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Franchise Agreement for Iowa by woj14951

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									           Inside This Issue:
 Truth on Cigarette Tax Hike
 Speaker Murphy and Big Labor
                                          1
                                          2
                                                             House
 Speaker Murphy and SEIU                  2                  Republican
 Air and Water Bio Security               4
 Cable Franchise Battle                   5                  Newsletter
 Renewable Energy Technologies            7
 Education Committee Update               8                  February 21, 2007
 Prison Issues                            11
 Mental Health Troubles Brewing           12
 Judiciary Update                         13
 Living Wage                              14
 Wild Animals in Iowa                     14                                 Appropriations
 Ban on Private Prisons                   15
 Gambling Bills Piling Up                 16
 License Plate Issues                     17
 General Dardis’ Address                  19
                                                          Despite What House Democrats Say, the
 Cigarette Tax Update                     20              Cigarette Tax Increase Will Not Be Spent on
 House Republican Talking Points          21              Health Care
Both the Senate and House Democrats have introduced bills to increase the cigarette tax by $1 per pack, which is
estimated to generate $30 million in FY 07 and $138.4 million in FY 08.

Both of these bills claim that all of the new money generated by the cigarette tax hike will be spent on health care.
However, when the joint budget targets are released, it will become evident that the bulk of the increase goes to fund
increases for other areas of the budget including the Regents, teacher salaries and state employee salaries.

Joint budget targets are due for release this Friday, February 23. If Senator Gronstal’s prediction comes true (―The
Governor will get 95 percent of everything he wants…‖), we know pretty much what the General Fund spending
increases for each budget subcommittee will be.

The Governor estimates that the tax increase will generate $30 million in FY 07 and $138.4 million in FY 08 (the total
of all of the Governor’s tax increases is $179 million in FY 08.)

In FY 07, the Governor has requested $55 million in supplemental appropriations. However, only $8 million of this
amount is for Medicaid and therefore for health care. If you credit the $8 million towards health care, that leaves $22
million to fund the new Power Fund, Targeted Small Business and utility costs. That would mean only 27 percent of
the increase was going directly to health care.

Here are the major health care spending increases in the Governor’s FY 08 budget recommendations:

       $60.8 million to Medicaid
       $3.5 million for HAWK-I
       $7.6 million for mental health
       $2.8 million for anti-smoking programs

That equals $74.7 million. It is a stretch to say that the increase for Medicaid is funded by the cigarette tax increase
because it is an entitlement that must be funded regardless of whether or not the Legislature raises taxes. For the sake
of the argument, if one assumes that the $74.7 million goes to new health care spending, that is only 54 percent of the
tax increase spent on health care. That leaves the other 46 percent to fund any of the following items:

       State Employee Salaries -- $120 million *
       K-12 school aid -- $95.2 million
       Teacher Compensation -- $70 million
         Property Tax Credits -- $40 million
         Commercial Property Taxes -- $25 million
         Board of Regents -- $25 million
         Department of Corrections -- $24.5 million
         Universal Preschool -- $20 million
         Child Care Assistance -- $18.6 million
         Community Colleges -- $12.4 million
         All other increases -- $48.5 million

* The Governor has not delivered his salary bill but that is what is available under the spending limit

Both of the bills being considered, SF 128 and HF 346, state that all of the new revenue from the cigarette tax increase
is to be used for health-care related purposes. However, at some point they will have to notwithstand this language in
order to make their budget work.

It is obvious that the cigarette tax is being increased by $1 per pack in order to balance the budget. The Democrats are
planning a $560 million increase in the general fund budget. Without the cigarette tax increase, they can’t meet their
goals.

(Contact: Lon Anderson, 1-5184)



                                                    Attack on Right to Work

Speaker Murphy and Organized Labor
Organized labor donated over $190,000 to Speaker’s Murphy’s campaign committee in 2004 and 2006 according to
campaign finance records.

                                 Organized Labor Donations To Murphy’s Campaign Committee
                                                1998-2006 State Election Cycles

                    $120,000
                                                                                                                   $100,825
                    $100,000                                                                    $90,143

                     $80,000

                     $60,000

                     $40,000

                     $20,000                                                 $5,069
                                       $3,125             $1,575
                            $0
                                        1998               2000               2002               2004               2006

               Source: Iowa Ethics and Campaign Finance Disclosure Board, Institute on Money in State Politics, Murphy Campaign Committee



Connections between Speaker Murphy and SEIU



                                                                                                                                            2
The SEIU has written nearly $850,000 in campaign checks the last two election cycles to organizations that
directly benefit House Democrats. Speaker Murphy himself has taken over $40,000 from SEIU in the last
two election cycles. That total makes SEIU Speaker Murphy’s top donor during the last two election cycles.

SEIU Local 199 is also Teri Murphy’s union. Teri Murphy is the wife of Speaker Pat Murphy. Teri Murphy
was actively involved in the effort to unionize nurses at Finley Hospital in 2003 and was a member of the
union bargaining team at Finely in 2004. Also in 2004 Mrs. Murphy spoke at the Democratic National
Convention as a member of SEIU’s universal health care advocacy group Iowa for Health Care. SEIU Local
199 has filtered over $300,000 in itemized payments to Iowa For Health Care in 2005 – payments that were
used to further Iowa For Health Care’s left-wing agenda. Speaker Murphy sponsored HF 2290 in 2004, an
Iowa for Health Care backed measure on nurse staffing ratios.

Larry Murphy, Speaker Murphy’s brother, is the registered lobbyist for SEIU and Change to Win. He has
lobbied for SEIU since 2004. Change to Win is an SEIU led coalition of seven unions whose stated purpose
is to organize non-union workers into unions and improve the organizational structure of union workers. The
seven affiliated Change to Win unions are:
      SEIU – Service Employee’s International Union
      IBT – International Brotherhood of Teamsters
      LIUNA – Laborers International Union of North America
      UNITE HERE – A merger between the Union of Needletrades, Industrial and Textile Employees and
        Hotel Employees and Restaurant Employees Union
      UBC – United Brotherhood of Carpenters and Joiners of America
      UFW – United Farm Workers
      UFCW – United Food and Commercial Workers


                          SEIU-Related Donations To Murphy’s Campaign Committee
                                       1998-2006 State Election Cycles
             Note: The chart below includes donations from the SEIU and its affiliates to Murphy’s committee.

                   $35,000                                                               $31,358
                   $30,000
                   $25,000
                   $20,000
                   $15,000                                                                                 $10,425
                   $10,000
                    $5,000                                             $1,000
                                      $0                $0
                         $0
                                1998 Cycle        2000 Cycle        2002 Cycle        2004 Cycle       2006 Cycle

                                                   Total SEIU-Related Donations
                    Sources: Iowa Ethics and Campaign Finance Disclosure Board, The Institute on Money in State Politics




                                                                                                                           3
                        SEIU Donations To Committees That Benefit Iowa House Democrats
                                        2004 & 2006 State Election Cycles
                                                        2004 State Election Cycle
                SEIU Donations To The IDP, DLCC & Murphy's Committee
                Iowa Democratic Party                                                                                               $359,900
                DLCC                                                                                                                $105,000
                Murphy's Campaign Committee                                                                                          $31,000
                Total                                                                                                                   $495,900
                         Source: The Center For Public Integrity; The Institute On Money In State Politics, 2004 State Election Cycle


                                                         2006 State Election Cycle
                SEIU Donations To The IDP, DLCC & Murphy's Committee
                Iowa Democratic Party                                                                                                   $107,180
                DLCC                                                                                                                    $235,000
                Murphy's Campaign Committee                                                                                              $10,000
                Total                                                                                                                   $352,180
                                         Source: IRS.gov; Institute on Money in State Politics, 2004 & 2006 Cycles


(Contact: Jeff Mitchell, 1-5137)



                                                                Agriculture

Air & Water Subcommittee Discusses Biosecurity Issues
On Tuesday, February 20, the standing Subcommittee on Air and Water Quality held a ―round table‖ hearing to
discuss biosecurity conflicts between the state’s swine farrowing and gestating farmers and swine wean to finish
farmers. The discusses arises from two companion pieces of legislation introduced into both chambers (Senate File 10
and House File 173) that would create authority for a county board of supervisors to establish biosecurity ordinances
requiring distance separations between existing swine gestating and farrow facilities and wean-to-finish swine
operations.

