Financing as an
economic development financing tool.
Sales Tax Refund for Downtowns
The Iowa General Assembly enacted legislation this year that provided 100%
state sales tax abatement to the new racetrack in Newton. The downtowns in
cities across the state, both large and small, are desperately in need of
redevelopment. The state sales tax abatement could be structured as the
Newton project, with 100% for ten years or some graduated rate over 10 years or
less. The graduated option would be similar to Iowa Code 427B.1, which allows
for partial property tax exemption for industrial real estate.
The increase in property tax to schools and the additional income taxes from jobs
in these retail establishments would more than offset the state sales tax losses
from projects that may have occurred anyway. The added vitality in small towns
across Iowa would make Iowa a more attractive place to live, work and locate a
business.
Requested Action: Support efforts to establish a state sales tax abatement for
downtown redevelopment.
FundinQ of Maior Transportation Proiects
The State of Iowa has used a strategy of allocating funds for completing the
major transportation projects in the state as opposed to using a piecemeal
approach. This strategy has been successful with extensive work being
completed on major corridors. The same strategy should be used for major
projects in larger cities, which require significant funding commitments for
completing the projects in a reasonable amount of time. Examples include the
Southwest Arterial and the Julien Dubuque Bridge.
Requested Action: Support efforts to continue the strategy for funding major
transportation projects throughout the State including projects that have federal
earmarks.
Property Tax
The current tax structure for state and local governments is a mix of tax laws,
rates and policies that do not provide for a fair and consistent tax system. The
Iowa League of Cities and the Iowa State Association of Counties (ISAC) have
identified key areas needing revision for a comprehensive tax reform in Iowa.
They include: Changes to assessment and valuation procedure, city and county
budgeting processes, developing an alternative to current property tax limitations,
elimination of the rollback formula and homestead exemption.
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Requested action: Work with the Iowa League of Cities and ISAC to approve
legislation to design a tax structure that provides tax equity and policies that are
consistent with an overall direction for state and local government taxation.
Fully Fundina Enrich Iowa Proaram
Enrich Iowa is a state aid program for Iowa's libraries. Until recently, Iowa was
one of 8 states without direct state aid to libraries. Current state funding is at $1
million statewide versus the recommended $3 million for full funding. If Enrich
Iowa were fully funded, the Carnegie-Stout Public Library could realize at least
$100,000 a year in state aid.
Requested Action: Support efforts to fully fund the Enrich Iowa program at $3
million statewide.
Municipal Communication Utilities
Communities across the state are considering creating municipal communication
utilities to provide a vehicle for companies to offer state-of-the-art services to
citizens and business. The option to form a municipal communications utility has
been a critical negotiation tool for cities to use when trying to negotiate more
affordable cable and internet service for citizens.
Requested action: Resist efforts of telephone, cable TV. and other
telecommunication companies to pass a state law to inhibit the creation of
municipal communication utilities.
Telecommunications
Cities maintain and provide data on the location of public utilities, however, no
information is available from telecommunication companies on the location of
fiber optic and other telecommunication lines. This information is critical for
negotiating development agreements for businesses desiring to expand or locate
in a community.
Requested action: Pass legislation requiring that all video, telecommunications
and Internet providers provide a map of their infrastructure to each municipality
they serve.
Rescind House File 324 Reportina reauirements
In the 2001 General Assembly House File 324 (HF 324) was enacted. This law
set up numerous new requirements for cities concerning bidding for street, bridge
and culvert projects involving construction, reconstruction and improvements
costing over $25,000 ($50,000 for cities over 50,000 in population).
One requirement was a new report that is labor intensive and taxing to city
public works departments. In addition to the report that cities currently submit
on street receipts and expenditures using road use tax funds, the new report
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requires cities to provide detailed cost accounting for all projects within 90
percent of the bid threshold. The report also includes a statement of the cost
of purchasing, leasing, or renting construction or maintenance equipment.
Since the reports are extremely detailed and some cities do hundreds of street
projects annually, this new requirement will entail a city needing additional
resources. HF 324 did not charge the Iowa Department of Transportation to
use this new report for any specific state purpose, resulting in 950 cities
expending resources that could be used elsewhere. This becomes particularly
onerous for small cities that publicly bid the majority of street projects.
Requested Action: Support effort to reduce the reporting requirements for HF
324.
Hotel and Food Establishment license fees
A draft bill the Iowa Department of Inspections and Appeals (IDIA) will be
submitted to the Iowa Legislature in the upcoming legislative session. This bill
increases the hotel and food establishment license fees which will bring them in
line with costs of running the program. The Bill also .includes a Plan Review fee
based on establishment risk and square footage, along with a reinspection fee for
critical violations found. In FY 06, the projected cost for conducting the Food
Inspection Activity is $77,612, while our projected revenue is $69,000.
Requested Action:
Support proposed legislation that will fully fund State mandated health
inspections for Hotel and Food Establishments through increased license fees.
