Iowa legislature completes 2nd funnel

Last Friday, March 15, the Iowa Legislature completed its second funnel and has determined which bills it will focus on passing this session. Here are the bills the Chamber is tracking and where they stand:

Major Economic Growth Attraction Program (MEGA): SF 574

The MEGA Program would create a new incentive for large projects with statewide impact. The bill authorizes up to two projects to receive the incentive. The bill has passed the House of Representatives with an amendment and we hope to see the Senate pass the bill in the coming weeks. We remain focused on pushing this bill over the finish line and are highly optimistic about its passage.

Governor’s Income Tax Bill: SF 2398

This bill remains alive and up for debate in the Ways and Means Committee. Reynolds’ proposal would lower the individual income tax rate to a flat tax of 3.65% by 2025 and to 3.50% by 2026. The Chamber is supportive of this bill, which would help alleviate the tax burden on Iowans.

Zero Income Tax Bill: SSB 3141

This bill remains with the Ways and Means Committee. Originating in the Iowa Senate, it would provide a pathway to reduce the individual income tax rate to zero and lower the minimum corporate tax rate to 4.9%. The way this bill is structured shows that Iowa’s legislature is thinking about responsibly reducing taxes over time. The Chamber is excited about Iowa becoming a more taxpayer-friendly state and supports this legislation.

Interstate Passenger Rail Compact: HF 591 & SF 2315

HF 591 passed the Iowa House of Representatives but was placed on the unfinished business calendar along with its Senate companion bill. Should the law pass, Iowa will join Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, North Dakota and Wisconsin in efforts to link Midwestern cities through passenger rail. This priority is being delayed by closed-door conversations and we hope to provide more information soon. The Quad Cities Chamber is very supportive of gaining access to passenger rail.

Passed Bills Awaiting Governor’s Signature – Chamber’s position:

• SF 2204, Foreign Ownership of Ag Land – MONITOR

Other Live Bills – Chamber’s position:

• HF 2246, Land Redevelopment Trusts – SUPPORT
• HF 2420, Workforce Housing Incentive Increase – SUPPORT
• HF2450, Economic Development/Energy Shortages – MONITOR
• HF 2516, Work-based learning – SUPPORT
• HF 2536, Duties of the Iowa Finance Authority – MONITOR
• HSB 715, IEDA Certified Site Program Appropriation – MONITOR
• SF 182, Land Redevelopment Trusts – MONITOR
• SF 550, Sales and Use Tax changes – MONITOR
• SF 2133, Infrastructure Revolving Fund – SUPPORT
• SF 2156, Levee/Drainage – MONITOR
• SF 2257, Child Tax Credit – MONITOR
• SF 2260, Work-based learning – SUPPORT
• SF 2394, Major Events and Tourism Program – SUPPORT

Dead Bills – Chamber’s position:

• HF 2305, Child Care Center Requirements, flex care for children up to five years old – SUPPORT
• SF 108, E-Verify – OPPOSE
• SF 2188, Community College Reporting – MONITOR
• SF 2289, Economic Development/Energy Shortages – MONITOR

To see all Iowa bills the Chamber is watching, check out our bill tracker. 

In other news from the Legislature, the Iowa Revenue Estimating Conference released its Estimate of General Fund Receipts. This report sets the limit for spending unless it's for the legislature's FY25 negotiations. Tax and spending negotiations are likely to kick into high gear now that final revenue numbers are available. The topline projections show a 2.2% decrease in revenues for FY24 (current year) and a slight uptick of 0.7% for FY25.

The State’s reserve funds and taxpayer relief funds have $900 million and $2.7 billion respectively in their accounts, setting the stage for discussions of further income tax cuts this session.