Alcoholic Beverages Division (IABD), the Division of Banking (DOB), the Credit Union Division (CUD), the Insurance Division (IID), and the Utilities Board (IUB)

ADMINISTRATION AND REGULATION APPROPRIATIONS SUBCOMMITTEE ANALYSIS OF THE FY 2018 & FY 2019 GOVERNOR’S RECOMMENDATIONS

FISCAL SERVICES DIVISION JANUARY 2018

Table of Contents

TABLE OF CONTENTS

Page Subcommittee Members and Staff ...... 1 Summary of FY 2019 Recommendations ...... 2 Department of Administrative Services ...... 3 Auditor of State ...... 6 Ethics and Campaign Disclosure Board ...... 8 Office of the Chief Information Officer ...... 10 Department of Commerce ...... 12 Office of Governor and Lieutenant Governor ...... 15 Governor’s Office of Drug Control Policy ...... 17 Department of Human Rights ...... 19 Department of Inspections and Appeals ...... 21 Department of Management ...... 24 Iowa Public Information Board ...... 26 Department of Revenue……………………………………………………………………………………………………………….. 28 Secretary of State...... 30 Treasurer of State ...... 32 Iowa Public Employees Retirement System ...... 34 Comparison to Other States – Full-Time-Equivalent (FTE) State Government Employees ……………. 36 LSA Publications ……………………………………………………………………………………………………………….……………. 36 Appendix A – General Fund Tracking ...... 37 Appendix B – Other Fund Tracking ...... 42 Appendix C – FTE positions Tracking ...... 46 Appendix D – Historical Appropriations: FY 2010 – Gov. Rec FY 2019 ...... 53 Appendix E – Samples of Budget Unit Schedules 1 and 6 ...... 68 Appendix F – FY 2017 Year-End Appropriations ...... 71 General Fund Appropriations…………………………………………………………………………………………………….…… 73 Other Fund Appropriations…………………………………………………………………………………………………….………. 75 Appendix G – Federal Funds ...... 76 Appendix H – Budget Unit Briefs ...... 79 Appendix I – Fee Project ...... 137 Appendix J – Issue Reviews ...... 138

Administration and Regulation Appropriations Subcommittee

ADMINISTRATION AND REGULATION APPROPRIATIONS SUBCOMMITTEE MEMBERS

SENATE HOUSE

Dennis Guth, Chairperson John Landon, Chairperson

Jake Chapman, Vice Chairperson Stan Gustafson, Vice Chairperson

Liz Mathis, Ranking Member Timi Brown-Powers, Ranking Member

Jim Lykam Ako Abdul-Samad

Dan Zumbach Jane Bloomingdale

Abby Finkenauer

Kristi Hager

Larry Sheets

Todd E. Taylor

LEGISLATIVE SERVICES AGENCY

Fiscal Services Division Legal Services Division

Christin Mechler (515.250.0458) Gus Harb (515.281.3745) [email protected] [email protected]

Angel Banks-Adams (515.281.6301) Tim McDermott (515.281.8090) [email protected] [email protected]

Administration and Regulation Appropriations Subcommittee

Fiscal Staff: Angel Banks-Adams Christin Mechler Analysis of Governor’s Budget

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DEPARTMENT OF ADMINISTRATIVE SERVICES Overview and Funding History

Agency Overview: The Department of Administrative Services (DAS) was established on July 1, 2003, by combining all or a portion of four existing State agencies (General Services, Revenue and Finance, Personnel, and Information Technology). Currently, the DAS consists of four enterprises providing corporate-level facility and business services to other agencies of State government, and a Core/Finance Operations Division responsible for the internal administration of the Department. The four enterprises are the General Services Enterprise (GSE), Human Resources Enterprise (HRE), Central Procurement and Fleet Services Enterprise (CPFSE), and State Accounting Enterprise (SAE). The Information Technology Enterprise (ITE) was moved out of the DAS to create the independent Office of the Chief Information Officer (OCIO) in FY 2015.

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General Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Administrative Services, Department of Administrative Services Operations $ 3,872,647 $ 3,629,496 $ 3,566,936 $ -62,560 Utilities 2,509,649 2,447,360 2,899,231 451,871 Terrace Hill Operations 385,933 386,660 386,660 0 Total Administrative Services, Department of $ 6,768,229 $ 6,463,516 $ 6,852,827 $ 389,311

Governor’s Recommendations FY 2019 – Significant Changes Operations – A decrease to revise the FY 2019 appropriation to match the FY 2018 base $ -62,560 after the Governor’s recommended FY 2018 deappropriation. Utilities – An increase to revise the FY 2019 appropriation to match the FY 2018 base $ 451,871 after the Governor’s recommended FY 2018 deappropriation.

Discussion Items FY 2018 Governor’s Budget Adjustment – The Governor’s FY 2018 budget adjustment for the Department of Administrative Services totals $389,311. The Governor is recommending that a decrease of $62,560 in funding be implemented in the Operations line item of the Department’s budget appropriation. More information on how the reduction will be achieved will be provided once available. The Governor is also recommending an increase of $451,871 be implemented in the Utilities line item of the Department’s budget. This increase is intended to cover the expected FY 2018 shortfall of utility costs (electricity, water, and natural gas) on the Capitol Complex, Terrace Hill, and the laboratory buildings in Ankeny. Utility Rate Costs – The DAS utilities are funded through a General Fund appropriation to cover utility costs for the Capitol Complex, Terrace Hill, and the laboratory buildings in Ankeny. In FY 2016, the DAS received a supplemental appropriation totaling $450,000 (SF 2109, FY 2016 Supplemental Appropriations Act). At the 2017 Governor’s Budget Hearing, DAS Director Janet Phipps stated that the Department is expecting a shortfall in Utilities funding of approximately $450,000 at the close of FY 2018. FY 2018 and FY 2019 DAS Service Rate Increases – The Customer Council met on July 19, 2017, and adopted the following rate changes for FY 2018, FY 2019, and FY 2020. Action taken on the previously approved FY 2018 and FY 2019 rates: • Reduce the FY 2018 rate for Capitol Complex Association/Iowa Labs Association fees from $6 per square foot to $5.75 per square foot. The DAS is aware of customer agency budget constraints and the need to provide routine maintenance on the Capitol Complex and at the Iowa Laboratories Facility in Ankeny, so a more gradual rate increase has been proposed and adopted for FY 2018 through FY 2020. • Reduce the FY 2019 rate for Capitol Complex/Iowa Labs Association fees from $6.25 per square foot to $6 per square foot. The DAS is aware of customer agency budget constraints and the need to provide routine maintenance on the Capitol Complex and at the Iowa Laboratories Facility in Ankeny, so a more gradual rate increase has been proposed and adopted for FY 2017 through FY 2019. Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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Approved rate increases for FY 2019 and FY 2020: • Increase the FY 2019 rate for Capitol Complex Association fees and Iowa Labs Association fees from $5.75 per square foot to $6 per square foot. • Increase the FY 2020 rate for Capitol Complex Association fees and the Iowa Labs Association fees from $6 per square foot to $6.25 per square foot. All other rate methodologies for DAS services remain at a status quo level for FY 2019. Additional Information. More information is available through the 2017 Iowa DAS Utility Services Business Plan and Agency Impact Statements. The Business Plan provides brief descriptions of all DAS utility services and methodologies that were reviewed and approved by the Customer Council. Additional information is available on the website: das.iowa.gov/das-core/das-customer-council.

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AUDITOR OF STATE Overview and Funding History

Agency Overview: The position of Auditor of State was created in 1857 by Article IV, Section 22 of the Iowa Constitution. The Auditor is elected by popular vote and serves a four-year term. The duties of the Auditor’s Office are spelled out in Iowa Code chapter 11. The mission of the Office of the Auditor of State is to benefit all citizens of Iowa by providing independent audit, review, and other technical services to State and local governments to ensure the objective, economical, and businesslike conduct of public activities in an objective, accountable manner. The Auditor’s Office provides independent audits of the financial operations of State and local governments. The Office also reviews government activities to ensure they are conducted in an effective, efficient, and legal manner.

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General Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Auditor of State Auditor of State Auditor of State - General Office $ 929,617 $ 894,255 $ 886,193 $ -8,062 Total Auditor of State $ 929,617 $ 894,255 $ 886,193 $ -8,062

Governor’s Recommendations FY 2019 – Significant Changes General Office – A decrease to revise the FY 2019 appropriation to match the FY 2018 $ -8,062 base after the Governor’s recommended FY 2018 deappropriation.

Discussion Items FY 2018 Governor’s Budget Adjustment – The Governor’s FY 2018 budget adjustment for the Auditor of State totals $8,062. The Governor is allowing the Office discretion as to how the reduction will be implemented. More information on how the reduction will be achieved will be provided once available. Fee Revenue – The Office’s primary source of funding comes from billing State agencies, local governments, and other entities pursuant to Iowa Code sections 11.5B, 11.6, and 11.24. Over the past several years, the number of audits of small, local government entities has steadily increased. Currently, if a local government or other interested party petitions for and approves an audit, the Auditor must comply with the request, whether or not the entity can be billed for audit services provided. The Subcommittee may be interested in how the Office addresses the challenges of increased audit requests, as well as time and budgetary constraints.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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ETHICS AND CAMPAIGN DISCLOSURE BOARD Overview and Funding History Agency Overview: The Iowa Ethics and Campaign Disclosure Board administers and enforces the State campaign, lobbying, and ethics laws. The Board also reports on all gifts and bequests received by an Executive Branch agency other than a Regents university, as specified in Iowa Code section 8.7.

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General Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Ethics and Campaign Disclosure Board, Iowa Campaign Finance Disclosure Ethics & Campaign Disclosure Board $ 547,501 $ 547,501 $ 597,501 $ 50,000 Total Ethics and Campaign Disclosure Board, Iow $ 547,501 $ 547,501 $ 597,501 $ 50,000

Governor’s Recommendations FY 2019 – Significant Changes Ethics & Campaign Disclosure Board – An increase to restore the Board staffing level to $50,000 six full-time employees. Discussion Items New Electronic Filing System and Ethics Training – A 2016 mandate requires all campaign disclosure and report filing to be done electronically. At this time, the Board is working with the Office of the Chief Information Officer (OCIO) to gather and draft the technological requirements for a more user-friendly online filing system. The Subcommittee may be interested in an update on the drafting process, cost estimates, and technological upgrades and changes needed to continue to reduce paper filings. The Board also seeks to provide on-demand electronic ethics training for Executive Branch employees and officials. If successful, the Board will expand the ethics training to include campaign finance.

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OFFICE OF THE CHIEF INFORMATION OFFICER Overview and Funding History Agency Overview: The Office of the Chief Information Officer (OCIO) was transferred from the DAS to become a separate department by SF 396 (Government Efficiency Act), enacted during the 2013 Legislative Session. The Chief Information Officer is appointed by and serves at the pleasure of the Governor and is subject to confirmation by the Senate. The OCIO was created for the purpose of leading, directing, managing, coordinating, and providing accountability for the information technology resources of State government and to provide objective, customer-focused information technology services and business solutions. Some of the Chief Information Officer’s responsibilities are to prescribe and adopt information technology standards and rules, advise the Governor on issues related to information technology, consult and work with all governmental entities to achieve the information technology goals established by the OCIO, and develop systems and methodologies to review, evaluate, and prioritize information technology projects.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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Governor’s Recommendations FY 2019 – Significant Changes IT Consolidation – An appropriation from the Transportation, Infrastructure, and Capitals $ 3,300,000 Appropriation Subcommittee of $3,300,000 from the Technology Reinvestment Fund for FY 2019 for technology projects and IT consolidation. This is an increase of $2,300,000 compared to estimated FY 2018. Broadband – An appropriation from the Transportation, Infrastructure, and Capitals $ 2,600,000 Appropriations Subcommittee of $2,600,000 from the Rebuild Iowa Infrastructure Fund (RIIF) for broadband expansion grants. This is an increase of $2,600,000 compared to estimated FY 2018.

Discussion Item Cybersecurity – In October 2017, the OCIO held a grand opening for a new Security Operations Center. As cybersecurity and technological awareness continue to be among the primary efforts of the OCIO, the Subcommittee may want an update on any initiatives the Office is taking to protect Iowans from cyber attacks and other Internet-based threats.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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DEPARTMENT OF COMMERCE Overview and Funding History

Agency Overview: The Department of Commerce is comprised of five divisions: the Alcoholic Beverages Division (IABD), the Division of Banking (DOB), the Credit Union Division (CUD), the Insurance Division (IID), and the Utilities Board (IUB). The Professional Licensing and Regulation Bureau is attached to the Banking Division. Each Division is responsible for regulation of an industry or a group of industries. Each Division’s budget is prepared independently and then combined with the other Divisions’ budgets for submission to the Governor and General Assembly for consideration.

Five-Year Funding History

$35.0 $30.0 $25.0

$20.0

Millions $15.0 Other Funds $10.0 $5.0 General Fund $0.0 Actual Actual Actual Estimated Gov. Rec. FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

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General Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Commerce, Department of Alcoholic Beverages Alcoholic Beverages Operations $ 1,201,153 $ 1,005,461 $ 996,391 $ -9,070 Professional Licensing and Reg. Professional Licensing Bureau $ 443,655 $ 373,626 $ 370,263 $ -3,363 Total Commerce, Department of $ 1,644,808 $ 1,379,087 $ 1,366,654 $ -12,433

Governor’s Recommendations FY 2019 – Significant Changes

Alcoholic Beverages Operations – A decrease to revise the FY 2019 appropriation to $-9,070 match the FY 2018 base after the Governor’s recommended FY 2018 reduction. Professional Licensing Bureau – A decrease to revise the FY 2019 appropriation to match $-3,363 the FY 2018 base after the Governor’s recommended FY 2018 reduction.

Other Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Commerce, Department of Banking Division Banking Division - CMRF $ 10,499,790 $ 11,145,778 $ 11,145,778 $ 0 Credit Union Division Credit Union Division - CMRF $ 1,869,256 $ 1,869,256 $ 2,204,256 $ 335,000 Insurance Division Insurance Division - CMRF $ 5,485,889 $ 5,485,889 $ 5,485,889 $ 0 Utilities Division Utilities Division - CMRF $ 9,210,405 $ 9,040,405 $ 8,560,405 $ -480,000 Professional Licensing and Reg. Field Auditor - Housing Trust Fund $ 62,317 $ 62,317 $ 62,317 $ 0 Total Commerce, Department of $ 27,127,657 $ 27,603,645 $ 27,458,645 $ -145,000

Governor’s Recommendations FY 2019 – Significant Changes Credit Union Division – An increase to hire a Credit Union Examiner and for the first $335,000 phase of a mainframe system upgrade. Utilities Division – A decrease of one-time funding for research and development for an $-480,000 energy security project in FY 2018.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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Discussion Items FY 2018 Governor’s Budget Adjustment – The Governor’s FY 2018 budget adjustment for the Department of Commerce is a decrease of $12,433. The Governor is allowing the Office discretion as to how the reduction will be implemented. More information on how the Department will achieve this reduction will be provided once available. FY 2019 Commerce Revolving Fund Appropriations – The Governor is recommending the following changes to the Department of Commerce’s Commerce Revolving Fund appropriation: • An increase of $335,000 for the Credit Union Division, for the following: $80,000 for one Credit Union Examiner FTE position and $255,000 for the first phase of a mainframe system upgrade. • A decrease of $480,000 for the Utilities Division due to one-time funding for research and development for an energy security project in FY 2018. Staff Turnover – The Banking, Credit Union, Insurance, and Utilities Divisions are experiencing difficulties retaining younger professional staff members at the current pay levels. After gaining a few years of experience, younger staff members are hired by private sector firms offering higher salaries. The situation is aggravated by retirements of senior staff members. The Division of Banking has hired 10 new full-time employees, and five of these new employees are replacing retirees. Federal and State Charter Bank Conversion – Senate File 2314 (FY 2017 Administration and Regulation Appropriations Act) provided the Division of Banking with increased spending authority for the purpose of regulating federally chartered banks that convert to State-chartered banks. The Subcommittee may be interested in an update on the current trend of federal-to-State charter bank conversion and how the Division has been affected by these changes. Alcoholic Distribution and Licensing Reform – During the 2017 interim, the IABD commissioned and completed a study on the current state of the alcoholic beverage distribution industry in Iowa. Results of the study have led the Division to conclude that due to the increasing number of alcohol sale and delivery points, a change in the distribution process is necessary to continue to provide efficient and timely service. The IABD is currently working with the DAS to review proposals for the creation of a public/private partnership in alcohol distribution across the State. The Subcommittee may be interested in an update on the request for proposals process, as well as on potential staffing and revenue changes the IABD may experience as a result of a new distribution process. The Division is also working to streamline the licensing process for alcohol retailers, and started holding public forums across the State during the fall of 2017.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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OFFICE OF GOVERNOR AND LIEUTENANT GOVERNOR

Overview and Funding History

Agency Overview: The position of State Governor was created in 1857 by Article IV, Section 1 of the Iowa Constitution. The Governor is elected by a statewide popular vote and serves a four-year term. The duties and responsibilities of the Office are specified in Iowa Code chapter 7. The Governor’s Office is responsible for managing the Executive Branch and implementing policies and programs in accordance with State law. The functions funded by the Terrace Hill Quarters appropriation consist of the following: • Staffing and expenses of the overall operation of Terrace Hill National Historic Landmark and Iowa Governor’s Residence. • Daily food preparation and housekeeping services for the Governor and the Governor’s family. • Maintenance of the grounds by the DAS.

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General Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Governor/Lt. Governor's Office Governor's Office Presidential Electors $ 651 $ 0 $ 0 $ 0 Governor/Lt. Governor's Office 2,160,842 2,074,842 2,053,954 -20,888 Terrace Hill Quarters 92,631 92,070 92,070 0 Governor's Office Transition 0 150,000 0 -150,000 Total Governor/Lt. Governor's Office $ 2,254,124 $ 2,316,912 $ 2,146,024 $ -170,888

Governor’s Recommendations FY 2019 – Significant Changes Governor/Lt. Governor’s Office – A decrease in funding to revise the FY 2019 $ -20,888 appropriation to match the FY 2018 base after the Governor’s recommended FY 2018 deappropriation. Governor’s Office Transition – A decrease in funding to reflect the removal of one-time $ -150,000 time gubernatorial transition funds that are no longer needed in FY 2019.

Discussion Item FY 2018 Governor’s Budget Adjustment – The Governor’s FY 2018 budget adjustment for the Governor/Lt. Governor’s Office totals $20,888. The Governor is allowing the Office discretion as to how the reduction will be implemented. More information on how the reduction will be achieved will be provided once available.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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GOVERNOR’S OFFICE OF DRUG CONTROL POLICY Overview and Funding History

Agency Overview: The Governor’s Office of Drug Control Policy (ODCP) coordinates agencies and stakeholders involved with drug enforcement and substance abuse treatment and prevention. The ODCP creates the drug control policy and strategy for the State and identifies, pursues, and administers federal and other grants.

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General Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Drug Control Policy, Governor's Office of Office of Drug Control Policy Operations $ 237,333 $ 228,305 $ 226,247 $ -2,058 Total Drug Control Policy, Governor's Office of $ 237,333 $ 228,305 $ 226,247 $ -2,058

Governor’s Recommendations FY 2019 – Significant Changes Operations – A decrease to revise the FY 2019 appropriation to match the FY 2018 base $ -2,058 after the Governor’s recommended FY 2018 reduction.

Discussion Items FY 2018 Governor’s Budget Adjustment – The Governor’s FY 2018 budget adjustment for the Governor’s Office of Drug Control Policy is a decrease of $2,058. The Governor is allowing the Office discretion as to how the reduction will be implemented. More information on how the reduction will be achieved will be provided once available. Heroin and Opioid Epidemic – According to the ODCP, three out of every four habitual heroin users initiate their heroin addiction by abusing prescription opioid medication. Although the State has seen a decrease in the amount of heroin-related overdose deaths in the last two years, the epidemic remains one of the most prevalent challenges facing law enforcement statewide. The Subcommittee may want an update on what types of prevention and education efforts the Office is utilizing to help reduce the occurrence of drug abuse across the State.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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DEPARTMENT OF HUMAN RIGHTS Overview and Funding History

Agency Overview: The Iowa Department of Human Rights (DHR) is comprised of the Central Administration and three major divisions: Community Advocacy and Services, Community Action Agencies, and Criminal and Juvenile Justice Planning. The Community Advocacy and Services Division is comprised of seven offices that promote self-sufficiency for individuals by providing training and educating the public, developing public and private partnerships, and advocating and advancing the interest of the constituencies they serve. The seven offices are the Offices of Asian and Pacific Islander Affairs, Deaf Services, Latino Affairs, Native American Affairs, Persons with Disabilities, the Status of African Americans, and the Status of Women.

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General Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Human Rights, Department of Human Rights, Dept. of Central Administration $ 211,824 $ 201,233 $ 199,418 $ -1,815 Community Advocacy and Services 1,016,404 965,584 956,883 -8,701 Total Human Rights, Department of $ 1,228,228 $ 1,166,817 $ 1,156,301 $ -10,516

Governor’s Recommendations FY 2019 – Significant Changes Central Administration – A decrease to the FY 2019 appropriation to revise the $ -1,815 FY 2018 budget adjustment. Community Advocacy and Services – A decrease to the FY 2019 appropriation to revise $ -8,701 the FY 2018 budget adjustment.

Discussion Items FY 2018 Governor’s Budget Adjustment – FY 2018 Governor’s Budget Adjustment – The Governor’s FY 2018 budget adjustment for the Department of Human Rights is a decrease of $21,228. The Governor is allowing the Department discretion as to how the reduction will be implemented. More information on how the reduction will be achieved will be provided once available. Iowa Justice Data Warehouse Application - The Iowa Justice Data Warehouse, a central repository of justice statistics, is planning to provide a Web-based application, Easy Access, which will be used to share aggregate adult and juvenile criminal justice data with the public. The Criminal Juvenile Justice Planning Division is under the purview of the Justice System Appropriations Subcommittee.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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DEPARTMENT OF INSPECTIONS AND APPEALS Overview and Funding History

Agency Overview: The Department of Inspections and Appeals (DIA) is a regulatory agency charged with protecting the health, safety, and well-being of Iowans. The DIA consists of four major divisions: the Administration Division, the Administrative Hearings Division, the Health Facilities Division, and the Investigations Division. The Food and Consumer Safety Bureau, Social and Charitable Gambling Unit, and Targeted Small Business (TSB) Certification Program are located in the Administration Division. The DIA also includes five administrative units: the Child Advocacy Board, the Employment Appeal Board, the Hospital Licensing Board, the Iowa Racing and Gaming Commission, and the State Public Defender. The State Public Defender is funded through the Justice System Appropriations Subcommittee and is not discussed in this section.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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General Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Inspections and Appeals, Department of Inspections and Appeals, Dept. of Administration Division $ 524,632 $ 516,234 $ 511,559 $ -4,675 Administrative Hearings Division 653,276 631,520 625,808 -5,712 Investigations Division 2,475,820 2,393,368 2,371,799 -21,569 Health Facilities Division 4,899,541 4,727,300 4,684,724 -42,576 Employment Appeal Board 40,619 39,266 38,912 -354 Child Advocacy Board 2,578,968 2,493,081 2,470,615 -22,466 Food and Consumer Safety 573,934 554,821 549,799 -5,022 Total Inspections and Appeals, Department of $ 11,746,790 $ 11,355,590 $ 11,253,216 $ -102,374

Governor’s Recommendations FY 2019 – Significant Changes

Administration Division – A decrease to update the base to the Governor’s $ -4,675 recommended FY 2018 revised level. Administrative Hearings Division – A decrease to update the base to the Governor’s $ -5,712 recommended FY 2018 revised level. Investigations Division – A decrease to update the base to the Governor’s recommended $ -21,569 FY 2018 revised level. Health Facilities Division – A decrease to update the base to the Governor’s $ -42,576 recommended FY 2018 revised level. Employment Appeal Board – A decrease to update the base to the Governor’s $ -354 recommended FY 2018 revised level. Child Advocacy Board – A decrease to update the base to the Governor’s recommended $ -22,466 FY 2018 revised level. Food and Consumer Safety – A decrease to update the base to the Governor’s $ -5,022 recommended FY 2018 revised level.

Other Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Inspections and Appeals, Department of Inspections and Appeals, Dept. of DIA - RUTF $ 1,623,897 $ 1,623,897 $ 1,623,897 $ 0 Racing Commission Gaming Regulation (Riverboat) - GRF $ 6,194,499 $ 6,194,499 $ 6,194,499 $ 0 Total Inspections and Appeals, Department of $ 7,818,396 $ 7,818,396 $ 7,818,396 $ 0

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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Discussion Items FY 2018 Governor’s Budget Adjustment – The Governor’s FY 2018 budget adjustment for the Department of Inspections and Appeals is a reduction of $102,374. The Governor is allowing the Office discretion as to how the reduction will be implemented. More information on how the reduction will be achieved will be provided once available. Sports Betting – In anticipation of a U.S. Supreme Court ruling on Christie vs. National Collegiate Athletic Association in the spring or early summer of 2018, national discussion has turned to the legalization of sports betting as a form of gambling. The Subcommittee may be interested in discussing what potential legal, fiscal, and social effects the legalization of sports betting would have on the regulatory duties of the Racing and Gaming Commission and Iowa’s current gaming industry.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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DEPARTMENT OF MANAGEMENT

Overview and Funding History Agency Overview: The Department of Management (DOM) is the planning and budgeting agency within the Executive Branch. The Director of the DOM serves as the Governor’s chief financial advisor.

Five-Year Funding History

$3.0

$2.5

$2.0

$1.5

Millions Other Funds $1.0

$0.5 General Fund $0.0 Actual Actual Actual Estimated Gov. Rec. FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

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General Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Management, Department of Management, Dept. of Department Operations $ 2,510,018 $ 2,510,018 $ 2,487,389 $ -22,629 Total Management, Department of $ 2,510,018 $ 2,510,018 $ 2,487,389 $ -22,629

Governor’s Recommendations FY 2019 – Significant Changes Operations – A decrease to the FY 2019 appropriation to match the FY 2018 budget $ -22,629 adjustment.

Other Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Management, Department of Management, Dept. of DOM Operations - RUTF $ 56,000 $ 56,000 $ 56,000 $ 0 Total Management, Department of $ 56,000 $ 56,000 $ 56,000 $ 0

Discussion Item FY 2018 Governor’s Budget Adjustment – The Governor’s FY 2018 budget adjustment for the Department of Management is a decrease of $22,629. The Governor is allowing the Office discretion as to how the reduction will be implemented. More information on how the reduction will be achieved will be provided once available.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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IOWA PUBLIC INFORMATION BOARD Overview and Funding History Agency Overview: The Iowa Public Information Board was created by SF 430 (Public Information Board Act) during the 2012 Legislative Session to provide an alternative for complaint proceedings regarding open meetings and public records laws. The Board consists of nine members appointed by the Governor and confirmed by the Senate. Prior to establishment of the Board, complaints relating to the open meetings and public records laws were handled by different agencies in the State. The Office of Ombudsman handled many of these cases. In addition, some cases were handled by the Attorney General’s Office, as well as internally by local entities. The Board began meeting in July 2012 to organize, develop administrative rules, and identify staffing needs and budget requirements. The Board received a General Fund appropriation and became operational in July 2013.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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General Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Public Information Board Public Information Board Iowa Public Information Board $ 273,198 $ 323,198 $ 339,343 $ 16,145 Total Public Information Board $ 273,198 $ 323,198 $ 339,343 $ 16,145

Governor’s Recommendations FY 2019 – Significant Changes Iowa Public Information Board – An increase to hire in-house legal counsel for the $16,145 Board.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

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DEPARTMENT OF REVENUE Overview and Funding History

Agency Overview: The Department of Revenue (IDR) is comprised of five divisions, including: Tax Management, Property Tax, Internal Services, Technology and Information Management, and Tax Policy and Communications. The Department of Revenue collects all taxes in Iowa that are required by law. The Department also provides taxpayers with information that supports tax filing and payments.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

28 Administration and Regulation Appropriations Subcommittee

General Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Revenue, Department of Revenue, Dept. of Printing Cigarette Stamps $ 1,382 $ 124,652 $ 124,652 $ 0 Operations 16,588,753 15,692,753 15,549,996 -142,757 Tobacco Reporting Requirements 18,416 17,525 17,525 0 Total Revenue, Department of $ 16,608,551 $ 15,834,930 $ 15,692,173 $ -142,757

Governor’s Recommendations FY 2019 – Significant Changes Operations – A decrease to the FY 2019 appropriation to match the FY 2018 budget $ -142,757 adjustment.

Other Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Revenue, Department of Revenue, Dept. of Motor Fuel Tax Admin - MVFT $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 0 Total Revenue, Department of $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 0

Discussion Items FY 2018 Governor’s Budget Adjustment – The Governor’s FY 2018 budget adjustment for the Department of Revenue is a decrease of $142,757. The Governor is allowing the Department discretion as to how the reduction will be implemented. Combating Tax Fraud – As the options to file individual and corporate income taxes online increase, the Department continues see a rise in the reporting of identity theft and tax fraud. Combating these crimes through increased security measures remains a priority for the Department, and the Subcommittee may want to ask for an update on the Department’s efforts to reduce fraud occurrences across the State.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

29 Administration and Regulation Appropriations Subcommittee

SECRETARY OF STATE

Overview and Funding History Agency Overview: The Office of the Secretary of State was created in 1857 in Article IV, Section 22 of the Iowa Constitution. The duties of the Office are spelled out in Iowa Code chapter 9. The Office also coordinates and supervises elections and maintains and operates the Voter Registration Program.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

30 Administration and Regulation Appropriations Subcommittee

General Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Secretary of State, Office of the Secretary of State Administration and Elections $ 1,425,518 $ 2,125,518 $ 2,125,518 $ 0 Business Services 1,425,518 1,371,292 1,339,767 -31,525 Total Secretary of State, Office of the $ 2,851,036 $ 3,496,810 $ 3,465,285 $ -31,525

Governor’s Recommendations FY 2019 – Significant Changes Business Services – A decrease in funding to revise the FY 2019 appropriation to match $ -31,525 the FY 2018 base after the Governor’s recommended FY 2018 deappropriation.

Other Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Secretary of State, Office of the Secretary of State Address Confidentiality Program - ACRF $ 120,400 $ 120,400 $ 120,400 $ 0 Total Secretary of State, Office of the $ 120,400 $ 120,400 $ 120,400 $ 0

Discussion Items FY 2018 Governor’s Budget Adjustment – The Governor’s FY 2018 budget adjustment for the Office of the Secretary of State is a decrease of $31,525. The Governor is recommending this decrease in funding be implemented in the Business Services line item of the Office’s budget appropriation. More information on how the reduction will be achieved will be provided once available. Implementation of HF 516 (Secretary of State, Election Integrity Act) – For FY 2018, the General Assembly appropriated an increase of $700,000 in the Administration and Elections line item under the Secretary of State’s budget pursuant to HF 640 (FY 2018 Administration and Regulation Appropriations Act). Language in SF 516 (FY 2018 Standing Appropriations Act) declared that the $700,000 increase to the Office was sufficient for the implementation of Iowa Code section 48A.10A (relating to voter identification cards) as described in HF 516. As of November 30, 2017, a vendor for printing and mailing voter ID cards has been selected. Diamond Communication Solutions has been chosen to mail an estimated 123,000 cards at a total cost of $86,000 (approximately $0.70 per card). The Subcommittee may want an update on the distribution of the voter ID cards, and any other questions regarding the implementation of HF 516. Technology Project – The Governor is recommending a new appropriation of $1,050,000 from the Technology Reinvestment Fund for FY 2019 for various technology projects.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

31 Administration and Regulation Appropriations Subcommittee

TREASURER OF STATE Overview and Funding History

Agency Overview: The position of Treasurer of State was created in 1857 by Article IV, Section 22 of the Iowa Constitution. The Treasurer is elected by a statewide popular vote and serves a four-year term. The duties and responsibilities of the Office are specified in Iowa Code chapter 12. The Treasurer of State provides financial services to the State of Iowa by maintaining records of the receipts and disbursements in the State treasury. The Treasurer is responsible for reporting the bonding activities of all political subdivisions and agencies and makes recommendations to the General Assembly and the Governor on modifications to the bonding authority.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

32 Administration and Regulation Appropriations Subcommittee

General Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Treasurer of State, Office of Treasurer of State Treasurer - General Office $ 1,067,296 $ 1,026,698 $ 1,017,442 $ -9,256 Total Treasurer of State, Office of $ 1,067,296 $ 1,026,698 $ 1,017,442 $ -9,256

Governor’s Recommendations FY 2019 – Significant Changes General Office – A decrease in funding to revise the FY 2019 appropriation to match the $ -9,256 FY 2018 base after the Governor’s recommended FY 2018 deappropriation.

Other Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Treasurer of State, Office of Treasurer of State I-3 Expenses - RUTF $ 93,148 $ 93,148 $ 93,148 $ 0 Total Treasurer of State, Office of $ 93,148 $ 93,148 $ 93,148 $ 0

Discussion Item FY 2018 Governor’s Budget Adjustment – The Governor’s FY 2018 budget adjustment for the Office of the Treasurer of State totals $9,256. The Governor is allowing the Office discretion as to how the reduction will be implemented. More information on how the reduction will be achieved will be provided once available.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

33 Administration and Regulation Appropriations Subcommittee

IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM Overview and Funding History

Agency Overview: The Iowa Public Employees’ Retirement System (IPERS) administers the retirement benefits for many of Iowa’s public employees. Iowa’s public employers use IPERS benefits to attract and retain qualified public personnel in public service. The benefits help public employees care for themselves during retirement.

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

34 Administration and Regulation Appropriations Subcommittee

Other Fund Recommendations

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Iowa Public Employees' Retirement System IPERS Administration Administration - IPERS $ 17,686,968 $ 17,988,567 $ 17,988,567 $ 0 Total Iowa Public Employees' Retirement Syste $ 17,686,968 $ 17,988,567 $ 17,988,567 $ 0

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

35 Administration and Regulation Appropriations Subcommittee

Comparison to Other States Full-Time Equivalent (FTE) State Government Employees The Book of States reports the number of full-time equivalent State Employees (FTE) per 100,000 (FTE) state government employees Population for all states. The chart shows the 1,800.0 number of FTE employees per 1,600.0 100,000 state residents based on 1,400.0 the 2015 Census estimate. Using 1,200.0 the number of FTE employees per 100,000 population creates a ratio 1,000.0 that can be used to compare 800.0 different states. Compared to the 600.0 surrounding states, South Dakota 400.0 has the most state employees 200.0 relative to the population served, 0.0 and Illinois has the fewest. Iowa ranks third.

LSA Publications The Legislative Services Agency (LSA) has issued the following Issue Reviews that relate to the Administration and Regulation Appropriations Subcommittee: Overview of Iowa Public Pension Systems Iowa’s Craft Beer Industry Building Maintenance on State Facilities

LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected] Christin Mechler (515.250.0458) [email protected]

Administration and Regulation Appropriations Subcommittee | LSA – Fiscal Services Division

Appendix A

General Fund Tracking

37 General Fund Appropriations

The following information provides an explanation of the columns of the General Fund appropriation report.

 (1) Actual FY 2017. These are the final year‐end General Fund appropriation amounts for FY 2017. The numbers incorporate any applicable supplemental appropriations and deappropriations, salary adjustment allocations, and adjustments to standing unlimited appropriations. Reversions are not deducted from the appropriation amounts.  (2) Estimated FY 2018. These are the FY 2018 appropriations enacted during the 2017 Legislative Session after any applicable item vetoes by the Governor.  (3) Gov Rec Adj. FY 2018. These are the Governor’s recommended appropriation adjustments to FY 2018 General Fund appropriations. Under the Governor’s recommendation, departments would be given discretion as to where reductions would be made.  (4) Gov Rec FY 2018. This column represents the total FY 2018 appropriations with the Governor’s adjustments incorporated.  (5) Gov Rec FY 2019. This column represents the Governor’s recommended General Fund appropriations for FY 2019.  (6) Gov Rec vs Est FY 2018. This shows the difference between the Governor’s FY 2019 recommendations (Column 5) and Estimated FY 2018 (Column 2).  (7) Gov Rec FY19 vs Gov Rec FY18. This shows the difference between the Governor’s FY 2019 recommendations (Column 5) and the FY 2018 appropriations with the Governor’s recommended adjustments (Column 4).

38 Administration and Regulation General Fund

Actual Estimated Gov Rec Adj. Gov Rec Gov Rec Gov Rec vs Gov Rec FY19 vs FY 2017 FY 2018 FY 2018 FY 2018 FY 2019 Est FY 2018 Gov Rec FY18 (1) (2) (3) (4) (5) (6) (7)

Administrative Services, Department of Administrative Services Operations$ 3,872,647 $ 3,629,496 $ 0 $ 3,629,496 $ 3,566,936 $ -62,560 $ -62,560 Utilities 2,509,649 2,447,360 451,871 2,899,231 2,899,231 451,871 0 Terrace Hill Operations 385,933 386,660 0 386,660 386,660 0 0 Adminstrative Services 0 0 -62,560 -62,560 0 0 62,560 Total Administrative Services, Department of $ 6,768,229 $ 6,463,516 $ 389,311 $ 6,852,827 $ 6,852,827 $ 389,311 $ 0

Auditor of State Auditor of State Auditor of State - General Office $ 929,617 $ 894,255 $ -8,062 $ 886,193 $ 886,193 $ -8,062 $ 0 Total Auditor of State $ 929,617 $ 894,255 $ -8,062 $ 886,193 $ 886,193 $ -8,062 $ 0

Ethics and Campaign Disclosure Board, Iowa Campaign Finance Disclosure Ethics & Campaign Disclosure Board$ 547,501 $ 547,501 $ 0 $ 547,501 $ 597,501 50,000$ $ 50,000 Total Ethics and Campaign Disclosure Board, Iowa $ 547,501 $ 547,501 $ 0 $ 547,501 $ 597,501 50,000$ $ 50,000

Commerce, Department of Administration Department of Commerce$ 0 $ 0 $ -12,433 $ -12,433 $ 0 0$ $ 12,433 Alcoholic Beverages Alcoholic Beverages Operations $ 1,201,153 $ 1,005,461 $ 0 $ 1,005,461 $ 996,391 $ -9,070 $ -9,070 Professional Licensing and Reg. Professional Licensing Bureau$ 443,655 $ 373,626 $ 0 $ 373,626 $ 370,263 $ -3,363 $ -3,363 Total Commerce, Department of $ 1,644,808 $ 1,379,087 $ -12,433 $ 1,366,654 $ 1,366,654 $ -12,433 $ 0

Governor/Lt. Governor's Office Governor's Office Presidential Electors$ 651 $ 0 $ 0 $ 0 $ 0 0$ $ 0 Governor's/Lt. Governor's Office 2,160,842 2,074,842 -20,888 2,053,954 2,053,954 -20,888 0 Terrace Hill Quarters 92,631 92,070 0 92,070 92,070 0 0 Governor's Office Transition 0 150,000 -150,000 0 0 -150,000 0 Total Governor/Lt. Governor's Office $ 2,254,124 $ 2,316,912 $ -170,888 $ 2,146,024 $ 2,146,024 $ -170,888 $ 0

39 Administration and Regulation General Fund

Actual Estimated Gov Rec Adj. Gov Rec Gov Rec Gov Rec vs Gov Rec FY19 vs FY 2017 FY 2018 FY 2018 FY 2018 FY 2019 Est FY 2018 Gov Rec FY18 (1) (2) (3) (4) (5) (6) (7)

Drug Control Policy, Governor's Office of Office of Drug Control Policy Operations$ 237,333 $ 228,305 $ -2,058 $ 226,247 $ 226,247 $ -2,058 $ 0 Total Drug Control Policy, Governor's Office of $ 237,333 $ 228,305 $ -2,058 $ 226,247 $ 226,247 $ -2,058 $ 0

Human Rights, Department of Human Rights, Dept. of Central Administration$ 211,824 $ 201,233 $ 0 $ 201,233 $ 199,418 $ -1,815 $ -1,815 Community Advocacy and Services 1,016,404 965,584 0 965,584 956,883 -8,701 -8,701 Department of Human Rights 0 0 -21,228 -21,228 0 0 21,228 Total Human Rights, Department of $ 1,228,228 $ 1,166,817 $ -21,228 $ 1,145,589 $ 1,156,301 $ -10,516 $ 10,712

Inspections and Appeals, Department of Inspections and Appeals, Dept. of Administration Division $ 524,632 $ 516,234 $ 0 $ 516,234 $ 511,559 $ -4,675 $ -4,675 Administrative Hearings Division 653,276 631,520 0 631,520 625,808 -5,712 -5,712 Investigations Division 2,475,820 2,393,368 0 2,393,368 2,371,799 -21,569 -21,569 Health Facilities Division 4,899,541 4,727,300 0 4,727,300 4,684,724 -42,576 -42,576 Employment Appeal Board 40,619 39,266 0 39,266 38,912 -354 -354 Child Advocacy Board 2,578,968 2,493,081 0 2,493,081 2,470,615 -22,466 -22,466 Food and Consumer Safety 573,934 554,821 0 554,821 549,799 -5,022 -5,022 Inspections and Appeals 0 0 -102,374 -102,374 0 0 102,374 Total Inspections and Appeals, Department of $ 11,746,790 $ 11,355,590 $ -102,374 $ 11,253,216 $ 11,253,216 $ -102,374 $ 0

Management, Department of Management, Dept. of Department Operations$ 2,510,018 $ 2,510,018 $ -22,629 $ 2,487,389 $ 2,487,389 $ -22,629 $ 0 Total Management, Department of $ 2,510,018 $ 2,510,018 $ -22,629 $ 2,487,389 $ 2,487,389 $ -22,629 $ 0

Public Information Board Public Information Board Iowa Public Information Board$ 273,198 $ 323,198 $ 0 $ 323,198 $ 339,343 16,145$ $ 16,145 Total Public Information Board $ 273,198 $ 323,198 $ 0 $ 323,198 $ 339,343 16,145$ $ 16,145

40 Administration and Regulation General Fund

Actual Estimated Gov Rec Adj. Gov Rec Gov Rec Gov Rec vs Gov Rec FY19 vs FY 2017 FY 2018 FY 2018 FY 2018 FY 2019 Est FY 2018 Gov Rec FY18 (1) (2) (3) (4) (5) (6) (7)

Revenue, Department of Revenue, Dept. of Printing Cigarette Stamps$ 1,382 $ 124,652 $ 0 $ 124,652 $ 124,652 0$ $ 0 Operations 16,588,753 15,692,753 -142,757 15,549,996 15,549,996 -142,757 0 Tobacco Reporting Requirements 18,416 17,525 0 17,525 17,525 0 0 Total Revenue, Department of $ 16,608,551 $ 15,834,930 $ -142,757 $ 15,692,173 $ 15,692,173 $ -142,757 $ 0

Secretary of State, Office of the Secretary of State Administration and Elections $ 1,425,518 $ 2,125,518 $ 0 $ 2,125,518 $ 2,125,518 0$ $ 0 Business Services 1,425,518 1,371,292 0 1,371,292 1,339,767 -31,525 -31,525 Secretary of State 0 0 -31,525 -31,525 0 0 31,525 Total Secretary of State, Office of the $ 2,851,036 $ 3,496,810 $ -31,525 $ 3,465,285 $ 3,465,285 $ -31,525 $ 0

Treasurer of State, Office of Treasurer of State Treasurer - General Office$ 1,067,296 $ 1,026,698 $ -9,256 $ 1,017,442 $ 1,017,442 $ -9,256 $ 0 Total Treasurer of State, Office of $ 1,067,296 $ 1,026,698 $ -9,256 $ 1,017,442 $ 1,017,442 $ -9,256 $ 0

Total Administration and Regulation $ 48,666,729 $ 47,543,637 $ -133,899 $ 47,409,738 $ 47,486,595 $ -57,042 $ 76,857

Appendix B

Other Funds Tracking

42 Other Fund Appropriations

The following information provides an explanation of the columns of the Other Fund appropriation report.

