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June 12, 2002

The Honorable Chester Culver
Secretary of State
State Capitol
LOCAL

Dear Secretary Culver:

I hereby transmit House File 2627, an act addressing public funding provisions and properly related matters by making, reducing, and transferring appropriations, adjusting other expenditures for the fiscal year beginning July 1, 2002, and including other appropriations, cooperative tax credits, and effective and retroactive applicability date provisions.

With the Revenue Estimating Conference's recent action to decrease general fund resources available to the State by $212.5 million in fiscal year 2003, I took responsible action in calling a special session to take the necessary steps to balance the budget. I had offered a reasonable alternative plan that would have protected more of the services provided to Iowans. However, the legislative leaders in the majority party rejected my plan. This left me with two options - sign the bill as passed by the legislature or have no budget in place for the new fiscal year that starts in just a few weeks. Clearly, it would be irresponsible to shut down state government. Therefore, I have no alternative but to sign this legislation.

Despite the extraordinary challenge of a national recession, I am pleased that we were successful in our administration's fight to preserve some key priorities of Iowa families, including improving learning by reducing class sizes and increasing teacher quality, and preserving access to health care for our children and senior citizens. I am also pleased to restore $600,000 to the Enrich Iowa Libraries program. A reduction in funding to this important initiative would stifle the progress this administration has made in improving educational opportunities for Iowa's children.

However, this bill has several provisions which I cannot support. I oppose the Republicans' continuous assault on our senior citizens by attempting to raise prescription drug costs on Iowans in need. I have vetoed their attempt to double the copayments on prescription drugs in the past, and I will do so again. The burdens created for some Iowa families and seniors are simply unacceptable.

I am unable to approve the items designated as Section 3, subsection 7 in its entirety, Section 9, subsection 3 in its entirety, and Section 21, subsection 2 in its entirety. These sections require Commerce, Racing and Gaming and the Lottery to report Accountable Government Act activities by January 13, 2003. With the reduction of State employees, this would create an unnecessary requirement. Such reports should be completed per the implementation procedures as set forth in Iowa Code Chapter 8E.

I am unable to approve the items designated as Section 5, subsection 5 in its entirety, Section 13, subsection 2 in its entirety, Section 26, subsection 2 in its entirety, and Section 28 in its entirety. These sections require the Departments of General Services, Personnel and Information Technology to identify duplicative situations within State Government and report by September 1, 2002. Such activities should be conducted on an enterprise wide basis as set forth in Section 11, subsection 3 of the bill.

I am unable to approve the item designated as Section 26, subsection 1 in its entirety. This item requires the Information Technology Department to notify the Department of Management prior to any fee increases. The Department of Management is then to notify the Legislative Fiscal Bureau. The two departments will work cooperatively to examine such fee or rate increases, without the necessity of this legislative mandate.

I am unable to approve the item designated as a portion of Section 30. This would increase the maximum possible award to an employee for a cost saving idea from $2,500 to $25,000. While employee suggestions are encouraged and indeed welcomed, the State's current financial situation precludes such an increase.

I am unable to approve the item designated as Section 49, numbered paragraph 3. Last year the Legislature approved and I signed into law the Accountable Government Act. This legislation established a comprehensive, enterprise-wide process for setting program goals and establishing results measurements. This Section would create redundancies in goals and results measurements for the Department of Economic Development.

I am unable to approve the items designated as Section 59, paragraph 2b, Section 60, paragraph 2b and Section 61, paragraph 2b. These sections would require any business or individual receiving benefits from specified Regent programs to have a commercially viable service or product. Many of the proposals and ideas brought to these programs have not been developed to a stage of commercialization. To apply this criteria at such an early stage of development would be contradictory to the very services these programs are designed to provide.

I am unable to approve the item designated as Section 64, numbered paragraph 3. The Department of Workforce Development has identified federal funds that can be used to collect labor market information. Monies from the penalty and interest account can and have been used to support services in the workers' compensation and labor divisions of the Department. The budget cuts sustained by these divisions could have an adverse impact to the safety of Iowa's citizens and its workforce. The director of the Department of Workforce Development currently has the authority to reassign unused penalty and interest funds. We must maintain that flexibility to reallocate dollars when needed to ensure the safety of Iowans.

I am unable to approve the item designated as Section 72. Expenditure information for the executive branch agencies of state government is currently available to the economic development appropriation subcommittee and the Legislative Fiscal Bureau on a daily basis through the Iowa Financial and Accounting System. The Legislative Fiscal Bureau also has the authority to request expenditure information from Regent universities. The reporting requirement in this section would duplicate existing data and place an unneeded requirement on limited staff resources.

I am unable to approve the item designated as Section 73. The Department of Workforce Development has begun a multi-phased project to upgrade the electronic unemployment insurance processing system. This upgrade will address the reporting and transmitting problems identified in this section of the bill. I concur that this problem must be addressed; however, the complexity and magnitude of the needed upgrade cannot be accomplished and implemented by July 1, 2002.

I am unable to approve the item designated as a portion of Section 102, subsection 2d. This language requires new reporting every other month to legislators on net budgeting. This section would require additional staff resources at a time when funding for staff has been severely reduced.

I am unable to approve the item designated as Section 106 in its entirety. Last year the Legislature approved and I signed into law the Accountable Government Act. This legislation established a comprehensive, enterprise-wide process for setting program goals and establishing results measurements. This Section would create redundancies in goals and results measurements for these departments.

I am unable to approve the item designated as Section 108 in its entirety. This section would repeal the enabling language for the Community Grant Fund and end the program. Although no money is appropriated for the Community Gr

I am unable to approve the item designated as a portion Section 111, subsection 6. This language requires the Department of Human Services to consult with the Welfare Reform Council and legislative members prior to implementing rules related to the Family Investment Program as required by the federal government. This mandated consultation process may unduly delay the rules where federally required.

I am unable to approve the item designated as Section 115, subsection 8 in its entirety. This language continues language from prior years related to the number of beds allowed in a community setting for persons with mental retardation. With the implementation of home and community based waivers, this language is no longer needed.

