2021 Iowa Legislature Highlights
The 2021 Legislative Session has already been called one of the most consequential in modern Iowa history. Following a 2020 election where Iowa Republicans maintained their substantial majority in the Iowa Senate and greatly expanded their majority in the Iowa House, the Republicans again controlled the legislature and the Governor’s mansion allowing for their agenda to take center stage.
At the start of the session, Governor Reynolds outlined her agenda in her January Condition of the State speech which she delivered during primetime rather than the typical 11am timeslot. The agenda was far-reaching including tax cuts, education reform, broadband expansion, a biofuels mandate, affordable housing expansion, and a criminal justice and police reform package. All of these pieces were discussed at length, but tax cuts and education reform dominated the session.
At the onset, the typical statehouse core expected the session to be limited in scope due to the ongoing COVID-19 pandemic. The Iowa Senate moved all subcommittee and committee work to virtual options while the House allowed virtual viewing but to testify the public had to present in person. These virtual changes led to a Capitol building with far less foot traffic, but the policy scope was not narrow. The majority party moved several key priorities through the policy process and delivered on many key election promises including 2nd Amendment and Abortion Constitutional Amendments
However, as session continued it was clear there were substantial differences in priorities between the Iowa House and Senate, primarily on tax cuts and mental health. This can largely be attributed to a large freshman class of legislators in the Iowa House who came in with policy priorities of their own leading to differing priorities between the chambers. Following weeks of negotiations, the Governor offered what she called a compromise tax and mental health proposal that included much of her agenda. The end of session deadline flew by, and lawmakers continued negotiations into two weeks of legislative overtime. A deal was finally cut, and the tax omnibus bill was set to be the centerpiece of the session until the legislature passed a few other priority bills in the last hours. Those included a “Back the Blue” proposal increasing penalties for rioters, a second Election Reform bill limiting “ballot harvesting,” and an amended education practices bill that immediately suspended mask requirements set by schools, cities, and counties. These issues in the final hours came to define the 2021 Legislative Session.
Legislation To Be Remembered
Tax Omnibus Legislation (SF 619)
As mentioned above, the tax bill was the main topic of discussion at the Capitol in the final two months of session. In fact, the disagreements on tax cuts and moving mental health funding to the state led to legislators largely going home for two weeks while negotiations on a compromise continued behind closed doors. The bill has numerous provisions which are summarized below, but a full analysis by LSA can be found here.
- Removes the triggers from the 2018 income tax cuts
- Moves the mental health system to the state from local governments while phasing out the commercial property tax backfill over 5 or 8 years depending on county population growth metrics
- Increases school state aid to 88.4% starting in the 2022-2023 school year due to the backfill phase out
- Increases the income level eligibility for the Child Dependent Development tax credit to $90,000 annually
- Phases out the Inheritance Tax over 4 years with a full repeal in 2025
- Increases the cap of transfers to the Housing Trust to $7 million each year, increases the Workforce Housing Tax Credit to $40 million with $12 million reserved for small cities, establishes a Downtown Loan Guarantee program, increases the Brownfields and Grayfields credit cap to $15 million, and creates a Disaster Recovery Housing Assistance program through IEDA
- Requires parity for mental health telehealth services
- Creates the Manufacturing 4.0 Technology Fund and the Energy Infrastructure Revolving Loan Program
- Increases the Volunteer Firefighter and EMS worker tax credit to $250
- Expands the Beginning Farmer Tax Credit
- Exempts COVID and PPP relief dollars and food banks from certain taxes and makes changes to the High Quality Jobs Program, the Renewable Chemical Production Tax Credit, bonus depreciation, promotional play gambling, the Targeted Jobs Withholding Credit, and the Elderly Property Tax Credit while removing the business interest expense deduction
COVID-19 Vaccine Passports and Other Vaccine Legislation (HF 889)
With the COVID vaccine coming to market as the 2021 session began, vaccination reporting and freedom of choice came center stage with the introduction of a multitude of bills (HF 217, HF 247, HF 329, HF 330, HF 631, SF 125, SF 193). The anti-vaccine groups showed up in droves to express their concerns including discrimination for choosing not to be vaccinated and a lack of reporting adverse reactions to vaccinations. Health care provider and public health groups stood in opposition to these recommendations expressing concern over increased vaccine hesitancy based on falsehoods. It appeared as though there was an increased number of legislators sympathetic to the issue agreeing that vaccination is a personal choice for which individuals should not be punished. In the end, none of the vaccine bills made it to the floor for debate in either chamber.
The single piece of legislation passed this session addressing vaccinations was strictly related to COVID and the potential for “vaccine passports”. House File 889 was introduced as a leadership bill and managed by Rep. Holt and Sen. Chapman as a compromise agreed to by leadership and Governor Reynolds. It prohibits businesses or governmental entities from accessing state grants or contracts if they require a customers, patrons, clients, patients, or other persons to furnish proof of their COVID vaccine status. The bill, however, does not apply to hospitals, nursing homes, and other health care facilities or organizations. Groups supporting vaccine freedom rights thought the legislation did not go far enough to protect Iowans from discrimination and pushed for the health care exemption to be removed. In the end, there was strong bipartisan support for this bill, and it was signed into law within an hour of passing both chambers.
