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[Dome]Interim Calendar and Briefing

November 15, 1995

Contents:
CALENDAR OF SCHEDULED MEETINGS
AGENDA INFORMATION REGARDING SCHEDULED MEETINGS
BRIEFINGS - INFORMATION REGARDING RECENT MEETINGS

Calendar of Scheduled Meetings

Friday, November 17, 1995
Business Taxation Study Committee
10:00 a.m., Room 22
Tuesday, November 21, 1995
Fiscal Committee of the Legislative Council
10:00 a.m., Des Moines, Exact Location to be Announced
Tuesday, November 28, 1995
Nonbusiness Taxation Study Committee - Tentative
10:00 a.m., Room 22
Wednesday, November 29, 1995
Joint Meeting - Administration Committee and Capital Projects Committee of the Legislative Council
9:00 a.m., Room 22
Service Committee of the Legislative Council
11:00 a.m., Room 22
Capital Projects Committee of the Legislative Council
1:00 p.m., Room 24
Administration Committee of the Legislative Council
1:00 p.m., Room 22
Studies Committee of the Legislative Council
2:00 p.m., Room 22
Legislative Council
2:30 p.m., Room 22
Wednesday, December 6, 1995
Senate File 13 (Parental Notification) Conference Committee
10:00 a.m., Room 22
Tuesday, December 12, 1995
Administrative Rules Review Committee
10:00 a.m., Room 22
Housing Development Study Committee - Tentative
1:00 p.m. - 5:00 p.m., Room 116
Wednesday, December 13, 1995
Administrative Rules Review Committee
9:00 a.m., Room 22
Thursday, December 14, 1995
Public Retirement Systems Study Committee - Tentative
10:00 a.m., Room 22
Intermediate Criminal Sanctions Task Force
10:00 a.m. - 3:30 p.m., Lucas Bldg., Hearing Room 2

Agenda Information Regarding Scheduled Meetings

Business Taxation Study Committee

Co-chairperson: Senator Tom Vilsack
Co-chairperson: Representative Roger Halvorson

Fiscal Committee of the Legislative Council

Co-chairperson: Senator Larry Murphy
Co-chairperson: Representative David Millage

Legislative Council and Council Committees

Chairperson: Speaker Ron Corbett
Vice Chairperson: Senator Wally Horn

Senate File 13 (Parental Notification) Conference Committee

Co-chairperson: Senator Elaine Szymoniak
Co-chairperson: Representative Dan Boddicker

Administrative Rules Review Committee

Co-chairperson: Senator Berl E. Priebe
Co-chairperson: Representative Janet Metcalf

Housing Development Study CommitteeTENTATIVE

Co-chairperson: Senator Michael Gronstal
Co-chairperson: Representative Libby Jacobs

Public Retirement Systems Study CommitteeTENTATIVE

Co-chairperson: Senator John P. Kibbie
Co-chairperson: Representative Mona Martin

BRIEFINGS - Information Regarding Recent Meetings

ALTERNATE ENERGY PRODUCTION STUDY COMMITTEE

November 6-7, 1995, First and Second of Two Meetings; Third Meeting to be Requested

