The Latest on ABI's Legislative Priorities

March 17, 2025 | ABI Members Thrive On Connections, Partnerships Brad Hartkopf, Iowa Association of Business and Industry, bhartkopf@iowaabi.org

We’re two months into the first session of the 91st Iowa General Assembly. The 2025 legislative session has been a busy one as nearly 1,500 pieces of legislation have been filed by policymakers.

We have passed a critical point during session as the first legislative funnel deadline has come and gone. Legislation, excluding appropriations, ways & means and a few other types of bills, must have passed through a full committee in either chamber in order to be considered for the rest of the year. Of course, nothing is ever truly “dead” until the Legislature adjourns sine die sometime near the end of April or early May.

ABI public policy staff continues to advance issues that fall underneath our priorities, which are Taxes, Workforce and Regulatory Reform. Below is a summary of where things stand.

Taxes – Iowa’s tax climate has gone from being one of the most uncompetitive to one of the most competitive in the country over the last several years. Policymakers have prioritized fiscally prudent budgeting and pro-growth policies, which have allowed them to lower our corporate and individual income tax rates by significant margins, eliminate the inheritance tax, exempt retirement income from taxation and enact the first phase of property tax reform.

In 2025, phase two of property tax reform and cuts will be heavily discussed. Iowa remains uncompetitive in this space as the nonpartisan Tax Foundation has ranked our state 32nd in the nation. Though at the time of this writing a property tax bill hasn’t been filed yet, we expect a proposal will be unveiled that looks at providing relief to all classes of payers. ABI’s position is that if the property tax burden is eased this year, all payers should benefit in a similar way.

Iowa is also a leader nationally when it comes to the management of our unemployment insurance (UI) trust fund system. Thanks to the leadership and public policy decisions by Governor Kim Reynolds and the Legislature over the last few years, our state has one of the most solvent UI funds in the country. With that said, Governor Reynolds has filed legislation that would provide nearly $1 billion of UI tax relief to businesses over five years. The governor’s bill proposes to cut the taxable wage base in half and lower the tax rates businesses face. Many states are facing tax hikes on businesses due to mismanaging their trust funds, but Iowa is 180 degrees from that position. This legislation is a key ABI priority and has survived the first funnel.

Workforce – Tremendous progress has been made in addressing childcare challenges, workforce housing infrastructure and the funding of programs that allow Iowans to upskill over the last several years. There has been significant bipartisan support in addressing these issues, which are fundamental to having a sound business climate.

Another issue that falls under workforce is drug and alcohol testing. Employers utilize these regimens to keep workplaces safe. The House and Senate Workforce Committees have passed bills that address some of the challenges businesses face in this space. This includes clarifying the definition of a “safety sensitive position”, modernizing communication methods regarding the exchange of drug and alcohol testing results and requiring plaintiffs to prove their case against defendants. Right now, businesses are presumed guilty until proven innocent. The bill makes employers innocent until proven guilty. These commonsense changes are necessary as they bring some balance back to this part of the Iowa Code.

Regulatory Reform – This is a perennial priority for the association as we’re always working to cut red tape for our members. There are numerous bills we are supporting on behalf of members that will make it easier for them to operate their businesses. We also work with state agencies outside of the legislative session to address any issues that members may have that fall under their jurisdiction.

ABI is in a great position to close out the second half of the session strong and move our priorities out of the Legislature and down to Governor Reynolds’ desk for her consideration. Please contact JD Davis at jddavis@iowaabi.org or Brad Hartkopf at bhartkopf@iowaabi.org if you have any questions about our efforts. ABI