During the roundtable discussion, proponents of this legislation suggested that the separation distances be at least a
mile and preferably two miles, and are necessary to protect Iowa’s shrinking gestating and farrowing livestock sector
from growing disease pressure from proliferating swine finisher units that are increasingly stocked with pigs farrowed
out-of-state and imported into Iowa for growing them to market weights. The proponents noted that out of the 35
million or so head of pigs grown to market weight in Iowa each year, only about 15 million were farrowed in Iowa.
Hence, if the average value of each imported pig is $40, the Iowa economy is missing out on $800 million of economic
activity that could have occurred in Iowa if the pigs were farrowed here. Opponents of the proposal noted that the
science of biosecurity and distance separation is not yet adequately understood to justify the property right
infringement actions proposed by the legislation. In fact, the Iowa Veterinary Medical Association, when asked
whether they supported this legislation, replied that they did not and the answer reflects their lobbyist declaration as of
the date of the meeting.

During the discussion of the issue, it was noted that a one-mile separation requirement would completely prevent eight
entire quarter-sections of nearby farmland from subsequently establishing or expanding swine grower units, while a
two-mile separation would infringe completely on 40 nearby 160-acre parcels. It was relayed that ballpark estimates

                                                                                                                                                   4
of the economic value of being able to grow swine to market weights on a 160-acre parcel of farmland, where the size
of the finisher is limited to the amount of manure that crops utilize and are consistent with DNR manure application
rates, is: $200,000 to $250,000 of gross cash slaughter sales or $60,00 to $75,000 of contract feeding proceeds that
typically result in net income of $10-24 thousand, and a fertilizer value to the land on an annualized basis of $25-40
per acre or, cumulatively, $4,000 to $6,400, for a prospective net annual farm income of $14,000 to $25,000 on
average. Consequently, a distance separation that prohibits a landowner from utilizing their agricultural property to
finish swine and use the manure as fertilizer for growing corn will cost such a land owner about $100 to $150 per acre
on land which is precluded from such economic activity by the separation regulations.

Hypothetically: If biosecurity setbacks were adopted for swine gestating and farrowing operations as envisioned by an
amendment to SF 10 discussed in the Senate Agriculture Committee (SF 10.703), and it resulted in the expansion of
the Iowa sow herd to the point that the state produced enough weaned pigs so importation of pigs from outside the
state was no longer necessary (hence gaining the $800 million in potential lost marketing of weaned pigs), the potential
offsetting loss created by the setback to neighboring landowners that would be preempted from future establishment of
swine finishers would be a potential $525-million to 1.125 billion. This assumes that the amount of land impacted by
the setbacks would be in the range of 5.25-7.5 million acres, and also assumes that no more than 4,000 new farrowing
operations would take advantage of this hypothetical law. It would appear that this prospective regulation would
transfer economic benefits at the expense of other landowners without any compensation for this public taking for
private benefit. In addition, there may be no net gain to the state if the proposed regulations currently being discussed
were enacted.

(Contact: Lew Olson, 1-3096)



                                                   Commerce

Another Round in the Video Franchise Reform Fight is About to Begin
The battle over who gets to provide Iowans with ESPN, HBO, and the Uncle Ed show has once again flared up as the
Senate Commerce Committee is preparing to debate a bill that will dramatically transform cable franchise law in the
state. Senate Study Bill 1208 is out, and the e-ails are already flooding into the Capitol as people take sides.

Reforming the way Americans get their cable has been a long discussed idea. While people love the programs they
receive, they generally do not like the continual rate increases for little change in their packages. Across the nation,
states have moved to provide more competition as technology grants different industries the ability to distribute video
programming.

Going into 2007, 11 states had already approved some form of cable franchise reform legislation. Those states are
Arizona, California, Indiana, Kansas, Louisiana, Michigan, New Jersey, North Carolina, South Carolina, Texas and
Virginia. This issue has been considered by Congress last year, with the House overwhelmingly approving a bill to
create a national franchising structure.

So what does the proposed Iowa bill do? Under current Iowa law – Iowa Code section 364.2 - each city has the
authority to grant a franchise for cable television service. SSB 1208 would dramatically change this process. The bill
would require a person or company providing cable service or video service to apply to the state or a municipality for a
―certificate of franchise authority‖ to provide cable in a specified service area. Companies already providing cable
under a franchise agreement entered into prior to July 1, 2007, are not required to apply for a certificate of franchise
authority until the agreement expires or is terminated.

When a company applies for a certificate of franchise agreement under the new arrangement, they would have to
comply with a number of requirements. These requirements include:

       Describing the area that the company plans on providing service to;
                                                                                                                           5
       Agreeing to comply with federal requirements for cable service;
       Agreeing to comply with local right of way ordinances; and
       The address of the principal place of business.

When a company receives a certificate of franchise agreement from the state or a city, the certificate shall including an
explicit grant of authority to provide cable service in the area identified by the certificate. Additionally, the certificate
would be transferable, with the holder to notify the Secretary of State of the transfer at least 14 days before it occurs.

The certificate of franchise authority would be considered to be a ―franchise‖ for federal law purposes, and the state
will be considered to be the franchising authority for the competitive cable providers in the state.

In what might be the most controversial aspect of the bill, the new law would put strict limits on the power of cities
over holders of the certificates. Code section 364.2, relating to the powers of cities to grant franchises, would not
apply to a holder of a certificate of franchise authority under the bill.

Cities also would no longer be able to get certain conditions inserted into the franchise agreements. Among the things
cities would no longer be able to require of a holder of the certificate are:

       Mandatory build-out provisions;
       Requiring the company to be granted a separate franchise from the city;
       Paying fees that are not permitted under the bill; and
       Requiring other conditions not mentioned in the bill.

Cities would still be able to require a certificate of franchise authority to provide channels for public, educational, and
governmental programming. Cities would also receive a franchise fee from the certificate holder. The amount of the
fee would based on a percentage of gross revenue and would not exceed five percent.

If a cable service provider receives a certificate of franchise authority and chooses to enter into a market, they would
be required to give that city 30 days notice of their intentions. If a company enters into a market where there is an
existing franchise, the company holding the franchise would have the opportunity to renegotiate the agreement with
the city so that both companies are operating under similar conditions.

Proponents of the bill will state that the main focus of this effort is to provide competition and reduce the cost to the
consumer. According to their data, the national rate of inflation has increased 12 percent since 2002 and median
family income has risen 11 percent in the same time period. Cable rates in Iowa for this time frame have risen by 36
percent.

This proposal is not without strong interests in opposition. Mediacom, the dominant cable provider in the state, can be
expected to put up strong opposition to the bill. Cities, who fear the loss of revenue from franchise fees and the loss of
control over the service in their cities, will also have issues. One of their main concerns will be the build-out of
services to underserved areas.

No bill has been filed in the House at this point. Proponents do expect a study bill in the House Commerce Committee
to be coming down soon.

(Contact: Brad Trow, 1-3471)




                                                                                                                              6
                                              Economic Growth

Iowa Competes for Renewable Energy Technologies
Jobs creation projects win Economic Development incentives

Renewable energy growth dominated the actions made by the Economic Development Board and Iowa Department of
Economic Development (IDED) to stimulate jobs creation in the state of Iowa. Incentives were awarded to attract a
world leading wind energy company, build four new ethanol plants and create industries of the future throughout the
state. The nine projects recently approved for state incentive programs will create and retain 372 jobs and attract new
capital investment of $763 million.

Since July 2003, the board and department have assisted 415 projects that will create or retain 32,022 jobs. New capital
investment planned with these projects totals more than $9 billion.

Wind energy Company Considers West Branch
Acciona Energia of Spain is locating an assembly plant in North America for wind turbines to support development of
wind parks in North America. The plant will be modeled after the company’s existing Acciona Windpower’s factories
in Spain and China. To assist West Branch in securing the assembly operation to occupy the former Sauer-Danfoss
plant, the Economic Development Board has awarded a $2 million float loan and $500,000 investment from the
Community Economic Betterment Account (CEBA), plus $350,000 from the Physical Infrastructure Assistance
Program (PIAP). Tax benefits from the High Quality Jobs Creation (HQJC) program are also part of incentives. The
project will create 110 jobs, with 109 of the jobs paying an average wage of $15.14 per hour.

