2022 SESSION UPDATE - JAN 31, 2022
Bill introductions remain well behind previous years, with fewer than 400 introduced thus far. Legislators continued subcommittee and committee work on various bills this week as well. This week, the House and Senate introduced their respective tax-cut proposals, both of which, like the Governor’s proposal, seek to lower Iowa’s individual income tax rate to 4% and exempt retirement income, including some for retired farmers. While similarities exist, there are several key differences outlined below that lawmakers will need to address in the coming weeks and months. Legislators also continued subcommittee and committee work on various bills this week ahead of the first legislative funnel mid-February. 
Mandatory School Start Date Bill Tabled for Another Session 
In 2015, former Governor Terry Branstad signed a law that forbid all Iowa public and private schools from starting before August 23. The mandatory starting date law does not apply to districts that have year-round school. A move to get rid of the state law that forbids schools from starting the fall term before August 23 has stalled in the Iowa House (HSB 574). The tourism industry objects, arguing families quit traveling and they lose student employees if school starts earlier in August.

Biofuel Access Bill
The Governor's proposal (HSB594) to increase renewable fuel - biodiesel and ethanol -access received a favorable vote and was reported out of the House Ways and Means Committee on Wednesday evening with a vote of 16-8. The bill is now renumbered as HF2128. The bill was introduced by the Governor to help Iowans gain access to higher blends of ethanol products. The Governor has pledged to put in $10M to support retails for infrastructure updates they may need to comply with the bill. However, no retailer will have to “crack concrete” due to waivers allowed for in the legislation. The bill could be debated on the House floor as early as next week. Significant work occurred on the legislation over the interim since the 2021 legislative session to address fuel retailer concerns including infrastructure upgrade costs.

Hands-Free Legislation Advances 
Iowa lawmakers and public safety advocates who have been working for years to ban the use of handheld phones and other devices behind the wheel, and this year is no different. Both the Iowa House and Senate are working on bills that would prohibit any handheld use of phones or other devices while driving, with some exceptions for people in certain jobs such as emergency workers or police. Iowa’s current law bans some device uses such as sending text messages behind the wheel. It allows a driver to use a handheld device for some other purposes, such as navigation or phone calls. But lawmakers, many of whom spend hours each week behind the wheel, have been reluctant in recent years to pass more restrictive legislation. Senate File 330, which was introduced last year and never reached the Senate Floor, passed out of subcommittee early this week, and on Thursday, the Senate Transportation Subcommittee passed it unanimously by a voice vote. The bill would create a $45 fine and moving violation if drivers are caught with a cell phone or electronic device in their hands while the vehicle is moving. A similar bill, House File 392, which passed the House Transportation Committee this week, raises the scheduled fine to $100. Also in the House, there is a separate bill that bans the use of handheld devices only in school zones or road construction zones. 

Automatic Traffic Enforcement Bills 
A transportation subcommittee held meetings early this week on SF 2061 and SF 2062 and advanced both the forward on a 2-1 vote. Senator Dickey is the sponsor of both bills and chaired the subcommittees. Senator Bisignano, who has opposed traffic camera bans in the past, replaced Senator Lykam on SF 2062. Bisignano opposed both bills at the subcommittee hearing. SF 2061 prohibits a local government from using an out-of-state company to manage an automated traffic enforcement device. SF 2062 requires a local government to establish the safety need for an automated traffic enforcement device prior to placing the ATE device. It requires the use of alternatives to improve safety for at least six months prior to the placement, and requires at least two public hearings on the matter. The Legislature has taken up a number of bills to ban enforcement of traffic laws through automated systems and cameras over the past ten years, but the House and Senate have not been able to pass a ban in the same form. 
Tax Reform 

This week, the Senate and House released their proposals for tax reform. Below is a comparison of the two bills, which slightly differ from the Governor's proposal (HSB551/ SSB 3044)
Senate Proposal (SSB 3074) 
  • Lower the state income tax to 3.6% within five years. For comparison, Governor Reynolds has a goal of lowering it to 4%.
  • Reduce the corporate tax rate to 7.8% - currently it is 9.8% . The Governor’s tax plan reduces the top corporate rate each year that corporate tax receipts exceed $700M. (Eventually caps the decreases at 5.5% across the board).
  • Fund water quality and outdoor recreational programs by shifting the current local option sales tax and applying it statewide. 
  • Eliminates taxes on retirement income (like the Governor's plan). 
  • Transition the Iowa Taxpayers' Relief Fund into an "Income Tax Elimination Fund" with a goal of eliminating the individual income tax. 
  • Give farmers an exemption for either cash rent or farm crop shares. 
House Proposal (HSB 626)
  • Reduces the individual income tax rate to a flat 4%, like the Governor's plan. 
  • Eliminates retirement income (like the Governor's plan) and some income for retired farmers.
  • Net capital gain exclusion: Like the Governor’s plan, this bill grants an employee-owner one irrevocable lifetime election to exclude capital gains from capital stock on one qualified corporation.
  • Allows farmers who have farmed for at least 10 years to exclude from income any income from a farm tenancy agreement for real property the owner has owned for 10 years or more. Additionally, grants retired farmers a capital gains exclusion for the sale of farming property.
  • Does not include a cut in the corporate tax rate.
  • Does not change the local option sales taxes to a statewide tax.
  • Sets dollar amounts that will transfer from the Taxpayer relief fund to the general fund from FY23 to FY28.
This week, the Legislative Service Agency (LSA) released an interactive budget analysis tool. This data visualization is created using the budget data sent from the Department of Management to LSA. The tool shows the Governor’s proposed FY 23 budget and breaks the budget down by department, as well as provides historical data for comparison purposes. 

The tourism and hospitality industry was decimated due to the COVID-19 pandemic. The industry is starting to see some recovery, but much work is still left to be done. Increased tourism investment will lead to a healthier economy and a strong workforce for the entire state. The following initiatives will assist with the recovery of the hospitality industry. Learn more on the website.
The full 2022 legislative calendar can be found here.
Below are the key dates of interest.
JANUARY 10 – First day of session (Iowa Code Sec. 2.1)

JANUARY 11 - Governors Condition of the State Address 

FEBRUARY 18 – Final date for Senate bills and joint resolutions to be reported out of Senate committees and House bills and joint resolutions out of House committees (First Funnel)

MARCH 18 – Final date for Senate bills and joint resolutions to be reported out of House committees and House bills and joint resolutions out of Senate committees (Second Funnel)

APRIL 19 – 100th calendar day of the session (Per diem expenses end)
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