This week in the Iowa Legislature
The 6th week of the 2023 Legislative Session kept lawmakers busy on a variety of topics including government reorganization, tax policy, and the death penalty. Both the House and Senate passed a handful of noncontroversial bills on the floor to keep bills moving through the process. Bills continue to be introduced at a slower than expected pace, but as soon as they come down hearings are scheduled quickly on priority bills to ensure they don’t get caught up in the first funnel deadline just two weeks away.
Despite overwhelming objections from lobbyists and the public, bills moving forward and making the news this week included HPV Vaccine Education, HF 187, which would remove the provision in law requiring schools to teach about “the availability of a vaccine to prevent HPV” to 7th and 8th graders, making the instruction optional, however, general instruction about sexually transmitted diseases, including HPV, still would be required. The Death Penalty, SF 14, would narrowly allow for a death penalty sentence only applying to an offender who kidnaps, rapes, then murders a minor. OTC Contraception, SSB 1139, the Governor’s health care bill moved without the provision to allow for over-the-counter birth control. Gender Education Ban, HF 8, prohibits the teaching of gender identity and sexual orientation for grades kindergarten through six.
The week ended with Governor Kim Reynolds signing HF 161, Medical Malpractice Tort Reform, into law. This bill caps noneconomic damages in lawsuits against health care providers in medical incidents that result in the loss or impairment of a bodily function, disfigurement, or death at $1 million for clinics and individual doctors and $2 million for hospitals.
Tax Policy Proposals
This week the legislature sent their first property tax reform bill to the governor. SF 181, Residential Rollback Recalculation, is a fix to an oversight in last year’s legislation. It was unanimously approved by the Senate a few weeks ago and cleared the House on Wed. The bill removes singular properties that were classified as multi-residential before and recalculates the residential rollback in FY 24 saving taxpayers $133 million in property taxes. Because this will reduce property tax revenues collected by local governments, the legislature extending the deadline by 30 days to allow more time to submit their FY24 budget.
Since the corrective bill is out of the way, the House and Senate are continuing their work on their competing individual property tax bills, simultaneously moving them through their respective chambers. The Ways and Means chairs have their own throughs on how to reduce property taxes as it’s a priority for the House and Senate Republican caucus’ and the Governor. It will likely be one of the last issues resolved before adjournment. A high-level overview of each bill as they are currently written is below, noting they are not in their final form by any means.
HF 1: Assessment Limitations, Bonding Limits
- Reduces the $5.40 levy, increasing transparency requirements,
- Reduces school foundation property tax levy from $4.90 per $1,000
- Caps property assessment increases to no more than 103%
- Requires schools to have a 10% deposit before building a new project
- Requires an election for some essential purpose expenditures
SSB 1124 City Levy Rate Limitations:
- Combines several levies into one general fund levy, provides a new process to set a limit on that fund that is connected to assessment growth. The levy is subject to revenue growth limitation once under the limit
- The levy will be assessed for value and is subject to revenue growth limitation
- Reduces the dollar amount of population-based thresholds for General Corporate Purpose bonding limits by 30%
SSB 1125 Local Government Tax Omnibus LOSST, Commercial Rollback Decline & Others:
- Increases sales tax from 6% to 7% in 2025, eliminates the LOSST and then transfers a portion of retail sales taxes back to cities
- Removes the Code requirement that one-half of the money generated by the water service tax be deposited into the water quality financial assistance fund then deposits all funds generated from the water service tax into the general fund
- Makes an appropriation to the Natural Resource and Outdoor Recreation Trust Fund
- Reduces commercial and industrial property tax rollback to 85% and then 80% in two years
- Converts the Homestead and Veterans Property Tax Credits into exemptions making them reduce local government revenues rather than be paid for by the state
- Increases eligibility for Senior and Disabled Person Tax Credit
Legislators and staff on the State Government Committee in both chambers have been working overtime on the Governor’s 1,700-page reorganization bill. The Senate held two subcommittee meetings to discuss SSB 1123 this week making it four meetings to date with at least one more to go before moving the bill through the full committee. While House State Government Chair, Jane Bloomingdale, is taking a different approach and plans to hold four subcommittee meetings next week over the noon hour as they start vetting HSB 126. A priority for the Governor, these bills seek to consolidate the current 37 state agencies to 16 and to find efficiencies in state government. The long and short of it…department and agency heads would no longer be appointed by commissions and instead would be chosen by the Governor, subject to Senate confirmation. While some changes make sense and are long overdue, others have been met with objection and concern. One thing is clear, the bills are not in their final form and will require much more work before moving forward.
It’s about to get busy! If the past holds true, the Subcommittee and committee work will continue to increase and intensify as we head to the first funnel deadline only two weeks away! As a reminder, a list of scheduled committees and subcommittees with their virtual access information can be found at the provided link.