CEBA Awards to Information Solutions
The Economic Development Board approved $165,000 from the Community Economic Betterment Account (CEBA)
and tax benefits from the High Quality Jobs Creation (HQJC) program to assist Coralville in retaining LMS North
America, Inc. Now owned by a Belgium company, the Coralville operation needs to reduce office space to 10,000 sq.
ft., or the operation might be relocated to expanded LMS facilities in Troy, Michigan. The project seeks to retain 33
jobs paying an average wage of $34.71 per hour in Iowa.

T8Design, a Cedar Falls provider of Internet software for online business processes, was awarded $100,000 for
expansion from the Community Economic Betterment Account (CEBA). Company growth is expected to require 37
additional employees, with 21 of the jobs paying an average wage of $26.44 per hour. Customers of T8Design include
Nike, McDonald’s, and John Deere.

Award to Bioscience Entrepreneurs
The board awarded $100,000 from the Entrepreneurial Ventures Assistance (EVA) program to Sirrah, a start-up
animal health company beginning limited manufacturing of a swine vaccine developed at Iowa State University.
Sirrah’s product is aimed at preventing Porcine Respiratory and Reproductive Syndrome (PRRS), one of the leading
swine diseases that has baffled researchers for decades. The company will rent office space at the ISU Research Park
and will create five jobs paying an average wage of $38.01 per hour.

Buena Vista, Plymouth County Ethanol Plants
The Board awarded tax benefits from the High Quality Jobs Creation (HQJC) program to new ethanol plants proposed
by Riverview Corn Processors in Akron and the Oregon Trail Energy near Storm Lake.

Oregon Trail will create 42 jobs, 34 of the jobs paying an average wage of $18.68 per hour. The Buena Vista County
plant is a $220 million capital investment in a facility capable of producing 115 million gallons of ethanol per year.

Akron Riverview proposes to create 39 jobs, with 30 of the jobs paying an average wage of $21.83 per hour. The $181
million plant would have annual production of 100 million gallons of ethanol per year. Akron Riverview is a
subsidiary of Little Sioux Corn Processors, Marcus.
                                                                                                                          7
Galbraith, Garner Ethanol Plants
Kensington Industry & Investment, a newly organized company based in Texas, was awarded tax benefits from the
High Quality Jobs Creation (HQJC) program for plans to build ethanol plants in Kossuth and Hancock counties. The
$165 million plant near Galbraith, an unincorporated community in Kossuth County near Luverne, would create 45
jobs paying an average wage of $27.09 per hour. The $163 million plant near Garner in Hancock County would create
45 jobs paying an average wage of $28.63 per hour. Each of the plants would be capable of producing 100 million
gallons of ethanol per year. Kensington hopes to begin construction this year with the completion dates in 2008.

Knoxville Seeks 3M expansion
Knoxville’s 3M plant is planning an $8 million expansion to accommodate new production. The first proposed project
would expand the Knoxville production facility by 27,000 square feet to accommodate relocation of a product line
currently manufactured at the company’s plant in St. Paul, Minnesota. The second project is competing with other 3M
plant locations in Minnesota, Missouri. The Knoxville application was approved by IDED for tax benefits from the
High Quality Jobs Creation (HQJC) program to create 16 jobs paying an average wage of $19.38 per hour. 3M has
three locations in Iowa, employing 341 in Ames, 156 in Forest City and 515 in Knoxville.

Award supports start-up companies
To further the success of the NewVentures Center in Davenport, the IDED has awarded $165,000 from the Physical
Infrastructure Assistance Program (PIAP) for facilities expansion. The award will be used to covert 3,600 sq. ft. into
private offices where entrepreneurs can meet with clients and conduct general business activities.

Source: www.iowalifechanging.com

(Contact: Kristin Gray, 1-3026)



                                                    Education

Education Bills on the Move
The House Education Committee has moved the following bills to the House calendar:

House File 468: Requires the Iowa Department of Education (DE) to study which of the 14 data software vendors that
Iowa school districts are using is appropriate for compatibility with the DE’s statewide student information system. A
report is due in January 2008.

House File 459: Expands the use of the Physical Plant and Equipment Levy (PPEL) to include software. Iowa’s
current PPEL law only allows software preloaded on a computer to be funded through the PPEL.

House File 469: Allows school districts to use PPEL funds to contract for bus services as well as for school bus
maintenance and repairs costing more than $500.

House Study Bill 87: With the amendment adopted in committee, the bill may draw considerably less attention. As
originally drafted, HSB 87 contained explicit suggested curricula for teaching sex education to Iowa’s public school
students. As amended, the bill requires current human growth and development curriculum to be research and
scientific-based.

House Study Bill 114: The bill restores reorganization incentives for school districts. In addition, the bill includes
Governor Culver’s concept of a financial incentive to share administrative services.

            Whole grade sharing leading to reorganization: Reinstates this incentive that expired on June 30, 2006. In
             order to qualify for the incentive, two districts must indicate the intent to reorganize. At that point, the
                                                                                                                          8
            district that whole grade shares is eligible for a weighting. The weighting is available for three years
            before the reorganization and three years after the reorganization. A new feature in this law is that the two
            districts must demonstrate progress towards reorganization in the second and third year of the incentive.
           Sunsets regional academy weighting The department feels this is not a well-used incentive and they may
            propose another option.
           Extends weighting for equalizing the uniform levy when a district of over 600 students merges with a
            district with under 600 students.
           Administrative sharing: This is a new incentive proposed by Governor Culver. The incentive is available
            to all school districts regardless of size. Reorganization is NOT required. In order to get the weighting the
            district must share an administrative function with another political subdivision.

                o   A weighting of 0.02 per student is available with the minimum weighting equal to 10 full time
                    students and a maximum total weighting equal to 40 students.
                o   The bill appropriates $400,000 for FY 08 to jump-start the process.
                o   The weighting is available for ―each discrete‖ administrative function shared. As such, the district
                    may qualify for the weighting for more than one administrative function.
                o   The administrative function must be shared for at least 20% of the school year.
                o   Administrative functions include:
                         Superintendent management
                         Business management
                         Human resources
                         Transportation
                         Operation and maintenance
                o   The ―political subdivision‖ eligible for the district to share with includes:
                         City, township, school district, community college, AEA, Regent’s institution or ―any
                             other governmental subdivision‖, which presumably means a state agency.

The FY 09 fiscal impact of restoring the weighting is approximately $900,000 in state aid and $80,000 in property
taxes.

The FY 09 fiscal impact of the shared administrative services is

        State Aid Range: $6.3 million - $32.3 million
        Property Tax Range: $900,000 - $4.6 million

(Contact: Ann McCarthy, 1-3015)



                                        Environmental Protection

Democratic House Environmental Protection Members Okay Incomplete Legislation
On Monday, February 19, the House Environmental Protection Committee approved two bills on party-line votes that
were badly flawed and incomplete. It was clearly apparent that the new majority party moved both bills absent of
critical provisions that would allow either measure to be effective because they were afraid of negative repercussions
had they included the critical components. The two bills involved were House Study Bill 82, which dealt with the
allocation of waste tire funds, and House Study Bill 85, which proposes to establish new water withdrawal and use
permit fees. Both bills were amended by committee action and both passed on party-line, 11-9 votes.

During committee consideration of HSB 82, Democrats stripped out of the bill language that would extend the
diversion of 20% of the $5 surcharge on certificates of title from the Road Use Tax Fund (currently scheduled to expire
July 1, 2007) for another nine years, but they retained the portion of the bill that would reallocate funds that were

                                                                                                                         9
deposited into the fund. The stated reason for stripping out the extension of the diversion was because of road
construction needs. However, doing so without replacing the funding source creates a nonsensical bill that purports to
appropriate funds in the next nine fiscal years without identifying the source and the amount of funding that will be
available. During the prior 14 years of a Republican majority in the House there was a practice when moving forward
legislation to identify the funding source and by doing so, legislators were accountable for spending funds derived
from taxpayers’ pockets. When Republican committee members noted this lack of accountability to Iowa taxpayers
for future state funding decisions, the floor manager awkwardly stated that another committee would make the
decision on where the funds would come from and how much they would be .