• (1) Actual FY 2017. These are the final year-end General Fund appropriation amounts for FY 2017. The numbers incorporate any applicable supplemental appropriations and deappropriations, salary adjustment allocations, and adjustments to standing unlimited appropriations. Reversions are not deducted from the appropriation amounts. • (2) Estimated FY 2018. These are the FY 2018 appropriations enacted during the 2017 Legislative Session after any applicable item vetoes by the Governor. • (3) Gov Rec FY 2019. This column represents the Governor’s recommended General Fund appropriations for FY 2019. • (4) Gov Rec vs Est FY 2018. This shows the difference between the Governor’s FY 2019 recommendations (Column 3) and Estimated FY 2018 (Column 2).

43 Administration and Regulation Other Funds

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Commerce, Department of Banking Division Banking Division - CMRF$ 10,499,790 $ 11,145,778 $ 11,145,778 $ 0 Credit Union Division Credit Union Division - CMRF$ 1,869,256 $ 1,869,256 $ 2,204,256 $ 335,000 Insurance Division Insurance Division - CMRF$ 5,485,889 $ 5,485,889 $ 5,485,889 $ 0 Utilities Division Utilities Division - CMRF$ 9,210,405 $ 9,040,405 $ 8,560,405 $ -480,000 Professional Licensing and Reg. Field Auditor - Housing Trust Fund$ 62,317 $ 62,317 $ 62,317 $ 0 Total Commerce, Department of $ 27,127,657 $ 27,603,645 $ 27,458,645 $ -145,000

Inspections and Appeals, Department of Inspections and Appeals, Dept. of DIA - RUTF$ 1,623,897 $ 1,623,897 $ 1,623,897 $ 0 Racing Commission Gaming Regulation (Riverboat) - GRF$ 6,194,499 $ 6,194,499 $ 6,194,499 $ 0 Total Inspections and Appeals, Department of $ 7,818,396 $ 7,818,396 $ 7,818,396 $ 0

Management, Department of Management, Dept. of DOM Operations - RUTF$ 56,000 $ 56,000 $ 56,000 $ 0 Total Management, Department of $ 56,000 $ 56,000 $ 56,000 $ 0

Revenue, Department of Revenue, Dept. of Motor Fuel Tax Admin - MVFT$ 1,305,775 $ 1,305,775 $ 1,305,775 $ 0 Total Revenue, Department of $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 0

Secretary of State, Office of the Secretary of State Address Confidentiality Program - ACRF $ 120,400 $ 120,400 $ 120,400 $ 0 Total Secretary of State, Office of the $ 120,400 $ 120,400 $ 120,400 $ 0

44 Administration and Regulation Other Funds

Actual Estimated Gov Rec Gov Rec vs FY 2017 FY 2018 FY 2019 Est FY 2018 (1) (2) (3) (4)

Treasurer of State, Office of Treasurer of State I-3 Expenses - RUTF$ 93,148 $ 93,148 $ 93,148 $ 0 Total Treasurer of State, Office of $ 93,148 $ 93,148 $ 93,148 $ 0

Total Administration and Regulation $ 54,208,344 $ 54,985,931 $ 54,840,931 $ -145,000

Appendix C

FTE Position Tracking

46 Explanation of FTE Position Data

The following is an explanation of the Full-Time Equivalent (FTE) position information provided on the following tables. The columns of FTE data represent different points in time that the numbers were compiled. For additional information on the State’s FTE positions, see the Issue Review entitled FY 2017 FTE Positions and Personnel Costs.

(1) Actual FY 2017. This data represents the actual FTE utilization calculated at the close of the fiscal year. The FTE usage is calculated by taking the actual hours worked during the fiscal year and dividing the number by 2,080 hours. For example, if a department has budgeted a full-time position (equating to 1.0 FTE) and this position is vacant for six months of the fiscal year, at the close of the fiscal year, the calculation of the actual FTE would be 0.5 (1,040 ÷ 2,080 = 0.5). The calculation of the actual FTE factors out the portion of the FTE that was vacant during the fiscal year.

(2) Estimated FY 2018. This data represents the estimated FTE positions that were budgeted by the departments at the beginning of FY 2018 and incorporates any revisions that would have been made to the budget by the departments through (approximately) December 2017. Changes to the estimates can occur for a variety of reasons. For example, if departments are not provided funding for salary adjustment to cover the costs of funding collective bargaining contracts, the departments will often reduce the number of FTE positions in order to cover costs.

(3) Gov Rec FY 2019. This is the Governor’s recommendation for FY 2019 FTE positions.

(4) Gov Rec vs Est FY 2018. Represents the difference between the Governor’s recommended FTE positions for FY 2019 and the most recent estimates for FY 2018.

(5) Bill Number. Denotes nonappropriated FTE positions by “NONAPPR.” These FTE positions are not subject to an appropriated cap.

47 Administration and Regulation FTE Positions

Actual Estimated Gov Rec Gov Rec vs Bill FY 2017 FY 2018 FY 2019 Est FY 2018 Number (1) (2) (3) (4) (5)

Administrative Services, Department of Administrative Services Operations 49.34 49.47 50.37 0.90 Utilities 1.00 1.00 1.00 0.00 Terrace Hill Operations 4.49 5.07 5.07 0.00 Personnel Development Seminars 2.29 2.88 2.88 0.00 NONAPPR Health Insurance Administration Fund 3.84 4.00 4.00 0.00 NONAPPR I/3 18.22 21.85 21.85 0.00 NONAPPR Centralized Purchasing - Administration 16.57 17.55 17.55 0.00 NONAPPR Vehicle Dispatcher Revolving Fund 5.98 2.00 2.00 0.00 NONAPPR Motor Pool Revolving Fund 2.30 1.80 0.80 -1.00 NONAPPR Self Insurance/Risk Management 0.20 0.20 0.20 0.00 NONAPPR Mail Services Revolving Fund 8.94 9.40 9.40 0.00 NONAPPR Human Resources Revolving Fund 51.61 56.57 56.20 -0.37 NONAPPR Facility & Support Revolving Fund 54.74 61.95 61.45 -0.50 NONAPPR Worker's Compensation Insurance Fund 2.01 2.00 2.00 0.00 NONAPPR Administrative Services 221.55 235.74 234.77 -0.97 State Accounting Trust Accounts DNR/SPOC Insurance Trust 0.00 1.00 0.00 -1.00 NONAPPR Total Administrative Services, Department of 221.55 236.74 234.77 -1.97

Auditor of State Auditor of State Auditor of State - General Office 104.63 103.00 103.00 0.00 Total Auditor of State 104.63 103.00 103.00 0.00

Ethics and Campaign Disclosure Board, Iowa Campaign Finance Disclosure Ethics & Campaign Disclosure Board 6.02 6.00 6.00 0.00 Total Ethics and Campaign Disclosure Board, Iowa 6.02 6.00 6.00 0.00

Chief Information Officer, Office of the Chief Information Officer, Office of the Office of Chief Information Officer 114.46 131.25 131.25 0.00 NONAPPR Total Chief Information Officer, Office of the 114.46 131.25 131.25 0.00

48 Administration and Regulation FTE Positions

Actual Estimated Gov Rec Gov Rec vs Bill FY 2017 FY 2018 FY 2019 Est FY 2018 Number (1) (2) (3) (4) (5)

Commerce, Department of Alcoholic Beverages Alcoholic Beverages Operations 16.34 16.90 16.90 0.00 Tobacco Compliance Employee Training 4.23 4.25 4.25 0.00 NONAPPR Liquor Control Act Fund 56.99 68.35 68.35 0.00 NONAPPR Alcoholic Beverages 77.56 89.50 89.50 0.00 Professional Licensing and Reg. Professional Licensing Bureau 10.17 10.00 10.00 0.00 Banking Division Banking Division - CMRF 73.07 80.00 80.00 0.00 Credit Union Division Credit Union Division - CMRF 12.40 14.00 15.00 1.00 Insurance Division Insurance Division - CMRF 94.72 114.85 116.85 2.00 Insurance Division Education Fund 0.74 0.50 1.00 0.50 NONAPPR Insurance Division Regulatory 0.92 1.15 1.15 0.00 NONAPPR Settlement Account 1.00 1.00 1.50 0.50 NONAPPR Insurance Division 97.38 117.50 120.50 3.00 Utilities Division Dual Party Relay Service 0.54 0.60 0.60 0.00 NONAPPR Utilities Division - CMRF 56.72 67.50 67.50 0.00 Utilities Division 57.27 68.10 68.10 0.00 Total Commerce, Department of 327.85 379.10 383.10 4.00

Governor/Lt. Governor's Office Governor's Office Governor's/Lt. Governor's Office 21.43 20.55 20.55 0.00 Terrace Hill Quarters 1.81 1.93 1.93 0.00 Total Governor/Lt. Governor's Office 23.24 22.48 22.48 0.00

49 Administration and Regulation FTE Positions

Actual Estimated Gov Rec Gov Rec vs Bill FY 2017 FY 2018 FY 2019 Est FY 2018 Number (1) (2) (3) (4) (5)

Drug Control Policy, Governor's Office of Office of Drug Control Policy Operations 4.01 4.50 4.00 -0.50 Total Drug Control Policy, Governor's Office of 4.01 4.50 4.00 -0.50

Human Rights, Department of Human Rights, Dept. of Central Administration 5.35 5.51 5.51 0.00 Community Advocacy and Services 7.29 6.49 6.49 0.00 Weatherization - D.O.E. 6.09 5.36 5.36 0.00 NONAPPR Justice Assistance Grants 6.16 6.45 5.87 -0.58 NONAPPR Juvenile Justice Action Grants 0.92 1.16 1.16 0.00 NONAPPR Low Income Energy Assistance 2.36 2.23 2.23 0.00 NONAPPR CSBG - Community Action Agency 4.62 4.42 4.42 0.00 NONAPPR Disability Donations & Grants 1.15 1.08 1.08 0.00 NONAPPR Total Human Rights, Department of 33.93 32.70 32.12 -0.58

Inspections and Appeals, Department of Inspections and Appeals, Dept. of Administration Division 13.48 13.65 13.65 0.00 Administrative Hearings Division 21.71 23.00 23.00 0.00 Investigations Division 46.04 53.00 53.00 0.00 Health Facilities Division 104.43 109.00 109.00 0.00 Employment Appeal Board 11.04 11.00 11.00 0.00 Child Advocacy Board 28.49 27.38 27.38 0.00 Indian Gaming Monitoring Fund 1.02 1.05 1.05 0.00 NONAPPR Amusement Devices Special Fund 1.75 1.80 1.80 0.00 NONAPPR Food and Consumer Safety 28.00 28.50 28.50 0.00 Inspections and Appeals, Dept. of 255.97 268.38 268.38 0.00 Racing Commission Gaming Regulation (Riverboat) - GRF 48.06 62.10 50.10 -12.00 Total Inspections and Appeals, Department of 304.03 330.48 318.48 -12.00

50 Administration and Regulation FTE Positions

Actual Estimated Gov Rec Gov Rec vs Bill FY 2017 FY 2018 FY 2019 Est FY 2018 Number (1) (2) (3) (4) (5)

Management, Department of Management, Dept. of Department Operations 20.66 20.00 20.00 0.00 Total Management, Department of 20.66 20.00 20.00 0.00

Iowa Public Employees' Retirement System IPERS Administration Administration - IPERS 79.66 88.13 88.13 0.00 Total Iowa Public Employees' Retirement System 79.66 88.13 88.13 0.00

Public Information Board Public Information Board Iowa Public Information Board 2.35 3.00 3.00 0.00 Total Public Information Board 2.35 3.00 3.00 0.00

Revenue, Department of Revenue, Dept. of Tax Gap Collections 97.29 149.46 149.46 0.00 NONAPPR Operations 183.25 152.54 152.54 0.00 Total Revenue, Department of 280.54 302.00 302.00 0.00

Lottery Authority, Iowa Lottery Authority Lottery Fund 108.44 110.00 110.00 0.00 NONAPPR Total Lottery Authority, Iowa 108.44 110.00 110.00 0.00

51 Administration and Regulation FTE Positions

Actual Estimated Gov Rec Gov Rec vs Bill FY 2017 FY 2018 FY 2019 Est FY 2018 Number (1) (2) (3) (4) (5)

Secretary of State, Office of the Secretary of State SOS Technology Modernization Fund 0.00 4.00 5.50 1.50 NONAPPR Administration and Elections 12.60 12.60 11.50 -1.10 Business Services 13.77 13.60 13.50 -0.10 Address Confidentiality Program - ACRF 0.00 1.00 1.00 0.00 NONAPPR Total Secretary of State, Office of the 26.37 31.20 31.50 0.30

Treasurer of State, Office of Treasurer of State Treasurer - General Office 24.98 29.00 28.80 -0.20 Total Treasurer of State, Office of 24.98 29.00 28.80 -0.20

Total Administration and Regulation 1,682.70 1,829.58 1,818.63 -10.95

Bill Totals NONAPPR 575.38 676.31 675.36 -0.95 5027JA 1,107.32 1,153.27 1,143.27 -10.00

Appendix D

Historical Appropriations FY 2010 – Gov. Rec. FY 2019

Note: The historical FTE report contains both appropriated and nonappropriated FTE positions to show total FTE usage.

53 Administration and Regulation General Fund

Actual Actual Actual Actual Actual Actual Actual Actual Estimated Gov Rec FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Administrative Services, Department of Administrative Services Operations$ 4,814,309 $ 4,467,583 $ 4,020,344 $ 4,020,344 $ 4,067,924 $ 4,067,924 $ 4,067,924 $ 3,872,647 $ 3,629,496 $ 3,566,936 Utilities 3,127,085 3,126,547 2,626,460 2,676,460 2,658,909 2,568,909 3,018,909 2,509,649 2,447,360 2,899,231 Terrace Hill Operations 0 263,329 405,914 405,914 405,914 405,914 405,914 385,933 386,660 386,660 I3 Distribution 0 0 3,277,946 3,277,946 0 0 0 0 0 0 Iowa Building Operations 0 0 995,535 995,535 0 0 0 0 0 0 Technology Procurement 0 2,113,169 0 0 0 0 0 0 0 0 Total Administrative Services, Department of $ 7,941,394 $ 9,970,628 $ 11,326,199 $ 11,376,199 $ 7,132,747 $ 7,042,747 $ 7,492,747 $ 6,768,229 $ 6,463,516 $ 6,852,827

Auditor of State Auditor of State Auditor of State - General Office $ 814,921 $ 904,193 $ 905,468 $ 905,468 $ 914,506 $ 944,506 $ 944,506 $ 929,617 $ 894,255 $ 886,193 Total Auditor of State $ 814,921 $ 904,193 $ 905,468 $ 905,468 $ 914,506 $ 944,506 $ 944,506 $ 929,617 $ 894,255 $ 886,193

Ethics and Campaign Disclosure Board, Iowa Campaign Finance Disclosure Ethics & Campaign Disclosure Board$ 470,700 $ 371,910 $ 475,000 $ 490,000 $ 490,335 $ 550,335 $ 550,335 $ 547,501 $ 547,501 $ 597,501 Total Ethics and Campaign Disclosure Board, Iowa $ 470,700 $ 371,910 $ 475,000 $ 490,000 $ 490,335 $ 550,335 $ 550,335 $ 547,501 $ 547,501 $ 597,501

Commerce, Department of Alcoholic Beverages Alcoholic Beverages Operations $ 1,806,444 $ 1,449,887 $ 1,220,391 $ 1,220,391 $ 1,220,391 $ 1,220,391 $ 1,220,391 $ 1,201,153 $ 1,005,461 $ 996,391 Banking Division Financial Literacy$ 0 $ 0 $ 0 $ 100,000 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Insurance Division Senior Health Insurance Information Program $ 47,028 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Professional Licensing and Reg. Professional Licensing Bureau $ 810,498 $ 644,825 $ 600,353 $ 600,353 $ 601,537 $ 601,537 $ 601,537 $ 443,655 $ 373,626 $ 370,263 Total Commerce, Department of $ 2,663,970 $ 2,094,712 $ 1,820,744 $ 1,920,744 $ 1,821,928 $ 1,821,928 $ 1,821,928 $ 1,644,808 $ 1,379,087 $ 1,366,654

Telecommunications and Tech Commission Iowa Communications Network Regional Telecom Councils$ 0 $ 0 $ 0 $ 992,913 $ 992,913 $ 0 $ 0 $ 0 $ 0 $ 0 Total Telecommunications and Tech Commission $ 0 $ 0 $ 0 $ 992,913 $ 992,913 $ 0 $ 0 $ 0 $ 0 $ 0

54 Administration and Regulation General Fund

Actual Actual Actual Actual Actual Actual Actual Actual Estimated Gov Rec FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Governor/Lt. Governor's Office Governor's Office Presidential Electors$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 651 $ 0 $ 0 Governor's/Lt. Governor's Office 2,064,471 1,972,752 2,288,025 2,194,914 2,196,455 2,196,455 2,196,455 2,160,842 2,074,842 2,053,954 Terrace Hill Quarters 394,291 127,075 0 93,111 93,111 93,111 93,111 92,631 92,070 92,070 Administrative Rules Coordinator 127,167 122,829 0 0 0 0 0 0 0 0 Governor's Office Transition 0 0 0 0 0 0 0 0 150,000 0 National Governor's Association 70,783 70,783 0 0 0 0 0 0 0 0 State-Federal Relations 41,958 40,832 0 0 0 0 0 0 0 0 Governor's Office $ 2,698,670 $ 2,334,271 $ 2,288,025 $ 2,288,025 $ 2,289,566 $ 2,289,566 $ 2,289,566 $ 2,254,124 $ 2,316,912 $ 2,146,024 Governor Elect Expenses Governor Elect Expenses$ 0 $ 10,000 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Total Governor/Lt. Governor's Office $ 2,698,670 $ 2,344,271 $ 2,288,025 $ 2,288,025 $ 2,289,566 $ 2,289,566 $ 2,289,566 $ 2,254,124 $ 2,316,912 $ 2,146,024

Drug Control Policy, Governor's Office of Office of Drug Control Policy Operations$ 313,531 $ 346,213 $ 290,000 $ 240,000 $ 241,134 $ 241,134 $ 241,134 $ 237,333 $ 228,305 $ 226,247 Total Drug Control Policy, Governor's Office of $ 313,531 $ 346,213 $ 290,000 $ 240,000 $ 241,134 $ 241,134 $ 241,134 $ 237,333 $ 228,305 $ 226,247

Human Rights, Department of Human Rights, Dept. of Central Administration$ 274,773 $ 205,636 $ 206,103 $ 206,103 $ 224,184 $ 224,184 $ 224,184 $ 211,824 $ 201,233 $ 199,418 Community Advocacy and Services 0 1,120,915 1,028,077 1,028,077 1,028,077 1,028,077 1,028,077 1,016,404 965,584 956,883 Individual Development Accounts 0 0 0 100,000 0 0 0 0 0 0 Asian and Pacific Islanders 120,087 0 0 0 0 0 0 0 0 0 Deaf Services 340,913 0 0 0 0 0 0 0 0 0 Persons with Disabilities 187,408 0 0 0 0 0 0 0 0 0 Latino Affairs 160,290 0 0 0 0 0 0 0 0 0 Status of Women 284,295 0 0 0 0 0 0 0 0 0 Status of African Americans 150,116 0 0 0 0 0 0 0 0 0 Status of Native Americans 4,817 0 0 0 0 0 0 0 0 0 Total Human Rights, Department of $ 1,522,699 $ 1,326,551 $ 1,234,180 $ 1,334,180 $ 1,252,261 $ 1,252,261 $ 1,252,261 $ 1,228,228 $ 1,166,817 $ 1,156,301

55 Administration and Regulation General Fund

Actual Actual Actual Actual Actual Actual Actual Actual Estimated Gov Rec FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Inspections and Appeals, Department of Inspections and Appeals, Dept. of Administration Division $ 1,804,510 $ 1,629,656 $ 1,527,740 $ 248,409 $ 545,242 $ 545,242 $ 545,242 $ 524,632 $ 516,234 $ 511,559 Administrative Hearings Division 609,585 587,493 528,753 528,753 678,942 678,942 678,942 653,276 631,520 625,808 Investigations Division 1,307,666 1,240,626 1,168,639 1,168,639 2,573,089 2,573,089 2,573,089 2,475,820 2,393,368 2,371,799 Health Facilities Division 2,011,845 3,787,852 3,555,328 3,917,666 5,092,033 5,092,033 5,092,033 4,899,541 4,727,300 4,684,724 Employment Appeal Board 46,318 44,746 42,215 42,215 42,215 42,215 42,215 40,619 39,266 38,912 Child Advocacy Board 2,628,330 2,678,008 2,680,290 2,680,290 2,680,290 2,680,290 2,680,290 2,578,968 2,493,081 2,470,615 Food and Consumer Safety 0 0 0 1,279,331 1,279,331 1,279,331 1,279,331 573,934 554,821 549,799 Inspections and Appeals, Dept. of $ 8,408,254 $ 9,968,381 $ 9,502,965 $ 9,865,303 $ 12,891,142 $ 12,891,142 $ 12,891,142 $ 11,746,790 $ 11,355,590 $ 11,253,216 Racing Commission Pari-Mutuel Regulation$ 2,637,614 $ 2,495,376 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Riverboat Regulation 3,034,862 3,078,100 0 0 0 0 0 0 0 0 Racing Commission $ 5,672,476 $ 5,573,476 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Total Inspections and Appeals, Department of $ 14,080,730 $ 15,541,857 $ 9,502,965 $ 9,865,303 $ 12,891,142 $ 12,891,142 $ 12,891,142 $ 11,746,790 $ 11,355,590 $ 11,253,216

Management, Department of Management, Dept. of Department Operations$ 2,730,360 $ 1,993,328 $ 2,393,998 $ 2,393,998 $ 2,550,220 $ 2,550,220 $ 2,550,220 $ 2,510,018 $ 2,510,018 $ 2,487,389 Grants Enterprise Management 0 170,670 0 0 0 0 0 0 0 0 Total Management, Department of $ 2,730,360 $ 2,163,998 $ 2,393,998 $ 2,393,998 $ 2,550,220 $ 2,550,220 $ 2,550,220 $ 2,510,018 $ 2,510,018 $ 2,487,389

Public Information Board Public Information Board Iowa Public Information Board$ 0 $ 0 $ 0 $ 0 $ 350,000 $ 350,000 $ 350,000 $ 273,198 $ 323,198 $ 339,343 Total Public Information Board $ 0 $ 0 $ 0 $ 0 $ 350,000 $ 350,000 $ 350,000 $ 273,198 $ 323,198 $ 339,343

Rebuild Iowa Office Rebuild Iowa Office Rebuild Iowa Office$ 178,449 $ 472,361 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Total Rebuild Iowa Office $ 178,449 $ 472,361 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

56 Administration and Regulation General Fund

Actual Actual Actual Actual Actual Actual Actual Actual Estimated Gov Rec FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Revenue, Department of Revenue, Dept. of Printing Cigarette Stamps$ 107,529 $ 124,392 $ 124,652 $ 120,041 $ 120,262 $ 124,325 $ 118,509 $ 1,382 $ 124,652 $ 124,652 Operations 22,729,219 18,625,258 17,659,484 17,659,484 17,880,839 17,880,839 17,880,839 16,588,753 15,692,753 15,549,996 Tobacco Reporting Requirements 19,591 19,591 18,416 18,416 18,416 18,416 18,416 18,416 17,525 17,525 Revenue Examiners 0 315,801 0 0 0 0 0 0 0 0 State Debt Coordinator 300,000 0 0 0 0 0 0 0 0 0 Total Revenue, Department of $ 23,156,339 $ 19,085,042 $ 17,802,552 $ 17,797,941 $ 18,019,517 $ 18,023,580 $ 18,017,764 $ 16,608,551 $ 15,834,930 $ 15,692,173

Secretary of State, Office of the Secretary of State Administration and Elections $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,425,518 $ 2,125,518 $ 2,125,518 Business Services 0 0 0 0 0 0 2,896,699 1,425,518 1,371,292 1,339,767 Operations 2,895,585 2,892,261 2,895,585 2,895,585 2,896,699 2,896,699 0 0 0 0 Total Secretary of State, Office of the $ 2,895,585 $ 2,892,261 $ 2,895,585 $ 2,895,585 $ 2,896,699 $ 2,896,699 $ 2,896,699 $ 2,851,036 $ 3,496,810 $ 3,465,285

Treasurer of State, Office of Treasurer of State Treasurer - General Office$ 854,289 $ 854,265 $ 854,289 $ 854,289 $ 1,084,392 $ 1,084,392 $ 1,084,392 $ 1,067,296 $ 1,026,698 $ 1,017,442 Watershed Improvement Fund 0 0 0 3,000,000 0 0 0 0 0 0 Total Treasurer of State, Office of $ 854,289 $ 854,265 $ 854,289 $ 3,854,289 $ 1,084,392 $ 1,084,392 $ 1,084,392 $ 1,067,296 $ 1,026,698 $ 1,017,442

Total Administration and Regulation $ 60,321,637 $ 58,368,262 $ 51,789,005 $ 56,354,645 $ 52,927,360 $ 51,938,510 $ 52,382,694 $ 48,666,729 $ 47,543,637 $ 47,486,595

57 Administration and Regulation Other Funds

Actual Actual Actual Actual Actual Actual Actual Actual Estimated Gov Rec FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Administrative Services, Department of Administrative Services DAS Operations - FRRF$ 100,000 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Terrace Hill Operations - CRF 0 168,494 0 0 0 0 0 0 0 0 Autism Coverage - UST 0 140,000 0 0 0 0 0 0 0 0 Medication Therapy Management - UST 0 543,000 0 0 0 0 0 0 0 0 Total Administrative Services, Department of $ 100,000 $ 851,494 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Commerce, Department of Banking Division Banking Division - CMRF$ 8,662,670 $ 8,814,932 $ 8,851,670 $ 9,098,170 $ 9,167,235 $ 9,317,235 $ 9,667,235 $ 10,499,790 $ 11,145,778 $ 11,145,778 Credit Union Division Credit Union Division - CMRF$ 1,727,995 $ 1,722,097 $ 1,727,995 $ 1,792,995 $ 1,794,256 $ 1,794,256 $ 1,869,256 $ 1,869,256 $ 1,869,256 $ 2,204,256 Insurance Division Insurance Division - CMRF$ 4,881,216 $ 4,914,534 $ 4,983,244 $ 4,983,244 $ 5,032,989 $ 5,099,989 $ 5,325,889 $ 5,485,889 $ 5,485,889 $ 5,485,889 Insurance Division Operations - CMRF 0 54,999 0 0 0 0 0 0 0 0 Insurance Information Exchange - UST 0 147,000 0 0 0 0 0 0 0 0 Insurance Division $ 4,881,216 $ 5,116,533 $ 4,983,244 $ 4,983,244 $ 5,032,989 $ 5,099,989 $ 5,325,889 $ 5,485,889 $ 5,485,889 $ 5,485,889 Utilities Division Utilities Division - CMRF$ 8,256,654 $ 8,149,457 $ 8,173,069 $ 8,173,069 $ 8,179,405 $ 8,329,405 $ 8,560,405 $ 9,210,405 $ 9,040,405 $ 8,560,405 Professional Licensing and Reg. Field Auditor - Housing Trust Fund$ 62,317 $ 62,317 $ 62,317 $ 62,317 $ 62,317 $ 62,317 $ 62,317 $ 62,317 $ 62,317 $ 62,317 Total Commerce, Department of $ 23,590,852 $ 23,865,336 $ 23,798,295 $ 24,109,795 $ 24,236,202 $ 24,603,202 $ 25,485,102 $ 27,127,657 $ 27,603,645 $ 27,458,645

Human Rights, Department of Human Rights, Dept. of Public Safety Advisory Board - UST$ 0 $ 140,000 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Total Human Rights, Department of $ 0 $ 140,000 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

58 Administration and Regulation Other Funds

Actual Actual Actual Actual Actual Actual Actual Actual Estimated Gov Rec FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Inspections and Appeals, Department of Inspections and Appeals, Dept. of DIA - RUTF$ 1,623,897 $ 1,623,897 $ 1,623,897 $ 1,623,897 $ 1,623,897 $ 1,623,897 $ 1,623,897 $ 1,623,897 $ 1,623,897 $ 1,623,897 Medicaid Fraud Annual Conference - MFF 0 0 0 0 6,500 0 0 0 0 0 Health Facilities - MFF 0 0 650,000 286,661 0 0 0 0 0 0 EBT Investigations - MFF 0 119,070 119,070 119,070 0 0 0 0 0 0 Dependent Adult - MFF 0 885,262 885,262 885,262 0 0 0 0 0 0 Boarding Homes - MFF 0 119,480 119,480 119,480 0 0 0 0 0 0 Dependent Adult Abuse - MFF 0 250,000 250,000 250,000 0 0 0 0 0 0 Assisted Living - MFF 0 1,339,527 1,339,527 1,339,527 0 0 0 0 0 0 DIA Asst Living/Adult Day Care - SLTF 1,339,527 0 0 0 0 0 0 0 0 0 DIA Health Facility - FRRF 400,000 0 0 0 0 0 0 0 0 0 Inspections and Appeals, Dept. of $ 3,363,424 $ 4,337,236 $ 4,987,236 $ 4,623,897 $ 1,630,397 $ 1,623,897 $ 1,623,897 $ 1,623,897 $ 1,623,897 $ 1,623,897 Racing Commission Pari-Mutuel Regulation GRF$ 0 $ 0 $ 2,628,519 $ 3,062,765 $ 3,068,492 $ 3,068,492 $ 0 $ 0 $ 0 $ 0 Gaming Regulation (Riverboat) - GRF 0 0 3,194,244 3,045,719 3,045,719 3,045,719 6,194,499 6,194,499 6,194,499 6,194,499 Socioeconomic Gambling Study - GRF 0 0 0 0 125,000 0 0 0 0 0 Exchange Wagering Study - GRF 0 0 0 0 0 0 50,000 0 0 0 Racing Commission $ 0 $ 0 $ 5,822,763 $ 6,108,484 $ 6,239,211 $ 6,114,211 $ 6,244,499 $ 6,194,499 $ 6,194,499 $ 6,194,499 Total Inspections and Appeals, Department of $ 3,363,424 $ 4,337,236 $ 10,809,999 $ 10,732,381 $ 7,869,608 $ 7,738,108 $ 7,868,396 $ 7,818,396 $ 7,818,396 $ 7,818,396

Management, Department of Management, Dept. of DOM Operations - RUTF$ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000 DOM Operations - FRRF 200,000 0 0 0 0 0 0 0 0 0 DOM Operations - CRF 0 260,000 0 0 0 0 0 0 0 0 Total Management, Department of $ 256,000 $ 316,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000

Revenue, Department of Revenue, Dept. of Motor Fuel Tax Admin - MVFT$ 1,305,775 $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 1,305,775 Total Revenue, Department of $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 1,305,775 $ 1,305,775

59 Administration and Regulation Other Funds

Actual Actual Actual Actual Actual Actual Actual Actual Estimated Gov Rec FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Secretary of State, Office of the Secretary of State Redistricting - IowAccess$ 0 $ 0 $ 75,000 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Address Confidentiality Program - ACRF 0 0 0 0 0 0 94,600 120,400 120,400 120,400 Total Secretary of State, Office of the $ 0 $ 0 $ 75,000 $ 0 $ 0 $ 0 $ 94,600 $ 120,400 $ 120,400 $ 120,400

Treasurer of State, Office of Treasurer of State I-3 Expenses - RUTF$ 93,148 $ 93,148 $ 93,148 $ 93,148 $ 93,148 $ 93,148 $ 93,148 $ 93,148 $ 93,148 $ 93,148 Total Treasurer of State, Office of $ 93,148 $ 93,148 $ 93,148 $ 93,148 $ 93,148 $ 93,148 $ 93,148 $ 93,148 $ 93,148 $ 93,148

Iowa Public Employees' Retirement System IPERS Administration Administration - IPERS $ 18,001,480 $ 17,606,229 $ 17,686,968 $ 17,686,968 $ 17,686,968 $ 15,686,968 $ 17,686,968 $ 17,686,968 $ 17,988,567 $ 17,988,567 Total Iowa Public Employees' Retirement System $ 18,001,480 $ 17,606,229 $ 17,686,968 $ 17,686,968 $ 17,686,968 $ 15,686,968 $ 17,686,968 $ 17,686,968 $ 17,988,567 $ 17,988,567

Total Administration and Regulation $ 46,710,679 $ 48,515,218 $ 53,825,185 $ 53,984,067 $ 51,247,701 $ 49,483,201 $ 52,589,989 $ 54,208,344 $ 54,985,931 $ 54,840,931

60 Administration and Regulation FTE Positions

Actual Actual Actual Actual Actual Actual Actual Actual Estimated Gov Rec FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Administrative Services, Department of Administrative Services Operations 87.33 73.80 71.30 65.47 59.08 54.19 50.26 49.34 49.47 50.37 Utilities 0.96 0.99 1.00 1.00 1.00 1.00 0.94 1.00 1.00 1.00 Terrace Hill Operations 0.00 0.00 3.96 4.06 3.93 4.07 4.09 4.49 5.07 5.07 Terrace Hill Operations - CRF 0.10 5.38 0.08 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Iowa Building Operations 0.00 0.01 6.65 5.71 0.00 0.00 0.00 0.00 0.00 0.00 Personnel Development Seminars 3.32 1.27 1.28 1.50 1.34 1.86 1.74 2.29 2.88 2.88 IT Operations Revolving Fund 108.20 98.64 100.39 99.65 105.63 0.00 0.00 0.00 0.00 0.00 Health Insurance Administration Fund 0.00 0.00 0.00 0.00 0.00 0.09 3.19 3.84 4.00 4.00 Employee Assistance Program 0.00 0.00 0.00 0.00 0.05 0.19 0.00 0.00 0.00 0.00 I/3 15.20 16.29 18.44 17.64 17.78 17.71 17.90 18.22 21.85 21.85 Centralized Purchasing - Administration 12.91 10.99 12.01 13.88 16.85 17.54 17.59 16.57 17.55 17.55 Vehicle Dispatcher Revolving Fund 9.13 8.41 6.41 9.29 10.12 9.32 8.30 5.98 2.00 2.00 Motor Pool Revolving Fund 2.63 3.11 2.43 2.27 3.18 3.03 2.32 2.30 1.80 0.80 Self Insurance/Risk Management 1.97 0.70 0.77 0.44 0.20 0.20 0.20 0.20 0.20 0.20 Mail Services Revolving Fund 9.21 8.15 8.39 9.15 9.17 9.15 9.18 8.94 9.40 9.40 Human Resources Revolving Fund 47.00 42.29 44.29 46.74 53.79 52.12 51.31 51.61 56.57 56.20 Facility & Support Revolving Fund 92.86 85.60 73.00 66.74 62.40 56.62 56.75 54.74 61.95 61.45 Worker's Compensation Insurance Fund 0.00 0.00 0.00 0.00 0.00 0.06 1.90 2.01 2.00 2.00 Building Energy Mgmt Fund 0.00 0.00 0.03 1.54 0.00 0.00 0.00 0.00 0.00 0.00 Iowa Power Fund 0.00 0.00 2.62 2.15 0.00 0.00 0.00 0.00 0.00 0.00 Administrative Services 390.82 355.62 353.05 347.23 344.53 227.15 225.67 221.55 235.74 234.77 State Accounting Trust Accounts DNR/SPOC Insurance Trust 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 Total Administrative Services, Department of 390.82 355.62 353.05 347.23 344.53 227.15 225.67 221.55 236.74 234.77

Auditor of State Auditor of State Auditor of State - General Office 103.70 99.64 102.22 100.61 100.50 102.90 105.73 104.63 103.00 103.00 Total Auditor of State 103.70 99.64 102.22 100.61 100.50 102.90 105.73 104.63 103.00 103.00

Ethics and Campaign Disclosure Board, Iowa Campaign Finance Disclosure Ethics & Campaign Disclosure Board 5.36 3.68 4.87 4.96 4.97 5.86 6.05 6.02 6.00 6.00 Total Ethics and Campaign Disclosure Board, Iowa 5.36 3.68 4.87 4.96 4.97 5.86 6.05 6.02 6.00 6.00

61 Administration and Regulation FTE Positions

Actual Actual Actual Actual Actual Actual Actual Actual Estimated Gov Rec FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Chief Information Officer, Office of the Chief Information Officer, Office of the Office of Chief Information Officer 0.00 0.00 0.00 0.00 2.76 111.76 117.06 114.46 131.25 131.25 Total Chief Information Officer, Office of the 0.00 0.00 0.00 0.00 2.76 111.76 117.06 114.46 131.25 131.25

Commerce, Department of Alcoholic Beverages Alcoholic Beverages Operations 23.35 20.06 16.05 16.12 16.31 14.80 13.04 16.34 16.90 16.90 Tobacco Compliance Employee Training 0.00 0.00 0.00 0.09 3.90 3.42 2.90 4.23 4.25 4.25 Liquor Control Act Fund 40.78 49.46 58.99 63.41 62.07 58.70 58.41 56.99 68.35 68.35 Alcoholic Beverages 64.13 69.52 75.05 79.63 82.28 76.91 74.36 77.56 89.50 89.50 Professional Licensing and Reg. Professional Licensing Bureau 11.60 11.17 9.64 9.25 10.22 9.97 10.48 10.17 10.00 10.00 Real Estate Education Fund 0.81 0.75 1.60 1.30 0.31 0.00 0.00 0.00 0.00 0.00 Professional Licensing and Reg. 12.41 11.92 11.24 10.55 10.53 9.97 10.48 10.17 10.00 10.00 Banking Division Banking Division - CMRF 67.87 70.53 68.48 66.98 65.23 67.23 69.19 73.07 80.00 80.00 Credit Union Division Credit Union Division - CMRF 14.05 14.03 13.25 13.97 12.80 12.86 13.17 12.40 14.00 15.00 Insurance Division Insurance Division - CMRF 94.23 92.62 96.37 92.50 94.52 90.81 90.07 94.72 114.85 116.85 Insurance Division Education Fund 0.00 0.00 0.17 0.69 0.70 0.69 0.71 0.74 0.50 1.00 Insurance Division Regulatory 0.00 0.00 0.44 1.63 0.84 0.89 0.96 0.92 1.15 1.15 Settlement Account 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 1.00 1.50 Insurance Division 94.23 92.62 96.98 94.82 96.06 92.39 91.74 97.38 117.50 120.50 Utilities Division Dual Party Relay Service 0.00 0.00 0.00 0.00 0.00 0.00 0.18 0.54 0.60 0.60 Utilities Division 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Utilities Division - CMRF 63.82 64.78 63.23 62.08 62.17 61.31 61.37 56.72 67.50 67.50 Utilities Division 63.85 64.78 63.23 62.08 62.17 61.31 61.55 57.27 68.10 68.10 Total Commerce, Department of 316.54 323.39 328.22 328.04 329.07 320.69 320.50 327.85 379.10 383.10

62 Administration and Regulation FTE Positions

Actual Actual Actual Actual Actual Actual Actual Actual Estimated Gov Rec FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Governor/Lt. Governor's Office Governor's Office Governor's/Lt. Governor's Office 20.19 19.39 24.07 22.80 21.76 20.89 20.41 21.43 20.55 20.55 Terrace Hill Quarters 8.62 1.79 0.11 1.79 1.82 1.82 1.83 1.81 1.93 1.93 Statewide Volunteer Program 1.95 0.74 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Administrative Rules Coordinator 1.83 1.77 0.12 0.00 0.00 0.00 0.00 0.00 0.00 0.00 State-Federal Relations 2.26 1.46 0.12 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total Governor/Lt. Governor's Office 34.85 25.17 24.41 24.59 23.58 22.71 22.23 23.24 22.48 22.48

Drug Control Policy, Governor's Office of Office of Drug Control Policy Operations 7.74 8.03 7.52 4.27 4.01 3.86 4.03 4.01 4.50 4.00 Drug Task Forces 0.10 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total Drug Control Policy, Governor's Office of 7.84 8.03 7.52 4.27 4.01 3.86 4.03 4.01 4.50 4.00

63 Administration and Regulation FTE Positions

Actual Actual Actual Actual Actual Actual Actual Actual Estimated Gov Rec FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Human Rights, Department of Human Rights, Dept. of Central Administration 6.57 4.86 5.28 5.43 5.31 5.45 5.50 5.35 5.51 5.51 Community Advocacy and Services 0.16 10.32 7.14 8.98 8.68 7.51 7.56 7.29 6.49 6.49 Public Safety Advisory Board - UST 0.00 1.31 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Weatherization - D.O.E. 7.51 7.54 7.79 7.39 6.28 6.11 5.94 6.09 5.36 5.36 Justice Assistance Grants 4.86 2.23 3.29 3.48 3.66 3.73 4.31 6.16 6.45 5.87 Juvenile Accountability Block 0.00 0.67 0.31 1.27 1.28 0.71 0.71 0.00 0.00 0.00 Community Grant Fund 0.00 0.02 0.04 0.00 0.03 0.00 0.00 0.00 0.00 0.00 Status of Women Federal Grants 0.98 1.03 0.97 0.49 0.00 0.00 0.00 0.00 0.00 0.00 Juvenile Justice Action Grants 0.00 0.00 0.00 0.00 0.13 0.12 0.57 0.92 1.16 1.16 Low Income Energy Assistance 2.79 3.01 3.00 2.63 2.68 2.67 2.68 2.36 2.23 2.23 Weatherization - HHS (LEAP) 0.00 0.00 0.00 0.00 1.15 0.00 0.50 0.00 0.00 0.00 Juvenile Accountability 0.43 0.12 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 CSBG - Community Action Agency 4.63 4.71 4.26 4.00 4.47 4.93 4.98 4.62 4.42 4.42 Disability Donations & Grants 1.41 1.41 1.31 0.87 0.85 1.60 1.36 1.15 1.08 1.08 Asian and Pacific Islanders 0.97 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Deaf Services 4.21 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Persons with Disabilities 2.93 0.21 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Latino Affairs 0.97 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Status of Women 2.37 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Status of African Americans 1.90 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total Human Rights, Department of 42.69 37.44 34.38 34.54 34.53 32.84 34.13 33.93 32.70 32.12

64 Administration and Regulation FTE Positions

Actual Actual Actual Actual Actual Actual Actual Actual Estimated Gov Rec FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Inspections and Appeals, Department of Inspections and Appeals, Dept. of Administration Division 34.59 35.73 33.76 11.89 13.37 13.13 13.34 13.48 13.65 13.65 Administrative Hearings Division 21.79 22.51 22.96 21.88 21.84 22.50 22.17 21.71 23.00 23.00 Investigations Division 45.79 52.17 53.57 53.29 54.03 52.13 49.74 46.04 53.00 53.00 Health Facilities Division 129.01 121.92 118.95 111.28 103.24 108.27 112.46 104.43 109.00 109.00 Employment Appeal Board 13.42 13.67 13.93 11.03 10.62 10.77 11.06 11.04 11.00 11.00 Child Advocacy Board 39.30 37.05 31.75 31.58 31.21 32.40 31.40 28.49 27.38 27.38 Indian Gaming Monitoring Fund 0.68 0.66 1.05 1.05 1.05 0.99 0.97 1.02 1.05 1.05 Amusement Devices Special Fund 0.00 0.00 0.45 2.55 2.65 2.57 1.83 1.75 1.80 1.80 Food and Consumer Safety 0.00 0.00 0.48 21.28 22.95 23.98 26.63 28.00 28.50 28.50 Inspections and Appeals, Dept. of 284.58 283.71 276.89 265.83 260.96 266.75 269.62 255.97 268.38 268.38 Racing Commission Pari-Mutuel Regulation GRF 0.00 0.00 22.76 23.83 22.83 22.10 0.00 0.00 0.00 0.00 Pari-Mutuel Regulation 24.14 23.40 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Gaming Regulation (Riverboat) - GRF 0.00 0.00 37.52 32.58 32.24 32.50 52.49 48.06 62.10 50.10 Riverboat Regulation 36.46 36.92 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Racing Commission 60.59 60.32 60.27 56.41 55.07 54.59 52.49 48.06 62.10 50.10 Total Inspections and Appeals, Department of 345.17 344.03 337.17 322.25 316.03 321.34 322.11 304.03 330.48 318.48

Management, Department of Management, Dept. of Department Operations 26.36 21.13 21.04 21.06 22.08 21.59 21.16 20.66 20.00 20.00 Total Management, Department of 26.36 21.13 21.04 21.06 22.08 21.59 21.16 20.66 20.00 20.00

Iowa Public Employees' Retirement System IPERS Administration Administration - IPERS 79.18 82.11 80.73 77.58 75.31 76.37 79.78 79.66 88.13 88.13 Total Iowa Public Employees' Retirement System 79.18 82.11 80.73 77.58 75.31 76.37 79.78 79.66 88.13 88.13

65 Administration and Regulation FTE Positions

Actual Actual Actual Actual Actual Actual Actual Actual Estimated Gov Rec FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Public Information Board Public Information Board Iowa Public Information Board 0.00 0.00 0.00 0.00 2.87 2.99 3.03 2.35 3.00 3.00 Total Public Information Board 0.00 0.00 0.00 0.00 2.87 2.99 3.03 2.35 3.00 3.00

Rebuild Iowa Office Rebuild Iowa Office Rebuild Iowa Office 9.95 10.86 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total Rebuild Iowa Office 9.95 10.86 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Revenue, Department of Revenue, Dept. of Tax Gap Collections 38.39 43.81 60.19 59.15 73.63 76.25 78.17 97.29 149.46 149.46 Operations 322.98 262.97 240.80 231.23 203.73 211.98 204.66 183.25 152.54 152.54 Revenue Examiners 0.00 3.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total Revenue, Department of 361.37 310.28 301.00 290.38 277.36 288.23 282.84 280.54 302.00 302.00

Lottery Authority, Iowa Lottery Authority Lottery Fund 106.57 102.61 107.36 109.15 107.24 108.85 107.79 108.44 110.00 110.00 Total Lottery Authority, Iowa 106.57 102.61 107.36 109.15 107.24 108.85 107.79 108.44 110.00 110.00

Secretary of State, Office of the Secretary of State SOS Technology Modernization Fund 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.00 5.50 Administration and Elections 0.00 0.00 0.00 0.00 0.00 0.00 0.00 12.60 12.60 11.50 Business Services 35.05 31.22 30.47 25.32 25.85 24.19 27.21 13.77 13.60 13.50 Address Confidentiality Program - ACRF 0.00 0.00 0.00 0.00 0.00 0.00 0.63 0.00 1.00 1.00 Total Secretary of State, Office of the 35.05 31.22 30.47 25.32 25.85 24.19 27.84 26.37 31.20 31.50

66 Administration and Regulation FTE Positions

Actual Actual Actual Actual Actual Actual Actual Actual Estimated Gov Rec FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Treasurer of State, Office of Treasurer of State Treasurer - General Office 26.13 26.79 28.13 27.13 26.47 25.33 25.22 24.98 29.00 28.80 Total Treasurer of State, Office of 26.13 26.79 28.13 27.13 26.47 25.33 25.22 24.98 29.00 28.80

Total Administration and Regulation 1,891.58 1,782.00 1,760.55 1,717.11 1,697.17 1,696.66 1,705.18 1,682.70 1,829.58 1,818.63

Appendix E

Samples of Budget Schedules 1 and 6

68 The Schedule 1 shows the “decision packages” used by the Executive Schedule 1 Example Branch to arrive at the Department’s annual budget request (dollars and FTE positions) and the Governor’s Fiscal Year recommendations for a particular STATE OF IOWA Fiscal Year 2019 Annual Budget budget unit. a SPECIAL DEPARTMENT: (660) Natural Resources, Department of Department name & budget unit Budget Unit: (542G720001) GF-Natural Resources Operations b Schedule 1 Fiscal Year 2019 Fiscal Year 2019 Department Governor's Rank Description Funding Source Request Recommendations Base Maintain essential services associated with Appropriation 11,299,811 11,299,811 Total appropriation and FTEs natural resource protection, recreation and FTE 1,054.95 1,054.95 preservation.

