Week 2 of the Legislative Session is in the Books

January 19, 2024

Nearly 350 bills have already been filed as the second session of the 90th Iowa General Assembly begins to unfold. Subcommittee meetings have ramped up as policymakers and lobbyists seek to advance their initiatives. ABI staff has been busy attending pertinent subcommittees and having conversations with lawmakers as we work to advance our 2024 legislative agenda.

Below is a recap of where our focus has been.

HSB 543 / SSB 3038 - Governor’s Tax Legislation

Governor Kim Reynolds unveiled a bold legislative proposal that seeks to enhance our income tax climate, provides property tax relief to childcare centers and cuts unemployment insurance taxes.

Here's the details of the bill:

  • In Tax Year 2024, there’s a flat individual income tax rate of 3.65% (which is retroactive to January 1). In Tax Year 2025, that rate becomes 3.5%.
  • Childcare facilities will be recategorized as residential property through a property tax limitation.
  • The maximum Unemployment Insurance tax rate will be lowered from 7% to 5.4% in all tax tables.
  • The number of tax tables will be reduced from eight to four.
  • The tax table rankings will drop from 21 to nine, effectively cutting overall tax categories from 168 to 36.

The impact: These unemployment tax changes are projected to save employers $800 million over five years.

ABI has not taken a position on the bill at this time. The legislation has been sent to the Tax Committee for feedback.

If you have any feedback for us, please contact JD Davis or Brad Hartkopf.

HSB 536 / SSB 3079 - Pharmacy Benefit Manager (PBM) Legislation

In the 2022 legislative session, ABI supported amended legislation dealing with Pharmacy Benefit Managers (PBMs) and their relationship with Iowa pharmacies. Part of that legislation expanded the role of the Iowa Insurance Division in the regulation of PBMs.

This year, after conferring with PBMs and Iowa pharmacies, the Insurance Division has brought an update bill, and it has moved through the Iowa House Commerce Committee.

ABI is neutral on the subject matter of the bill and will continue to monitor the bill to ensure that there are no provisions added that could increase costs to ABI member company-sponsored health plans for employers or employees.

Additional PBM legislation is a possibility this year and will be reviewed in the same manner. Two years ago, with ABI’s support, the legislature voted unanimously for legislation to aid small independent pharmacies. It is our hope that if new legislation is introduced this year, it too can aid small local pharmacies in a manner that does not increase health care plan costs.

HSB 508 / SSB 3013 - Product Liability Reform

A subcommittee of House Judiciary members considered legislation ABI brought forward that modernizes and strengthens product liability protections for manufacturers and retailers.

Here's how:

  • It ensures that innocent sellers like retailers and distributors cannot face liability for a product they had no role in manufacturing.
  • It creates a rebuttable presumption for manufacturers that a product isn’t negligently designed or manufactured if certain parameters are met within the legislation.

The bill manager stated the legislation will need more before it can be considered at the committee level. ABI will continue to educate policymakers on the proposal.

HSB 504 / SSB 3028 - Future Phantom Damages

Legislation passed in 2020 that ensured damages recovered by plaintiffs for medical care only replaced the actual cost of the medical care provided. 

Most of us are familiar with the practice of insurers working with medical providers to reimburse those providers at levels below the costs that were billed for care. Any level of damages above the actual cost paid are the “phantom” damages because they reflect costs that were never incurred.

This year’s legislation takes this now accepted principle and extends it to future medical care. The bill advanced from subcommittee level this week to the full House Judiciary Committee where additional review of the bill is expected before consideration.

ABI continues to advocate on its behalf.

SF 319 - Drug and Alcohol Testing Reform

ABI has spearheaded changes to Iowa’s drug and alcohol testing statute during the last few sessions. Currently, an employer is guilty until proven innocent under the law. We seek to flip the burden of proof back to the individual bringing the claim against the employer, which is proper jurisprudence.

The bill also modernizes communication methods for the exchange of drug and alcohol testing results, ensures employers can designate a job as a “safety sensitive position” and includes an evidentiary standard for proving a case against the employer.

The bill was assigned to subcommittee members yesterday. We hope to have a subcommittee held early next week and possibly move the bill out of committee by the end of next week.

SF 455 - Topsoil and Stormwater Regulatory Reform

This legislation creates uniformity throughout Iowa cities and counties as it relates to the regulation of topsoil and stormwater. It also provides additional certainty for homebuilders and is one action that can be taken to mitigate the cost of new housing construction.

The bill passed the Senate, but didn’t come off the House floor last year. It was approved through a subcommittee on Wednesday.

ABI is supportive of the legislation.