WAYS & MEANS-Week of April 16th

HF 675—Mechanic’s Liens

HF 2467—Snowmobiles, ATVs

HF 2460—Tax Increment Financing

HF 2464—IDPH Technical Bill

SSB 3202—Brownfields and Grayfields Tax Credits

FLOOR ACTION:

HF 675 makes significant changes to Code Chapter 572, the Mechanic’s Lien chapter. Currently, Chapter 572 is archaic, cumbersome and difficult to interpret, sometimes resulting in subcontractors failing to get paid for work and filing unenforceable liens. In addition, homeowners sometimes pay double for the work done on their homes because they have no notice of liens that were filed, close on their home and pay the general contractor who sometimes fails to pay a subcontractor. Currently, mechanic’s lien filings are done at the county level. This bill creates a State Construction Registry (SCR), which is Internet-based and administered by the Secretary of State. The SCR will serve as a state-wide central repository where pre-lien notices and mechanics’ liens will be filed and housed. The requirements relating to the SCR apply to residential construction, defined in the bill as “construction on single-family or two-family dwellings occupied or used, or intended to be occupied or used, primarily for residential purposes, and includes horizontal condominiums.” Under the bill:

** General contractors and owner-builders who contract with subcontractors to provide labor and furnish materials on a project will post a “notice of Commencement of Work” to the State Construction Registry website within 10 days of commencement of work on the property. The bill outlines the information required to be included in the notice. The Secretary of State then assigns an SCR number to the project.

** If a general contractor fails to post the notice of commencement of work, a subcontractor may post the notice.

** In order to preserve lien rights, subcontractors will post a “preliminary notice” to the SCR website relating to a residential project for which they are providing labor, services, materials, etc.

** To perfect a lien after filing a preliminary notice, a subcontractor must post the lien to the website that homeowners, bankers, abstracters and others will be able to search for postings related to a property. [4/16: 46-2 (Bartz, Kettering “no”; Horn, Ward excused)]

HF 2467 makes various updates to Department of Natural Resources (DNR) regulations regarding snowmobiles, all-terrain vehicles (ATVs) and personal watercraft. The bill clarifies that the instruction courses that are offered to the operators of snowmobiles, ATVs and personal watercraft are education courses, rather than simply safety courses. This conforms to national standards for these courses. The bill also extends the length of registration for snowmobiles and ATVs from one year to three years, which conforms to existing boat registrations. The fees are adjusted to correspond to this change in registration, so the one-year, $15 registration fee for snowmobiles and ATVs will be replaced with a three-year, $45 fee. The fee paid to county recorders will increase from $2 to $5, which is a net savings of $1 to the owner. The bill expands the definition of public land to include public ice, and makes technical changes to the required equipment for ATVs and snowmobiles. The bill also bans the practice of “water-skipping,” where a rider of a snowmobile will attempt to drive the vehicle across the surface of a waterway (not including an ice-covered waterway). [4/12: 29-18 (Anderson, Bacon, Behn, Bertrand, Chelgren, Dix, Feenstra, Hamerlinck, Hatch, Kettering, McKinley, Seymour, Smith, Sodders, Sorenson, Ward, Whitver, Zaun “no”)]

COMMITTEE ACTION:

HF 2460 relates to Iowa’s urban renewal law and incremental taxes. A Senate Ways and Means amendment strikes everything in HF 2460. The amendment:

** Requires certain reporting of the counties, cities and rural improvement trustees regarding urban renewal projects, plans and tax increment financing (TIF). Each municipality must file the electronic report with the Department of Management by December 1, 2012.

** Requires the Legislative Services Agency to do an annual report on the information contained in the reports, and this annual report will be sent to the Governor and the Legislature. When a municipality amends or modifies an adopted renewal plan to include an additional urban renewal project, they must hold a public hearing.

** TIF cannot be used for the relocation of a commercial or industrial enterprise not presently located within the municipality unless: 1) The local governing body of the municipality where the business is currently located has a entered into a written agreement with the local governing body of the municipality where the business is proposing to relocate or has a written agreement concerning the general use of economic incentives to attract commercial or industrial development within those municipalities; or 2) The local governing body of the municipality where the commercial or industrial enterprise is proposing to relocate and the use of TIF is in the public interest (requires some written verification). “Relocation” means the closure or substantial reduction of an enterprise’s existing operations in one area of the state and the initiation of substantially the same operation in the same county or contiguous county in the state.

** The TIF revenue on wind energy urban renewal areas can only be used for the construction and improvement of roads, bridges and culverts. Wind energy TIFs are limited to 10 years.

** A city must get the approval of the county board of supervisors when the city adopts a resolution approving the Local Option Sales Tax (LOST) TIF. [4/18: 11-3 (Anderson, Bartz, Smith “no”; Quirmbach “pass”)]

HF 2464 makes technical changes and updates to various programs within the Iowa Department of Public Health, including Board of Nursing Home Administrators, inspections of radiation machines, HIV confidentiality and the reporting of federal grants with a state match. [4/18: short form]

SSB 3202 increases the amount of tax credits that the Economic Development Authority may annually allocate under its aggregate tax credit limit in Code section 15.119 to the Redevelopment Tax Credit Program for Brownfields and Grayfields from $5 million to $10 million. This does not increase overall spending on tax credits just allows changes to the allocations under the cap. [4/18: short form]