Republican members, while supportive of some aspects of the bill such as the continued clean-up of remaining waste
tire piles, continued promotion of waste tire recycling efforts, and recognizing the growing illegal dumping of solid
waste along the state’s roadways, were concerned that by not identifying a source of funding for these operations
there’s a good chance that another committee run might reinsert the language extending the diversion of road use tax
funds. Additionally, some Republicans are also concerned about the growth of state government proposed by this
measure, since it would authorize and fund several new positions in DNR to administer and promote automotive waste
recycling and illegal solid waste dumping issues.

Last session, when House Republicans facilitated passage of legislation creating an automotive mercury switch
recycling effort; DNR assured legislators that it could undertake this new responsibility with no additional funding
since the anticipated effort would only involve just one-half of an FTE and just under $30,000, and the agency had the
existing resources to accommodate the program. HSB 82, as drafted and passed, would add another $150,000 to
DNR’s budget to fund almost two more state employee positions.

HSB 85 proposes to give DNR authority to independently establish new annual fees and substantially increase existing
permit fees to be assessed upon entities that either have water wells or surface water inlets that have the capacity to
withdraw 25,000 gallons a day or have a private water impoundment of more than 18 acre feet. The increased fees that
would be assessed by DNR would apply to 3,200 to 3,500 permit holders, which includes 635 municipal public water
supply systems, 426 quarries, 142 industries, 1,574 crop irrigators, 28 power companies, 222 golf courses, 20 rural
water districts, 18 ethanol plants, 92 hog/beef confinements, and 35 poultry/dairy/turkey/fish operations, with about
300 new permits issued each year. The fees would be established by administrative rules process and approved by the
Environmental Protection Commission, and would be based on the amount of water involved and the department’s
cost of reviewing permit applications.

The bill was submitted by DNR for the purpose of increasing departmental revenues to both expand current water
withdrawal permitting activities, and to institute a new expansive ongoing multi-year research effort to gather scientific
information on:
(1) aquifer characteristics,
(2) the quantity of water stored in aquifers,
(3) the effects of withdrawing substantial amounts of water from an aquifer.

The reason being given for increasing oversight of Iowa water use is the explosive expansion of ethanol plants in Iowa,
which use about four to five gallons of water for each gallon of ethanol produced. There are existing operations and
planned expansion of ethanol production in this state that could reach 5 billion gallons per year in the next two years
(hence utilizing at least 20 billion gallons of water). This seems like an enormous amount of water, but compared to
existing water allocations in current permits of 2.381 trillion gallons, and the fact that around 30 trillion gallons falls as
rain or snow each year on Iowa, it doesn’t seem quite so important. Individually, though, an ethanol plant drawing 500
million gallons per year (or 1.4 million gallons per day) to produce 100 million gallons of ethanol may have significant
local impacts on other nearby water wells.

The estimated cost to ramp up current water withdrawal/water use permit processes would expand state spending from
the current $250,000 level (which is funded with about $100,000 in permit fees, with the balance coming from the
General Fund) to an amount of up to $650,000, if DNR doesn’t redeploy the General Fund monies. The other larger
research component that DNR is seeking to fund would cost an additional $1 million per year (or a combined total of
$1.65 million), according to information the agency presented to the Ag and Natural Resources budget subcommittee

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on January 25. However, this additional revenue for long-term research was not funded by HSB 85, as passed by the
committee. HSB 85, as initially drafted, did not specify an amount of additional funds that DNR could choose to
assess water users, but during committee deliberations on the bill an amendment with language that set a maximum of
$500,000 in yearly total fees (an increase of $400,000) was adopted. The committee also considered an amendment
authored by a Republican that would have delayed imposition of additional and increased fees to the issuance of
renewed or new permits (current permits have a term of 10 years) which would have honored the assumptions and
conditions of current permits already issued and in effect, but that amendment failed on a voice vote. Republicans
voted against the bill, but not because they don’t approve of better oversight of Iowa water resources. However, they
weren’t comfortable with the bill’s lack of specificity on the amount individual water users might be charged and were
uncertain (the bill manager would not commit) about whether the bill would be referred to the Ways and Means and
Appropriations Committees for their consideration. The bill’s title states that it is—―An act relating to permit fees for
diverting, storing, or withdrawing water and making appropriations.‖

(Contact: Lew Olson, 1-3096)



                                           Government Oversight

Discussion of Civil Rights, Mental Health Issues in Prisons Continues

On Tuesday, February 13, the Government Oversight Committee continued to hear testimony from other state officials
on several of the issues Citizens’ Aide/Ombudsman (CA/O) Bill Angrick discussed with the committee at a meeting
the previous week.

Ralph Rosenberg, executive director of the Iowa Civil Rights Commission (CRC), did not have much enthusiasm – at
least at the present time - for a bill originally proposed by the CA/O in 2005. House Study Bill 74 would have
expanded the jurisdiction of the CRC over discriminatory practices related to public accommodations by including
state and local jails, prisons, detention centers and community based corrections programs as public accommodations.
Rosenberg said the jurisdiction of the CRC, which ends once a person is charged, over persons in correctional facilities
ended about 20 years ago based on an Attorney General’s opinion. However, he said his biggest priority is an increase
in his budget, which he said has been reduced to 1991 levels because of budget cuts (the CRC requested a $250,000
increase for FY 08; the Governor recommended a $97,000 increase). Rosenberg said the estimated 1,600 more
complaints per year that might result by redefining prisons and jails, etc., as public accommodations would nearly
double the commission’s workload, and make it difficult to give equal time to other complaints and clear up the CRC’s
current backlog of cases.

Rosenberg was more supportive of legislation (SF 199 and HSB 184) proposed by the CRC that would give the
commission to issue subpoenas and order discovery in investigating any unfair or discriminatory practice – they
currently have this authority only in investigations of discrimination related to housing/real property practices. He said
this would likely save the commission money, since most recipients cooperate with the type of administrative
subpoena the commission would send by certified mail (as opposed to a judicial subpoena personally served by a law
enforcement official).

John Baldwin, deputy director of the Department of Corrections, and Dr. Bruce Sieleni, the department’s mental health
director, discussed a 2006 report to the Board of Corrections dealing with problems and issues posed by mentally ill
offenders in Iowa prisons. Baldwin said over 2,900 inmates in the correctional system have been diagnosed with some
form of mental illness, a number he expects to approach 3,500 inmates in the near future. He added, however, that
units such as the Clinical Care Unit at the Iowa State Penitentiary at Ft. Madison and the new 178-bed Special Needs
Unit at Oakdale (at which physical ailments will also be treated) are helping. Baldwin said that subject to the
enactment date of the FY 07 supplemental budget bill, which contains $3.4 million for the Oakdale facility, staff likely
will be hired beginning in mid-March. Sieleni discussed the fact that drugs and other medical care must be provided to
inmates at a level equal to that received by the larger community; the dangers of anxiety and depression as inmates go

                                                                                                                       11
on and off antidepressant medication; and the gap between the supply of medication inmates suffering from depression
receive when they are released (two months’ supply) and the time before they can usually access antidepressants in the
community (3-4 months). Baldwin also said he is not proud of the fact of the fact that the department has had to
recruit psychiatric social workers to provide services to inmates with a dual diagnosis (mental health and substance
abuse problems), because psychiatrists simply won’t apply for the positions.

Finally, the committee adopted, as amended, a motion by Rep. Baudler to request the State Auditor conduct an audit of
the Polk County Treasurer’s Internet Clearing Account, due to concerns expressed by the Iowa State County
Treasurer’s Association (ISCTA) following the distribution of over $600,000 to the other 98 counties from the interest-
bearing account by the Polk County Treasurer last year. An ensuing schism between the two groups of treasurers
(Polk County and eight other counties/the remaining 90 counties) resulted in two different websites -
iowataxesandtags.com and iowatreasurers.org - rather than a single site for the online payment of property taxes and
vehicle registration fees by Iowans. Among other issues, the committee’s request asks the Auditor to look at the rights
of both ISCTA and Polk County over control of the website and the clearing account.

