Appropriations Committee Report – Week 12, 2019


SF 608/SSB 1250- Economic Development Budget

SSB 1251 – Agriculture and Natural Resources Budget


SF 600 – Transportation Budget


SF 608/SSB 1250– Economic Development Budget

SF 608/SSB 1250 appropriates $41.6 million from the General Fund to the Department of Cultural Affairs (DCA), the Iowa Economic Development Authority (IEDA), the Iowa Finance Authority (IFA), the Public Employment Relations Board (PERB) and Iowa Workforce Development (IWD). This is $1.4 million more than the FY19 budget.

The bill appropriates $28.8 million from other funds. This is an increase of $1.2 million over FY19. Other funds include the Skilled Worker and Job Creation Fund, IWD’s Special Contingency Fund and the Unemployment Insurance Reserve Interest.

FY20 Senate GOP Recommendation                        $ 41.6 million
FY19 Appropriation                                                         $ 40.2 million
Difference                                                                          $ 1.4 million
Percent Increase                                                              3.5 percent increase

Department of Cultural Affairs (DCA)

DCA receives an increase of $25,000 over FY19 for the Cultural Trust Grants. Cultural Trust Grants go to Iowa nonprofit arts, history, sciences and humanities organizations for education programs and support local endowment building.

Iowa Economic Development Authority (IEDA)

IEDA is receiving a decrease of $25,000 over FY19.

  • The World Food Prize is reduced by $50,000.
  • The Council of Governments receives an increase of $25,000.
  • Other Funds (non-General Fund dollars):
    • New Appropriation/Future Ready Iowa  line item: The bill appropriates $400,000 (from the Skilled Workers and Job Creation Fund) to the Iowa Commission on Volunteer Services to be used for establishing a volunteer mentor program to support implementation of the Future Ready Iowa Skilled Workforce Last-Dollar Scholarship program. The program was established in the Future Ready Iowa Act (2018).
    • New Appropriation: The bill appropriates $100,000 (from the Skilled Worker and Job Creation Fund) to the Iowa Economic Development Authority for a Housing Needs Assessment Grant Program that would be distributed by the Executive Committee of the Governor’s Empower Rural Iowa Initiative at the recommendation of the Investing in Rural Iowa Task Force. The program is intended to provide small communities with hard data and housing-related information specific to the community being analyzed.
    • New Appropriation: The bill appropriates $300,000 (from the Skilled Worker and Job Creation Fund) to the Iowa Economic Development Authority for Rural Innovation Grants Program to be distributed by the Executive Committee of the Governor’s Empower Rural Iowa Initiative at the recommendation of each of the three Empower Rural Iowa Task Forces for supporting Innovative Rural Projects.
    • The bill appropriates $1.8 million less to the High Quality Jobs Program. This funding is from the Skilled Worker and Job Creation Fund.

Iowa Finance Authority (IFA)

IFA receives status quo funding ($658,000) for the Home and Community-Based Services Rent Subsidy Program that provides rent assistance to individuals on one of the Medicaid Home and Community-based Services (HCBS) Waivers.

Public Employment Relations Board (PERB)

  • PERB is receiving status quo funding.


Iowa Workforce Development (IWD)

IWD is appropriated $162,000 more than FY19 out of the General Fund appropriation. IWD is receiving an increase of $1.2 million in other funds (Unemployment Insurance Reserve Interest) over FY19 budget.

  • $12,000 increase to Workers’ Compensation Division.
  • $1.2 million General Fund decrease to workforce field offices. The bill appropriates an increase of $1.2 million from other funds (Unemployment Insurance Reserve Interest) for field offices.
  • $50,000 general increase to the Offender Reentry Program.
  • New Appropriation/Future Ready Iowa  line item: There is an appropriation of $1.2 million for the Iowa Employer Innovation Fund, which was established in the Future Ready Iowa Act (2018). The funding will match eligible employer moneys to expand opportunities for education and training leading to high-demand jobs and to encourage Iowa employers, community leaders, and others to provide leadership and support for regional workforce talent pools throughout the state and for Future Ready Iowa Education and outreach.
  • New Appropriation: The bill appropriates $100,000 to fund a position to assist with the support of Home
    Base Iowa activities. IWD already has an FTE filling these duties and IWD has been using other, non-appropriated funds.


Board of Regents

  • New Appropriation: $750,000 to Iowa State University for Biosciences Innovation Ecosystem and $250,000 to University of Iowa Biosciences Innovation Ecosystem, for a total of $1 million. The Governor recommended $2 million, and the Regents requested $4 million. The money will be used to establish a nationally renowned innovation ecosystem in Iowa bioscience platforms (e.g., biobased chemicals, precision and digital agriculture, vaccines and immunotherapeutics, and medical devices) to grow and diversify Iowa’s economy. As the universities look to hire individuals, creating a funding program focused on early-stage technologies and creating an “Iowa Innovates” program will help attract young innovators to Iowa.
  • New Appropriation: $250,000 to University of Northern Iowa for equipment, technology and salaries to expand UNI’s additive manufacturing capabilities. UNI requested $400,000.
  • ISU, UI and UNI receive status quo from the Skilled Worker Job Creation Fund for their economic development initiatives.

