Week five of the legislative session was full of subcommittee and committee action. The first funnel is this week, Friday, February 16. A large number of bills moved forward in week five, but several key priorities have yet to meet the funnel deadline. Among those priorities is the Governor’s Boards and Commissions bill implementing the recommendations of the Boards and Commissions Recommendation Committee. It is expected that the bill will be introduced this week, which may present procedural challenges given the timing and the volume of bills that will be considered during the week.

What is the funnel?

This funnel is a deadline that legislators need to meet for a bill to remain “alive” and eligible for further action. To remain eligible for consideration this session, a bill must be voted out of committee in its chamber of origin by the end of the day Friday, February 16. There are limited exceptions for appropriations, tax, and leadership bills. The goal of the funnel is to narrow the focus of legislative priorities.

At the end of the first funnel last year, the Governor had signed five priority bills into law.

Bill Introductions

HHS Behavioral Health System Alignment

A major transformation was introduced this week in the HHS Behavioral Health System Alignment bill (HSB653/SSB3146). The Governor announced the Behavioral Health System Alignment in her Condition of the State.  Post-realignment, the Department of HHS has begun the process of aligning extensions of HHS, e.g. the MHDS System. A significant assessment indicates that the current MHDS system is fractured, that Iowans do not know how to access the system, and that there is both duplication in the system and other areas there are resources that are not being utilized.  HHS believes this transformation is a methodical way to cure the system, provide accountability, and fill the gaps.

An HMA Assessment reviewed service delivery in Iowa and determined behavioral health services are the most significant need in Iowa.  This bill introduced by HHS and the Governor will prioritize behavioral health by creating a new Code for Iowa’s Behavioral Health Service System and integrating disability services with Aging to concentrate on HCBS’s long-term services and supports. This year-long transition will help define clear points of access for Iowans and align federal, state, and local efforts, with accountability via local assessment of local needs.

Overview of the HHS Behavioral Health System Alignment Bill

Division I – BH Service System – Establishes a behavioral health system effective 7/1/2025

Division II – Conforming Changes – Conforming changes for when the following chapters are repealed on 7/1/2025:

• Select sections of Ch. 125
• Entire chapters:
• 142A
• 225C
• 227
• 230A
• 347B

Division III – Aging and Disability

Makes the following changes effective July 1, 2024:

• Removes the requirement that Aging and Disability Services can only designate Area Agencies on Aging as Aging and Disability Resource Centers

• Renames 231 – HHS – Aging – Older lowans to HHS – Aging and Disability Services
• Repeals select sections of Chapter 225C (225C.35 – 225C.42 & 225C.45)

Makes the following changes effective July 1, 2025:

• Moves relevant disability services sections from 225C – Mental Health and Disability Services to 231 – Aging and Disability Services
• Revises definitions of who can be served under amended chapter 231 to include:
  • Individuals with disabilities
  • Persons of all ages (not just persons with disabilities eighteen years of age and older)

Division IV – Transition of Mental Health, Addictive Disorder, and Disability Services

• Outlines HHS’ powers and duties to create the behavioral health service system
• Transfers disability services from Behavioral Health to Aging and Disability Services on July 1, 2025
• Outlines HHS’ responsibilities during the transition period (July 1, 2024 – June 30, 2025)
• Establishes the responsibility of HHS to publish the initial transition plan, by September 30, 2024, on the HHS website
• Outlines the requirement for MHDS regions to revert remaining funds to HHS by July 1, 2025
• Outlines provisions for MHDs regions to collect outstanding debts, claims, or other liabilities owed to the county, for services rendered prior to July 1, 2025

Legislative Activity

State Supplemental Aid

This year’s State Supplemental Aid (SSA) legislation will miss the February 8 deadline. This annual bill provides funding for Iowa’s K-12 schools and must be passed within 30 days of the release of the Governor’s budget. Senate Education Committee approved School Foundation Aid (SF 2258) this week but there is no companion in the House. Last year, lawmakers raised SSA funding by 3%; Reynolds’ budget included a 2.5% increase this fiscal year.

