IOWA ADVISORY COMMISSION ON INTERGOVERNMENTAL RELATIONS

MINUTES

June 9, l995

PRELIMINARY BUSINESS

The first meeting of the l995-l996 Iowa Advisory Commission on Intergovernmental Relations was called to order by Acting Chairperson Don Meisner at 10:10 a.m., Friday, June 9, l995, in Committee Room 22, Statehouse, Des Moines, Iowa. Members present in addition to Mr. Meisner were:

• Senator Sheldon Rittmer
• Senator Albert G. Sorensen
• Representative Bob Renken
• Ms. Alta M. Bachman
• Ms. Judith A. Bodholdt
• Mr. Louis Galetich
• Ms. Betty L. Grandquist
• Ms. Laura Jardon
• Mr. Carl Miller
• Mr. Robert Paulson
• Ms. Janet Phipps
• Mr. Linus F. Rothmeyer
• Mr. Barry Stetzel
• Ms. K. Marie Thayer

Also present were Mr. David Vestal and Mr. Bob Mulqueen, Iowa State Association of Counties; Ms. Susan Crowley, Mr. John Pollak, Ms. Julie Smith, and Mr. Thane Johnson, Legislative Service Bureau; other interested persons; and other legislative staff.

MEETING IN BRIEF

• Introduction of New Members, Ms. Janet Phipps, Director, Department of General Services and Mr. Carl Miller, Mayor, Mason City.
• Election of Chairperson and Vice Chairperson.
• Approval of December 9, l994, minutes.
• Results of Federal Mandates Study -- Mr. David Vestal, Iowa State Association of Counties (ISAC); Mr. Bob Mulqueen accompanied Mr. Vestal to address questions relating to environmental issues.
• State/county funding of mental health, mental retardation, and developmental disabilities (MH/MR/DD) services, Senate File 69 -- Mr. John Pollak, Committee Services Administrator, Legislative Service Bureau (LSB).
• Underground Storage Tanks Program amendments, House File 508 -- Ms. Julie Smith, Legal Counsel, LSB.
• Legislative Action on l994 Commission Recommendations -- Ms. Susan Crowley, Legal Counsel, LSB.
• Tax Exemption for Machinery and Equipment, Senate File 69 -- Ms. Susan Crowley, Legal Counsel, LSB.
• Selected county officer legislation, Senate Files 9, 422, and 458 -- Mr. Thane Johnson, Senior Research Analyst, LSB.
• Selection of l995 study topics by Commission members.
• Next meeting date -- Friday, September 8, l995.

COMMISSION BUSINESS

1. Acting Chairperson Meisner welcomed the Commission members to the quarterly meeting and introduced two new members, Ms. Janet Phipps, Director, Department of General Services, and Mr. Carl Miller, Mayor, Mason City.
2. Ms. Judith Bodholdt nominated Mr. Don Meisner as Chairperson and Mr. Barry Stetzel as Vice Chairperson of the Commission. Mr. Robert Paulson moved that a unanimous ballot be cast for Mr. Meisner as Chairperson and Mr. Stetzel as Vice Chairperson of the Commission. The motion was adopted.
3. Representative Renken moved that the minutes of the Commission meeting of December 9, l994, be approved as submitted. The motion was seconded by Mr. Rothmeyer and adopted.
4. Mr. David Vestal, Legal Counsel, ISAC, discussed a federal mandates survey for which ISAC collected Iowa data at the request of the United States Advisory Commission on Intergovernmental Relations (US ACIR). The survey covers county officials' responses to the federal laws which are considered the most burdensome. The following lists of most burdensome federal mandates in order of priority from the responses received by the National Association of Counties (NACo) in its l993 survey and from the responses received by ISAC from 52 counties in its 1995 survey on behalf of the US ACIR are:

   NACo	ISAC
   a. Immigration Act	a. Solid Waste Requirements
   b. Clean Water Act Amendments	b. Occupation Safety and Health Act
   c. Solid Waste Requirement	c. Intermodal Surface Transportation Efficiency Act (ISTEA)
   d. Clean Air Act	d. Underground Storage Tanks
   e. Americans with Disabilities	e. Americans with Disabilities

