This year’s session of the Iowa General Assembly promises plenty of debates that could affect economic development and corporate bottom lines. 

Plenty of lawmakers have said they expect serious discussions about raising the gasoline tax to raise cash for road and bridge repairs, and many wouldn’t mind revamping the state’s income tax code to make Iowa more competitive with surrounding states. 

There is a good chance lawmakers will talk about new and retooled tax credits meant to spur new investments and spinoff businesses such as manufacturing new products from oils and other materials leftover from biofuels manufacturing.

Gov. Terry Branstad and legislative leaders agree that last year’s balky efforts to increase access to high-speed Internet across the state must give way to action in this session. The issue is a complicated blend of changes in regulations and increased financial assistance, with the added challenge of avoiding damage to small companies in competition with communications giants such as Sprint Corp. and Verizon Communications Inc., lawmakers say. 

Some lawmakers even want to talk about raising the general sales tax, a move needed to start filling the now empty Iowa Natural Resources and Outdoor Recreation Trust Fund, which is in line for the first 3/8ths of 1 percent of any sales tax increase. Voters approved the fund in 2010 to address a shortfall in cash for water quality projects, park improvements, soil conservation and trails. If the sales tax were raised, the fund would get more than $120 million a year.

Business Record writers looked at several legislative topics in more depth for this issue. 

Repairing roads and bridges

You’ll find my look at the gas tax debate. At this point, all parties seem to have an open mind, but there is little evidence support has gelled around a specific approach. The governor speaks of wanting action, and even floated a trial balloon with a local-option tax idea that immediately drew widespread criticism, but he continues to avoid endorsing a specific plan. Senate Majority Leader Michael Gronstal leans toward a simple 10-cent increase in the per-gallon tax. House Speaker Kraig Paulsen hears mostly talk of a gas tax increase, or perhaps a hybrid deal that lowers that tax and adds a sales tax on wholesale fuels.
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High-speed Internet

Kent Darr reports that the broadband issue has bogged down for several reasons. At the top 
of the list: Republicans weren’t excited about offering financial incentives to the companies involved. And Democrats wondered about regulation on cell towers that appeared to be burdensome to local governments.

Gov. Branstad, who calls his program “Connect Every Acre,” envisions a mix of grants to service providers, property tax exemptions and streamlined permitting processes.

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Renewable chemical tax credit

Joe Gardyasz weighs in on the Iowa Economic Development Authority’s proposal to offer tax credits – carved out of the existing supply – to companies that would use byproducts from biological feedstocks to create high-value chemicals. Those chemicals could then be used to make new products. For example, oils left over from biofuels production could be used to make plastics. The IEDA staff has a long list of chemicals that would qualify. The list is based on a federal tally of high-value chemicals that are important in a range of fields. 

The idea is new to the Legislature, and key lawmakers say it will have to be properly vetted. But they give the legislation decent odds of passing and note that broad-based support already is coming in from the likes of the Cultivation Corridor and Iowa Biotechnology Association.

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Wish lists

Every legislative session brings a large set of wish lists, not to mention a string of well-timed and self-serving reports and statements by interest groups jockeying for position even before the starting gate opens at the Statehouse. We’ve been tracking the business groups’ proposals. The wish lists of the Greater Des Moines Partnership, Iowa Chamber Alliance, the Iowa Association of Business and Industry, the Iowa Economic Development Authority and United Ways of Iowa were detailed in a previous issue. Those platforms called for a renewable chemical production tax credit, a sales tax increase to provide cash for the Natural Resources and Outdoor Recreation Trust Fund, better access to high-speed Internet, a gasoline tax increase or other action to raise money for road and bridge repairs, the elimination of sales and use taxes on replacement parts and consumable supplies, and a study of workforce issues, among other proposals. 

» Read that story: http://bit.ly/1E7Tmuh