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January 29, 2021
2022 Legislative News
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Expect the next three weeks to be busy at our State Capitol. Legislators will continue to work through their list of bills to get them out of committee before February 18. If a bill has not been voted out of its committee of origin by this date, it is no longer considered alive and its path to becoming a law ends. Last week there were 159 meetings over three days, and 514 new bills have been introduced since the start of session, on top of the hundreds that remain from last year. There are a lot of bills to sift through in a short amount of time.
The big news this week was House and Senate leaders released their tax plans. As we reported a few weeks ago, the Governor announced sweeping tax reform that cut income taxes for Iowans and businesses, get rid of taxes on the income people get in retirement, and help farming families with other tax cuts.
All three bills make large reductions in the Iowa income tax rate, with the House and Governor cutting the top rate from 8.53% down to a 4% flat tax by 2026, and the Senate cutting it to 3.6% by 2027 with a mechanism for it to move to zero if revenues are available. Iowa currently has the 8th highest income tax in the nation; all three plans would make Iowa the 4th lowest in the country (not counting the 8 states that have no income tax).
All three tax bills also repeal income taxes on retirement income, exclude retired farmer lease income from income tax, provide a single lifetime exclusion of capital gains on a retired farmer’s land or livestock, and provide a similar one lifetime exclusion to an employee owner selling or exchanging capital stock (ESOPS).
In addition to these provisions, the Governor and the Senate’s bills include reductions to corporate income tax rates from the current top rate of 9.8%. The Governor’s bill (SSB 3044) would reduce the State’s top corporate rate to a 5.5% flat tax if revenues are available to trigger the reduction. The Senate’s bill (SSB 3074) would lower the rate to 5.3% on the first $100,000, and lower the rate to 7.8% on revenue above that amount. The House bill (HSB 626) does not include a corporate income tax cut, lowering the overall cost of their tax plan.
The Senate tax bill, however, goes a lot farther. The bill converts the Local Option Sales Tax (LOST) that has been instituted in most jurisdictions across the State into a statewide sales tax. The change would hold most taxpayers harmless when they are making a purchase since they would still pay the 7% sales tax already in place in their city or county. The bill contains language for local governments clarifying it would protect the voter approved revenues to cities and counties by ensuring it gets directed back to them in the same manner as it is currently.
The state sales tax increase would trigger the start of the 3/8 cent funding toward the Natural Resources and Outdoor Recreation Trust Fund, an initiative that was passed by constitutional amendment many years ago and remains hugely popular among Iowans in multiple polls over the years. The Senate bill utilizes the same funding formula for the Trust Fund as the one that Governor Reynolds included in her Invest In Iowa proposal two years ago. That formula was developed over several months by the Governor, Senator Ken Rozenboom, Rep. John Wills, and others. The section of the bill would cause roughly $220 million per year to start flowing into water quality projects, parks, trails, the Resource Enhancement and Protection (REAP) program, and other quality of life initiatives that proved invaluable during the pandemic.
The Senate bill also makes changes to several tax credit programs, removes the sales tax exemption from several products, and contains other provisions. You can review a two page summary of the bill that we prepared here.
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Busy Weeks for Psychology Bills
There has been a lot of action on various bills that IPA is working on proactively and defensively, with some really good progress to report:
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Predoctoral Internships: Rep. Joel Fry and Rep. Ann Meyer, the chairs of the human services budget and standing committees, will meet on Tuesday morning at 8 a.m. to review House File 2017, which allows pre-doctoral interns to apply for and receive a provisional license. This is one of IPA's top priorities for the year. Dr. Warren Phillips and Dr. Matt Cooper plan to join your lobbyists at the Capitol on Tuesday morning to answer questions and talk about the importance of this bill to keeping and attracting more psychologists to the state. You can watch the live-stream of this subcommittee on Tuesday at 8 a.m. here.
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Mental Health Professional Loan Forgiveness: A Senate subcommittee unanimously approved Senate Study Bill 3003 last week, which creates a non-prescribing mental health professional loan forgiveness program for psychologists, social workers, mental health counselors, and marriage and family therapists who agree to work full time in a mental health shortage area for five years (seven years for part-time). The Senate Education Committee plans to move the bill out of committee (saving it from the funnel) next week sometime. The House Human Resources Committee has already moved its bill forward - House File 2137 creates two programs, $1 million for prescribing mental health professionals (prescribing psychologists, psych ARNPs, psychiatrists) and $500,000 for non-prescribing mental health professionals (psychologists, social workers, mental health counselors, marital and family therapists). IPA supports both bills (but obviously prefers the House's more inclusive approach).
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Neuropsychologists/Concussion Screening: The House Human Resources Committee advanced House Study Bill 517 on Thursday afternoon to add "a person who holds a doctorate in psychology with specialty training in neuropsychology and concussion management" to the list of professionals who can help with school sport concussion injuries. IPA also supported this bill and is part of its legislative requests for the year.
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Autism Definition: Autism Speaks has a bill (House Study Bill 512) that updates references to autism disorders and changes the definition in insurance code to define it as a mental health condition (defining by referencing DSM). This is being done so that denials by insurance can be challenged under mental health parity law (and telehealth payment parity would also apply). This bill will get another number (House File) soon. IPA supports, but you can be sure insurers will oppose.
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Cognitive Screenings: Another early success. IPA was able to get Senate File 2015 changed. The bill allowed speech therapists and audiologists to perform cognitive screenings, but it was overly broad as written and definitely a scope expansion. The bill was amended in committee at the request of IPA to define the narrow list of cognitive assessment tools they can use, and requiring referral to an appropriate specialist or professional for diagnosis and treatment. The Senate State Government Committee will vote on this next week, but all parties have agreed to this change.
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Disclosure of Psychological Testing Materials: The subcommittee reviewing House File 2042 met this week to hear testimony on the disclosure of psychological testing materials to the defense counsel. Dr. Paul Ascheman crushed the testimony by explaining the problems with the bill, our concerns, and the potential for misuse. All other health professional organizations opposed, including the Iowa Medical Society, as well as advocacy groups like NAMI and victim services organizations. The subcommittee was chaired by the bill's sponsor Rep. Dustin Hite, a lawyer from Oskaloosa. He asked the Defense Counsel to talk to us about changes, but decided not to move the bill forward at this time. A Senate subcommittee will meet this week on its companion bill Senate Study Bill 3054 on Monday at 2:30 p.m. Dr. Paul Ascheman will be back on point in this meeting, but will get to zoom in for his testimony this time. You can watch via Zoom here.
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The subcommittee on the bill to add 56 beds to the state's two MHIs (House Study Bill 531) was cancelled this week as legislators continue to explore other options for expanded psychiatric inpatient options for children, teens, and adults. This bill was really propelled forward by county sheriffs who cannot find placement at the same time hospitals are overrun with COVID-19 patients.
As you can see, lots going on at the Capitol, and IPA is doing pretty well on its priorities. We will continue to watch for bills as they progress but new bills are added daily and status is updated twice a day in the IPA Bill Tracker, so that's always a good place to start.
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Your Bill Tracker
Click above to see status of important bills, or create your own report with our custom download.
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Town Halls & Public Forums
Find a local event with your state or federal elected officials here. Three weeks are shown at a time on this website.
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Your Legislative Team:
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