0001 Adjustment to reflect FY2018 Governor's Appropriation 0 -123,373 recommended deappropriation in FY2019

Fiscal Year 2019 Fiscal Year 2019 Fiscal Year 2018 Department Governor's Total Budget Unit Funding Estimated Request Recommendations Appropriation $ 11,299,811 $ 11,299,811 $ 11,176,438 Base budget and Full Time Total FTE 1,057.95 1,054.95 1,054.95 Equivalent Positions (FTEs)

A Schedule 1 provides a summary of funding available for a Department. The Schedule shows General Fund and total funds plus FTE positions. The Schedule shows, by priority, any changes to current law (or budget).

69 The Schedule 6 shows all of the resources for a Schedule 6 Example particular budget unit, including appropriations, federal funds, etc. STATE OF IOWA Fiscal Year Fiscal Year 2019 Annual Budget SPECIAL DEPARTMENT: (660) Natural Resources, Department of Budget Unit: (542G720001) GF-Natural Resources Operations Schedule 6 Department name & budget unit Fiscal Year 2019 Fiscal Year 2019 b Fiscal Year 2017 Fiscal Year 2018 Department Governor's Actual Estimated Request Recomm Budget unit receipts Resources Appropriations Appropriation $ 12,862,307 $ 11,299,811 $ 11,299,811 $ 11,176,438 Legislative Reductions -1,354,496 0 0 0 Appropriation 11,507,811 11,299,811 11,299,811 11,176,438 Receipts Federal Support 23,056,391 24,451,635 24,451,635 24,451,635 Intra State Receipts 83,357,156 88,636,473 88,636,473 88,636,473 Gov Fund Type Transfers - Other Age 249,915 0 0 0 Refunds & Reimbursements 4,237,993 4,322,275 4,322,275 4,322,275 Unearned Receipts 508,999 490,349 490,349 490,349 111,410,454 117,900,732 117,900,732 117,900,732 Total Resources $ 122,918,265 $ 129,200,543 $ 129,200,543 $ 129,077,170 Full Time Equivalent (FTE) FTE 946.94 1,057.95 1,054.95 1,054.95 Positions Disposition of Resources Personal Services-Salaries $ 87,220,615 $ 90,693,943 $ 90,693,943 $ 90,693,943 Personal Travel In State 550,152 817,415 817,415 817,415 Budget unit expenditures State Vehicle Operation 1,944,598 2,393,599 2,393,599 2,393,599 Depreciation 1,266,280 2,072,366 2,072,366 2,072,366 Personal Travel Out of State 230,257 370,225 370,225 370,225 Office Supplies 301,161 393,181 393,181 393,181 Facility Maintenance Supplies 905,451 973,420 973,420 973,420 Equipment Maintenance Supplies 1,342,955 1,445,576 1,445,576 1,445,576 Professional & Scientific Supplies 19,649 8,400 8,400 8,400 Ag.,Conservation & Horticulture Supp 1,246,476 1,243,070 1,243,070 1,243,070

A Schedule 6 provides a detailed budget for all appropriated accounts or Funds under the control of the Department. Receipts includes the appropriation, the salary adjustment (if applicable), across-the-board reductions, supplemental appropriations, intra-state receipts from other agencies, receipts from local governments, and other receipts such as fees. Expenditures include all expenses related to the operating

budget, such as salary, travel, contracts, etc. Expenditures also include the reversion or balance brought forward.

Budget schedules are available at: https://www.legis.iowa.gov/publications/fiscal/budgetSchedules 70

Appendix F

FY 2017 Year-End Appropriations

71 FY 2017 Appropriation Activity

The following information provides a summary of the FY 2017 General Fund and non-General Fund appropriations for the departments under the purview of the Administration and Regulation Appropriations Subcommittee. Appropriations are adjusted for several factors throughout the fiscal year, including supplemental appropriations, deappropriations, and adjustments to standing appropriations to account for actual expenditures. Other activity associated with appropriated funds include: balances brought forward, transfers, and reversions. The tables show each of the departments’ appropriations and the changes that occurred throughout the fiscal year.

• Original Appropriation: The amounts appropriated from the General Fund in individual appropriation bills during the 2017 Legislative Session. • Adjustment to Standings: These adjustments represent changes that are made to budgeted standing unlimited appropriations for the purpose of balancing out the year-end amount. There are numerous standing unlimited appropriations established in the Code. The exact amount for each of these appropriations is not known until the close of the fiscal year. As the General Assembly develops the annual budget, an estimated amount is included for budgeting purposes. This estimated appropriation is then adjusted to reflect actual expenditures. • Supplemental/Deappropriations: These changes represent the supplemental appropriations and deappropriations enacted during the 2017 Legislative Session. • Salary Adjustment (Other Funds Only) – A few non-General Fund appropriations were authorized to receive appropriation adjustments to fund their salary increases for FY 2017. • Total Net Appropriation: This is the sum of all of the above numbers and represents the final appropriation amount after the above changes were applied. • Balance Brought Forward: Appropriated funds allowed to carry forward from FY 2016 to FY 2017. These funds provided additional spendable dollars for FY 2017. • Appropriation Transfers In and Out: These adjustments represent transferred appropriation spending authority between enacted appropriations. These transfers are usually implemented by the Governor through the authority of Iowa Code section 8.39. • Balance Carry Forward: Appropriated funds that are allowed to carry forward from FY 2017 to FY 2018. Provides additional spendable dollars for FY 2018. • Reversions: These are the unspent appropriated funds that revert back to the fund from which they were appropriated. • Total Appropriation Expended: This number represents the appropriation after all of the above adjustments have been made. The result is the total appropriated funds that were expended in FY 2017.

72 GENERAL FUND APPROPRIATIONS Administration and Regulation Appropriations Subcommittee

Balance Balance Original Adj to Supp & Brought Transfer Transfer Carry Total Total Approp Standing Deapprop Total Approp Forward In Out Forward Reversion Adjustments Expended Administration and Regulation Administrative Services, Department of Administrative Services, Dept. $ 4,046,974 $ 0 $ -174,327 $ 3,872,647 $ 125,944 $ 0 $ 0 $ 0 $ -72,254 $ 53,691 $ 3,926,338 Terrace Hill Operations 403,824 0 -17,891 385,933 6,444 1,700 0 0 -3,324 4,820 390,753 Utilities 2,555,990 0 -46,341 2,509,649 198,397 0 0 -154,374 0 44,023 2,553,672 Administrative Services, Department of Total 7,006,788 0 -238,559 6,768,229 330,785 1,700 0 -154,374 -75,577 102,534 6,870,763 Auditor of State Auditor of State - General Office 939,642 0 -10,025 929,617 0 0 0 0 -473 -473 929,144 Auditor of State Total 939,642 0 -10,025 929,617 0 0 0 0 -473 -473 929,144 Commerce, Department of Alcoholic Beverages Operations 1,214,106 0 -12,953 1,201,153 0 0 0 0 -1,465 -1,465 1,199,688 Professional Licensing Bureau 448,439 0 -4,784 443,655 0 0 0 0 0 0 443,655 Commerce, Department of Total 1,662,545 0 -17,737 1,644,808 0 0 0 0 -1,465 -1,465 1,643,343 Governor/Lt. Governor's Office Governor/Lt. Governor's Office 2,185,143 0 -24,301 2,160,842 79,817 34,731 0 0 -24,468 90,080 2,250,922 Presidential Electors 0 651 0 651 0 0 0 0 0 0 651 Terrace Hill Quarters 92,631 0 0 92,631 0 34,661 0 0 -1 34,660 127,291 Governor/Lt. Governor's Office Total 2,277,774 651 -24,301 2,254,124 79,817 69,392 0 0 -24,469 124,740 2,378,864 Governor's Office of Drug Control Policy Drug Policy Coordinator 239,892 0 -2,559 237,333 0 0 0 0 0 0 237,333 Governor's Office of Drug Control Policy Total 239,892 0 -2,559 237,333 0 0 0 0 0 0 237,333 Human Rights, Department of Community Advocacy and Services 1,022,782 0 -6,378 1,016,404 54,472 0 0 0 -83,525 -29,054 987,350 Human Rights Administration 223,029 0 -11,205 211,824 1,936 0 0 0 -2,501 -565 211,259 Human Rights, Department of Total 1,245,811 0 -17,583 1,228,228 56,408 0 0 0 -86,027 -29,619 1,198,609 Inspections & Appeals, Department of Administration Division 542,434 0 -17,802 524,632 22,265 65,000 0 0 -5,176 82,089 606,721 Administrative Hearings Div. 675,445 0 -22,169 653,276 54,905 0 0 0 -56,321 -1,416 651,860 Child Advocacy Board 2,666,487 0 -87,519 2,578,968 117 0 0 0 -36,900 -36,783 2,542,185 Employment Appeal Board 41,998 0 -1,379 40,619 5,262 0 0 0 -5,399 -138 40,481 Food and Consumer Safety 593,411 0 -19,477 573,934 651 0 0 -269,340 0 -268,689 305,245 Health Facilities Division 5,065,809 0 -166,268 4,899,541 79,046 0 -65,000 0 -179,360 -165,314 4,734,227 Investigations Division 2,559,838 0 -84,018 2,475,820 58,516 0 0 0 -158,384 -99,867 2,375,953 Inspections & Appeals, Department of Total 12,145,422 0 -398,632 11,746,790 220,762 65,000 -65,000 -269,340 -441,540 -490,118 11,256,672 Iowa Ethics & Campaign Disclosure Board Iow a Ethics & Campaign Disclosure Board 547,501 0 0 547,501 2,658 16,080 0 0 -1 18,737 566,238 Iowa Ethics & Campaign Disclosure Board Total 547,501 0 0 547,501 2,658 16,080 0 0 -1 18,737 566,238 Management, Department of Department of Management Operations 2,537,086 0 -27,068 2,510,018 0 0 0 0 -10 -10 2,510,008 Management, Department of Total 2,537,086 0 -27,068 2,510,018 0 0 0 0 -10 -10 2,510,008 Public Information Board Iow a Public Information Board 348,198 0 -75,000 273,198 402 41,093 0 0 -1 41,494 314,692 Public Information Board Total 348,198 0 -75,000 273,198 402 41,093 0 0 -1 41,494 314,692

73 GENERAL FUND APPROPRIATIONS Administration and Regulation Appropriations Subcommittee

Balance Balance Original Adj to Supp & Brought Transfer Transfer Carry Total Total Approp Standing Deapprop Total Approp Forward In Out Forward Reversion Adjustments Expended Revenue, Department of Printing Cigarette Stamps 124,652 -123,271 0 1,382 0 0 0 0 0 0 1,382 Refund Cigarette Stamps 0 0 0 0 0 0 0 0 0 0 0 Revenue, Department of 17,788,753 0 -1,200,000 16,588,753 142,540 0 -128,265 0 -74,946 -60,671 16,528,082 Tobacco Reporting Requirements 18,416 0 0 18,416 0 0 0 0 0 0 18,416 Revenue, Department of Total 17,931,821 -123,271 -1,200,000 16,608,550 142,540 0 -128,265 0 -74,946 -60,671 16,547,879 Secretary of State Elections/Voter Reg 1,440,890 0 -15,372 1,425,518 0 0 0 0 -4 -4 1,425,514 Secretary of State-Business Services 1,440,891 0 -15,373 1,425,518 1,511 0 0 0 -52 1,459 1,426,977 Secretary of State Total 2,881,781 0 -30,745 2,851,036 1,511 0 0 0 -56 1,455 2,852,491 Treasurer of State Treasurer - General Office 1,078,807 0 -11,511 1,067,296 25,543 0 0 0 -45,149 -19,606 1,047,690 Watershed Improvement Fund GF 0 0 0 0 1,623,101 0 0 -612,386 0 1,010,716 1,010,716 Treasurer of State Total 1,078,807 0 -11,511 1,067,296 1,648,644 0 0 -612,386 -45,149 991,109 2,058,405 Administration and Regulation Total $ 50,843,068 $ -122,620 $ -2,053,720 $ 48,666,728 $ 2,483,528 $ 193,265 $ -193,265 $ -1,036,100 $ -749,714 $ 697,714 $ 49,364,442

74 OTHER FUNDS APPROPRIATIONS Administration and Regulation Appropriations Subcommittee

Balance Balance Original Supp & Adj to Brought Carry Total Total Approp Deapprop Standing Salary Adj Total Approp Forward Forward Reversion Adjustments Expended Administration and Regulation Commerce, Department of Commerce Revolving Fund Banking Division $ 10,499,790 $ 0 $ 0 $ 0 $ 10,499,790 $ 0 $ 0 $ -170,643 $ -170,643 $ 10,329,147 Credit Union Division 1,869,256 0 0 0 1,869,256 0 0 -240,606 -240,606 1,628,650 Insurance Division 5,485,889 0 0 0 5,485,889 0 0 -6,551,977 -6,551,977 -1,066,088 Utilities Division 9,210,405 0 0 0 9,210,405 0 -409,628 -1,203,575 -1,613,202 7,597,203 State Housing Trust Fund Housing Improvement Fund Field Auditor 62,317 0 0 0 62,317 0 0 0 0 62,317 Commerce, Department of Total 27,127,657 0 0 0 27,127,657 0 -409,628 -8,166,801 -8,576,429 18,551,228 Inspections & Appeals, Department of Racing and Gaming Revolving Fund Racing and Gaming Operations 6,194,499 0 0 0 6,194,499 0 0 -242,917 -242,917 5,951,582 Road Use Tax Fund DIA - Us e Tax 1,623,897 0 0 0 1,623,897 0 0 0 0 1,623,897 Inspections & Appeals, Department of Total 7,818,396 0 0 0 7,818,396 0 0 -242,917 -242,917 7,575,479 IPERS Administration IPERS Fund IPERS Administration 17,686,968 0 0 0 17,686,968 0 0 -2,198,519 -2,198,519 15,488,449 IPERS Administration Total 17,686,968 0 0 0 17,686,968 0 0 -2,198,519 -2,198,519 15,488,449 Management, Department of Road Use Tax Fund DOM Road Use Tax Fund Appropriation 56,000 0 0 0 56,000 0 0 0 0 56,000 Management, Department of Total 56,000 0 0 0 56,000 0 0 0 0 56,000 Revenue, Department of M VFT-Unapportioned Motor Veh Fuel Tx-Admin Approp 1,305,775 0 0 0 1,305,775 0 0 -629,027 -629,027 676,748 Revenue, Department of Total 1,305,775 0 0 0 1,305,775 0 0 -629,027 -629,027 676,748 Secretary of State Address Confidentiality Revolving Fund Address Confidentiality Program 120,400 0 0 0 120,400 26,972 0 -76,017 -49,046 71,354 Secretary of State Total 120,400 0 0 0 120,400 26,972 0 -76,017 -49,046 71,354 Treasurer of State Road Use Tax Fund Funds for I3 Expenses 93,148 0 0 0 93,148 0 0 0 0 93,148 Treasurer of State Total 93,148 0 0 0 93,148 0 0 0 0 93,148 Administration and Regulation Total $ 54,208,344 $ 0 $ 0 $ 0 $ 54,208,344 $ 26,972 $ -409,628 $ -11,313,282 $ -11,695,938 $ 42,512,406

Appendix G

Federal Funds

76 2017 Competitive Grant Report Report Required by Iowa Code Section 8.9 Iowa Department of Management

Amount Match Funding Funding End FTE's Associated State Agency Title of Application Awarded Amount MOE? Start Date Date with Grant DAS IDNR Biologists 2016 $965,256 $1,447,884 No 9/22/2016 9/30/2018 4.50 ODCP Drug Free Communities $125,000 $125,000 No 9/30/2016 9/29/2017 0.00 ODCP Postconviction Testing of DNA Evidence $632,765 $0 No 10/1/2016 9/30/2018 1.00

ODCP Second Chance State Recidivism Reduction $1,000,000 $300,000 No 10/1/2016 9/30/2017 4.00 ODCP Drug Fee Communities $125,000 $125,000 No 10/1/2017 9/29/2018 0.00

77 2017 Noncompetitive Grant Report Report Required by Iowa Code Section 8.9 Iowa Department of Management

Amount Match Funding Funding End FTE's Associated State Agency Title of Application Awarded Amount MOE? Start Date Date with Grant

COMM Senior Health Insurance Information Program $645,200 $0 Yes 4/1/2017 3/31/2018 0.00 COMM MIPPA $182,701 $0 Yes 9/30/2016 9/29/2017 0.00 COMM MIPPA $169,031 $0 No 9/30/2017 9/29/2018 0.00 DHR Iowa's Title II Formula Grant Project $402,161 $40,000 No 10/1/2016 9/30/2019 0.86 DHR Iowa PREA Compliance Project $6,801 $0 No 10/1/2016 9/30/2017 0.00 Rehabilitation Services - Client Assistance DHR Program (FFY17) $131,917 $0 No 10/1/2016 9/30/2017 1.10 DHR Community Services Block Grant FFY17 $7,634,417 $0 No 10/1/2016 9/30/2018 2.36

DHR Low Income Home Energy Assistance (FFY17) $53,714,858 $0 No 10/1/2016 9/30/2018 2.00

DHR Weatherization Assistance Program (FFY17) $4,871,889 $0 No 4/1/2017 3/31/2018 3.00 Rehabilitation Services - Client Assistance DHR Program (FFY18) $24,885 $0 No 10/1/2017 9/30/2018 1.10

DHR Low Income Home Energy Assistance (FFY18) $47,959,417 $0 No 10/1/2017 9/30/2019 2.00

DHR State of Iowa JJDP Act Formula Grant (Title II) $401,650 $40,165 No 10/1/2017 9/30/2020 0.33 ODCP Residential Substance Abuse Treatment $94,916 $31,639 No 10/1/2016 9/30/2019 0.00 ODCP Coverdell Forensic Science $81,577 $0 No 10/1/2016 9/30/2017 0.00 ODCP Byrne JAG Formula Grant $1,823,729 $0 No 10/1/2016 9/30/2019 0.00

ODCP 2014 Residential Substance Abuse Treatment $78,985 $26,328 No 10/1/2014 9/30/2017 0.00

Appendix H

Budget Unit Briefs

BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 11, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Department of Administrative Services Operations

Overview In 2001, the Governor initiated a review of Executive Branch agencies with the goal of combining four existing service agencies. The Iowa Department of Administrative Services (DAS) was created on July 1, 2003, to manage and coordinate the central support functions of State government with an entrepreneurial, customer-focused approach. In 2014, the Information Technology Enterprise (ITE), which provides technology services for State government, was moved from the DAS to the Office of the Chief Information Officer (OCIO). The Department is organized into five areas: • Core/Finance – The DAS Core is responsible for internal and administrative operations within the Department, including: budgeting, accounts payable, accounts receivable, mail service, the Customer Service Center, legal counsel, legislative liaison, marketing, communications, Customer Council Support, and the Director’s office. Collectively, these functions are known as “shared services” — services that were consolidated at the formation of the DAS. • Human Resources Enterprise (HRE) – Human Resources provides personnel services to Iowa State government, including: qualification of applicants for State jobs, classification, compensation, selection assistance, affirmative action (Equal Employment Opportunity/Diversity Program), workforce planning, performance evaluation, workforce data gathering, reporting and analysis, labor relations, benefits, risk management and leave administration, safety, workers’ compensation and Return to Work, wellness, training and development, and consultation with and advice to State agencies on human resources matters. The Regents Board, Community-Based Corrections, and the State Fair Authority use HRE services on a limited basis. • General Services Enterprise (GSE) – The GSE maintains all Capitol Complex and Ankeny Laboratory buildings, grounds, and monuments; provides statewide architectural and engineering project management services for construction projects; and provides mail services to State agencies. • Central Procurement and Fleet Services Enterprise (CPFSE) – The CPFSE manages procurement activities for most Executive Branch agencies and operates the State’s vehicle fleet. • State Accounting Enterprise (SAE) – The SAE collects and reports financial information and processes financial transactions for all branches of government. The SAE also provides State payroll and oversees the Income Offset Program.

Funding The DAS receives a General Fund appropriation to support its own operations, but this is only a small part of the Department’s total budget. Enterprise services are supported by billings to other State

More Information

Department of Administrative Services: das.iowa.gov LSA Staff Contact: Christin Mechler (515.281.6561) [email protected]

www.legis.iowa.gov80 December 11, 2017 Budget Unit Brief 2

agencies for services received, and those billings account for the bulk of the revenues in the Department’s total budget.

Related Statutes and Administrative Rules Iowa Code chapter 8A Iowa Administrative Code 11

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 11, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Department of Administrative Services — Utilities

Purpose The Utilities appropriation to the Department of Administrative Services (DAS) pays for all utility costs (natural gas, electricity, water, and sewer services) for the buildings on the Capitol Complex, the Iowa Utilities Board Building, Terrace Hill, and the Ankeny Laboratory Facility.

Funding The Utilities budget unit receives a General Fund appropriation. Language in the Administration and Regulation Appropriations Act permits the DAS to carry forward unspent balances for use in future years as a way to address expense fluctuations caused by weather variability. In addition, the DAS participates in energy efficiency projects on the Capitol Complex that are funded by lease-purchases.

Related Statutes and Administrative Rules Iowa Code chapter 8A Iowa Administrative Code 11

More Information

Department of Administrative Services: das.iowa.gov LSA Staff Contact: Christin Mechler (515.281.6561) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 12, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Department of Administrative Services — Terrace Hill Operations

Purpose and History Terrace Hill Operations is the appropriation to the Department of Administrative Services (DAS) to support normal upkeep and routine maintenance of Terrace Hill buildings and grounds. Terrace Hill serves as the Governor’s mansion and is also an historical landmark that is open to the public for tours and special events. There are nine and a half acres of lawn, trees, plantings, and a garden that staff and a crew of volunteers maintain and provide snow removal for during the winter months. Funding Terrace Hill Operations receives an annual General Fund appropriation.

Related Statutes and Administrative Rules Iowa Code chapter 8A Iowa Administrative Code 11

More Information

Department of Administrative Services: das.iowa.gov LSA Staff Contact: Christin Mechler (515.281.6561) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 11, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Auditor of State

Purpose and History The position of Auditor of State was created in 1857 with Article IV, Section 22, of the Constitution of the State of Iowa. The Auditor is elected by popular vote and serves a four-year term. The duties of the Office are spelled out in Iowa Code chapter 11. The mission of the Office of the Auditor of State is to benefit all citizens of Iowa by providing independent audit, review, and other technical services to State and local governments to ensure the effective, economical, businesslike conduct of public activities in a prudent, accountable manner to achieve the intended purposes. The Auditor of State is required to annually make a complete audit of the books, records, and accounts of every department of State government. The Iowa Comprehensive Annual Financial Report (CAFR) and Single Audit Report are audited by the Auditor of State. The Office has the following three divisions: • Administration – Provides management and support services that include fiscal management, data processing, personnel training, recruiting, audit report production, and quality control. • Financial Audit – Prepares annual audits of all State agencies, departments, and certain governmental subdivisions. Provides technical assistance to these entities, private individuals, certified public accounting firms, and other governmental agencies. Performs report and working paper reviews of certified public accountant audits of governmental subdivisions, and conducts reaudits as needed. • Performance Investigation – Conducts performance audits of State agencies and the programs administered. The Division also investigates suspected embezzlement and conducts special studies assigned by the Auditor of State or requested by the General Assembly.

Funding — State General Fund The Office of the Auditor of State receives an annual appropriation from the General Fund to fund costs of conducting audits of State departments that are not statutorily required to reimburse the Office for annual audit costs. The appropriation is used to perform the following audits:

More Information

Auditor of State: auditor.iowa.gov National Association of State Auditors, Comptrollers and Treasurers: nasact.org LSA Staff Contact: Christin Mechler (515.281.6561) [email protected]

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Iowa State Fair Iowa Communications Network Department of Public Defense Attorney General Governor’s Office Department of Public Safety Auditor of State* Department of Human Rights Department of Revenue Department for the Blind Department of Inspections and Secretary of State Appeals Ethics and Campaign Disclosure Office of State/Federal Relations Board Judicial Department Office of Drug Control Policy Civil Rights Commission Judicial Retirement System State Appeal Board Department of Corrections Law Enforcement Academy State Executive Council Department of Cultural Affairs Legislature Treasurer of State Economic Development Authority Department of Management Underground Storage Tank College Student Aid Commission Parole Board Board Iowa Public Television Peace Officers’ Retirement Uniform State Laws Commission System Department on Aging Judicial Districts Public Employment Relations Iowa Centennial Memorial Board Foundation *The annual audit of the Auditor of State is completed by an independent accounting firm.

Other Sources of Revenue In addition to the General Fund appropriation, the Office receives fees for conducting audits and reviews of certain State agencies and governmental subdivisions (see Iowa Code sections 11.20 and 11.21 for subdivision fees). Iowa Code section 11.5B allows the Auditor of State to be reimbursed for costs of conducting audits of the following State agencies and entities: Department of Commerce Department of Education Iowa Public Employees’ Retirement System Department of Human Services Department of Workforce Development Department of Administrative Department of Transportation Services Department of Natural Department of Public Health Resources Board of Regents Department of Agriculture and Offices of the Clerks of the Office of the Chief Information Land Stewardship District Court (Judicial Branch) Officer Iowa Veterans Home Federal financial assistance received by all other departments

Iowa Code section 11.6 requires the finances of specified local governmental subdivisions to be audited annually. Governmental subdivisions have the option to use a Certified Public Accountant (certified by the State of Iowa) or the Auditor of State to conduct the audit. If a governmental subdivision chooses to use the Auditor of State, the Auditor of State will bill the entity to cover the cost of the audit. The Auditor of State is also authorized to charge governmental subdivisions a filing fee for costs associated with filing audits. The filing fee ranges from $100 to $850, depending on the size of the governmental subdivision budget.

Related Statutes and Administrative Rules Iowa Code chapter 11 Iowa Administrative Code 81

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 1, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Iowa Ethics and Campaign Disclosure Board

Overview The Iowa Campaign Finance Disclosure Commission was established in 1973 by the 65th General Assembly in SF 583 (Campaign Disclosure Act). The Commission consisted of five members appointed by the Governor. Commission duties included approving the forms developed by the State Commissioner of Elections; reviewing reports and statements filed by candidates; conducting hearings regarding grievances filed; and reporting violations to the Attorney General and county attorneys in the case of county, city, or school election violations. In 1982, civil penalty authority was enacted by the General Assembly, and fines were assessed to candidates for late filings. In 1993, the Commission’s name was changed to the Iowa Ethics and Campaign Disclosure Board, and the Board was expanded to six members appointed by the Governor and confirmed by the Senate for staggered six-year terms. The Board continues to educate the public, including county auditors and election commissioners, regarding information that is available to candidates for office and political committees and other facets of the election process.

Responsibilities The Board’s current responsibilities include: • Administering State law regarding: • Campaign laws that apply to candidates for State and local office, State and local ballot issues, permissible and impermissible financing of campaigns, use of campaign funds, paid-for-by attributions, and campaign signage. • Ethics laws that apply to candidates for statewide office and officials and employees of the Executive Branch. • Codes of ethics adopted by political subdivisions, if the Board has entered into agreements with the political subdivisions. • Lobbying laws that apply to persons who lobby the Executive Branch, including receiving registrations from lobbyists, reports from clients, and legislative session function registrations and reports. • Complaint investigations from the State Commissioner of Elections about whether a county redistricting plan was drawn for improper political reasons. • Providing advice to political candidates and governmental agencies on: • Campaign laws and the Board’s rules on campaigning. • Ethics laws. The Board investigates complaints, and the county attorney handles the prosecution. The Board’s advice, if followed, constitutes a defense to a complaint.

More Information

Iowa Ethics and Campaign Finance Disclosure Board: www.iowa.gov/ethics LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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• Gift law, conflicts of interest, post-State employment, and use of State resources, along with enforcement. • State lobbying laws and the Board’s rules on Executive Branch lobbying. • Receiving reports and making them available through the Board’s website. These reports include: • Reports regarding dual compensation, consent for sales/leases by regulatory agencies and the Governor’s Office, personal financial disclosure statements, and legislative session function registrations and reports. • Copies of personal disclosure forms filed by Iowa federal elected officials, which are posted on the Board’s website through a link to the Federal Election Commission’s website where the federal reports are posted. • Reports on all gifts and bequests received by an Executive Branch agency (other than a Regents university). The agency must file a summary report with the Legislative Services Agency regarding the gifts and bequests pursuant to Iowa Code section 8.7. • Copies of reports filed with the Internal Revenue Service (IRS) by 527 committees that engage in certain campaign activities in Iowa.

Staffing The Board staff consists of: • The Executive Director (also serves as legal counsel). • Three field auditors responsible for political action committee (PAC), legislative, statewide, and county central audits. • One administrative assistant.

Funding The Board is funded by an annual General Fund appropriation.

Related Statutes and Administrative Rules Iowa Code chapters 68A and 68B Iowa Code sections 331.210A, 714.16 and 8.7 Iowa Administrative Code 351

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division November 30, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Alcoholic Beverages Division

Overview The Iowa Alcoholic Beverages Division (ABD) is part of the Department of Commerce and is responsible for the regulation and control of alcohol in the State of Iowa. Iowa is one of 19 control states that, since the repeal of prohibition, directly controls the sale and distribution of alcoholic beverages based on a three-tier system between distributors, retailers, and consumers. In addition, the Division is responsible for the enforcement of State and federal laws and regulations regarding the sale and use of alcohol and tobacco products. The ABD generates revenue for State and local governments from the net profit from the direct sale of alcohol, liquor license fees, excise tax on beer and wine, and civil penalties levied through administrative sanctions. The ABD transfers all profits to the State General Fund, Executive Branch agencies, and cities and counties to support city, county, and State programs. The Division annually generates over $100.0 million to support State and local programs. The funds are used for substance abuse treatment programs and local programs at the city and county level. The Division transfers additional funds to support Iowa beer and wine promotion. In FY 2016, the ABD produced $330.5 million in profits: $105.7 million was transferred to the State General Fund, $21.9 million was transferred to the State Treasurer as beer and wine tax collections, $3.7 million was remitted to cities and counties, and $429,000 went to native wine and beer economic development. The ABD also transferred $21.3 million to the Department of Public Health (DPH) to administer substance abuse programs.

Iowa Alcoholic Beverages Commission The Commission has five members appointed by the Governor and confirmed by the Senate. Commissioners are appointed for five-year staggered terms and eligible for one five-year reappointment. Commissioners are chosen on the basis of managerial ability and experience as business executives. The Commission acts as a policymaking body and serves in an advisory capacity to the Division administrator. Commissioners may review, affirm, reverse, or amend all actions of the administrator in the wholesale liquor sales operation and in the licensing and regulating of the alcoholic beverages industry.

Facility The facility housing the ABD is located in Ankeny and provides work space for the Division’s administrative staff, regulatory and licensing employees, and warehouse workers. The State liquor

More Information

Alcoholic Beverages Division: abd.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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warehouse is part of the facility and stocks more than 1,600 liquor products for distribution to the State’s 1,300-plus Class E licensees. Weekly online liquor orders are filled at the warehouse, loaded onto tractor-trailers, and delivered by State truck drivers to retailers across Iowa.

Related Statutes and Administrative Rules Iowa Code chapter 123 Iowa Administrative Code 185

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 5, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Professional Licensing Bureau

Background The Professional Licensing Bureau (PLB) is part of the Banking Division of the Department of Commerce. The agency was created in 1986 as a result of statewide agency reorganization. In July 2006, it became a bureau of the Division of Banking. The Bureau oversees: • Accountants • Architects • Engineers and Land Surveyors • Landscape Architects • Real Estate Brokers and Agents • Real Estate Appraisers • Interior Designers The PLB provides support for the boards and commissions that govern each profession. The requirements for examination, licensing and regulation, review and investigation of complaints, licensee discipline, peer review committees, license renewal, and continuing education necessary for renewal are set by the boards and commissions with assistance from the Bureau. There are approximately 32,000 in- state and out-of-state licensees under the Bureau’s purview.

Funding The Professional Licensing Bureau receives an annual General Fund appropriation.

Related Statutes and Administrative Rules Iowa Code chapters 542, 542B, 543B, 543D, 544A, 544B, and 544C Iowa Administrative Code 193, 193A, 193B, 193C, 193D, 193E, 193F, and 193G

More Information

Professional Licensing Bureau, Banking Division, Department of Commerce: plb.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 11, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Governor’s/Lieutenant Governor’s Office

Purpose and History The position of State Governor was created in 1857 by Article IV, section 1, of the Iowa Constitution. The Governor is elected by a statewide popular vote and serves a four-year term. The duties and responsibilities of the Office are specified in Iowa Code chapter 7. The functions of the Governor’s Office consist of the following: • Managing the Executive Branch and implementing policies and programs in accordance with State law. • Preparing and submitting the Governor’s annual legislative program and budget. • Reviewing bills presented to the Governor for signature following final legislative action. • Making required appointments to boards and commissions and the Judiciary. • Working with State departments to provide direction on the desired course of State government. • Responding to and resolving constituent requests for assistance and information. • Fulfilling statutory obligations in the area of executive clemency. • Writing and producing Governor’s proclamations for Iowa citizens and associations. • Supervising the administrative rules promulgation process, coordinating rules review with the Legislative Branch, and assisting in the publication of the Iowa Administrative Code. • Promoting the interests of State government before Congress, federal agencies, national associations, and other organizations. The Office influences the development of national policies affecting State government, business and industry, and citizens. The Office also monitors federal budget policies and promotes initiatives for State government.

Funding – State General Fund The Governor’s Office receives an annual appropriation from the General Fund to fund the majority of the operational cost of the Office.

Related Statutes and Administrative Rules Iowa Code chapter 7 Iowa Const. art IV sec. 1

More Information

Office of the Governor: governor.iowa.gov National Governors Association: www.nga.org/cms/home.html LSA Staff Contact: Christin Mechler (515.281.6561) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 11, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Terrace Hill Quarters

Purpose The Terrace Hill Quarters appropriation provides for staffing and expenses for the overall operation of Terrace Hill National Historic Landmark and Iowa Governor’s Residence, including food preparation and housekeeping services for the Governor and the Governor’s family. The grounds are maintained by the Department of Administrative Services (DAS) through a separate appropriation (Terrace Hill Operations).

Funding The Governor’s Office receives an annual appropriation from the State General Fund for the staffing needs.

More Information

LSA Staff Contact: Christin Mechler (515.281.6561) [email protected]

www.legis.iowa.gov92

BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 1, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Office of Drug Control Policy – Operations

Background The Governor’s Alliance on Substance Abuse (GASA), the predecessor agency to the Governor’s Office of Drug Control Policy (ODCP), was established in 1987 under the jurisdiction of the Department of Public Health (DPH). In 1990, legislative action made GASA an independent agency called the Office of the Drug Enforcement and Abuse Prevention Coordinator, with an overall mission of facilitating coordination among State agencies and resources within the criminal justice/law enforcement system. The ODCP officially came into existence on July 1, 2000, when legislation changed the name and title of the Drug Enforcement and Abuse Prevention Coordinator to the Drug Policy Coordinator.

Operations The ODCP’s mission is to serve as a leader and a catalyst for improving the health and safety of all Iowans by promoting strategic approaches and collaboration to reduce drug use and related crime. The Office has two core functions, with associated services, products, and activities in place to support them. The core functions and services are: • Core Function – Advocacy: In order to enhance coordination and provide leadership and education to improve Iowa’s response to drug use and related crime, the ODCP strategically coordinates efforts among local, State, and federal agencies to efficiently reduce substance abuse and related problems. The Office also works to execute strategies that reduce medicine disuse and abuse and enhance prevention, treatment, and enforcement efforts. This includes prescription drug and opiate drug abuse. • Service – Drug Control Policy Guidelines and Program Coordination: In order to promote evidence-based programs, innovations, and policy changes to reduce the supply of and demand for illegal drugs, the ODCP facilitates program and policy development that is up to date with the changes in the nature and scope of substance abuse and drug manufacturing and distribution. The Office also works to promote a high level of collaboration among State agencies to identify and refine effective drug control policy, and to promote compliance with and enforcement of new Iowa laws. Training and guidance are also provided by the Office to support compliance with Iowa laws regarding the regulation of pseudoephedrine, a key methamphetamine precursor. • Core Function – Community Coordination and Development: With the administration of federal grant funds and other resources that help strengthen local and State drug enforcement and treatment efforts, the ODCP actively works to improve the ability of State and local governments and private partners to enforce drug laws and provide prevention and treatment services. Many of these efforts focus on criminal offenders and center on abuse prevention efforts at the community level.

More Information

Governor’s Office of Drug Control Policy: odcp.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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• Service – Drug Control Program Development and Evaluation: Through performance-based grant resources, the ODCP coordinates drug enforcement efforts across geographic and governmental jurisdictional boundaries to enhance public safety by interdicting illegal drug trafficking efforts in Iowa. Along with the collaborative efforts to investigate drug trafficking, the Office provides infrastructure and resources to support the criminal justice system statewide.

Funding The ODCP is funded by a combination of State General Fund and federal grant moneys.

Related Statutes and Administrative Rules Iowa Code chapter 80E

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 1, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Department of Human Rights — Central Administration

Purpose and History The Department of Human Rights (DHR) receives a General Fund appropriation for Central Administration in the Administration and Regulation Appropriations Act each year. This appropriation funds the centralized administrative operations of the Department. Duties of the Central Administration Division include: • Promoting the services of other DHR divisions/programs among their respective clientele and the general public. • Maintaining fiscal accountability for all funds received by the Department. • Approving and processing personnel transactions and payroll. • Coordinating purchasing activities. • Providing administrative and clerical support. • Promoting cooperative efforts among staff and programs. • Supporting the various divisions in the development of their respective administrative rules. • Assisting in the development, compilation, and dissemination of information to and from the DHR divisions on issues regarding their operations, activities, and special populations they serve. The Iowa DHR includes the following Divisions and Commissions: • Division of Criminal and Juvenile Justice Planning (CJJP) • Division of Community Action Agencies • Division of Community Advocacy and Services (CAS) • Commission of Asian and Pacific Islanders • Commission of Deaf Services • Commission of Latino Affairs • Commission of Native American Affairs • Commission of Persons with Disabilities • Commission on Status of African-Americans • Commission on the Status of Women • Commission on Community Action Agencies

More Information

Department of Human Rights: humanrights.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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Funding The Central Administration Division of the Department of Human Rights receives an annual General Fund appropriation.