I am unable to approve the item designated as Section 117, subsection 1 in its entirety. This subsection would require the Department of Human Services to seek input and recommendations from legislative members prior to entering into or extending a managed care contract for mental health and substance abuse services. The process for securing contracts provides that vendors will be evaluated on a specific set of criteria to assure fairness and eliminate potential conflicts of interest. This process includes a period of securing comments without giving the appearance of conflict of interest. Therefore, this section is not necessary.

I am unable to approve the item designated as Section 119, subsection 5 in its entirety. This language requires additional notice to legislators if additional federal child care funds are received. This section would require additional staff resources when funding for staff has been severely reduced.

I am unable to approve the item designated as Section 120, subsection 1, unnumbered paragraph 2. This item requires the Department of Human Services to submit a plan for relocating males currently at the Toledo, a female-only institution. This language has been included in the appropriation bill for the past three years; however, the Legislature has failed to fund the proposal. My recommendation in a previous year had included funding for this change, however the Legislature chose to use that funding instead for other programs.

I am unable to approve the item designated as Section 121, subsection 9 in its entirety. This language requires the Department of Human Services and juvenile court officers to develop criteria for intensive tracking and supervision of delinquent youth. These criteria were developed two years ago in response to this language; thus, this language is no longer needed.

I am unable to approve the item designated as Section 121, subsection 18 in its entirety. This directs the Department of Human Services to privatize the administration of foster care and adoption programs. Given the fact that no additional funds were provided for this purpose and staffing has been severely reduced, implementation of this section is not feasible.

I am unable to approve the item designated as a portion of Section 132, subsection 2. This item requires the Department of Human Services to submit proposed legislation to correct Code references related to service areas. This appears to be the realm of the Legislative Fiscal Bureau or Code Editor rather than the Department of Human Services, especially at a time when the Department's resources have been severely reduced.

I am unable to approve the items designated as Section 135, subsections 2 and 3 in their entirety. This language provides legislative intent for items already in progress or that appear to infringe on executive branch management duties. It is preferable that the Department of Human Services be allowed to have flexibility in this area.

I am unable to approve the item designated as Section 137, subsection 1b(3) in its entirety. The provision would increase the cost of prescription drugs for Iowans most in need. This is an additional financial burden on a group with very little or no income. Additionally, if the individuals do not have the funds, the pharmacist is required to dispense the drug anyway. This could create an additional reluctance on the part of pharmacists to handle Medicaid patients.

I am unable to approve the items designated as Section 138 in their entirety. This section would exempt a currently closed nursing facility in Dows from the Certificate of Need approval process and from meeting current life safety code and physical plant requirements, if the facility reopens by July 1, 2004. Allowing this section would put the state at risk for liability in the event of any physical plant or clinical operation problems. Excluding a facility from these requirements could place vulnerable residents at health and safety risks and would set a dangerous precedent.

I am unable to approve the items designated as Section 141 and Section 151, subsection 2c in their entirety. This language directs the department to reduce administrative requirements for the targeted case management waiver. These requirements are needed to obtain federal approval and support documentation for claims for federal funds under the waiver.

I am unable to approve the items designated as Section 142 and Section 151, Subsection 2f in their entirety. This provision would require nursing facilities to be certified for Medicaid and Medicare - even if the facility does not take Medicare patients. I have previously directed the Department of Human Services to prepare administrative rules to address dual certification for all applicable nursing facilities, thus requiring certification of a nursing facility for both Medicare and Medicaid when they are, in fact, providing services for clients of each program. This directive avoids unnecessary additional administrative cost for dual certification that would be borne by the state, over 62 nursing facilities, and Iowans who receive nursing home services.

I am unable to approve the language in Section 165, subsection 2, unnumbered paragraph 1. This section would limit the amount of reimbursement in relation to State costs from riverboat and racetrack enforcement costs. Sections 167,168, and 169 clearly change the reimbursement rate from riverboats and racetracks enforcement costs to 100% of the related expenses.

I am unable to approve Section 199 (a). This section would de-appropriate $600,000 from the FY 2003 Rebuild Iowa Infrastructure fund appropriation for the Enrich Iowa Libraries program. Quality libraries are a key component of the educational infrastructure for Iowa's children. A reduction in funding would stifle the progress this administration has made in improving educational opportunities for Iowa's children.

I am unable to approve Section 215. The Administration has made every attempt to provide quality educational opportunities for all Iowans. This section denies state employees the opportunity to access educational assistance. I believe this option should be maintained to further enhance the knowledge and skills of our workforce.

I am unable to approve the designated portion of Section 216. While I understand the need to reduce paper within state government, I feel that there are times when making state information available to the public in paper format is appropriate. An example would be making Iowa tourism brochures available at welcome centers, tourism booths, and other appropriate venues.

I am unable to approve Section 230. This section would increase the available yearly allocation of tax credits for the Accelerated Career Education program (ACE). I recognize that ACE programs allow education and business entities to provide students with valuable educational curriculum designed to meet the needs of specific industry sectors. I support the expansion of these programs; however, it should not be accomplished through the elimination of other vital economic development tools. I look forward to working with the legislature to identify opportunities to increase funding for ACE programs in the next legislative session.

I am unable to approve Sections 231and 232. These sections are designed to eliminate the New Jobs Tax Credit for businesses to raise the cap for tax credits for the Accelerated Career Education programs at Community Colleges. Sections 231 and 232 would eliminate a valuable tool used by communities and developers to encourage business growth and expansion. The elimination of the New Jobs Tax Credit would adversely affect the economic development packages of many communities.

For the above reasons, I respectfully disapprove these items in accordance with Amendment IV of the Amendments of 1968 to the Constitution of the State of Iowa. All other items in House File 2627 are hereby approved as of this date.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

June 4, 2002

The Honorable Chester Culver
Secretary of State
State Capitol
LOCAL

Dear Secretary Culver:

I hereby transmit House File 2625, an act addressing public funding provisions and properly related matters by making, reducing, and transferring appropriations, adjusting other expenditures for the fiscal year beginning July 1, 2001, and including other appropriations, cooperative tax credits, and effective and retroactive applicability date provisions.

