Appropriations Committee – Week 16, 2021

April 28, 2021 Senate Staff Appropriations Committee, Blog, Votes 0

FLOOR ACTION:

SF 592—FY22 Transportation Budget

SF 592 is the FY22 Department of Transportation (DOT) budget. There are two new appropriations, both from the Primary Road Fund (PRF), that total $10 million. This includes $5.3 million for major maintenance and $4.7 million for routine maintenance and preservation at DOT facilities. Facility Major Maintenance funds will be used to enhance and extend the life of DOT facilities. It will include adding new features, such as brine buildings and mechanic bays across the state. Routine maintenance and preservation will allow more flexibility in DOT spending decisions.

Annual maintenance-related appropriations typically funded as separate line-items that are now in the “Facility Routine Maintenance” include:

  • Utility improvements
  • Garage roofing projects
  • Heating, ventilation and air conditioning (HVAC) improvements
  • Field facility deferred maintenance
  • Americans with Disabilities Act (ADA) improvements.

Motor Vehicle Enforcement (MVE) Field Facilities: $400,000 – new appropriation from the Road Use Tax Fund (RUTF) designed to maintain the various enforcement field facilities.

Increases

  • Highway Division: $4.1 million increase to replace existing medium- and heavy-duty trucks and to fund nine new FTE positions. The FTE positions will perform project development and field construction inspection. The increase will also fund a more consistent replacement of snow plow blades. An increase in salt usage has resulted in the DOT needing more funds to cover the cost of salt. Three years ago, the DOT began transitioning medium- and heavy-duty trucks to a 12-year replacement cycle from a 15-year cycle. The DOT had recommended this transition to a shorter lifespan as repairs and parts, some of which are becoming obsolete, are costlier on older vehicles. There is a decrease of $2.3 million for Inventory and Equipment from the PRF as a result of funds being shifted to the Highway appropriation.
  • Motor Vehicle Division Field Facility Maintenance: $400,000, an increase of $100,000. Many of these facilities are used often and are front-facing. The additional funds will be used for increased maintenance. 
  • Rest Area Facility Maintenance: $400,000, an increase of $150,000. Funds will help better maintain rest areas, which are widely used by the public and often highly visible from the highway.

Decreases

  • State Road Maps: Decrease of $242,000. Maps are now printed every other year, rather than annually. Design and printing costs were allocated in FY21 for the new Iowa Transportation 2021-2022 maps.
  • DOT Workers’ Compensation: Decrease of $762,186 (RUTF $30,487/PRF $731,699) in payments to the Department of Administrative Services due to fewer workers’ compensation claims. Workers’ Compensation covers all approved medical expenses for the treatment of employee injuries and lost wages if the employee is incapacitated for more than three days. Premiums are based on a five-year rolling average of claims experience for the DOT.
  • Statewide Communication System: Decrease of $123,476. Lease payments are being shifted from RUTF/PRF to RIIF as additional public safety organizations use the system.
  • Inventory and Equipment: Decrease of $2.3 million as a result of funds being shifted to the Highway Division appropriation. The FY22 budget reflects a decrease of $11,287,000 for a one-time capital expenditure for repairs at the Ames Administration Building allocated in FY21.
    [4/28: 48-0 (Excused: Nunn, Schultz]

HF 867—FY22 Administration and Regulation Budget

HF 867 is the FY22 joint House and Senate Administration and Regulation budget. The bill appropriates a total of $149.6 million from the General Fund. This is an increase of $75 million over FY21.

FY22 Joint GOP                                             $149.6 million (Includes $100 million in broadband grants)

FY22 Governor’s Recommendation         $ 204.4 million (Includes $150 million in broadband grants)

FY22 v. FY21 Difference                              $75 million (includes the $21 million for Workday supplemental)

FY22 Senate FTEs                                         1,157           (Enacted FY21: FTEs: 1,156)

General Fund Highlights

  • There is no appropriation for Workday in FY22 in this budget. (It’s in the RIIF budget.)
  •  DAS/Utilities: An increase of $1,456,271 FY22 for a total of $5.3 million. This increase is needed as utility rates continue to rise. Any money that is not spent in FY20 will carry forward for utility costs in FY23.
  • Public Information Board: $15,000 increase for office expenses
  • Campaign & Disclosure: $52,000 increase to cover personnel and web reporting updates. Requires the Board to revert moneys back to the General Fund at the end of the fiscal year in an amount equal to what the Board receives for information technology-related expenses through the IOWAccess Revolving Fund, but not to exceed $12,600.
  • Terrace Hill Operations: An increase of $43,00 from FY21 for maintenance and care.
  • Secretary of State: $250,000 increase to restore to FY20 level due to cuts from FY21.
  • DIA: Nursing home inspections are not at the level Senate Democrats had for elder safety.
  • CASA: GOP level does not cover all 99 counties like Senate Democrats had for child protection.

