Legislative Focus
January 27, 2012
Volume XI, Edition 3
Various Economic Development Efforts Spark Interest in House and Senate
With property tax reform discussion and hearings on the use of Tax Increment Financing (TIF) getting a majority of the headlines, the Legislature is actually working on economic development initiatives that would hopefully provide additional scrutiny on new regulations and make it easier to transfer companies from one generation to the next. Some of this discussion is actually bi-partisan. Hmmm, very strange indeed?
House Unanimously Approves Bill Requiring a Jobs Impact Statement on All Rules
The House approved, by a unanimous vote, HF 2042 which would require that every proposed state regulation or rule contain a jobs impact statement. In addition, there would be a requirement that a detailed report on the impact of the proposed rule on state agencies, local governments, the public, and the regulated entities, including regulated businesses and self-employed individuals affected by the proposed regulation or rule. The statement must also determine whether a proposed rule would have a positive or negative impact on private sector jobs and employment opportunities. As part of this requirement, the regulating agency is required to take steps to minimize the adverse impact on jobs and the development of new employment opportunities before proposing a rule.
ESOP Bill – Employee Stock Ownership Plan – Getting Fair Amount of Attention
There is an effort being pushed by the economic development community to foster and promote employee stock ownership plans (ESOPs) with a goal of transferring ownership of Iowa companies to Iowans. SF 2065 and its House companion, HF 2085, have been approved by the House and Senate Economic Growth Committees. Both bills have been referred to House and Senate Ways and Means Committees.
The bills provide $1.0 million to the Iowa Economic Development Authority to provide financial and technical assistance and educational efforts to Iowa businesses regarding the formation of ESOPs. The bill also provides an exemption for capital gains from the sale or exchange of employer securities if the ESOP owns at least 30 percent of all outstanding shares issued by the corporation.
There seems to be a joint effort between House and Senate leadership in making these bills happen.
Unemployment Insurance Bills Pass Out of House Committee
House Files 2103 and 2104 passed the House Labor Committee and await floor debate. HF 2103 would reduce the time period during which construction and non-construction employers are subject to the contribution rate for “new employers” for unemployment insurance. The time period would be reduced from twelve (12) consecutive calendar quarters to four (4) consecutive calendar quarters immediately preceding the computation date.
The other bill, HF 2104, reduces the years of experience used to calculate the benefit ratio for an employer’s contribution rate for unemployment insurance from five to three years. MBI is monitoring both bills.
Status of MBI Bills of Interest
Statute of Repose- SF 2031 introduced by Senator McCoy (D-Des Moines) and HF 2078 was introduced by Representative Eric Helland (R-Grimes). These bills reduce Iowa’s statute of repose on real property from 15 years to 8 years. In its current form, this law allows lawsuits to be filed against architects, engineers and constructors of improvements to real property up to 15 years after completion of the project. MBI feels that a reduction in the length of the state of repose will limit frivolous construction-defect lawsuits against contractors, architects, engineers and suppliers. The Trial Lawyers and the Iowa Bar Association have put on a full court press in opposition. MBI supports SF 2031 and HF 2078.
Notification for Retainage Claims on Public Projects- SF 2034 introduced by Senator McCoy (D-Des Moines) and its House companion HF 2005 was introduced by Representative Chip Baltimore (R-Boone). These bills address the notification requirements for claims on public sector projects and would require notification to the principal contractor of all entities that provide materials and / or labor to a publicly funded construction project. Such changes would require those providing labor and / or materials on a public project to notify the general contractor / principal contractor within 45 days of first being on the jobsite to retain claim eligibility. This amended notification requirement will somewhat mirror the requirements that subs and suppliers must comply with on private sector jobs (similar to mechanics lien notifications in Chapter 572). MBI is supportive of these bills.
Bill Drafts on Alternative Project Delivery Pilot Project Expected Soon
Another of MBI’s policy priorities for the 2012 session deals with an alternative project delivery pilot project. The pilot project concept would allow three projects in each of the next three years at the Regents and one project in each of the next three years at the Iowa Department of Administrative Services (DAS) to utilize alternative project delivery (either Design Build or CM at Risk) in the procurement process. The Chairs of the House and Senate State Government Committees - Senator Jeff Danielson (D-Cedar Falls) and Representative Pete Cownie (R-West Des Moines) - have requested companion study bills for their respective committees.
Until next week,
Chad Kleppe