(Contact: Bruce Brandt, 1-3440)



                                              Human Resources

Mental Health Troubles Growing According to ISAC Survey
One of the major issues facing Iowa but not getting much attention in the media is the state’s mental health system.
Since the implementation of Senate File 69 in 1995, the state and counties have worked to identify ways to maximize
their combined funding to address the needs of Iowa’s most vulnerable citizens. Expanding Medicaid definitions to
obtain federal matching funds, lowering county mental health fund balances, and other efforts were effective in
preserving the system for over a decade.

As we enter Fiscal Year 2008, the ability of these steps to control costs and maintain services has been outpaced by the
demands on the system. With the increase in the minimum wage, expanded eligibility action is now required before
Iowa’s mental health program is challenged in court or the system collapses.

How do we know we have a problem? ISAC is currently conducting a survey of county CPC administrators to
determine how counties are handling the funding issues. So far, 69 counties have responded to the survey. For the
current year, 14 counties reported that they had to reduce services from their county mental health plans. Some
counties chose to provide additional local funds to supplement their mental health fund. According to the ISAC
survey, 25 counties have done that in FY 2007.

For FY 2008, the picture is even more grim. Of the counties responding to the ISAC survey, 31 already have planned
to reduce services in their mental health plan. Polk County has already stated that they will have to reduce the number
of people they serve by almost 1,000. Linn County has said they will have to cut 700 off of their programs.

The options facing the state are very limited. ISAC and the state Mental Health Commission have asked the
Legislature for a $23 million increase in funding for FY 2008. This would fund the allowed growth in the system and
put back funds that former Governor Vilsack and then-DHS Director Jessie Rasmussen took out of the system during
the budget crisis in 2001.

The other option being advocated by some is to lift the cap on county mental health property tax levies. This was
frozen when Senate File 69 was implemented and the state assumed half of the funding responsibility.

(Contact: Brad Trow, 1-3471)


                                                                                                                     12
                                                    Judiciary

Committee Action
The following bills passed out of the Judiciary committee this week:

HSB 133 - An Act adding hallucinogenic substances to the list of schedule I controlled substances, and providing
penalties.

        o   This bill adds hallucinogenic substances to the list of Schedule I controlled substances.
                o A Schedule I controlled substance has no known medical purpose in treatment in the U.S.
        o   Adds ―salvia divinorum‖ and ―salvinorin A‖ to the list of Schedule I controlled substances.
                o ―Salvia Divinorum‖ is a perennial herb in the mint family that resembles sage
                o ―salvinorin A‖ is believed to be the key ingredient responsible for the psychoactive effects of
                     ―salvia divinorium‖.
        o   The leaves of Salvia divinorium plant can be dried and smoked, or while still fresh wadded together and
            chewed. It can also be brewed and had for tea.
        o   Salvia divinorum and Salvinorin A are not currently controlled under the CSA and are available at retail
            locations and on the Internet
        o   The following states have enacted restrictions on this substance
                o 2005 – Louisiana made it illegal to purchase or distribute
                o 2006 – Tennessee made possession or distribution illegal
                o Alaska, Illinois, New Jersey, New York, Oregon, Oklahoma, Pennsylvania, and Wyoming have
                     proposed legislation to control the sale and distribution.
                o It is controlled in Finland, Denmark, Australia and Italy.
        o   The bill will make it a Class ―C‖ felony to manufacture, deliver or possess with the intent to manufacture
            or deliver the substances (including a counterfeit or simulated form).
                o Class ―C‖ felonies are punishable by confinement for no more then 10 years and a fine of at least
                     $1,000 but not more than $10,000.
        o   The bill also makes it a serious misdemeanor for any unauthorized person to possess the substance.
                o Serious misdemeanors are punishable by confinement for no more than one year and a fine of at
                     least $315 but not more than $1,875.

HSB 138 - An Act relating to appealing the determination a person is a sexually violent predator. This bill provides
that when a jury or court determines a person is or is not a sexually violent predator, the person determined to be a
sexually violent predator may appeal.

(Contact: Kristin Gray, 1-3026)




                                                      Labor

Living Wage
On February 9, House File 313 was filed – this bill calls for a study on the economic, fiscal and social impact of
enacting a living wage in Iowa.

What is ―living wage‖?

                                                                                                                        13
Typically, a ―living wage‖ is enacted as an ordinance at the municipal or county level and sets hourly take-home pay
above the federally defined poverty level.

A living wage ordinance requires employers to pay wages that are above federal or state minimum wage levels. Only a
specific set of workers are covered by living wage ordinances, usually those employed by businesses that have a
contract with a city or county government or those who receive economic development subsidies from the locality.

The living wage level is usually the wage a full-time worker would need to earn to support a family above federal
poverty line, ranging from 100% to 130% of the poverty measurement. The wage rates specified by living wage
ordinances range from a low of $6.25 in Milwaukee, Wisconsin, to a high of $12 in Santa Cruz, California.

In addition to setting wage levels, many ordinances also have provisions regarding benefits (such as health insurance
and paid vacation), labor relations, and hiring practices.

To date, living wage laws have only been enacted only on the local level, not in state legislatures.

(Contact: Mary Earnhardt, 1-3298)



                                               Local Government

Franchise Tax Revenues Back to Cities and Counties
House File 200 moved out the House Local Government Committee this week. This bill reinstates the $8.8 million in
franchise tax revenues flowing to Iowa’s cities and counties.

The 2003 Government Reinvention bill diverted $7 million in franchise tax funding to the Community, Attraction and
Tourism (CAT) fund. This $7 million is matched with $5 million from the Rebuild Iowa Infrastructure Fund (RIIF)
for a total of $12 million for CAT

This bill gives $8.8 million back to cities and counties to support their local budgets. The Local Committee vote was
unanimous with the bill likely to move if replacement dollars can be found for the CAT fund.




                                               Natural Resources

Wild Animals Are Back!

On Tuesday, February 20, subcommittee members for HSB 169 met to discuss one of the three bills drafted concerning
the control of wild animals. HSB 169 was on the agenda to be debated in the Natural Resources Committee for
Wednesday, February 21, but after meeting with the subcommittee and hearing comments from interested parties,
another subcommittee session was requested in order to further review all the options.

Here is a brief summary of each bill:

HSB 169 would regulate the possession of dangerous wild animals, which include wolves, coyotes, jackals, hyenas,
lions, tigers, cougars, leopards, cheetahs, ocelots, servals, bears, pandas, rhinoceroses, elephants, alligators, crocodiles,
snakes and other primates. The bill states that a person can possess the wild animal if they currently possess the animal
upon effectiveness of the bill and if they haven’t been convicted of an offense relating to animal welfare and haven’t
                                                                                                                           14
been convicted of a felony. They must also register the animal with the Iowa Department of Agriculture and Land
Stewardship (IDALS) and attach an electronic identification device to the animal. They are also strictly liable for any
injuries resulting from the actions of such animal.

HF 302 is identical to HSB 169 and regulates the same animals as listed in HSB 169, BUT puts the Department of
Natural Resources in charge of administering the bill’s provisions.

HF 333 would regulate the same wild animals through IDALS. The person cannot be convicted of a criminal offense
and must be licensed by the department in order to own the animal. They also have to file proof of financial
responsibility with the department, have a plan of veterinary care, provide the location of the animal and must confine
the animal on the person’s premises in a manner required by the department.


Does Lead Deer Harvest for Fourth Year in a Row
Iowa hunters reported 150,552 deer harvested during the 2006-07 hunting seasons, with the most deer taken from
Clayton County (7,389), and the least from Calhoun County (159). The Iowa Department of Natural Resources has
posted the results of the reported deer harvest by season, sex, and county at www.iowadnr.gov.

"The reported deer harvest totals should be taken as a minimum number, not as an exact number," said Willie Suchy,
wildlife research supervisor for the DNR. "The number will not include the deer that were wounded and not recovered,
any hunters who became frustrated with the reporting system and those who simply were not going to report,
regardless of the circumstances. But it does give us information that we can build on."