With the Revenue Estimating Conference's recent action to decrease general fund resources available to the State by $205.5 million in fiscal year 2002, I took responsible action in calling a special session to take the necessary steps to balance the budget. House File 2625 is the result of a plan that I worked with legislators in developing to solve the budget shortfall for the current year. The plan included a series of funding transfers that allow us to continue to provide the priority services of Iowans.

However, the bill has several provisions which I cannot support. I oppose the Republicans' continuous assault on our senior citizens by attempting to raise prescription drug costs on Iowans in need. I have vetoed their attempt to double the copayments on prescription drugs in the past, and I will do so again. I also cannot support the Republicans' plan to add an unnecessary, burdensome layer of bureaucracy and cost to the delivery of medical assistance. The burdens created for some Iowa families and seniors are simply unacceptable.

House File 2625 is, therefore, signed on this date with the following exceptions, which I hereby disapprove.

I am unable to approve Division V, Section 34 in its entirety. This provision would increase the cost of prescription drugs for Iowans most in need. This, in effect, is a tax on a group - aged, blind, disabled, children, caretakers with very little or no income. Additionally, if the individuals do not have the funds, the pharmacist is required to dispense the drug anyway. This requires pharmacists to subsidize the costs and creates an additional reluctance on the part of pharmacists to handle Medicaid patients.

Section 34 would also require additional bureaucracy and associated costs by calling for monthly reporting requirements for those who experience a change in income, mailing address, household composition, or health insurance. In doing so, the legislature would be creating an additional layer of bureaucracy, and an additional layer of cost to process the monthly reports. This new bureaucratic requirement is particularly unnecessary, considering the Department of Human Services already requires Iowans in need who receive medical assistance to report changes in such factors.

I am unable to approve Section 37. This section removes the requirement that the legislature establish the state percent of allowable growth in funding for our local school districts within the first 30 days of a legislative session. This provision was developed to ensure the State's commitment to education was made up front and did not get bogged down in last minute budget negotiations and to provide adequate planning time for school districts. Now, more than ever, when education is our state's top priority, we must maintain that commitment to our local schools.

I am unable to approve Section 40, Subsection 1. This section requires the departments of personnel to identify duplicative job responsibilities throughout state government and report these positions to the Oversight Committee. These determinations on an enterprise-wide basis are already being done.

I am unable to approve Section 40, Subsection 3. This Administration has made every attempt to provide quality educational opportunities for all Iowans. This section denies the opportunity for state workers to access educational assistance. With a shrinking state workforce, it is more important than ever to make sure the remaining professionals have the training and education they need to effectively serve Iowans. I believe this option should be maintained.

I am unable to approve Section 42. This section eliminates state funding to the State Medical Library. The Legislature had intended to shift this funding from the Medical Library to the Department of Cultural Affairs for cultural grants, but the bill failed to complete the transfer. While the Republican Legislature eliminates the Medical Library funding, they also establish a task force charged with determining whether to continue the State Medical Library; and if so, where it should be located. The Medical Library provides essential educational materials and diagnostic and research searches for health professionals and students. Closing this valuable resource for many Iowans is shortsighted and unnecessary.

For the above reasons, I respectfully disapprove these items in accordance with Amendment IV of the Amendments of 1968 to the Constitution of the State of Iowa. All other items in House File 2625 are hereby approved as of this date.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

May 10, 2002

The Honorable Chester Culver
Secretary of State
State Capitol
LOCAL

Dear Secretary Culver:

I hereby transmit Senate File 2326, an Act making, reducing, and transferring appropriations, and providing for other properly related matters and including effective dates.

Since the Legislature approved this bill, there has been a dramatic change in the State's revenue projections. Most states and the federal government experienced a large reduction in final pay income tax returns and a correspondingly large increase in taxpayers due refunds. Because of this change in circumstance, I asked the State's Revenue Estimating Conference (REC) to meet to review their official revenue estimate for both fiscal years 2002 and 2003.

On May 7th, the REC met and decreased general fund resources available to the State by $205.5 million in fiscal year 2002 and $220.1 million in fiscal year 2003. By law, both the governor and the legislature must rely on the REC estimate in preparing and approving the state budget.

While I am concerned about many details within this bill, there is a larger, more fundamental concern that prevents me from approving the majority of this bill. Due to recent action by the REC in lowering revenue projections, signing this bill would enact a general fund budget for fiscal year 2003 that results in a general fund deficit of more than $200 million and would be an irresponsible action. I cannot and will not do so.

At the same time, we cannot go back on our commitment to our children and families. Education at all levels is the number one priority in Iowa. To build on progress in student achievement, reduced class sizes, and job and wealth creation, we must have an educated workforce, and we must use our colleges and universities as an engine for economic growth. Even as we work to cut budgets, we must do all we can to preserve our commitment to education and maintain the educational opportunities for our children.

To help ensure this educational commitment, I am approving Division IV, Sections 76 through 86, the education portion of Senate File 2326 with the noted exceptions. While it falls short of my original goals for funding, given our current fiscal realities, it is likely the best investment we can make at this time. We will continue to work for additional resources in education through achieving savings and efficiencies in government. In the end, however, we must look to our educated workforce and our colleges and universities to be a catalyst for economic growth in our state. In the long run, education is the key to Iowa's economic prosperity.

In order for our children to have the best opportunities available to them, they must also have adequate access to health care. Iowa has the distinction of being the top performing state in the nation according to The Social Health of the States, conducted by the Fordham Institute for Innovation in Social Policy. In an effort to continue the progress we have made in ensuring every child receives the medical attention they need I am approving Sections 106, which provides funding for the Healthy and Well Kids in Iowa (HAWK-I) program. In a nation as wealthy as ours, no child should be left out.

Senate File 2326 is, therefore, signed on this date with the following exceptions, which I hereby disapprove.