Federal Overview.
Dr. Larry Hill, Oak Ridge National Laboratory, Tennessee and Visiting Fellow with the National Conference of State Legislatures, discussed regulations at the federal level affecting electric utilities and the restructuring of the electric utility industry. He identified policy issues that Iowa and other states will need to address. Mr. Matthew Brown, Senior Energy Policy Specialist, National Conference of State Legislatures presented a fifty state survey entitled, "Incentives for Renewable Energy Sources that Generate Electricity."
State Overview.
Mr. Larry Bean, Division Administrator, Energy and Geological Resources Division, Department of Natural Resources, discussed the state's current energy plan and policies, and the importance of alternate energy in energy diversification. Mr. Bill Smith, Bureau Chief of Rate and Safety Evaluation Bureau, Utilities Division, Department of Commerce, provided background on Iowa's current alternate energy production requirements. The Chairperson of the Iowa Utilities Board, Mr. Alan Thoms, and members of the Board, Ms. Nancy Shimanek Boyd and Mr. Emmet George discussed a proposal to eliminate the 105 kilowatt purchase requirement and replace it with a requirement that an investor-owned electric utility must derive a minimum of two percent of their annual energy load from renewable energy sources.
West Branch Middle School Science Class.
Partners in Environmental Science, a West Branch Middle School science class, asked the Committee to maintain energy efficiency standards and alternate energy purchasing requirements. The students discussed various ways in which they had reduced energy requirements in their school and at home.
Investor-Owned Electric Utilities.
A panel composed of Mr. John Lewis, President, Iowa Utilities Association; Mr. Dean Crist, Manager, Bulk Power Services, MidAmerican Energy Company; Mr. Erik Madsen, Manager of Pricing and Contracts, IES Utilities, Inc.; and Mr. Lynn Vorbrich, President, Electric Division, MidAmerican Energy Company, discussed the current alternate energy purchasing requirements, the practical use of alternate energy, changes in the electric utility industry that will affect the utilities' ability to compete, and advocated the repeal of the purchasing requirements.
Rural Electric Cooperatives (REC)
Mr. Keith Luchtel spoke on behalf of the Iowa Association of Electric Cooperatives. He stated that while the RECs support the development of alternate energy, they do not believe that it is fair to ask only the investor-owned utility customers to finance the development.
Municipal Utilities (IAMN).
Ms. Linda Kading, General Counsel for the Iowa Association of Municipal Utilities, presented IAMUs view that they are neutral on the issue of repealing the 105 kilowatt purchasing requirement. Mr. Glenn Cannon, General Manager, Waverly Light and Power, discussed the experiences that Waverly Light and Power has had with wind generated electricity.
Business and Industry.
Mr. George Van Damme, Energy Manager, Deere & Company, provided a history of John Deere's development in the state and explained actions that the Company has taken to implement energy efficiency strategies. He stated that imposing long-term embedded costs on Iowa utility companies and their customers does not bode well for the competitive position of Iowa businesses. Mr. John Croushore, Chief Financial Officer, Cedar River Paper Co., Cedar Rapids, explained that one of the company's reasons for locating within the state of Iowa in 1993 was the competitive cost of energy. He requested that the Committee ensure that the same sound economic design and planning be required from alternate energy production facilities as would be required of any competitive business to survive.
Sustainable Energy for Economic Development Coalition (SEED).
This panel was composed of three members of SEED including Mr. Mike Tennis, Senior Energy Analyst, Union of Concerned Scientists, Ms. Heather Rhoads, Iowa SEED Coordinator, and Mr. Ed Woolsey, Iowa Renewable Energy Association Board Member. Mr. Mike Tennis compared alternate energy flat price rates with current and future electricity rates and suggested that there are numerous ways to structure payments for acquiring renewable energy. Ms. Heather Rhoads discussed the SEED campaign's goals, values, and platform. Mr. Ed Woolsey discussed figures showing the small proportion of alternate energy production compared to that of current Iowa utility electric production, and the economic potential for renewable energy in Iowa.
Izaak Walton League.
