Members,

Last Week

The Senate voted on more of the Governor’s appointees to Iowa’s various boards and commissions last week. Appointees must receive a 3/4 ‘s majority vote from the Senate to be approved. Larry Johnson, interim director of the Department of Health and Human Services, was considered on Tuesday, but ultimately failed to get the required votes. Governor Reynolds must appoint a new interim Director while the Senate either reconsiders Johnson’s appointment or considers a new appointee.

On Thursday, Republican leaders in both the House and Senate announced that the overall budget target for FY27 had been agreed to at $9.645 billion, an increase of $135.9 million from FY26. This week, individual budget chairs will begin meeting to find compromises on the budget bills.

Property Taxes

On Tuesday, the House held a subcommittee meeting on Senate File 2472, the property tax bill approved by the Senate on April 8^th. On Wednesday, a public hearing was held on the bill, and the Ways and Means Committee met to amend the bill's language. The amended bill passed the House with a bipartisan 64-23 vote and includes the following divisions:

• Division I limits the growth of certain property tax levies for local governments to 102.0% of the prior year’s budget, limits local government’s general fund unassigned reserves, and prohibits bond usage for general operations.
• Division II eliminates the ongoing General Fund appropriation supporting the commercial and industrial property tax replacement beginning in FY 2028 and appropriates $125.0 million annually to the Taxpayer Relief Fund.
• Division III reduces the school foundation levy from $5.40 to $5 per $1,000 starting in FY 2028, makes changes to school district reorganization incentives, conforms the Family Farm Tax Credit, and conforms the Agricultural Land Credit.
• Division IV modifies the Secure an Advanced Vision for Education (SAVE) Fund Equity Transfer percentage and extends the Fund’s repeal to January 1, 2071.
• Division V requires county auditors to submit an annual report that includes parcel identification information.
• Division VI modifies provisions related to urban renewal areas and tax increment financing (TIF), including exempting certain levies, and setting fixed durations to TIF Districts.
• Division VII modifies provisions related to property assessments.
• Division VIII creates the Local Government Efficiency Grant Program and appropriates $10.0 million from the General Fund.
• Division IX creates the FirstHome Iowa Program and related fund to assist with first-time homeownership.
• Division X modifies provisions related to distorted market valuations.
• Division XI makes changes to local government property tax statements and procedures.
• Division XII adds a second bond special election date in June and prohibits two bond elections in the same year.
• Division XIII establishes a voter-approved emergency medical services (EMS) levy above the current maximum levy rate.
• Division XIV establishes an unspent balance cap, allows schools to request a one-time budget adjustment, and requires school districts to establish policies related to unspent balances.
• Division XV establishes a homestead property tax exemption equal to $15,000 in taxable value per homestead.
• Division XVI limits the growth of agriculture extension levies for local governments to 102.0% of the prior year’s budget.

Following the bill’s passage, leadership in the House and Senate released the following statements:

• “The Iowa House Republicans' property tax reform proposal restores some accountability and focuses on real, tangible relief for all Iowans. We don’t pick winners and losers. We don’t shift one person’s tax burden to another. We deliver real relief for Iowans that will provide $435 Million in savings just next year and $4 billion in relief over the next six years.”
• "The Senate released our property tax proposal on the very first day of session so we could have real conversations about what reform looks like and work with our colleagues on getting a bill across the finish line," said Senate Majority Leader Mike Klimesh. "The Senate has passed our vision for true property tax reform. Now that a version has passed the Iowa House, I am optimistic we can work on a compromise that includes aspects of all our plans, helps address the fact that Iowa is the one of the worst states for property tax burdens, and provides relief to the Iowans desperately asking for it.”

 

Iowa Make America Healthy Again Act

On Monday, the House reconsidered House File 2676 after it was returned from the Senate. The House largely adopted the Senate’s amendment, made minor changes to the student physical activity requirements, and approved it with a 61-31 vote. HF 2676 was sent back to the Senate for final passage and includes the following provisions.

• Division I — Short Title “Iowa Make America Healthy Again Act”
• Division II — Continuing Education Requirements — Nutrition and Metabolic Health
• Division III — Medical School Graduation Requirement — Nutrition
• Division IV — Supplemental Nutrition Assistance Program — Summer Electronic Benefits
• Transfer for Children Program
• Division V — School Foods and Beverages
• Division VI — Epinephrine Delivery Systems
• Division VII — Ivermectin — Over-the-Counter Availability
• Division VIII — Student Instructional Technology Standards
• Division IX — Presidential Physical Fitness Test
• Division X — Student Physical Activity Requirements
• Division XI — Psychology Interjurisdictional Compact

Other Bills of Interest

Senate File 2496: Excludes property taxes for emergency medical services from TIF districts. The bill passed both the House and Senate unanimously.

Senate File 2480: Imposes an alternative nicotine product and vapor product tax of $0.05 per container and appropriates $3 million from revenues collected to the Iowa Board of Regents for the purpose of conducting pediatric cancer research.  The bill passed the Senate 44-0.

 

This Week

Both chambers will hold limited debate while leadership continues negotiations on key issues, including eminent domain, property taxes, the Governor’s priorities, and the budget.

House Schedule

Senate Schedule

 

Take Care,

Chris LaFerla
President & CEO
Council Bluffs Chamber