College Student Aid Commission

  • This is the first time the College Student Aid Commission has received an appropriation out of the Economic Development budget.
  • New Appropriation/Future Ready Iowa line item: The bill appropriates $1 million to establish a grant that would allow Iowans who left college with at least half the required credits for a bachelor’s degree in a high-demand field of study to enroll in a public or private four-year institution in Iowa to complete the degree. This program was established in the Future Ready Iowa Act (2018). The House GOP Education proposal funds this program at $1 million from the General Fund.
    [3/28: party-line (Absent: Breitbach)]

SSB 1251 – Agriculture and Natural Resources Budget

SSB 1251 is the Senate Republican FY20 budget to the Department of Agriculture and Land Stewardship (IDALS) and the Department of Natural Resources.

FY19 Appropriation                                                                         $39.4 million
FY20 Appropriation                                                                         $40.0 million
Difference                                                                                          $604,000
Percent Increase                                                                              1.5 percent

Significant Funding Increases

Department of Agriculture and Land Stewardship (IDALS)

  • There is a $304,000 increase for IDALS operations in the Senate Republican’s proposed Agriculture & Natural Resources budget over FY19 appropriations. This provides funding to establish the industrial hemp program in IDALS and implement the Iowa Hemp Act (SF 599/HF 733).
  • There is a conditional transfer of $200,000 from the general appropriation to IDALS to the Veterinary Diagnostic Laboratory at ISU. The transfer will occur if SF 601 or successor legislation is signed into law. SF 601 would establish a new pesticide fees fund under the control of IDALS. Currently, pesticide fees are deposited into the general fund and appropriated by the legislature. By depositing the fees directly into a fund under IDALS, they will have direct access to the pesticide fee revenues. Because the current fees do not directly flow to the department, it is anticipated that IDALS will have more funds available when pesticide fees are directly assigned to the department. The conditional transfer will provide more funding to the Veterinary Diagnostic Laboratory without reducing overall funding for IDALS.


Farmers with Disabilities

  • There is a $50,000 increase for the Farmers with Disabilities program over FY19, increasing the appropriation to $180,000. This money provides support to Easter Seals to administer the Rural Solutions program that assists farmers with physical or mental disabilities. The program offers agricultural worksite and home modification consultations, peer support, services for the family, information and referrals, and medical equipment loan services.


Foreign Animal Disease Response Fund

  • The budget increases funding for Foreign Animal Disease response and by $250,000, doubling the appropriation to $500,000. This funding assists IDALS in developing response and preparedness efforts for future outbreaks of infectious animal diseases. IDALS, in cooperation with farm groups and the Livestock Health Advisory Council at Iowa State University, will develop measures to prepare for, prevent, control, or eradicate the transmission and incidence of foreign animal diseases for livestock in the state.


Other Significant Funding Issues

Department of Natural Resources (DNR)

  • This budget proposes status quo funding for DNR. This funding level is $1.3 million less than the department received from the General Fund in FY16.
  • The budget does include new language that will allow DNR to use up to $250,000 from the existing appropriation for state parks operations and maintenance in the Environment First Fund to provide for up to three new state park rangers.


Resource Enhancement and Protection program (REAP)

  • The budget appropriates $12 million for REAP. This is $4 million below the amount appropriated in FY17 and $6 million below the highest funding levels for the program in FY 10. Unlike previous years, Republicans are not proposing to divert funding from REAP to backfill funding shortfalls for state parks operations and maintenance.
  • REAP funding is allocated under the formula to these separate accounts:
  • Open Spaces – Open spaces is used to permanently protect and develop Iowa’s public lands and waters. DNR also uses funds in this account to pay property taxes owed to counties for land that has been acquired by DNR.
  • County conservation boards – County conservation boards compete for grants that they can use to develop programing and public areas under their control.
  • Soil and water conservation – This money is divided between projects and practices funding. IDALS has used funding from this area in the past to support urban soil conservation and water quality projects.
  • City parks and open spaces – Cities compete for grants that they can use to develop public areas and amenities to promote outdoor recreation and natural habitat.
  • DNR Land Management – DNR uses these funds to manage state conservation lands and facilities.
  • Cultural Affairs – Grants for historical preservation and country schools.
  • In FY19, Republicans diverted $3 million from REAP to pay for state parks maintenance, repair and operations. REAP is a stand-alone program and should not be weakened so that Republicans can minimize the damaging cuts in their budget. The program has helped bring together a broad coalition of hunting, fishing, conservation, recreation and environmental organizations to push for projects that improve the state’s quality of life and make it a better place to live and raise a family. Diverting money from one portion of the program hurts its effectiveness as a way to invest in Iowa’s future.