Ms. Nancy Lange, Associate Director, Midwest Energy Efficiency Program, Izaak Walton League, Minneapolis, urged continuing investment in renewable energy. She recommended a timetable for acquisition be established, but that the rates should be left up to competitive forces among renewable energy providers to produce the most competitive price; that small producers should be encouraged; and that even if the structure of the electric utility industry is changed in the future, the state should require all retail electric suppliers to purchase a share (i.e. 5%) of its energy needs from renewable resources.
Former Legislator.
Mr. David Osterberg, Professor, University of Iowa, Environmental Policy, and former member, Iowa House of Representatives, provided a personal history of the passage of the alternate energy purchasing requirements. He stated that the present alternate energy rates are fair when the proper comparison is made. He indicated that the utilities want to compare short run costs of current energy production to long run costs of alternate energy production when the proper comparison is long run costs to long run costs.
Technologies and the Future.
Dr. Frank Kreith, Legislative Fellow, American Society of Mechanical Engineers, discussed the status of renewable energy in the United States, the process for development of new technologies, and a comparison of the different types of alternate energy technologies.
Iowa Energy Center.
Mr. Norm Olson, Program Manager, Iowa Energy Center provided background on the Center and discussed the current alternate energy program. He suggested that a basic resource assessment for each significant potential alternate energy source be performed and that biomass and wind demonstration projects should be undertaken.
Hydroelectric Power.
The panel included the following persons: Mr. Loyal Gake, Director of Development and Regulatory Compliance, North American Hydro, Neshkoro, Wisconsin; Mr. Tom Wilkinson, President, FORIA Hydro Corp., Cedar Rapids; Mr. Jean-Pierre A. L. Honnart, Groupe Page, Geneva, Switzerland; Mr. Oliver Page, Groupe Page, Cannes, France; and Mr. Michel Page, Groupe Page, Cannes France. Mr. Gake and Mr. Wilkinson discussed the technical aspects of developing hydroelectric power and stated that they need approximately five cents per kilowatt hour in order to develop hydroelectric power. Mr. Honnart recounted his efforts to develop hydroelectric power within the state and expressed his frustrations with changes that have been made and actions that have been taken by the investor-owned electric utilities.
Wind Energy.
The panel included the following persons: Mr. Philip Stoffregen, Legal Counsel, Zond Systems; Mr. Steve Blake, President, Windustries, Inc.; Mr. Tyler McNeal, Windway Technologies; and Mr. Paul White, Midwest Manager, Vestas-American Wind Technology, Inc. Mr. Stoffregen, made several comments regarding the proposal that was presented by the Iowa Utilities Board. Mr. Blake expressed his frustration regarding the investor-owned utilities refusal to enter into contracts with Windustries. He stated that the alternate energy production (AEP) law should not be changed and that in reliance upon the law, Windustries and other companies have invested substantial resources to develop AEP projects. Mr. McNeal stressed that the AEP law is working and that changing it now will draw into question the tradition of Iowa as a fair place to conduct business. Mr. Paul White stated that Vestas, a wind turbine manufacturing company, wants to build a manufacturing plant in Iowa but is concerned that the AEP law will be changed.
Methane Production from Solid Waste Landfills.
Members of the panel included the following persons: Ms. Teree Caldwell-Johnson, Director, Metro Waste Authority, Des Moines; Mr. Ron Mace, Landfill Facility Manager, Blue Stem Solid Waste Agency, Cedar Rapids; Mr. Randy Hartman, Executive Director, Great River Solid Waste Management Agency, Fort Madison. Ms. Caldwell-Johnson provided the Committee with an overview of the Metro Waste Authority and its methane producing facility and discussed landfill gas and its potential as a renewable resource. Mr. Hartmann and Mr. Mace discussed projects at their respective landfills and urged the Committee to maintain the six cents per kilowatt buy-back for gas-to-energy projects.
Biomass.
Mr. Jim Cooper, Chariton Valley Resource Conservation and Development Area, explained that Chariton Valley Biofuels Project is to use conservation reserve program land to grow switchgrass to be used as a fuel source. He advocated the use of biomass as an economic and feasible energy alternative.
Next Meeting.
The Committee is requesting authorization to meet to consider recommendations on January 16, 1996.

