Week 2 Legislative Update

Legislative Update
The 2022 Iowa Legislative Session

Week of January 17, 2022

This week in the Iowa Legislature
The week started slow with the Legislature having Monday off for MLK Day, but both chambers increased their volume of bill introductions and started to really jumpstart the subcommittee process as the week progressed. The prevalence of COVID was clear with at least five legislators and several lobbyists out this week; we expect this will continue throughout session which could impact the scheduling of bill hearings and committee work in future weeks.

Governor’s Tax Plan Introduced
Governor Reynolds released the details of the Tax Plan she outlined in her Condition of the State Address this week (HSB 551/SSB 3044), which drew the attention of many at the Capitol. The bill has many provisions, but the key items include
• A gradual move to a flat 4% individual income tax rate by 2026
• The creation of a process to buy down the corporate income tax rate when state receipts exceed $700 million
• An exemption for taxes paid on stock trades for ESOPs and other employee-owned company stocks
• An exclusion of retired farmer cash rent and all retirement income from the overall individual income tax

A two-page overview of the Governor’s tax plan can be found here.

The bill is under consideration by House Ways & Means Committee Chair Lee Hein and Senate Ways & Means Committee Chair Dan Dawson. The House is largely expected to use the Governor’s bill as a starting point, while the Senate is said to have their own bill which could address tax credits and exemptions. These negotiations are expected to take much of the remainder of the 2022 Legislative Session.

Legislative Meeting Protocols Update
The Iowa House and Senate released their final COVID-19 subcommittee and meeting protocols this week. As expected, the House continues their policy of requiring in person testimony at subcommittees. The House provides links to view subcommittee and committee hearings, as well as floor debate.

The Senate has taken a hybrid approach to their meeting protocols. Members of the public and lobby can attend Senate subcommittees and testify either in person or via the provided Zoom link. Committee hearings and floor debate can be viewed on the legislative website as well.

Looking Ahead
We expect both chambers to be in the full swing of session next week with a full committee and subcommittee schedule set for the first full week of the legislature. A list of scheduled committees and subcommittees with their virtual access information can be found at the provided link.

House Republicans have indicated they will have a floor vote on school aid in the coming week in an effort to keep their commitment to schools to set the increase before school budgets must be certified. Governor Reynolds proposed a 2.5% increase, but the legislature hasn’t yet given an indication on their school funding priorities. Legislative Democrats criticized the proposed 2.5% and the State Education Association has called for a 4% increase. Expect this issue to take a lot of bandwidth the next couple of weeks.