This week in the Iowa Legislature

With the First Legislative Funnel deadline just one week away, lawmakers held hundreds of subcommittee meetings and long committee blocks to consider their members’ priority bills. Nearly every committee in the House moved legislation forward to ensure the issues didn’t die before the first funnel, while the Senate remained more conservative in their work. The Governor’s legislative proposals and public announcements continue to capture the attention of the public and media including her priorities addressing postpartum Medicaid coverage for mothers, gender identity, work-based learning, and a behavioral health and substance abuse system merger.

Governor’s Initiatives:

  • Postpartum Medicaid: Low-income mothers will be eligible for a full year of Medicaid coverage under Governor Reynold’s proposal. Iowa law currently provides coverage for women with family incomes up to 370% of the Federal Poverty Level (FPL) with Medicaid coverage during pregnancy and 60 days after giving birth, the federal minimum allowed by law. Senate Study Bill 3140 would decrease the number of women and babies eligible for Medicaid by reducing the family income cap (370% of FPL to 215%). Any family making over 215% of the federal poverty level ($64,000 for a family of four), would no longer be eligible to receive this Medicaid benefit. The proposal to expand postpartum Medicaid coverage to a year (as opposed to 60 days) has broad support, but concerns were raised on lowering the income cap, thus reducing the number of women eligible for benefits. Both chambers remain committed to moving the bill but there appears to be flexibility on what the final income cap will be. The Senate passed their version out of Committee on a party-line vote while the House is expected to follow suit next week making both bills eligible for debate until the end of session.
  • Border Announcement: Governor Reynolds announced she will use federal ARPA funds to send more Iowa National Guard Soldiers to the border to assist with reducing illegal immigration. Her remarks came one day after her trip to Eagle Pass, Texas to meet with Governor Greg Abbott and other Republican governors. The Supreme Court recently ruled individual states do not have the authority to enforce border security and the task should be left to the federal government.
  • Definition of a Woman: Transgender individuals will be required to disclose their gender transition on their driver’s license and birth certificate under Governor Reynold’s proposal. The bill also defines sex as “either male or female, at birth, unless otherwise provided by law.” A female is defined as “a person whose biological reproductive system is developed to ova, while a male is “a person whose biological reproductive system is developed to fertilize the ova of a female.” The bill states separate, but equal accommodations for “a person born with a medically verifiable diagnosis of disorder or difference of sex development shall be provided.” If enacted, this accommodation could apply to public bathrooms or other gender-segregated spaces. House Study Bill 649 was considered by a House subcommittee on Tuesday while hundreds of LBGTQ+ advocates gathered at the Capitol to protest the bill. There was heated debate in the subcommittee, but it ultimately passed the full committee on a party-line vote after being amended to remove transgender identification on IDs and birth certificates.
  • Work-Based Learning Bill: Senate Study Bill 3143 would shorten student teaching requirements for eligible students and expand work-based learning programs. Student teaching requirements would be reduced from 14 weeks to 4 weeks for students with previous experience and certification as a substitute teacher. The bill would also repeal and consolidate workforce programs that fall under regional and industry sector partnerships (internships, co-ops, apprenticeships) with the statewide network. All work-based learning programs would be funded by a new Workforce Opportunity Fund, established with a $30 million reinvestment from the state’s unemployment compensation reserve fund. The final change in the bill would cap the eligibility for the Last-Dollar Scholarship program at a family income of $20,000 or less. The Last-Dollar scholarship supports Iowans seeking high-demand jobs. Overall, Republican legislators supported the bill while Democrats expressed concerns with reducing student teaching hours and other provisions. The Association for Business and Industry and labor organizations expressed great concern with recommendation to use of the unemployment compensation reserve fund for anything other than unemployment benefits. The House responded to the concerns and removed this provision from the bill while the Senate made no changes and passed it out of committee on a party-line vote.
  • Behavioral Health Proposal: Under the Governor’s proposal, Iowa’s 13 Mental Health and Disability Services Regions and 19 Integrated Provider Network Service Areas would consolidate into one Behavioral Health System with seven Behavioral Health Districts. These districts will cover prevention, education, treatment, recovery, and crisis services related to both mental health and substance use disorders. Each district will have its own individualized mental health plan, system, budget, and organization. The district would be managed by an organization selected by the state per a public bidding process. The Iowa Department of Health and Human Services (HHS) would utilize federal block grant funding for mental health and substance abuse services and direct it to the districts to use in support of their plan. The organization could be the existing agency overseeing the mental health programs or another public or private entity. Additionally, the proposed legislation removes the “core services” language Iowa’s regional mental health providers must offer now. Instead, the required services will be laid out in a contract between HHS and the districts. The disability services previously provided by the state’s Mental Health and Disability service network will transition to the state’s Aging and Disability Services program. HHS believes they can complete the program transition by July 1, 2025. Advocates for mental health and disabilities organizations have concerns with the aggressive timeline and transitioning disability services to cohabitate with aging services.