School Food Proqram Inspections
An additional food inspection legislative issue is based on legislation that became
effective July 2005. An amendment to Section 9(h) of the Richard B. Russell
National School Lunch Act (42 U.S.C. 1758(f)(5)) went into effect. This
amendment imposes an unfunded mandate requiring at least two school food
program inspections per year instead of one.
Currently, the City of Dubuque Health Services Department inspects school food
lunch programs one time per year, but does not receive any license or inspection
fees for the service. It is not necessary to inspect the school food lunch
programs more than once per year and this additional requirement would put an
additional workload burden on staff.
Requested Action:
Oppose legislation to add a second School Food Program inspection.
Bed and Breakfast Tax Classification
The State of Iowa department of revenue rule says that regardless of commercial
use, a "single family dwelling" is to be classified for tax purposes as "residential."
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The court of appeals agrees with this interpretation and states that because a
bed and breakfast is used as a single family dwelling and a bed and breakfast
and was constructed as a single family dwelling it fits the exception in the
revenue rule that regardless of commercial use, a "single family dwelling" is
"residential. This interpretation could have sweeping ramifications on
commercial and other property once constructed as residential but now zoned
and operating as office, commercial or other non-residential use.
Requested action:
Adopt legislation that modifies the revenue rule on the classification of property
so that bed and breakfast and other businesses operating in what were "single
family dwellings" are taxed as commercial.
411 Contributions
The City of Dubuque's contribution to the retirement system for police officers
and firefighters went from 17% of wages in fiscal year 2003 to 28.21 % of wages
in fiscal year 2006. The additional annual cost associated with the increases in
the City's contribution to the police officer and firefighter retirement system is
$1,210,203. The contribution rate for police officers and firefighters has
remained unchanged since Fiscal Year 1997. Their contribution is 9.35% of
wages.
Requested action:
Any future increases in funding to support the retirement system for police
officers and firefighters should be borne by the employees and not the cities. In
the event there is a reduction in the funding needed to support the retirement
system for police officers and firefighters, cities contribution to the system should
be reduced.
411 Subroaation
Currently in Chapter 411 cities are not allowed to seek reimbursement from Third
Parties for costs incurred for Police and Fire injury and illness claims. As such, a
Police or Fire employee may collect against the City for an injury or illness claim
and collect a second time for the same incident against a Third Party. If the
employee is successful in getting payment from the Third Party, the City is
currently not able to obtain reimbursement (subrogate) from the Third Party
payment.
Requested action:
Amend Chapter 411 to allow cities to seek reimbursement from third parties for
costs incurred for Police and Fire injury and illness claims.
Underaae and Binae Drinkina
Current legislation provides for a penalty to be placed upon the establishment
that serves minors, however, only a simple misdemeanor penalty is placed upon
the underage person attempting to purchase alcoholic beverages. This does not
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discourage this problem, which is particularly prevalent in college age students.
In an effort to combat underage consumption and "Binge Drinking" by our college
age population, we would ask legislative consideration to increase the simple
misdemeanor penalty found in Iowa Code Chapter 321.216 and 123.50 to a
higher penalty.
Requested action:
Pass legislation to increase the simple misdemeanor penalty found in Iowa Code
Chapter 321.216 and 123.50 to a higher penalty.
Expand Definition of Good Moral Character
One of the criteria for the issuance of a State of Iowa liquor license is determined
by "Person of Good Moral Character" as defined in State of Iowa Code 123.3
(26)(d). The State takes into consideration the local municipalities local
interpretation of "Person of Good Moral Character" prior to issuing a liquor
license:
Requested action:
Review the definition 123.3(26)(d) "Person of Good Moral Character" by
consideration to expand felony convictions to include appropriate indictable
misdemeanors (i.e. convictions of O.w.1. (321J.2), Bootlegging (123.59) and
other such liquor violations)
Cultural and Entertainment District Incentives
In 2004 the State of Iowa established a Cultural and Entertainment District
program. The purpose of this program is to promote arts and culture in Iowa
communities and to promote renovation of historic buildings to house cultural
programs. The initial program was funded with $1 million in historic tax credits
for 2005 and 2006 for eligible projects in these districts.
Requested action: Continue funding for tax credits for properties located in
State of Iowa recognized Cultural and Entertainment Districts.
Civil RiQhts Enforcement
Civil rights agencies are the law enforcement tools for civil rights laws. The Iowa
Commission works in partnership with the Dubuque Human Rights Commission
and other local commissions to successfully leverage resources to enforce civil
rights laws across Iowa. The Iowa Commission also is responsible for
enforcement of civil rights in Dubuque County. The state and local agencies are
leaders in efforts to educate business and industry on civil rights laws, on
diversity, and preventing discrimination. The Iowa Civil Rights Commission has
faced severe budget reductions and is currently operating at the lowest staffing
levels in twenty years. Reduced support for the Iowa Civil Rights Commission
impedes its ability to protect the public, and sends the wrong message regarding
the value we place on diversity and inclusivity, at a time when we are struggling
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as a state to attract economic development and build our workforce. Civil rights
protection provides the mechanism to address and prevent problems in the
workplace that could hamper new Iowans from locating and remaining in our
state.