New Language:

  • Insurance Division: $75,000 for FTE to investigate financial exploitation (Commerce Revolving Fund)
  • Racing and Gaming Commission: $200,000 from the gaming regulatory fund for socioeconomic study on the impact of gambling in Iowa. This happens every 10 years.
  • Racing and Gaming Commission: Strikes language requiring the Racing and Gaming Commission Regulation to use their appropriation for website construction and maintenance.
  • Language originally in SF 417 (from Senate State Government and referred back to State Government)
    • Eliminate $2 fee for a copy of the US Census results by anyone.
    • Eliminate $3 for a certificate with the seal attached.
    • Eliminate $25 per day prior to issuing a transient merchant’s license.
      [4/28: 47-0 (Excused: Hogg, Nunn, Schulz)]

COMMITTEE ACTION:

SF 611/SSB 1272—Disaster Recovery Housing Assistance

SF 611 establishes a Disaster Recovery Homeowner Assistance Program and Fund under the administration of the Iowa Finance Authority (IFA). The purpose of the program and fund is to provide forgivable loans and grants to eligible homeowners and eligible renters of disaster-affected homes. In addition, the bill creates an Eviction Prevention Program. Awards for the Eviction Prevention Program come from the newly created Disaster Recovery Housing Assistance Fund.

Disaster Recovery Housing Assistance

The bill allows unobligated and unencumbered moneys in certain IFA revolving loans funds to be transferred into the new Disaster Recovery Homeowner Assistance Fund. The IFA revolving loan funds are the Senior Living Revolving Loan Program Fund, Home and Community-Based Services Revolving Loan Program Fund, Transitional Housing Revolving Loan Program Fund, and the Community Housing and Services for Persons with Disabilities Revolving Loan Program Fund.

In addition, the bill permits IFA to transfer any unobligated and unencumbered moneys from any IFA fund (notwithstanding any other law to the contrary) for deposit in the new Disaster Recovery Homeowner Assistance Fund with the prior written consent and approval of the Governor. The bill also allows the executive director of IFA to transfer any unobligated and unencumbered money from any fund under Iowa Economic Development Authority to be deposited into the Disaster Homeowner Assistance Fund with the written approval of the director of the Iowa Economic Development Authority and with prior written approval of the Governor. The bill requires any transfer to be reported to the Legislative Fiscal Committee of the Legislative Council on a monthly basis.

IFA will not use more than 5% of the moneys in the fund at the beginning of a fiscal year for administrative costs.

A “disaster-affected home” means a primary resident that is destroyed or damaged due to a natural disaster that occurs on or after the effective date of this act (immediately) that is located in a county that is a subject of a state of disaster emergency proclamation by the Governor that authorizes disaster recovery homeowner assistance. It also means a primary residence that is destroyed or damaged due to a natural disaster that occurred on or after March 12, 2019, (Governor declared disaster emergency proclamation that authorizes disaster recovery housing assistance or Presidential declared disaster in which Iowans are eligible for federal individual assistance) but before the effective date of this act.

IFA will provide the funds to local program administrators to award the forgivable loans. IFA may enter into an agreement with one or more local program administrators to administer the program and moneys in the fund. “Local program administrator” means:

  • Ames, Cedar Falls, Cedar Rapids, Council Bluffs, Davenport, Des Moines, Dubuque, Iowa City, Waterloo and West Moines. These cities are entitlement cities under the Community Development Block Grant from HUD.
  • A Council of Governments whose territory includes at least one county that is subject of a state of disaster emergency proclamation by the Governor that authorizes disaster recovery housing assistance or the eviction prevention program.
  • A Community Action Agency whose territory includes at least one county that is subject of a state of disaster emergency proclamation by the Governor that authorizes disaster recovery housing assistance or the eviction prevention program.

The bill lists requirements to be eligible for a forgivable loan or grant for a homeowner:

  • The homeowner must register for the disaster case management program.
  • The home is located in a county that has been proclaimed a state of disaster emergency by the Governor.
  • The home sustained damage greater than the damage that is covered by insurance or federal disaster-related financial assistance that a homeowner is eligible to receive.
  • A local program administrator must deem the home suitable for rehabilitation or damaged beyond reasonable repair.
  • The home cannot be proposed for buyout by the county or city (or the home is eligible for buyout but the homeowner is requesting a forgivable loan for repair or rehabilitation in lieu of buyout).
  • The assistance does not duplicate benefits provided by other disaster assistance program.

The loan may be used for repair or rehabilitation or the down payment assistance on the purchase of replacement housing (and cost of repairs to replacement housing to render it decent, safe and sanitary). The maximum forgivable loan award will be determined by IFA by rule. The replacement housing cannot be located in a 100-year floodplain. The forgivable loan will have a five-year term and will be interest free.

