Ways & Means Committee – Week 21, 2020

COMMITTEE ACTION:

SF 2393—Professional licensees

SF 2393, as amended, narrows the ability of licensing and professional boards to disqualify individuals holding certain licenses because of a criminal conviction. In addition, the bill addresses Iowa licensing boards issuing licenses, certifications or registrations to individuals without exams to those who have licenses in other states when they establish residency in Iowa. The bill allows (with certain exceptions) out-of-state individuals without licenses who relocate to Iowa to be issued a license without the required Iowa education and training as long as they have three years of relevant work experience. Division II of the bill includes many non-relevant provisions to licensing. Some items in Division II are from bills the Senate passed and the House did not take up. Some items are related to COVID-19 and the Governor’s proclamations.

Details of the bill:

Division I

  • The bill affects licensing under the electrician code chapter (103), plumbers and mechanical contractors (105), health-related professions (147), emergency medical care/trauma care (147A), medicine and surgery (148), genetic counseling (148H), chiropractic (151), nursing (152), dentistry (153), hearing aids (154A), funeral directing, mortuary science, cremation (156), educational examiners board (272), and regulation of licensed professions and occupations (272C).
  • The bill eliminates certain subsections in the Code chapters for electricians and plumbers on denying, revoking or suspending licenses based on certain crime convictions.
  • The bill narrows the ability of licensing and professional boards to disqualify individuals holding certain licenses because of a criminal conviction. For a conviction to disqualify an individual from a professional license, the offense must directly relate to the duties and responsibilities of the profession. “Offense directly relates to” means actions customarily performed in the licensed profession or the circumstances under which an offense was committed are customary to the licensed profession. The Educational Examiners can still deny a license due to a founded report of child abuse.
  • A licensing board may grant an exception to the disqualification of license if they board determines by clear and convincing evidence that the applicant is rehabilitated and an appropriate candidate for licensure.
  • A person’s conviction for a crime may be grounds for a denying, revoking or suspending a license only if there is unreasonable risk to public safety because the offense directly relates to the duties and responsibility of the profession and the appropriate licensing board or agency does not grant an exception. This ability for denial applies to Chapter 272C – Professional Licensing (many professional licenses are covered by this chapter), but does not apply to Chapter 272 – Educational Examiners.
  • (Section 26) Licensure of people licensed in other jurisdictions: Requires that a professional or occupational license, certificate or registration be issued to a person without an examination if:
    • That person establishes residency in Iowa; or that person is married to an active-duty member of the military and is accompanying the member on an official permanent change of station to a military installation in Iowa.
    • Certain conditions must be met to allow for licensing, certification or registrations without examination in Iowa, including similar scope of practice in the other jurisdiction, having been licensed or registered in the other jurisdiction for least a year, the other jurisdiction imposed minimum education requirements (may not be substantially equivalent to Iowa), the person does not have discipline imposed on them from a regulating entity, etc. This section applies to individuals who come from states that require a license, a certification or registration for their profession; and to professional boards covered by Chapter 272C and to the Board of Educational Examiners.
  • (Section 27) A person applying for a professional license, certificate or registration who relocates from a state that did not required a professional occupational license, certificate or registration will be considered to have met any education, training or work experience requirements imposed by an Iowa licensing board if they have three or more years of related work experience with a substantially similar scope of practice within the four years preceding the date of application. This does not apply to a license, certificate or registration issued by the board of medicine, board of nursing, dental board or board of pharmacy. This does not prevent a licensing board, agency or department from requiring an exam specific to Iowa laws prior to issuing a license.
  • A licensing board will waive a license fee if the applicant’s household income does not exceed 200% of federal poverty guidelines, and they’re applying in Iowa for the first time.

Division II

  • Public records: Allows for electronic examination in lieu of in-person.
  • Allows a record request in writing, by telephone or electronic means.
  • Private security business does not include bail bond businesses. 
  • Allows the Elevator Safety Board to reduced elevator fees for nonprofit associations.
  • Eliminates the Hospital Licensing board. 
  • Amends the substance abuse treatment Code Chapter. Allows meetings with counsel or family and friends to be via phone or electronically.
  • Allows BOEE-certified personnel to provide continuing education requirements online, if available.
  • Deer hunting licensing for out-of-state hunters.
  • Allows real estate appraisers to complete contact hours under supervision in a bordering state, not to exceed 50% of state requirement.
  • Architect exam flexibility: Don’t have to retake modals you’ve already passed.
  • Repeals requirement for travel agent registration with Secretary of State. 
  • COVID-19 impact: Pushed back repeal of old immunization law. In 2018, the Legislature added 155A.46 to Iowa Code, allowing pharmacists to independently order and administer immunizations. Rules were needed from Medicaid to ensure pharmacists could bill for the immunizations, but the action ion the riles was delayed because of COVID-19. Pushing back the repeal of the old immunization law for one more year will give pharmacists more time to enroll with Medicaid, as well as to ensure there is no gap in coverage for Medicaid members who seek immunizations at a pharmacy.
  • COVID-19 impact: School physicals – extension on requirement for athletics until Dec. 31, 2020.
  • COVID-19 impact: Shareholder meeting – allows tele-meetings through Dec. 31, 2020.
    [6/11: 11-6, party line]

SSB 3202 – Tax policy omnibus

SSB 3202 is a large tax policy bill based on a Department of Revenue (DOR) proposal.