Requested Action: Support budget increases for the Iowa Civil Rights
Commission to enable the Commission to return to adequate staffing and to
further its enforcement initiatives.
Enterprise Zone Incentives
The Enterprise Zone legislation was written to promote private investment in
economically distressed areas of a city or county. To assist new employees of
companies locating in enterprise zones, the legislation provides for employers to
establish a capital fund for down payments or rental subsidies. The business
funds this program through a credit from state withholding taxes, based on the
wages paid to the participating employees. An amount equal to 1.5 percent of
the gross wages paid by the employer is credited from the payment otherwise
withheld, and used to capitalize this fund.
This feature of the legislation has not been utilized to date. One reason is that
the credit produces so little capital for the housing assistance program. For an
employee earning $10 per hour, the credit equals approximately $300. Typically,
down payment assistance programs offer $3,000 to $5,000; rental subsidy
programs average $2,500 to $3,000 annually. In order to make this program
effective, the credit for withholding should be increased.
Another option is to allow the credit to be "pooled," to be made available to all
eligible employees. As the legislation currently is written, the 1.5 percent credit is
made available on the basis of withholding from individual employees - for the
benefit of only that employee. If the credit could be aggregated, a larger capital
fund could be established, from which all employee purchasing or renting
housing in the enterprise zone could access funds for their housing needs.
Another reason for lack of employer participation in this program is that the
legislation requires the employer to choose between use of the tax credit for job
training or for providing a housing assistance program. Employers to date have
chosen to use the credit to pay for training new employees.
Requested action: The legislation should be amended to provide the credit for
both job training and employee housing assistance and to "pool" the funds. This
will increase the tax credit and increase interest in the program by employers.
Airport FundinQ
Designate at least $3 million a year for aviation projects and programs through
the establishment of the new Aviation an Iowa Resource or AIR fund.
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Rebuild Iowa
Provide for continuation of Rebuild Iowa Infrastructure Fund appropriations for
vertical infrastructure projects at both commercial and general aviation airports.
Expand Cities' Extraterritorial Jurisdiction
Cities have extraterritorial jurisdiction (ET J) for up to two miles from their
corporate limits for subdivision review and approval only if the County has zoning
for the rural areas. Extending the cities' ET J to include review and approval of
zoning changes would facilitate planned and managed growth. Legislation
should provide incentives for governments to voluntarily plan together, and
identify recommended land use impact to be considered during the planning
process. The League supports legislation that expands land management
practices such as ETJ of cities to include review and approval of zoning changes.
Requested action: Support legislation enabling cooperative planning and
effective land management practices.
Property Owners on Historic Preservation Commissions
Section 303.34 of the Iowa Code requires that: "At least one resident of each
designated area of historical significance shall be appointed to the commission."
This requirement is problematic for the City of Dubuque's Old Main Historic
District, which is primarily commercial. It would be beneficial for the City in the
recruitment and retention of commissioners to be able to appoint property owners
to represent historic districts. Furthermore, since historic preservation
regulations apply to the rehabilitation, renovation and restoration of property,
allowing property owners to serve on the commission would be appropriate.
Furthermore, some Iowa cities are experiencing burgeoning commissions as
historic districts are designated and representatives of each district are
appointed. To avoid "over-populating" a commission, allowing a majority of the
districts to be represented on a historic preservation commission would be
appropriate.
Requested action: Enact legislation allowing property owners to represent a
majority of the historic districts on the Historic Preservation Commission.
Appeal of Actions bv Historic Preservation Commission
Section 303.34 of the Iowa Code states that an aggrieved party may appeal the
action of a historic preservation commission to the City Council, and then to
district court. The City Council, like the court, has to consider whether the
commission exercised its powers and followed the guidelines established by law
and ordinance, and whether the commission's action was "patently arbitrary and
capricious." This process places the City Council in the difficult and
uncomfortable position of interpreting technical guidelines and determining their
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appointees "arbitrary and capricious." The City Council would support an
alternative process.
Requested action: Consider legislation providing an alternative appeals
process regarding an action of the historic preservation commission.
Ambiant Air Qualitv Rules
In July 2004 the Environmental Protection Commission set H2S limites at 30
parts per billion (ppb) with a 60 minute average. Due to the fact that this is an air
quality rule, it has to effect everyone, farmers, industries and municipalities alike.
This rule could have disastrous effects on wastewater plants causing cities to
provide for major H2S, ammonia and other mercapton control system that are
very expensive and costly to operate.
Requested action: Enact legislation that exempts local government from the 30
ppb rule.
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