I am unable to approve Division I, Sections 1 through 33; Division II, Sections 34 through 45; Division III, Sections 46 through 75; Division V, Sections 87 through 98; Division VI, Sections 99 through 105 and Sections 107 through 140; Division VII, Sections 141 through 162; Division VIII, Sections 163 through 167. This action is necessary as a result of the REC's lowering the revenue estimates. I intend to work with lawmakers in a special session this month to take responsible action to reduce spending, reallocate existing resources, and balance this budget.

I am unable to approve Section 79, subsection 15, paragraph 2. This paragraph states that it is the intent of the general assembly to cease providing assistance for the Jobs for America's Graduates (JAG) program on June 30, 2003. This is a valuable program that provides direct services to the most at-risk juniors and seniors in local school districts through direct intervention. These students are worked with intensively to ensure that they graduate and are successful in obtaining a job or enrolling in postsecondary training. It is our duty to provide the tools to enable all students to succeed.

I am unable to approve Section 79, subsection 16, paragraph 2. This paragraph states that it is the intent of the general assembly to cease providing assistance for the Americorps After-School Initiative on June 30, 2003. Americorps is an after school program aimed at middle school students located in schools with high rates of juvenile crime, violence and drug abuse. This is an important tool in linking people across Iowa willing to volunteer to improve a child's life.

For the above reasons, I respectfully disapprove these items in accordance with Amendment IV of the Amendments of 1968 to the Constitution of the State of Iowa. All other items in Senate File 2326 are hereby approved as of this date.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

May 10, 2002

The Honorable Chester Culver
Secretary of State
State Capitol
LOCAL

Dear Secretary Culver:

I hereby transmit Senate File 2317, an act relating to the tobacco master settlement agreement, including tobacco product manufacturer compliance, making an appropriation, and providing penalties. This legislation provides additional remedies to aid in the enforcement of the Model Statute, Code 453C which was required to be approved and enforced by the State in the Master Settlement Agreement with the Tobacco Manufacturers.

Sections 1-8 of this bill would require compliance with chapter 453C before a distributor could affix stamps to the product. Additionally, a registered agent would be required for service of process of those out of state manufacturers selling in this state. Iowa is required to "diligently enforce" Chapter 453C and penalties for failure to are monetary and substantial. The possibility exists that the entire amount owed to Iowa for any particular year could be eliminated if the statute is not diligently enforced.

Section 9 is the balance owed the private counsel retained to represent Iowa in its litigation against the Tobacco manufacturers. The original appropriation contained in House File 755, section 25, of last year's appropriation was $944, 877.60 short of the obligation owed to the attorneys by contract. The shortage was created when estimates paid by Tobacco manufacturers over the last three years did not meet actual obligation. When the contractual obligation to the attorneys is concluded, the balance of the payments will be assigned to the State.

In its present form there is some question as to whether Sections 1-8 would jeopardize Iowa having a qualified model statute within the meaning of the Master Settlement Agreement. That in itself would result in substantial monetary penalties for the State.

Senate File 2317 is, therefore, signed on this date with the following exceptions, which I hereby disapprove.

I am unable to approve Sections 1-8 given the potential to put Iowa in non-compliance with the Master Settlement Agreement. I look forward to working with lawmakers to approve legislation that would ensure compliance with the Master Settlement Agreement and not jeopardize these funds.

For the above reasons, I respectfully disapprove these items in accordance with Amendment IV of the Amendments of 1968 to the Constitution of the State of Iowa. All other items in Senate File 2317 are hereby approved as of this date.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

May 10, 2002

The Honorable Chester Culver
Secretary of State
State Capitol
LOCAL

Dear Secretary Culver:

I hereby transmit House File 2623, an Act relating to public funding provisions involving the compensation and benefits for public officials and employees, county mental health allowed growth, regulatory and other properly related matters of the state, making and reducing appropriations, and providing effective dates.

This Administration has made clear from day one that our top priority for Iowa is education. Over the past four years, our investment in education has paid tremendous dividends in more quality teachers, smaller classes, and better results. We have seen record interest in higher education, record enrollment in our colleges, and record employment in our workforce. House File 2623 makes an important investment in Iowa's K-12 schools by funding the student achievement and teacher quality program. This is a vital investment not only in our young people, but also in the future of our state.

House File 2623 is, therefore, signed on this date with the following exceptions, which I hereby disapprove.

I am unable to approve Section 17. This section would eliminate the requirement that innovation projects produce savings and eliminates the standing appropriation to repay the Innovations Fund for savings that do not accrue directly to a department. This would reduce the flexibility of the program.

I am unable to approve Sections 18, 19, 20, 21, 33, 34 and 35. This administration has continually supported improvement of customer service to Iowa citizens through the use of information technology and advanced telecommunications services. The use of credit card transactions as a way to pay for certain government services is one example of this commitment to improved customer service. We will continue to support efforts to improve customer service, however, the above referenced sections of this bill relating to the use of credit card transactions, while well intended, would adversely impact these efforts as well as the citizens of Iowa. There is no funding provided to departments to make system changes required to allow the intake of credit card payments. In addition, the language does not allow for the capture of transaction fees associated with credit card processing. A credit card payment system without the proper technology and funding to support it will result in poor system performance and customer dissatisfaction.

I am unable to approve Section 42, which amends Chapter 556.12, Subsection 1, relating to notice and publication requirements of unclaimed property, commonly referred to as The Great Iowa Treasure Hunt. This language is contrary to Section Nine of the Uniform Unclaimed Property Act of 1995, which Chapter 556.12 subsection 1 is based on; and the proposed language would unduly restrict the flexibility of the State Treasurer in scheduling the workload of personnel available to return property to Iowans.

I am unable to approve Section 49. This section requires the departments of personnel, information technology and general services to identify duplicative job responsibilities throughout state government and report these positions to the Oversight Committee by Sept. 1, 2002. These determinations on an enterprise-wide basis are already being done.

I am unable to approve Section 52. This section requires the departments of agriculture and natural resources to file a written report on a quarterly basis with the appropriations subcommittee regarding all expenditures of moneys during the quarter and the number of FTEs allocated during the quarter. This information is obtainable by the Legislative Fiscal Bureau from the state's accounting and personnel systems, and no mandate is needed to enable legislators to access it.