BLUEPRINT FOR IOWA'S YOUNG CHILDREN

November 8, 1995, Third of Three Meetings

Testimony.
During its third and final meeting, the Blueprint for Iowa's Young Children Study Committee heard a presentation on state and federally funded programs for children by Mr. Jon Neiderbach and Ms. Margaret Buckton of the Legislative Fiscal Bureau.
Recommendations.
After a lengthy discussion of the Legislative Fiscal Bureau presentation and the information provided in the first two Committee meetings, the Committee made the following recommendations to the General Assembly:

HOUSING DEVELOPMENT STUDY COMMITTEE

November 9, 1995, Second of Two Meetings; Third Meeting to be Requested

The following presentations were made to the Committee:

Rural Economic and Community Development.
Ellen King Huntoon, Acting State Director, Rural Economic and Community Development (RECD, formerly Farmers Home Administration) of the United States Department of Agriculture, spoke to the Committee regarding the programs administered by the RECD, and the potential impact of anticipated reductions in its budget from the budget for federal fiscal year 1995. RECD programs are limited to communities under 20,000 in population and rural in character. The programs consist of single- and multi-family housing assistance in the form of loans or grants aimed at low- and moderate-income families and the elderly. Iowa has the largest number of RECD multi-family projects in the country. Ms. Huntoon also discussed the implications for Iowa if federal funds are consolidated into block grants and the amount of funding reduced over past levels. Iowa could see a 30 to 40 percent decrease in available program funds and up to a 60 percent decrease in funding for rural infrastructure under the block grant proposals now before congress.
Neighborhood Finance Corporation.
Curt Heidt, Executive Director, Neighborhood Finance Corporation (NFC), discussed the role NFC plays in housing development. The NFC was founded in 1990 as a non-profit mortgage banker and has loaned over $28 million and provided grants of over $4 million to designated neighborhoods in Des Moines. NFC programs operate on a partnership philosophy, seeking to citizen participation, economic diversity, maximum leverage of funds, and goals that create accountability. Mr. Heidt stressed the need for flexible sources of funds for housing development, tools to encourage capital investment along the entire housing continuum, and for introducing some flexibility in local building codes.
Iowa Coalition for Housing and the Homeless.
Loyd Ogle, Executive Director, Iowa Coalition for Housing and the Homeless, spoke to the Committee regarding the need for Iowa to take a more active role in improving Iowa's response to homelessness and the lack of affordable housing in the state. Mr. Ogle recommended fully funding the emergency assistance program so that it operates on a year round basis, encouraging the formation of local or regional housing trust funds with proceeds from the real estate transfer tax, and endorsed the recommendation from the Housing Summit that the General Assembly appropriate an additional $10 million to the Iowa Finance Authority Housing Improvement Fund.
Impact of TIF on Schools.
Dr. Veronica Slacker, Superintendent of Schools, and Ron Marr, Vice President of the School Board, Waukee, Iowa, explained the impact of tax increment financing on the Waukee school district. While supporting the use of tax increment financing as a positive development tool for cities, Dr. Slacker recommended that school districts be involved, in more than a consulting capacity, in the planning and implementation of tax increment financing districts and that a limit be placed on the amount of a school district budget which may be diverted by tax increment financing. Mr. Marr stated that tax increment financing reduces a district's ability to plan for expansion and to avoid large changes in the property tax levy.
Quad-Cities Development Cluster.
Robert Zelsdorf and Shelley Sheehy, representing the Davenport - Quad Cities Housing Cluster expressed their support to the Committee for an additional $10 million appropriation to the Iowa Finance Authority, the creation of local housing trust funds using real estate transfer tax proceeds, and maintaining the current low and moderate income requirement for tax increment financing for housing. Mr. Zelsdorf also provided the Committee with an overview of the services currently provided by the Cluster and explained how creation of a local housing trust fund would provide upwards of $500,000 for housing projects by the cluster.
Homebuilders Association of Iowa.
Charles Wasker, General Counsel, Homebuilders Association of Iowa, stated that the Association has officially adopted the recommendations made to the Committee by the Department of Economic Development at the October 4, 1995 meeting. (See Interim Calendar, October 11, 1995). Mr. Wasker also recommended that the sales tax on housing building materials be eliminated, that proceeds from the real estate transfer tax be appropriated to the Iowa Finance Authority, that the state codes regarding housing be examined with an eye toward eliminating unnecessary requirements that increase the cost of housing without impacting on health and safety, and that multi-family housing not be assessed as commercial property.
Proposed Committee Recommendations.
The Committee proposed the following recommendations made to the Committee be considered for discussion at the third meeting:
Related Information.
On October 31, 1995, the Iowa Rural Development Council, the Iowa Department of Economic Development, and other state and federal housing agencies hosted a housing conference entitled "Housing: Solving the Puzzle" in Des Moines. The conference provided information on innovative housing models, financing tools, and successful case studies to the participants. Proposed solutions identified in a panel discussion regarding overcoming existing barriers to housing development include modifying current tax increment financing law to allow infrastructure development funded by tax increment financing for other than low and moderate income housing, addressing zoning regulations that affect affordability, and educating leaders on appropriate modular and manufactured housing solutions to housing development. Staff Contact, Kathy Beery, Iowa Department of Economic Development.
Next Meeting.
The Committee agreed to seek approval for holding a third meeting, tentatively scheduled for December 12, 1995, at 1:00 p.m.

