Iowa Legislative Session—Sine Die!

The Iowa Legislative session concluded this week, five weeks beyond the 100th calendar day of the session when the per diem ran out. The Education Savings Plans (ESAs), one of Governor Reynolds top priorities and approved by the Senate largely led to the delay.

Ultimately, agreement on the issue was not reached but the Governor and supporters in both chambers pledged to revisit the issue next year. Once it was decided that the chambers would not reach a consensus on the ESA issue, it did not take long for leadership and appropriators to wrap up the budget and resolve the remaining policy issues.

Gov. Reynolds released the following statement on the conclusion of the 2022 legislative session: “This legislative session, I charged the House and Senate to work together to further advance Iowa’s strong growth through policies that cut taxes, invest in biofuels and strengthen our families, communities, schools, workforce and economy. I’m proud that our state is leading the nation in many of these areas and delivering on the promises we made to the people of Iowa.

“Iowa’s economy is expanding, our communities are flourishing, and our profile is rising. None of that would be possible without the businesses, community leaders, and educational institutions that form the bedrock of our communities. Most of all, it wouldn’t be possible without our people and the communities they call home. Thanks to them, there’s never been a better time to invest in Iowa, to move to Iowa, and to believe in Iowa. They are the source of our strength.”

Lt. Governor Gregg released the following statement: “Governor Reynolds’ leadership has again benefited Iowans greatly and improved their everyday lives in areas that matter the most. Historic tax cuts, expanded child care availability, supporting public education, focusing efforts to get Iowans employed are just a few of the major initiatives passed this session that continue to make Iowa a great place to live, work and raise a family.”

The last few days of session saw another round of tax reform, a compromise on the Bottle Bill that was 40 years in the making, and a number of increases and decreases in budget priorities. Overall it was probably a success, so large items were agreed upon and passed.

The budget total ended up being $8.4 billion. There were 1,439 bills and resolutions introduced, 118 enrolled, and 98 signed by the Governor. Here are a few of the bills that we were in support of:

• HF2317: Tax Reform. Major tax reform was the ultimate priority for the Governor and Republicans in both chambers; it was highlighted in opening day remarks by leadership in the House and the Senate and was the focal point of the Governor’s Condition of the State Address. The Governor signed the bill on March 1.
• HF2198: Age of Childcare Workers and Staffing Ratios. This bill would allow a 16-year-old to work or volunteer at a childcare facility without supervision. The Senate amended the bill adding language regarding staffing ratio. The bill allows childcare centers to increase child to staff ratios to 1:7 for children under 2 and 1:10 for children 3 and older. The bill passed the Senate as amended 31-18 on April 18. It now goes to the Governor for her signature.
• HF2127: Childcare Reimbursements. The Senate approved this bill, which allows a childcare provider to collect the difference between the amount of state assistance and the amount the provider normally charges from a family in the childcare assistance program. It now goes to the Governor for her signature.
• HF2316: School Supplemental Aid. The House and Senate reached an agreement on Education funding, accepting the 2.5% School Supplemental Aid (SSA) level proposed by the House and Governor Reynolds. The Senate approved the House version of the SSA bill thereby increasing school funding by $159 million (2.5% per pupil). The bill passed the Senate 31-17 and sent the bill down to the Governor for her signature. HF2316 was the first bill signed into law in the 2022 legislative session. Over 56% of Iowa’s entire budget funds public education. In fiscal year (FY) 2023, which begins July 1, 2022, that’s more than $3.6 billion. Eighty percent of the education budget goes to K-12 schools, including more than $3.5 billion for state foundation school aid and nearly $29.5 million for transportation equity.
• HF2355: Unemployment Insurance. With 80k jobs currently available in Iowa, Governor Reynolds made unemployment changes a priority. The bill implements a number of reforms that will encourage individuals to return to work, ensure the long-term integrity and health of the unemployment insurance trust fund and end up saving the trust fund approximately $74 million annually, which in time should end up lowering business taxes on employers. Highlights include:
  • Shortens the maximum benefit duration from 6 months (26 weeks) to 4 months (16 weeks). This provision alone saves the unemployment insurance trust fund over $69 million annually.
  • It adjusts the maximum benefit duration for business closings from 9 months to 6 months. This modification will save the UI trust fund approximately $4.6 million.
  • It enhances suitable work requirements by accelerating the timeframe and wage at which someone must accept a job.
  • It defines the term “misconduct”. By defining it in the statute, it allows both parties to know the rules of the game when a dispute is brought before a judge.
  • It modernizes the guide for interpretation which is critical as the purpose of Code Chapter is changing from unemployment to re-employment.
  • It streamlines the appeals process. Right now, the appeals process for both parties is an administrative law judge (ALJ), the employment appeals board and then district court. The legislation allows either side to go directly from an ALJ to district court, thereby expediting the process of the outcome in a case.
• SF2383: Workforce. The HBA of Iowa was with this bill from the very beginning and it had a building code section in it that would have codified a minimum standard statewide, making it more difficult to pass social engineering building codes that drive up the cost of housing. Ultimately it was pulled out, but will return next session. The final bill did contain several provisions related to work-based learning programs, Health Care Workforce recruitment, and veterans’ benefits, was modified through the Senate committee process. This bill was proposed by the Governor to support several of her priorities to increase/support the workforce in Iowa to address our current workforce crisis. The House took up the Senate version of the Governor’s Workforce Omnibus bill and it now goes to the Governor for her signature.