  • Department of Revenue policy updates: Makes numerous changes to the administration of tax policy, including:
    • establishing penalties for specified businesses that fail to file returns.
    • establishing perjury penalties for false statements on documents filed with the department.
    • clarifying requirements for the collection and remitting of sales tax by online sellers.
    • establishing a process based on model language from the Multi-state Tax Commission to provide for the audit and review of partnerships and pass-through entities.

The bill makes these policy changes:

  • Setoff procedures: Corrects an issue with the recently passed updates to setoff procedures under SF 2328 and HF 2565 to ensure that existing rules for the setoff programs will remain in effect until DOR files adopted rules to enact the new legislation.
  • Pro rata share of entity-level income tax paid by shareholders or beneficiaries: Ensures resident shareholders and beneficiaries can claim the out-of-state tax credit paid in another state for their share of state taxes paid by that entity by establishing a new process for resident shareholders/beneficiaries to provide proof of taxes paid by the pass-through entity in another state and their share of the entity (as well as taxes paid).
  • Business interest expense deduction and global intangible low-tax income: Changes the treatment on Global Intangible Low Tax Income (GILTI) for Iowa corporate income taxes. It is currently treated as income and must be apportioned as such. Federal tax changes from the 2018 TCJA established GILTI in the Internal Revenue Code to discourage companies from using intellectual property to shift profits out of the country by adopting a “territorial” tax system that treats intellectual property as income. The bill allows companies to deduct GILTI from their Iowa taxable income, which would cut in-state taxes for companies that have previously shifted profits out of the U.S. to lower tax jurisdictions. The bill also lifts the cap on the business interest expense deduction under 163(j) of federal tax code, allowing corporations to further lower their tax liability.
  • Iowa Reinvestment Act: Authorizes a new time frame for projects to apply for approval of additional districts from July 1, 2020 to July 1, 2025. It also revises the size and makeup of eligible districts to allow for projects that include area in more than one city.
  • Local assessors: Adds accountability for assessors by addressing conflicts of interest in assessment of property owned by the assessor or their family members.
  • School Tuition Organization Tax Credit: Increasesthe total amount of tax credits eligible for contributions to an STO from $15 million to $25 million.
  • Paycheck Protection Program: Creates an income tax exemption for any forgiven loans issued as part of the Paycheck Protection Program under the federal CARES act. Generally, loan forgiveness is treated as income and is taxable.
  • Future tax changes: Eliminates the net receipts and revenue growth triggers in SF 2417 before the new contingent tax system goes into effect. With this change, the new system will go into effect for Tax Year 2023.
  • Capital gains: Provides a 15% deduction of a taxpayer’s net capital gains from the calculation of taxable income. Capital gains include increases in the value of assets (property or stock) over the initial purchase price or value.
  • Bonus depreciation/Section 179 expensing: Allows the amount that can be expended under Section 179 to match the amount allowed by any updated federal tax changes, rather than locked in.
  • Innocent spouse provisions: Reflects IRC section 6015, making relief from joint and several liability available at the state level under all the same circumstances that it would be granted for federal purposes.
  • Sales tax paid by third-party developers: Allows a pass-through entity awarded this credit to pass through the refundable credit to its owners.
  • Iowa Educational Savings Plan (529 Plans): Couples Iowa’s eligible educational expenses to match federal changes allowing certain qualifying apprenticeship program-related expenses or qualified education loan repayments.
  • Iowa Educational Savings Account and First-Time Homebuyer Account extensions: Extends the timeframe for an individual to make a contribution to July 31, 2020 and designate it for 2019. The Governor has already extended the deadline for 2019 contributions through July 31, 2020 with her disaster proclamations, so this would likely make no difference in practice.
  • Qualifying Personal Protective Equipment (PPE) – Donation: Adds a new use tax exemption to the Code. The exemption relates to the production of personal protective equipment (PPE) assembled and donated in connection with a governor’s disaster proclamation. Effective January 1, 2020, the exemption relates to both PPE and materials used to make PPE if it’s donated during or for six months after the declaration.
  • Short-term rental properties: Prevents counties and cities from enacting ordinances that prohibit short-term rental properties. These properties will be classified as residential property. Cities and counties can enact ordinances relating to short-term rental properties, as long as they are applicable properties for protection of public health, residential use and zoning purposes, limitation or prohibition on housing sex offenders, to manufacture, exhibit, distribute            or sell illegal drugs, liquor, pornography or obscenity, or to operate an adult-oriented entertainment establishment as described in section 239B.5, or to provide the county with an emergency contract for a short-term rental property.
  • Innovation Funds: Allows Iowa Economic Development Authority to reallocate tax credits between the Investment “Angel” Tax Credits and Innovation Fund Investment Tax Credits. IEDA would like the authority to move underused credits to areas where there is a demand.
  • Rural Improvement Zones: In response to a Supreme Court decision involving a drunk driving arrest by a DNR officer at Lake Panorama, the language change is proposed based on discussions with bond attorneys to ensure that the Lake Panorama RIZ continues to meet the standards to qualify as a RIZ.
  • Income tax exclusion – CARES Act – Emergency Student Grant money: This is not included in HF 2641. However, since this is a restatement of DOR policy, there is effectively no difference between the two bills.
  • Iowa income exclusion – stimulus payments: This is not included in HF 2641. However, since this is a restatement of DOR policy, there is effectively no difference between the two bills.
  • Hunting deer and turkey on a farm unit

[6/12: 11-6, party line]