RFRA

A contentious bill on religious freedom passed the House Judiciary Committee on Thursday morning, making it funnel-proof. The bill (HSB 614/SF 2095) is a state version of the federal Religious Freedom Restoration Act, or RFRA, and requires courts to use the compelling interest test when reviewing if a law unduly burdens the practice of religion by a person. Opponents of the bill say it would enable discrimination, allowing business owners to deny services or accommodations to people in protected classes based on religious beliefs.

Gender Definitions

The Governor’s bill related to Sex and Statutory Construction (HSB 649) passed subcommittee and was amended in committee this week. The bill legally defines the terms “man,” “woman,” and “sex,” and requires the use of these definitions on original birth certificates and must include their sex at birth on any subsequent birth certificate issued due to a gender transition. The amendment removes this requirement for driver’s licenses and non-operator IDs.

The bill also says the term “equal” does not mean “same” or “identical,” and it says that “separate accommodations are not inherently unequal.” These contexts could include detention facilities, domestic violence shelters, crisis centers, locker rooms, restrooms, and more. LGBTQ rights activists oppose the bill for potentially segregating transgender Iowans in these types of facilities. A Senate companion bill would need to pass committee before the first funnel to be eligible for the rest of session.

Extending Postpartum Medicaid Coverage

The Senate Health and Human Services Committee approved the Governor’s postpartum Medicaid coverage bill (SSB 3140) this week. Similar legislation has been proposed in the last two legislative sessions, and if passed, Iowa would be one of the last states to make this extension from 60 days to 12 months for Medicaid coverage for mothers and babies. Democrats voted against the bill and said that they support extending post-partum coverage to 12 months but want eligibility for the coverage set at the 375% Federal Poverty Level and not the 215% level proposed in the bill.

Bills Awaiting Next Steps

Tax Plan

Income Tax Elimination (SSB 3141) Income Tax Constitutional Amendment (SSB3142) bills were expected to have House companions this week, but no matching legislation was introduced. Neither bill has been put in front of a subcommittee as of yet, but both will pass the funnel because they sit in the Ways and Means Committee, an exception to the usual funnel rules.

Area Education Agencies (HSB542/SSB3073)

The Area Education Agency reform bill is facing challenges in both chambers. The House Education Committee Chair Representative Wheeler said the bill will not move forward in his committee. Senate Republicans remain optimistic the chambers can find a compromise. Republican leadership has expressed intention to do something for special education in the state, but the path is unclear. The House bill (HSB 542) is tabled, while the Senate bill (SSB 3073) is awaiting consideration by the Education Committee, which met this week but did not take up the AEA bill.

Executive Branch Update

Former Iowa Secretary of Agriculture Bill Northey passed away. Governor Reynolds ordered state flags to be flown at half-staff on Monday. On Tuesday, the House and Senate both took a moment of silence in his honor. She released a statement:

“Bill was a great leader whose work ethic and passion for Iowa agriculture was unmatched. Iowans and farmers around the country were fortunate to have such a rock-solid advocate and friend,” said Gov. Kim Reynolds. “Bill understood well our responsibility to be good stewards of the land and exemplified that calling throughout his career. But his life’s greatest role was as a loving husband, father, and grandfather. Bill will be missed. Kevin and I offer our deepest condolences and prayers to Cindy and their family.”

Governor Bill Introductions

Here is a brief overview of where the Governor’s priorities, as outlined in her Condition of the State, stand at the start of the first funnel week:

Governor bills that have been requested, but not yet introduced:

• Public Entity Investments, ESG Prohibition
• Internet Age Verification and Liability

Retirement Tracker

What’s next?

Legislators are racing to “funnel-proof” their priorities before the end of next week. Since this is the second year of the 90^th General Assembly, any legislation that does not pass this major milestone will not carry over to the next year. Any bills considered “dead” next week will need to be reintroduced in the next General Assembly. Committees will consider large numbers of bills next week in the four legislative days they have left, given they typically adjourn on Thursdays. The full 2024 Session Timetable can be found here.