2022 Iowa Legislative Session - Week 3 Summary

Activity ramped up this week with over 120 subcommittee meetings at the Capitol. Although it seems like there are a lot of bills introduced so far this session, the 2022 session is down by about 400 bills in comparison to past sessions.

Senate Republicans introduced the Senate’s version of a comprehensive tax reform proposal, SSB 3074.  Over a five-year period, the bill will cut taxes for individuals, corporations, and retirees and fund the Natural Resource and Outdoor Recreational Trust Fund, commonly referred to as Iowa’s Water & Land Legacy (IWILL).  Dan Dawson, Chair of Senate Ways and Means Committee, told Radio Iowa that “In the end, the Senate Republicans have tried to produce a bill that creates a vision for Iowa.  It creates a vision of having lower rates, it creates a vision of attracting more people to the state and it creates a vision of funding our priorities.”

Among other things, the bill would:  

• Lower individual income tax rate to 3.6 over 5 years - eventually eliminated;
• Cut corporate income tax by more than $140 million to a flat rate of 7.8%;
• Eliminates tax on retirement income;
• Farmers exemption for either cash rent or farm crop shares;
• Eliminates a sales tax exemption for computer peripheral devices;
• Reduces research and development tax credit;
• One percent local option sales tax becomes a statewide tax - which triggers funding IWILL or water quality and other environmentally related programs; and  
• Changes Taxpayer Relief Fund into Income Tax Elimination Fund.

Sen. Dawson is joined on the subcommittee by Senators Roby Smith (R-Davenport), Brad Zaun (R-Urbandale), Joe Bolkcom (D-Iowa City), and Pam Jochum (D-Dubuque). The bill will likely be discussed in a subcommittee next week.

House Republicans also introduced a tax proposal this week. Their income tax reform bill, HSB 626, has similar provisions with the plans offered by Governor Reynolds and the Senate. However, it does not include corporate tax cuts, nor does it trigger IWILL. The bill would:

• Phases in a 4.0% flat tax in tax year beginning Jan. 1, 2026;
• Increases the retirement income exclusion to cover all income;
• Includes capital gains election for sale of certain qualified stock; 
• Farmers excludes payment for leased farmland and expands certain capital gain exclusions for retired farmers; and
• Transfers moneys from the Taxpayer Relief Fund to the general fund.

House Ways and Means Chair Rep. Lee Hein (R-Monticello) is joined on the subcommittee by Representatives Jane Bloomingdale (R-Northwood), Dustin Hite (R-New Sharon), Chuck Isenhart (D-Dubuque), and Dave Jacoby (R-Coralville). A subcommittee meeting date has not been set. 

Another significant issue and a Governor’s priority moved forward in the House this week - the biofuels bill. HF 2128 would require gas stations to offer higher ethanol blends and allow retailers to apply for waivers under certain circumstances. It passed the House Ways & Means Committee by a vote of 16-8.  The Senate has not introduced a similar bill.

In other news, former presidential candidate and Iowa caucus winner Rick Santorum was the primary speaker at a rally at the Capitol Tuesday. Santorum is now a registered lobbyist officially representing the Convention of States Action. The organization’s primary goal is to call a convention under Article V of the Constitution but restrict proposed amendments to impose fiscal restraints on the federal government, limit its power and jurisdiction and impose term limits on officials and members of Congress.   Wisconsin is the 16th state to pass a resolution calling for a Convention of States.  It takes 34 states to call a Convention.  The rally also featured speeches by several Iowa legislators. 

In 2020, the Iowa Legislature passed a law that stiffened penalties for those who trespass at livestock facilities. Earlier versions of the law had been found unconstitutional, but the 2020 law was upheld in a new state district court decision issued on January 20, 2022. The new law “does not discriminate on the basis of the viewpoint of the offender,” wrote District Judge Derek Johnson. “A person who trespasses on a food operation to abuse an animal is treated the same as a person who trespasses on a food operation to rescue one.” In the case, the defendant placed a video camera and audio recorder inside a hog confinement facility.  A federal challenge to Iowa’s law is still ongoing.  

In other agriculture news, the “war on breakfast” as coined by U.S. Senator Chuck Grassley, continues.  A California law that requires increasing space between the amount of sows, hens and calves if sold to Californians took effect on January 1. After initial lawsuits failed, a coalition of California grocers and restaurateurs challenged the law’s enforcement given regulations hadn’t been set. A Sacramento County Superior Court Judge agreed and ruled that restaurants and retailers would not be subject to penalties until California enacts final regulations. The National Pork Producers Council and the American Farm Bureau Federation are also challenging the constitutionality of the law.

BrownWinick Government Relations:

To view additional summaries from the 2022 Iowa Legislative session or to learn more about BrownWinick’s Government Relations Team, visit our Lobbying and Public Policy team page.