   Mr. Vestal noted that the NACo survey includes 128 counties nationwide, which include 20 percent of the nation's population. Mr. Rothmeyer commented that a federal Department of Transportation drug and alcohol testing program for county and city transportation-related employees is another burdensome mandate which will be required in the near future.
5. Mr. John Pollak, Committee Services Administrator, LSB, provided the Commission with a summary of the portion of Senate File 69 relating to the funding of mental health, mental retardation, and developmental disabilities (MH/MR/DD) services by the state and the counties. The legislation limits county expenditures for MH/MR/DD services and increases the involvement of the state in paying for these services. The legislation maintains the concepts of managed care and single point of entry for cost savings. County property tax levies for MH/MR/DD services are limited to a base year amount. The legislation included an inflation factor adjustment, but the procedures to establish the amount of the inflation factor were item vetoed. The Governor also item vetoed a provision which would have limited a county's financial liability for MH/MR/DD services to the fixed budget amount beginning with Fiscal Year 1996-1997. A Property Tax Relief Fund is established in the Department of Revenue and Finance with a three-part distribution formula and the property tax relief is apportioned among the counties based on their respective populations, taxable property valuations, and their proportion of spending for MH/MR/DD services in the base year. The legislation established two studies: one to be conducted by the state-county management committee to monitor various aspects of the MH/MR/DD services program and property tax relief provisions and the second conducted by the county finance committee to study and consult on other general budgeting ramifications resulting from consolidating the county basic levies and the general supplemental levies.
6. Ms. Julie Smith, Legal Counsel, LSB, presented a summary of Senate File 508 which addressed virtually all of the concerns and criticisms of the Underground Storage Tank Program. The major provisions are as follows:
   • a. Increases the annual allocation from the use tax to the Underground Storage Tank (UST) Fund from $15.3 million to $17 million.
   • b. Beginning January 1, l996, an additional $10 million for two years and $17 million for five years to the Marketability Fund.
   • c. Five million dollars annually for seven years from the Marketability Fund to the Innocent Landowners Fund to provide benefits to innocent landowners similar to those benefits received by other persons who are owners of petroleum-contaminated property and not otherwise eligible to receive benefits from the UST Fund.
   • d. The cleanup requirements are to be based on risk-based correction action (RBCA) standards which consider the degree of risk imposed and site-specific criteria.
   • e. Prioritization of claims is eliminated. Prioritization tended to eliminate large owners and political subdivisions.
   • f. An owner with a net worth of $100,000 or less who owns no more than one site is not required to pay more than 18 percent of the total costs of corrective action on that property.
   • g. The loan guarantee program is expanded by removing the requirement that the applicant be a small business and by providing that a loan guarantee may be granted for capital improvements to a tank site or for purchase of property contaminated by a leaking underground storage tank.
   • h. An owner or operator may upgrade insurance until December 22, l998, through the state program, but the owner or operator must pay two times the regular premium cost and an additional surcharge of $800 per tank. The Act expands property transfer insurance coverage and requires the Iowa Comprehensive Petroleum Underground Storage Tank Fund Board to study the issue of privatizing the insurance program.
   A copy of Ms. Smith's Summary of Senate File 508 was distributed to the Commission and is filed with the Legislative Service Bureau.
7. Ms. Susan Crowley, Legal Counsel, LSB, provided the Commission with a summary of the portion of Senate File 69 which eliminates the property tax on industrial machinery, equipment and computers. Division V of S. F. 69 exempts certain machinery and equipment from property taxation and phases out the existing property tax on other machinery and equipment as follows:
   • a. Machinery and equipment first assessed for property taxation on or after January 1, l995, is exempt.
   • b. The property tax on machinery and equipment acquired or leased on or after January 1, l982, is phased out over a four-year period beginning with the assessment year January 1, l999, and ending January 1, 2002.
   • c. However, machinery and equipment located within an urban renewal area with indebtedness to be repaid with tax-increment financing or having a new jobs training project financed by the tax incremental financing shall continue to be assessed at 30 percent of net acquisiton cost until the debt is retired or refinanced or the project completed.