Does filled 51.8 percent (77,946) of the tags that were reported. Hunters reported harvesting 58,653 bucks and 13,953
button bucks, which are young bucks occasionally mistaken for does. Suchy said the information, when combined with
the deer population surveys, will help with setting the antlerless deer quotas by county and other deer hunting seasons.

(Contact: Kristin Gray, 1-3026)



                                                  Public Safety

Committee Approves Ban on Privatized Prisons
On Tuesday, February 20, the Public Safety Committee approved House File 295, which prohibits the Department of
Corrections from entering into an agreement with a private sector, for-profit entity for the purpose of housing inmates.

While this language has been contained in the Justice Systems budget bill as session law in recent years, this bill takes
the next step by codifying it.

The concern is that should prison overcrowding become an issue (because of the reluctance of the majority party to
approve funding for a new prison), the department or the Governor might have to contract with a private entity in
another state to take some of Iowa’s inmates. In addition, should the economy take a downturn and revenue growth
recedes, it might be a cost effective way to temporarily reduce the Corrections budget.

The bill was supported by the AFL-CIO, Communications Workers of America, and AFSCME. The unions
acknowledge that the Republicans had no intention of creating a privatized prison when we had the majority but they
aren’t taking any chances. This is a victory for organized labor and may signal the start of a string bills that will
reduce any contracting with private entities by the state.

The bill was approved by the committee on a 14-7 vote.

                                                                                                                       15
House Republicans will oppose bills that decrease the Executive Branch’s flexibility in dealing with budget
difficulties. While it is not likely that the Governor would use privatized prisons, he should have that option should
prison overcrowding coincide with a downturn in revenue.

(Contact: Lon Anderson, 1-5184)



                                              State Government

Subcommittees Consider Gaming-Related Legislation
It would be an odd year if some sort of gaming legislation was not introduced. And this year is no different. The
Gaming and Licensing subcommittee has met or is scheduled to meet on a few bills.

Unlike previous gaming years. when there was one major issue at hand or one main piece of legislation the body
considered this year the subcommittee, with Republican membership that includes Greiner, Raecker, and Roberts, has
been asked to consider a number of bills that do not grab the attention of the newspaper headlines. Below is a
summary of that legislation:

Casinos and Horses – There are a number of casino and gaming-related bills. At this time it does not appear all will
move forward. There have been four casino and horse-related bills the subcommittee has started to look at that may
make their way to the floor:

HSB 41, proposed by the Racing and Gaming Commission. makes changes to laws related to horses. The proposed
changes deal with drug testing when samples are taken from a horse; it allows a commission veterinarian to make
judgments on a horse and other rather noncontroversial changes. However, this bill does make changes to parts of
Code Chapter 99D.

HF 181 deals with minimum purses for standardbreds. It sets the minimum purses at $1.0 million.

HF 276 eliminates the need for a county to approve of gaming on an excursion boat or race track after a certain
number of successful elections. This bill states that if a county approves a proposition to operate gambling games on
an excursion boat or racetrack in two successive elections (held every eight years), the proposition to authorize
gambling is no longer required. For excursion boat licenses, the public could ask for the county authorization to be put
to a vote.

HF 372 allows purses to be submitted separately. Under current law, they must be submitted jointly. There have been
some questions and concerns at to what ― jointly‖ means in the past.

Amusement Devices – Currently, there is no bill in the House that authorizes the use of TouchPlay machines.
However, DIA and DPS have introduced a bill, HSB 173, dealing with amusement devices. Amusement devices were
authorized by the Legislature a few years prior to the TouchPlay machines becoming popular. The amusement device
machines are different than the TouchPlay machines because with amusement device machines you can not win a cash
prize; you can only win a limited amount of in-store coupons. The Legislature also put additional restrictions on these
machines. HSB 173 is intended to enhance regulatory and enforcement actions for registered amusement devices.
DIA and DPS say they have identified the need for other options to more effectively regulate and enforce the
amusement device industry.

Bingo, Card Games and Annual Game Night Activities – There are a number of bills that address bingo games,
card games, and annual game night activities. These bills do everything. from allowing weekly Texas Hold’em
Tournaments to allowing cash prizes to be awarded at annual game night activities. It is likely that a bill related to

                                                                                                                         16
these issues will be considered by the full house. Bills that are currently out there both in State Government and in
Veterans Affairs include:

HF 49 allows emergency service providers holding annual game nights to award cash prizes totaling $2,000.

HF 300 provides for veterans’ weekly game nights and allows for the issuance of cash prizes at annual game nights if
the licensee is a veterans organization, emergency service provider, or 501C(3) that previously had an annual game
night license. This bill is currently in the Veterans Affairs Committee and the subcommittee has discussed an
amendment that would limit this bill.

HF 382 allows organizations that have applied for exempt status with the IRS within the previous twelve months and
that have not been rejected to be eligible for a bingo license.

HF 409 allows county fairs to obtain a limited license to sponsor or authorize a qualified organization to conduct a
bingo occasion once each day during the fair.


                                                      Bill Action

The committee took action on one bill this week:

HF 75 taxes bingo games on the net rather than the gross amount. It passed 20-0.

(Contact: Kelly Ryan, 2-5290)



                                                Transportation

Committee Looks At License Plate Issues
The Transportation Committee is expected to soon consider HF 222, which is a bill that deals with Veterans license
plates but has been expanded to include other emblem license plates. Below is a refresher on license plates.

Background - There are currently 25 types of special license plates available in Iowa, with 11 associated with the U.S.
Armed Forces. Special license plates are either created in legislation or through procedures set out in 761 Iowa
Administrative Code, Chapter 401. For plates established through the procedures set out in the Administrative Code,
requests, which can be proposed by any state agency, person, or group, must be submitted to the DOT. If approved,
the requestor has one year to submit 500 paid applications before the new plate can be manufactured or issued.

Special license plates that have been created by the Legislature include:

       Breast Cancer Awareness                                      Bronze Star

       Collegiate                                                   Congressional Medal of Honor

       Educational                                                  Disabled Veteran

       Emergency Medical Services, Fire Fighter                     Ex-Prisoner of War

       Heritage                                                     Legion of Merit

       Love Our Kids                                                National Guard

                                                                                                                        17
       Motorcycle Rider Education                                    Pearl Harbor

       Resources Enhancement & Protection (REAP)                     Purple Heart

       Amateur Radio                                                 U.S. Armed Forces Retired

       Silver Star


Special license plates that have been created through the administrative process include –
    Cattleman’s
    Organ and Tissue Donor Awareness
    God Bless America
    Shiners
    Veterans

Fees - Most of the licenses charge additional initial and renewal fees for the license plate. However, specific groups
with special plates that have been created in legislation are exempted from paying certain fees by law, or are subject to
reduced fees in lieu of the annual validation fee. These groups include the Congressional Medal of Honor, Ex-Prisoner
of War, Legion of Merit, or Disabled Veteran

Of the license plates that require additional fees, most of those fees are directed into a special account related to the
license plate. However, the fees for the Veteran-related (including the Bronze Star, National Guard, Pearl Harbor,
Purple Heart, Silver Star, U.S. Armed Forces Retired) license plates and the EMS license plate created by Code send
the additional money to the RUTF.

HF 222 - HF 222 addresses that situation by sending additional fees paid when registering or renewing a Veterans
license plate to the Veterans License Plate fund.

The subcommittee has approved an additional amendment that would also include EMS license plates by sending
additional initial fee money to the EMS fund. Another amendment the subcommittee supported would allow all
spouses of deceased veterans to keep the Veterans license plate. A final amendment that will be brought to the
committee will make the bill effective upon enactment.


                                                       Bill Action

None.

(Contact: Kelly Ryan, 2-5290)



                                                Veterans Affairs

Major General Dardis Addresses the Legislature
On Tuesday, February 20, Major General Ron Dardis, the Adjutant General of the Iowa National Guard, addressed
members of the Legislature, Governor, and other statewide elected leaders. He provided the State of the National
Guard Address.