Related Statutes and Administrative Rules Iowa Code chapter 216A Iowa Code sections 2.56, 7E.5, 48A.19, 80E.2, 84A.6, 101C.3, 135.109, 225C.23, 232.147, 237.3, 241.3, 303.3C, 35 6.37, 476.20, 476.51, 476.66, 477.5, 541A.1, 622A.7, 622B.1, 622B.4, 692.15, 804.31, and 901B.1 Iowa Administrative Code 421, 427, 428, 429, 431, 433, 434, 435, 436

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 1, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Department of Human Rights — Community Advocacy and Services Division

Overview The Division of Community Advocacy and Services (CAS) is a division within the Department of Human Rights (DHR). The CAS promotes diversity and links underserved and underrepresented persons with government support and/or services. For example, CAS staff offers individualized services that help non- English-speaking persons access interpreting services so they can receive health care; educates private- sector employers on the value of hiring persons with disabilities; and promotes laws and policies to eliminate discrimination and create equity. The Division also offers youth programming promoting gender equality and leadership skills. The CAS oversees eight offices that work together to study issues affecting groups that have a history of being marginalized. Each office administers programs and advocates for policies that support greater success for its service populations. In addition, each office is responsible for collecting and analyzing data regarding these populations. The data assists in determining programming and helps to expand culturally affirmative services throughout State government. The groups served by these offices are: • Asian and Pacific Islanders • Deaf and hearing impaired persons • Latinos • Persons with disabilities • African Americans • Women • Iowa Youth Congress

Funding The Community Advocacy and Services Division receives an annual General Fund appropriation.

Related Statutes and Administrative Rules Iowa Code chapter 216A Iowa Administrative Code 421, 429, 431, 433, 434, 435, and 436

More Information

Department of Human Rights: humanrights.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 5, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Administration Division — Department of Inspections and Appeals

Description The Administration Division of the Department of Inspections and Appeals (DIA) provides centralized support services for the Department. The Director’s Office staff oversees all strategic planning, legislative affairs, administrative rulemaking, personnel, and public information activities for the Department. The Division also includes the Food and Consumer Safety Bureau, Social and Charitable Gambling Program, and the Targeted Small Business (TSB) Certification Program. • Food and Consumer Safety Bureau. The Bureau is responsible for administering and enforcing the Iowa Food Code (Iowa Code chapter 137F) by conducting food safety inspections to prevent foodborne illnesses at grocery stores, restaurants, convenience stores, food processing plants, and mobile food trucks. The Iowa Food Code is based on food safety recommendations developed by the Food and Drug Administration (FDA), in consultation with representatives from the food industry and regulators. The DIA also contracts with local health agencies to conduct inspections. Enacted in May 2016, Senate File 2314 (FY 2017 Administration and Regulation Subcommittee Appropriations Act) amended the process of collecting fees associated with food inspections by permitting the DIA to keep fee revenue collected from inspections completed for FY 2017. Fees collected on behalf of a municipal corporation are not retained by the Department. The Department is required to deposit $800,000 of collected fees into the General Fund and permitted to retain the remainder in its operating budget. The Food and Consumer Safety Bureau also maintains a Restaurant Inspection website where visitors can view or download inspection reports for Iowa food establishments, including restaurants, grocery stores, and convenience stores. • Social and Charitable Gambling Program. This Program administers Iowa Code chapter 99B, to regulate games of skill or chance, raffles, bingo, social gambling, and amusement devices. Qualified organizations may obtain a social or charitable gambling license to conduct fundraising activities benefiting educational, civic, public, charitable, patriotic, or religious purposes. Gambling receipts are subject to Iowa sales tax, including nonprofit organizations. A Social Gambling License authorizes small stakes card and parlor games (such as cribbage, euchre, hearts, checkers, chess, dominoes, etc.) between individuals. When held by a beer or liquor establishment, it also permits sports-betting pools. Enacted in July 2015, Senate File 482 reorganized and modified Iowa Code chapter 99B by eliminating outdated and redundant provisions and increasing prize value allowances in a manner consistent with current social and charitable gambling activities. • Targeted Small Business (TSB) Certification Program. The TSB Certification Program certifies businesses owned, operated, and actively managed by women, minority group members, or persons

More Information

Department of Inspections and Appeals, Administration Division: dia.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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with disabilities. In order to be certified as a TSB, a business must be located in the State of Iowa, operate for profit, average an annual gross income of less than $4.0 million for the last three fiscal years, and be at least 51.0% owned and operated by women, minority groups, service-disabled veterans, or persons with a disability. Certified TSBs are eligible to apply for low-interest loans and equity grants through the Iowa Economic Development Authority (IEDA). Also, State purchasing officers consider TSBs when seeking bids for State-purchased goods and services. • Indian Gaming Compacts. The DIA serves as Iowa’s lead contact for Indian gaming compacts. The Director is authorized to enter into and implement agreements or compacts between the State of Iowa and Native American tribes located in the State as per the authority of the Indian Gaming Regulatory Act (25 U.S.C section 2701 et seq.). This ensures that the agreements or compacts contain provisions intended to implement the policies and objectives of the Indian Gaming Regulatory Act. Iowa has three tribal gaming compacts that were first negotiated in 1992 and authorize casino- type gaming in the State. These compacts are with the Winnebago and Omaha Tribes of Nebraska and the Sac and Fox Tribe of the Mississippi in Iowa.

Funding The Administration Division has a budget of approximately $1.5 million annually that includes a General Fund appropriation, federal support, and governmental transfers.

Related Statutes and Administrative Rules Iowa Code chapters 10A, 99B, and 137F Iowa Administrative Code 481

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 5, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Administrative Hearings Division — Department of Inspections and Appeals

Overview The Administrative Hearings Division is one of four divisions within the Department of Inspections and Appeals. The Division holds contested case hearings involving individuals objecting to an adverse action taken by a State department or agency. During a contested case hearing, individuals may present evidence and testimony to refute the department’s action. An Administrative Law Judge (ALJ) is assigned to conduct the case and hears the facts for the issue in question. At the conclusion of the hearing, the ALJ issues a proposed decision based on the evidence provided. The proposed decision may sustain, reject, or modify the initial action taken by the department or agency. Any party can appeal the proposed decision to the State agency that initiated the action, and the agency can also review a proposed decision on its own motion. The agency has the authority to sustain, reject, or modify the proposed decision. Iowa law and the Department’s administrative rules specify how contested case hearings are conducted. The Division holds contested case hearings that involve suspensions or revocations of driver’s licenses by the Iowa Department of Transportation (DOT), as well as those involving individuals contesting suspension or termination of entitlements by the Iowa Department of Human Services (DHS). In addition to the DOT and the DHS cases, the Division conducts administrative hearings for nearly all State departments and licensing boards. The Department also handles appeals by Iowans who have been denied a permit to acquire firearms or carry weapons, or cases where a permit has been suspended or revoked by the Commissioner of Public Safety or other law enforcement.

Funding The Administrative Hearings Division receives an annual General Fund appropriation.

Related Statutes and Administrative Rules Iowa Code chapter 10A Iowa Administrative Code 481

More Information

Administrative Hearings Division – Department of Inspections and Appeals: dia.iowa.gov/ahd LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 1, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Investigations Division — Department of Inspections and Appeals

Overview The Investigations Division is one of four divisions in the Department of Inspections and Appeals (DIA). The Division investigates alleged fraud in the State’s public assistance programs, including the theft of warrants and Medicaid fraud by health care providers, and conducts professional practice investigations on behalf of State licensing boards. The Division also reviews applications for public assistance to prevent the issuance of funds to ineligible individuals, and initiates recovery actions to recoup overpayments when individuals fraudulently receive public assistance. The Division performs expenditure audits of local Department of Human Services (DHS) offices to determine eligibility for federal fund reimbursement for operating expenses. These DHS audits ensure compliance with applicable State and federal funding requirements. The Division also conducts health care audits at residential care facilities, nursing facilities, and residential and intermediate care facilities for the intellectually disabled. Audit findings are used to assist in determining whether Medicaid reimbursement procedures meet participation requirements. Staff members in the Medicaid Fraud Control Unit conduct investigations of alleged abuse and neglect of residents in long-term care facilities that receive Medicaid reimbursements from the federal government. Investigators also look into allegations that residents have been defrauded of personal funds or possessions. When abuse or fraud is substantiated, the Division works with local law enforcement officials to bring the offenders to trial. When Medicaid fraud is suspected, the DIA often works side-by-side with investigators from the Federal Bureau of Investigation, the U.S. Postal Service, and other State and federal law enforcement agencies.

Funding The Investigations Division receives an annual General Fund appropriation.

Related Statutes and Administrative Rules Iowa Code chapter 10A Iowa Administrative Code 481

More Information

Investigations Division – Department of Inspections and Appeals: dia.iowa.gov/investigations-divison LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 5, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Department of Inspections and Appeals — Health Facilities Division

Background The Health Facilities Division of the Iowa Department of Inspections and Appeals is the designated State survey and certification agency responsible for inspecting and licensing or certifying various health care entities, health care providers, and health care suppliers operating in the State of Iowa. Entities subject to the Department’s oversight and regulation include nursing facilities, skilled nursing facilities, residential care facilities, intermediate care facilities for the intellectually disabled, hospitals, hospices, home health agencies, programs and facilities caring for children, assisted living programs, and elder group homes. Health Facilities Division personnel also investigate complaints alleging improper care or treatment of patients, residents, and tenants in licensed and certified entities. By law, the Division has the authority to investigate complaints alleging a violation by a health care entity of licensing rules under Iowa Administrative Rules or the applicable federal regulations. Complaints alleging improper care in assisted living programs, elder group homes, and adult day care are investigated by the Adult Services Bureau within the Division. Complaints are investigated on site by survey staff. Depending on the nature of the allegation, the complaint investigation process includes observations, resident interviews, and/or records review. The Division is also responsible for the following: • Investigating complaints of hospitals violating licensing rules under Iowa Code chapter 135B. If the hospital is accredited by the Joint Commission on the accreditation of health care organizations (JC) or the American Osteopathic Association (AOA), the Division must obtain the approval of the Centers for Medicare and Medicaid Services before initiating a complaint investigation, or the investigation of an accredited hospital cannot be initiated. • Operating the Best Practices Program to encourage long-term care nursing facilities to share new and innovative approaches to resident care. The Program makes available to health care providers a variety of identified practices that have been shown to be effective in long-term care settings. • Providing a direct care worker (DCW) webpage. The webpage provides certified nursing assistants access to the Iowa Direct Care Worker Registry to apply for registration and to edit and update registration information. It also provides access to the administrative rules with the training requirements for certified nursing assistants, certified medication aides, and nutritional assistants. • Maintaining a list of certified nursing assistants (CNAs) qualified by education, training, and testing to work in federally certified long-term care facilities. The list is used by health care facilities to recruit workers. Federal regulations require Medicare and Medicaid-certified facilities to check the Direct Care Worker Registry to verify that certified nursing assistants are eligible to work in those facilities.

More Information

Department of Inspections and Appeals, Health Facilities Division: dia.iowa.gov/health-facilities LSA Staff Contact: Angel Banks-Adams (515.281.6031) [email protected]

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• Maintaining inspection reports and final findings of complaint investigations for a wide variety of Iowa health care entities. Reports for nursing facilities, residential care facilities, intermediate care facilities, and assisted living programs are available online.

Funding The Health Facilities Division receives an annual General Fund appropriation of approximately $4.8 million and approximately $10.2 million in federal funds.

Related Statutes and Administrative Rules Iowa Code chapter 10A and 135B Iowa Administrative Code 481—50

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 5, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Employment Appeal Board — Department of Inspections and Appeals

Description The authority and duties of the Employment Appeal Board are specified in Iowa Code section 10A.601. The Board is administratively attached to the Department of Inspections and Appeals (DIA). It is a three- member Board, appointed by the Governor and confirmed by the Senate, that serves as the final administrative law forum for appeals. Board members are selected to represent employers, employees, and the general public. The Board has authority to hear appeals for the following: • Personnel actions under Iowa Code chapter 8A. • Peace officer and Capitol security discharges under Iowa Code chapter 80. • Occupational Safety and Health Act citations under Iowa Code chapter 88. • Construction contractor registration citations under Iowa Code chapter 91C. • Unemployment insurance appeals under Iowa Code chapter 96. • Iowa Public Employees’ Retirement System (IPERS) appeals under Iowa Code chapter 97B.

Funding The Employment Appeal Board receives an annual General Fund appropriation.

Related Statutes and Administrative Rules Iowa Code chapters 8A, 80, 88, 91C, 96, and 97B Iowa Code sections 7E.6, 10A.104, 10A.403, 10A.601, 68B.35, 80.15, 88.1, 88.3, 88.6, 88.8, 89.13, 91C.8, 96.6, 96. 11, 96.19, 97B.20B, and 97B.27 Iowa Administrative Code 486

More Information

Department of Inspections and Appeals, Employment Appeal Board: www.dia.iowa.gov/other- services/attached-units/employment-appeal-board LSA Staff Contact: Angel Banks-Adams (515.281.6031) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 5, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Child Advocacy Board — Department of Inspections and Appeals

Background The Iowa Child Advocacy Board (ICAB) is administratively attached to the Department of Inspections and Appeals (DIA) but is an independent board that provides for citizen involvement in child welfare issues. The Board is composed of nine members appointed by the Governor of Iowa and confirmed by the Iowa Senate. The Board is responsible for establishing policies and procedures for two volunteer child advocacy programs: the Court Appointed Special Advocate (CASA) Program and the Iowa Citizen Foster Care Review Board (FCRB) Program. Citizen volunteers for these two programs work with abused and neglected children. The ICAB annually reports on issues affecting children in the Iowa child welfare system and offers recommendations for improvements. The two programs administered by the ICAB function as follows: • Iowa Court Appointed Special Advocate Program: The Iowa Court Appointed Special Advocate Program recruits, trains, and supports community volunteers to serve as a voice in court for abused and neglected children and works to ensure that each child is living in a safe, permanent, and nurturing home. The CASA volunteers must be able to think independently, use good judgment in difficult situations, and communicate effectively, both verbally and in writing. Volunteers are expected to serve at least a one-year commitment unless the child’s case is closed by the Court earlier. Applicants go through an intensive screening process, undergo a criminal history check, and provide references. • Iowa Citizen Foster Care Review Board Program: The Iowa Citizen Foster Care Review Board Program recruits, trains, and supports community volunteers to serve on local community boards with the goal of providing permanency for children placed in foster care. Persons age 21 and older can apply to serve on local review boards. Volunteers commit to a two-year term and go through a criminal and background check. There are local boards in 50 counties, with some counties having more than one active board. The boards meet monthly to review the status of children who have been removed from their parents. Advisory recommendations in the best interest of the child are provided by the boards to the court and other system officials.

Funding The Child Advocacy Board receives an annual General Fund appropriation.

More Information

Department of Inspections and Appeals, Child Advocacy Board: childadvocacy.iowa.gov/ LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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Related Statutes and Administrative Rules Iowa Code chapter 10A Iowa Code section 237.16 Iowa Administrative Code 489

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 5, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Food and Consumer Safety Bureau – Department of Inspections and Appeals

Overview The Food and Consumer Safety Bureau is located in the Administration Division of the Department of Inspections and Appeals (DIA). The Bureau is responsible for administering and enforcing the Iowa Food Code (Iowa Code chapter 137F) by conducting food safety inspections at food establishments (grocery stores, restaurants, and convenience stores), food processing plants, school concession stands, and mobile food units (food trucks). According to the DIA, the purpose of the Iowa Food Code is to “safeguard the public health and provide to consumers, food that is safe, unadulterated and honestly prepared.” In addition to grocery stores, restaurants, and convenience stores, the Bureau deals with bed and breakfast homes and inns, farmers markets and temporary food establishments, egg handlers, and home food establishments. The Food and Consumer Safety Bureau also maintains a restaurant inspection website through which visitors can view or download inspection reports for Iowa food establishments, including restaurants, grocery stores, and convenience stores. All food establishments in Iowa are inspected according to the Iowa Food Code. The Food Code is based on food safety recommendations developed by the federal Food and Drug Administration, in consultation with representatives from the food industry and regulators. The Food Code is derived from scientifically developed factors focusing on public health and the prevention of foodborne illness. In recent years, trends have indicated that more and more food establishments are returning the duty of food inspections back over to the Bureau, as opposed to contracting with local county or city inspectors. Enacted in May 2016, Senate File 2314 (FY 2017 Administration and Regulation Subcommittee Appropriations Act) amended the process of collecting fees associated with food inspections by permitting the DIA to keep fee revenue collected from inspections completed by the Department for FY 2017. Fees collected on behalf of a municipal corporation are not retained by the Department. The Department is required to deposit $800,000 of collected fees into the General Fund, and permitted to retain the remainder in its operating budget.

Funding The Food and Consumer Safety Bureau receives an annual General Fund appropriation.

Related Statutes and Administrative Rules Iowa Code chapters 10A and 137F Iowa Administrative Code 481

More Information

Food and Consumer Safety Bureau – Department of Inspections and Appeals: www.dia.iowa.gov/food-consumer-safety LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 6, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Department of Management

Overview The Department of Management (DOM) was created to integrate budgeting with planning for decision making within the Executive Branch. The mission of the Department is to lead enterprise planning and coordinate enterprise governance systems through strategic planning, to operate as a finance and accountability center, and to promote and coordinate the implementation of the Governor’s agenda. The Department’s key services, products, and activities include: • Budget development and oversight. • Governance system development and oversight for the Accountable Government Act (AGA), including strategic and performance planning and performance auditing. • Policy development and analysis. • Revenue estimating and economic forecasting. • Coordination for the Early Childhood Iowa Initiative. • Continuous improvement/Lean implementation. • Enterprise project management. • State Appeal Board administration. • Local government budget support. • Utility tax replacement administration. • Collective bargaining support.

Funding The Department of Management receives an annual General Fund appropriation.

Related Statutes and Administrative Rules Iowa Code chapter 8 Iowa Administrative Code 541

More Information

Department of Management: dom.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 5, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Iowa Public Information Board

Background The Iowa Public Information Board (IPIB) was created by SF 430 (Public Information Board Act) during the 2012 Legislative Session. The Board is an independent agency that was created to address open government concerns, to bring consistency to the interpretation of open meetings and public record laws, and to provide an alternative for the enforcement of these laws. The Governor made the first Board appointments in late FY 2012, and the Board began meeting in July 2012 to organize, develop administrative rules, and participate in the budgeting process. Beginning in FY 2014, the Board was fully operational and began meeting monthly to discuss complaints and contested cases and to issue declaratory orders and advisory opinions.

Operations Pursuant to Iowa Code chapters 21 and 22, the Board has the authority to issue both informal advice and declaratory orders to enforce laws regarding the State’s open meetings and records laws. When requested, the IPIB staff is also available to offer advisory opinions and formal rulings. The Board also offers training to local and State agencies, disseminates information regarding relevant transparency issues, investigates complaints and subpoena information, seeks resolution of disputes, and is able to impose civil penalties and other appropriate remedies to enforce the open meetings and public records laws. As of the close of CY 2016, the IPIB staff has processed 875 cases. The majority of these cases consisted of informal requests. One declaratory order was filed and 18 formal advisory opinions were disbursed.

Staffing The Board consists of nine members, who are appointed by the Governor and confirmed by the Senate, along with three full-time employees: an Executive Director, a Deputy Director, and an administrative assistant. When contested cases come before the IPIB, the Executive Director typically serves as counsel to the Board, and the Deputy Director prosecutes contested cases. In a case where the Executive Director and the Deputy Director cannot serve as counsel to the Board, the Board relies on the Attorney General’s staff for consultation and advice. If necessary, the Attorney General’s staff will defend the Board in court.

Funding The Board receives an annual General Fund appropriation.

More Information

Iowa Public Information Board: ipib.iowa.gov SF 430: www.legis.iowa.gov/legislation/BillBook?ga=84&ba=SF430 LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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Related Statutes and Administrative Rules Iowa Code chapters 21, 22,and 23 Iowa Administrative Code 497

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 6, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Printing Cigarette Stamps — Standing Unlimited Appropriation

Background Pursuant to Iowa Code section 453A.7, a cigarette tax stamp must be affixed to each cigarette package as proof that the tobacco tax has been paid. The design, size, denomination, and type of such stamps are determined by the Director of the Department of Revenue. The tax is imposed on the sale of cigarettes and must be paid by the person or business making the first sale in Iowa. Most states use cigarette stamps as a means to tax cigarettes and reduce cigarette smuggling. North Carolina, South Carolina, and North Dakota do not use tax stamps as a means of tax collection. Iowa’s cigarette tax is $1.36 per pack and ranks 28th of the 50 states and the District of Columbia, making it the median tax rate for the U.S. Nationally, Missouri has the lowest cigarette tax at $0.17 per pack; Virginia is next lowest at $0.30 per pack. New York has the highest cigarette tax at $4.35 per pack, and Connecticut is second at $3.90 per pack. Some states permit cities and counties to impose additional taxes on cigarettes.

Funding Costs associated with printing cigarette stamps are funded by a standing unlimited General Fund appropriation established pursuant to Iowa Code section 453A.7.

Related Statutes and Administrative Rules Iowa Code section 453A.7 Iowa Administrative Code 701—82

More Information

Department of Revenue: tax.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6031) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 6, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Department of Revenue Operations

Background The Department of Revenue is responsible for the administration of the major sources of State and local tax revenue. The responsibilities for tax administration include the collection of revenue totaling nearly $9.0 billion from various sources. The Department is also in charge of administering various property tax- related functions performed by local government officials. The Department is structured along functional lines and divided into five divisions. The major divisions of the Department include: • Business Services Division: Responsible for general management of the Department. The Division administers the Department’s budget; provides centralized accounting services within the Department; performs personnel, payroll, and training functions; and assists with strategic planning and program measurement. It also oversees the procurement process for the Department and maintains facilities management. • Property Tax Division: Assists local governments in making property tax assessments fair and consistent by acting as the general supervisor over the administration of property tax laws. The Division focuses its work on four separate areas: • Equalization: This area of the Division issues tax equalizations to county auditors each odd- numbered year. These equalizations are based on aggregate abstract valuations and median sales ratios. Assessment limitations for residential and agricultural property classes are calculated annually. • Assessor Education: This area of the Division administers assessor and deputy examinations and is responsible for maintaining assessor and deputy registries. Technical assistance and educational programs are provided to both assessors and boards of tax review. The Division also provides opportunities for continuing education for both assessors and deputy examiners in order to fulfill and maintain their education requirements. • Central Assessments and Appraisal: This area of the Division is responsible for annually assessing telephone, railroad, pipeline, and water companies, as well as administering the replacement tax for gas and electric utility companies. It provides appraisal support for tax equalization procedures and technical assistance for appraisal practices. • Local Government, Credits, Exemptions, and Transfer Tax: This area of the Division provides general and technical assistance to local governments regarding property tax issues, including tax credits and exemptions. It also provides reimbursement for State-funded credits and exemptions.

More Information

Department of Revenue: tax.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6031) [email protected]

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• Tax Management Division: Responsible for all facets of tax processing. The Division has two sections: • The Collection Services Section operates the accounts receivable system for the Department, contacts taxpayers who do not pay their accounts by the expiration of the appeal period, issues bills for the Department, coordinates the Department’s collection activities, and provides collection services to other State agencies. • The Compliance Services Section issues refunds, adjustments, and assessments based on the outcome of field audits conducted throughout Iowa. The audits include office examinations of returns and other related tax documents. • Research and Analysis Division: Performs departmental research and specific types of analysis. These types are as follows: • Tax Research and Program Analysis: This type of analysis estimates the fiscal impact of proposed State and federal tax legislation. This part of the Division prepares monthly reports that track the direction of Iowa’s economy, as well as annual individual sales and income tax statistical reports. Through a complete and unbiased study of tax credits, the Division also tracks, analyzes, and forecasts tax receipts and refunds, providing support to the members of the State Revenue Estimating Conference (REC) and members of the General Assembly. The Division also administers the Tax Credit Tracking and Analysis Program, and posts Department data on the Iowa Datashare website. • Performance Analysis: In this type of analysis, the Division prepares visual presentations of Department key performance indicators, assisting other Divisions in the tracking of performance measures as well. In addition to the Department annual reports, the Division prepares various legislatively mandated reports and conducts analysis for other third-party customers. • In addition to the four Divisions listed above, the DOR also oversees four sections that operate under the philosophy that a knowledgeable taxpayer voluntarily complies with the tax laws and this, in turn, increases revenue collections. The DOR believes that new and expanded tax programs promote voluntary compliance through education and information services. These services are divided into four sections: • The Taxpayer Services Section consists of taxpayer service specialists, who assist more than one million taxpayers by telephone, email, mail, Internet, or in person, and assist with business and income tax electronic filings. • The Audit Services Section works to resolve protests through informal settlements or through formal proceedings that include appeals to the Director, the State Board of Tax Review, and the Iowa district courts. Staff works with the Attorney General’s Office to review protests, obtain information on each case, and represent the Department. • The Tax Policy Analysis Section writes administrative rules, prepares formal rulings, compiles topical papers, responds to complex written and oral inquiries related to tax law and policy, drafts legislation, and monitors the legislative process. • The Communications Section researches, writes, and produces educational materials in a variety of media. Section staff members provide training for taxpayers and preparers and manage the Department’s website and social media output.

Funding The Department of Revenue receives an annual General Fund appropriation.

Related Statutes and Administrative Rules Iowa Code chapters 421 through 453D and Iowa Administrative Code 701

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 18, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Tobacco Reporting Requirements

Background The Tobacco Reporting Requirements standing limited appropriation supports the Department of Revenue’s enforcement of Iowa Code chapter 453D (Tobacco Product Manufacturers – Enforcement of Financial Obligations). In 1998, Iowa and 45 other states, the District of Columbia, and five United States Territories settled claims against the four largest tobacco manufacturers through the Master Settlement Agreement (MSA). The MSA changed how tobacco companies selling cigarettes and roll-your-own tobacco do business in Iowa. According to the MSA, the manufacturers agreed to certain restrictions on their marketing and to make payments perpetually to the plaintiff states. The payments are to offset the State’s cost of tobacco-related health care costs. Tobacco manufacturers that sell their products in Iowa are affected by two requirements. The first relates to financial obligations for tobacco product manufacturers. Tobacco manufacturers are required to either join the MSA and comply with its terms and obligations or to establish a qualified escrow account and make payments as a “nonparticipating manufacturer” (NPM). The quarterly escrow payments are to be used to offset the state’s tobacco-related health care costs. The second piece of legislation enforces tobacco manufacturers’ financial obligations and their certification for the Iowa Directory of Certified Tobacco Product Manufacturers by the Iowa Attorney General. A tobacco manufacturer that markets its product in Iowa, whether through a distributor, retailer, or similar intermediary, and without either joining the MSA or becoming an NPM, is subject to litigation and civil penalties. It is unlawful to stamp, sell, offer, or possess for sale cigarettes from a tobacco product manufacturer or a brand family that is not published in the Directory. Persons found in violation of these requirements are guilty of a serious misdemeanor. Violations also carry civil penalties. The minimum civil penalty is $5,000 per violation or 500.0% of the retail value of the product sold, whichever is greater. In addition, persons who stamp, sell, or possess for sale a brand not included in the Directory may have their licenses suspended or revoked, and any product found in their possession is deemed contraband and seized and destroyed. Profits gained in violation of this legislation are to be confiscated and paid to the State Treasurer.

Funding Iowa Code section 453D.8 provides a standing limited appropriation of $25,000 annually to the Department of Revenue for enforcement of Iowa Code chapter 453D. The General Assembly routinely applies limits to this appropriation.

Related Statutes and Administrative Rules Iowa Code chapter 453D

More Information

Department of Revenue: tax.iowa.gov LSA Staff Contact: David Reynolds (515.281.6934) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 11, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Administration and Elections

Purpose and History The Office of the Secretary of State was created in 1857 in Article IV, Section 22, of the Iowa Constitution. The duties of the Office are spelled out in Iowa Code chapter 9. The mission of the Office of the Secretary of State is to provide access to information about businesses in Iowa conveniently and economically, ensure election integrity and access to voting for Iowa citizens, and encourage Iowans to become civically engaged.

Elections and Voter Registration Division The Secretary of State serves as the State Commissioner of Elections. The primary functions of the Elections and Voter Registration Division are to coordinate and supervise all elections in Iowa, promote voter education and participation, and provide training to local election officials. As the supervisor of elections, the Office conducts the statewide canvass of votes and certifies the results of Iowa and federal elections, including preliminary results on the night of the primary and general elections. The Division oversees the activities of county election commissioners, prescribes uniform election practices and procedures, prescribes necessary forms required for the conduct of elections, and publishes a summary of proposed constitutional amendments. The Office also appoints the Board of Voting Machine Examiners and coordinates its activities. In addition, the Office is charged with implementation of the federal Help America Vote Act (HAVA). The Secretary of State is also the State Commissioner of Voter Registration and is responsible for administration of the National Voter Registration Act of 1993. The Secretary (or designee) chairs the Voter Registration Commission. The Office is responsible for the maintenance of the statewide voter registration in conjunction with county commissioners.

Funding — State General Fund The Secretary of State receives an annual appropriation from the General Fund for operational costs for elections and voter registration activities.

Related Statutes and Administrative Rules Iowa Code chapter 9 Iowa Administrative Code 721

More Information

Iowa Secretary of State: sos.iowa.gov Iowa State Association of County Auditors: www.iowaauditors.org LSA Staff Contact: Christin Mechler (515.281.6561) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 11, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Business Services

Purpose and History The Office of Secretary of State was created in 1857 in Article IV, Section 22, of the Constitution of the State of Iowa. The duties of the Office are spelled out in Iowa Code chapter 9. The mission of the Office of the Secretary of State is to provide access to information about businesses in Iowa, to ensure election integrity and access to voting for Iowa citizens, and to encourage Iowans to become civically engaged.

Business Services Division The appropriation allows the Secretary of State to: • Review, process, approve, and file, on a limited basis, statutory documents relating to domestic and foreign business entities operating within Iowa. • Handle fictitious names and trademarks, process annual and biennial reports, and administer the Corporate and Partnership Farming Act. • Examine, process, file, and provide information to the public concerning recorded documents relating to Revised Article 9 of the Uniform Commercial Code. • Issue and renew notary commissions and revoke commissions when warranted. • Accept legal service of original notices. • Perform accounting, budgeting, purchasing, data processing, and personnel functions for the Office. • Image or otherwise preserve all permanent records and provide certified copies upon request. The Division also manages the State Land Office, preserves the Official Acts of the General Assembly and the Constitution of the State of Iowa, and files oaths of office for appointed and elected officials. The Division serves as the repository for city records concerning incorporations, boundaries, and other filings. The Secretary of State also oversees travel agencies, transient merchants, postsecondary schools, and instructional schools. The Secretary is the principal filing officer for over 75,000 corporations, limited partnerships, family farm corporations, and trademarks. As a central filing agency for corporations, the Division registers corporations to legitimize their status as legal entities within the State. The Division also maintains the official record of Uniform Commercial Code (UCC) liens. The Division serves the business community by providing information needed by investors and persons conducting business with corporations operating in Iowa.

More Information

Iowa Secretary of State: sos.iowa.gov Secretary of State Offices of All U.S. States & Territories: entrepreneurs.about.com/od/generalresources/a/secretarystate.htm LSA Staff Contact: Christin Mechler (515.281.6561) [email protected]

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Funding – State General Fund The Secretary of State receives an annual appropriation from the General Fund for the operational costs of the Business Services Division.

Related Statutes and Administrative Rules Iowa Code chapter 9 Iowa Administrative Code 721

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 12, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Treasurer of State

Purpose and History The position of Treasurer of State was created in 1857 by Article IV, Section 22, of the Constitution of the State of Iowa. The Treasurer is elected by a statewide popular vote and serves a four-year term. The duties and responsibilities of the Treasurer are specified in Iowa Code chapter 12. In general, the responsibilities of the Treasurer include the following: • Serves as the State’s cash manager. The Treasurer coordinates the financial services used by State agencies and maintains custody of State funds. The Treasurer processes receipts, makes disbursements, and invests all State funds. The Treasurer accounts for State funds on a cash basis and balances regularly with financial institutions and the Department of Administrative Services. • Coordinates the issuance of debt by State agencies and authorities, invests bond proceeds, and manages lease-purchase financing for State agencies. • Administers the investment of two State pension funds: the Peace Officers’ Retirement Fund and the Judicial Retirement Fund. The Treasurer serves as the custodian for these funds, as well as the Iowa Public Employees’ Retirement (IPERS) Fund. • Prepares an annual report of the bonded indebtedness of public units in the State. • Administers Iowa’s 529 college savings plans under the Iowa Educational Savings Plan Trust in accordance with Iowa Code chapter 12D (also known as the College Savings Iowa Program). The Trust was created to provide Iowa families with a way to save for future education expenses while benefiting from State and federal tax incentives. Iowa has two 529 college savings plans: College Savings Iowa (sold directly) and the Iowa Advisor 529 plan (sold by advisors). • Manages unclaimed property that is remitted to the State under Iowa Code chapter 556. Property is held until it is claimed by the owners or their heirs via the Great Iowa Treasure Hunt. • Holds collateral pledged by Iowa banks to secure public deposits. • Implements the Small Business Linked Investments for Tomorrow (LIFT) Program. Under the LIFT Program, State money is placed in certificates of deposit in Iowa banks with the agreement that the money be used to finance small business loans at set rates. • Serves as an ex officio member of various boards and commissions.

More Information

State of Iowa Treasurer: www.treasurer.state.ia.us National Association of State Auditors, Comptrollers and Treasurers: nasact.org Iowa State County Treasurers Association: www.iowatreasurers.org LSA Staff Contact: Christin Mechler (515.281.6561) [email protected]

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Funding — State General Fund The Treasurer of State’s Office receives an annual appropriation from the General Fund to fund operational costs related to State finance, fund accounting, and related administrative activities.

Other Sources of Revenue In addition to the General Fund appropriation, the Treasurer’s Office receives an annual appropriation from the Road Use Tax Fund that is used to reimburse the Department of Administrative Services for providing State accounting system resources related to the accounting for and distribution of Road Use Tax money. The Treasurer also receives reimbursements for salary costs related to various programs including: Cash Management, Unclaimed Property, Iowa Education Savings Plan Trust, Pension Investment and Custody, and Protection of Public Deposits.

Related Statutes and Administrative Rules Iowa Code chapters 12, 12A, 12B, 12C, 12D, 12E, 12F, 12G, 12H, and 556 Iowa Administrative Code 781

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 1, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Banking Division – Department of Commerce

Background The Iowa Department of Banking (IDOB) was established in 1917 with the mission to protect the interests of those doing business with Iowa chartered banks, licensed financial service providers, and licensed professionals through regulation that ensures safety, soundness, and adherence to laws and regulation. In 1986, the IDOB was reorganized and became a part of the Department of Commerce. The Division is led by the Superintendent of Banking, who is charged with the supervision and regulation of all State- chartered commercial banks, professional services, and all other entities subject to regulatory review under the IDOB. The Superintendent works closely with the State Banking Council and acts in an advisory capacity on any issues that may come before the IDOB.

Operations The Division of Banking is comprised of three bureaus: Banking, Finance, and Professional Licensing. • The Banking Bureau employs bank examiners and regulates State-chartered banks, bank holding companies, and trust companies. • The Finance Bureau oversees regulated loan licensees, industrial loan company licensees, debt management companies, mortgage bankers/brokers/registrants, delayed-deposit service businesses, money service businesses, and mortgage loan originators. • The Professional Licensing Bureau (PLB) joined the Banking Division in FY 2007, and oversees accountants, architects, engineers and land surveyors, landscape architects, real estate brokers, appraisers, and interior designers.

Staffing The Superintendent of Banking is appointed by the Governor and confirmed by the Iowa Senate for a four-year term. The six-member State Banking Council is also appointed by the Governor, and members serve staggered four-year terms.

Funding With the exception of the PLB, the Banking Division receives an annual appropriation from the Commerce Revolving Fund (CRF). The PLB receives an annual General Fund appropriation.

More Information

Banking Division – Department of Commerce: www.idob.state.ia.us LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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Related Statutes and Administrative Rules Iowa Code chapter 524 Iowa Administrative Code 187

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 1, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Credit Union Division — Department of Commerce

Background The Iowa Credit Union Act was enacted by the Iowa General Assembly in 1925 and defined a credit union as “an institution for savings [that] shall be subject to taxation only as to its real estate, moneys and credits. The shares shall not be taxed.” The supervision and regulation of credit unions was placed under the Superintendent of Banking. The Department of Credit Unions was established January 1, 1979. The Department was reorganized as the Division of Credit Unions within the Department of Commerce on July 1, 1986, and the supervisory and regulatory responsibility of the Division was transferred to the Superintendent of Credit Unions.

Operations The Credit Union Division administers the chartering, merging, conversion, and liquidation of State credit unions. The Division also acts as an advisory body to State agencies and private individuals in matters concerning credit union affairs. Other duties include providing fundamental and technical assistance to credit unions, maintaining an equitable fee structure, and ensuring the offset of Division expenditures. As the head of the Division, the Superintendent of Credit Unions carries out the supervision, control, and enforcement of the laws, bylaws, rules, and regulations pertaining to the organization of credit unions operating under a State charter. The Superintendent is charged with protecting the interests and corporate rights of the more than 90 credit unions in Iowa through regular analysis and examination of their respective operations, taking remedial action if necessary.

Staffing The Superintendent of Credit Unions is appointed by the Governor and confirmed by the Iowa Senate. The Division’s seven-member Review Board is also appointed by the Governor and must be approved by the Senate. Members serve staggered three-year terms. The Board may include two public members, but no more than five members at one time may be directors or employees of a State credit union.

Funding The Credit Union Division does not receive funding from the State General Fund, but rather from the Commerce Revolving Fund (CRF).

Related Statutes and Administrative Rules Iowa Code chapter 533 Iowa Administrative Code 189

More Information

Credit Union Division, Department of Commerce: creditunions.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 1, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Insurance Division — Department of Commerce

Background The Iowa Insurance Division (IID) is one of five divisions within the Department of Commerce. The Insurance Division regulates all insurance business transacted in Iowa, oversees companies and individuals in the sale of insurance in Iowa, and has general control over all aspects of the insurance industry, from the forms used to the rates charged. The Insurance Division also has statutory authority over activities related to the sale of securities and other regulated products in the State. The Division is directed by the Insurance Commissioner, who is appointed by the Governor and approved by the Iowa Senate.

Operations The Insurance Division consists of six bureaus: • The Market Regulation Bureau assists consumers in understanding insurance by answering questions, providing search capabilities for insurance companies and agents, offering consumer alerts, and receiving complaints about the handling of claims by insurance companies. When necessary, the Bureau conducts investigations and brings disciplinary action against insurance companies and agents. The Bureau also offers an education program to combat securities investment fraud. • The Company Regulation Bureau licenses insurers that conduct business in Iowa. The Bureau monitors the financial condition of all companies authorized to do business in Iowa for compliance with Iowa statutes and regulations on a quarterly basis. On-site examinations of domestic insurers are completed at least once every five years. The Bureau also regulates workers’ compensation of self-insured individuals, and group self-insured individuals and collects premium taxes. • The Product and Producer Regulation Bureau is responsible for insurance agent licensing, the approval of the policy forms that must be filed by insurance companies, and the approval of rate filings. • The Enforcement Bureau is responsible for prosecuting administrative actions of bureau chiefs, attorneys, and investigators who prosecute administrative actions for the Insurance Division. The Bureau receives cases from the Market Regulation Bureau and the Securities and Regulated Industries Bureau and decides the appropriate action to be taken on the case through the administrative forums. Reparative action can include fines, suspension or revocation of licenses, and cease and desist orders. The Bureau’s enforcement staff represents the Division when cases are heard by an administrative law judge and appealed to the Commissioner. The Bureau is accountable to the Insurance Commissioner, but operates on its own discretion to separate the Commissioner from issues that could be appealed to the Commissioner.

More Information

Insurance Division – Department of Commerce: iid.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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• The Securities and Regulated Industries Bureau provides investor protection through the administration and enforcement of the Iowa Uniform Securities Act. The Bureau enforces antifraud laws and administrative rules, securities registration and broker-dealer and agent licensing laws, and the full disclosure and substantive investor protection sections of the Iowa Code. The Bureau administers the licensing of broker-dealers and agents, including a review of disciplinary history to determine whether to deny or revoke licenses of broker-dealers and agents; provides broker-dealer and investment adviser examinations; and offers investor education and public information distribution. In addition, the Bureau administers motor vehicle service contracts, prearranged funeral services and merchandise, residential service contracts, congregate care and continuing care retirement facilities, cemetery merchandise, and cemeteries. • The Insurance Fraud Investigation Bureau investigates and prosecutes fraudulent insurance acts in an effort to reduce the amount of premium dollars used to pay fraudulent claims. The Fraud Bureau receives insurance fraud and medical identity theft referrals from insurance companies, law enforcement agencies, and the public. In addition to these six bureaus, the Division includes: • The Iowa Insurance Consumer Advocate, who acts to assist consumers in the areas of insurance, securities, and regulated industries. The Consumer Advocate works in conjunction with the other areas of the Division to advocate for the best interest of consumers and support consumers through policy, outreach, complaint assistance, and administrative actions. • The Senior Health Insurance Information Program (SHIIP) is a free, confidential service housed within the Insurance Division that helps Iowans make informed decisions about Medicare and other health coverage. The Program trains volunteer insurance counselors to answer questions about Medicare and insurance. The volunteers assist in classroom settings and through one-on-one counseling to evaluate options and help seniors make informed insurance decisions.

Funding The IID does not receive an annual appropriation from the State General Fund, but rather from the Commerce Revolving Fund (CRF).

Related Statutes and Administrative Rules Iowa Code chapters 502, 502A, and 505 through 523I Iowa Administrative Code 191

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 6, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Utilities Division — Department of Commerce

Background The Iowa Utilities Board was originally established in 1878 as the Iowa Board of Railroad Commissioners. Over the years, the agency has evolved from one that regulates freight and railroads, grain elevators, and passenger and freight truck transportation to one that regulates public utilities. The Board’s mission is to regulate utilities to ensure that reasonably priced, reliable, environmentally responsible, and safe utility services are available to all Iowans.

Operations The Utilities Board regulates electric, natural gas, and water utilities and the services of communications utilities, as well as generally all pipelines and the transmission, sale, and distribution of electrical current. The regulated service areas are defined below. • Electricity – The Board regulates the rates and services of two investor-owned utilities: MidAmerican Energy Company (MEC) and Interstate Power and Light Company (IPL), a subsidiary of Alliant Energy Company. Municipal electric utilities are regulated for safety and disconnection, and only in matters of statute. Rural electric cooperatives (RECs) are regulated for service, safety, and disconnection and have the option of being regulated for rates. Linn County REC is the only REC that has opted to have the Board set its rates. The Board also has jurisdiction over certification of electric power generators and grants franchises for electric transmission lines. • Natural Gas – Pursuant to Iowa Code chapter 476, the Board has general jurisdiction over gas utilities furnishing natural gas by piped distribution. The Board regulates the rates, service, and safety of investor-owned gas utilities, including: MEC, IPL, Black Hills Energy, and Atmos Energy Corporation. The Board also regulates the safety of gas service provided by municipal utilities, but does not regulate propane gas. The Board conducts construction inspections and issues permits for intrastate transmission pipelines, and also inspects interstate natural gas pipelines on behalf of the federal government. Pursuant to Iowa Code chapter 479A, the Board also has the authority to implement certain controls over hazardous liquid pipelines to protect landowners and tenants from environmental or economic damages. • Telecommunications – The Board has general regulatory authority over two-way landline telecommunications. The Board does not regulate cellular service or cable television service, but has the authority to issue cable or video service franchises. The Board regulates only the service, and not the rates, of local Iowa service providers. Federal law grants the Board authority to resolve interutility disputes between industry competitors. In addition, the Board has jurisdiction to hear all complaints regarding any unauthorized change to a telecommunications customer’s account, even if the service in question is deregulated.

