Week 12 brought the second major milestone for the legislature, the second funnel; despite this deadline, the week had an eerily slow pace. Highlights included the Governor signing two more bills and the Senate introducing a framework for the eventual state budget. There was very little debate, and the most energy was put toward placing bills on the unfinished business calendar to beat the second funnel or letting low-priority policy bills time out.
Iowa Hawkeye basketball player Caitlin Clark won the Associated Press women’s basketball Player of the Year for her accomplishments this season, along with a few other awards. Legislators receiving awards were Senator Sinclair and Representative Kaufmann as the 2023 winners of the Herbert Hoover Uncommon Public Service Award, given annually to a Senator and Representative for their service.
Legislative Activity
Non-Economic Damages Caps
The House and Senate are at odds on trucking company liability. Senate File 228 passed the House this week, with an amendment that would raise the cap on non-economic damages claims to $5 million when someone is injured or killed by a commercial vehicle like a semi-truck. The bill would shield companies from liability for direct negligence for hiring a driver who caused a crash, but companies would still be liable for training and supervision of their drivers. Representative Gustoff says it’s a reasonable compromise and will help these companies with insurance costs. Democrats say the bill takes away Iowan’s right to have a jury decide compensation for injury or death in these rare cases. Six Republicans (Andrews, Cisneros, Gustafson, Hayes, Jones, and Young) voted with the Democrats against the bill.
The bill originally came to the House from the Senate, which passed a $2 million cap. The amendment more than doubles the allowable amount and now returns to the Senate for consideration of the amendment. It is unclear if there is support for this change in the Senate.
Carbon Pipelines
The bill to restrict the use of eminent domain for carbon pipelines (HF 565) did not pass the second funnel and is no longer eligible for this legislative session. Senator Bousselot, chair of the subcommittee, said time ran out before Friday’s funnel deadline. “The bill came over late last week from the House. It arrived so late in the process, I chose not to move the bill to subcommittee without a committee meeting scheduled late in the week,” Bousselot said. The Senate declined to schedule hearings on other bills proposing restrictions to eminent domain, and last year they did not pass a bill that would have instituted a one-year pause on companies’ ability to ask for eminent domain. A recent poll by Des Moines Register and Mediacom Iowa found that 78% of Iowans oppose letting companies use eminent domain for carbon pipeline projects.
Although the bill is dead, the issue is likely to linger into discussions to end the legislative session. Legislative leadership could introduce a new bill if the Republican and Democrat leaders in the House and Senate all agree, or the language could be amended into a budget bill. Representative Holt, the bill’s floor manager, said he is unsure if these options will be considered.
Budget Update
Midweek the Senate introduced seven shell appropriations bills. These bills do not include any actual appropriations, as those numbers have yet to be determined. The Senate previously announced a proposed budget of $8.486 billion in FY 2024. The target is the same amount Governor Kim Reynolds released in her budget earlier this year. It represents a 3.3% increase in state spending.
Note: Additional changes to the budget bills may need to be made when Governor Reynolds signs SF 514, effectively reorganizing the departments described by the series of bills.
Senate Appropriations is scheduled to meet on Monday to consider five of the budget bills as a subcommittee of the whole (Admin & Reg, Ag & Natural Resources, EcoDevo, and Education). It is unclear whether the committee will approve the budget bills with appropriations numbers or as shell bills; moving the bills as shell bills will allow the Senate to quickly move on these appropriations, adding appropriation amounts via floor amendments when called up by the full chamber.
We will keep you apprised of the numbers the Senate settles on, and the progress through budgeting season.
Executive Branch Update
Gov. Reynolds Signs SF 75 and SF 262 into Law
SF 75: A bill for an act relating to certain health facilities (including ambulatory surgical centers and rural emergency hospitals) including licensing requirements and fees, providing penalties and making penalties applicable, providing emergency rulemaking authority, and including applicability and effective date provisions.
“This is part of our unwavering commitment to ensuring all Iowans, no matter where they live, receive the quality medical care they need and deserve,” said Gov. Reynolds. “This bill is an impactful step in that direction, and it’s a pleasure to sign it into law.”
SF 262: A bill for an act relating to consumer data protection, providing civil penalties, and including effective date provisions.
“In our digital age, it’s never been more important to state, clearly and unmistakably, that consumers deserve a reasonable level of transparency and control over their personal data,” said Gov. Reynolds. “That’s exactly what this bill does, making Iowa just the sixth state to provide this kind of comprehensive protection.”