                                                                                                                            18
Dardis began his address by reporting the Iowa National Guard is strong, quite possibly the strongest it has been in
generations. He stated the Iowa National Guard set recruiting records by enlisting more new soldiers during that
period than ever before. In fact, both the Iowa Army and Air National Guard remain over 100% strength.

Dardis also thanked the Legislature for its commitment to the Guard’s infrastructure and facility programs. He stated
the state has provided quality facilities in which our service members can work and train. The state dollars allow the
guard to leverage federal dollars to upgrade and refurbish armories and maintenance facilities in critical locations
around the state.

He also addressed other resources. Dardis said the guard continues to have sufficient resources to meet the homeland
security requirements despite equipment challenges cause by the global war on terrorism and service transformation.
He told the body the Guard has adequate equipment to perform their 10 core capabilities for homeland security/defense
missions. He did indicate they do have shortfalls but when it comes to having what they need to perform their state
mission, he was confident they can get the job done. Dardis indicated over the next seven years their equipment will
be replaced and upgraded.

Dardis also addressed the global war on terrorism. He described the National Guard as a uniquely American
organization, with a proud military lineage and strong community ties. He said the National Guard is a community-
based organization with global responsibilities. According to Dardis, it plays a unique role in our national defense
strategy. Due to the cuts to the size of the active duty military after the Cold War, coupled with federal mobilization
and sourcing policies, the military has to rely on the reserve component forces or the National Guard forces. The Iowa
National Guard has been at the forefront of the global war on terrorism. It has mobilized and deployed more than
9,500 soldiers and airmen – more than 100% of the Guard’s authorized strength.

As part of his comments regarding the global war on terrorism, Dardis addressed the desire to limit deployments to 365
days, start to finish, including pre-deployment training and boots on the ground time. This is a change from the 18 to
24 month call-ups. There is also a goal to lengthen the time between mobilizations to a minimum of 60 months
between mobilizations. Due to the change in policy, the clock has been reset for all units and all members are not
eligible for immediate involuntary call-ups. This has resulted in this goal not being met.

Finally, Dardis honored and thanked soldiers, families of soldiers, and support groups after his speech.

                                                      Bill Action

No action this week.

(Contact: Kelly Ryan, 2-5290)



                                               Ways and Means


House Ways and Means To Debate Cigarette Tax Increase
On Wednesday, February 21, the House Ways and Means Committee was set to take up House File 346 Wednesday
night.

House File 346 increases the cigarette tax by $1 per pack, making the tax on a pack of cigarettes $1.36. The bill also
increases the tobacco tax to 61% of the wholesale sales price and cost.

House File 346 deposits the revenue derived from the cigarette and tobacco tax increase into the Healthy Iowans
Tobacco Trust.

                                                                                                                       19
Cigarette Tax
Under current law, the Iowa cigarette tax is imposed on the sale of cigarettes and must be paid by the person making
the first sale in Iowa. Tax payment is shown by a stamp affixed to each cigarette package. Currently, this tax is 36
cents per package of 20; 45 cents per package of 25.

Tobacco Tax
Under current law, the Iowa Tobacco Tax is imposed on the sale of all tobacco products (except cigarettes and little
cigars) at a rate of 22% of the wholesale sales price of the tobacco products.

Fiscal Services estimates that increasing the cigarette and tobacco tax to these amounts results in more than $140
million of new revenue.

Cigarette Tax Rates in the 50 States and the District of Columbia

                         Tax Rate                                              Tax Rate
       State            (per pack)                                 State      (per pack)
 *Alabama                 0.425                        Nebraska                  0.64
 Alaska                    1.60                        Nevada                    0.80
 Arizona                   1.18                        New Hampshire             0.80
 Arkansas                  0.59                        New Jersey                2.40
 California                0.87                        New Mexico                0.91
 Colorado                  0.84                        *New York                 1.50
 Connecticut               1.51                        North Carolina            0.30
 Delaware                  0.55                        North Dakota              0.44
 Florida                  0.339                        Ohio                      1.25
 Georgia                   0.37                        Oklahoma                  1.03
 Hawaii                    1.40                        Oregon                    1.18
 Idaho                     0.57                        Pennsylvania              1.35
 *Illinois                 0.98                        Rhode Island              2.46
 Indiana                  0.555                        South Carolina            0.07
 Iowa                      0.36                        South Dakota              0.53
 Kansas                    0.79                        *Tennessee                0.20
 Kentucky                  0.30                        Texas                     0.41
 Louisiana                 0.36                        Utah                     0.695
 Maine                     2.00                        Vermont                   1.19
 Maryland                  1.00                        *Virginia                 0.30
 Massachusetts             1.51                        Washington               2.025
 Michigan                  2.00                        West Virginia             0.55
 Minnesota                 1.23                        Wisconsin                 0.77
 Mississippi               0.18                        Wyoming                   0.60
 *Missouri                 0.17                        District of Columbia      1.00
 Montana                   1.70                        U.S. Median               0.80

 *Counties and cities may impose an additional tax on cigarettes (per pack)

Additional Tax Information:

                          Additional
       State              Tax Rate
Alabama                   0.01 - 0.06
Illinois                  0.10 - 0.15
Missouri                  0.04 - 0.07
                                                                                                                       20
New York City               $1.50
Tennessee                    0.01
Virginia                 0.02 - 0.15

(Source: Federation of Tax Administrators)

(Contact: Mary Earnhardt, 1-3298)

                                       House Republican Talking Points
Senator Gronstal’s Fair Share Analogy
―Incoming Senate Majority Leader Mike Gronstal of Council Bluffs likened the current situation to the friend who
always seems to be in the bathroom when it is his turn to pay for the next pitcher of beer.

"Now that's just wrong," Gronstal said.      (Sioux City Journal 12-6-06)


Not exactly. If unions want the right to bargain ―fair share‖ dues, then who is only group no sitting at the table? The
non-union worker that’s who. So it’s not like a friend who always seems to be in the bathroom when it is his turn to
pay for the next pitcher of beer.

It’s like telling that friend ―We all agreed…you’re buying the next round of drinks.‖

It’s not ―fair share‖ it’s ―forced share‖.


                                              Democrat’s Agenda So Far
Raised the minimum wage from $5.15 to $7.25 per hour by 1-1-08. During the fall elections, House Democrats
promised to raise the minimum wage in Iowa from $5.15 an hour to $7.25 an hour by 2009. While that’s good for low
wage earners, it is bad for small employers.

Approved a symbolic bullying bill by requiring all school district to have bullying policy in place by September 1.
The Democrats conveniently ignored the fact that all public and non-public schools are already required to have a
student discipline policy in place addressing harassment in order to be accredited. In their rush to pass a bill they
forgot to include cyber-bullying on their list. Thanks to Republicans it is now included. Below is the list of student
traits or characteristics that the Democrats included on their ―list‖.

        Age
        Color
        Creed
        National origin
        Race
        Religion
        Marital status
        Sex
        Sexual orientation
        Gender identity
        Physical attributes
        Physical or mental ability or disability
        Ancestry
        Political party preference
        Political belief
        Socioeconomic status
                                                                                                                         21
       Familial status.

Republican amendments to include a parent involvement policy and nonpublic school language clarifying that the
bullying policy should not inhibit teachings or consideration of doctrinal matters were eliminated from the final
version of the bill.

Allowable growth funding levels that are suspiciously similar to the levels adopted by Republicans. Democrats
adopted a 4% allowable growth rate and rejected an opportunity to approve 6% allowable growth. They also rejected a
plan to have the state take the burden off local property taxpayers. Despite the opportunity to approve additional
education dollars AND provide some property tax relief LIKE THEY PROMISED THE VOTERS LAST FALL,
Democrats rejected the ideas.

                                            Just over the horizon…
Repealing Iowa’s ban on human cloning…
Essentially the Democrats are repealing the code section which bans human cloning and are replacing it with a new
―ban‖ which isn’t a ban.

Chapter 707B prohibits human cloning for any purpose, whether it be for Reproductive or therapeutic cloning. A
person performing or participating in cloning would be guilty of a class C felony, while transporting cloned embryos is
a aggravated misdemeanor. The prohibition does not impact in vitro fertilization.