More Information

Iowa Utilities Board, Department of Commerce: iub.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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• Water – The Board regulates the rates and service of one investor-owned water utility, Iowa- American Water Company, that serves about 60,000 water customers in Davenport and Clinton. The Board does not regulate small or municipally owned waterworks. • Other – The Board has the authority to resolve customer complaints, enforce safety and engineering standards, approve plans for energy efficiency programs, approve plans for recovery of costs to control emissions from generating facilities, oversee affiliate transactions, and review proposals for reorganization. The Board conducts public comment hearings on rate filings. It also administers a dual-party relay service to allow communication-impaired persons to use the telephone, and an equipment distribution program to provide telecommunications devices for the deaf to eligible persons. The Utilities Board has five sections staffed by accountants, engineers, economists, lawyers, and other professional and administrative staff. These sections include: • Customer Service – Customer Service staff handles customer inquiries and complaints, while providing a variety of communications to increase public awareness of energy, telecommunications and other utility-related issues, and the regulatory role of the Iowa Utilities Board. Customer Service staff also produces the agency annual report, arranges rate case public comment meetings for the Board, and conducts annual outreach meetings for utility and Community Action Agency representatives on topics related to energy service, low-income energy assistance and weatherization, and the winter heating disconnection moratorium. • Energy – The Energy Section reviews and processes monthly, recurring, and periodic filings, including the purchased gas adjustments (PGA) for natural gas costs and the energy adjustment clause (EAC) for electricity costs. Filings are reviewed for accuracy, impact, and trends. Energy Section staff also process tariffs, service territory changes, waivers, and other filings. In addition, Energy Section staff participates on many agency interdisciplinary teams addressing policy issues, rate increase requests, formal complaints, and rulemakings. • Policy Development – The Policy Development Section works on a variety of issues for the Board. Examples of these issues include analysis and review of energy efficiency programs; processing eligibility applications for, and answering questions about, the wind and renewable energy tax credit programs; regional and interregional transmission planning; market monitoring and mitigation, electric transmission development/operation, and energy market issues in collaboration with regional organizations; and stakeholder workshops on finance issues such as formula rate protocols and cost allocation. • Safety and Engineering – The Safety and Engineering Section is responsible for the regulation of safety, construction, and operation and maintenance of facilities of gas and electric service providers and pipeline, electric transmission, and distribution companies. The responsibilities include reviewing and processing all petitions for electric transmission line franchises per Iowa Code chapter 478, and for pipeline permits per Iowa Code chapters 479 and 479B. This Section is also responsible for conducting inspections of natural gas and electric utilities for compliance with safety standards, and acts as an interstate agent for the federal Department of Transportation in pipeline safety matters. • Telecommunications – The Telecommunications Section processes telephone filings and deals with issues such as telecommunications relay services. Services such as these allow persons who are deaf, hard-of-hearing, deaf-blind, or have difficulty speaking to use the telephone system on a functionally equivalent basis to persons without communications impairments, providing them with training and necessary equipment. The Telecommunications Section also works to conserve telephone numbering resources and to equalize intercarrier compensation between rural and metropolitan areas.

Funding The Board receives an annual appropriation from the Commerce Revolving Fund (Iowa Code section 546.12).

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Related Statutes and Administrative Rules Iowa Code chapters 474 and 476 through 480A Iowa Administrative Code 199

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 6, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Professional Licensing Bureau Field Auditor — Housing Trust Fund

History and Purpose The Professional Licensing Bureau (PLB) was established in 1986. Since 2006, it has been a Bureau within the Banking Division of the Department of Commerce. The Bureau supervises a variety of licensed professions in the State of Iowa, including: • Accountants • Architects and Landscape Architects • Real Estate Brokers and Sales • Real Estate Appraisers • Engineers and Land Surveyors • Interior Designers The Bureau acts as the primary support system to the various commissions and boards that oversee each licensed profession. Each board or commission sets the requirements for examination, licensing, and regulation, as well as renewal and continuing education requirements. The Bureau also supports commissions and boards in matters of licensee compliance and discipline.

Funding The PLB receives an annual appropriation from the Housing Trust Fund (HTF). The funds are utilized by the Bureau to conduct audits of real estate broker trust funds.

Related Statutes and Administrative Rules Iowa Code section 16.181 Iowa Administrative Code 193E.13

More Information

Iowa Professional Licensing Bureau: plb.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6031) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 6, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

DIA — Road Use Tax Fund (RUTF) Appropriation

Purpose and History The Department of Inspections and Appeals (DIA) receives an annual appropriation from the Road Use Tax Fund (RUTF). This appropriation is transferred to the operating budget of the Administrative Hearings Division. The Division holds contested hearings involving individuals objecting to an adverse action taken by a State department or agency. Approximately one-third of all the Division’s contested case hearings involve suspensions or revocations of driver’s licenses by the Iowa Department of Transportation (DOT) for reasons such as operating while intoxicated (OWI).

Funding The Division receives an annual General Fund appropriation.

Related Statutes and Administrative Rules Iowa Code chapter 10A Iowa Administrative Code 481

More Information

Administrative Hearings Division, Department of Inspections and Appeals: www.dia.iowa.gov/administrative-hearings/about-division LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 5, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Pari-Mutuel and Riverboat Regulation — Gaming Regulatory Revolving Fund

Purpose The Pari-Mutuel and Riverboat Regulation appropriation provides for administration of pari-mutuel and excursion gambling boat laws under Iowa Code chapters 99D and 99F, respectively, as well as associated administrative rules. The Iowa Racing and Gaming Commission (IRGC) approves the regulatory fees at its June meeting each year in order to have the regulatory fees established at the beginning of the fiscal year. Regulatory costs include the annual IRGC appropriation and the Department of Public Safety’s Division of Criminal Investigation (DCI) costs for both pari-mutuel and excursion gambling. Upon establishment of the regulatory fees, the IRGC releases a memo to the general managers of all gaming entities, informing them of the regulatory fees for the following fiscal year. Prior to FY 2016, the appropriation associated with Pari-Mutuel and Riverboat Regulation consisted of two separate budget units. For FY 2016, these budget units were consolidated into one budget unit. Pari-Mutuel and Riverboat Regulation funding is determined by the Administration and Regulation Appropriations Subcommittee.

Pari-Mutuel Regulation The Racing and Gaming Commission’s racing (pari-mutuel) services include the above listed service areas of licensing, compliance, and information services, as well as racing animal welfare. Rules are in place for drug-testing greyhounds and horses racing at pari-mutuel racetracks. The Commission employs qualified veterinarians to oversee the animals. The veterinarians are responsible for performing pre- and post-race examinations of the animals, obtaining specimens for drug testing, and performing stable/kennel inspections, among other responsibilities.

Riverboat Regulation The Racing and Gaming Commission’s nonracing (riverboat) services are categorized into three main areas: • Licensing: The Commission licenses gaming facilities, all persons working and participating at the facilities, and all manufacturers and distributors participating in businesses with the facilities prior to conducting business or working for a facility. Licensure involves completing an application and undergoing a background check. • Compliance: The Commission ensures compliance with all rules and statutes governing racing and gaming. From the first step of approving electronic gaming devices to the final administrative action, the Commission monitors all aspects of racing and gaming in Iowa. The Commission verifies all racing and gaming revenues that are due to the State to ensure that the related government entities

More Information Iowa Racing and Gaming Commission: irgc.iowa.gov LSA Staff Contact: Christin Mechler (515.281.6561) [email protected]

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are receiving tax revenues authorized by law. The Commission ensures compliance by licensed facilities with the Iowa laws prohibiting underage gambling and gambling while intoxicated. • Information Services: Multiple financial reports are available on the Commission website, including racing and gaming revenue reports, pari-mutuel handle reports, and annual reports.

Funding The Commission receives an appropriation from the Gaming Regulatory Revolving Fund (GRF.

Other Sources of Revenue Funds received pursuant to Iowa Code section 99D.14 (Pari-Mutuel Regulation) and Iowa Code chapter 99F (Riverboat Regulation) are deposited in the GRF created in Iowa Code section 99F.20. These funds are used to the extent appropriated by the General Assembly. The IRGC is subject to the budget requirements of Iowa Code chapter 8 and the respective auditing requirements and procedures of Iowa Code chapter 11. The racetracks and excursion gambling boats are assessed all appropriated expenditures of the Commission through regulatory fees.

Related Statutes and Administrative Rules Iowa Code chapters 8, 11, 99D, and 99F Iowa Administrative Code 491

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 6, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

DOM Operations — Road Use Tax Fund (RUTF)

Purpose and History The Department of Management (DOM) integrates the budgeting process with the planning for decision- making within the Executive Branch. Pursuant to Iowa Code chapter 8, the Department’s key duties are to direct enterprise and governance planning, operate as a finance and accountability center, and act as a coordinator of the implementation of the Governor’s agenda. The Department also provides the following services: • Revenue estimating and forecasting. • Budget development and oversight. • Local government budget support. • Collective bargaining support. Beginning in 1990, a portion of the Road Use Tax Fund (RUTF) has been appropriated annually to the operations budget of the DOM. The RUTF was established to receive all net proceeds of motor vehicle registration fees under Iowa Code chapter 321 and motor fuel tax or license fees under Iowa Code chapter 452A, as well as revenue derived from use and excise taxes collected under Iowa Code chapter 423C and Iowa Code sections 423.26, and 423.26A. The appropriation from the RUTF is used to fund support and services provided to the Department of Transportation (DOT), as well as salaries and other miscellaneous expenses.

Funding In addition to the RUTF support, the DOM receives approximately 50.0% of its budgetary funding from a General Fund appropriation and the remainder from various agency reimbursements.

Related Statutes and Administrative Rules Iowa Code chapters 8, 321, 423C, and 452A Iowa Code sections 423.26 and 423.26A

More Information

Department of Management (DOM): dom.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 6, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Department of Revenue — Motor Vehicle Fuel Tax

Purpose and History The Iowa Department of Revenue (IDR) administers and oversees the major sources of State and local tax revenue. The IDR is divided into six major divisions: • Compliance Division • Internal Services Division • Property Tax Division • Revenue Operations Division • Tax Policy and Communications Division • Technology and Information Management Division The Department’s key responsibilities include collecting revenue and supervising a variety of property tax- related functions performed by local government officials. In addition to these duties, Iowa Code section 452A.57 requires the IDR and the Department of Transportation to act as administrators of funds collected from the Motor Vehicle Fuel Tax (MVFT), depending on which entity receives the initial tax payment.

Funding The IDR receives an annual appropriation from the Motor Vehicle Fuel Tax Fund as authorized under Iowa Code section 452A.77. The appropriation is used for salaries, support, maintenance, and miscellaneous purposes, as well as the administration and enforcement of the provisions of Iowa Code chapter 452A and the Motor Vehicle Fuel Tax Program.

Related Statutes and Administrative Rules Iowa Code chapter 452A Iowa Code sections 452A.57 and 452A.77

More Information

Iowa Department of Revenue: tax.iowa.gov LSA Staff Contact: Angel Banks-Adams (515.281.6031) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 12, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Safe at Home Address Confidentiality Program

Background In 2015, HF 585 (Victims of Violence, Information Protections, Criminal Surcharge Act) established the Safe at Home Address Confidentiality Program effective January 1, 2016. The Program provides a substitute address for survivors of domestic violence, sexual assault, trafficking, or stalking to use on all public records. In addition, the Program provides a mail-forwarding service and confidential voter registration and absentee ballots. Iowa was the 34th state to implement this Program. Participants in the Program are provided an enrollment card from the Secretary of State’s Office good for a term of four years. Participants may re-enroll in the Program after each term.

Funding House File 585 created two new surcharges that took effect July 1, 2015, as follows: • $100 for adjudication of guilt or deferred judgment for a crime of domestic assault, sexual abuse, stalking, or human trafficking. • $50 for a domestic abuse protective order contempt surcharge for violating a domestic abuse protective order. The Act also created the Address Confidentiality Program Revolving Fund. Moneys in the Fund are to be collected from the surcharges by the clerk of court and appropriated by the General Assembly to the Secretary of State’s Office. The Secretary of State’s Office is also required to file an annual report with the Department of Management (DOM) and the Legislative Services Agency (LSA) regarding expenditures from the Fund.

Related Statutes and Administrative Rules Iowa Code section 9.8

More Information

Secretary of State, Safe At Home Program: safeathome.iowa.gov LSA Staff Contact: Christin Mechler (515.281.6561) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 5, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

Treasurer of State: I-3 Expense — Road Use Tax Fund (RUTF)

Purpose The Treasurer’s Office receives an annual appropriation from the Road Use Tax Fund (RUTF) that is used to reimburse the Department of Administrative Services (DAS) for providing information technology services related to the administration of the RUTF.

Funding The Treasurer’s Office also receives an annual General Fund appropriation that covers additional Integrated Information for Iowa (I-3) expenses not covered by the RUTF appropriation. For additional information on the Treasurer’s Office, please see the Budget Unit Brief Treasurer of State.

Related Statutes and Administrative Rules Iowa Code chapter 12 Iowa Administrative Code 781

More Information

State Treasurer of Iowa: www.iowatreasurer.gov National Association of State Auditors, Comptrollers and Treasurers: nasact.org Iowa State County Treasurer’s Association: www.iowatreasurers.org LSA Staff Contact: Angel Banks-Adams (515.281.6301) [email protected]

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BUDGET UNIT BRIEF – FY 2018 Fiscal Services Division December 11, 2017

Ground Floor, State Capitol Building Des Moines, Iowa 50319 515.281.3566

IPERS Administration

Purpose and History The Iowa Public Employees’ Retirement System (IPERS) was created on July 1, 1953, to replace the Iowa Old Age and Survivor’s Insurance System (IOASI) that existed from 1946 until July 1953. IPERS is an independent agency within the Executive Branch of State government charged with the administration of the retirement system established by Iowa Code chapter 97B. The IPERS chief executive officer is appointed by the Governor, subject to confirmation by the Senate, and serves a four-year term.

The IPERS plan is a defined benefit pension plan that covers, for the most part, all nontemporary employees of the State of Iowa and its political subdivisions, including counties, municipalities, agencies, and public school districts. Employees who have earned IPERS receive a monthly lifetime benefit.

Funding The IPERS Trust Fund is a fiduciary fund solely used to hold funds in trust for members of the retirement system. IPERS expenditures are paid from the IPERS Trust Fund under Iowa Code section 97B.7 through the exclusive benefit rule. The General Assembly appropriates moneys from the Trust Fund to cover administrative expenses for benefit administration and investment staff expenses. All other expenses (benefit payments and other investment-related expenses) are paid directly from the IPERS Trust Fund and do not go through the appropriations process.

Related Statutes and Administrative Rules Iowa Code chapter 97B Iowa Administrative Code 495

More Information

IPERS: www.ipers.org LSA Staff Contact: Christin Mechler (515.281.6561) [email protected]

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Appendix I

Fee Project

The Fee Project acts as reference guide to fees charged by departments and agencies. The information reflects FY 2015 and FY 2016 and when available, includes the number of people that paid each fee and the amount of revenue generated by each fee. The information is reported by State agencies as of December 15, 2016. The Fee Project workbooks for each Subcommittee are available on each respective Subcommittee webpage at the links listed below. Hard copies of these reports are available from the Fiscal Services Division upon request.

Admin. And Reg. - https://www.legis.iowa.gov/docs/publications/SF/851463.pdf

Agriculture and DNR - https://www.legis.iowa.gov/docs/publications/SF/851466.pdf

Economic Development - https://www.legis.iowa.gov/docs/publications/SF/851468.pdf

Education - https://www.legis.iowa.gov/docs/publications/SF/851469.pdf

Human Services - https://www.legis.iowa.gov/docs/publications/SF/851470.pdf

Justice System - https://www.legis.iowa.gov/docs/publications/SF/851472.pdf

Transportation - https://www.legis.iowa.gov/docs/publications/SF/851473.pdf

137

Appendix J

Issue Reviews

 Overview of Iowa Public Pension Systems  Iowa’s Craft Beer Industry  Building Maintenance on State Facilities

138

ISSUE REVIEW Fiscal Services Division

December 6, 2013

Overview of Iowa Public Pension Systems ISSUE

This Issue Review provides basic comparative information between the three public pension systems for state, county, municipal, and school employees that are administered by the state and one pension system for city police and fire employees administered by an independent Board of Trustees. The systems include: the Iowa Public Employees Retirement System (IPERS), the Municipal Fire and Police Retirement System of Iowa (MFPRSI), the Peace Officers’ Accident, Disability and Retirement System (PORS), and the Judicial Retirement System. This Issue Review will examine the membership, benefit provisions, contribution rates, actuarial assumptions, and financial condition of each of the systems. Definitions of some of the more common actuarial terms used in pension fund administration are also provided in a Fiscal Topic titled “Glossary of Actuarial Terms.” This Issue Review does not include information regarding the Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA-CREF), the pension system covering many Board of Regents employees.

AFFECTED AGENCIES

Iowa Public Employees Retirement System (IPERS) Municipal Fire and Police Retirement System of Iowa (MFPRSI) Peace Officers’ Accident, Disability and Retirement System (PORS) Judicial Retirement System

CODE AUTHORITY

Iowa Code chapter 97A Iowa Code chapter 97B Iowa Code chapter 411 Iowa Code chapter 602, Article 9, Part 1

BACKGROUND

Iowa has four public pension systems covering employees of state government, county and municipal government, and public school employees. As of the 2012 valuations, the four systems had nearly 170,000 active employee members and were providing retirement benefits for more than 106,000 retired public officials. All four systems are defined benefit plans.1

1 An employer-sponsored retirement plan in which an employer/sponsor promises a specified monthly benefit on retirement that is predetermined by a formula based on the employee’s earnings history, length of service, and age rather than depending directly on individual investment returns. It is ‘defined’ in the sense that the benefit formula is defined and known in advance. The investment risk is borne by the plan sponsor.

139 ISSUE REVIEW 2 December 6, 2013

The governance of all four systems begins with the plan sponsors, the General Assembly and the Governor. By statute, they set the membership of each system, provisions for the determination of contribution rates for employers and employees, and benefit provisions of each system. More information for each system is provided below along with a description of the internal governance of each system. IPERS2 – Established on July 4, 1953, to replace the Iowa Old-Age and Survivors’ Insurance System, IPERS is the largest of the four systems providing services and benefits to approximately 266,000 active and retired members of about 2,200 covered employers. Employees of the public education system comprise the largest segment of the IPERS membership, followed by state employees, city employees, county employees, and public health employees. The working membership by employer group is reflected in Chart 1. Chart 1

Source: IPERS – A Legislator’s Guide to Iowa Public Employees’ Retirement System There are three “groups” of members that are served by IPERS. The regular group includes most state, county, municipal, and public school system employees. Special services group 1 consists of county sheriffs and deputies and special services group 2 includes peace officer employees of the Departments of Natural Resources and Transportation, correctional officers, police and firefighters not covered by Iowa Code chapters 400, 410, or 411, county jailers, and emergency medical service providers. The IPERS Investment Board is comprised of 11 members, seven voting and four nonvoting, and establishes the investment policy and oversees the actuarial analysis of the System. Six members are appointed by the Governor, three are public members and three are members of the System. The seventh voting member is the State Treasurer. The four nonvoting members are two state Representatives and two state Senators. The Benefits Advisory Committee (BAC)3 is comprised of nine voting members, eight of whom are constituents of the system representing employers, active employees, and retired employees, and one public member. The BAC was established to counsel IPERS and the General Assembly on benefits and services. IPERS is an independent state government agency administering the plan.

2 For more information see the Fiscal Topic Iowa Public Employees’ Retirement System and the IPERS 2013 valuation report. 3 See Iowa Code §97B.8B.

140 ISSUE REVIEW 3 December 10, 2013

Regular provision members contribute 5.93% of covered wages and employers contribute 8.93% for FY 2014.4 Regular IPERS has a multiplier of 2.0% for each year of service up to 30 years with an additional 1.0% for each of no more than five additional years. The maximum benefit available is 65.0% of the average final compensation (AFC) with 35 years of service. The AFC is based on the highest five years of earnings. Normal retirement is at age 65, age 62 with 20 years of service, or rule of 88 (age + years of service = 88). Early retirement penalties of 0.5% apply for each month the member’s retirement precedes the normal retirement date for the member for service earned prior to July 2012. For members retired prior to July 1, 1990, a noncompounding cost of living adjustment (COLA), or dividend, based on the Consumer Price Index (CPI) is provided only if the system is fully funded, and is limited to no more than 3.0%.5 For members retired on or after July 1, 1990, a favorable experience dividend has been available, payable from a reserve account seeded with just over $600 million from the IPERS Trust Fund.6 This benefit provision will cease after the January 1, 2014, dividend due to the funded status and not a repeal of the applicable law. Retiring members may select from six irrevocable payment options. They are: • Life annuity with a designated lump sum – Provides a lifetime monthly benefit with a designated lump sum payable to a beneficiary not to exceed the member’s total contributions plus interest. • Life annuity with a variable decreasing lump sum – Provides a lifetime monthly benefit with a death benefit equal to the difference between monthly benefits received and total contributions plus interest. • Single life annuity – Provides a lifetime monthly benefit with no survivor benefit. • Joint and survivor annuity – Provides a lifetime monthly benefit plus a death benefit equal to 25.0%, 50.0%, 75.0%, or 100.0% of the member’s monthly benefit. Certain restrictions apply. • 120-month term certain annuity – Provides a guaranteed monthly benefit for the member for 120 months. If the member dies prior to receiving 120 payments the remaining payments are made to a beneficiary. • Joint and survivor pop-up annuity – Provides a monthly benefit for the life of the member plus a death benefit equal to 25.0%, 50.0%, 75.0%, or 100.0%. If the beneficiary predeceases the member; the monthly benefit is increased to what it would have been under the life annuity with a variable decreasing lump sum. If a member terminates service prior to the seven-year vesting period, the member is entitled to withdraw the member’s contributions plus interest, or roll the amount to another qualified plan. If a vested member terminates service prior to the normal retirement age, the member may withdraw, or receive a deferred benefit at normal retirement age. As of the June 30, 2012, actuarial valuation, the funded ratio for IPERS regular members was 79.2% and the unfunded actuarial liability (UAL) for regular members was $5,806 million. IPERS is presently amortizing the UAL using a 30-year open, level percent of pay basis.7 The plan for Sheriffs and Deputies is administered by IPERS and members contribute 9.88% of covered wages and employers contribute 9.88% for FY 2014. The Sheriffs and Deputies multiplier is on a sliding scale depending on the years of covered employment and a maximum

4 Pursuant to Iowa Code section 97B.11 IPERS is required to set contribution rates each year that are equal to the required contribution rate. However, the rate set by the system cannot vary by more than one percentage point from the prior fiscal year. 5 See Iowa Code §97B.49F. 6 For more information on the dividend payments see the Issue Review – IPERS Retirement Dividend Payments. 7 Beginning with the June 30, 2014, actuarial valuation, IPERS will change to a 30-year closed, level percent of pay basis.

141 ISSUE REVIEW 4 December 6, 2013 benefit of 72.0% of the AFC with 30 years of service. Normal retirement age is 50 with at least 22 years of covered service. The AFC is based on the highest three years of earnings. No early retirement penalties apply to Sheriffs and Deputies covered employment. Retiring members may select from the same six irrevocable payment options available to regular members. Members are also eligible to receive level payment options where they receive higher IPERS benefits before age 62 and then reduced IPERS benefits after age 62 to provide nearly equal monthly income before and after they become eligible for Social Security benefits. If a member terminates service prior to the four-year vesting period the member is entitled to withdraw the member’s contributions plus interest. If vested, members are entitled to receive a portion of the employer contributions calculated by dividing the years of service by 22, or the member may roll the amount to another qualified plan. Upon termination of employment, members may, in lieu of cashing out of IPERS, leave their investment with IPERS to draw a retirement benefit when eligible. As of the June 30, 2012, actuarial valuation, the funded ratio for IPERS Sheriffs and Deputies was 88.7% and the UAL was $57 million. IPERS is presently amortizing the UAL using a 30- year closed level percent of pay basis. The plan for the Protection occupations is administered by IPERS and members contribute 6.76% of covered wages and employers contribute 10.14% for FY 2014. The Protection Occupation multiplier is on a sliding scale depending on the years of covered employment and a maximum benefit of 72.0% of the AFC with 30 years of service. Normal retirement age is 55 with at least 22 years of covered service. The AFC is based on the highest three years earnings. No early retirement penalties apply to special service covered employment. Retiring members may select from the same six irrevocable payment options available to regular members. Members are also eligible to receive level payment options where they receive higher IPERS benefits before age 62 and then reduced IPERS benefits after age 62 to provide nearly equal monthly income before and after they become eligible for Social Security benefits. If a member terminates service prior to the four-year vesting period the member is entitled to withdraw the member’s contributions plus interest. If vested, the member is entitled to receive a portion of the employer contributions calculated by dividing the years of service by 22, or the member may roll the amount to another qualified plan. As of the June 30, 2012, actuarial valuation, the funded ratio for IPERS special services group 2 was 95.1% and the UAL was $53.0 million. IPERS is presently amortizing the UAL using a 30- year closed, level percent of pay basis. MFPRSI8 – Established by the 1990 General Assembly,9 MFPRSI combined 87 separate fire and police retirement systems from local jurisdictions into the statewide system. Effective January 1, 1992, the separate systems ceased to exist and the respective entities were required to transfer assets equal to their accrued liabilities to MFPRSI. The MFPRSI Board of Trustees is comprised of nine voting members and four nonvoting legislators, two from the Senate, and two from the House. The nine voting members include four active and retired fire and police members and four city representatives appointed by police and fire associations and the Iowa League of Cities. One private citizen member is selected by the eight appointed trustees. The Board is authorized to make investments, pay benefits, set contribution rates, hire staff and consultants, and perform all functions required in the administration of the System. The System is a distinct entity separate from state government

8 For more information see the MFPRSI 2012 valuation report. 9 1990 Iowa Acts ch. 1240.

142 ISSUE REVIEW 5 December 10, 2013 and provides services and benefits to 8,000 active members and retired fire and/or police employees from 49 cities with populations of 8,000 or more prior to the federal census conducted in 1990. The MFPRSI members contribute 9.4% of covered wages and employers contribute 30.12%.10 MFPRSI has a multiplier of 3.0% for each year of service up to 22 years with an additional 2.0% for each of no more than eight additional years. The maximum benefit available is 82.0% of AFC. The AFC is based on the highest three years of earnings. Normal retirement is at age 55 with 22 years of service. A guaranteed COLA of 1.5% is provided each July 1 and an additional fixed amount is provided to retired members based on the length of time the member has been retired.11 Retiring members may select from four irrevocable payment options. They are: • Single life annuity with a designated lump sum – Provides a monthly benefit for the life of the member with a designated lump sum payable to a beneficiary when the member dies. • Single life annuity – Provides a monthly benefit for the life of the member with no survivor benefit. • Joint and survivor annuity – Provides a monthly benefit for the life of the member plus a death benefit equal to 50.0%, 75.0%, or 100.0% of the member’s monthly benefit. The basic benefit is a joint and 50.0% survivor annuity. • Joint and survivor pop-up annuity – Provides a monthly benefit for the life of the member plus a death benefit equal to 75.0% or 100.0%. If the beneficiary predeceases the member the monthly benefit is increased to what it would have been under the basic benefit. If a member terminates service prior to the four-year vesting period the member is entitled to withdraw the member’s contributions plus interest, or roll the amount to another qualified plan. The MFPRSI and the PORS share portability between the two systems that allows the present value of accrued benefits and service to be transferred between the two systems should a vested member of either system terminate service and become an active member of the other system. The MFPRSI also provides a Deferred Retirement Option Plan (DROP) allowing a member to delay retirement and continue working for up to five years with a portion of the retirement allowance set aside in a separate account.12 As of the July 1, 2012, actuarial valuation, the funded ratio for the MFPRSI was 72.0% and the UAL was $655.2 million. The MFPRSI is presently amortizing the UAL using a 25-year open, level dollar basis. PORS13 – Created on July 4, 1949, PORS is one of two systems that provide benefits to employees and retirees of a single state agency. The PORS provides services and benefits to approximately 1,200 active members and retired peace officer employees of the Iowa Department of Public Safety (DPS). The PORS Board of Trustees is made up of five voting members. The Commissioner of the DPS serves as the chairperson, the State Treasurer is a statutory member of the Board, one trustee is a retired member elected by peers, one trustee is an active employee elected by

10 Pursuant to Iowa Code section 411.11, the employer contribution rate is adjusted annually to the required contribution as determined by the System Actuary. 11 For information comparing MFPRSI and PORS COLAs, other benefits, and contributions see the Issue Review Peace Officers’ Retirement, Accident and Disability System and Municipal Fire and Police Retirement System. 12 For more information on the MFPRSI DROP plan refer to the Fiscal Topic paper – 411 System Deferred Retirement Option Plan. 13 See the Fiscal Topic Peace Officers’ Retirement Accident and Disability System (PORS) and the PORS 2012 valuation report.

143 ISSUE REVIEW 6 December 6, 2013 peers, and one member is appointed by the Governor. The Board sets the investment policy, oversees the actuarial services for the System, and with the assistance of staff advises the Governor and the General Assembly with regard to benefits and contribution rates. The PORS is managed by one full-time and one part-time staff in the Administrative Services Division of the DPS as required in Iowa Code section 97A.5. PORS members contribute 10.85%14 of covered wages and the state contributes 29.0%15 plus an additional appropriation of $5.0 million beginning July 1, 2013,16 and continuing until the PORS funded status is 85.0%. The PORS has a multiplier of 2.75% for each year of service up to 32 years. The maximum benefit available is 88.0% of AFC and is based on the highest three years earnings. Normal retirement is at age 55 with 22 years of service. The PORS does include an early retirement provision at the age of 50 and penalties apply based on the number of months retirement precedes the age of 55. A COLA based on the increases received by active members at the same rank and position on the salary scale is provided each July 1 and January 1, plus an additional fixed amount is provided to retired members based on the length of time the member has been retired. Retiring members may select from four irrevocable payment options. They are: • Life annuity with a designated lump sum – Provides a monthly benefit for the life of the member with a designated lump sum payable to a beneficiary. • Single life annuity – Provides a monthly benefit for the life of the member with no survivor benefit. • Joint and survivor annuity – Provides a monthly benefit for the life of the member plus a death benefit equal to 50.0%, 75.0%, or 100.0% of the member’s monthly benefit. The basic benefit is a joint and 50.0% survivor annuity. • Life annuity with five-years or 10-years certain – provides a guaranteed monthly benefit for the member for 60 or 120 months. If the member dies prior to receiving 60 or 120 payments the remaining payments are made to a beneficiary. If a member terminates service prior to the four-year vesting period the member is entitled to withdraw the member’s contributions plus interest, or roll the amount to another qualified plan. The PORS and the MFPRSI share portability between the two systems that allows the present value of accrued benefits and service to be transferred between the two systems should a vested member of either system terminate service and become an active member of the other system. If a vested member terminates service prior to the normal retirement age, the member may withdraw, or receive a deferred benefit at normal retirement age. As of the July 1, 2012, actuarial valuation, the funded ratio for the PORS was 61.0% and the UAL was $187.2 million. The PORS is presently amortizing the UAL using a 30-year closed (established in 2008) level percent of pay basis. Judicial Retirement System17 – Created on May 12, 1949, this System provides services and benefits to 386 active members and retired judges of the state courts. Membership includes Supreme Court Justices, Court of Appeals Judges, District Court Judges, District Associate Judges, Associate Probate Judges, and Associate Juvenile Judges. Magistrates are covered

14 Member contributions increase by 0.5% until reaching 11.35% effective July 1, 2014, pursuant to Iowa Code section 97A.8(1)(d)(8). 15 The state contribution rate is scheduled to increase by 2.0% each year until reaching a maximum contribution rate of 37.0% effective July 1, 2017, unless the normal contribution rate is less, pursuant to Iowa Code section 97A.8(1)(b)(2). 16 2010 Iowa Acts ch. 1167, §13. 17 For more information see the Fiscal Topic Judicial Retirement System and the Judicial Retirement System 2013 valuation report.

144 ISSUE REVIEW 7 December 10, 2013 by the Iowa Public Employees’ Retirement System (IPERS). The State Court Administrator is granted the authority to oversee the System in Iowa Code section 602.9102. Judicial Retirement System active members contribute 9.35% of covered wages and the state contributes 30.6% during 2014. Judicial Retirement has a multiplier of 3.25% for each year of service up to 20 years. The maximum benefit available is 65.0% of AFC and is based on the highest three years earnings. Normal retirement is at age 65, or 50 with 20 years of service. There is no provision for early retirement for judges. Judges become vested in the System after four years of covered service. Retiring judges receive an annuity for the life of the judge with 50.0% of that amount payable to an eligible surviving spouse with payments totaling at least the amount of the judge’s contributions. A member terminating service prior to retirement is entitled to withdraw the member’s contributions plus interest, or roll the amount to another qualified system. As of the July 1, 2012, actuarial valuation, the funded ratio for the Judicial Retirement System was 68.9% and the UAL was $53.0 million. The Judicial Retirement System is presently amortizing the UAL using a 25-year closed (established in 2007) level dollar basis.

SYSTEM INFORMATION

A comparison of some basic information for each of Iowa’s public pension systems is provided in Table 1 and Table 2. All data is as of the 2012 actuarial valuation. Table 1 IPERS IPERS IPERS Sheriffs & Protection System Regular* Deputies Occupations MFPRSI PORS Judicial Active Membership 155,800 1,530 6,870 3,888 618 192 Retired Members 99,324 671 1,682 3,816 541 186 Covered Payroll (in millions) $6,510.5 $95.2 $322.1 $258.5 $43.9 $25.8 Annual Benefits Paid (in millions) $1,392.0 $18.7 $387.0 $126.2 $23.3 $9.2 Average Active Member Annual Salary $41,820 $62,996 $46,732 $66,491 $71,040 $134,167 Average Retired Member Annual Benefit $14,136 $28,284 $22,286 $33,084 $43,402 $49,561 * IPERS covered employment includes permanent part-time employees which has an unknown impact on average active and retired annual salary and benefit data. Earnings covered by the MFPRSI and PORS are exempt from Social Security coverage. For members of these systems the earnings while employed by the DPS or a covered city are exempt from the Social Security tax of 6.2% paid on earned income up to the covered wage base of $113,700 for tax year 2013. Members of PORS and MFPRSI are eligible for a reduced Social Security benefit under the Windfall Elimination Provision (WEP) of the Social Security Act if they have 40 quarters of qualified employment outside of their PORS and MFPRSI covered employment. The calculations are complicated and vary depending on each individual’s social security covered wages and if the pension received is based on work covered, or not covered by social security. Therefore, the implications are not thoroughly explored in this Issue Review. Estimates of the effect of the WEP can be obtained using online calculators available on the Social Security website http://www.socialsecurity.gov/retire2/anyPiaWepjs04.htm.

145 ISSUE REVIEW 8 December 6, 2013

Table 2 IPERS IPERS IPERS Sheriffs & Protection System Regular Deputies Occupations MFPRSI PORS Judicial Vesting Period 7 Years 4 Years 4 Years 4 Years 4 Years 4 Years Benefit Based On Average High 5 High 3 High 3 High 3 High 3 High 3 Maximum Service Retirement Benefit/ Years of Service 65%/35 72%/30 72%/30 82%/30 88%/32 65%/20 Cost of Living Adjustment Yes* Yes* Yes* Yes Yes No * Not guaranteed and are dividends that are not added to the prior monthly benefit and is dependent upon retirement date and funded status.

BENEFIT COMPARISON

For purposes of comparison, Table 3 provides an estimated benefit calculation for each of the systems, the same assumptions for years of service, wages earned, and age at retirement, in this case age 56.18 Social Security benefits were also calculated using the online calculators available on the Social Security Administration’s website to provide a better indication of the postretirement income available to all members. For the PORS and MFPRSI two estimates are provided, one assuming that the member does continue working in Social Security covered employment after retirement from career employment, and the other assuming the member does not continue working postretirement. To maintain comparability, the same post retirement social security covered wages are assumed for all IPERS members and included in the estimated Social Security benefit. No COLA for Social Security is assumed. For PORS the pension is assumed to grow at the 15-year average COLA increase of 1.6%. For the MFPRSI member the pension is assumed to grow at the statutory 1.5% plus the fixed escalation amount. Table 3 Iowa Public Pension System Benefit Comparison Estimated Benefit Benefit Rate Average Annual Social Total Post Received Received @ 32 Final Pension Security Retirement by by Pension System YOS Comp. Benefit Benefit Benefit Age 62 ** Age 70 IPERS Regular * 62.0% $ 51,705 $ 32,057 $ 23,904 $ 55,961 $ 192,342 $ 640,030 IPERS Special Service 75.0% 53,435 40,076 23,904 63,980 240,456 752,296 PORS w/out WEP 88.0% 53,435 47,023 47,023 294,744 735,615 PORS w/ WEP 88.0% 53,435 47,023 8,844 55,867 294,744 871,648 MFPRSI w/out WEP 82.0% 53,435 43,817 43,817 275,715 696,995 MFPRSI w/ WEP 82.0% 53,435 43,817 8,844 52,661 275,715 834,566 Judicial Retirement 65.0% 53,435 34,733 23,904 58,637 208,398 677,494 * Using High-5 ** Social Security benefits are not available until age 62. The “Benefit Received by Age 62” represents pension benefits only. *** YOS = Years of Service. WEP = Windfall Elimination Provision.

ACTUARIAL ASSUMPTIONS AND EXPERIENCE

The actuarial assumptions used by each of the systems are set by the Boards of Trustees with the input and advice of the actuarial firm contracted by the systems. Assumptions are reviewed

18 Social Security benefits are available at age 62 with a benefit reduced by as much as 25%. Full retirement age is on a sliding scale between ages 66 and 67 depending on year of birth. See page 6 of the Social Security Administration’s Retirement Benefits publication EN-05-10035.

146 ISSUE REVIEW 9 December 10, 2013 every four to five years by the system actuary who conducts an experience study examining the actuarial methods and assumptions and how the experience of the system compares to those methods and assumptions. Economic assumptions such as inflation, wage growth, and investment return are examined as well as the demographic assumptions of mortality, retirement and disability rates, terminations and salary increases, among others. A comparison of several basic actuarial assumptions, plan provisions, and metrics for each of the systems is provided in Table 4. All data is as of the June 30, 2012, actuarial valuation. Table 4 IPERS IPERS IPERS Sheriffs & Protection System Regular Deputies Occupations MFPRSI PORS Judicial Employee Contribution (% of covered wages)* 5.95% 9.88% 6.76% 9.40% 10.85% 9.35% Employer Contribution (% of covered wages)* 8.93% 9.88% 10.14% 30.12% 29.00% 30.60% Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Actuarial Cost Method Normal Normal Normal Normal Normal Normal Mortality Table RP 2000 RP 2000 RP 2000 Weighted** RP 2000 RP 2000 % Investment return 7.50% 7.50% 7.50% 7.50% 8.00% 7.50% Normal Cost 10.17% 16.62% 16.04% 18.37% 26.22% 22.03% Smoothing Period 4 Years 4 Years 4 Years 5 Years 4 Years 4 Years 30-Year 30-Year 30-Year 25-Year 30-Year 25-Year Amortization Period Open*** Closed Closed Open Closed Closed Percent of Percent of Percent of Level Percent of Level Amortization Method Payroll Payroll Payroll Dollar Payroll Dollar Funded Ratio 79.20% 88.70% 95.10% 74.00% 61.00% 68.89% Unfunded Actuarial Accrued Liability – UAAL (in millions) $5,805.83 $56.78 $53.49 $655.24 $187.25 $52.96 UAAL Per Capita Active $37,264 $37,111 $7,786 $168,529 $302,994 $275,833 * FY 2014 contribution rate ** Four-twelfths 1971 Group Annuity Mortality Table and eight-twelfths 1994 Group Annuity Mortality Table *** Changes to a 30-year closed period effective 6/30/2014 One actuarial assumption having a critical impact on the condition of the funds is the investment return. For the three largest of Iowa’s public systems, the investment return is expected to exceed 60.0% of the income to the fund. An artificially high assumed return can make the funded status appear much better than it may be. However, continued failure to meet the assumed return could quickly result in an unhealthy pension fund. Over the last 30 years the average market investment return for each of the systems has met the actuarial assumption for earnings. Even with the market downturns in 2000 and 2008, each of the systems have experienced returns averaging near the assumed rate. Data for the 10-year and 30-year average investment returns as of the 2012 actuarial valuation for each of the systems is reflected in Table 5. Table 5 System Assumed Return 10-Year Average 30-Year Average IPERS 7.50% 7.84% 11.06% MFPRSI * 7.50% 7.89% 9.60% PORS 8.00% 7.12% 10.59% Judicial ** 7.50% 5.52% 7.64% * Since inception on January 1, 1992 ** Data prior to 1986 not available Most retirement systems use a smoothed investment return over a period of four to five years for the determination of asset value thereby removing the volatility inherent in utilizing the

147 ISSUE REVIEW 10 December 6, 2013 market investment return. 19 The peaks and valleys caused by extraoridnary gains and losses are lessened due to the deferred recognition of those gains and losses. As an example, PORS recognizes 25.0% of a gain or loss from each year over a four-year period. Chart 2 reflects the investment return for the PORS comparing return on market value and actuarial value (smoothed). The effect of smoothing is apparent in the actuarial investment return line which does not have the extreme swings that appear in the market investment return line because investment gains and losses are spread over a four-year period. This plays a critical role in the determination of contribution rates. Chart 2

Most retirement plans are funded with the intent of accumulating assets over an employee’s working career that will be sufficient, with investment earnings, to pay the benefit after they retire. As a result, the ultimate cost of the benefits is allocated to each year of service for all members. If a plan has a funded ratio of 100.0%, it means the current asset value is equal to the amount of costs allocated to past service, i.e. the system is exactly in sync with their funding plan. This typically is not the case, as actual experience frequently varies from that anticipated by the actuarial assumptions. For example, if the investment return assumption is not met, as has been the case over several years of the last decade, and absent some other mitigating factor the plan’s funded ratio will decline. To the extent the System’s actuarial liability exceeds the actuarial value of assets, an unfunded actuarial liability (UAL) exists and additional contributions are necessary to fund the UAL over time. When an unfunded actuarial liability exists, the amount will only decline if the contributions and the interest on the UAL to the system are more than the ongoing cost (normal cost). If contributions are less than this amount the unfunded actuarial liability will grow at the assumed investment return rate even if all actuarial assumptions are met. For example, an unfunded actuarial liability of $1,000,000 will grow $75,000 over a year’s time if the assumed rate of return is 7.5% and no contributions are made to reduce the UAL. The UAL is amortized, or paid off,

19 According to page 4 of a Morningstar, Inc. study of public pension plans entitled “The State of State Pension Plans, A Deep Dive into Shortfalls and Surpluses.”

