House extends film tax credit suspension, ducks loose-meat fight

DES MOINES – The Iowa House voted Friday to scale back or halt some state tax credit programs, bring all breaks under more scrutiny and add another year's suspension to the beleaguered film tax incentive program.

Senate File 2380, which representatives approved on a 54-43 vote, would keep the film tax credit program in abeyance until July 1, 2013, under House-approved changes. It also would bring all credits under review and make other modifications that Rep. Paul Shomshor, D-Council Bluffs, expected the Senate would accept and send to Gov. Chet Culver next week.

“I think Senate File 2380 is a good step forward,” Shomshor said.

Rep. Tom Sands, R-Wapello, who offered an amendment that included the longer film tax credit suspension, said he supports the incentive but wanted to provide enough time to revamp it properly and allow the Iowa's Attorney General Office to sort through criminal and civil matters stemming from allegations of mismanagement, lax oversight, irregularities and theft. He said the suspension could be lifted if the program is retooled sooner.

A fiscal note issued by the nonpartisan Legislative Services Agency projected the savings under S.F. 2380 would be $5.4 million next fiscal year, $25.2 million in fiscal 2012 and $35.9 million in fiscal 2013 – with most of those reductions tied to the film credit suspension.

Minority Republicans tried unsuccessfully to dedicate whatever reductions are made to state tax credits would be earmarked for property tax relief rather than flow into the general fund and spent.

“Ladies and gentlemen, this is not the way to balance the budget,” said Rep. Chuck Soderberg, R-LeMars.

The bill would establish a statutory panel of legislators to review state tax credits over the next five years and lower the caps on certain business tax credits – including reducing the cap on economic development credits from $185 million to $120 million. It also would cut the Iowa Fund of Funds contingent tax credits from $100 million to $60 million and place more focus of research tax credits to smaller-sized businesses.

Also Friday, House members decided they had no beef with the way state regulators were handling a loose-meat controversy.

During debate on a $63.6 million budget bill to fund state administrative and regulatory agencies for fiscal 2011, representatives removed Senate language to waive state regulation on a cooking technique a Marshalltown restaurant uses in the making of its loose-meat sandwiches.

The issue came to the attention of lawmakers when state food-safety inspections raised questions about the restaurant's “traditional cooker” methods in dealing with cooked and raw meats. The state Department of Inspections and Appeals notified Taylor's Maid-Rite that it must change a cooking process in which cooked hamburger is placed in the same heated equipment used to cook raw meat.

Representatives also averted a gambling debate when Rep. Mary Mascher, D-Iowa City, agreed to withdraw an amendment she offered that would have set up a process whereby casinos in Council Bluffs and Dubuque would have paid $10 million annually to maintain their state licenses but end greyhound racing.

House Majority Leader Kevin McCarthy, D-Des Moines, said it appeared unlikely the Legislature would deal with the dog-racing issues as leaders try to adjourn the 2010 session by the end of next week.

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