Bill to relax fireworks law in Iowa could bring opportunity for business owners

Some lawmakers see change as a potential source of revenue

Published: March 2 2014 | 3:30 am - Updated: 1 April 2014 | 9:03 am in

DES MOINES --- There are more types of products in the four firework stores that hug Interstate 35 than the entire population of the small, border town of Eagleville, Mo. home to  300 people. It's a mere 10 miles from the Iowa border where retailers  see a lot of activity during the 4th of July.

Frigid February is a far cry from the summer where sales boom for Marv Martin, store manager of Hale Fireworks, but he's got his eye on pending Iowa legislation to relax Iowa firework laws and how it could impact the store this year. The retiree said a significant amount of customers are Iowans  and other out-of-state residents.

“It’s I-35, you’ll get a lot of people who will take them back home whether it’s legal or illegal,” he said.

Lawmakers such as Sen. Mark Chelgren, R-Ottumwa, who originally started the discussion this session, want to see the law changed to retain the out-of-state spending observed by Martin.

“I think there are some legislators that are very cognizant of that…” said the bill’s floor manager Sen. Jake Chapman, R- Adel. “If people (Iowans) are shooting them off and enjoying them we might as well keep our money here in the State of Iowa and collect sales tax revenue from it as well.”

Although legislators don’t know what kind of economic impact a change in Iowa law could bring it will certainly be a new source of revenue in the state and a new business venture for some firework dealers.

Even Gov. Terry Branstad admitted to visiting South Dakota and Missouri as a child to buy fireworks. Although the governor hasn’t stated whether or not he’d support the bill if it made it to his desk.

Martin said last week he believes the changed law would hurt his store and the three others nestled next to Exit 106 along I-35. And although he’d “rather not see it happen” he and the store’s owner have discussed setting up a location in Iowa if the bill passed.

Pyro City Fireworks owner, John Collar, doesn’t think the legislation would significantly impact his business because many out-of-state customers who stop there in the summer head down to vacation in Missouri.

“We have people who have been coming here for years and we have Black Cat products, which is what a majority of people want,” said the 60-year-old whose store is located at the same exit as Hale Fireworks. “So they’d stop here even if Iowa legalizes fireworks.”

ECONOMIC IMPACT

Forty-two states and the District of Columbia have laws that legalize some form of consumer fireworks. Iowa is among four states that only allow sparklers or other novelty items and four states ban all consumer fireworks, according to the American Pyrotechnics Association. Violation of the laws in Iowa is a simple misdemeanor.

Consumer fireworks are products such as aerial displays, roman candles and many Black Cat products that would all be legal under Senate File 2294.

Julie Heckman, executive director of the APA, said she’s seen a trend over the last two decades of states relaxing laws on consumer fireworks and she thinks revenue plays a key factor. The industry saw $965 million in revenue in 2012, according to the APA, $645 million coming from consumer fireworks sales.

“I think it would be very positive,” Heckman said of the Iowa legislation. “I think they’ll be able to generate revenue that’s very necessary for the state.”

Although not many states collect economic data on fireworks, a South Dakota report showed the state received $307,075 in its 4 percent state sales tax revenue from firework sales in 2012. The South Dakota Sales and Use Tax Report also showed counties along the Iowa border generated the highest tax revenue for firework sales in the state including Union County with $52,580, Minnehaha County with $41,135 and Lincoln County with $38,233 in tax revenue.

South Dakota and Missouri both have laws that only allow dealers to sell to citizens within the state during seasonal periods – 4th of July and Christmas – while others with the appropriate licensing can sell to out-of-state customers year-round.

South Dakota Fire Marshal Paul Merriman said the state has roughly 400 firework dealers, who obtain retail licensing through his office.  Missouri has 1,164 seasonal  dealers in 2013 along with 142 licensed distributors, manufacturers or wholesalers, according to the Missouri Department of Public Safety.

Chapman said the current bill doesn’t limit sales to a certain period of the year but in an industry focused around the July holiday, it’s likely the bulk of dealers will be active in the summer. However, lawmakers are open to adjustments in the bill.

CONCERNS

Although SF2294 would allow the state fire marshal, city councils and county boards to suspend the use of fireworks if the products were seen as a public threat, public safety and medical associations remained concerned about the safety hazards that can result from handling fireworks.

“I think there really needs to be a bit more time to study the effects of legalizing the fireworks,” said Iowa City Fire Marshal Brian Greer. “That really didn’t happen because this bill just came up rather quickly.”

Greer said if the legislation did pass he’d most likely have an education campaign for adults and youth on the dangers of fireworks and how to safely handle them.

Chapman said attempts to relax firework laws in Iowa have failed before but he thinks making it through the legislative funnel is promising.

It’s now up to Senate Majority Leader Mike Gronstal, D-Council Bluffs, to decide if the bill should be debated. Gronstal told reporters last week his caucus hasn’t discussed the bill and he’s unsure if the bill would be brought to the floor this week.

Chapman said with six Republicans and four Democrats supporting in the bill out of committee the bipartisan support is a good sign the legislation might have some success.

“I think there is a swell of support to move this legislation forward,” he said.

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