This week in the Iowa Legislature

The second funnel week is finally over, and hundreds of bills are now ineligible for further consideration by the legislature. This was a very different funnel week than in years past as the amount of subcommittee and committee work was limited. The week started off very slow and quiet, but the House very quickly focused on floor debate which is not typical for a traditional funnel week. The Senate held no floor debate and only gave each policy committee one block to consider bills: yet again moving far fewer bills through the process than their House colleagues.

With the funnel deadlines behind us, the focus of the legislature will narrow to those policy items that survived and far more attention will be given to the state budget and tax policy. We expect budget projections could come as early as next week after the Revenue Estimating Conference (REC) met on Friday.

Bill Trackers Updated

The AS team has updated your bill trackers in Advokit to reflect those bills surviving or dying in the Second Funnel Deadline. If you see a bill that you believe is listed incorrectly, please reach out to a member of our team. Occasionally, bill information is not updated on the legislative website in a timely fashion so Advokit can also be behind. We will correct any inconsistencies brought to our attention.

Storm Water Passes the House on Second Attempt

After failing on the House floor 44-49 last week in a highly rare occurrence, House Republicans passed a “Motion to Reconsider” Senate File 455, which would prohibit cities and counties from passing stricter stormwater and topsoil regulations than outlined in the General Permit 2 requirements outlined by the DNR. As the bill was reconsidered, 10 House Republicans joined all House Democrats in voting no. The bill ultimately passed 53-46 and now goes back to the Senate where it passed 33-15 last session.

Limits on the Consumable Hemp Program Move Forward in the House

After trying for two weeks straight, the House managed to amend and pass HF 2605 changing the rules of the consumable hemp program by imposing THC potency limits on all products, as well as a 21-year-old age minimum. Rep. Steve Holt, R-Denison, said it’s a necessary to close the loopholes in Iowa’s program. Democrats expressed concerns with the impacts it will have on local businesses and patients who need access to these products locally. Advocates expressed concerns with the age restrictions as Iowa would be the only state to criminalize parents for giving their kids hemp-derived CBD products. The House amendment would cap the THC limits in all consumable hemp products to 10 mg per container. Many Iowans depend on federally legal full spectrum consumable hemp products that have no psychoactive effects. The bill significantly restricts the availability of products stores can sell despite being nonintoxicating. The bill was attached to its Senate companion and can be heard on the Senate floor through the end of session.

House Passes Another Component of their School Safety Agenda

This week, House Republicans advanced HF 2652, another component of their school safety agenda. The bill would establish new grant programs for school districts, require a review of all school building codes for safety mechanisms, and provide funding for school safety technology upgrades. The first proposed grant program is a $3 million investment providing funds to schools to upgrade technology which can: alert and detect district employees and first responders if there is a visible, unholstered firearm on school grounds or integrate with a district’s existing security camera infrastructure. The $3 million is being moved from the state’s E911 program which has caused pushback. The other grant program would allow school districts to train and arm teachers for a permit to carry. House Democrats opposed the bill due to the funds for arming teachers, while House Republicans argued the bill is providing solutions for school safety. The bill ultimately passed with bipartisan opposition 59-35 and now awaits consideration in the Senate Appropriations Committee.

Notable Bills Not Advancing Past the Second Funnel

Each Chamber chose to shelve several proposals from their colleagues across the rotunda this week. Here are a few of the more controversial bills no longer eligible for consideration this session:

  • House File 2575 – House proposal increasing penalties on ending pregnancies without consent (Did not advance due to concerns on impacts to IVF)
  • Senate File 108Senate E-Verify proposal which would have penalized businesses for hiring undocumented workers
  • House File 2608House proposal to limit human smuggling and prohibit undocumented immigrants from receiving public assistance
  • Senate File 2324Senate Proposal to limit the DNR’s ability to purchase land for public uses
  • Senate File 2311 – Senate proposal to allow public entities to bypass the State Auditor and instead have a private CPA do their annual required audits
  • House File 2544 – House proposal to set substantial civic and social studies minimum standards for Iowa school districts
  • House File 2558 – House proposal to cap tuition increases at 3% and restrict diversity, equity, and inclusion programs at Iowa’s three regent universities
  • Senate File 2374 – Senate proposal to allow for public union automatic decertification if an employer fails to submit needed information

March 15 REC Budget Projections

The Revenue Estimating Conference (REC) met on Friday, March 15 to estimate future state revenues and provide fiscal data used to prepare the state budget. When the REC met in December, they predicted the General Fund revenue for FY25 to be $9.637 billion compared to their March estimate of $9.505 billion. This is the anticipated slight reduction from the December projection. The legislature must use the lower of the December or the March estimates for the upcoming fiscal year budgeting.

The expected decrease in revenue is attributed to the latest round of tax cuts from the 2022 session tax reform bill, HF 2317. The bill set a flat 3.9% personal income tax to be phased in by 2026, reduces corporate tax rates in the coming years, and eliminated state taxes on retirement income in 2023.

The forecast for FY26 General Fund revenue is $9.601 billion, another 1% decrease from the FY 25 projection stemming from the tax reform legislation. Nevertheless, House and Senate Republicans remain confident they can cut taxes again without substantially decreasing the state’s overall revenue while still supporting state programs.

We continue to hear that only very small increases in state budgets can be expected with stagnant revenues and the legislature’s focus on continued income tax cut proposals.

Looking Ahead

With the second funnel in the rearview, legislators will be spending their time passing bills on the floor, crafting budget bills, and considering tax legislation. Ideally, they will be looking to wrap up their work and prepare for adjournment by the middle of April. Priorities identified in January by the chambers and the Governor that still need agreement are AEA Reform, K-12 Education Funding, and Income Tax Cuts to name a few. Policy committees are done considering legislation for the session. The House’s policy committee work is completely done while the Senate committees may meet to consider gubernatorial appointments, but nothing else. As budget targets and bills are released, we will provide updates on the overall budget discussions and your key budget priorities.