Overview / Major Events
Today marks the arrival of the first big legislative benchmark with the first legislative funnel. Policy bills that have failed to be approved in their committee of origin by the close of business today are technically dead for the year. As action in some committees could extend later into this evening, a full run down of what made the cut and what failed will be included in next week’s update. The next funnel is exactly four weeks from today (and that requires passage on the floor in one Chamber and committee approval in the other Chamber for continued eligibility).
Governor Reynolds unveils significant Tax Reform proposal
Governor Kim Reynolds started the much anticipated tax reform discussion in Iowa with the introduction of her plan to reduce and reform Iowa’s personal income tax system. Tax reform has taken on a new sense of urgency in Iowa due to a quirk in Iowa law called “federal deductibility”.
Iowa is one of only a few states that allow Iowans to fully deduct the federal income taxes they pay on their Iowa returns. While this keeps Iowa’s tax rates artificially high, it also means that when the federal government CUTS taxes (as they did, significantly, late last year) it results in state tax INCREASE (as you have a much smaller federal deduction and that means your taxable income in Iowa is higher and subject to state tax).
Key points from her plan (which will result in a $1.7 billion tax cut by full implementation in 2023):
Senate Republicans make BIG push on social issues this week
Senate Republicans moved two big pieces of legislation being promoted by the state’s social conservatives with the passage of the Religious Freedom Restoration Act (RFRA) and a bill that bans abortion at the moment a fetal heartbeat is present in a pregnancy in their respective Senate committees this week.
RFRA (SSB 3171) was passed in the Senate Local Government Committee and will move onto the Senate Debate Calendar. This bill passed committee despite strong opposition from Iowa’s business community who argue the bill will have a chilling effect on their ability to recruit qualified candidates to Iowa to help fill the state’s needs for more highly skilled workers.
HEARTBEAT (SSB 3143) passed the Senate Judiciary Committee and will also move to the Senate Debate Calendar. This legislation comes on the heels of last year's bill that imposed a 72-hour waiting period on receiving an abortion (a law that is now being heard by Iowa’s Supreme Court – after a District Court ruled that the law IS constitutional and does not place an “undo burden” on a woman’s access to abortion services.
Senate Commerce Committee Approves Energy Bill
The Senate Commerce Committee approved SSB 3039, an omnibus energy bill that is being backed by a coalition of Iowa energy interests (Alliant Energy, ITC, RECs, Iowa Association of Municipal Utilities, Black Hills Energy, etc.). A number of amendments were adopted to clarify the bill’s intent regarding solar and other renewable energy projects (solar activists have complained the bill could hamper the deployment of private solar generation). The bill now moves to the Senate Debate Calendar.