There were two controversial election reform bills making their way across the finish line this session which were reflective of similar laws being pushed across the country following the debate around the November 2020 election results. SF 413 was passed early in session to redefine how elections are conducted in Iowa. Absentee ballot drop-off locations were limited to one ballot box, penalties were established for election officer misconduct, and early and absentee voting periods were shortened. A last-minute amendment to the bill requires Iowa’s polls to close one hour earlier as well. Then, on the last night of session the legislature passed SF 568 which substantially limited what proponents called “ballot harvesting.” The bill only allows a family member to deliver an absentee ballot to a drop-off location with some limited exemptions for the blind and disabled.
Child Care Legislation
Improving access and affordability to child care has long been a priority for the Governor and the Iowa House. The impact of the pandemic and the availability of a workforce prioritized the urgency to address several child care issues. The House introduced numerous bills and remained vigilant about sending them to the Senate in record time, however, the Senate didn’t have the same urgency. The House passed several bills including tax incentives for businesses offering child care to their employees (HF712, SF122, HF606, HF370), increasing funding for the WAGES program (HF301), addressing the cliff effect (HF302), increasing the allowed number of children per home provider (HF260), increasing the income eligibility for the child care tax credit (HF893), and increasing provider reimbursement rates (HF891). Ultimately, the House stood their ground and in the final negotiations secured agreement on the following priorities
- The Cliff Effect bill which creates an “off-ramp” for families utilizing CCA
- Legislation allowing in-home providers to increase from 5 children to 6
- Income eligibility for the child care tax credit was increased from $45,000 to $90,000 in the omnibus tax bill
- Provider reimbursement rates were increased to 50%
Telemedicine and Telehealth
Another issue that elevated as a major priority as a result of COVID-19 was access to Telemedicine. With more Iowans utilizing telehealth services throughout the duration of the pandemic, providers demanded the same rate of pay for telehealth visits as they are paid for in person visits. Several pieces of legislation were introduced to varying degrees including these in the House (HF431, HF294, HF731, HF784) and one in the Senate (SF92). The House acted swiftly moving these priority bills with bipartisan support. Meanwhile, the Senate remained reluctant to take any action on telehealth and stood firmly on the premise that the market would take care of itself. In a last-ditch effort to address the issue, Representative Fry included policy language requiring payment parity for mental health teleservices in the House Health and Human Services budget bill. As negotiations were being finalized, both chambers agreed to the Mental health payment parity language in the tax omnibus bill.
Supported by every Republican and one Democrat in the House, HF 756 removed the requirement for an individual to obtain a permit to purchase a handgun. Federal background checks will remain in place for licensed sellers; however, it was not explicitly stated in the bill that private sales had to follow the same guidelines. The Senate supported the bill in a 31-17 vote before moving on to debate HF 621. This bill, which mirrors the 2005 Protection of Lawful Commerce in Arms Act, limits the liability of gun and ammunition manufactures and sellers. Individuals cannot sue a firearms manufacturer or dealer for the wrongful use of a firearm in a crime or for the “lawful design, manufacture, marketing, or sale” of a firearm or accessory. the This legislation raised concerns about hindering legitimate cases over defective merchandise or improper warnings. The passage of these bills proved to be a major win for gun rights advocates early in the session.
In addition to the tax cuts bill which also included affordable housing and economic development programs, Governor Reynolds sustained a high batting average yet again. Her agenda items finding success included broadband expansion, education reforms and “Back the Blue” legislation only leaving her goals for a biofuels mandate and a felon voting rights constitutional amendment for next year.
Broadband Expansion (HF 848)
A key priority this session was expanding access to broadband throughout Iowa. In January, the Governor proposed a $150M allocation for three years. After strong bipartisan support, she signed HF 848 providing hundreds of millions of dollars for broadband expansion. The investment of $100 million for the first-year appropriation will go to companies that provide high-speed broadband service to underserved areas. It will be supplemented by federal money available through the U.S. Department of Agriculture, the Federal Communications Commission, federal coronavirus relief dollars, and potentially the Biden administration’s infrastructure plan. By increasing internet speeds, Iowans will be able to compete effectively for the ever-expanding pool of remote work opportunities and rural areas can attract professionals who might otherwise relocate to different communities or states.
Governor Reynolds introduced an aggressive education reform agenda in January; the majority of which has now become law. These priorities are outlined below.
- SF 160 – Requires every school to provide an 100% in-person option during the pandemic
- HF 847 – prohibits school, cities, and counties from having mandatory mask requirements, expands open enrollment options, and increases education-related tax credits
- HF 813 – Loosens requirements for the creation and implementation of public charter schools in Iowa
- SF 269 – State Supplemental School Aid with a 2.4% increase totaling $3.4 billion and reduces the per pupil funding gap to $145
- HF 802 – Bans the teaching of divisive concepts including limits on the teaching of racism, sexism, diversity, and inclusion
- HF 228 – Ends the use of voluntary diversity plans in five Iowa school districts allowing for increased open enrollment out of those districts
- HF 744 – Free speech protections for Iowa students
Back the Blue (SF 342)
Governor Reynolds originally introduced her “Back the Blue” bill partnered with a ban on racial profiling. The Iowa Legislature removed the racial profiling ban and passed only public safety professional protections. There was heated debate over the “Back the Blue legislation in both chambers as the bill began as a four-page document and ended as a 33-page piece of legislation changing the penalties and consequences of crimes, creates new offenses, and introduces qualified immunity among other protections for police officers. Particularly controversial were the new provisions requiring an individual to pull over for an unmarked police vehicle and making rioting a felony. The bill passed with bipartisan support in the last hours of the legislative session and it is expected to be signed into law.