I am unable to approve Sections 57 and 59. These sections would eliminate the Scope of Practice Review Committee (SPRC) related to the Department of Public Health. This is the only science-based forum available to work out scope of practice issues between health care professions. Most health care organizations do not support eliminating the SPRC: three-fourths of the Iowa health care providers in a recent survey favored keeping the SPRC process as it is or keeping it with some modifications.

I am unable to approve Section 58. This section would make the appropriation to the division on the Status of African-Americans contingent on the appointment of all nine members to the Commission on the Status of African-Americans. This language raises the prospect that the entire budget for the division would be in jeopardy anytime there is a vacancy on the commission. It is not appropriate to unfairly single out one commission for a different standard, and this is not a precedent we want to set for any commission.

I am unable to approve Section 65. This section limits the costs for riverboat enforcement that can be billed to riverboats, which is an amount less than 100% of costs for riverboat enforcement in fiscal year 2003. If retained, this would act as a cap in future years, which would generate a lower percentage of actual costs in each future fiscal year. The limitation on track gaming creates a situation where there are not sufficient expenditures in track gaming and pari-mutuel to even approach an additional $420,000. This provision would lead to a reduction in revenue that is not reflected in the Legislature's budget assumptions.

I am unable to approve Sections 66 and 67. Section 66 amends the 2002 Iowa Acts, Senate File 2326, section 175, subsection 14 pertaining to Public Transit Assistance, by striking the subsection. I have approved the funding of Public Transit Assistance as provided in Senate File 2326, section 175, subsection 14. Section 67 proposes to reduce the amount appropriated from the General Fund of the state to the Department of Transportation for Public Transit Assistance for fiscal year 2002, by $1,107,938. These dollars have already been allocated and likely spent by local public transit systems. To seek their repayment would have serious impacts on public transit services.

For the above reasons, I respectfully disapprove these items in accordance with Amendment IV of the Amendments of 1968 to the Constitution of the State of Iowa. All other items in House File 2623 are hereby approved as of this date.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

May 10, 2002

The Honorable Chester Culver
Secretary of State
State Capitol
LOCAL

Dear Secretary Culver:

I hereby transmit House File 2612, an Act relating to and making transportation and other infrastructure-related appropriations to the state department of transportation, including allocation and use of moneys from the road use tax fund, primary road fund, and general fund of the state, and providing for the nonreversion of certain moneys and including an effective date.

Since the Legislature approved this bill, there has been a dramatic change in the State's revenue projections. On May 7th, the REC met and decreased general fund resources available to the State by $205.5 million in fiscal year 2002 and $220.1 million in fiscal year 2003. As a result, I intend to work with lawmakers in a special session this month to take responsible action to reduce spending, reallocate existing resources, and balance this budget.

Businesspeople and academic experts tell us again and again: the single most important component in attracting growth and investment is the quality of the workforce. That is our advantage in Iowa. We have a highly educated population. We value learning and knowledge, and our budgets and policies have always reflected that.

I recently proposed a plan that would provide the necessary resources to maintain the progress we have made in education and health care while also providing funding from the Tobacco Settlement Restricted Capitals Account to ensure highway construction is maintained at the same rate as planned. No road construction projects would be slowed or stopped under this compromise plan. At this time I am unable to approve this bill because it would not allow for an implementation of that plan.

For the above reasons, I respectfully disapprove House File 2612.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

May 9, 2002

The Honorable Chester Culver
Secretary of State
State Capitol Building
L O C A L

Dear Mr. Secretary:

I hereby transmit Senate File 2190, an Act concerning workers' compensation, which among other things, would reduce workers' compensation payments made to injured employees by expanding the ability of employers to apportion compensation payments made to employees who suffer more than one work-related injury, or a single injury that follows a preexisting functional condition.

The workers' compensation statute has historically struck a carefully crafted balance between the interests of employers and employees in the state of Iowa. Legislators originally enacted the statute to create a consistent and fair compensation schedule for workers who suffered injuries during the course of their employment. Like the acts of most other states, the Iowa workers' compensation statute guaranteed prompt, yet limited, compensation for employee work-related injuries. Legislators also crafted the original statute to promote industrial and workplace safety, and reduce the likelihood that injured workers and their dependants would be forced to seek public assistance. In exchange for this well-defined and structured system, employees gave up all rights to seek full and fair compensation for their work-related injuries in a court of law. Thus, the Iowa workers' compensation statute became the exclusive remedy for all work-related injuries, regardless of the circumstance.

Senate File 2190 destroys the effective balance between the interests of employers and the well-being of injured workers by expanding an employer's ability to apportion workers' compensation payments due and owing when the employer received a prior payment for a prior injury. In essence, Senate File 2190 would allow an employer to receive a 'credit' for any pre-existing condition that affected the employability of a worker, whenever a subsequent workplace injury increased the industrial disability of the worker, regardless of the nature of the subsequent injury, or its relationship to the prior one. SSenate File 2190 would also allow an employer to apportion a work-related injury, even where a prior injury or disease would not cause an ascertainable portion of the work-related injury, and wouldn't independently produce some degree of disability before the subsequent injury. This change would be clearly divergent from the common law of tortious liability, and it would contravene the initial intent of the worker's compensation statute.

Under Senate File 2190, a worker who has suffered a partial disability of 35 percent for a damaged shoulder tendon, can only recover a workers' compensation payment of 15 percent, for a subsequent and unrelated back injury, sustained on the job, which results in an additional 50 percent loss to the worker's earning capacity. As such, this worker, whose working capacity has fallen from 100% to 15%, would see his or her compensation payment reduced under Senate File 2190 from 85% to 50%. This result would be unjust and untenable. Not only would it lead to an unconscionable windfall for employers, at the expense of working Iowans, but it would also jeopardize the safety of workers by removing a powerful incentive for Iowa companies to maintain safe working environments.

