State Policy Update
Legislators have one more week until the scheduled conclusion of the session, and when their per diems’ end. Leading up to the end of session, the focus will be on tax bills, budget bills and those on the unfinished business calendars. The bills the Economic Alliance has been most closely following include:
- SF318 creates an Iowa Office of Apprenticeship within Iowa Workforce Development, leveraging existing staff to oversee program development, compliance, business engagement, and grant management to help address future workforce development. Status: Approved by Senate and House/Await Governor’s Action.
- HF47 exempts from the individual income tax the amount of wages received by a taxpayer for providing certain child care services. Status: Approved by House Ways & Means Subcommittee on 1/25. Fiscal Note.
- HF707 increases child care provider rates by $10.8 million and expand eligibility of the Child Care Assistance Program, and requires parents to work 32 hours, instead of the previous 28 hours, per week to qualify for CCA. Status: Approved by House on 4/13. Awaits action in Senate Appropriations Subcommittee.
- HF668 lowers the percentage of a commercial child care facility assessed value that is subject to property taxation by applying the residential rollback percentage to the entire value of the center or facility that is used for child care. The changes to the taxable value of child care facilities will reduce the property taxes owed by facility owners beginning with FY 2025. Status: Passed full House on 3/21. Fiscal Note.
- HF642 creates the “Major Economic Growth Attraction Program” or “MEGA Program” to allow Iowa to compete for large scale economic development projects that provide high paying jobs and capital investment. Status: Approved by House Ways & Means Committee on 3/7. Fiscal Note.
- SF408/HF679 is an Iowa Economic Development Authority technical bill that includes tax credit programs to encourage entrepreneurship and spur economic growth for our communities. Status: Approved by Senate Ways & Means Committee on 4/20. Fiscal Note. Approved by House Ways & Means Subcommittee on 3/21. Fiscal Note.
- HF671allows Iowa to adopt the Professional Counselors Interstate Licensure Compact, a system whereby professional counselors licensed to practice in one member state may practice in another member state. Status: Placed on the Senate unfinished business calendar 3/30. Passed full House 4/11.
- HF506 funds the workforce housing tax program to help incentives developing more housing options in both rural and urban areas. Status: Awaits action in House Ways & Means Committee.
- SF542 updates to Iowa’s youth employment laws. It adds allowable work activities and hours, expands work-based learning programs and more. Status: Approved by Senate on 4/17. Awaits action by House. Fiscal Note.
Two bills that create a new resident and new graduate income tax credit to encourage workers to move here and recent graduates to stay here. Status: HSB63 approved by House Ways & Means Subcommittee on 1/31. HF447 awaits action in House Appropriations Committee.
Property Tax & Budget Conversations Continue
Property tax reform has seen a lot of talk this session with the latest happenings centered around two separate bills. This week the Senate, with overwhelming bipartisan support, passed SF569 which focuses on eliminating some property tax levies, consolidating others and converting property tax credits for veterans and seniors to more lucrative exemptions, resulting in roughly $100 million reduction in property taxes. The House, also with overwhelming bipartisan support passed HF718 which would reduce the school foundation property tax rate and have the state provide the loss revenue to schools. It would also limit annual increases in property tax bills to 3% for homes and farms and limited to 8% per year for commercial and industrial properties. Negotiations continue to see if legislators can reach a compromised deal yet this session. We support tax reform that promotes economic growth, simplification, fairness and innovation for business and our municipal partners. The one thing legislators must do is pass a budget for the preceding fiscal year. The talk in the Capitol is that leadership has agreed to the overall budget number and are now working on individual budgets. Whether they can achieve writing and passing all of them before next week’s scheduled adjournment remains to be seen.