The bill lists requirements to be eligible for a forgivable loan or grant for a renter:

  • The renter must register for the disaster case management program.
  • A local program administrator must deem the home of the renter suitable for rehabilitation but unsuitable for current short-term habitation, or the home is damaged beyond reasonable repair.
  • The assistance does not duplicate benefits provided by other disaster assistance programs.
  • If the renter is referred to IFA or a local administrator by their Disaster Case Manager, IFA may award a grant to the renter to provide short-term financial assistance for the payment of rent for replacement housing.
  • IFA will establish by rule the maximum forgivable loan and grant amounts awarded. Also, by rule, IFA will establish the terms of any forgivable loan.
  • IFA will report to the Legislature certain information pertaining to this program and awards on or before January 31 of each year.

Eviction Prevention Program

  • IFA will establish and administer an Eviction Prevention Program that awards grants to eligible renters and to eviction prevention partners. Grants may be awarded upon a state of disaster emergency proclamation by the Governor that authorizes the eviction prevention program.
  • “Eligible renter” means a renter whose income meets the qualification of the program (adopted by rule), who is at risk of eviction and who resides in a county that is subject of a state disaster emergency proclamation by the Governor that authorizes the eviction prevention program.
  • “Eviction prevention partner” means a qualified local organization or a governmental entity as determined by rule by IFA.
  • Grants will be used for short-term financial rent assistance to keep eligible renters in their current residences. Grants to the eviction prevention partner will be used for short-term financial rent assistance or services provided to eligible renters. IFA will establish by rule the maximum forgivable loan and grant amounts awarded.
  • The bill is effective upon enactment. There is no appropriation in the bill. Administrative cost to the program will be funded by the annual 5% administrative allowance cap allowed in the bill.
    [4/27: short form]

SF 612/SSB 1270—Real Estate Transfer Tax Increase to State Housing Trust Fund

SF 612 makes changes to the amount of Real Estate Transfer Tax that gets deposited into the State Housing Trust Fund. Current law states that 30% of the Real Estate Transfer Tax receipts paid by county recorders to the State Treasures are transferred to the State Housing Trust Fund each fiscal year, with a $3 million cap limit. Moneys in excess of the cap are deposited into the General Fund. This bill increases the $3 million cap to $5.5 million (a $2.5 million increase).

[4/27: short form]

SF 613/SSB 1271—Downtown Loan Guarantee Program

SF 613 creates a Downtown Loan Guarantee Program to be administered by the Iowa Economic Development Authority (IEDA) in partnership with the Iowa Finance Authority (IFA). The purpose of the program is to encourage downtown businesses and banks to reinvest and reopen following the COVID-19 pandemic. IEDA and IFA will partner with Iowa financial institutions to secure funding for eligible projects.

For a loan to be guaranteed, the projects must include all these criteria: the loan finances an eligible Community Catalyst Building Remediation Grant Project or Main Street Iowa Challenge Grant within a designated district; must include a rehabilitation component and may include acquisition or refinance; at least 25% of the project costs are used for construction or renovation; must include an eligible housing component; must have a federally insured financial lending institution issued the loan; the loan does not reimburse the borrower for working capital or operations; and the project meets certain Main Street Iowa design reviews.

On a loan amount of less than or equal to $500,000, the loan guarantee will not exceed 50% of the loan. On a loan amount greater than $500,000, IEDA may provide a maximum loan guarantee of up to $250,000. IEDA will guarantee loans for five years with the possibility of an extension by an additional five years. IEDA may also deny a loan guarantee for unreasonable bank loan fees or interest. The lender will pay an annual loan guarantee fee as set by rule. The loan is not transferrable if the loan or the project is sold or transferred. The loan must not be insured or guaranteed by another local, state or federal guarantee program. In the event of a loss due to default, the loan guarantee proportionally pays the guarantee percentage of the loss to the lender.

Moneys for the program may consist of any moneys appropriated by the Legislature for this purpose and any other moneys that are available to IEDA. There is no appropriation in this bill. IEDA will receive annual loan guarantee fees from the lenders in this program.
[4/27: short form]

SF 614/SSB 1257—Federal Block Grant

SF 614 authorizes the receipt and expenditure of the federal block grant funds totaling $368.1 million for Federal Fiscal Years (FFY) 2022 and $368.1 million FFY23. The federal fiscal year begins on October 1. The federal funds levels listed in the bill are based on estimates. The bill does specify how the funds will be allocated should the federal funds received should be less or more than what is anticipated. In the case that Iowa receives less money (other than the funding for the service to victims of sex offenses and for rape prevention), the Governor is to prorate the allocated funds after notifying the Legislature (specifically, chairs and ranking members on Appropriations and appropriate subcommittees) and Legislative Services Agency. The notification is to include the allocation plan and the reasoning behind the plan. The chairpersons and ranking members will be allowed at least two weeks to review and comment on the proposed action before the action is taken. If any federal funds are awarded or become available after the Legislature adjourns, the funds are appropriated to the appropriate department for expenditure, provided the Legislative Council is notified within 30 days of the receipt of funds, and given an opportunity to review funding and provide comments. The bill also allows for the receipt and expenditures of categorical grants to various state departments.