HF 287, the Democrat’s cloning bill, repeals Iowa Code Chapter 707B. It says so right on page 2, line 19 – ―Chapter
707B, Code 2007, is repealed.‖

What is the difference between reproductive and therapeutic cloning?

Reproductive cloning, sometimes called human cloning, is done utilizing a process called ―somatic cell nuclear
transfer‖ (SNT). SNT involves the removal of the nucleus of an adult somatic cell (any cell other than a sperm or egg).
The nucleus from the cell is then transferred to an egg cell from which the nucleus has been removed. Through proper
stimulation, the cell develops into an embryo that can then be implanted into the uterus. A real life example of this is
Dolly the sheep.

Therapeutic cloning or nuclear transplantation utilizes similar procedures to reproductive cloning, with the difference
being the end result. The embryo created for therapeutic cloning has the stem cells extracted from it. This is
embryonic stem cell research.

Raising the tobacco tax…
Speaker Murphy on the tobacco tax:

―Last week House Minority Leader Pat Murphy, D-Dubuque, said a cigarette tax hike isn’t needed because they state
now has a budget surplus fueled by healthy tax revenues. That sounded a lot like the argument made last spring by
GOP House Speaker Christopher Rants, who was criticized by Murphy for refusing to allow a vote on raising the tax.‖
(Sioux City Journal, 10-12-06)

―The Iowa House is unlikely to go along with incoming Gov. Chet Culver’s proposal for a dollar increase in the
cigarette tax, incoming House Speaker Pat Murphy said Friday. ―I don’t think we’ll go that high,‖ said
Murphy…Instead, he looks for a tax increase in the range of 40 cents to 60 cents a pack.‖ (Des Moines Register, 1-6-
07)

"’Governor Culver has given some compelling arguments to go to a dollar," Murphy said during a taping of Iowa
Public Television's "Iowa Press" program, which will air this weekend.‖ (Associated Press, 2-10-07)



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The House Democrats claim that all of the new money generated by the cigarette tax hike will be spent on health care.
However, when the joint budget targets are released, it will become evident that the bulk of the increase goes to fund
increases for other areas of the budget including the Regents, teacher salaries and state employee salaries.

Local smoking bans…
HSB 89 lets your city, county or local board of health enforce a smoking ordinance or rule more stringent than current
Iowa law. The ordinance or rule could include, but is not limited to, any of the following:

        1. Eliminating or limiting smoking in factories, warehouses and similar places of work not usually
           frequented by the general public, and rooms or halls used for social function.
        2. Prohibiting the designation of a smoking area.
        3. Eliminating or limiting smoking in a ―public place consisting of a single room or a bar‖
           This seems to fit restaurants as well as bars.

Repeal of English law…
Democrats in the House State Government Committee have filed a bill, House Study Bill 108, that repeals Iowa’s
English law. Like the so-called ―fair share‖ bill, Democrats DID NOT campaign on repealing English not did they
include it in the campaign plan.

Weaken Penalties on Drug Dealers…
HF 244 repeals mandatory minimum sentences for certain drug offenses.

The bill repeals Code section 124.401A, which provides for an additional sentence of five years if a person is
convicted of a drug-related offense within 1,000 feet of a school, public park, public swimming pool, public
recreation center, or marked school bus.

Secondly, the bill also repeals Code section 124.401C, which provides for an additional sentence of five
years if a person manufactures methamphetamines in the presence of a minor.

Next, the bill repeals Code section 124.413, requiring a person convicted of a controlled substance-related
offense under section 124.401, subsection 1, to serve a minimum sentence equal to one-third of the
maximum sentence.

Fourth, the bill repeals Code section 902.8A, requiring a person convicted of an amphetamine or
methamphetamine-related offense under section 124.401D, to serve a minimum sentence of 10 years.

Fair Share…
HF 324 forces non-union public employees - like teachers- to pay union dues. It also states that ―as a condition of
continued employment‖ private sector non-union employees who work in union shops will either have to join the
union, pay union dues or be fired.

The effect of HF 324 is the same as a direct repeal of the Right to Work law.

Groups opposed to Right to Work Repeal/Fair Share bill HF 324:

            o   Iowa Association of Business and Industry
            o   National Federation of Independent Businesses – Iowa
            o   Associated Builders and Contractors of Iowa
            o   Professional Educators of Iowa
            o   Iowa Association of School Boards
            o   Iowa Bankers Association
            o   Iowa Hospital Association
            o   Iowa Association of Electric Cooperatives
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            o   Professional Developers of Iowa
            o   Home Builders Association of Iowa
            o   Iowa Motor Truck Association
            o   Iowans for Right to Work
            o   Iowa Independent Bankers Association
            o   Iowa Chamber Alliance
            o   Siouxland Chamber of Commerce
            o   Cedar Rapids Chamber of Commerce
            o   Iowa Propane Gas Association
            o   Iowa Lumber Association
            o   Iowa Wholesale Distributors Association
            o   Iowa Retail Assocation

On Sunday Feb. 4 the Sioux City Journal nailed what the Democrat’s plan is about: ―Although the legislation
technically would not repeal Iowa’s Right to Work law, its essential effect would be the same – forced unionism of
workers.‖

On Tuesday Jan. 30 the Wall Street Journal called the Democrat’s effort to gut Right to Work the ―Iowa Emigration
Act‖.

The Journal stated ―If the Iowa Legislature wanted to chase jobs and employers out of the state, they couldn’t come up
with a better plan than undermining right to work.‖

Also according to the Journal:
―Right to work laws are strongly correlated with faster growth in jobs and personal income.‖

―A recent survey by the National Right to Work Institute found that, between 1986 and 2006, 11 right-to-work states
have added 104,000 auto manufacturing jobs, a 63% increase. The non right-to-work states lost 130,000 auto jobs, or
15% over the same period.‖

David Yepsen of the Des Moines Register noted in his column on Jan. 30 that,:
       ―…lawyers and others trying to craft the legislation to enact it are discovering that they can't do it without
       gutting part of the right-to-work law. (That law also says it's illegal to collect "dues, charges, fees,
       contributions, fines or assessments to any labor union, labor association or labor organization" as a condition
       of employment.)

Labor is saying, "You promised fair share." Democratic legislators are saying, "You didn't tell us we'd have to gut the
right-to-work law to do it." Labor replies: "So what's wrong with that?"

On February 13th the Clinton Herald wrote: ―Perhaps the words Fair Share don’t scare you yet – but they should.‖

On February 13th, the Cedar Rapids Gazette wrote: ―The ―fair‖ aspect of the legislation seems to be more about ―fare,‖
inasmuch as the measure has the potential to dump millions of dollars into unions, which have seen their ranks decline
in recent years.‖

The Gazette summarized it’s position: ―As much as proponents would like to position the debate about winning one for
the little guy, it is not. This issue is more fundamental than a classic labor-business clash. It is about the importance of
individuals to make choices about where they work, and whether they want to be represented by a union. Being forced
to do so is an infringement on the basic rights Iowans cherish.‖

On February 10th the Mason City Globe-Gazette wrote: ―To some it looks like a classic quid pro quo. Unions have
been the most fervent backs of the Democratic Party and are licking their chops thinking now the Democrats control
both house of the Legislature and the governor’s office in Iowa, it’s time for some payback that would boost union
membership rates, which have been declining.‖

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The Globe-Gazette went on to write: ―We’d like to see the issue go away. Fair share could be a real detriment to the
state’s ability to attract new businesses. Various reports show some businesses won’t even consider locating in non-
right to work states. But beyond that, fair share simply isn’t fair.‖

On Febuary 13 the Burlington Hawkeye wrote: ―In addition to bargaining contracts, unions are very politically and
socially active. It’s simply wrong for them to compel someone to financially support an organization in which they
have philosophical differences.

Unions sruggling to retain and grow membership should look inside themselves and create a marketing strategy to
swell their ranks. They have something to sell to a new employee, and should put their expertise at that endeavor.‖

On February 18th, the Des Moines Register wrote, ―It is not exactly a repeal of Iowa’s right to work law, but it would
have the same effect on businesses looking at Iowa.

The so-called ―Fair Share‖ legislation is not fair. It is forced unionism.

There is nothing fair about forcing individuals to pay dues to a union or an organization they do not choose to belong.




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