Second Funnel Arrives; What's Dead and Alive?

ALIVE

SF 607/HF 980 - Unemployment Insurance Premium Reform: Governor Reynolds has put forward a robust bill that transforms Iowa’s unemployment insurance tax system. The goal of the legislation is to right-size the amount of premiums employers pay into the trust fund with the amount of benefits being delivered to claimants, which will provide approximately $1 billion in tax relief to businesses who pay the premiums over the course of five years.

The legislation cuts the taxable wage base in half from $39,500 to $19,500, shrinks the number of tax tables and tax ranks and then lowers the top tax rate for each table down to the federal minimum of 5.4%. The Senate bill varies slightly from the House bill as it was amended in committee to add a surcharge to certain employers who have an average benefit ratio over three years that exceeds a particular threshold.

ABI is registered in favor of both versions of the bill and will back whatever compromise can be reached by the governor, the Senate and the House. ABI appreciates Governor Reynolds for leading on this key issue and House and Senate floor managers Representative David Young and Senator Adrian Dickey for their work in managing the legislation.

• ABI Position: Support

HSB 313/SSB 1208 - Property Tax Reform: Ways and Means Chairs Senator Dan Dawson and Representative Bobby Kaufmann have met with the ABI public policy team and continue to meet with interest groups for reaction to the property tax proposal they have jointly filed. The duo place a 2% annual revenue limiter on local governments while moving all classes of property (except ag land) to 100% of valuation over time. Property tax relief is delivered by moving local school expenses off of property tax and onto state general fund sources. As representatives for the various property classifications model how the bill would affect their constituents, more will be known on how to move forward on these bold reforms. If you have input you think would inform this debate, please forward it to JD Davis or Brad Hartkopf. 

• ABI Position: Support

SSB 1210 - Freight Forwarders Tax Parity: A Senate subcommittee has advanced an issue that ABI has worked on for a few years now. Similarly situated competitors are taxed differently for purposes of income tax due to how those companies were first structured and then evolved over time. The legislation ensures they are treated equally, giving neither company an advantage over one another. Due to the legislation having a fiscal impact on the budget, policymakers will be taking that into account when they are crafting the budget and determining whether this proposal will fit.

• ABI Position: Support

SSB 1205/HSB 305 - IEDA Tax Credit Reform: The Iowa Economic Development Authority has introduced a set of reforms to tax credits they use to stimulate economic growth in Iowa through business expansion and attraction. The credits range from the Research and Activities Credit to a new program for filmmaking in Iowa.  We have sent the proposal to both the ABI Tax Committee and the Economic Growth Committee for feedback from those groups. As a tax matter the legislation was not subject to the second funnel and your ABI public policy team will be working with IEDA to see that our feedback is considered as the bill moves forward.

• ABI Position: Neutral

SF 110/HF 767 - Drug and Alcohol Testing Reform: A longstanding priority for ABI has been to address some challenges that currently exist within Iowa’s drug and alcohol testing statute. We have made tremendous progress in moving the bill forward this year as the legislation has come out of the House and passed the Senate Workforce Committee.

The bill ensures employers can classify certain jobs as “safety sensitive positions”, gives flexibility to both employers and employees regarding the exchange of drug and alcohol testing results and requires that if lawsuits are filed against employers, the plaintiff (employee in this instance) has to prove their claim against the employer versus current law, which states the employer has the burden of proving their innocence.

• ABI Position: Support

SF 383/HF 852 - Pharmacy Benefit Managers (PBMs): Since 2022, ABI has been working on legislation modifying the role of PBMs in the delivery of pharmacy benefits to employees of Iowa private sector employers. Iowa led many states with the adoption of a suite of reforms in 2022 that placed PBMs under state regulation by our Insurance Commissioner, prohibits PBMs from clawing back reimbursements already made to pharmacies and allows pharmacies to suggest lower cost drugs to patients. The current effort attempts to find cost savings in prescription drug spend that can be converted to higher reimbursements to pharmacies. The problem with this approach is exposed when the savings do not materialize and the increased reimbursements would still be required. ABI has suggested that the state instead look to the reforms that Senator Grassley is proposing at the federal level that have been endorsed by groups as diverse as the American Pharmacy Association and the National Association of Manufacturers.