Gov. Reynolds Appoints Mary Mosiman Director of Iowa Department of Revenue
Mary Mosiman currently serves as the department’s Deputy Director and Tax Management Division Administrator.
“Mary’s leadership of the department’s tax division and her service as co-sponsor of a multi-year tax modernization effort have prepared her well to serve as director of this critical state department,” Governor Reynolds stated. “Mary is an exceptional public servant and I look forward to her serving in my cabinet.”
Mosiman replaces Kraig Paulsen, who has served as IDR’s Director since 2019. Since October 2021, he has served concurrently as Director of the Iowa Department of Management, a position he will retain as he manages the implementation of Governor Reynolds’ state government alignment initiative.
Gov. Reynolds’s Statement on the Closure of Iowa Wesleyan University
Iowa Wesleyan University, a private university in Mount Pleasant, Iowa, announced it will close at the end of the academic year. The board cited concerns with lack of funding, a decrease in philanthropic giving, and enrollment changes among the reasons for closure.
Gov. Reynolds released the following statement in response to the announced closure of Iowa Wesleyan University:
“Today, my thoughts are with the students, faculty, and staff who are stunned by this announcement, and the people of Mount Pleasant who have long revered the university as a pillar of their community. The state is committed to supporting them during this time of transition. I have directed the Iowa Economic Development Authority and Iowa Workforce Development to reach out to community and business leaders, and work together to keep the local economy strong.
“It wasn’t until February 3, 2023, that my office received a request from the university for $12 million for ongoing operating costs. As I’ve said many times, we endeavor not to spend one-time federal dollars on ongoing expenses. To better understand their request and the financial health of the university, my office engaged an independent, third-party accounting firm to conduct due diligence. The firm reported that Iowa Wesleyan had a $26.1 million loan from the USDA, using their campus as collateral, that could be recalled in full as early as November 2023. Additionally, Iowa Wesleyan’s auditor cited ongoing concerns about the university’s fiscal health, stating “significant operating losses and reduced liquidity raise substantial doubt about its ability to continue as a going concern.” The firm also highlighted that while enrollment at Iowa Wesleyan has grown over the past three years, its financial health has continued to deteriorate over the same period.
“Based on this and other factors, the independent accounting firm determined that providing one-time, federal funds would not solve the systemic financial issues plaguing the university. If the state would have provided the federal funding as requested and it was used to finance debt or other impermissible uses according to US Treasury guidelines, the state and taxpayers could have been liable for potential repayment to the federal government. Moreover, the state has separately received $122 million in requests from other universities and community colleges across the state.
“With this information, I made the difficult decision to not pursue the university’s funding request.”
By the Numbers
So far this session, there have been just over 1,300 bills introduced. Only 1.8% of those bills have made their way to the Governor’s desk.
After a bill has passed both chambers and is officially enrolled (signed by the President of the Senate and Speaker of the House) the bill is sent to the Governor for final action. The Governor must take final action on all bills passed by the General Assembly, either signing, vetoing, or taking no action. During the legislative session, the Governor has three calendar days to act on a bill once it is officially enrolled and messaged to her office (Note: bills are automatically enrolled after final chamber action, there may be intentional or unintentional delays in official enrollment after final passage of a bill).
Below is a complete list of the bills awaiting enrollment/message to the Governor and bills signed by the Governor this session.
At the end of Week 12, 24 bills were enrolled and sent down to the Governor, seven of these awaiting her signature. Seventeen bills have been signed into law by the Governor to date. A complete list of enrolled bills and enactment dates can be found here.
What’s next?
Budget season is upon us. Senate Appropriations will begin moving budget bills through full committee early next week. We can expect to see budget work begin in earnest as Leaders and Chairs dial-in budget targets.
During Week 13, (April 3-7) the Senate can only consider House bills, House joint resolutions, and unfinished business, and the House can only consider only Senate bills, Senate joint resolutions, and unfinished business (Joint Rule 20); this Joint Rule allows for chambers to clear calendars of lingering policy issues.
Additionally, Republican lawmakers may focus their energy on finalizing a proposal on taxes/property tax reform in the coming weeks, which has been a top priority since the start of session. House and Senate leadership have not yet worked out a unified proposal. Senator Dan Dawson and Representative Bobby Kauffman have each introduced property tax legislation and will need to agree on a bill to send to the Governor if anything related to property taxes is going to move this year.
Tax reform, pipelines, and budgeting are likely to be the highlights in the coming weeks and in final negotiations leading up to (or past) the scheduled 110th Day of Session on April 28.
The full 2023 Session Timetable can be found here.