Workers' compensation is widely regarded as an important tool to ensure that employers update working environments and minimize any hazardous working conditions that may jeopardize the health and safety of their workforce. Workers' compensation also constitutes the first line of defense against economic catastrophe, whenever a wage earner sustains a substantial work-related injury. Senate File 2190 would impose undue hardships on injured workers and their dependants by shifting the fiscal responsibility for support following a work-related injury from the employer to the injured employee. Senate File 2190 may also have the unintended consequence of increasing the tax burden placed on Iowa taxpayers, who fund public assistance programs that support injured and/or displaced workers with reduced earning capacities.

The state of Iowa must protect its workers. Protection cannot be provided without ensuring that workers who suffer a substantial work-related injury have access to a balanced and consistent compensation schedule. Senate File 2190 would create a plainly inequitable compensation schedule by expanding apportionment limitations in a manner that would substantially reduce compensation payments made to employees who suffer more than one work-related injury, or a single injury that follows a preexisting functional condition. This bill would shift an unjust portion of the burden of diminished employability away from employers, and place it squarely on the shoulders of injured workers.

For this reason, I hereby respectfully disapprove Senate File 2190.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

May 9, 2002

The Honorable Chester Culver
Secretary of State
State Capitol Building
L O C A L

Dear Mr. Secretary:

I hereby transmit House File 678, an Act, that requires parties in any dissolution of marriage or other domestic relations action, which involves custody of a child, to participate in mediation or a settlement conference, unless the court determines that a history of domestic abuse exists, or unless the court determines that direct physical harm or significant emotional harm to the child, or other children, or a parent is likely to result. House File 678 would define 'participation in mediation or a settlement conference' to include the receipt of assistance in the completion of a parenting agreement between the parties that specifies the details of visitation. This Act would amend Iowa Code §598.7A, which currently requires a court to determine on its own motion, or upon the application of either party to a domestic relations proceeding, whether the parties to the proceeding shall participate in mediation to attempt to resolve differences, without court intervention.

Courts in the fifth, sixth and seventh judicial districts in Iowa have increasingly utilized mediation as a tool to facilitate voluntary settlements in domestic relations actions involving child custody issues. Mediation in these districts have allowed a number of parties to create equitable dissolution decrees, avoid the trauma of litigation, and reduce the hostility that is often associated with marital dissolution or other domestic relations actions involving child custody issues. Under Iowa Code §598.7A, courts in these districts have developed effective mediation programs that reflect the needs of their communities, and provide resources to support program implementation.

Representatives of the judicial branch have expressed some reservations with House File 678. The mandatory mediation programs that exist in Iowa rely on administrative services for coordination and oversight. The judicial branch should be confident that the programs can be adequately funded before a programmatic requirement is imposed. Parties responsible for implementing the mandatory mediation program should also be confident that a pool of qualified mediators will be easily accessible to parties living in all locations across the state in order to ensure that costs associated with mediation remain consistent statewide.

Given the concerns expressed by the judicial branch, and other parties responsible for the bill's implementation, I must conclude that House File 678 has not received the full support of those most integral to the bill's success. Neither the courts nor this office are opposed to the concept of mediation. It has clearly proven to serve as a useful tool in promoting settlement in domestic relations cases. However, in light of the budget challenges that are currently facing Iowa courts, I cannot support this bill until the concerns identified above: namely; administrative costs and the accessibility of qualified mediators throughout the state, have been adequately addressed.

For the reasons stated above, I hereby respectfully disapprove House File 678.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

May 9, 2002

The Honorable Chester Culver
Secretary of State
State Capitol Building
L O C A L

Dear Mr. Secretary:

I hereby transmit House file 2339, an Act relating to the filing of a supersedeas bond, which among other things reduces the supersedeas bond amount that a defendant must post when appealing the order or judgment of a lower court. House file 2339 proposes to replace the existing guidelines governing supersedeas bonds, as outlined by the Iowa Supreme Court, with a reduced three-tier system.

Currently, supersedeas bonds are governed by Iowa R. App. P. 6.7(2), which provides:

If the judgment or order appealed from be for money, the penalty of such bond shall be 125 percent of the amount thereof, including costs, unless, in exceptional cases, the District Court fixes a larger amount; in all other cases, an amount sufficient to save appellee harmless from the consequences of the appeal.

The Supreme Court adopted Iowa R. App. P. 6.7(2) to ensure that parties, who obtained a successful judgment in a lower court, would not be prejudiced by a stay of judgment pending a final ruling on appeal. As in many surrounding states, the Court's supersedeas bond requirement protects the interests of non-appealing parties by requiring any party who seeks to stay the execution of a judgment to demonstrate that all costs, interest lost, and damages resulting from an appeal can be covered.

The formula contained in House file 2339 would provide judgment holders with grossly inadequate security coverage during the pendency of their appeal. This would upset the current balance of rights between judgment holders and those seeking to stay the execution of a judgment on appeal. It could also allow some defendants, acting in bad faith, to file frivolous appeals, post very little security, and dissipate assets during appeal, which would defeat the whole purpose of requiring a party to secure a supersedeas bond.

The formula contained in House file 2339 would also seem to defy a rational explanation when applied to various scenarios, since it would provide 100 percent coverage for a damage award between $1 and $1 million, 1 percent coverage for a $100 million damage award, and 25 percent coverage for a judgment of $100,000,001. Such wide disparities in statutory coverage could be characterized as arbitrary in the best possible light and a potential violation of the equal protection clause in the worst.

House file 2339 also contains a provision that expressly exempts the state or any of its political subdivisions from filing a supersedeas bond upon appeal of a lower court order or judgment if the court finds "good cause shown." Historically, courts have not ordered the state of Iowa to post a bond in order to stay the execution of a judgment on appeal. The state continues to maintain the position that it is not required to post a bond, and furthermore, judgment holders are precluded from executing judgments against it. House file 2339 could create more problems than it solves by prompting a court to conclude that the state is required to post a supersedeas bond in order to avoid the execution of a judgment, absent a Supreme Court Order, in the same manner as a private citizen.