148 ISSUE REVIEW 11 December 10, 2013 over a long period of time to accumulate the assets needed to cover the shortfall between the portion of the projected liabilities attributable to past service and the current value of assets. The Governmental Accounting Standards Board (GASB) statement 25 currently limits this period to a maximum of 30 years. Systems use either a closed or open period of time. A closed period requires the liability to be paid off by a date certain, similar to a residential loan. An open period resets the amortization period every year. A closed period will result in a larger actuarial contribution rate and will more quickly improve a system’s funded ratio. When an unfunded actuarial liability exists, the required contribution rates must be higher in order to fund both the cost of the current year of service for active employees and a portion of the shortfall between the actuarial liability and the actuarial assets (UAL amortization payment). If the required contribution rate is funded and all other economic and demographic variables meet expectations, the system will reach a funded ratio of 100.0% at the end of the amortization period. A history of funded ratios for each of the public pension systems is provided in Chart 3. Chart 3 Iowa Public Pension Systems History of Funded Ratio 120.0%

110.0%

100.0%

90.0%

80.0%

70.0%

60.0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

IPERS PORS** MFPRSI* Judicial

*Based on market value of plan assets rather than actuarial value **Smoothing method implemented July 1, 2001

149 ISSUE REVIEW 12 December 6, 2013

Because MFPRSI funded ratios are based on market value of plan assets the volatility of the markets is reflected in the blue line. The spike in funded ratio for 2008 recognizes all of the investment gain for that year, reported at 18.9% on a market basis. The other Systems reported funded status on an actuarial value and had not recognized 100% of the gains from 2004-2006. COMPARISON OF CONTIGUOUS STATES It is difficult to compare plans from state-to-state due to differences in plan design (defined benefit, defined contribution, or hybrid plans, and postretirement COLA provisions), extremes in plan membership (state only or state, local, and education), contribution structure (single- employer or multi-employer), actuarial assumptions used by the plans (investment return, amortization method). The comparisons provided in this Issue Review are intended to provide basic information with regard to plan design, funding strategies, and actuarial assumptions. General Retirement Systems (plans similar to IPERS) – Of the seven states sharing a border with Iowa, six offer defined benefit plans and one (Nebraska) offers a cash balance plan (see Attachment A for more information). Four plans that have comparable membership to IPERS have more than one tier of membership. The tiers are generally based on employment date or retirement system eligibility date and have differing benefit structures and/or contribution rates.20 The average employer contribution rate is 13.19% of covered wages and the average employee contribution is 5.26%. The average funded ratio of the seven systems is 74.79% with a high of 99.8% (Wisconsin) and a low of 34.7% (Illinois). The average return on investment assumption is 7.78% with a high of 8.5% (Missouri) and a low of 7.2% (Wisconsin). The Missouri system requires no contribution from covered employees except for those hired on or after January 1, 2011, and 1.13% of the $25.5 billion Missouri budget is expended on pension system contributions. The South Dakota plan provides a benefit equal to 100.0% of the average high three years of earnings reduced by post retirement earned income and primary Social Security. Four of the plans provide benefits for state employees only, while the remaining three provide benefits to county, municipal, and/or school employees. Plan provisions for five of the systems include a postretirement COLA to augment the initial pension calculated at retirement. The average annual benefit for retired members of the seven systems was $15,881 for 2012 and the average active member salary was $46,665. A comparison of basic plan provisions for IPERS and the general pension systems of the seven surrounding states can be found in Attachment A. A table showing some of the actuarial assumptions, contribution rates and memberships of IPERS and the seven surrounding states can be found in Attachment D. Public Safety Retirement Systems (plans similar to PORS, MFPRSI and IPERS special service groups) – All seven contiguous states provide a greater benefit for public safety employees than is provided for general retirement system members. The benefit maximums range from a low of 75.0% to a high that is greater than 100.0% of the average final compensation. Plan membership ranges from state and local law enforcement and the inclusion of fire fighters to membership involving the State Patrol only. The average employer contribution rate is 22.7% of covered wages for the six systems for which data was available. The highest contribution rate reported was 55.23% for Missouri Department of Transportation and State Patrol and the lowest reported was 8.0% (South Dakota). The average employee contribution is 9.44%, the highest of which was Nebraska at 19.0% and the

20 See page 184 of the Legislative Services Agency 2012 Iowa Factbook for comparative information for Iowa and the seven contiguous states.

150 ISSUE REVIEW 13 December 10, 2013 lowest was Missouri at 4.0%. Missouri required no employee contribution until January 1, 2011, for new hires. The average funded ratio of the bordering states systems is 68.69% with a high of 99.9% (Wisconsin) and a low of 34.7% (Illinois). The average investment return assumption is 7.64% with a high of 8.25% (Missouri) and a low of 7.20% (Wisconsin). A member retiring from the Minnesota State Patrol system with 35 years of service receives a benefit equal to 105.0% of average final compensation. Four of the public safety plans provide benefits to state employees only, with two providing benefits only to State Patrol employees. Plan provisions for five of the systems include a postretirement COLA to augment the initial pension calculated at retirement. For the six systems for which data was available, the average annual retired member benefit was $44,504 in 2012. The average active salary for the same period was $66,504. A comparison of basic plan provisions for the systems of the seven surrounding states that are similar to PORS and MFPRSI can be found in Attachment B. A table showing some of the actuarial assumptions, contribution rates, and memberships for the public safety programs of IPERS, PORS, MFPRSI, and the seven surrounding states can be found in Attachment D. Judicial Retirement Systems – Five of Iowa’s neighboring states have a separate retirement system for members of the state judiciary and all provide a different benefit structure than are provided for the general retirement system members. Benefit maximums range from a low of 65.0% of average final compensation to a high of 100.0%. The average employer contribution is 27.5% of covered wages for the five bordering states with separate judicial systems. The highest employer contribution is 59.7% (Missouri) and the lowest is 7.7% (Nebraska). The average employee contribution rate is 7.2% with a high of 12.1% (Minnesota) and a low of 0.0% (Missouri). The average funded ratio of the five states is 50.3%, the highest being 89.0% (Nebraska) and the lowest was 24.7% (Missouri). Among the states for which data was available, the average annual active member salary was $121,405 and the average annual benefit for a retired member was $59,869. Four of the five state plans include a post-retirement COLA provision. A comparison of basic plan provisions for those systems of the seven surrounding states that are similar to Iowa Judicial Retirement can be found in Attachment C. A table showing some of the actuarial assumptions, contribution rates and memberships for the judicial retirement programs for Iowa and five of the seven surrounding states can be found in Attachment D. BUDGET IMPACT Public entity contributions to public pension systems, excluding contributions for Board of Regents employees to the Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA-CREF), are depicted in Table 6. Table 6 FY 2012 Public FY 2012 Employee FY2012 Benefits Pension System Contributions * Contributions * Paid * IPERS $ 8.4 $ 366.4 $ 1,549.2 MFPRSI 61.9 23.4 132.6 PORS 10.7 4.3 23.3 Judicial 8.2 2.5 9.7 Total $ 663.4 $ 396.6 $ 1,714.8 *Amounts are in millions Data is not readily available to ascertain the portion of benefits paid to members whose state of permanent residence is still Iowa for all four systems. However, IPERS reports 88.0% of all

151 ISSUE REVIEW 14 December 6, 2013 benefits are paid to Iowans. If the same holds true for the other three, the four public pension systems potentially pump over $1.5 billion dollars into Iowa’s economy each year. A comprehensive policy review of this subject is available in the Legislative Service Agency’s Legislative Guide to Iowa Public Retirement Systems.

STAFF CONTACTS: David Heuton (515-725-0509) [email protected] Jennifer Acton (515-281-7846) [email protected]

152 Attachment A

Other State Pension Systems similar to IPERS general group Illinois – The State Employee’s Retirement System (SERS) was created January 1, 1944, and is a defined benefit plan. Unused and unpaid sick leave may be used to meet service eligibility requirements as additional service credit. Paid sick and vacation time may be used to meet service eligibility requirements if contributions are made to the system on those payments. However, these payments do not change the average final compensation. Employees covered by Social Security contribute 4.0% and those exempt from Social Security contribute 8.0%. The state matches 38.4% on a covered wage ceiling currently set at $106,800. The ceiling is increased annually by 3.0% or half of the Consumer Price Index (CPI), whichever is less. The SERS has a multiplier of 1.67% of covered wages for each year of service for social Security covered employees and 2.2% for non-covered employees. The maximum benefit is 75.0% of the average high eight years of earnings for both groups. Normal retirement age with an unreduced benefit is 60 with eight years of service, or when the member meets the Rule of 85, where the age and years of service are equal to or greater than 85. For those retiring before normal retirement age the pension benefit is reduced by one-half of 1.0% for each month under age 60. The SERS provides for a compounding COLA each January 1 after the first full year of retirement for retired members age 60 and older. The COLA is equal to 3.0% or one-half of the CPI for the prior year, whichever is less. Members terminating employment are entitled to the employee contributions only and is not entitled to the state contribution or any interest accumulated on the employee’s or the state’s contributions. Members are not eligible to receive a pension from SERS if they have fewer than 10 years of covered service. Retiring members may select from two irrevocable payment options. They are:  Reversionary Annuity – A member may elect to receive a smaller pension during his lifetime in order to provide a spouse or a designated dependent with a lifetime income. That payment would be in addition to any other benefit payable by the System.  Level Income – A member who contributes to Social Security as a state employee may elect to have his pension payments increased before Social Security normal retirement age and reduced thereafter. To be eligible for this election the member must have established eligibility for a Social Security pension. Of the seven contiguous states, Illinois’ SERS has the lowest funded percentage at 34.68% as of the July 1, 2012, actuarial valuation, and the Unfunded Actuarial Liability (UAL) based on the actuarial value of assets was $21,613.9 million. The SERS is presently amortizing the UAL using a 30-year open period on a level percent of projected capped pay basis. Actual annual employee and employer contributions to the system during FY 2012 totaled $1.65 billion. During FY 2010, pursuant to Illinois Public Act 96-0043, the State infused a total of $723.7 million into the SERS from a general obligation bond issuance. Debt service contributions on the bond issue are approximately 1.8% through FY 2023. Kansas – The Kansas Public Employees Retirement System (KPERS) was created in 1962 as a defined benefit plan and provides pension benefits to all state, public school district, and county employees and most municipal employees. The KPERS includes two tiers of membership, those beginning covered employment prior to July 1, 2009, are Tier 1 members and those beginning covered employment on, or after July 1, 2009, are Tier 2 members. Tier 1 members contribute 4.0% of covered wages (increasing to 5.0% in 2014 and 6.0% in 2015) and Tier 2 members contribute 6.0%. The employer contributes 12.37% of covered wages regardless of the employee’s contribution.

153 Attachment A

The KPERS has a multiplier of 1.75% for years of service prior to January 1, 2014, and 1.85% per year of covered service after December 31, 2013. Average final compensation is based on the highest five years of earnings, but they are not required to be consecutive years. The plan contains no provision for post-retirement COLAs. Employees vest with five years of credited service. Normal retirement age from the KPERS is 65 with five years of service or 60 with 30 years of credited service. Members with at least 30 years of service may retire before age 60 with a reduced pension. A Rule of 85 is available to Tier 1 members. Members may select from the following benefit payment options:  Straight Life Annuity – The standard benefit paying a monthly pension for the life of the member.  Joint and Survivor Benefit – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 50.0%, 75.0%, or 100.0% of the member benefit for the remainder of the spouse’s life.  Life Income, 5-Year, 10-year or 15-Year Certain – Monthly payments for the life of the member. If the member dies before receiving 60, 120 or 180 months in benefits the death benefit payable is equal to the remaining monthly payments.  Lump Sum Payment – A lump sum at retirement that must be paid in 10.0% increments and can be no more than 50.0% of the actuarial present value of the standard benefit straight life annuity. If a member terminates employment other than by retirement they are entitled to employee contributions plus interest at a guaranteed rate of 8.0% if hired before July 1, 1993 and 4.0% if hired on, or after July 1, 1993. Terminating employees that withdraw contributions forfeit all rights under the system and are not entitled to any of the employer contributions. As of the December 31, 2012, actuarial valuation, the KPERS funded percentage was 55.0% and the UAL was $9,357.5 million. The KPERS is presently amortizing the UAL using a 40-year closed period (established in 1993), on a level percent of pay basis. In FY 2014, Sub HB 2333 begins directing revenue from the Expanded Lottery Act Revenues Fund to help pay down the KPERS unfunded liability. Expanded Lottery Funds include net gaming revenues collected from state-owned casinos and electronic gaming machines at pari-mutuel racetracks. Legislative estimates place the estimated amount to be approximately $40.0 million. In addition, if the State of Kansas sells surplus real estate, 80.0% of the proceeds must be used to reduce the unfunded liability of KPERS until the funded ratio of 80.0% is achieved. No estimate of the potential proceeds generated by this measure is presently available. Beginning January 1, 2015, a new cash balance retirement plan will go into effect for new employees. A “cash balance” plan is a type of defined benefit plan that includes some elements of a defined contribution plan and shares risk between employer and employee. Each member makes contributions equal to 6.0% of covered wages. Employees will earn pay credits quarterly based on years of service. Pay credits represent dollars and are tracked in the member’s account along with their contributions. The account balance earns a guaranteed 5.25% interest annually and possibly additional interest based on KPERS’ investment returns and funding status. At retirement, the account balance is annuitized to create a guaranteed lifetime monthly benefit. The cash balance plan will have survivor and partial lump-sum payment options. Members can also use part of the account balance to fund future compounding COLAs. Minnesota – The Minnesota State Retirement System (MSRS) was established in 1929 as a defined benefit plan. Employees contribute 5.0% of covered wages that is matched by an employer contribution of 5.0%. For members starting covered employment on or after July 1,

154 Attachment A

1989, normal retirement age is 66 and retirement before age 66 results in a pension reduced by as much as 46.29% at age 55. The benefit is a level formula based on the average high five consecutive years salary times a multiplier of 1.7% per year of covered service with a maximum benefit of 68.0% (40 years of service). A Rule of 90 (combined age and years of service) providing an unreduced pension at any age is available for members beginning covered employment prior to July 1, 1989. Two methods are available for calculating a retirement benefit for employees in this group. The level formula as described above is available and a “Step” formula that employs two multipliers. A multiplier of 1.2% is applied to the first 10 years and a multiplier of 1.7% to those years of service in excess of 10. The benefit to the Step formula is a reduced early retirement reduction allowing retirement as early as age 50 with a reduction factor of 36.0%. Retiring members may select from several irrevocable payment options. They are:  Single Life Benefit – Monthly payments for the life of the member with a refund of any unpaid balance of the member’s account paid to the beneficiary.  Joint and Survivor Benefit – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 50.0%, 75.0%, or 100.0% of the member benefit for the remainder of the spouse’s life.  Life Income, 15-Year Certain – Monthly payments for the life of the member. If the member dies before receiving 180 months in benefits the death benefit payable is equal to the remaining monthly payments and may be made to more than one surviving beneficiary. An annual postretirement benefit increase of 2.0% of the member’s monthly benefit is provided for the life of the pensioner and beneficiary. Members terminating service after the five-year vesting period may chose to leave contributions in the fund and request a deferred benefit that grows at a rate of 2.5% or 3.0% per year, depending on date of hire, until the member begins receiving a benefit. Members requesting a refund are entitled to the employee contributions plus guaranteed interest of 6.0%. The terminating member is not entitled to any of the employer contribution or accumulated interest on employer contributions. As of the July 1, 2012, actuarial valuation, the funded percentage of the system was 82.7% and the UAL was $1,920.9 million. The MSRS is presently amortizing the UAL using a 30-year closed period (established in 2009) on a level percent of pay basis. Missouri – Created in 1955 by Chapter 104 of the Missouri Revised Statutes, the Missouri State Employee’s Retirement System (MOSERS) is a defined benefit plan providing benefits to state employees. Employees beginning covered service after July 1, 2011, contribute 4.0% of pay and the State contributes 16.98% of pay. Employees establishing membership prior to July 1, 2011, make no contributions toward their retirement benefit. Members that terminate service before the required vesting period of 10 years are entitled to a refund of employee contributions plus accumulated interest. Once an employee becomes eligible for a retirement benefit they may not request a refund of contributions. Retirement eligibility begins at age 67 with 10 years of service or when the member’s age and years of service total 90. If neither condition is met, an early retirement reduction factor of 0.5% is applied for each month prior to age 67. The MOSERS includes a monthly minimum base benefit of $15 per year of service. A member with 25 years of service is guaranteed at least $375 per month (25 x 15 = 375). The MOSERS also includes a “temporary benefit formula” providing a benefit to supplement other income until the retired member reaches the age of 62.

155 Attachment A

The formula for the temporary benefit is 0.8% x years of service x average final pay. To receive the temporary benefit the member must retire under the Rule of 90 provisions. Retiring members may select from several irrevocable payment options. They are:  Single Life Benefit – Monthly payments for the life of the member with a refund to the beneficiary of any unpaid balance in the member’s account.  Joint and Survivor Benefit – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 50.0%, or 100.0% of the member benefit for the remainder of the spouse’s life.  Life Income, 10-year or 15-Year Certain – Monthly payments for the life of the member. If the member dies before receiving 120 months, or 180 months in benefits (depending on the options selected), the death benefit payable is equal to the remaining monthly payments and may be made to any surviving beneficiary. The System provides a postretirement COLA equal to 80.0% of the CPI, but no more than 5.0% of the monthly benefits are provided every year on the anniversary of retirement. Should a member terminate employment prior to the 10 years required for vesting the member is entitled to the employee’s contributions plus accumulated interest on the employee’s contributions. The member forfeits all benefits under MOSERS and is not entitled to any of the employer contributions. As of the June 30, 2012, actuarial valuation, the funded percentage of the MOSERS was 73.16% and the UAL was $2,896.5 million. The MOSERS is presently amortizing the UAL using a 30-year open period on a level percent of pay basis. Nebraska – The Nebraska Public Employee’s Retirement Systems (NPERS) was established as a defined contribution plan in 1964. A cash balance benefit was added in 2002 and employees beginning employment after January 1, 2003, have been automatically enrolled in the plan. Employees contribute 4.8% of covered compensation and the state contribution is 7.49% of covered wages. If a member terminates employment after vesting, they are entitled to both employee and employer contributions, plus interest. Cash balance participants are guaranteed a rate of return equal to the federal mid-term rate1 as published by the Internal Revenue Service plus 1.5%, but in no case less than 5.0%. Members who had been in the defined contribution plan had the option to transfer to the cash balance option in 2003, 2008, and 2013. There is no guaranteed rate of return for the defined contribution plan and members make their own investment decisions for both employee and employer contributions. The members of the defined contribution plan assume all of the risk and receive all of the benefit from that investment risk. Payment options at retirement for both the defined contribution plan and the cash balance plan include deferral of payments until a later date (no later than age 70½), a monthly annuity, rollover distribution to another qualified plan, a lump sum distribution, or a combination of any of the above. The defined contribution plan has an additional option of systematic withdrawal (quarterly, semi-annual or annual distributions). All payment options have the same actuarial value as that of an immediate lump sum payment at retirement. If an annuity is purchased, the member must specify whether or not a COLA is desired. If the COLA option is selected, the COLA is a 2.5% compounding increase to the annuity each year. Annuities may be purchased in several forms. They are:  Life Only Annuity – Monthly payments for the life of the member with no refund or death benefit.  Modified Cash Refund Annuity – Monthly payments for the life of the member with a death benefit paid to any beneficiary equal to the difference between the amount received by the member and the amount required to purchase the annuity.

1 The federal mid-term rate is based on the average market yield during the calendar month of the determination on outstanding marketable obligations of the United States with156 maturities of at least three, but no more than nine years. Attachment A

 Period Certain and Continuous Annuity – Monthly payments for the life of the member. If the member dies before receiving the designated period of 60, 120, or 180 months the death benefit payable is equal to the remaining monthly payments and may be made to any beneficiary.  Joint and Survivor Annuity – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 50.0%, 75.0%, or 100.0% of the member benefit for the remainder of the spouse’s life.  Non-Spousal Joint and Survivor Annuity – Monthly payments for the life of the member with guaranteed survivor benefits paid to the beneficiary equal to 50.0% of the member benefit for the remainder of the beneficiary’s life. The beneficiary cannot be the spouse or an alternate payee.  Designated Period Annuity – Monthly payments to the member for a designated period of 60, 120, 180, or 240 months. Monthly payments cease at the end of the designated period and no lifetime benefit is guaranteed. If a member dies before the designated period the remaining monthly payments are made to the beneficiary or estate. As of the January 1, 2013, actuarial valuation, the funded percentage of the Cash Balance Plan was 93.6% and the UAL was $68.5 million. The NSER is presently amortizing the UAL using a 25-year closed period (established in 2007) on a level dollar basis. South Dakota – The South Dakota Retirement System (SDRS) was created July 1, 1974, as a defined benefit plan. Members contribute 6.0% of all wages and the employer matches with 6.0% of all wages. Statutes include language to prevent spiking income levels as employees approach retirement eligibility in order to prevent a windfall benefit. Average final compensation is based on the highest 12 consecutive quarters during the last 40 quarters of covered employment. Benefits are calculated using two formulas and the member is entitled to the higher of the two benefit calculations. The standard benefit formula includes a multiplier of 1.7% for years of service before July 1, 2008, and a multiplier of 1.55% for years of service on or after July 1, 2008. The alternative formula includes a multiplier of 2.4% for years of service before July 1, 2008, and a multiplier of 2.25% for years of service on or after July 1, 2008. However, under the alternative formula the member’s pension benefit is reduced by 80.0% of primary Social Security. The alternative formula is funded through an additional employer contribution of 6.2% on earnings in excess of the maximum taxable amount for Social Security in any calendar year. Benefit payment options are limited to:  Joint and Survivor Annuity – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 60.0% of the member benefit for the remainder of the spouse’s life.  Level Income Payment – For members electing early retirement, an option is available to have pension payments increased before Social Security normal retirement age and reduced thereafter (between ages 55 and 62). A postretirement COLA indexed to the CPI and the market value of the fund is provided annually at a minimum of 2.1%, but not more than 3.1%. A compounding COLA is provided only if the member has been retired for at least the previous fiscal year period. If a member terminates employment after three, but prior to 10 years of creditable service, the member is entitled to the employee’s contributions plus interest and 85.0% of the employer contributions plus interest. A member withdrawing contributions forfeits all benefits under SDRS. A member terminating employment prior to having three years of credited service is entitled to withdraw the member’s contributions plus interest and 50.0% of the employer’s contribution plus interest. Vested members terminating prior to retirement are entitled to employee contributions plus interest and 85.0% of the employer contributions plus accumulated interest, or a lifetime monthly benefit.

157 Attachment A

As of the June 30, 2012, consolidated annual financial report, the funded percentage of the SDRS was 92.6% and the UAL was $625.0 million. The SDRS is presently amortizing the UAL using a 30-year closed period (established in 2011) on a level percent of pay basis. Wisconsin – The Wisconsin Retirement System (WRS) was created in 1981 by the merger of the Wisconsin retirement fund, the state teachers’ retirement system, the Milwaukee teachers’ retirement fund, and several other public retirement and disability programs. The employee contribution rates are set at 7.0% of covered wages and are matched with an equal amount provided by the employer. The plan is designed to provide career public employees, those with more than 25 years of service, with a benefit between 50.0% and 70.0% of preretirement earnings. The WRS includes two benefit payment calculations that are made for each member when they apply for pension benefits. The first calculation, the “formula method” is a defined benefit calculation based on average final compensation, years of service, and multipliers. The multiplier is set at 1.6% of the average high three years earnings. The second calculation is the “money purchase method” and is a defined contribution calculation that guarantees an annuity that can be provided by the member’s required contributions plus the employer’s match. A retiring member is entitled to the greater of the two determinations. Minimum retirement age is 55 with a normal retirement age of 65. There is no postretirement COLA provision. Retiring members may select from several irrevocable payment options. They are:  Joint and Survivor Benefit – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 75.0% or 100.0% of the member benefit for the remainder of the spouse’s life.  Joint and Survivor Benefit – an annuity reduced 25.0% upon the death of either the member or the beneficiary’s death.  Joint and 100.0% Survivorship Annuity – monthly payments for a guaranteed 180 months with a 100.0% survivorship annuity for a beneficiary for the balance of 180 months should the member pre-decease the beneficiary.  Life Annuity, Five-Year or 15-Year Certain – Monthly payments for the life of the member. If the member dies before receiving 60 months, or 180 months in benefits (depending on the options selected), the death benefit payable is equal to the remaining monthly payments and may be made to any surviving beneficiary. A member terminating service prior to the required 5-year vesting period is entitled to withdraw the member’s contributions plus interest. There is no entitlement to any portion of employer contributions or interest. A vested member that terminates employment is entitled to a pension at the age of 65 or at age 55 with a reduced benefit. As of the December 31, 2012, actuarial valuation report, the funded percentage of the WRS was 99.9% and the UAL was $1,612.3 million. The WRS is presently amortizing the UAL using a variable open period to stabilize contribution rates (25-year open period for 2012) on a level percent of pay basis.

158 Attachment B

Other State Public Safety Pension Systems (similar to MFPRIS and PORS) Illinois – The State Employee’s Retirement System (SERS) was created January 1, 1944, and is a defined benefit plan. Unused and unpaid sick leave may be used to meet service eligibility requirements as additional service credit. Paid sick and vacation time may be used to meet service eligibility requirements if contributions are made to the system on those payments. However, these payments do not change the average final compensation. The AFC is calculated one of three ways; the average of the highest 48 consecutive months over the last 120 months, the average of the last 48 months of service, or the final rate of pay (not exceeding 115.0% of the average of the last 24 months pay), and includes overtime. Employees covered by Social Security contribute 8.5% and those who are exempt from Social Security contribute 12.5%. The state matches at 38.44% on a covered wage ceiling currently set at $106,800. The ceiling is increased by 3.0% or half of the Consumer Price Index (CPI), whichever is less. The SERS has a multiplier of 2.5% of covered wages for each year of service for covered employees and 3.0% for non-covered. The maximum benefit is 80.0% of the AFC for both groups. Normal retirement age with an unreduced benefit is 50 with 25 years of service or age 55 with 20 years of service. SERS provides for a compounding COLA each January 1 after the first full year of retirement for retired members age 55 and older equaling 3.0%. The 80.0% maximum benefit limitation does not apply to postretirement increases. A member terminating employment is entitled to the employee contributions only and is not entitled to the state contribution or any interest accumulated on the employee’s or the state’s contributions. Members are not eligible to receive a pension from SERS if they have fewer than 8 years of covered service. Retiring members may select from two irrevocable payment options. They are:  Reversionary Annuity – A member may elect to receive a smaller pension during his lifetime in order to provide a spouse or a designated dependent with a lifetime income. That payment would be in addition to any other benefit payable by the System.  Level Income – A member who contributes to Social Security as a state employee may elect to have his pension payments increased before Social Security normal retirement age and reduced thereafter. To be eligible for this election the member must have established eligibility for a Social Security pension. For funded status, unfunded actuarial liability, and amortization method see the SERS general retirement summary in Attachment A. Kansas – The Kansas Police and Fireman’s Retirement System (KP&F) is a defined benefit plan created in 1966 and governed under the umbrella of KPERS. The KP&F represents approximately 7,150 police and fire fighter employees of 94 state and local employers. As is the case with KPERS, there are two tiers of membership in the KP&F, those members employed before July 1, 1989 (Tier 1), and those employed on or after July 1, 1989 (Tier 2). Members contribute 7.15% of gross earnings. Employer contributions vary from employer to employer with a high of 28.3%, to a low of 19.9%, the contribution rate for the majority of employers. The KP&F has a multiplier of 2.5% per year of service and a maximum benefit of 90.0% of the AFC based on the highest three of the last five years of reported earnings, but they need not be consecutive years. The plan contains no provision for a postretirement COLA. The AFC for

159 Attachment B

Tier 1 employees includes extra pay such as vacation and sick leave paid at retirement and the AFC for Tier 2 employees does not. Tier 1 members vest with 20 years of credited service and Tier 2 members vest with 15 years of credited service. Normal retirement age for Tier 1 members is any age with 32 years of credited service or 55 with 20 years of credited service. Normal retirement age for Tier 2 members is 50 with 25 years of credited service, 55 with 20 years of credited service, or 60 with 15 years of credited service. Members may select from the following irrevocable benefit payment options:  Straight Life Annuity – The standard benefit paying a monthly pension for the life of the member. A beneficiary receives any remaining contributions plus interest not already paid to the member.  Joint and Survivor Benefit – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 50.0%, 75.0%, or 100.0% of the member benefit for the remainder of the spouse’s life.  Life Income, 5-Year, 10-Year or 15-Year Certain – Monthly payments for the life of the member. If the member dies before receiving 60, 120, or 180 months in benefits the death benefit payable is equal to the remaining monthly payments.  Lump Sum Payment – A lump sum at retirement that must be in paid 10.0% increments and can be no more than 50.0% of the actuarial present value of the standard benefit straight life annuity. The lump sum is then combined with another option to provide a reduced, regular monthly benefit. If a member terminates employment other than by retirement they are entitled to employee contributions plus interest at a guaranteed rate of 8.0% if hired before July 1, 1993, and 4.0% if hired on, or after July 1, 1993. Terminating employees that withdraw contributions forfeit all rights under the system and are not entitled to any of the employer contributions. As of the July 1, 2012, actuarial valuation, KP&F’s funded percentage was 66.5% and the UAL was $866.4 million. The KPERS is presently amortizing the UAL using a 40-year closed period (established in 1993), on a level percent of pay basis. Minnesota – The Minnesota State Patrol Retirement Plan (MSRS) is a defined benefit plan providing coverage to state troopers, state agents, conservation officers, and members of the Department of Corrections fugitive apprehension unit. Employees contribute 12.4% of covered wages that are matched by an employer contribution of 18.6%. The AFC is calculated on the highest five years, need not be consecutive, and need not be calendar years. A member’s benefit is based on the AFC times a multiplier of 3.0% per year of covered service with a maximum benefit of 105.0% (35 years of service). The plan does provide for early retirement at age 50 with a benefit reduction of no more than 6.0% for those hired before July 1, 2010, and 12.0% for those hired on or after July 1, 2010. Retiring members may select from several irrevocable payment options. They are:  Single Life Benefit – Monthly payments for the life of the member with a refund to the beneficiary equal to any unpaid balance of the member’s account.  Joint and Survivor Benefit – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 50.0%, 75.0%, or 100.0% of the member benefit for the remainder of the spouse’s life.  Life Income, 15-Year Certain – Monthly payments for the life of the member. If the member dies before receiving 180 months in benefits the death benefit payable is equal to the remaining monthly payments and may be made to more than one surviving beneficiary.

160 Attachment B

An annual postretirement benefit increase of 1.5% of the member’s monthly benefit is provided until the fund reaches a 90.0% funded ratio. Then the postretirement benefit increase is adjusted to 2.5% of the member’s monthly benefit for the life of the pensioner and beneficiary. Members terminating service after the five-year vesting period may chose to leave their contributions in the fund and request a deferred benefit. If a member requests a refund, the member is entitled to the employee contributions plus guaranteed interest of 6.0% to June 30, 2011, and 4.0% after that. The terminating member is not entitled to any of the employer contribution or accumulated interest on employer contributions. As of the July 1, 2012, actuarial valuation, the funded percentage of the system was 72.84% and the UAL was $206.7 million. The MSRS is presently amortizing the UAL using a 30-year closed period (established in 2007), on a level percent of pay basis. Missouri – The Missouri State Employee’s Retirement System (MPERS) is a defined benefit plan providing benefits to employees of the Missouri Department of Transportation and State Highway Patrol. Employees beginning covered service before July 1, 2000, are members of the “closed” plan and those beginning employment on or after July 1, 2000, are members of the Year 2000 Plan. There is no employee contribution for members of the closed plan or the Year 2000 Plan. Members of the Year 2011 Plan, those employed on or after July 1, 2011, contribute 4.0% of pay. The state contribution for all three plans is 55.23% of pay. Members that terminate service before the required vesting period of five years (Year 2000 Plan) or 10 years (Year 2011 Plan) are entitled to a refund of employee contributions plus accumulated interest at a guaranteed rate of 4.0%. Employees eligible for a retirement benefit may not request a refund of contributions. Retirement eligibility begins at age 60, the mandatory retirement age, with five years of service or when the member’s age and years of service total 80, but not before age 48. The benefit is based on a multiplier of 1.7% for each year of service and the AFC. Creditable service is determined by the length of service plus unused sick leave, where 168 hours of unused sick leave equals one month of creditable service. The MPERS also includes a “temporary benefit formula” providing a benefit to supplement other income until the retired member reaches the age of 62. The formula for the temporary benefit is 0.8% x years of service x average final pay. To receive the temporary benefit the member must retire under the Rule of 80 provisions. Retiring members may select from several irrevocable payment options. They are:  Single Life Benefit – Monthly payments for the life of the member with a refund to the beneficiary of any unpaid balance of the member’s account.  Joint and Survivor Benefit – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 50.0% or 100.0% of the member benefit for the remainder of the spouse’s life.  Life Income, 10-Year or 15-Year Certain – Monthly payments for the life of the member. If the member dies before receiving 120 months, or 180 months in benefits (depending on the options selected), the death benefit payable is equal to the remaining monthly payments and may be made to any surviving beneficiary. Postretirement COLAs equal to 80.0% of the CPI, but no more than 5.0% of the monthly benefits, are provided every year on the anniversary of retirement. As of the June 30, 2012, actuarial valuation, the funded percentage of the MPERS was 46.31% and the UAL was $1,775.2 million. The MPERS is presently amortizing the UAL using a 12- year closed period for unfunded retiree liabilities and a 27-year close period for all other unfunded liabilities (both established July 1, 2013), on a level percent of pay basis.

161 Attachment B

Nebraska – The Nebraska State Employee’s Retirement System’s State Patrol Plan was established as a defined benefit plan on September 7, 1947. Employees contribute 16.0% of covered compensation and the state contributes 16.0% of covered wages. The state has been making additional contributions since FY 2004 that have totaled more than $15.8 million. Members terminating employment after vesting are entitled to employee contributions, plus interest at a rate set by law and subject to change annually. There is no guaranteed rate of return. Retirement eligibility begins at age 55 with 10 or more years of service with mandatory retirement at age 60. An early retirement benefit is available at age 50, but is reduced by 5/9ths of 1.0% for each month the age precedes age 55, or for each month the years of service precedes 25 years, whichever provides the greater benefit. The benefit is based on a multiplier of 3.0% for each year of service and the AFC, and is limited to 75.0% of average final compensation. The AFC is determined by gross wages including overtime, but does not include bonuses, early retirement incentives, and severance pay. The normal benefit payment form is a joint and 75.0% survivor annuity. If the member has dependent children at the time of postretirement death, the spouse receives a monthly annuity of 100.0% of the member’s monthly benefit. Members may also elect a refund of contributions. No other payment option is available to retired members. A COLA provision provides an increase each July 1 that is equal to the Consumer Price Index- Clerical Workers (CPI-W) for the previous fiscal year, but no more than 2.5%. As of the July 1, 2012, actuarial valuation, the funded percentage of the State Patrol Plan was 78.1% and the UAL was $79.5 million. The plan is presently amortizing the UAL using a 30- year closed period (established in 2006), on a level dollar basis. South Dakota – The South Dakota Retirement System’s (SDRS) Public Safety Plan is a defined benefit plan covering state law enforcement officers, police officers, firefighters, county sheriffs and deputies, correctional staff, court services officers, conservation officers, and park rangers. Members contribute 8.0% of gross wages reported on the employee’s W-2 and the employer matches with 8.0% of gross wages. Average final compensation is based on the highest 12 consecutive quarters during the last 40 quarters of covered employment. The standard benefit formula includes a multiplier of 2.4% for years of service before July 1, 2008, and a multiplier of 2.0% for years of service on, or after July 1, 2008. Normal retirement age is 55 and a member may retire as early as age 45 with an unreduced benefit if their age and years of service total 75. Irrevocable benefit payment options are limited to:  Joint and Survivor Annuity – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 60.0% of the member benefit for the remainder of the spouse’s life.  Level Income Payment – For members electing early retirement, an option is available to have pension payments increased before Social Security normal retirement age and reduced thereafter (between ages 45 and 62). Postretirement COLAs indexed to the CPI and the market value of the fund are provided, but cannot exceed 3.1% or be less than 2.1% in any year. A compounding COLA is provided only if the member has been retired for at least the previous fiscal year period.

162 Attachment B

If a member terminates prior to having three years of credited service, the member is entitled to withdraw the member’s contributions plus interest and 50.0% of the employer’s contribution plus interest. Vested members terminating prior to retirement are entitled to employee contributions plus interest and 85.0% of the employer contributions plus accumulated interest, or a lifetime monthly benefit when reaching normal retirement age. For funded status, unfunded actuarial liability, and amortization method see the SDRS general retirement summary in Attachment A. Wisconsin – The Wisconsin Retirement System (WRS) was created in 1981 by the merger of the Wisconsin retirement fund, the state teachers’ retirement system, the Milwaukee teachers’ retirement fund, and several other public retirement and disability programs. Employee contribution rates for the public safety category are set at 7.0% of covered wages and are matched with a 14.0% contribution provided by the employer. The plan is designed to provide career public safety employees, with more than 25 years of service, with a benefit between 50.0% and 85.0% of pre-retirement earnings. The benefit maximum for the protective service plan is 85.0% of AFC. The WRS includes two benefit payment calculations that are made for each member when they apply for pension benefits. The first calculation, the “formula method,” is a defined benefit calculation based on average final compensation, years of service, and multipliers. The multiplier is set at 2.67% of the average high three years earnings for service prior to July 1, 2000, and 2.5% for service on or after July 1, 2000. The second calculation is the “money purchase method” and is a defined contribution calculation that guarantees an annuity provided by the member’s required contributions plus the employer’s match. A retiring member is entitled to the greater of the two determinations. Minimum retirement age is 50 with a normal retirement age of 53 with 25 or more years of service. There is no postretirement COLA provision. Retiring members may select from several irrevocable payment options. They are:  Joint and Survivor Benefit – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 75.0% or 100.0% of the member benefit for the remainder of the spouse’s life.  Joint and Survivor Benefit – an annuity reduced 25.0% upon the death of either the member or the beneficiary.  Joint and 100.0% Survivorship Annuity – monthly payments for a guaranteed 180 months with a 100.0% survivorship annuity for a beneficiary for the balance of 180 months should the member predecease the beneficiary.  Life Annuity, 5-Year, or 15-Year Certain – Monthly payments for the life of the member. If the member dies before receiving 60 months, or 180 months in benefits (depending on the options selected), the death benefit payable is equal to the remaining monthly payments and may be made to any surviving beneficiary. A member terminating service prior to the required 5-year vesting period is entitled to withdraw the member’s contributions plus interest. There is no entitlement to any portion of the employer contributions or interest. A vested member that terminates employment is entitled to a pension at the age of 65, or at age 55 with a reduced benefit. For funded status, unfunded actuarial liability and amortization method see the WRS general retirement summary in Attachment A.

163 Attachment C

Other State Judicial Pension Systems Illinois – The Judicial Retirement System of Illinois (JRS) provides benefits to over 2,000 active and retired judges and associate judges and is a defined benefit plan. Judges contribute 11.0% of covered wages including an optional 2.5% survivor’s annuity contribution. However, the decision to decline the survivor’s annuity is irrevocable. The state match for FY 2014 is 63.09%. The JRS has a multiplier of 3.5% of covered wages for each of the first 10 years of service and 5.0% for each year after 10 years with a maximum benefit of 85.0% of the average high four years of earnings. Normal retirement age is 60 with 10 years of service for an unreduced benefit. Members may retire at age 55 with 10 years of service, but the benefit will be reduced by one-half of 1.0% for each month under age 60. The JRS provides for a compounding COLA of 3.0% each January 1 after the first full year of retirement for retired members age 60 and older. The COLA is also provided to beneficiaries receiving a survivor pension. Members terminating employment are entitled to the employee contributions only and are not entitled to the state contribution or any interest accumulated on the employee’s or the state’s contributions. Retiring members may select from two irrevocable payment options. They are:  Straight Life Annuity – The standard benefit paying a monthly pension for the life of the member. A beneficiary receives any remaining contributions plus interest not already paid to the member.  Joint and Survivor Benefit – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 66⅔% of the member benefit for the remainder of the spouse’s life. As of the July 1, 2012, actuarial valuation, the funded ratio was 28.59% on a market value of assets basis and the UAL was $1,420.5 million. The JRS is presently amortizing the UAL using a 30-year open period on a level percent of projected capped pay basis Kansas – The Kansas Judicial Retirement System is a defined benefit plan governed under the umbrella of KPERS. The system provides benefits to approximately 260 active members and 220 retired members. As is the case with KPERS, there are two tiers of membership in the Judicial Retirement System, those members employed before July 1, 1987 (Tier 1), and those employed on or after July 1, 1987 (Tier 2). Judges are vested upon election or appointment. Members contribute 6.0% of gross earnings until the age of 65 with 20 years of service, or when the member has enough service to receive the maximum benefit of 70.0%. Employer contributions are currently 23.98% of gross earnings. Member contributions earn a guaranteed 8.0% interest if the member’s service commenced before July 1, 1993, and 4.0% if service commenced on or after July 1, 1993. The Kansas Judicial Retirement system has a multiplier of 5.0% for up to 10 years of service if membership commenced before July 1, 1987, and a multiplier of 3.5% per year of service if membership commenced on or after July 1, 1987. The maximum benefit for either tier is 70.0% of the average final compensation (AFC). The AFC is based on the highest three of the last 10 years earnings, but they need not be consecutive years. The plan contains no provision for postretirement COLAs. Normal retirement age from the Judicial Retirement System is 65 with one year of service or 62 with 10 years of credited service, or any age and years of service combination equaling 85. Mandatory retirement age is the end of the term in which the judge turns 70 if a Supreme Court

164 Attachment C justice and 75 for all other judges. Members may select from the following irrevocable benefit payment options:  Straight Life Annuity – The standard benefit paying a monthly pension for the life of the member. A beneficiary receives any remaining contributions plus interest not already paid to the member.  Joint and Survivor Benefit – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 50.0%, 75.0%, or 100.0% of the member benefit for the remainder of the spouse’s life.  Life Income, 5-Year, 10-Year or 15-Year Certain – Monthly payments for the life of the member. If the member dies before receiving 60, 120, or 180 months in benefits the death benefit payable is equal to the remaining monthly payments.  Lump Sum Payment – A lump sum at retirement that must be paid in 10.0% increments and can be no more than 50.0% of the actuarial present value of the standard benefit straight life annuity. The lump sum is then combined with another option to provide a reduced, regular monthly benefit. Members terminating employment other than by retirement are entitled to employee contributions plus interest. Terminating employees that withdraw contributions forfeit all rights under the system and are not entitled to any of the employer contributions. As of the December 31, 2012, actuarial valuation, the Judicial Retirement System funded percentage was 81.4% and the UAL was $29.0 million. The KPERS is presently amortizing the UAL using a 40-year closed period (established in 1993), on a level dollar basis. Minnesota – The Minnesota Judicial Retirement Plan is a defined benefit plan administered by the Minnesota Employee Retirement System providing coverage to approximately 310 active members and 290 retired members. Employees contribute 7.5% of covered wages matched by an employer contribution of 20.5%. The AFC is calculated on the highest five years, these need not be consecutive and need not be calendar years. A member’s benefit is based on the AFC times a multiplier of 3.2% per year of covered service with a maximum benefit of 76.8% of the AFC. Mandatory retirement age is 70. The plan does provide for early retirement at age 60 with a benefit reduction of as much as 30.0%. Retiring members may select from several irrevocable payment options. They are:  Single Life Benefit – Monthly payments for the life of the member with a refund to the beneficiary of any unpaid balance of the member’s account.  Joint and Survivor Benefit – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 50.0%, 75.0%, or 100.0% of the member benefit for the remainder of the spouse’s life.  Life Income, 15-Year Certain – Monthly payments for the life of the member. If the member dies before receiving 180 months in benefits the death benefit payable is equal to the remaining monthly payments and may be made to more than one surviving beneficiary. An annual postretirement benefit increase of 2.0% of the member’s monthly benefit is provided for the life of the pensioner and beneficiary. Members terminating service after the five-year vesting period may chose to leave their contributions in the fund and request a deferred benefit. Members requesting a refund are entitled to the employee contributions plus guaranteed interest of 6.0% to June 30, 2011, and 4.0% after that. Terminating members are not entitled to any of the employer contribution or accumulated interest on employer contributions.