• ABI Position: Oppose

SF 315 - Pharmacy Benefit Manager Reverse Auctions: The state of Iowa, through the Department of Administrative Services, is experimenting with the concept of a reverse auction for PBM services. The low qualified bidder would conduct PBM services for the state employee plan. The bill introduced would codify that process and add many of the provisions to the state plan that the Iowa Pharmacy Association is seeking for the private sector.

• ABI Position: Neutral

HF 248 - Adoption Mandate: An issue that has been around the Capitol for several legislative sessions relates to a proposal that would require employers to provide the same benefits they provide to employees who have biologically born children to employees who adopt children. This would apply to children aged 0-6 and be for the first year of the adoption.

ABI has worked with policymakers to narrow the scope of this bill as previous versions covered children aged 0-18. The 2025 version also ensures that disability leave is not awarded unless the employee has a qualifying disability. The bill has passed the House and the Senate Workforce Committee.

• ABI Position: Neutral

HF 834/SF 585 - Energy Omnibus Governor Reynolds’ wide-ranging energy omnibus has passed committees in both chambers and remains available for debate through the end of the session. Key provisions would create an “all of the above” energy source policy for Iowa’s advanced ratemaking law, allow incumbent utilities the right of first refusal (ROFR) for certain electricity transmission projects and let utilities negotiate innovative rates with large customers.

• ABI Position: Neutral

SF 586 - Third Party Litigation Financing: The Senate has shown interest in moving transparency legislation for the practice of third party litigation financing. Proponents argue that third parties may not have the same interests in lawsuits as the primary litigants related to settlements and other matters and that disclosure of the financing arrangements is valuable to the parties involved in the litigation. The bill has passed the Senate Judiciary Committee and has been referred to the Ways and Means Committee, where it will remain eligible for consideration.

• ABI Position: Support

HF 970 - SNAP Use Restrictions: There has been a push in some states to reform how SNAP dollars (food stamps) can be utilized by recipients. In Iowa, the House has passed legislation that would require the Iowa Department of Health and Human Services to request a waiver from the United States Department of Agriculture that would allow SNAP dollars to only be used on “healthy foods and beverages based on necessary nutrition for good health.” If the waiver is ultimately obtained, SNAP dollars could not be used on some products, which are currently eligible, produced by ABI members. The bill has an appropriation attached to it, which means policymakers can consider it for the rest of the year.

• ABI Position: Against

DEAD

SF 308 - Whistleblower Protections: The House Labor and Workforce Committee did not take action on a Senate bill that would have created a private cause of action for an employee that believed an employer had taken retaliatory action against the employee for passing certain company information to a state lawmaker or staff of the legislature. The bill would also provide a shield to the lawmaker against participation in lawsuits surrounding the employer. It was not disclosed during the consideration of the bill what events brought about the perceived need for the legislation.

• ABI Position: Oppose

SF 394 - Duty to Warn Legislation: Over the last two years, policymakers have considered legislation that would prohibit “duty to warn” lawsuits against manufacturers of pesticides if those products meet all federal labeling regulations and requirements. The bill would still permit lawsuits to be brought forward under other legal theories. The Senate passed the bill, but the House did not consider it. 

• ABI Position: Support

HF 927 - Intentional Emission of Air Contaminants: Every legislative session, there are brand new issues that emerge which some policymakers would like to see addressed. This year, there was a proposal in the House that would have prohibited the intentional emission of air contaminants for the purposes of affecting temperature, weather or the intensity of the sunlight.

Following the bill’s passage in the Environmental Protection Committee, there was an amendment filed that would have made a violation of the provisions in the legislation a Class D felony, required the Department of Natural Resources to conduct a cloud seeding study and mandated the federal government follow the components of the bill. 

ABI was tracking the bill as there could have been some unintended consequences that would have expanded liability against those who emit.

• ABI Position: Neutral