For the reasons stated above, I hereby respectfully disapprove House file 2339.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

May 7, 2002

The Honorable Chester Culver
Secretary of State
State Capitol Building
L O C A L

Dear Mr. Secretary:

I hereby transmit House File 2621, an Act relating to tax credits under the new jobs and income program and the enterprise zone program for farmers' cooperatives and including a retroactive applicability date.

House File 2621 was offered as a way to provide early stage operating capital for cooperative owned ethanol production facilities by passing previously authorized investment tax credits to individual cooperative members. This legislation was intended to allow for a refund of these credits thereby providing operating capital for the cooperative. By limiting total refunds to the maximum currently authorized for value added agricultural enterprises, the cost to the state would be minimized.

A detailed analysis has revealed that House File 2621 provides a substantially different approach to the use of authorized tax credits than was originally intended. The language in House File 2621 allows the tax credits to be used against members' individual tax liability. In addition, it does not require that the credits be refundable and limited to the amount currently authorized for value added agricultural enterprises. Legislators and cooperative representatives who dealt with this bill agree that House File 2621, if enacted, will allow for the use of tax credits in a manner that has not received legislative deliberation.

My administration has maintained a strong commitment to creating new opportunities for value-added agriculture in Iowa-particularly in the area of ethanol. By the end of 2003, Iowa will be home to at least 11 new ethanol plants, doubling the number of Iowa ethanol plants since 1999. These plants currently are in various stages of planning and construction, gearing up to meet national demand. When completed, they will add 187 million gallons of ethanol capacity while providing economic opportunity for Iowa farmers.

The investment tax credits authorized to cooperative owned ethanol production facilities are available for use for up to seven years. As a result, we have the ability to revisit this issue with the Legislature to ensure the policy meets legislative intent without losing any tax credits. The opportunity may exist for this correction to be made in the next special session.

For the above reasons, I hereby respectfully disapprove House File 2621. I look forward to signing a bill that provides early operating capital for cooperative owned ethanol production facilities as the Legislature intended.

For the above reasons, I hereby respectfully disapprove House File 2621.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

April 11, 2002

Brent Siegrist
Speaker of the House
State Capitol Building
L O C A L

Dear Speaker Siegrist:

I hereby transmit House File 608, an Act relating to the delinquency charges on certain pre-computed consumer credit transactions.

At a time when predatory lending is on the rise, this legislation would be a benefit to such lenders. It represents a risk to Iowa consumers and a loss to the Iowa economy. The added costs are born by the citizens of Iowa then realized by out-of-state high-cost lenders.

The Attorney General's Office supports the rejection of this bill as poor consumer practice that would ultimately represent no benefit to the citizens and economy of our state. In fact, he indicates that Iowans participating in these loan programs may find repayment to be a strain and in the end, only compound their financial problems.

For the above reasons, I hereby respectfully disapprove House File 608.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

March 29, 2002

Brent Siegrist
Speaker of the House
State Capitol Building
L O C A L

Dear Speaker Siegrist:

I hereby transmit House File 2264, an act relating to informed consent provisions relating to an abortion and providing criminal penalties, and providing an effective date.

House File 2264 provides that an abortion shall be prohibited without the "voluntary and informed consent" of the woman seeking the procedure. There has been an ongoing discussion in this state about the level of communication that takes place between medical professionals and women seeking abortion services. A number of Iowans believe that women who seek abortion services in this state do not receive sufficient information to make an informed decision about whether to terminate their pregnancies. Given this concern, I have directed the Iowa Department of Public Health to take all appropriate steps to ensure that Iowans confronted with this difficult choice are given access, at their option, to a full range of medically-accurate and comprehensive information. Furthermore, I have directed the Department to take appropriate steps to ensure that Iowans have access to information that also promotes quality pre-natal and neo-natal care, and encourages the use of family support services at every stage of pregnancy and family development. I believe my directive will make available more medically-accurate and comprehensive information than House File 2264 would have required without criminalizing the actions of doctors.

Given the current laws in Iowa and the now heightened level of information that will be made available to women pursuant to my directive to the Iowa Department of Public Health, I conclude that House File 2264 is unnecessary. For these reasons, I hereby respectfully disapprove this bill.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

March 21, 2002

The Honorable Mary Kramer
President of the Senate
State Capitol Building
L O C A L

Dear President Kramer:

I hereby transmit Senate File 2048, an Act prohibiting disbursements of moneys from the Vision Iowa fund to entities entering into certain labor-related agreements, and providing an effective date.

I am unable to approve Senate File 2048. This bill would deny public entities that receive funding from the Vision Iowa program the same tool private entities use regularly to ensure quality work and timely completion on a project. Denying this tool may result in taxpayers paying more for a project due to poor workmanship, incurring cost overruns and repairs following the completion of a project. Poor workmanship can also increase the likelihood of accidents and expose the public to additional liability. Public entities should have the ability to use project labor agreements as a tool if officials deem it to be in the citizens' best interest.

Furthermore, local governments are granted home rule power and authority under the Iowa Constitution to determine local affairs. Senate File 2048 restricts local governments' ability to enter into agreements even if such involvement benefits the public's interests. If project labor agreements were to be banned, public entities would need a legal framework that ensures minimum qualifications for workers guaranteeing the quality and timeliness of work performed on publicly funded projects.

Ensuring quality and timeliness is a function of the experience and training of workers involved. Experience and training are reflected in the wages paid to workers. I acknowledged early on in the debate that a level playing field must exist for bidding, and I worked to develop a framework with lawmakers that would provide for competitive bids while maintaining quality and timeliness of work. My plan would replace the current project labor agreement structure with a prevailing wage and minimum qualifications for workers on publicly funded projects. With such a plan, quality, timeliness, competitive bidding, and wage concerns are all addressed. Unfortunately, the Legislature declined to address these concerns.

Iowa needs a system that focuses on the lowest qualified competitive bid to ensure that work is done properly, on-time, without increased maintenance and repair expenses, and without increased exposure to liability. Senate File 2048 does not accomplish this goal and, in fact, restricts it in some instances.

