After a number of long days and late nights, the First Session of the 88^th General Assembly of Iowa adjourned sine die on Saturday, April 27, 2019—the 105^th day of session, five days ahead of the scheduled adjournment date Friday, May 3 (110^th day).  The third year of the Republican trifecta brought a wide array of issues - sports betting, judicial nominating, children’s mental health, and a number of major public policy changes were made in Iowa.  The legislature also addressed procedural changes related to election laws and Constitutional Amendment notifications by the Secretary of State to address indiscretions that occurred in 2018. 

Budget Breakdown

The legislature finalized their work appropriating $7.643 billion for FY2020.  The budget for FY2020 accounts for 97.39% of ongoing revenue; the budget will be 0.2% higher than the adjusted FY19 budget, fills all reserve accounts, and leaves an ending balance of nearly $300 million.  See the budget breakdown below.

Bills 

A record high volume of legislation was introduced and considered.  Totals for 2019:

• 2,008 Bills/resolutions introduced
• 143 Bills/resolutions enrolled (as of 4/27/2019)
• 45 Bills signed into law (as of 4/27/2019)

For comparison, the chart below provides totals for bills/resolutions introduced over the last ten years.

Major Topics of the 2019 Legislative Session

Sports Betting

Prior to session, sports betting was forecasted to be a focus of the legislature.  On the final Monday evening of the legislative session with a 31-18 vote, the House passed SF617, legalizing betting on sporting events and fantasy sports in the state of Iowa. The Senate passed the bill the week prior 67-31. The vote in both the House and Senate was largely bipartisan with several Republicans and Democrats voting for and against the bill. The Iowa Racing and Gaming Commission is tasked with establishing rules and setting up the regulatory framework for the legislation should it be signed into law. Iowa is one of several states that has sought to legalize sports betting following a 2018 U.S. Supreme Court decision that allowed states to move forward on the issue.

Judicial Nominating Commission Reform

Major discussions this year centered around reforming the process for nominating district court and appellate judges.  Bills reforming the existing Judicial Nominating Commission advanced in both the House and Senate.  Initial proposals under consideration would have changed the structure of the Judicial Nominating Commission by removing the 50% of commissioners elected by the Iowa Bar and replacing that 50% with individuals appointed by the House and Senate majority and minority leaders.  Standalone bills did not advance.  However, on the final day of session, the House advanced an amendment to the Standings Appropriation bill (SF638) addressing Judicial Nominations.  The adopted amendment:

• authorizes the Governor to appoint an additional member to the commission
• removes sitting judges from serving as chairs on nominating commissions
• requires an election of a Chief Justice of the Iowa Supreme Court every two years, beginning in 2021 

Property Tax Reform

Property tax reform was identified as a major priority for both chambers.  After many iterations, a final compromise on property tax reform was reached in the final week of session. SF634 passed out of the Senate at 10 p.m. on Wednesday night, it then passed out of the House early Thursday morning, five hours later.  The final language of SF634:

• leaves all levies from Code of Iowa Chapter 384 in place including General Fund ($8.10), Emergency, and Trust and Agency
• establishes “maximum property tax dollars” which is equal to 102% of last year’s revenue for certain levies, including Trust and Agency and Employee Benefits levies
• allows a city to exceed the 2% threshold with a two-thirds majority vote of the council after notice, public hearing, and 20-day wait as laid out in the bill
• leaves in place existing levy caps, such as the $8.10 Levy, Emergency Levy, and other caps in Chapter 384, on a city’s ability to exceed the 2% threshold

Hemp

Also in the final week of session, the legislature passed a measure legalizing industrial hemp production in the state. The Iowa Hemp Act SF599 passed the House 95-3 on Tuesday and the Senate 49-1 on Thursday.  Under the law, farmers will be permitted to grow up to 40 acres of the crop which will be monitored by the Iowa Department of Agriculture and Land Stewardship.  State Rep. Jarad Klein, himself a farmer, called the bill’s success “a win” for customers, retailers, and farmers.

Empower Rural Iowa

A priority the Governor set forth in her State of the State address was Empower Rural Iowa.  Accompanying legislation HF772 was introduced, expanding broadband access across the state, as well as incentivizing housing construction in underserved areas.  The bill modifies the existing broadband infrastructure and grant program, extends a property tax exemption for broadband infrastructure, and modifies the existing Workforce Housing Tax Incentives Program.  Both chambers passed the bill unanimously.  The final bill also includes $10 million in housing tax credits to help rebuild in flooded areas.  Governor Reynolds praised the passage of HF772 saying, “If we are going to be successful as a state, there needs to be growth and prosperity in every single corner of Iowa. With the passage of today's legislation, we are one step closer to achieving that goal. This initiative serves as a connector to existing programs and resources which provide our communities with a roadmap for continued success.”

Future Ready Iowa

Another major priority for the Governor was Future Ready Iowa.  The Governor rolled out Future Ready Iowa in 2018 and in 2019 she requested $20 million to fund the “Future Ready Iowa” initiatives.  The House and Senate agreed on appropriations for a number of the Future Ready Iowa initiatives:

• The Education Appropriations bill includes a little more than $13 million for Future Ready Iowa’s Last-Dollar Scholarship program. The bill also includes policy language that establishes criteria for the Workforce Development Board for the Last-Dollar Scholarship program. In addition to the Last-Dollar Scholarship language, the bill includes more than $208 million for community college funding, an increase of about $1 million for the Iowa Tuition Grant, and more than $481 million for general fund funding of the Regents Universities.
• The Economic Development budget includes $1.2 million for the Employer Innovation Fund and $1 million for the Skilled Workforce Grant Fund–both components of Future Ready Iowa.

Children’s Mental Health Services + Mental Health

In March, the House passed legislation that creates the framework for a children’s Mental Health System in Iowa.  The proposal came from Governor Reynolds and was based on recommendations made by experts and advocates.  HF690 establishes a Children’s Behavioral Health System Board, orders each region to hire a children’s services coordinator, establishes eligibility standards, and mandates that certain services be provided, including early identification, medication prescribing and management, outpatient therapy, crisis stabilization, and inpatient treatment.  The Senate concurred with the House efforts in the final weeks of session, sending one of the Governor’s top priorities of the 2019 legislative session down to her desk.  This is the first-ever statewide children’s mental health system.

Session End

This session a total of 159 were sent to Governor Reynolds for her consideration.  The Governor has until May 27 to sign into law all of the enrolled bills that have been messaged to her. We will provide another update after the veto period with details on the new laws.