This week in the Iowa Legislature

After nearly a month of no floor debate, the Iowa Senate returned on Monday pulling an all-nighter filled with fiery debate. Senators considered several bills and governor appointments into the early morning hours on Tuesday. The fireworks came when Republican Senators refused to answer Democrat questions on the child labor bill. The House returned on Wednesday and both chambers debated and advanced their competing property tax reform packages. On Thursday, each chamber considered a few priority bills including the Governor’s ‘Parental Rights” bill which the House finally concurred with before heading home for the weekend.

Late in the week, a budget deal was announced allowing the budget co-chairs to start negotiating in earnest. We have heard the House could start moving budget bills through the subcommittee and committee process as early as Monday and both chambers might make a run at final adjournment by next weekend or into the first week of May. However, we understand there is still no deal on a property tax reform proposal which could delay final adjournment.

Iowa Senate Passes Bill Loosening Child Labor Laws

On Monday night the Iowa Senate debated the child labor bill, SF 542, until 5am Tuesday morning. The bill would change the state’s child labor laws to allow children aged between 14 and 17 to work longer hours and in formerly restricted fields such as roofing and manufacturing with parental permission. Senate Minority Leader Zach Wahls expressed significant concerns stating, “No Iowa teenager should be working in America’s deadliest jobs.” Floor debate became even more impassioned as Senate Republicans refused to answer any questions from Democrats. Republicans stated the decision to not make public comments on the floor was due to a recent Iowa Supreme Court decision which cited floor comments to determine the intent of legislation. Democrats blasted this new floor strategy which has garnered a lot of negative media attention. After hours of debate on amendments, the Iowa Senate passed the bill with bipartisan opposition 32-17. The bill was set to be debated by the House on Thursday, but it was pulled from consideration likely due to concerns from House Republicans and several amendments filed by Democrats. It must still pass the House before being sent to the Governor.

Dueling Property Tax Reform Proposals Advance

“Property Taxes, Property Taxes, Property Taxes.” The property tax reform discussion has been center stage the entire legislative session, but now the issue has taken up most of the oxygen at the capitol. The Senate was laser focused on getting their new property tax proposal passed this week. The proposal, SF 569, was introduced on Monday and then moved through subcommittee, committee, and passed the Sente floor with strong bipartisan support 48-1 in three days. The purpose of this bill is to “consolidate and reduce local governments’ levy rates,” to incentivize and coerce the reduction of local government budgets and levy rates. Iowa property owners have been feeling the burden of rising property values as the average home in Iowa increased 22% in valuation over the past year. Senator Dawson, the floor manager of the bill, argued “the system’s broken.” The bill caps cities’ and counties’ levy rates, and the only way counties can raise the rate above the new statutory caps will be through a special election. Dawson noted that the bill is not a final deal between the chambers, but they are hoping to get a deal made.

The Iowa House also advanced their version of a property tax reform proposal on the floor with strong bipartisan support 93-1. Both the House and Senate proposals include ‘truth in taxation” initiatives and efforts to limit property tax rates, but with different approaches. The largest sticking points remaining are the House wanting to reduce the school aid levy and have the state backfill the decrease and the Senate’s inclusion of a number of exemption increases. With no deal on property taxes reached to date, it is unclear what the final package will include.

Below are a few highlights from the competing property tax proposals:

House Property Tax Proposal, HF 718:

  • Reduces the $5.40 school district property tax levy by $1 and has the state fill in the gap for local district funding to the tune of $200 million. (This is the main sticking point with the Senate)
  • Caps annual property tax increases per property to 3% for residential and agricultural properties and 8% for commercial and industrial properties.
  • “Truth in Taxation” proposal which House Republicans argue will increase transparency in the process by requiring more notice to the taxpayers and move all elections for bonding to the same as the general election.

Senate Property Tax Proposal, SF 569:

  • Consolidates several city property tax levies and places limits on local government budgets.
  • Caps the city general services levy at $8.10 per $1,000 in valuation, the county general services at $3.50 per $1,000 in valuation, and the county rural services levy at $3.95 per $1,000.
  • Limits property tax assessments rather than limiting property tax increase like the House proposal.
  • Includes an additional $6,500 homestead property tax exemption for Iowans 65 and older and more than doubles a property tax exemption for veterans by increasing it to $4,000.
  • Finally, it includes several “Truth in Taxation” proposals similar to those in the House bill.

Iowa Senate Sends Trucker Tort Reform Bill to Governor

The Senate also considered the trucker tort reform legislation, SF 228, for a second time on Monday night. The legislation places a $5 million-dollar cap on damages that can be awarded to victims in a lawsuit against a trucking company. A House Amendment adjusted the employer liability to ensure companies can be held accountable for “negligent hiring, training, and supervising practices.” The Senate floor manager Senator Bousselot argued the language falls short of the ideal policy for trucking liability, nevertheless, it is a step in the right direction. He argued the intent of the bill was “protecting Iowans who are injured while keeping stability in the critical, critical components of our supply chain.” Democrats said the bill was better than the original proposal after the House amendment, but it still could be improved. The bill passed the Senate with bipartisan opposition on a vote of 31-19 on Monday, and the bill is now awaiting Governor Reynolds’ signature.

Budget Process

We have a budget deal! Late in the week, the Capitol was abuzz as lobbyists were made aware of a state budget deal between the House and Senate. The joint overall budget target was set at $8.51 billion which is closer to the House target than those of the Governor and Senate, and we have listed the individual joint budget targets in the chart below.

Below is the updated chart outlining each individual budget bill, its number, and where it is in the overall process. This chart will be updated each week until the legislature adjourns.

Bill Number Department Status Joint Target
SF 557 Admin & Reg Passed SENATE full committee 4/4 $70.54M
SF 558 Ag & Natural Resources Passed SENATE full committee 4/4 $43.54M
SF 559 Economic Development Passed SENATE full committee 4/4  $41.80M
HF 709 Federal Block Grants Passed HOUSE 99-0 in SENATE committee 4/19 N/A
SF 560 Education Passed SENATE full committee 4/4 $982.91M
SF 561 Health & Human Services Passed SENATE full committee 4/4 $2.124B
SF 562 Judicial Branch Passed SENATE full committee 4/4 $881.71M
SF 563 Justice Systems Passed SENATE full committee 4/4 Combined with Judicial
Not yet introduced Rebuild Iowa Infrastructure Fund (RIIF/TIC) TBA
Not yet introduced Transportation TBA
Not yet introduced Standings $4.372B

Looking Ahead

We are a week away from the scheduled adjournment date of April 28th, and we are hearing lawmakers could try to make a run at a final adjournment by next weekend or early the following week. With a budget deal struck, the House will likely move their budget bills through the committee process early next week and they could be on the House floor for consideration by mid-week. With a property tax deal still eluding leadership and some pending priorities still needing to be passed, there remain a number of variables which could impact when they reach Sine Die.