   The legislation also provides reimbursement from the state to replace revenue lost from the tax exemption for machinery and equipment. The replacement is computed based on the difference between the assessed value for Fiscal Year l996-l997 or the subsequent fiscal year ending with Fiscal Year 2005-2006 and the assessed value as of the l994 assessment year. The assessed value amount is multiplied by the tax rate for each taxing district for that fiscal year.
8. Ms. Crowley also distributed a listing of recommendations of the Commission which were introduced as bills during the 1995 Legislative Session. The recommendations were introduced separately in six bills and two were enacted. The recommendations enacted included:
   • a. Senate File 225, removing the public bidding requirement for ballot purchases of $5,000 or more.
   • b. Senate File 229, removing public bidding requirements for coal purchases of $300 or more.
   The remaining bills are available for further consideration by the General Assembly during the l996 legislative session. A copy of the recommendations is filed with the Legislative Service Bureau.
9. Mr. Thane Johnson, Senior Research Analyst, LSB, summarized three enactments of interest to county governments. The three Acts are as follows:
   • a. Senate File 9 provides that when a county electorate votes to abolish the office of county recorder, the duties of the county recorder are to be transferred to the office of county auditor which is renamed the office of auditor and recorder. The board of supervisors may assign the duties of the county recorder relating to issuance of boating, fishing, hunting, and snowmobile licenses as it deems appropriate.
   • b. Senate File 422 transfers most duties of the clerk of the district court relating to vital statistics to the county recorder as of July 1, l997. When the county recorder supplies a certified copy of a birth, death, or marriage certificate, a new fee of $4 is charged for the service. The clerk of the district court will keep duties relating to birth and death records where the district court is involved.
   • c. Senate File 458 changes some duties and makes a number of technical amendments relating to the powers and duties of the county treasurers. A few of the changes are as follows:
     • (1) All county treasurers are required to mail a statement of fees due for the renewal of vehicle registrations. This duty has been optional for county treasurers except in counties of 100,000 population or more.
     • (2) County treasurers are authorized to collect an administration fee of $5 for charges or assessments which they are required to collect.
     • (3) A number of requirements regarding the recording of warrants are changed.
     • (4) Procedures for the prepayment of special assessments are changed to simplify prepayment.
     • (5) Procedures for the sale of property at a tax sale are amended.
10. 1995 Interim Study Topics. Chairperson Meisner noted that Chapter 28C, which creates the Iowa Commission on Intergovernmental Relations, is repealed effective July 1, l995. However, the Legislative Council has agreed to continue the Commission as an interim study committee so that study topics and priorities should be established soon. The following list of study topics were suggested during the discussion:
    • a. Complete review of school mandates and transportation mandates. (ISTEA)
    • b. Monitor implementation of Senate File 69 relating to MH/MR/DD programs.
    • c. Clean water requirements.
    • d. Solid waste requirements.
    • e. Occupational Safety and Health Administration (OSHA) regulations.
    • f. Property taxes - residential/agricultural land rollback and current unfunded tax credits.
    • g. Taxpayers' rights amendment.
    • h. State administrative rules process.
    The Commission agreed to select the study topic priorities by postcard ballot which will be mailed to the membership soon.

Adjournment - Next Meeting Date.

Chairperson Meisner noted that the next quarterly meeting of the Commission is Friday, September 8, l995.

Ms. Phipps moved that the Commission meeting adjourn at 12:50 p.m.

RESPECTFULLY SUBMITTED,

Thane R. Johnson

Senior Research Analyst

Written Materials Filed with the Legislative Service Bureau

• Draft: Most Burdensome Federal Mandates.
• Summary of Senate File 69 - Funding of Mental Health, Mental Retardation, and Developmental Disabilities (MH/MR/DD) Services, John Pollak, Committee Services Administrator, Legislative Service Bureau.
• Memorandum: Summary of House File 508 Relating to Underground Storage Tank Program, Julie A. Smith, Legal Counsel, Legislative Service Bureau.
• Tax Exemption for Machinery and Equipment, (See #2, Senate File 69).

OTHER INFORMATION FOR THIS COMMITTEE:

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