Income Tax Elimination Introduced

In a rare occasion, late last week the chairs of the Legislature’s tax-writing committee (Ways and Means) proposed a joint bill to gradually eliminate Iowa’s individual income tax. Senate Study Bill 3141 builds on the Senate’s previous proposal, to reduce the tax rate to 3.7% in 2026, and then 3.65% in 2027. In the following year, individual income tax reductions would be financed through the creation of the “Iowa Taxpayer Relief Trust.”  This trust will receive an initial infusion of $2.6 billion, sourced from the Taxpayer Relief Fund established in 2023. From there, 5% of the trust fund money will move into the Income Tax Elimination Fund annually. The point of creating the trust fund is to create an endowment for the state to assist in buffering the budget as further tax cuts are implemented. The bill also includes a mechanism to reduce corporate income taxes to 4.9% over time depending on state revenues. Representative Kaufmann and Senator Dawson outlined this proposal as a long-term plan aimed at eventually eliminating Iowa’s income tax. Legislative leadership has indicated this may be a longer-term discussion and more short-term tax proposals may be introduced later in session. Critics of this proposal say it will never work long term because the state would be using one time money for ongoing expenses and the reserves from the trust will eventually run out.

Looking Ahead

And just like that the First Legislative Funnel Week is here! As of Friday, February 16th, all bills except for appropriations and tax policy items will need to be passed out of a subcommittee and a full committee in one chamber to be considered until the second funnel deadline on March 15th. This coming week will be one of the busiest of the session with packed schedules filled with subcommittee meetings that will taper by midweek and committee blocks scheduled into Thursday afternoon. Committee meetings typically run much longer with extensive closed-door discussions where members will debate bills in their respective caucuses to consider whether or not to move them forward.

There is no floor debate scheduled this coming week and only a few budget hearings are currently scheduled as they turn their attention to solely focus on policy work. We ask you to be prepared for surprises and to respond to any bill introduced and fast tracked as quickly as possible. Anything goes as policymakers try to beat the first deadline. Your weekly reports will highlight all the action from the coming week, and we will update your tracking to reflect bills still alive following the first funnel.

With the busy week ahead, a list of scheduled committees and subcommittees with their virtual access information can be found at the provided link. If you have challenges connecting with the virtual link, you can always call in as well.

Bills of Interest

Advocacy Strategies continues to ensure that every bill pertaining to you will be tracked. Along with this email report each week you will see a bill tracker chart developed by our new bill tracking system, AdvoKit. Please review this and confirm your declared bills are correct. Please let us know if there are any changes that need to be made.

Our ability to best represent you is based on quick and open communication. Once the legislative session progresses further, our requests for bill declarations will increase substantially. We ask you to let us know your organization’s position on each bill within 24 hours of your receiving daily bills in AdvoKit so we can respond accordingly.