2016 Legislative Takeaways

posted on Tuesday, May 3, 2016

The Iowa Legislature adjourned for the year early Friday evening after a series of last-minute negotiations. While we were pleased to see increased awareness and recognition of the need to significantly expand support for Iowa’s water, land and continued clean energy growth this session, we are frustrated by the Legislature’s ultimate lack of meaningful action.

There were a few exceptions. Along with our partners and allies, we were able to advance legislation that will expand clean energy in the state. We also preserved several essential conservation and clean energy programs and policies. Maintaining these hard-fought victories of sessions past is critical and better positions us for future progress.

Clean energy accomplishments of note included preserving Iowa’s upfront solar tax incentive, maintaining net-metering for solar and other types of distributed renewable energy, and extending the production tax incentive eligibility deadline for solar and wind projects by one year.

Although legislators failed to Fund the Trust to support our natural resources and outdoor recreation, we did move the conversation forward significantly this year. Yesterday, at his weekly press conference, Gov. Branstad said “the three-eighths of a cent is something we’d be willing to consider.” We appreciate Governor’s remarks and the opportunity it creates to move other state leaders to support the Trust, even though we are frustrated that it’s taken six years to reach this point. Nevertheless, we will persevere. We also grew support for adopting a comprehensive watershed approach to tackle the state’s water quality challenges, and advanced reasonable protections for at risk wildlife.

These policies and programs – both those that were advanced and those that were maintained – will protect our environment and strengthen our economy, improve our communities and preserve public health. That said, we share many Iowans’ disappointment that the Legislature adjourned without taking more meaningful action to support our water, land and continued clean energy leadership.

As always, the Council will continue to advocate for strong environmental policies in its year-round work with state and federal agencies, and after exhausting other options, in the courts. Our shared work for the 2017 Iowa Legislative Session begins now.

Success at the Capitol next year depends on what we do as individuals and as a community between now and next legislative session. As incumbents and legislative hopefuls hit the campaign trail heading into November’s election, ask legislators what they did this past session to support our natural resources, and what they will do in 2017 to create a more sustainable future for Iowa. Legislators claimed they didn’t hear enough about these issues from their constituents. Let’s make sure they can’t say the same next year.

It’s time our elected officials take action on the scale needed to address the urgent – and growing – natural resource challenges facing our state. We look forward to continuing and elevating the conversations started this session, and returning to the Capitol next January to work with policymakers to make our state cleaner, healthier and a better place to live, work and explore.

2016 Legislative Summary

Below is an in-depth summary of key legislation. It is organized by the 2016 legislative priorities identified by each program at the start of this past session

Clean Energy Legislation

Priority: Expand, Improve and Maintain Clean Energy Tax Incentives

In recent years, the Council and its allies have successfully improved access to clean energy by establishing and expanding the tax incentives available for businesses, farmers, homeowners and utilities. This year, one of Iowa’s most successful clean energy tax incentives – the upfront solar tax incentive– was placed in jeopardy when an unintentional technical error uncoupled the state tax incentive from the federal tax incentive. The recently extended federal investment tax credit continues through 2021 for both business and residential installations before reverting to a 10% credit for businesses only in 2022. The technical error would have resulted in Iowa’s tax incentive expiring this year, instead of continuing to match the federal incentive for years to come. This would have put solar out of reach for many Iowans and dealt a devastating blow to Iowa’s growing solar industry.

The Council and its allies were able to secure language in HF 2468 to recouple the state and federal incentives, extending the upfront solar tax incentive for residential and business installations through 2021. This means that Iowa’s annual $5 million fund for the upfront solar tax credit is available each year from 2016 to 2021 to match the federal solar incentive for both residential and business installations.

In that same bill, the Council and its allies were able to successfully extend the eligibility deadline for the 476C production tax incentive for renewable energy, including solar and wind projects, by one year. Eligibility for this important production tax incentive was scheduled to end by December 31, 2016.The extension allows these projects until the end of 2017 to be completed. Without this extension, many clean energy projects would have lost the tax incentive, which would have resulted in a number of canceled projects.

The legislation also fixed a problem with the annual waiting list for the upfront solar tax incentive for solar projects installed in 2014 and 2015 and eased some of the ownership requirements for solar projects eligible for the 476C production tax incentive. The Council also sought to increase available tax incentives for wind and solar, including an increase in the annual amount of annual funds available for the upfront solar tax incentive (from $5 to $7.5 million) and an increase in the solar capacity for 476C production tax incentives (of 10 megawatts or more). While legislation was introduced to increase both incentives, these measures were not included in the final bill given budget priorities.

Priority: Secure Sufficient Clean Energy Infrastructure

For several years, a number of bills have been introduced to significantly limit development of needed transmission infrastructure for renewable energy. This session resulted in the adoption of compromise language to establish timetables for the review and approval of certain transmission lines. Fortunately, the many other more restrictive proposals were not adopted in the final legislation. Two bills, HF 2459 and SF 2109, added a new time frame for the review and approval of certain types of new high voltage transmission lines. This timeframe only applies to merchant transmission lines that are high voltage direct current (DC) and meet certain requirements on the spacing of substations. Transmission lines in Iowa today are typically alternating current (AC), but Iowa has significant transmission needs to enable more wind and even solar generation to come on-line.