165 Attachment C

As of the July 1, 2012, actuarial valuation, the funded percentage of the system was 51.46% and the UAL was $136.7 million. The Judicial Retirement System is presently amortizing the UAL using a 30-year closed period (established in 2009), on a level percent of pay basis. Missouri – The Missouri Judicial Retirement System is a defined benefit plan administered under the umbrella of the Missouri Employee Retirement System (MOSERS) providing benefits to approximately 400 active members and 490 retired members of the Missouri judiciary. Judges are vested immediately upon becoming a member. Judges beginning covered service before January 1, 2011, are members of the “closed” plan and those beginning employment on or after January 1, 2011, are members of the Judicial Plan 2011. There is no employee contribution for members of the closed plan. Members of the Judicial Plan 2011 contribute 4.0% of pay. The state contribution for all three tiers is 59.69% of pay. Members that terminate service prior to retirement that are members of the Judicial Plan 2011 are entitled to a refund of employee contributions plus accumulated interest at a guaranteed rate of 4.0% and forfeit all rights to receive benefits from the plan. Once employees become eligible for a retirement benefit they may not request a refund of contributions. Closed plan members are retirement eligible at 60 with 15 years of service and at age 62 with 12 years of service. Judicial Plan 2011 members are eligible to retire at age 67 with 12 years of service and at age 62 with 20 years of service. The mandatory retirement age is 70. Failure to retire by the mandatory retirement age results in forfeiture of all rights to a retirement benefit, annual compensation, or salary. The plan requires the member to retire “in good standing.” Members convicted of a felony in any court, impeached for misconduct, or disbarred from the practice of law forfeit all rights to benefits. The base monthly benefit is 50.0% of the monthly compensation at retirement with 10 years of service. Creditable service is determined by the length of service. Retiring members may select from several irrevocable payment options. They are:  Single Life Benefit – Monthly payments for the life of the member with a refund to the beneficiary of any unpaid balance of the member’s account.  Joint and Survivor Benefit – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 50.0%, or 100.0% of the member benefit for the remainder of the spouse’s life.  Life Income, 10-Year, or 15-Year Certain – Monthly payments for the life of the member. If the member dies before receiving 120 months, or 180 months in benefits (depending on the option selected), the death benefit payable is equal to the remaining monthly payments and may be made to any surviving beneficiary. Postretirement COLAs equal to 80.0% of the CPI, no less than 4.0%, but no more than 5.0% of the monthly benefits are provided every year on the anniversary of retirement. As of the June 30, 2012, actuarial valuation, the funded percentage of the Judicial Retirement Plan was 24.7% and the UAL was $311.1 million. The plan is presently amortizing the UAL using a 30-year closed period (established June 30, 2010), on a level percent of pay basis. Nebraska – The Nebraska Judges Retirement Plan is a defined benefit plan administered by the Nebraska Public Employees Retirement System. Judges hired before July 1, 2004, contribute 7.0% of compensation with fewer than 20 years of service and 1.0% of compensation for 20 or more years of service. These rates change to 6.0% and 0.0% effective July 1, 2014. Judges hired on or after July 1, 2004, contribute 9.0% until they have 20 years of service and will contribute 5.0% after 20 years. These rates are scheduled to change to 8.0% and 4.0%

166 Attachment C effective July 1, 2014. Since FY 2003 the state made contributions totaling more than $34.1 million through appropriation of court fees and general fund appropriations. Members are vested upon appointment. If a member terminates employment, the member is entitled to employee contributions, plus interest at a rate set by law and subject to change annually. There is no guaranteed rate of return. Normal retirement age with an unreduced benefit is age 65. An early retirement benefit is available between the ages of 55 and 62, but is reduced by an actuarial factor based on age. Early retirement between the ages of 62 and 65 is available with a benefit reduced by 3.0% for each year retirement precedes the age of 65. The benefit is based on a multiplier of 3.5% for each year of service and the AFC, and is limited to 70.0% of average final compensation. The AFC equals the highest three 12-month periods of salary. Members may select from several irrevocable benefit payment options. They are:  Single Life Benefit – Monthly payments for the life of the member with a refund to the beneficiary of any unpaid balance of the member’s account.  Straight Life Annuity – Monthly payments for the life of the member with no refund or death benefit.  Life Income with 5-Year, 10-Year, or 15-Year Certain – Monthly payments for the life of the member. If the member dies before receiving 60 months, 120 months, or 180 months in benefits (depending on the option selected), the death benefit payable is equal to the remaining monthly payments and may be made to any surviving beneficiary.  Joint and Survivor Benefit – Monthly payments for the life of the member with guaranteed survivor benefits paid to the surviving spouse equal to 50.0%, 66⅔%, or 100.0% of the member benefit for the remainder of the surviving spouse’s life.  Joint and Last Survivor Benefit – Monthly payments for the life of the member and the member’s spouse with guaranteed survivor benefits equal to 50.0%, 66⅔%, or 100.0% of the member’s benefit paid to the surviving spouse after the member’s death. If the spouse predeceases the member, benefit payments equal to 50.0%, 66⅔%, or 100.0% of the original benefit are paid to the member for the remainder of the member’s life. A postretirement COLA provision provides an increase each July 1 that is equal to the CPI-W for the previous fiscal year, but no more than 2.5%. As of the July 1, 2012, actuarial valuation, the funded percentage of the Judicial Retirement Plan was 89.0% and the UAL was $11.5 million. The plan is presently amortizing the UAL using a 30-year closed period (established in 2011), on a level dollar basis. South Dakota – The South Dakota Retirement System’s (SDRS) Judicial Retirement Plan is a defined benefit plan covering justices, judges, and magistrate judges. Members are vested after three years of contributory service and are eligible to apply for benefits at the normal retirement age of 65. An unreduced early retirement benefit is available as early as age 55 if the member’s age and years of service total 80. Members contribute 9.0% of gross wages reported on the employee’s W-2 and the employer matches with 9.0% of gross wages. Average final compensation is based on the highest 12 consecutive quarters during the last 40 quarters of covered employment. The benefit formula includes a multiplier of 3.73% for up to 15 years of service occurring before July 1, 2008, plus a multiplier of 2.4% for years of service in excess of 15 years occurring prior to July 1, 2008. For service occurring after July 1, 2008, a multiplier of 3.33% is applied for a period of up to 15 years of service plus a multiplier of 2.0%

167 Attachment C for service in excess of 15 years. An example of the calculation is shown below assuming retirement on July 1, 2012, at age 65, with 25 years of service, and an AFC of $85,000. For the first 15 years of service: Multiplier $85,000 15 Years x x = $47,595.75 3.73% (Average Final Comp) Service before 7/1/2008 Plus Multiplier $85,000 0 Years x x = $0.00 3.33% (Average Final Comp) Service after 7/1/2008 For service in excess of 15 years Multiplier $85,000 6 Years x x = $12,240.00 2.40% (Average Final Comp) Service before 7/1/2008 Plus Multiplier $85,000 4 Years x x = $6,800.00 2.00% (Average Final Comp) Service after 7/1/2008 Total Benefit $47,595.75 + $0 $12,240 + $6,800 + = $66,635.75 per year First 15 Years Service in Excess of 15 Irrevocable benefit payment options are limited to:  Joint and Survivor Annuity – Monthly payments for the life of the member with guaranteed survivor benefits paid to the spouse equal to 60.0% of the member benefit for the remainder of the spouse’s life.  Level Income Payment – For members electing early retirement, an option is available to have pension payments increased before Social Security normal retirement age and reduced thereafter (between ages 55 and 62). A compounding postretirement COLA indexed to the CPI and the market value of the Fund is provided, but cannot exceed 3.1% or be less than 2.1% in any year. A COLA is provided only if the member has been retired for at least the previous fiscal year period. If a member terminates prior to having three years of credited service, the member is entitled to withdraw the member’s contributions plus interest and 50.0% of the employer’s contribution plus interest. Vested members terminating prior to retirement are entitled to employee contributions plus interest and 85.0% of the employer contributions plus accumulated interest, or a lifetime monthly benefit. For funded status, unfunded actuarial liability, and amortization method see the SDRS general retirement summary in Attachment A. Wisconsin – See Attachment A

168 Surrounding States Comparison ATTACHMENT D

Avg Annual Assumed 2012 Avg Annual Retired Annual Active Retired Rate of Funded Average Active Member Benefit YOS Member Required Normal Plan Description Membership Members Members Return Ratio Final Comp. Salary Maximum Multiplier Benefit Contribution Cost General Membership Plans Iowa PERS State, Local, Schools 155,800 101,677 7.50% 79.20% High 5 $ 41,820 65% AFC 2.00% $ 14,136 14.88% 10.17% Illinois SERS State, Local, Schools 62,729 62,788 7.75% 34.68% High 4 $ 69,012 75% AFC 1.67% $ 26,766 44.31% 12.81% Kansas PERS State, Local, Schools 148,605 79,390 8.00% 55.00% High 5 $ 40,522 60% 1.85% $ 12,929 20.95% 8.26% Minnesota SERS State, GA, Judges 48,207 31,975 8.00% 82.67% High 5 $ 51,107 68% 1.70% $ 17,266 12.32% 7.17% Missouri SERS State Employees 51,332 37,308 8.00% 73.16% High 3 $ 36,314 65% AFC 1.70% $ 14,973 13.97% N/A Cash Nebraska PERS State Employees 11,956 910 7.75% 93.60% N/A $ 41,861 Balance N/A $ 15,353 11.32% 10.06% South Dakota PERS State, Local, Schools 38,207 22,408 7.25% 92.60% High 3 $ 39,329 N/A Variable $ 17,247 12.48% 10.28% Wisconsin Ret. Syst. All Gov't Employees 252,526 149,804 7.20% 99.90% High 3 $ 48,511 70% AFC 1.60% $ 12,218 14.00% 14.00% 1 Based on actual Wisconsin Retirement System experience. * Benefit is 100% of AFC reduced by earned income and primary Social Security

Public Safety Plans IPERS Sheriffs & Deputies Sheriffs & Deputies 1,530 671 7.50% 88.70% High 3 $ 62,996 72% AFC 2.73% $ 28,284 19.76% 16.62% IPERS Protection Occupations Police, Fire, DNR, DOC 6,870 1,682 7.50% 95.10% High 3 $ 46,732 72% AFC 2.73% $ 22,286 16.90% 16.04% Iowa POR Iowa DPS only 618 549 8.00% 61.00% High 3 $ 71,040 88% AFC 2.75% $ 43,402 53.14% 26.22%

IOWA 411 Municpal > 8,000 3,888 3,816 7.50% 72.00% High 3 $ 66,491 82% AFC 3.00% $ 33,084 39.52% 18.37% Illinois SERS State Police, Fire, DOC High 8 80% AFC 3.00% Kansas KP & F State & Local Police 7,187 4,525 8.00% 66.50% High 3 $ 62,489 90% AFC 2.50% $ 28,600 28.51% 14.58% Minnesota State Patrol Troopers, Agents,DNR 823 963 7.00% 72.84% High 5 $ 76,883 105% 3.00% $ 52,914 42.52% 21.60%

Missouri DOT and Patrol Uniformed Patrol 1,215 826 8.25% 46.31% High 3 $ 59,840 N/A 1.70% $ 50,521 58.63% 17.34%

Nebraska State Patrol Troopers 427 422 8.00% 78.10% High 3 $ 62,359 75% AFC 3.00% $ 41,212 56.06% 29.10% South Dakota PS & Judicial Public Safety & Judges 2,705 1,298 7.25% 92.60% High 3 Variable 2.00% $ 51,875 12.48% 10.28% Wisconsin Ret. Syst. Protective Occupations 2,727 203 7.20% 99.90% High 3 $ 70,949 85% AFC 2.50% $ 41,901 21.00% 20.70%

Judicial Plans Iowa Judicial 192 186 7.50% 68.89% High 3 $ 134,167 65.00% 3.25% $ 51,885 40.74% 22.03% Illinois SERS 968 1,056 7.00% 29.74% High 8 $ 178,143 85% AFC Varies $ 102,365 73.07% 25.91% Kansas Judges 261 227 8.00% 81.40% High 3 $ 107,584 70% AFC 3.50% $ 38,261 29.74% 19.61% Minnesota SERS 308 314 8.00% 51.46% High 5 $ 127,844 76.8% AFC 3.20% $ 60,269 41.50% 18.20% Missouri Judges 398 496 8.50% 24.70% High Month $ 115,165 65% 2.50% $ 54,403 57.30% N/A Cash Nebraska Judges 150 166 8.00% 91.60% N/A $ 126,703 Balance N/A $ 43,197 25.63% 20.43% South Dakota PERS See South Dakota PS & Judicial Variable See South Dakota PS & Judicial

N/A - not readily available or not applicable 169 Surrounding States Comparison ATTACHMENT D (cont.)

Employer Employee Normal Contri- Contri- Retirement Special Smoothing Plan Description bution bution Age Provisions Actuarial Cost Method Mortality Table Period General Membership Plans Iowa PERS 8.93% 5.93% 65 Rule of 88 Entry Age Normal RP 2000 5-Year Illinois SERS 38.44% 4%/8% 60 Rule of 85 Projected Unit Credit RP 2000 5-Year Kansas PERS 12.37% 6.00% 65 Rule of 85 Entry Age Normal RP 2000 5-Year Minnesota SERS 5.00% 5.00% 65 Rule of 90 Entry Age Normal RP 2000 5-Year Missouri SERS 16.98% 0.00% 65 Rule of 80 Entry Age Normal RP 2000 5-Year Cash 1994 Group Annuity Mortality Nebraska PERS 7.49% 4.80% 55 Balance Entry Age Normal Tables 5-Year South Dakota PERS 6.00% 6.00% 65 Rule of 85 Frozen Entry Age 1995 Buck Mortality Table 5-Year Wisconsin Ret. Syst. 7.00% 7.00% 65 None Frozen Entry Age Wisc 2012 Mortality Table1 5-Year 1 Based on actual Wisconsin Retir * Benefit is 100% of AFC reduced

Public Safety Plans IPERS Sheriffs & Deputies 9.88% 9.88% 55 Rule of 88 Entry Age Normal RP 2000 5-Year IPERS Protection Occupations 10.14% 6.76% 55 Rule of 88 Entry Age Normal RP 2000 5-Year Iowa POR 29.00% 10.85% 55 Entry Age Normal RP 2000 4-Year Blended 1/3 1971 Group Annuity Mortality, 2/3 1994 IOWA 411 30.12% 9.40% 55 Entry Age Normal Group annuity Mortality 5-Year Illinois SERS 38.44% 12.50% 60 Kansas KP & F 21.36% 7.15% 55 Entry Age Normal RP 2000 5-Year Minnesota State Patrol 18.60% 12.40% 55 Entry Age Normal RP 2000 5-Year 1994 Group Annuity Mortality Missouri DOT and Patrol 55.23% 0.00% 60 Rule of 80 Entry Age Normal Tables 3-Year 1994 Group Annuity Mortality Nebraska State Patrol 16.00% 16.00% 60 50/25 YOS Entry Age Normal Tables 5-Year South Dakota PS & Judicial 8.00% 8.00% 55 Rule of 75 Frozen Entry Age 1995 Buck Mortality Table 5-Year Wisconsin Ret. Syst. 14.00% 7.00% 54 Frozen Entry Age Wisc 2012 Mortality Table1 5-Year

Judicial Plans Iowa Judicial 30.60% 9.35% 65 20 YOS Entry Age Normal RP 2000 4-Year Illinois SERS 38.83% 11.00% 62 Projected Unit Credit UP-1994 Mortality Tables 5-Year Kansas Judges 23.98% 5.76% 62 Rule of 85 Entry Age Normal RP 2000 5-Year Minnesota SERS 20.50% 7.52% 65 Entry Age Normal RP 2000 5-Year Missouri Judges 59.69% 0.00% 62 12 YOS Entry Age Normal Cash 1994 Group Annuity Mortality Nebraska Judges 7.68% 7.00% 65 Balance Entry Age Normal Tables 5-Year South Dakota PERS 9.00% 9.00% 65 Rule of 80 Frozen Entry Age

N/A - not readily available or not 170

ISSUE REVIEW

Fiscal Services Division

January 4, 2018

Iowa’s Craft Beer Industry ISSUE

This Issue Review provides background and historical information on Iowa’s growing craft beer brewing industry, identifies and analyzes current production efforts, and reports on emerging trends. The Issue Review also presents a side-by-side comparison of the emerging craft brewing industry of several of Iowa’s neighboring states, including an analysis based on similar size and population statistics. Finally, this Issue Review also provides a brief outlook on regulatory and legislative trends.

AFFECTED AGENCIES

Iowa Alcoholic Beverages Division (IABD) Iowa Economic Development Authority (IEDA) Department of Revenue (DOR) County/City Development and Community Involvement Programs Iowa Brewers Guild

CODE AUTHORITY

Iowa Code chapter 123

BACKGROUND AND HISTORICAL SIGNIFICANCE

The production, marketing, and sale of “craft” or nontraditionally brewed beer have increased in popularity over the last several years. The number of craft breweries in Iowa has grown significantly from only 27 craft breweries in 2011 to 70 craft breweries in 2016. Though the increased interest in this alcohol production niche appears to be relatively recent for many states, Iowa’s brewing industry had its beginnings in the 19th century when the “Garvasius Santo” brewery opened in Fort Madison in 1844. Much has changed since that time. Iowa’s response to the pre- and post-Prohibition period plays a unique role in the production, manufacturing, selling, and regulation of craft beer today. Below is a brief historical outline that highlights several key events in the State’s history of alcohol production and regulation.

A Brief Historical Outline of Alcohol Production and Regulation in Iowa 1920 January 16: The Volstead Act is enacted to carry out the intent of the 18th Amendment. The Amendment prohibits the ingestion of intoxicating beverages with the exception of those used for religious, research, or developmental reasons.1 The manufacture, sale, trade, and transport of alcohol are also prohibited.

1 National Archives, The Volstead Act (August 15, 2016), www.archives.gov/education/lessons/volstead-act.

171 ISSUE REVIEW 2 January 4, 2018

1933 February 20: The Blaine Act, which proposes a repeal of the 18th Amendment, is passed by Congress.2 July 10: Iowa becomes the 10th state to ratify the Blaine Act. December 5: The Blaine Act is ratified and becomes the 21st Amendment, effectively restoring the control of alcohol production, sale, and regulation back to individual states. 1934 Iowa begins opening State-regulated retail liquor stores. A special permit is needed to purchase alcohol for any type of consumption. March 6: The 45th Iowa General Assembly passes the “Liquor Control Act,” allowing the State to assume direct control over wholesale and retail sale of all alcoholic beverages except beer. The Iowa Liquor Control Commission is also established with the intent to act as the regulatory body for alcohol production and sale in Iowa. 1963 The creation of the class C liquor license allows for the sale of alcoholic liquor by the glass for consumption on licensed premises. 1972 The first iteration of Iowa Code chapter 123 is created. In addition to streamlining statutes, the chapter also establishes the Iowa Beer and Liquor Control Department as the regulating authority of alcohol production and sales in the State of Iowa. The class C license becomes a combination on-premise liquor, wine, and beer license, rescinding prior regulation that required a separate permit for each type of alcohol. Additionally, gasoline stations are added to the definition of “grocery” to allow the sale of beer for off-premise consumption. 1973 The State of Iowa officially permits alcohol sales on Sundays, with a local option to prohibit such activity. The privilege allows licensees to sell and serve alcoholic beverages on Sundays, but only if a special permit has been obtained. 1979 The Iowa Beer and Liquor Control Department begins collecting a five-cent deposit on each bottle of hard liquor or wine sold in the State.3 1980 August 7: The financing of a new, central liquor distribution center commences with the sale of revenue bonds totaling approximately $4.0 million.

2 Ethan P. Dais, Yale Law School, Liquor Laws and Constitutional Convention: A Legal History of the Twenty-First Amendment (April 9, 2008), digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=1065&context=student_papers. 3 The Beverage Container Control Act was approved in the 1978 Legislative Session and took effect on July 1, 1979. The overall purpose of the legislation was to control litter along roadways in Iowa. In 1980, the Department of Transportation estimated there was a 79.0% reduction in bottle and can litter in Iowa after the passage of this legislation. Another benefit has been the development of a waste recycling industry, which is supported by consumer participation. It is estimated that there has been a 33.0% per capita reduction of garbage sent to Iowa landfills since 1988. 172 ISSUE REVIEW 3 January 4, 2018 1981 With the creation of the single class B beer permit, tap rooms are effectively legalized in Iowa. The new permit allows holders to sell wholesale beer for on- and off-premise consumption. 1985 Millstream Brewing Company is established in Amana, Iowa, slowly rekindling the public’s interest in and market visibility of craft brewing in the State of Iowa.4 1986 The Iowa Beer and Liquor Control Department is renamed the Iowa Alcoholic Beverages Division (IABD), retaining the role of sole wholesaler of all hard liquor within the State.5 Beer and wine wholesale operations are moved entirely to the private sector. Remaining State-run retail locations begin to close and the creation of the class E liquor license permits holders to sell hard liquor to business in the private sector. 1989 With the enactment of 1989 Iowa Acts, House File 127 (Beer Brewed for the Consumption on the Premises Act), the IABD announces the establishment of the special class A beer permit in Iowa Code section 123.124, specifically created to allow class C, special class C liquor license, and class B beer permit holders to manufacture their own beer for purposes of on-site consumption.6 Known as the “brewpub” license, this new permit not only allows restaurants to expand their marketability in the service industry, but also allows a significant opportunity for revenue expansion. 1990 July 1: With the establishment of a five-day class C and special class C liquor license, as well as the class B beer permit, manufacturers and wholesalers are allowed to sell their products at festivals, fairs, and celebrations sponsored or authorized by local authorities. 2009 The establishment of the class C native wine permit allows native wineries and breweries to share employees, expanding business opportunities across the State of Iowa. 2010 July 1: Pursuant to the enactment of 2010 Iowa Acts, Senate File 2088 (State Government Reorganization Act), Division XI, sections 87 through 96, the definition of high alcoholic content beer is updated to include beer which contains more than 5.0%, but not more than 12.0%, of alcohol by weight. As craft beer typically carries higher alcohol content, this legislation effectively allows microbreweries and independent craft brewers to sell their products directly to the consumer rather than distribute it through the IABD.

4 Throughout the remainder of the 1990s, eight other craft breweries opened for brief periods of time. Only two of these, Court Avenue Restaurant and Brewing Company (1996) and Rock Bottom Restaurant and Brewery (1997), are still open today. 5 Now placed under the auspices of the Department of Commerce, the Division carried out several new duties, including the disbanding of State retail operations and the creation of a new class E liquor license that allows the sale of off-site liquor to approved applications. The IABD acts as the sole wholesaler of alcoholic liquor only, placing wholesale wines and beer in the control of the private sector. The liquor inventory of the State is placed under the bailment system, which requires all liquor sales to go solely through the State. 6 https://abd.iowa.gov/historical-highlights 173 ISSUE REVIEW 4 January 4, 2018

The establishment of class AA and special class AA permits allows beer manufacturers in the State to hold both brewer’s and distiller’s licenses. With this opportunity, private manufacturers are now able to diversify their products and expand their industry without having to focus on only one aspect of the growing alcohol market. 2015 Retailer-operated brewpubs are allowed to sell beer to wholesalers outside the State of Iowa, as long as they comply with the purchasing state’s laws. July 1: Pursuant to 2015 Iowa Acts, Senate File 456 (Regulation of Retail Sale of Beer for Off-Premises Consumption Act), class C permit holders are allowed to fill, refill, and sell “growlers” of craft beer to be consumed off-premises. 2016 Senate File 2151 (Alcoholic Beverages, Technical Regulation Provisions Act), enacted in the 2015 Legislative Session, made several changes for native Iowa wineries, including allowing tastings on production premises. Although this change is not directly linked to the production of craft beer, it does highlight the expansion of natively produced alcohol within the State. Many native brewers and vintners believe that expanding the amount of natively produced alcohol options leads to a more successful tourism and economic climate for the State, from which all parties can benefit. 2017 Senate File 516 (FY 2018 Standing Appropriations Act), enacted in the 2017 Legislative Session, requires the Alcoholic Beverages Division to conduct a study concerning enforcement and licensing issues related to alcoholic beverage control. A working group on licensing and enforcement reform is currently meeting and continued to do so throughout December 2017. The growing number of craft breweries in the State will likely be affected by any potential changes the working group may explore. The historical events outlined above directly correspond to growth in Iowa’s craft brewing industry. Both Figure 1 and 2 indicate a large spike in the amount of craft breweries established in Iowa, most pointedly beginning in 2009 and remaining steady through 2013. As Figure 1 indicates, the last five calendar years show the most dramatic increase in brewery locations in Iowa. The recent nationwide interest in craft brewing has affected Iowa as well.

Figure 1: Number of Iowa Craft Breweries, 1985-2013

Source: Iowa Wine and Beer Promotion Board, 2014

174 ISSUE REVIEW 5 January 4, 2018 Figure 2 tracks the progression of Iowa’s craft brewing industry from its “reawakening” in 1985 to its current state. Figure 2 depicts three categories of breweries: the number opened, the number closed, and those currently active. It is important to note that the number of brewery closings has remained relatively low over most recent years, while both the newly opened and active breweries experienced significant growth beginning 2003 through 2012. Figure 2: Number of Active Breweries in Iowa, Openings and Closings, 1985-2014

Source: Dave Ropte, 515 Brewing Company, Strategic Economics Group

Since the early 2000s, Iowa’s craft beer industry has seen massive expansion on a commercial and private level. Along with the number of microbreweries, brewpubs, and nanobreweries, the number of hobby and amateur brewers has grown as well. As can be seen above, the largest spike of active breweries coincides with the latest push to promote the industry throughout the first decade of the 2000s.

CURRENT SITUATION Iowa’s current system of alcohol distribution and regulation is a central factor in understanding how craft beer has carved its own production and regulatory niche. The impact of the enforcement of national Prohibition and its repeal in 1933 plays a significant role in Iowa’s unique approach to regulating alcohol consumption, manufacturing, and sale. A direct result of Iowa’s approach to alcohol and the influence of Prohibition can be linked to its current regulatory system, which is known as the Three-Tier System of Alcohol Distribution. The Three-Tier System is primarily characterized by placing each of the three significant parties in the production and distribution process — the brewer, the distributor, and the retailer — into separate, distinct tiers. These tiers are separated by law and regulations that prohibit any potential financial conflicts of interest or undue influence within the system.7 The Three-Tier System has four primary goals: • To avoid the overly aggressive marketing and sales practices of the pre-Prohibition Era; • To generate tax revenue that can be collected efficiently from the beer distribution industry; • To facilitate State and local control of alcoholic beverages; and • To encourage moderate consumption.8

7 Associated Beer Distributors of Illinois, The History of Beer and the Three-Tier System, http://www.abdi.org/the- three-tier-system/. 8 Associated Beer Distributors of Illinois, The History of Beer and the Three-Tier System, http://www.abdi.org/the- three-tier-system/. 175 ISSUE REVIEW 6 January 4, 2018

In Iowa, the distributor and/or wholesaler role is taken on by the IABD. All brewers and distillers must submit their products to the Division, which acts as the distributor to licensed retailers such as bars, restaurants, convenience stores, and grocery stores. The retailer then supplies product to the consumer. Figure 3 provides a graphical representation of the Three-Tier Distribution System. Figure 3: The Three-Tier Alcohol Distribution System

Source: https://www.loaddelivered.com/blog/raise-a-glass-successfully-navigating-the-alcohol-supply-chain/

As previously mentioned, one of the primary objectives of the Three-Tier System is to intentionally separate the parties involved in the production and sales process. To provide protection from undue competition or influence, the system places clear distinctions between each party and the role it plays in the market as a whole. It is important to note that the establishment of the special class A, or brewpub, license by the IABD in 1989 allows for some crossover between two of the system’s tiers (brewer and wholesaler). By allowing brewers to manufacture and sell beer for on-premise consumption, Iowa’s Three-Tier System of alcohol distribution provides potential business growth within the craft beer market. As craft beer is often initially brewed by smaller, local businesses, providing the opportunity to also serve and sell these products in the same location enables market expansion and ultimately, business profitability. Through legislation such as HF 127, passed in the 1989 Legislative Session, which expanded the on-site brewing capabilities for class C liquor license and class B beer permit holders, Iowa has become a more attractive place to not only begin but also maintain a new business venture. For additional information on the brewpub license, please see Appendix B.

Location and Visibility According to calendar year 2016 data collected by the national Brewers Association (BA), Iowa is currently home to 70 breweries, averaging approximately 3.2 breweries per capita.9 Iowa produces approximately 61,200 barrels of craft beer, or 0.9 gallons of beer per adult aged 21 years and older, annually.10 When compared to calendar year 2015, these changes indicate a 20.0% increase in the number of brewing establishments (a total of 70 breweries in 2016 compared to 58 total breweries in 2015), and an 11.3% increase in production (a total of 61,200

9 Brewers Association, Iowa Craft Beer Sales Statistics (2016), www.brewersassociation.org/statistics/by- state/?state=IA; per capita means per 100,000 adults 21 years of age and older. 10 Brewers Association, Iowa Craft Beer Sales Statistics (2016), www.brewersassociation.org/statistics/by- state/?state=IA. 176 ISSUE REVIEW 7 January 4, 2018 barrels of craft beer in 2016 compared to a total of 55,000 barrels produced in 2015).11 Figure 4 provides the locations of Iowa breweries and brewpubs. Figure 4: Location of Iowa Breweries and Brewpubs

Figure 4 illustrates that although there is a higher concentration of establishments in larger city and metropolitan areas such as Des Moines and Iowa City, the actual distribution of breweries ranges widely throughout the State. Smaller cities and rural areas are also home to some of Iowa’s breweries, such as Decorah’s Toppling Goliath Brewery and Pulpit Rock Brewing Company located in the northeastern corner of the State.

Production, Employment, and Labor Force Income According to the most recent study commissioned by the Iowa Wine and Beer Promotion Board (IWBPB) in 2014, the renewed interest in craft beer production has had a significant impact on Iowa’s economic climate. Although data from the study states that Iowa’s craft beer industry only covers about 1.2% of the State market, significant economic advances can be seen in the areas of production, employment, and labor force income. In order to measure the economic growth resulting from Iowa’s craft beer industry, the Strategic Economics Group, as commissioned by IWBPB, applied what is commonly known as the IMPLAN model. According to the Group, IMPLAN is “…a widely accepted and utilized software model…that uses national industry data and county level economic data to generate a series of multipliers that in turn

11 Strategic Economics Group, The Economic Impact of the Craft Beer Industry in Iowa (May 2015), www.traveliowa.com/UserDocs/2014_Iowa_Craft_Beer_Economic_Impact_Report.pdf. 177 ISSUE REVIEW 8 January 4, 2018 estimate the total economic impacts of economic activity.” 12 This model allows for the measurement of input-output revenue flows for different sectors of a specified economy. Direct, indirect, and induced effects of these revenue flows are then characterized and mapped by economic activity. This Issue Review will only focus on the direct effects resulting from the increased presence and popularity of the craft beer establishments in Iowa. Approximately 82.0% of the total production of craft beer in Iowa in 2014 was sold in the State, with the remaining amount being sold primarily in neighboring states. As Figure 5 indicates, total craft beer production was split relatively evenly among the 28 native breweries and 19 brewpubs present in Iowa in 2014.13 Figure 5: Total Craft Beer Production, Iowa 2014

Source: Iowa Alcoholic Beverages Division, Strategic Economics Group

The types of venues supporting these sales vary (Figure 6). Iowa consumers have the option of purchasing craft beer to consume on-site, off-site, or within movie theaters and live entertainment venues. Approximately 36.0% of the total breweries located in Iowa in 2014 also offered on-site tap rooms. One-fifth of the breweries located in Iowa in 2014 provided live entertainment.

Figure 6: Iowa Craft Brewery Venue Variety Criteria Count Total Craft Brewers by the End of 2014 50 Production Breweries Only 11 Production Breweries with Tap Rooms 18 Brewpubs 22 Brewpubs with Full Restaurant Menus 15

Live Entertainment 10 Source: Strategic Economics Group, 2014 Results from the IWBPB-commissioned craft beer study indicate that the growing craft beer industry in Iowa has also had a significant impact on the State’s employment sector. According to the study, in 2014 the rise of the craft brewing industry was directly responsible for approximately 1,300 additional jobs statewide.14 Figure 7 displays a breakdown of the growth in employment by economic sector.

12 Strategic Economics Group, The Economic Impact of the Craft Beer Industry in Iowa (May 2015), https://www.traveliowa.com/UserDocs/2014_Iowa_Craft_Beer_Economic_Impact_Report.pdf. 13 Strategic Economics Group, The Economic Impact of the Craft Beer Industry in Iowa (May 2015), https://www.traveliowa.com/UserDocs/2014_Iowa_Craft_Beer_Economic_Impact_Report.pdf. 14 Strategic Economics Group, The Economic Impact of the Craft Beer Industry in Iowa (May 2015), https://www.traveliowa.com/UserDocs/2014_Iowa_Craft_Beer_Economic_Impact_Report.pdf. 178 ISSUE REVIEW 9 January 4, 2018 Figure 7: Iowa Craft Brewing Employment Impact by Industry

Employment Impact Economic Sector (Indiviual Job Positions)

Service Industry 719

Manufacturing Industry 508

Trade Industry 56 Total 1,283

Source: Strategic Economics Group, 2014 The economic sector impact of craft brewing ranges from the food service industry to retail sales and the manufacturing of craft beer itself. Iowa’s service industry experienced the largest impact from the rise of the craft beer industry, with approximately 56.0% of the directly resulting jobs being housed in this sector. The manufacturing industry follows with approximately 39.6% of the total. The IMPLAN model also measures economic output changes through the calculation of changes in labor force income. According to the Strategic Economics Group, labor force income includes “the value of all of the income received from employment, including employee compensation, such as wages, salaries, benefits, as well as the income received by proprietors.”15 Several industries experienced an increase in labor force income resulting from the 2014 production efforts of the craft brewing industry (Figure 8).

Figure 8: Labor Income Impact Labor Income Impact Description (in Millions) Food and Beverage Industry $ 22.9 Breweries 6.7 Retail Industry (Food & Beverage) 1.6 Grain Farming 0.0

Total $ 31.2 Source: Strategic Economics Group, IMPLAN Modeling, 2014 The food services and drinking places sector of labor force income experienced the most significant amount of impact at $22.9 million, or 73.4%, of total impact for calendar year 2014. Retail stores experienced an approximate $1.6 million increase in labor force income, which amounts to approximately 5.1% of total monetary labor force income. Actual breweries, however, only experienced a 21.5% ($6.7 million) increase in the industry’s labor force income. Iowa’s grain farm industry was not impacted by the rise in craft beer popularity. This is likely due to the nature of the State’s soil and weather conditions, which are traditionally not suitable for planting and harvesting hops, a main ingredient in craft beer production.16

15 Strategic Economics Group, The Economic Impact of the Craft Beer Industry in Iowa (May 2015), https://www.traveliowa.com/UserDocs/2014_Iowa_Craft_Beer_Economic_Impact_Report.pdf. 16 While hops are not traditionally grown in Iowa, recent agricultural advances and research have led to a growing interest in planting and harvesting this potential cash crop. Iowa State University Extension and Outreach, Hops Production 101: A Guide to Growing Healthy Hops (May 2016), www.extension.iastate.edu/article/hop-production- 101-guide-growing-healthy-hops. 179 ISSUE REVIEW 10 January 4, 2018

STATE-BY-STATE COMPARISON The rise of the craft beer industry is evident on a national scale as well. Figure 9 depicts the United States as characterized by the number of gallons of craft beer produced and sold to adults age 21 and older. Although Iowa does not rank in the top 10 craft beer producing states, it does fall in the middle to high range of producing craft beer. In 2015, Iowa produced and sold approximately 1.0 to 1.4 gallons of craft beer per adult age 21 and older.

Figure 9: Gallons of Craft Beer Produced and Sold, State-by-State Comparison, 2015

Source: https://vinepair.com/articles/map-states-ranked-craft-beer-breweries/

According to the data analysis of the BA in 2016, Iowa ranks 22nd among craft beer-producing states in the United States, moving up 16 positions from being ranked at 38th place in 2015.17 The BA also notes that craft brewing in Iowa made a total economic impact of $861.0 million.18 Iowa ranks 23rd out of 50 states when the economic impact of the growing craft beer industry is measured on a national scale. The economic impact breaks down to approximately $388.77 per capita, ranking Iowa 13th out of 50 states and the District of Columbia for per-capita economic impact.19 Comparing the current state of the craft brewing industry in Iowa to the rest of the United States provides a rather broad analysis that does not account for varying regional and population-size specific factors. For a more in-depth analysis, this Issue Review uses 2016 electoral vote data as the primary tool in creating a dataset of categorically similar states to examine Iowa’s status in the craft beer industry. By utilizing datasets of states similar in either size/population or regional proximity, a more clear and indicative analytical comparison of where Iowa ranks in the national craft beer industry can be made.20 The first subset of this data includes Arkansas, Connecticut, Mississippi, West Virginia, Nevada, New Mexico, Oklahoma, Oregon, and Utah, as they are similar in size to Iowa (based on electoral votes). The second subset of the dataset includes Illinois, Kansas, Minnesota, Missouri, Nebraska, and Wisconsin, as they are the nearest in regional proximity to Iowa. Figure 10 displays the first dataset of the analysis, categorized by the number of breweries, production by barrel per year, and nationwide rank of each of the aforementioned similarly sized states, based on population.

17 Brewers Association, Iowa Craft Beer Sales Statistics (2016), www.brewersassociation.org/statistics/by- state/?state=IA. 18 Id. 19 Id. 20 Id. 180 ISSUE REVIEW 11 January 4, 2018

Figure 10: State-by-State Comparison, Similarly Sized States*, 2016

Number of Breweries Production by Barrel (/year) Rank (Nationwide) Mississippi 9 28,876 51

West Virginia 15 14,682 45

Oklahoma 20 47,847 43

Utah 27 199,220 40

Arkansas 28 35,846 38

Nevada 37 52,828 34

Connecticut 49 129,825 32

New Mexico 57 111,237 26

Iowa 70 61,232 22

Oregon 243 1,149,150 4 *Based on Electoral Votes

*Note: Nationwide Rank is based on number of craft breweries. Sources: https://www.brewersassociation.org/statistics/by-state/, https://www.archives.gov/federal-register/electoral-college/allocation.html

According to the Brewers Association, Iowa ranks 22nd out of 50 states and the District of Columbia for number of craft breweries. Further analyzing the dataset down into a comparison of just similarly sized states, as based on electoral vote numbers, provides additional data. When compared to 10 other states similar in size, Iowa ranks much higher in terms of number of breweries and production of barrels per year. Iowa ranks second in number of breweries when compared to the similarly sized states of the first dataset (Figure 11). Iowa ranks fifth in production and second in an overall comparison of the 10 similarly sized states’ national craft brewing ranking. In 2015, Iowa ranked sixth in production. The change in rank from 2015 to 2016 displays that the Iowa-produced craft beer market is growing. Figure 11: Iowa Rankings, Similarly Sized States, 2016

Number of Breweries Production Rank 1. Oregon 1. Oregon 1. Oregon 2. Iowa 2. Utah 2. Iowa 3. New Mexico 3. Connecticut 3. New Mexico 4. Connecticut 4. New Mexico 4. Connecticut 5. Nevada 5. Iowa 5. Nevada 6. Arkansas 6. Nevada 6. Arkansas 7. Utah 7. Oklahoma 7. Utah 8. Oklahoma 8. Mississippi 8. Oklahoma 9. West Virginia 9. Arkansas 9. West Virginia 10. Mississippi 10. West Virginia 10. Mississippi

Sources: https://www.brewersassociation.org/statistics/by-state/, https://www.archives.gov/federal-register/electoral-college/allocation.html

181 ISSUE REVIEW 12 January 4, 2018

A third form of analysis compares Iowa to its neighboring states based on geographical proximity rather than size or population. In Figure 12, the current craft brewing industries of six states are set in contrast to Iowa’s current craft brewing industry. Figure 12 provides a brief initial comparison of the number of breweries, production levels by barrel per year, and the national rank of each state in the current nationwide craft beer industry.

Figure 12: 2016 Craft Beer Industry Comparison, Neighboring States

Number of Breweries Production by Barrel (/year) Rank (Nationwide)

Illinois 181 337,582 11

Iowa 70 61,232 22

Kansas 31 51,542 37

Minnesota 112 609,415 16

Missouri 78 368,857 20

Nebraska 42 46,805 33

Wisconsin 138 974,538 14

Sources: https://www.brewersassociation.org/statistics/by-state/, https://www.archives.gov/federal-register/electoral-college/allocation.html

In comparison to 2015, Iowa’s neighboring states have also experienced significant growth in their respective craft beer industries. Nebraska, for example, produced 39,505 barrels of craft beer in 2015 and 46,805 in 2016, an 18.5% increase.21 Figure 13 compares these neighboring states to each other, rather than nationally.

Figure 13: Iowa Rankings, Neighboring States, 2016

Number of Breweries Production Rank 1. Illinois 1. Wisconsin 1. Illinois 2. Wisconsin 2. Minnesota 2. Wisconsin 3. Minnesota 3.Missouri 3. Minnesota 4. Missouri 4. Illinois 4. Missouri 5. Iowa 5. Iowa 5. Iowa 6. Nebraska 6. Kansas 6. Nebraska 7. Kansas 7. Nebraska 7. Kansas

Sources: https://www.brewersassociation.org/statistics/by-state/, https://www.archives.gov/federal-register/electoral-college/allocation.html

21 Strategic Economics Group, The Economic Impact of the Craft Beer Industry in Iowa (May 2015), https://www.traveliowa.com/UserDocs/2014_Iowa_Craft_Beer_Economic_Impact_Report.pdf. 182 ISSUE REVIEW 13 January 4, 2018 When compared to neighboring states, Iowa ranks fifth out of seven states in all categories— number of breweries, production, and rank. This comparison places Iowa at a lower ranking compared to those states in its closest proximity, but Iowa remains a strong contender in the craft beer industry. Though the craft beer industry in Minnesota is experiencing significant growth, increasing its barrel production by 97.9% from 2013 (308,000) to 2016 (609,415), comparative calculation develops a clearer analysis.22 Iowa, ranked lower than Minnesota in Figure 13, actually experienced a similar rate of growth in total barrel production of 108.3% from 2013 (29,400) to 2016 (61,232).23 Though Iowa’s craft beer industry may be smaller than nearby states, it is still experiencing positive growth. Comparing Iowa’s excise tax rate to states of similar size and regional proximity provides another perspective on the growing craft beer industry (Figure 14). Iowa imposes an excise tax significantly lower than some of its competitor states (19 cents/gallon), such as New Mexico (41 cents/gallon), Nebraska (31 cents/gallon), Utah (41 cents/gallon), and Oklahoma (40 cents/gallon). Iowa’s excise tax ranges from 38.0% to 52.0% lower than the above-listed states. Iowa sits favorably in revenue growth as the growing interest in craft beer continues to raise the production demand within the industry. Lower taxes may encourage the industry to continue to produce and expand. Furthermore, there are lower purchase costs for consumers at a lower taxation rate, similarly creating a stronger demand for the product. It is important to note, however, that Iowa’s excise tax is approximately three times as high as the neighboring competitor states of Wisconsin and Missouri (both charge an excise tax of six cents/gallon). Illinois levies a more comparable tax of 23 cents per gallon. Minnesota charges over twice as much of an excise tax on beer at 47 cents per gallon.