For the above reasons, I hereby respectfully disapprove Senate File 2048. Public entities will still have the ability to decide whether to use project labor agreements as a tool or not, depending on what is in the best public interest.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

March 1, 2002

The Honorable Mary Kramer
President of the Senate
State Capitol Building
L O C A L

Dear President Kramer:

I hereby disapprove and transfer Senate File 2121, an act relating to permitted and prohibited occupations for certain child laborers involving motor vehicle cleaning, washing, and polishing, and providing an effective date.

As it is drafted, Senate File 2121 would exempt businesses engaged in automobile cleaning from the current child labor laws that prohibit youth from working with dangerous or poisonous dyes or chemicals [Iowa Code 92.8(19)]. As written, this bill would allow workers under 18 years old to come into contact with any chemical used in the automobile cleaning, washing, and polishing processes-including those that are corrosive, toxic, and even potentially fatal.

Our child labor laws were created to provide safeguards for young people in the workplace. While I realize the important role that summer and after-school jobs play to instill the value of hard work to our young people, we must strike a balance that will afford our youth this opportunity for rewarding experience while also maintaining their health and safety. Although this bill would require youth to use protective equipment, I am not convinced that this requirement will always provide adequate protections from toxic, corrosive, or potentially fatal chemicals.

Senate File 2121 was originally designed to provide businesses a vehicle through which they could continue to employ teenagers in car washing jobs. No one disagrees with the goal of continued employment for our young people in cleaning automobiles. Unfortunately, the bill's language goes too far and could allow child laborers to be put into dangerous work settings.

Realizing that the solution to this issue must be a two-prong approach that ensures both employment access and worker safety, I have instructed the Iowa Division of Labor to issue an official interpretation of "dangerous or poisonous dyes or chemicals" as it relates to our child labor laws. This interpretation will clarify the chemicals that child laborers may come into contact with while maintaining the safety that they need in the workplace. Earlier today, the Labor Commissioner issued this official interpretation of the definition of "dangerous or poisonous dyes or chemicals" as referenced in Iowa Code 92.8(19). Further, I have directed the Division of Labor to continue to work with the automobile dealers in our state to ensure that we strike the right balance to maintain both safety and employment opportunities for young Iowans.

Given the new interpretation of the child labor provisions and the continued commitment of all parties to find a workable, real world solution to this issue, Senate File 2121 no longer appears necessary.

For the above reasons, I hereby respectfully disapprove Senate File 2121.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

February 8, 2002

Brent Siegrist
Speaker of the House
State Capitol Building
L O C A L

Dear Speaker Siegrist:

I hereby transmit House File 2245, an Act relating to the medical assistance program, making appropriations and transfers of funds, and providing an effective date.

The medical assistance supplemental bill is vitally important for hundreds of thousands of Iowans. This bill makes significant strides toward addressing the increased demand for medical services by families in need.

However, the bill has several provisions which I cannot support. I oppose attempts to raise prescription costs on Iowans in need and add an unnecessary, burdensome layer of bureaucracy and cost to the delivery of medical assistance. In addition, the anticipated cost savings for some provisions are overstated. The burdens created for some families and health care providers are also unacceptable.

House File 2245 is, therefore, signed on this date with the following exceptions, which I hereby disapprove.

I am unable to approve the item designated as Section 4, subsection 2 in its entirety. This language directs any remaining funds in the Hospital Trust Fund after the first $7 million is appropriated to replace the $2.5 million in the Tobacco Endowment. By vetoing this provision, any funds remaining in the Hospital Trust Fund would be transferred to the Senior Living Trust in accordance with Section 4, subsection 3 of the bill. This veto will improve the balance between resources used by the Senior Living Trust and Tobacco Settlement Endowment. It will also preserve the priority of long-term care transitions over the endowment.

I am unable to approve the item designated as Section 5, subsection 2 in its entirety. This language directs that if certain federal funds are not received during the present fiscal year, the Department of Human Services appropriations will be reduced by up to $7 million - funds used to protect children and provide health care coverage for uninsured Iowans. The provision punishes children and Iowans in need because of action on the part of the federal government.

I am unable to approve the item designated as Section 7, subsection 1 in its entirety. The legislature's bill would require additional bureaucracy and associated costs by calling for monthly reporting requirements for those who experience a change in income, mailing address, household composition, or health insurance. In doing so, the legislature would be creating an additional layer of bureaucracy, and an additional layer of cost to process the monthly reports. This new bureaucratic requirement is particularly unnecessary, considering the Department of Human Services already requires Iowans in need who receive medical assistance to report changes in such factors. This is an example of an area where the projected savings are overstated.

While I am not recommending a veto of the section relating to restrictions on dental services that would be available to medical assistance recipients, as now passed, most of the projected savings have been eliminated. Savings under this proposal are much less than the amount indicated by the Legislature of $1.6 million for four months.

I am unable to approve the item designated as Section 7, subsection 3 in its entirety. The provision would increase the cost of prescription drugs for Iowans most in need. This, in effect, is a tax on a group - aged, blind, disabled, children, caretakers with very little or no income. Additionally, if the individuals do not have the funds, the pharmacist is required to dispense the drug anyway. This requires pharmacists to subsidize the costs and creates an additional reluctance on the part of pharmacists to handle Medicaid patients.

I am unable to approve the item designated as Section 9 in its entirety. The provision would require nursing facilities to be certified for Medicaid and Medicare - even if the nursing facility does not take Medicare patients. Therefore I have directed the Department of Human Services to immediately prepare administrative rules to address dual certification for all applicable nursing facilities, thus requiring certification of a nursing facility for both Medicare and Medicaid when they are, in fact, providing services for clients of each program. The directive avoids unnecessary additional administrative cost for dual certification that would be borne by the state, over 62 nursing facilities (which do not need the dual certification, nor will they in the future serve Medicare clients), and Iowans who receive nursing home services.

For the above reasons, I respectfully disapprove these items in accordance with Amendment IV of the Amendments of 1968 to the Constitution of the State of Iowa. All other items in House File 2245 are hereby approved as of this date.

Sincerely,

Thomas J. Vilsack
Governor

TJV:jmc

cc: Secretary of the Senate
    Chief Clerk of the House

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