The budget discussion has started to heat up over the last couple of weeks. Statewide estimates made by the Revenue Estimating Conference (REC) set the tone for the session’s budget discussions, because all budget bills must take into account the REC projections. These estimates tell Legislators and the Governor how much money they have to spend or save (or return to taxpayers as some Republicans hope to do this session). Budget targets are released by the Governor early in session. Legislative budget bills may or may not reflect the Governor’s targets, largely depending on the political philosophy of the chambers. Last year, budget bills ended up in conference committees in June, when contentious negotiations did not yield agreement during the normal session timeframe. This session, we are following several budget bills (and hoping they don’t end up in conference committees in June) including the Regent’s budget which funds the State’s Universities, the Health and Human Services budget, the Transportation budget, and the Rebuild Iowa Infrastructure Fund (RIIF) budget. The RIIF budget appropriates money for many infrastructure projects around the State. Wide differences remain between Republicans in the House and Democrats in the Senate. A long road to agreement remains, particularly with big ticket items like education reform, property tax reform and mental health reform still unresolved.
Government relations extends beyond lobbying for our clients at the Capitol. We often are engaged in the administrative rule making process for our clients, either with rules that describe how a particular State statute is to be implemented or with rules that are in lieu of a proposed State statute. The latter type of rule is taking shape in the controversy relating to providing evidence of insurance to lenders in multi-million dollar commercial real estate transactions. Lenders in these types of loans, typically large banks, life insurance companies and pension funds, need to know the property they are taking as collateral is insured for all relevant risks. The property casualty insurance industry believes the only true evidence of the actual coverage on property is the policy. Since 2006 ACORD (the Association for Cooperative Operations Research and Development) has qualified it certificate or evidence of insurance forms with the disclaimer that the form “. . . is issued as a matter of information only and confers no rights upon the certificate holder.” Lenders relying on these forms as an alternative to the actual insurance policy do not have legal evidence (admissible in a court of law) the property is insured. This issue has placed the life insurance and property casualty insurance companies (often two division of the same company) in opposition to each other. This week the trade associations for the Iowa life and property casualty insurance companies, the independent agents and the banks reached agreement on a proposal, in lieu of HSB607, which will allows an insurance company or an agent to deliver the combination of an insurance binder (most often ACORD Form 75) and a certificate of evidence of insurance (most often ACORD Form 28) to a customer as evidence of insurance. The customer may provide the combined forms to its lender to satisfy the lender’s requirements. The proposal now moves to the Iowa Insurance Division, which will begin the formal rule making process that will govern insurance companies over which it has jurisdiction.
This week the House passed HF2367 by a 68-30 vote. This bill significantly tightens Iowa law with respect to landowner liability to trespassers and applies to all causes of action that accrue on or after July 1, 2012. HF2367 provides that an owner, lessee, or occupant of land owes no duty of care to a trespasser on the land and is not liable for any injury to a trespasser on the land, except in cases of willful or wanton conduct or gross negligence. The term “trespasser” is defined to mean a person who knowingly enters the land of an owner, lessee, or occupant without any express or implied legal right, or reasonably should have known that the person was entering the land without any express or implied legal right. The bill carves out from the limitations, in an attractive nuisance fashion, liability for injury to a child who is less than 16 years of age caused by a dangerous condition on the land if (i) the owner, lessee, or occupant knew or reasonably should have known that children were likely to trespass at the location of the dangerous condition, (ii) the owner, lessee, or occupant knew or reasonably should have known the dangerous condition existed and the owner, lessee, or occupant realized or should have realized it involved an unreasonable risk of death or bodily injury to such children, (iii) the injured child did not discover the dangerous condition or realize the risk involved in the condition or the risk of injury in the area made dangerous by the condition, and (iv) the owner, lessee, or occupant failed to exercise reasonable care to eliminate the danger or otherwise protect the child. The bill also includes a rebuttable presumption that a child who is fourteen years old or older is can appreciate the risk unless proven to the contrary. Finally, the bill provides that owner, lessee, or occupant of land whose actions are justified by defense of self or another, defense of property or aiding on the defense of property shall not be liable to a trespasser for damages arising from those actions.
Thomas E. Stanberry & Jessica S. Harder
Government Relations Report