COUNTY FINANCE COMMITTEE

November 9, 1995

Background.
The County Finance Committee is a permanent committee created in chapter 333A, Code of Iowa, with duties associated with county finance reporting and practices. The Committee is authorized to adopt administrative rules which have the force and effect of law.
MH/DD Budget Data.
The Committee reviewed Fiscal Year 1995-1996 MH/DD budget data collected from counties and also reviewed a worksheet prepared by the Department of Management for computation of a county's property tax portion of the MH/DD services fund. The Committee reversed an earlier decision and voted not to collect FY 1993-1994 and FY 1994-1995 budget data.
1994 Expenditures Report.
There was consensus among the Committee members that the Department of Human Services should set December 1 of each year as the deadline for amendments to the 1994 expenditures worksheet report for the following fiscal year.
Levy Study.
Committee members briefly discussed the feasibility of abolishing the supplemental levies under Iowa Code section 331.424, leaving only the general basic levy and rural basic levy. Senate File 69 struck from the allowable uses of the supplemental levy all references to funding MH/DD services. When the MH/DD services fund is in place, the primary purposes of the supplemental levy will be to fund elections, IPERS, tort liability, and the operation of the courts. The Committee by unanimous consent adopted a recommendation that the supplemental levies should not be combined into the basic levy.
Next Meeting.
The Committee is scheduled to meet next on December 1, 1995.

ADMINISTRATIVE RULES REVIEW COMMITTEE

November 13, 1995

Agriculture Department - Animal Welfare, ARC 5927A, notice.

Background.
In response to recent actions concerning dog breeders licensed by the state, the department proposes new requirements for commercial breeders. All commercial breeders will be required to contract with an Iowa licensed veterinarian to provide adequate health care for the animals. Under this proposal the vet must visit the facility at least once a year to review the facilities and examine the animals. If a visiting state inspector believes that an animal needs medical attention, the department may order a veterinarian's examination at the licensee's expense. Additionally, the proposal would place new restrictions on applicants who reapply for a license after revocation. Currently an individual could apply for relicensure immediately after revocation; under the proposal an applicant would be barred from further licensure for 36 months. If the applicant has been convicted of animal cruelty in a court proceeding their is a lifetime prohibition against licensure.
Committee Action.
Committee members expressed some concern over these provisions. At issue was whether the department had authority to require each breeder to retain the services of a veterinarian or require yearly visits. Concern was also expressed over the possibility of a "lifetime" prohibition against relicensure. The committee voted to request an informal advice from the Attorney General concerning the department's authority over commercial kennels. Further review can be expected when the rule is adopted in final form.

Environmental Protection Division - "Smaller" hog confinement operations, ARC 5933A, emergency.

Background.
The Department of Natural Resources uses emergency procedures to adopt special rules for hog facilities holding between 1400 and 4200 animals. Such facilities, if using a concrete holding pit, would otherwise escape any of the regulatory limitations established in House File 519, since these facilities are not actually subject to the Act itself. These facilities will be required to have a manure management plan on file with the division 60 days before hogs enter the facility. Neither the plan nor the facility itself will be reviewed by the division unless a complaint is received concerning the facility.
Committee Action.
The committee took no action on these provisions, noting that ultimately they would become part of the larger package of rules implementing House File 519. Initial review of those proposals is scheduled for the Committee's December meeting.

Iowa Law Enforcement Academy - Eyesight standards for new officers, 501 IAC 2.1(9), selective review.

Background.
The committee reviewed a long-standing academy requirement which provides that a newly hired officer could have vision no worse than 20/100, corrected to 20/20. At issue is the case of a newly hired police chief who is ineligible for certification as a peace officer, since he cannot meet this requirement. Opponents of the rule noted that the vision requirement only applies to new hires, not existing officers; they noted that in all likelihood officers are now serving who could no longer meet that standard. They suggested that a less stringent standard be in place for older applicants. The academy responded that once an exception is granted, it would be extremely difficult to maintain any standard at all, since all applicants for certification need to be judged by the same standard.
Committee Action.
Committee members differed on their responses to this issue. Some felt that the existing standard is meaningless, since it only applies to new hires and never again is applied against certified officers. Other felt the standard is needed as an entry level benchmark; while still others felt that standards should be in place for all law enforcement officers. A motion to refer this issue to the General Assembly for further study was defeated.