Appropriations include funds for the Substance Abuse Block Grant, Community Health Services, Maternal and Child Health Services, Preventive Health and Health Services, Stop Violence Against Women Grant Program, Residential Substance Treatment for State Prisoners Formula Grant Program, Edward Byrne Memorial Justice Assistance Grant Program, Community Services, Community Development, Surface Transportation Block Grant Program, Low-Income Home Energy Assistance, Social Services (DHS field operations, child and family services, local administrative costs, volunteers) and Child Care and Development.

The bill is similar to the federal block grant bill from two years ago. Most differences involve appropriation amounts and the inclusion of new language for certain grants related to Iowa Economic Development Authority (IEDA). Specifically, money is appropriated to IEDA for the Community Development Block from Disaster Relief Act of 2019. These funds are for the FFY18-FFY19. The funds for this grant were not finalized until a later date, thus requiring this language in the federal block grant bill. The bill also includes an appropriation for the Community Development Block grant from the Coronavirus Aid, Relief and Economic Security Act (CARES) for FFY19-FFY20.
[4/27: short form]

SF 615/SSB 1275—FY22 Standings

SF 615 is the FY22 standings appropriations bill. Standing appropriations, with the changes in this bill, equal $3.98 billion. This is a $32.5 million reduction from the standing appropriations in Iowa Code. However, it is a $42.8 million increase over FY21 appropriations.

Division I: Limitations of Standing Appropriations

The bill limits certain standing appropriations:

  • Nonpublic School Pupil Transportation: $8.1 million is appropriated, which is a $2.7 million decrease to the standing appropriation. This is no change from the FY21 appropriation.
  • Instructional Support State Aid: $0. This is a $14.8 million decrease to the standing appropriation. This is no change from the FY21 appropriation.
  • State Aid for Area Education Agencies (AEA): A $15 million reduction in the standing appropriation. This is no change from FY21 appropriation.

Standing appropriations are listed in Iowa Code. If you do not see the standing appropriation listed in the bill, the appropriation line item is funded at statutory level.

A few notable Standing appropriation items are:

  • School State Aid: $3.4 billion. This is only a $21.5 million increase (with the AEA cut) over FY21. The school funding increase was enacted by SF 269.
  • The Legislative Branch is funded at the standing unlimited amount of $37 million. This is a $1 million increase over FY21.
  • The Technology Reinvestment Fund is funded at the statutory level of $17.5 million from the General Fund. This fund was not funded out of the General Fund in FY21.
  • The Homestead Tax Credit, Elderly & Disabled Tax Credit, AG Land Tax Exemption, Military Service Tax Exemption are fully funded.
  • The Commercial and Industrial Property Tax Replacement ($152 million) and the Business Property Tax Credit ($125 million) are fully funded.

Division II: Corrective Provisions

In addition, the bill makes technical corrections to legislation enacted or considered during the 2021 session.
[4/27: 13-8, party-line (No: Democrats)]

HF 857—Butchery Innovation and Revitalization Fund and Program

HF 857 creates a Butchery Innovation and Revitalization Fund and Program for the purpose of awarding finical assistance (grants, low-interest loans and forgivable loans) to eligible businesses for expanding or refurbishing a small-scale meat processing business, licensed custom locker or mobile slaughter unit. Iowa Economic Development Authority (IEDA) will consult with Department of Agriculture (IDALS) to administer the program and to adopt administrative rules.

The bill provides for eligibility criteria for a business seeking financial assistance, including that the business employ fewer than 50 individuals. Applications will be scored and awarded based on a priority listed that includes the creation of new jobs, opportunities for local small-scale farmers to market processed meat under private labels, and greater flexibility or convenience for local small-scale farmers to have animals processed.

There is no appropriation in the bill. The House Economic Development budget, HF 871, appropriates $750,000 to the program. There is no appropriation for this program in the Senate Economic Development budget.

The bill creates an Artisanal Butchery Task Force within the IDALS for the purpose of exploring the feasibility of establishing an artisanal butchery program at a community college or an institution governed by the Board of Regents.  Members of the Task Force will be appointed by the Iowa Secretary of Agriculture. The bill identifies the groups from which the Secretary of Agriculture will choose a representative of the Task Force. IDALS will provide the staff and administrative support. The new Task Force will submit a report by December 31, 2021 to the Legislature on the Task Force’s findings and recommendations.

HF 857 passed the Iowa House on April 13, 91-0.
[4/27: 21-0]