Figure 14: Excise Tax on Beer, State-by-State Comparison

Source: https://taxfoundation.org/how-high-are-beer-taxes-your-state-0/

22 Barry Adams, Wisconsin State Journal, Craft beer continues to guzzle market share from mass-produced beer (March 17, 2015), host.madison.com/wsj/business/craft-beer-continues-to-guzzle-market-share-from-mass- produced/article_d23499a7-c432-54ed-94b8-c7562d7d77e1.html. 23 Minnesota Craft Brewers Guild, 2013 Year in Review (March 21, 2014), www.mncraftbrew.org/2013-year-in-review. 183 ISSUE REVIEW 14 January 4, 2018

FUTURE OUTLOOK The Strategic Economics Group projects strong growth for Iowa’s craft beer industry over the next several years. The Group estimates that within the next five years, craft beer production could as much as triple among Iowa breweries. During FY 2014, native Iowa brewpubs and breweries sold 15,442 barrels of beer, whereas they sold only 8,093 barrels in FY 2011, a 90.8% increase over just three years.24 As the market continues to expand in Iowa, so will production. Recent legislation is allowing additional economic growth in Iowa’s craft beer industry as well. In the 2015 Legislative Session, the Iowa General Assembly passed SF 456 (Regulation of Retail Sale of Beer for Off-Premises Consumption Act), which effectively allowed Iowa businesses to begin selling refillable containers of beer to be consumed at off-site locations. These containers, also called “growlers,” are eligible to be sold at grocery stores, convenience stores, and carry-out liquor stores. Customers may purchase growlers at a taproom or brewpub and bring the containers back to be refilled and resealed. Legislation like SF 456 increases availability and marketability of craft beer, allowing small starter breweries to expand their business reach and in turn focus on higher rates of production. Allowing for this type of sale increases the opportunity for craft beer to be served outside of breweries and taprooms, reaching a far greater amount of consumers than those in the proximity of such establishments. When compared and ranked according to national averages, Iowa’s craft beer industry has more room for growth. Statistics show the industry has expanded over the past several years due to growing demand. The Associated Press recently reported that as a result of this growing demand, hops production in the United States increased 20.0% in 2016.25 Furthermore, the monetary value of hops as a cash crop increased 19.0% per pound from 2015 to 2016.26 As one of the primary ingredients in the brewing of craft beer, hops production is integral to craft beer demand and production.

LSA STAFF CONTACT: Christin Mechler (515.250.0458) [email protected]

24 Strategic Economics Group, The Economic Impact of the Craft Beer Industry in Iowa (May 2015), https://www.traveliowa.com/UserDocs/2014_Iowa_Craft_Beer_Economic_Impact_Report.pdf. 25 Patrick Whittle, The Associated Press, Hop growers look to new parts of US to slake thirst for crop (September 11, 2016), bigstory.ap.org/article/8b73a8524cb246c19764586836ac6c09/hop-growers-look-new-parts-us-slake-thirst- crop. 26 Id. 184 ISSUE REVIEW 15 January 4, 2018 Appendix A: Craft Beer Relevant License Classes and Types License/ Permit Licensing Iowa Code Type Designation Description Section

Class A Beer For wholesale beer distributors. Allows for the Permit BA manufacture and sale of beer at wholesale to 123.124 licensed retailers. Class A For wholesale native beer distributors. Allows for the Native Beer BAN manufacture and sale of beer at wholesale to 123.130 Permit licensed retailers and other beer wholesalers. Class AA For wholesale beer distributors. Allows for the High Alcohol BAA manufacture and sale of high-proof beer at 123.124 Content Beer wholesale to licensed retailers. Permit Class A For wholesale native beer distributors — high-proof. Native High Allows for the manufacture and sale of high-proof Alcohol BAAN beer at wholesale to licensed retailers and other high- 123.124 Content Beer proof beer wholesalers. Permit For class C liquor licensees or class B beer permittees. Special Allows the license/permit holder to manufacture beer Class A Beer Brewpub and sell it for consumption on its licensed retail Permit 123.124 Privilege premises only and does not allow for self-distribution. For class C liquor licensees or class B beer Special Class permittees. Allows the license/permit holder to AA Beer High-Proof manufacture high-proof beer and sell it for Permit Brewpub 123.124 Privilege consumption on its licensed retail premises only and does not allow for self-distribution. For taverns, bars, restaurants, etc. Allows commercial Class B establishments to sell beer for on- premises Beer Permit BB consumption. Also allows carry-out sales of beer in 123.124 original unopened containers. For grocery stores, convenience stores, pharmacies, Class C Beer etc. Allows commercial establishments to sell beer Permit BC for off-premises consumption in original unopened 123.124 containers. No sales by the drink. For taverns, bars, restaurants, etc. Allows commercial Class C establishments to sell liquor, wine, and beer for on- Liquor LC premises consumption. Also allows carry-out sales of 123.30(3)(c) License beer in original unopened containers. For taverns, bars, restaurants, etc. Allows Special commercial establishments to sell wine and beer for Class C on-premises consumption. Also allows carry-out Liquor BW 123.30(3)(c) sales of beer and wine coolers in original unopened License containers.

*Please note that these license classes and types are specific to craft beer. Additional license information is available from the Alcoholic Beverages Division website.

Source: Iowa Alcoholic Beverages Division

Appendix B: 185 ISSUE REVIEW 16 January 4, 2018

Terms and Definitions Though the term “craft beer” has no patented definition, the establishments associated with its production and services are defined according to size, service provided, and production capability. As these terms are used quite often in discussion regarding the craft beer industry, definitions and distinctions for them are provided below. Craft Beer: Beer produced in a nontraditional or nonmechanized fashion, typically by smaller, non-mass-production breweries. Beer Distributor: The individuals who purchase beer from brewers in order to deliver it to retailers. In addition to acting as sales support, distributors often assist in matters of advertising, promotion, and merchandising. In a three-tier alcohol distribution system, such as Iowa’s system, the beer distributor acts as the middle tier. Microbrewery: A brewery that produces less than 15,000 barrels of beer per year. At least 75% of this produced beer is sold off-site. Microbreweries can sell to the public through the traditional wholesale-to-retail process, indirectly by acting as the wholesaler who sells to the retailer, or directly to the consumer through carry-out and/or on-site taproom or restaurant sales. Brewpub: A combination of brewery and restaurant that sells 25% or more of their brewed beer on-site. Beer is primarily brewed for internal restaurant and bar sales, and is often directly dispensed from on-site storage tanks. Where allowed by law, brewpubs often sell beer on a to- go basis and/or are also able to distribute it to off-site vendors. Contract Brewing Company: A business that hires an outside brewery to produce its signature beer. It can also be a brewery that hires an additional, similar brewery to produce greater amounts of such beer due to high demand and lacking production capacity. Contract brewing companies do, however, handle the marketing, sales, and distribution of their own beer, while generally leaving the actual brewing, production, and packaging to an outside contract brewery. Regional Craft Brewery: An independent, regional brewery whose primary sales consist of “traditional” or “innovative” beer to a fixed geographical location. Nanobrewery: A brewery that primarily operates on a system that produces no more than seven barrels of craft beer at a time. Taproom: A room in which alcoholic drinks such as beer are readily available on tap. These are often located in a hotel, bar, or restaurant.

186

ISSUE REVIEW Fiscal Services Division

January 11, 2018

Building Maintenance on State Facilities NOTE: Revised and republished with updated information on January 11, 2018. ISSUE

This Issue Review discusses funding, strategies, and outstanding projects to maintain buildings owned and operated by the State. The Issue Review examines all agencies that manage property. With the exception of the Board of Regents, information included in this Issue Review was reported directly to the Legislative Services Agency (LSA) by State agencies for the purposes of this report. Information from the Board is from its annual Facilities Governance Report.

DEFINITIONS Maintenance activities are defined differently by separate organizations. As a result, the deferred maintenance totals discussed in this Issue Review will vary in several key places. For many agencies, deferred maintenance estimates are derived from the major maintenance list maintained by the Department of Administrative Services (DAS). However, State agencies responsible for their own maintenance projects (see page 2) will track deferred maintenance by definitions set within each department. Department of Administrative Services (DAS) Board of Regents (definitions) (definition) Major Maintenance: Deferred Maintenance: Major maintenance is defined as expenditures made Deferred maintenance is the repair or replacement of all, beyond the regular, normal upkeep of physical or a part of, an existing capital asset that was not properties (i.e., Land, Buildings, and Equipment) for the repaired or replaced at the appropriate time because of a repair or replacement of failed or failing building lack of funds. Deferred maintenance is dependent upon components as necessary to return a facility to its time and is sometimes referred to as “capital renewal currently intended use, to prevent further damage, or to backlog.” Replacement of a building or infrastructure make it compliant with changes in laws, regulations, system or component when it should be replaced is codes, or standards. Tangible personal property as building renewal, not deferred maintenance. Deferred defined in the section “Routine Maintenance Definitions” maintenance results from inaction on normal shall not be eligible for major maintenance funds. maintenance, including planned and preventive

maintenance, and renewal and replacement projects. Examples: roofs, boilers, windows, utility systems, safety systems, and projects intended to comply with building codes and regulations.

Routine Maintenance: Expenditures made for the regular upkeep of physical properties (i.e., Land, Buildings, and Equipment) including recurring, preventive, and ongoing maintenance necessary to delay or prevent the failure of physical properties. For purposes of this definition, building operational costs are not considered routine maintenance. Tangible personal property as defined in the Routine Maintenance Definitions is not eligible for routine maintenance funds.

Examples: painting, sealing, parking lot and sidewalk repairs, routine tuck pointing, repairs to building components, upkeep of building alarm systems, and pest controls.

187 ISSUE REVIEW 2 January 11, 2018

MAINTENANCE RESPONSIBILITIES

Maintenance of State-owned property in Iowa is funded and managed in different ways depending on the location of the property, occupying agency, and use of the facility. For non-Board of Regents facilities, the type of maintenance occurring – routine maintenance compared to major maintenance – also impacts how maintenance activities are financed and managed. In total, the State of Iowa owns and is responsible for 58.0 million square feet of building space.

Responsibility to maintain State property is organized into three different categories. First, several agencies manage all maintenance that occurs on agency-occupied properties. The largest of these agencies is the Board of Regents, which manages a total of 39.8 million square feet of building space. The second largest is the Department of Transportation (DOT). The DOT operates 1,174 facilities, totaling 4.1 million square feet. The Department of Public Defense (DPD) manages a total of 4.1 million square feet and the Department of Natural Resources (DNR) manages 2.8 million square feet. There are also a number of smaller agencies that manage all maintenance. These are listed in Table 1 and include the Department for the Blind, Iowa Public Employees’ Retirement System (IPERS), Iowa Finance Authority (IFA), and the Lottery Authority. The Judicial Branch also manages the Judicial Building.1

The second category requires agencies to submit major maintenance projects to the DAS and manage routine maintenance projects on facilities outside the Capitol Complex. The DAS reviews and manages major maintenance projects. Projects are selected based upon set priorities. The two largest agencies that fall under this arrangement are the Department of Human Services (DHS) and the Department of Corrections (DOC). Major maintenance is most often funded through line-item appropriations from the Rebuild Iowa Infrastructure Fund (RIIF). Routine maintenance projects for these agencies are funded in operating budgets which often receive the majority of support from the General Fund.

Finally, the DAS manages routine maintenance and major maintenance on all facilities on the Capitol Complex. In these cases, the agencies pay an association fee to the DAS that funds routine maintenance and the DAS monitors these properties for major maintenance needs.2 Table 1 – Maintenance Responsibilities by Department3 Department Maintains Dept. Manages Routine Maintenance Major Maintenance and All Facilities DAS Manages Major Maintenance Capitol Complex

• Board of Regents • IPERS • DHS • ABD • IVH • DAS • Dept. for the Blind • IFA • DOC • IPTV • IWD • DOT • Judicial Branch • DPS • ILEA • DNR • Lottery Authority • DPD • CBCs

1 County-owned courthouses are not reviewed in this Issue Review. 2 This Issue Review does not discuss routine maintenance conducted on ceremonial space. 3 This table does not include facilities not on the Capitol Complex that are managed by the Department of Cultural Affairs (DCA). The Historical Building is on the Capitol Complex and managed by the DAS. Historical sites are managed by the DCA, but are not included in this Issue Review.

188 ISSUE REVIEW 3 January 11, 2018

STATUS OF STATEWIDE MAINTENANCE DAS, Capitol Complex, Iowa Labs, and Major Maintenance The Capitol Complex includes the buildings, facilities, and grounds around the Capitol Building and the Iowa Crime Labs in Ankeny. The Capitol Complex consists of 14 major buildings with 2.1 million square feet and is estimated to accommodate nearly 4,000 employees.4 Over 37 agencies have offices on the Capitol Complex and receive routine maintenance support exclusively through the DAS. Agencies on the Capitol Complex pay an annual association rate to the DAS to fund a number of services, including routine maintenance. These association fees are a portion of each agency’s budget, and must be considered within an agency’s annual budget. Iowa Code section 7E.5A identifies an industry standard of 1.0% of the replacement cost of a facility for budgeting for routine maintenance. During the past several years, this goal has been unmet. The routine maintenance portion of the association fee was established relatively recently. Beginning in FY 2016, the DAS dedicated a portion of the association fee to funding routine maintenance. Prior to the establishment of this charge for routine maintenance, routine maintenance had not had a dedicated funding stream since FY 2010, when funding was appropriated from the RIIF. The DAS collected $2.9 million in FY 2017 and is estimated to collect $2.9 million in FY 2018, and $3.1 million in FY 2019 through association fees for routine maintenance on the Capitol Complex.5 Based on a conservative estimate of a $150 per square foot replacement value, a 1.0% target for a routine maintenance budget would require $3.5 million.6 Separately, the Capitol Planning Commission recommended a total of 2.0% of replacement value to be devoted to routine maintenance on the Capitol grounds. As noted, the DAS receives major maintenance project requests from agencies, assesses the requests, and manages the projects. Requests for major maintenance are submitted to the DAS by a number of agencies (agencies that do not submit requests to the DAS are listed in Table 1). These projects are aggregated on the major maintenance list, which also provides a picture of deferred maintenance. Chart 1 displays the total estimated cost of projects requested from FY 2004 through the first quarter of FY 2018. The estimated cost of projects on the list has increased steadily since FY 2011, with the first decrease occurring in the first quarter of FY 2018. According to an assessment by the Baker Group in 2013,7 the increase in deferred maintenance is attributable to under-resourced maintenance activities.8 The large increase in major maintenance projects in FY 2014 (see Chart 1) is also attributable to increased scrutiny after assessments by the Baker Group. This latest decrease may be temporary; the majority of these annual totals were summed early in the fiscal year after departments had submitted annual budget requests.

4 Department of Administrative Services and Capitol Planning Commission, Iowa State Capitol Complex Master Plan (December 2016). 5 Capitol Planning Commission FY 2016 Annual Report (December 2016). 6 Id. 7 The Baker Group is a general contractor that provides a number of services including building assessments. 8 State of Iowa Capitol Complex: Deferred Maintenance Review, Baker Group (February 14, 2013).

189 ISSUE REVIEW 4 January 11, 2018

Chart 1 – Unfunded Major Maintenance Requests FY 2004 – FY 2018 (as of August 2017) $300 $290 $287 $300 $262

Millions 250 $233

200

$143 150 $125 $105 $94 $100 100 $55 $55 $41 $49 50 $28

0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 (Q1)

Chart 2 tracks the history of major maintenance appropriations. Between FY 2004 and estimated FY 2018, the RIIF was the single largest source of funding for major maintenance. The General Assembly has appropriated from several funds – most significantly, the Vertical Infrastructure Fund (VIF), which was created for the purpose of funding building infrastructure. The VIF provided $55.6 million in funding between FY 2006 and FY 2008, and has not provided funding since FY 2008. Between FY 2009 and FY 2012, major maintenance funding was provided primarily through bond proceeds. Since FY 2013, $70.3 million, or 87.9%, of appropriations for major maintenance were funded by the RIIF. The period since FY 2013 was the most stable period of appropriation levels, with annual funding between $9.5 million and $15.1 million. Chart 2 – Major Maintenance Appropriations

$45 $40.0 40 Millions 35 30 25

20 $16.6 $15.1 $14.6 $13.0 $14.0 15 $11.5 $11.5 $8.9 $10.0 $9.5 10 $4.3 $4.0 5 $3.0 $0.2 0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Est. FY18

190 ISSUE REVIEW 5 January 11, 2018

Chart 3 shows major maintenance projects by priority ranking. The DAS prioritizes projects based upon purpose (Major Maintenance Priority Recommendations). Since FY 2013, the percentage of total projects in each category has remained relatively stable. Chart 3 – FY 2018 (Q1) Major Maintenance Requests Project by Priority

Priority (rank) Life, Health, and Safety (1) $0 million

Damage Repair (2) $52.5 million

Americans with Disabilities (3) $2.1 million

Scheduled (4) $157.9 million

Efficiency (5) $67.6 million

Demolition (6) $7.3 million

Chart 4.1 displays projects on the major maintenance list by managing agency. Capitol Complex facilities, totaling 2.1 million square feet, comprise the majority of projects from a dollar perspective. Facilities for the DHS and DOC make up the majority of the rest of the requests. Chart 4.2 also displays major maintenance funding requests by Capitol Complex buildings. The two buildings with the most expensive total requests are the Hoover and Wallace buildings. In both of these instances, requests for Heating, Ventilation, and Air Conditioning (HVAC) renovations are driving the majority of the need. The Historical Building has nine projects listed in the current plan, for a total request of $16.0 million. Chart 4.1 – Major Maintenance Projects Chart 4.2 – Capitol Complex Major by Department (FY 2018 Q1) Maintenance Requests by Building

Other $35 $9.9 $30 30 3% Millions DHS $24 25 $43.1 15% 20 $17 $16 DAS- 15 $13 $12 $11 Cap $10 $9 Com 10 DOC $4 $4 $154.4 5 $3 $80.2 54% $2 $1 28% 0

(in millions) Source: DAS

191 ISSUE REVIEW 6 January 11, 2018

Major Agencies that Manage All Maintenance This section will review the maintenance activities of several major agencies that manage all of their maintenance activities. This section excludes several agencies, including those that occupy less than one million square feet, are owned by the State, and that manage all aspects of their facilities. These smaller agencies are discussed on page 14. The agencies discussed in this section may define maintenance differently from DAS. The phrase “major maintenance” is not generally used, but the definition of routine maintenance still generally aligns with the definition used by the DAS. Board of Regents The Board of Regents is the largest agency that manages all of its facilities’ maintenance activity. The individual universities and special schools9 manage all maintenance projects and submit large capital projects (such as building renovations) to the Board. The Board in turn can submit these project requests to the Governor in the annual Department budget request. The Board annually submits a Facilities Governance Report that provides information on all Regents facilities. The Report reviews existing deferred maintenance needs, expenditures, and general information regarding Regents properties. In Iowa, a large number of facilities were completed in the 1960s and 1970s, a development boom that reflected national trends. Chart 5 below shows building completion by year. Construction for Academic, Research, and Administrative buildings is represented in the blue chart, and all Regents facilities are represented in orange. The 1960s and 1970s were the biggest decades for construction, while the 2000s was the decade with the third most construction. In total, the Board of Regents manages facilities that total 39.8 million gross square feet: 18.5 million gross square feet of the total is for academic, research, and administrative purposes, and 21.3 million gross square feet is for other purposes.10 Chart 5 – Regents Construction by Year Regents Construction by Year Academic, Research, Admin. Square Feet Total Square Feet

1930 3.7 million 1930 5.4 million or prior or prior 1931 1931 0.8 million 1.6 million 1950 1950 1951 0.7 million 1951 1960 1960 2.2 million 1961 1961 1970 2.7 million 1970 7.0 million 1971 1971 1980 3.2 million 1980 5.5 million 1981 1981 1.6 million 1990 1990 3.5 million 1991 1991 2000 2.1 million 2000 5.1 million 2001 2001 2010 2.5 million 2010 5.8 million 2011 2011 $1.3 million 3.7 million Present Present Source: Board of Regents

9 Special schools include the Iowa School for the Deaf (ISD) and the Iowa Braille and Sight Saving School (IBSSS). 10 Totals may not add due to rounding.

192 ISSUE REVIEW 7 January 11, 2018

Maintenance projects and renovation projects that correct building deficiencies are funded from a number of sources. Unlike the other major agencies discussed, the Board receives a large share of its funding outside of the normal appropriations process. For General Fund buildings and utility buildings, 71.6% of funding since FY 1993 has been provided by building renewal and general university funds (25.8%), appropriations (17.5%), utility bonds (14.7%), and academic revenue bonds (13.6%). In total, the Board has corrected $973.4 million in deficiencies in building renovation and deferred maintenance projects since FY 1993. The Board also places an emphasis on fire safety projects. These projects have received a total of $83.1 million since FY 1993.11 The Board publishes a report on estimated deferred maintenance each year in the fall. In 2016, the Board reported deferred maintenance for all Regents institutions at $779.2 million. This has quickly risen since fall 2004. The rise is due to factors that include facility age, inflation related to construction costs, and a more thorough accounting of maintenance needs on Regents properties.12 Continued building assessments at the universities each year will add to accumulated deferred maintenance backlogs. The information in Chart 6 conveys gross square footage by institution and total deferred maintenance by institution. Chart 6.1 displays deferred maintenance need per square foot.

Chart 6 Gross Square Feet by Institution Deferred Maintenance Costs by Institution

20.0 $269.8 Iowa Iowa million million

14.3 $347.3 ISU ISU million million

4.8 $152.1 UNI UNI million million

0.4 $8.6 ISD ISD million million

0.2 $1.4 IBSSS IBSSS million million

Chart 6.1 – Deferred Maintenance Costs per Gross Square Foot

$31.4

$24.2 $22.6

$13.5 $7.3

Iowa ISU UNI ISD IBSSS

11 Iowa Board of Regents, Facilities Governance Report (February 2017). 12 Id.

193 ISSUE REVIEW 8 January 11, 2018

The Facilities Governance Report stated a replacement value of Regents facilities at $9.8 billion. Building repair expenditures in FY 2016 were 0.53% of this replacement value, and the FY 2017 budget was 0.47% of this replacement value.13 The Board also targets a benchmark for maintenance budgets of 1.0% of the replacement value of the building.14 In total, the Board reports that the universities and institutions spent $43.7 million on projects that corrected deferred maintenance projects in FY 2016. By institution, Iowa spent $30.8 million, ISU spent $11.6 million, UNI spent $856,700, and ISD spent $425,800. Chart 7 displays the total value of deferred maintenance projects corrected by institution from FY 2004 to FY 2016. A total of $278.6 million was spent over this time.

Chart 7 – Deferred Maintenance Corrected by Institution FY 2004 – FY 2016

$35 Iowa: $180.6 million ISU: $75.6 million Millions 30 UNI: $22.4 million

0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

13 Id. 14 Id.

194 ISSUE REVIEW 9 January 11, 2018

Department of Transportation The Department of Transportation has a number of roles and maintains diverse facilities across the State to support its mission. In total, the DOT is responsible for all maintenance activities on 1,174 buildings, a total of 4.1 million square feet. These facilities include the main headquarters in Ames, road maintenance garages, storage buildings including salt storage buildings, rest areas, law enforcement scales, license stations, offices, land, and radio towers. The DOT develops three-year plans for repairs and major improvements to its buildings. Projects are identified by individual districts in conjunction with Highway Division central maintenance and reported centrally to DOT Support Services. Support Services then determines what should be replaced or repaired, determines the priority of requested projects, and sets replacement and repair schedules based upon available funding. The General Assembly appropriates the majority of funding used for DOT building improvements. Funds are appropriated from the Road Use Tax Fund and the Primary Road Fund. Annual appropriations include preventative maintenance, utility improvements, roofing projects, HVAC improvements, and specific line items for rest area maintenance and ADA improvements. In the past, the DOT has received funding for scale replacements and specific projects. In estimated FY 2018, the DOT received a total of $4.0 million in seven appropriations to fund these activities. Each year the DOT also requests funding for at least one garage replacement or renovation, which is considered a capital project. The DOT has 102 maintenance garages. There are enough of these facilities that the DOT needs to regularly replace or improve maintenance garages to avoid a large backlog of repairs and problems.

Chart 8 – Appropriations to the DOT for Maintenance and Capital Projects $18 Maintenance Projects (utilities, roofs, preventative)

16 Garage, Facility, or Special Projects 14 4.0 Millions 12 10 0.9 4.5 4.0 4.4 8 3.4 4.0 6 12.3 9.4 4 2.0 3.8 7.4 1.4 1.3 1.5 6.5 7.1 0.9 5.2 4.9 2 3.1 2.0 2.6 2.4 2.6 3.1 2.2 0 1.0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Est. FY 18

In FY 2017, the DOT expended $2.5 million on routine maintenance and unplanned projects. This dollar amount is funded through administrative appropriations that also support the general operation of the Department including salaries, office equipment, vehicle operation, and other purposes. The Department has budgeted $2.0 million in FY 2018 for routine maintenance. As of fall 2017, the DOT does not have an estimate of total deferred maintenance. However, in September 2017, the Department began utilizing database software to track warranties, which are the life span of materials and costs. The Department believes that this will allow for better planning and budgeting when it comes to building assets. It is likely that this information will not be useful immediately, but as the Department records the status of more assets over time, this database should yield additional information regarding the Department’s building infrastructure.

195 ISSUE REVIEW 10 January 11, 2018

Department of Natural Resources The DNR manages all maintenance on a wide variety of structures that support various activities, including State parks, wildlife management, fish stocking, law enforcement, and Honey Creek Resort. As a result, the infrastructure that the Department supports is varied and difficult to summarize. Examples of vertical infrastructure that the DNR supports include utilities, cabins, lodges and shelter houses, storage facilities, garages, historic buildings, restrooms, visitor centers, and residences. In total, the DNR tracks over 1,700 buildings totaling over 2.8 million square feet. The DNR does not currently have an estimate of the deferred maintenance that might exist on all facilities. In 2015, the DNR estimated an infrastructure backlog on State park facilities that exceeded $200.0 million. These projects included but were not limited to sewer lines, cabins, and campsites. This estimate specifically excluded trails. In addition to general operation appropriations, the DNR typically receives two appropriations that support infrastructure improvements at State parks. The first appropriation is for State Parks Infrastructure from the RIIF. Since FY 2011, the DNR has received $35.0 million for this purpose. State park infrastructure improvements include replacing sewer lines, upgrading public drinking water systems, replacing shower buildings, constructing restrooms, replacing trail bridges, extending trail areas, and providing open-air interpretive shelters and exhibits. The second appropriation is from the Environment First Fund (EFF) to support State Park Operations and Maintenance. This line item is appropriated in the annual Agriculture and Natural Resources Appropriations Act and supports seasonal staff, facility maintenance, equipment replacement, and filling critical staff vacancies. The DNR reports that routine maintenance projects received $575,000 in FY 2017. For FY 2018, the Department is budgeting $300,000. This funding is provided by the land management portion of the Resource Enhancement and Protection (REAP) Program that also receives funding from the EFF. These funds may be spent on purposes not considered routine maintenance. In FY 2017, the DNR received a total of $8.2 million that was eligible to be expended on maintenance activities in State parks.

Chart 9 – Appropriated Funds for State Park Maintenance

$12 State Park Infrastructure (RIIF) State Park Operations and Maintenance (EFF)

Millions 10

5.0 5.0 5.0 8 3.0 2.0 5.0 6 5.0 5.0 4 2.5 2.5 6.4 6.2 6.2 0.3 6.1 6.1 2 3.2 3.7 2.0 2.0 2.0 2.0 2.5 2.5 2.5 2.5 0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Est. Note: This includes appropriations designated for specific projects or purposes. FY18

196 ISSUE REVIEW 11 January 11, 2018

Department of Public Defense The DPD maintains over 485 buildings at 40 locations across the State. In total, the DPD maintains 4.1 million square feet in buildings and over 4,800 acres of land. Of this total, 3.1 million square feet and 451 buildings are owned exclusively by the State. The facilities include readiness centers, Camp Dodge, logistics buildings, training facilities, and lodging. The DPD estimates a deferred maintenance backlog of approximately $326.6 million statewide.15 Camp Dodge deferred maintenance comprises $105.4 million of the total, with the remainder of the State facilities requiring $222.2 million.16 This estimate is calculated based upon what it would take to bring facilities within 90.0% of maintenance standards. The initial number does not include the cost to modernize for mission capacity, which is primarily based on the facilities required for different types of military units and the mission of each unit. Bringing Iowa DPD facilities to mission capacity would require $423.0 million. Unlike other State agencies, the DPD receives substantial federal support for its facilities. Funding for all National Guard facilities is determined by the U.S. Congress with input from the Army. Generally, the Iowa National Guard receives around $12.0 million annually from this process. The National Guard also receives federal funding that matches State appropriations. Without the State match, these federal dollars would be unavailable. In the past, matching funds required from the State have been between 25.0% and 50.0%. The DPD also receives appropriations from the RIIF and General Fund. Maintenance and construction activities are supported primarily by the RIIF, with appropriated General Fund dollars providing a relatively small amount of the total (1.5%).17 In FY 2017, the DPD expended a total of $8.6 million on routine maintenance. The RIIF provided $1.1 million of the total and $7.5 million was provided by federal sources. Chart 10 – Appropriations from the RIIF for Construction and Maintenance $8 Camp Dodge Readiness Centers

Millions 7 Facility Maintenance

5 2.7 0.5 0.9 1.0 0.6 0.5 0.5 4 0.3 2.9 0.1 2.5 4.8 0.9 1.0 3 2.1 1.8 2.6 1.9 2.0 2.0 2.0 1.5 0.3 2 2.7 1.0 2.8 2.8 2.5 1 2.4 2.0 2.0 2.0 2.0 2.0 2.0 2.0 1.5 1.5 0.7 1.0 0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Est. FY18 Note: Includes appropriations designated for specific readiness centers and projects.

15 Totals may not add due to rounding. 16 Routine maintenance expenses reported by the DPD do not match appropriations. RIIF appropriations fund major maintenance and routine maintenance. Appropriations may be expended over four years, and are not restricted solely to routine maintenance. 17 Iowa Department of Public Defense, 2017 Department of Public Defense Infrastructure Report to the General Assembly (January 2017), www.legis.iowa.gov/docs/publications/DF/852407.pdf.

197 ISSUE REVIEW 12 January 11, 2018

Agencies that Manage Routine Maintenance

Department of Corrections The DOC is responsible for routine maintenance on 39 total facilities that comprise nearly 6.0 million square feet. These buildings include the Community-Based Corrections Districts (CBC), penitentiaries, and correctional facilities. Currently, the DOC has $90.9 million in outstanding major maintenance requests. This includes $80.2 million for correctional facilities on the major maintenance list, and an additional $10.8 million for the CBCs.18 The DOC develops a budget for routine maintenance based upon past expenditures and expected projects or needs. In FY 2017, the DOC expended $4.0 million on routine maintenance on all DOC facilities. Of the total, $3.0 million was expended on penitentiaries and correctional facilities and $966,000 was expended on the CBCs. For FY 2018, the DOC has budgeted $3.8 million. Table 2 shows facilities where the DOC is responsible for conducting routine maintenance. It displays the number of buildings, building size, routine maintenance expenditures, FY 2018 budget, and major maintenance needs reported to the DAS as of July 2017. Table 2 – Department of Corrections – Size, Routine and Major Maintenance FY 2017 FY 2018 FY 2018 Q1 Major Facilities Square Feet Routine Maint. Budget Maintenance Requests

CBC District 5 3 177,500 $ 283,073 $ 225,000 $ 2,811,338 CBC District 1 6 147,865 380,734 261,000 1,357,250 CBC District 6 2 98,051 16,959 40,000 1,179,700 CBC District 7 2 82,831 10,496 9,000 4,776,000 CBC District 2 4 56,343 93,457 104,000 370,000 CBC District 3 2 51,850 132,316 157,747 100,000 CBC District 4 5 26,688 20,595 25,000 86,000 CBC District 8 2 22,075 28,850 24,000 106,855 CBC Totals 26 663,203 $ 966,480 $ 845,747 $ 10,787,143

Iowa State Penitentiary 4 1,342,772 $ 187,250 $ 200,000 $ 5,510,000 Clarinda Correctional Facility 1 931,150 220,560 140,000 19,599,050 Anamosa State Penitentiary 1 712,089 548,580 652,112 11,893,000 Mount Pleasant Correctional Facility 1 580,039 150,000 150,000 11,520,360 Iowa Medical Classification Center 1 490,182 438,643 529,403 12,363,829 Iowa Correctional Institution for Women 1 413,989 422,792 420,000 76,000 Newton Correctional Facility 2 345,084 368,182 311,726 10,495,500 Fort Dodge Correctional Facility 1 324,482 497,188 404,838 6,406,050 North Central Correctional Facility 1 187,525 161,152 140,555 2,294,000 Totals 13 5,327,312 $ 2,994,347 $ 2,948,634 $ 80,157,789

Grand Totals 39 5,990,515 $ 3,960,827 $ 3,794,381 $ 90,944,932

Source: Department of Corrections

18 Totals may not add due to rounding.

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Department of Human Services The DHS is responsible for routine maintenance on seven facilities that exceed 3.4 million square feet throughout the State. The DHS currently has $43.1 million in requests for major maintenance repairs. Of that total, $11.0 million is classified as damage, $1.6 million is ADA repairs, $9.7 million is scheduled maintenance, $19.1 million is efficiency, and $1.6 million is for demolition.19 The DHS develops a budget for maintenance based upon past expenditures and known information. The DHS will estimate inflation associated with these costs using the Consumer Price Index (CPI). Table 3 shows each facility managed by the DHS, expenses on routine maintenance in FY 2017, the budget for routine maintenance for FY 2018, and major maintenance reported in the first quarter of FY 2018. In FY 2017, the DHS expended $1.8 million on routine maintenance across all seven facilities. Table 3 – Department of Human Services Facilities Size, Routine and Major Maintenance FY 2017 FY 2018 FY 2018 Q1 Major Square Feet Routine Maint. Budget Maintenance Requests Glenwood Resource Center 1,050,348 $ 739,520 $ 976,784 $ 7,750,054 Woodward Resource Center 851,497 860,488 860,488 1,464,000 Independence Mental Health Institute 616,139 65,060 55,057 5,422,500 Cherokee Mental Health Institute 377,751 33,542 32,000 13,033,197 State Training School 319,480 105,540 74,500 10,647,218 Iowa Juvenile Home Toledo 138,280 0 0 0 Civil Commitment Center for Sexual Offen. 108,650 7,609 5,000 4,735,715

Total 3,462,145 $ 1,811,759 $ 2,003,829 $ 43,052,684 Source: Iowa Department of Human Services

19 Totals may not add due to rounding.

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Smaller Facilities Several other State agencies also manage maintenance on facilities outside the Capitol Complex. In total, these facilities encompass approximately 1.7 million square feet, with the Iowa Veterans Home representing the largest share of space. However, not all of these agencies receive major maintenance funding from the DAS. Table 4 displays these agencies, facility size, FY 2017 routine maintenance expenditures, and requested major maintenance. Table 4 also shows which agencies rely on the major maintenance appropriation to the DAS.

Agencies that receive major maintenance funding from the DAS support routine maintenance activities from their operating budgets, which, based on funding source, provide differing levels of support. For instance, the Department of Public Safety (DPS) is funded primarily with General Fund dollars. These dollars compete with other priorities, such as salaries.

Other agencies manage all maintenance that occurs on owned and occupied properties. The IPERS building is owned and operated by dollars from the IPERS Trust Fund. Whereas, the Lottery Authority funds maintenance activities from fees and revenues retained by the agency.

The budgets for these facilities are also developed differently. The DPS funds projects on an as-needed basis, the Iowa Veterans Home adjusts its budget based upon inflation, and IPERS funds maintenance based upon a prior building study. Table 4 – Agency-Managed Routine Maintenance – Smaller Facilities FY 2017 FY 2018 Q1 Major Buildings Square Feet Routine Maint. Maintenance Projects

DAS Managed Major Maint. Iowa Veterans Home 1 856,000 $ 496,000 $ 2,170,600 Dept. Public Safety 29 161,000 240,000 407,500 Alcoholic Bev Division 1 182,000 105,000 500,000 * IPTV 27 92,521 543,332 110,000 Law Enforcement Academy 1 47,000 163,420 2,831,850 Manage all Maintenance Judicial Branch Building 1 125,000 480,000 - Department for the Blind 1 119,000 75,832 50,000 IPERS 1 46,000 130,000 - Lottery Authority 1 40,000 116,000 - Iowa Finance Authority 1 31,000 150,000 - *This project was reported to the LSA, and was not reported to the DAS as of August 2017.

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BUDGET IMPLICATIONS

Funding routine and major maintenance activities remains a challenge across State government. In total, building space directly under State control exceeds 58.0 million square feet. Although this Issue Review discusses deferred maintenance estimates by agency, these figures likely do not compare directly to each other. The DAS and the Board of Regents both provide different definitions of maintenance that influence how and when maintenance backlogs are estimated. The DOT, DPD, and DNR also look at major maintenance differently. That said, the combined totals of the major maintenance list and Regents deferred maintenance exceed $1.0 billion. This estimate excludes facilities operated by the DNR and DOT. Table 5 displays requests by agencies that manage more than 1.0 million square feet, maintenance needs, and the maintenance needs per square foot. On a square-foot basis, the DPD has the largest maintenance needs of the reviewed facilities.20 The estimate for the Capitol Complex, which includes the parking garage square footage, is the second highest with an estimated $67.6 in major maintenance per square foot. Excluding parking garage space, maintenance costs are $76.9 per square foot. The reported figures in Table 5 may also change as agencies assess the status of other buildings. The DOT expects to develop a more complete account of building assets, and the DOC and DHS maintenance requests may also increase if buildings undergo assessments similar to the one completed by the Baker Group for the Capitol Complex.

Table 5 – Deferred Maintenance and Major Maintenance Agencies with Facilities Exceeding 1.0 Million Square Feet

Deferred Maintenance/ Maintenance Agency Size Major Maintenance Per Square Foot Department of Public Defense* 4,100,000 $ 326,618,631 $ 79.7 Capitol Complex 2,283,353 154,351,358 67.6 Board of Regents 39,774,380 779,214,100 19.6 Department of Corrections** 5,990,515 90,594,932 15.1 Department of Human Services 3,462,145 43,052,684 12.4 Department of Transportation 4,074,402 Unknow n Unknow n Department of Natural Resources 2,771,610 Unknow n Unknow n

*The DPD square footage includes some property ow ned by the U.S. government. Iow a is partially responsible for the maintenance of this property. Iow a ow ns a total of 3.1 million square feet. Square footage numbers for the DPD are rounded. **Includes Community-Based Corrections. These buildings are not ow ned by the State, but are included in the overall major maintenance needs provided by the DOC.

Agencies budget for and fund routine maintenance in different ways. Table 6 reflects routine and deferred maintenance expenditures for State facilities. A number of State agencies not on the Capitol Complex will either base a maintenance target on recent history or expend maintenance resources on an as-needed basis. The DAS has increased utility fees for occupants of the Capitol Complex to address the routine needs of the facilities. At the same time, the Board of Regents has identified the replacement value of its facilities and budgeted 0.47% of the replacement value in FY 2017 for building maintenance.

20 The federal government provides the majority of funding needed by the DPD for building and facility maintenance.

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The funding source of routine maintenance is varied. For a number of agencies, building maintenance is funded from General Fund appropriations that also support administration. This includes agencies on the Capitol Complex (by way of utility fees paid to the DAS), the DOC, and the DHS. Other agencies that receive significant non-General Fund appropriations include the DOT, the DPD, and the DNR. The Board of Regents provides for building maintenance through operating budgets that are supported by a number of sources including tuition, capital appropriations, and other revenues. Table 6 – FY 2017 Reported Routine and Preventative Maintenance

This Issue Review assesses the status of State facilities, but does not review the suitability of each facility for the mission it is serving. Evaluating the capability of each facility is a larger project that is outside the scope of this Issue Review. Attachment A provides information on different funding mechanisms, planning methods, and maintenance classifications for infrastructure in selected states.

LSA STAFF CONTACT: Adam Broich (515.281.8223) [email protected]

202 Attachment A – Other States

OTHER STATES States have adopted a number of different funding mechanisms, planning methods, and maintenance classifications to build and maintain infrastructure. In 2014, the National Association of State Budget Officers published Capital Budgeting in the States, a report that tracked capital budgeting practices. The report also endorsed a number of budgeting practices that were effective and efficient means to allocate capital expenses. The report reviewed practices used in each state. The report noted that 22 states are reported as maintaining a pay- as-you-go system for capital projects. States also rely on a number of different methods to fund state infrastructure. A sampling of states and designated revenues are listed below: • Missouri transfers 1.0% of net general revenue collections based on the preceding fiscal year to the Facilities Maintenance Reserve Fund that is used for maintaining, repairing, and renovating state facilities.1 • Montana uses 2.6% of cigarette tax revenue and up to 12.0% of coal severance tax revenue for infrastructure projects through the Long-Range Building Program to provide Capital construction and maintenance of state-owned facilities.2 • Nebraska uses cigarette tax revenue and designates 7.0 cents of the 64-cent tax to deposit in the Building Renewal Allocation Fund for deferred maintenance and repair of state buildings.3 • Indiana uses wagering tax revenue from riverboat casinos and pari-mutuel land-based casinos and lottery revenue for state and local capital projects through the Build Indiana Fund.4 The allocation is similar to Iowa’s RIIF in that the Build Indiana Fund and receives only a portion of the wagering taxes after several allocations are made. • Kansas uses gaming revenues, property tax revenue, and motor vehicle property tax revenue to fund its various building funds, such as the Educational Building Fund and the Correctional Institutions Building Fund.5

Many states use different types of bonds for infrastructure improvements. Nineteen states allow General Obligation (GO)6 bonds only after voter approval and 38 states place statutory or constitutional limits on GO bonds.7 In Iowa, the State Constitution limits GO bonds to $250,000, effectively eliminating GO bonds from consideration for projects.8

Revenue bonds are more widely used by state governments, including Iowa. According to a 1999 report by the National Association of State Budget Officers, 38 states indicated the use of revenue bonds in their capital budget processes.9 From the RIIF, Iowa is currently making annual debt payments of $67.0 million on $690.4 million in outstanding revenue bonds. In 2016, the Iowa Executive Council approved the refinancing of $265.0 million in revenue bonds at an interest rate of 1.7%, a rate decrease of around 2.0% that is expected to reduce debt payments by $3.0 million per year.

1 Missouri Constitution, Article IV, Section 27(b). 2 Montana Code Annotated, Title 17, Chapter 7, Sections 201 through 213 (2015). Coal severance taxes may be used for debt service payments on building projects if bonds have been issued for projects in the Program. 3 Nebraska Revised Statutes, Sections 77-2602 and 81-179, 2007. 4 Indiana Code, Sections 4-31-9-3, 4-33-13-4, and 4-30-17-2 through 4-30-17-13. 5 Kansas Statutes Annotated, Sections 76-6b01, 76-6b02, 76-6b04, 79-4803, and 79-5109 6 General obligation (GO) bonds are secured by a state or local government pledge to pay the debt service from taxes and other resources available, therefore, they are backed by the government entity’s pledge of full faith and credit and taxing power. The State of Iowa does not have any outstanding GO bonds. 7 National Association of State Budget Officers, Capital Budgeting in the States, 2014. 8 Iowa Const. art. VII, section 2. 9 National Association of State Budget Officers, Capital Budgeting in the States, 2014.

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