Human Services Department - Medicaid payment for certified nurse anesthetists, selective review.

Background.
Under current department rules a certified nurse anesthetist may be reimbursed directly from the Title XIX (Medicaid) fund. The problem is that nurse anesthetists are allowed to practice prior to obtaining certification; first in order to obtain required experience, and second because the examination is given on an infrequent basis.
DHS Position.
Medicaid will not pay for the services of an uncertified nurse anesthetist; however, the department would pay a physician who supervised the uncertified nurse anesthetist. Noting that Nursing Board rules also require uncertified nurse anesthetists to be supervised by a physician, representatives of the Department of Human Services contended that payment should present no problem, since it could be channeled through the supervising physician.
Board of Nursing.
Subsequently, a representative of the Nursing Board of Examiners categorically denied that the board requires uncertified nurse anesthetists to be supervised by a physician. The board representative contended that only a general working relationship with a physician is required. Additional review of this issue will be scheduled for the committee's December meeting.

Real Estate Commission - Disclosure requirements and ethical standards, ARC 5975A, notice.

Background.
House File 515 was enacted to clearly establish the relationships and duties that exist between parties to a real estate transaction and the broker handling the transaction. On review the committee noted that virtually all the detail of these standards is set out in the statute. These provisions were largely gleaned from other states having similar programs.
Disclosure Requirements.
The Act requires that brokers and salespersons disclose to each party all material adverse facts the licensee knows. The proposal itemizes facts or information that the licensee is required to keep confidential. This is basically things that are not "material facts" as contemplated by the statute. They rules additionally require the licensee to fully disclose in writing, any agency relation that exists with any party to a transaction. The client is required to acknowledge this disclosure in writing. Section three of the Act goes on to state that licensees must identify in writing which party the licensee represents and detail his or her general duties and obligations arising out of that relationship.
Brokerage Agreement Requirements.
Rule 1.42 specifies in detail the requirements for a brokerage agreement. These agreements must be in writing and cannot be assigned without the consent of all parties. The statement must disclose any cooperation with other brokerage firms. Compensation under the agreement may be by any party. It should be noted that mere payment of the fee does not establish an agency relationship between the payee and the licensee. Undisclosed compensation agreements are prohibited. A licensee may not solicit a brokerage agreement, unless the client initiates the contact. The rules also detail the responsibility both to the client, for whom the licensee is an agent and the licensee's responsibility to any other party to the transaction. These details are rather firmly based on old common law and do not appear controversial. With approval of the parties, the licensee can represent both the buyer and the seller, being especially careful to keep confidential all facts not required to be disclosed under House File 515.
Committee Action.
The Committee took no action on these proposed rules.

Department of Revenue and Finance - Sales and use tax exemptions, ARC 5979A, adopted.

Baling Twine Exemptions.
The department has completed action on a number of rules implementing several pieces of 1995 legislation. Committee members were concerned that in two cases the rules fail to accurately implement legislative intent. In the first instance, legislation exempted from sales tax the purchase of certain auxiliary attachments to farm machinery. In the case of hay balers, the department maintains the exemption does not extend to the twine used in these balers, unless the hay is sold to a consumer. Department representatives contend that a current exemption already exists for packaging material, making it inappropriate to interpret a specific exemption for twine. Committee members responded that there is little point in exempting a baler from tax but not also exempting the twine used in it.
Publishing Exemption.
In the second case, the rules added a definition of the term "publisher". Committee members noted that the legislature turned back specific attempts to define the term in the statute; they contended this action makes it inappropriate for the department to propose a definition by rule. Department representatives responded that some definition is essential to give meaning to the legislation. They contended that the only alternative would be to establish a case-by-case definition as particular cases arose.
Committee Action.
The committee referred these two issues to the General Assembly for further review.

GOVERNOR'S INSTITUTIONS TASK FORCE

Date Correction

Meeting Date Correction.
The November 8 Legislative Calendar and Briefing reported that the next Task Force meeting would be held on November 20 and 21. The correct meeting dates are Monday, November 27 and Tuesday, November 28. The meetings will be held at the STARC armory at Camp Dodge north of Des Moines. A portion of the November 27 meeting will utilize the Iowa Communications Network.

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