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February 24, 2023 | Public Policy

State Policy Update

This week was the final week before lawmakers head into the first funnel of the session next week. March 3 is the deadline when bills are required to pass at least one chamber’s committee to remain eligible for action this session. Appropriation and Ways and Means bills are exempt from funnel deadlines. The Economic Alliance is closely monitoring legislation related to our 2023 priorities, including:

Government Reorganization:

  • SSB1123 is Governor Reynolds’ proposal to realign state government including reducing the number of state agency directors who report directly to the Iowa governor from 37 to 16, and streamlines the executive branch of state government by consolidating existing agencies and programs. Status: Passed out Senate State Government Committee on 2/22.


  • SF356 sets limitations on cities and counties’ annual growth budgets from property tax funds. The bill governs a county’s authority to enter into loan agreements, leases, and lease-purchase contracts, and lowers thresholds that would trigger the requirement of approval by election, and also cap tax levy rates. Local government officials have argued they will no longer have the necessary funds to support essential services such as rural ambulances or staffing for law enforcement personnel. Proponents say this bill is the first step in reforming Iowa’s property tax system so that it is fair for all taxpayers and improves Iowa’s ranking. Iowa currently ranks 38th overall in the 2022 State Business Tax Climate Index for property taxes. Status: Passed out of Senate Ways & Means Subcommittee on 2/21.

Economic Development Incentives:

  • SSB1162/HSB147 creates legislation that creates the “Major Economic Growth Attraction Program”, or “MEGA Program”, so Iowa can better compete for large scale economic development projects that provide high paying jobs and capital investment. Status: Referred to Senate Ways & Means Subcommittee on 2/15. Passed out of House Economic Growth & Technology Subcommittee on 2/22.
  • SSB1087/HSB 23 is an Iowa Economic Development Authority (IEDA) bill that includes the Angel Investor Tax Credit program that encourages entrepreneurship and economic growth. Status: Passed out of Senate Commerce Subcommittee on 2/2. Passed out of House Economic Growth & Technology Subcommittee on 1/26.


  • SF318/HSB82 establishes the 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. Creates a state-level advisory board which will include members from multiple industry sectors to ensure program performance and sustainability. Status: Passed out of Senate Workforce Subcommittee on 2/16. Passed out of House Economic Growth & Technology Subcommittee on 2/8.

Child care:

  • HF343 creates a two-year pilot program to make child care workers automatically eligible for state child care assistance (CCA) for their own children. Status: Passed out of House Health & Human Service Committee on 2/20.
  • HF47 exempts from the induvial income tax the amount of wages received by a taxpayer for providing certain child care services. Status: Passed out of House Ways & Means Subcommittee on 1/25. Fiscal Note.


  • SF108/HF105 requires employers to use the federal Employment Verification (E-Verify) system in hiring practices to verify a person’s citizenship status. We do not support the mandatory use of E-Verify because the system is flawed and would penalize employers regardless. Status: Passed out of Senate Judiciary Committee on 1/26. Passed out of House Judiciary Subcommittee on 2/8.

New Resident/Graduate Incentives:

  • HSB63 creates a new resident and new graduate tax credits, which are available against the individual income tax. Status: Passed out of House Ways & Means Subcommittee on 1/31.
  • HF6 establishes the Iowa workforce grant and incentive program within the college study aid commission and modifies the responsibilities of the Iowa Workforce Development board. Status: Passed out of House Education Committee on 2/22.

Mental Health Workforce:

  • SF127/HF90 allows 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: Awaits action in full Senate Health & Human Services Committee. Passed out of House State Government Subcommittee on 2/22.

Second Chance Hiring:

  • HF15 establishes a pathway to education and employment reentry program to be administered by community colleges to ensure formerly incarcerated citizens can successfully transition back into the community. Status: Referred to House Education Subcommittee on 1/18.

Federal Policy Update

Last week Democratic Senate Majority Whip Richard Durbin and Republican Senator Lindsey Graham introduced a new version of The Dream Act bill, which would provide protections for young immigrants brought to the United States as children. The Dream Act has been before Congress in some variation at least 10 times and has yet to pass since its introduction in 2001. If enacted, the Dream Act of 2023 would resolve ongoing legal challenges to Deferred Action for Childhood Arrivals (DACA) and offer Dreamers permanent legal status, allowing them to continue living and working in the U.S. without fear of deportation.