Major Language Changes/Budget Concerns

The bill does include some changes to current Code language. Most of these changes are technical fixes to reflect the transfer of the geological survey from DNR to the University of Iowa.

Another provision codifies past appropriations language providing that IDALS will administer biofuels auditing and administration programs to ensure motor fuel quality sold by retailers and renewable fuels producers.

The bill also amends the Code regarding grain warehouse operators. The language will give primacy to the grain warehouse operator’s lien above all other creditors.

Under this budget, support for agriculture and natural resources in this state continues to suffer. Reduced funding has led to the elimination of successful programs and a large number of unfilled positions that should be providing services to Iowans. Cooperation between agriculture and natural resources is needed to move our state forward. This budget continues to pit them against each other.

Amendment adopted in committee

The committee adopted an amendment with three main items:

  1. Appropriates $100,000 from the remaining funds in the Watershed Improvement Review Board fund to the Iowa Soybean Association to continue to support farm demonstration projects that do research into nutrient resource management.
  2. Raises the small air permit fee fund cap from $250,000 to $750,000. The cap was put in place when the air permit fee system was redesigned in 2016. This cap restricts the amount of money DNR can raise through fees to support the processing of small source air quality permit applications. The fee cap also restricts how much money DNR can spend on processing these permits. Raising the fee fund cap allows for DNR to collect more fees to fund services for small source air permit holders. The fees can be changed through rulemaking by DNR, but that rulemaking process requires an extensive stakeholder review process. The proposal to raise the fee cap is supported by many small source permit holders.
  3. Ends mandates for mercury thermostat manufactures and retailers regarding the collection of thermostats that contain a mercury switch beginning in 2022. The sale of these thermostats has been banned in Iowa since 2009. With the ban on the sale of these thermostats, the state mandated the collection of existing thermostats by manufacturers and retailers who made or sold those items. The amendment repeals the mandated collection programs and reporting requirements. The manufacturers are continuing their collection efforts, but feel the mandated system is now unnecessary as the number of mercury thermostats remaining in use drops.
    [3/28: party-line (Absent: Breitbach)]


SF 600 – Transportation Budget

SF 600  makes a supplemental appropriation for FY18-19. It also makes FY19-20 appropriations from the Road Use Tax Fund and the Primary Road Fund to the Department of Transportation. FY19-20 appropriations are at the Governor’s level.


FY 2018-2019 Supplemental appropriations
SF 600 makes a supplemental appropriation of $8.7 million from the Primary Road Fund for the purchase of salt. This provision of the bill takes effect upon enactment.


Department of Transportation

Road Use Tax Fund

FY20 Appropriation                         $51,488,498

FY19 Appropriation                         $51,036,884

Difference                                          $451,614

Percent                                                0.9% increase

Primary Road Fund

FY20 Appropriation                         $353,199,194

FY19 Appropriation                         $338,492,899 *includes FY19 supplemental

Difference                                          $14,706,295

Percent                                                                4.34% increase

Total FY20 Appropriation:            $15.2 million


Road Use Tax Fund 

Appropriations include $350,000 in capital costs associated with a new driver’s license service center in Dallas County.

The Iowa Department of Transportation (DOT) provides driver and identification service centers in the most populous areas of the state, and county treasurers provide services in counties that do not have a service center. There are 17 service centers in 16 counties – two in Polk County. County treasurers provide services in the other 83 counties, working as DOT agents via 28E intergovernmental agreements.

Dallas County started offering services in 2002, but its population has more than doubled and is projected to grow another 20 percent in the next five years (107,000 in 2023). This has created service demands that far exceed what can be effectively managed under the county treasurer model. The current annual issuance volume is 26,000 licenses and IDs per year compared to the average county volume of 3,500. Dallas County issuance is now comparable to centers in Ames, Council Bluffs and Dubuque. Dallas County officials asked the DOT to assume services there.

The DOT budget request includes an adjustment for an additional eight FTEs (full-time equivalents) and $515,000 in operational funds for positions to staff the service center, as well as $350,000 in capital funds to establish a new leased facility. The service center would open in January 2020.

Primary Road Fund

Appropriations include $26,951,000 for a Sioux City facility that will combine the services and uses of five existing DOT facilities.

Sale of the existing facilities will return those properties to taxable use and will return an estimated $1,376,000 to the Primary Road Fund. It also should avoid an estimated $3,798,000 in major maintenance to existing facilities over the next 15 years, which will also benefit of the Primary Road Fund.

Consistent with steps to reduce the physical footprint in other districts, the DOT proposes to consolidate five facilities into a single facility – the current District 3 main office, the Leeds and Hamilton garages, and the Leeds resident construction engineer’s office.

All of these facilities are 40 to 60 years old. Consolidating avoids duplication of facilities and common spaces, improves coordination of collaborate staff, moves the facilities out of what are now residential areas to an area with better access to the highway system, and creates garage space large enough to accommodate modern DOT equipment.
[4/2: 46-0) Absent: Brown, Kinney, Mathis, Zaun)]