Under the new legislation, proposals for merchant transmission lines would need to be approved by the Iowa Utilities Board (IUB) within three years if they involve eminent domain. The IUB has a limited ability to extend this time frame. If the time frame is not met, the proposals would be rejected and an applicant could be unable to reapply for five years. The legislation provides a shorter two-year time frame for current applications for such transmission lines. In practice, this time frame applies to the Rock Island Clean Line project.

Priority: Protect Distributed Clean Energy Options

Early in the session, a bill (HF 2100) was introduced that would have gutted net-metering, a policy that makes solar and other types of distributed renewable energy more cost-effective farmers, businesses and homeowners across the state. Net metering allows customers’ renewable energy generation and electricity use to net out on a monthly basis. If customers use more electricity than they generate, they pay the retail rate for the excess. If customers generate more than they use, they get a bill credit at the retail rate for future use. Iowa’s rate-regulated utilities are required to offer net metering to customers. This bill – which we successfully defeated –would have gutted that requirement, allowing utilities to pay solar customers a much lower wholesale price for the excess energy they produce rather than credit the generation at the retail rate. Without net metering, many solar projects would not be viable, and Iowa’s solar industry would suffer.

Water & Land Legislation

Notable Successes & Challenges

The Council and its allies advanced protections for Iowa’s wild turtles, which have been disappearing from our lakes, rivers and streams at an alarming rate, in large part due to over-harvesting. The Governor signed HF2357, giving the DNR the authority to establish a commercial and non-commercial wild turtle harvest season and bag limits in Iowa. Once implemented, these reasonable protections will help current population levels stabilize.

The Council again sought to gain support for the Watershed Improvement Review Board (WIRB), a popular and important program that has widespread, bipartisan support for its success in supporting locally led water projects through competitive grants. To date, WIRB has helped fund 111 completed projects and 39 in-progress projects. However, despite its record of success, WIRB has received no funding for the last two years, and this year, the Legislature suspended the program. We will work to reverse this move next year and advocate for appropriate funding for this important program.

Priority: Fund the Natural Resources & Outdoor Recreation Trust Fund

After several years of calling for increased funding for clean water, the issue received dramatically increased attention and discussion at the Capitol this year. We saw a flurry of proposals aimed at increasing support to address the state water quality woes. These included legislation to fund the Natural Resources & Outdoor Recreation Fund, the Governor’s SAVE proposal, and a number of other bills that would at least begin to address our water problems. In the end, no meaningful legislation was advanced. We welcome the Governor’s aforementioned remarks indicating potential support for IWILL, will continue to call upon the state’s leaders to Fund the Trust.

Priority: Strengthen Iowa’s Nutrient Reduction Strategy

Despite the support of new advocates such as central Iowa business leaders, Iowa’s plan for reducing water pollution remained largely untouched. This year, the Council and its allies continued to call for improvements to strengthen Iowa’s Nutrient Reduction Strategy (NRS) including the establishment of a timeline with benchmarks, water quality testing and assessment and sustained funding. After a lot of talk, funding for Water Quality Initiative (WQI) projects – which seeks to implement the NRS – was allocated at $9.6 million, the same amount as last year. This falls far short of funding needed per scenarios in the NRS - initial investments ranging from $1.2 to $4 billion, and annual ongoing investments ranging from $756M to $1.2B. Iowa continues to lack of the type of sustainable funding that our neighbors in Missouri and Minnesota are using to improve water quality across the state.

Priority: Fully Fund the Resource Enhancement & Protection Program (REAP) at $20 Million

The Council again called upon policymakers to take long-overdue action to fully fund REAP, which provides critical funds to enhance and protect the state’s natural and cultural resources. Since its founding, REAP has benefited every county in Iowa and supported over 15,000 projects related to soil and water enhancement; parks, trails and wildlife areas; county conservation, historical resource preservation; roadside beautification and public land management. In the end, the Legislature allocated $16 million for REAP, maintaining the four-year status quo.

Priority: Support a Watershed Framework for Iowa

In advance of the start of session, the Council released “Healthy Lands, Healthy Waters: A Watershed Framework for Iowa,” a policy paper that lays out the need for and benefits of adopting a coordinated watershed approach to tackle the state’s water quality challenges. As the session advanced, an increasing number of legislators spoke not only about the need for significant long-term funding for water quality, but also a more comprehensive approach that reflected many of the Council’s recommendations including greater collaboration, accountability and transparency, with prescriptions for planning, monitoring and action. The importance of expanding and elevating the work of the state’s new Watershed Management Authorities was discussed widely, and several pieces of legislation were introduced that focused on watershed solutions. We supported several of these ideas and thank their legislative authors.

The 2016 legislative session serves as a good reminder that improving our state’s environmental policies is a long-term effort that requires patience and dogged commitment. Thank you for your partnership in our efforts.