Ways and Means Committee – Week 7, 2022

SF 590 – Community Land Banks

SF 590 creates a new section in the Iowa code to establish local government land banks. Land reserves are a tool to rehabilitate dilapidated, vacant and abandoned properties for productive use. Ultimately, the bill will create a solid funding base for affordable housing and community economic development. Land banks can be used by a community or group of communities to address and rehabilitate rundown and underdeveloped neighborhoods. This legislation is supported by local governments, councils of governments, housing advocates and developers as a tool to redevelop properties in which private developers have been reluctant to invest.
[2/23: Short form (Excused: Zaun]

SSB 3130 – Utility Alternative Taxes on Wind Energy Conversion Properties

SSB 3130 provides a number of updates and clarifications for the taxation of wind energy conversion property by local governments and under the utility alternative tax. The Utilities Substitute Tax is what replaced the state property tax on utilities. However, local governments can also establish a special assessment and valuation of wind properties located in their county, apart from the utility replacement tax.

Under the bill, wind energy conversion properties that had been assessed locally under the wind energy property tax special assessment will transition to the utility alternative tax after repeal. of a local ordinance that enacted the special assessment and the end of the initial 19-year assessment. period for the property. The bill also specifies that the maintenance, refurbishment or “repowering” of a wind farm does not justify an extension of the 19-year special assessment period. Repowering is defined as the removal and replacement of components of the wind energy property. In addition, the bill clarifies that the collector substation, where energy is collected from multiple power generation sources, is considered part of the wind energy conversion property and is subject to the utility replacement tax.

The bill was proposed by the Utility Alternative Tax Task Force, which includes members from local governments, utilities, state agencies and utility customers. They are responsible for reviewing matters regarding the Utilities Alternative Tax and making recommendations to the Legislative Assembly that will ensure tax neutrality for local governments, utilities, ratepayers and energy consumers.

The committee passed an amendment that will provide a firm timeline for determining the net acquisition cost of a wind energy conversion property. There will be no further adjustments to the net acquisition cost of the property after the property’s third year of valuation, provided there is no clerical error.
[2/23: Short form (Excused: Zaun]

SSB 3063 – Department of Revenue Sales Tax Administration

SSB 3063 is a Department of Revenue proposal to streamline the administration of sales and fuel taxes.

• Sales and Use Tax Returns – This would combine sales and use tax returns on the same return, eliminating the need for retailers to file separate returns. The bill will also combine sales and use tax permits into one permit.
• The bill establishes a new structure for determining how often a business files sales returns and uses tax returns. Returns will be filed monthly or annually, with monthly returns filed electronically, although a taxpayer may file for an exemption from this requirement.

• LOST/SAVE Distributions – This will allow IDR to distribute Local Option Sales Taxes (LOST) and Secure an Advanced Vision for Education (SAVE) funds to local governments or school boards, respectively, based on actual revenue instead of estimates. This eliminates the need for adjustments based on actual perceptions, which require additional disbursement to local government/school district or reimbursement to the state for an overpayment.
• Certified Service Providers – Liability for Sales Tax Due – This will extend the liability for sales tax due to Certified Service Providers for online marketplaces. This responsibility will allow the department to better enforce the collection of sales taxes for online transactions.
• Cancellation of Sales, Fuel and Hold Permits – This would allow the ministry to cancel a permit that is no longer in use. The ministry must first verify that the permit is no longer being used by the permit holder.
• Deadlines for Requesting a Sales Tax Refund – This clarifies when a request for a sales tax refund must be made under an incentive agreement between the Iowa Economic Development Authority and a business.
• Penalty for Failure to File a Fuel Retailer Report – This provision establishes a fine of $100 for failure to file an annual fuel retailer report. This ratio is required to determine the fuel tax differential for certain renewable fuel blends.
• Fuel Tax Changes – This section of the Bill will be deleted by an amendment.

The committee passed an amendment to remove the split from the bill reclassifying fuel taxes due to unforeseen complications with the international fuel tax agreement. The amendment also requires the department to provide each school district with an estimate of the SAVE monies the district will receive during the current school year. This solves a problem for local districts as the current estimated payouts were useful for bond agreements supported by SAVE funds.
[2/23: Short form (Excused: Zaun]

HF 419 – Driver’s License Station Convenience Fee

HF 419 allows counties to collect a $10 fee for issuing and renewing driver’s licenses and non-operator identification cards to those residing outside the county.
[2/23: 12-4 (No: Bolkcom, Petersen, Quirmbach, T. Taylor; Excused: Zaun)]