Travel Federation of Iowa
Legislative Update | Issue #5 | March 20, 2021
Tourism Funding Increase Won't Happen Without Your Help

In the stories below, you'll see our explanation and analysis of the state revenues as we begin the FY 2022 Budget process in Iowa. You'll see that revenues are just shy of where they need to be in order for a major income tax cut from 2018 to take effect.

There are a lot of uncertain numbers in the paragraphs below, so I want to spell out what we know to be certain - The funding increase for IEDA marketing will NOT happen without a giant grassroots effort from the tourism industry. There are too many needs out there for a lift like this to occur without the collective shoulders of everyone involved in Iowa Tourism pushing this forward.

Our firm has had the honor of being able to work with TFI for 18 years now at the Capitol, and together we have pulled off some amazing victories - the $900k+/year gaming funds line item, school start date, saving CAT several times, extending REAP, the list goes on and on. However, we have NEVER before had a Governor and an IEDA Director propose more than doubling tourism funding. THIS is the moment the industry needs to speak with one loud voice.

Legislators need to hear loud and clear from tourism professionals in every corner of Iowa that they need to support increasing funding for tourism marketing.

House File 789 (Link) and Senate File 475 (Link) are different bills, but both contain the $5 million in automatic funding to IEDA that is outlined in the handout above. Legislators need to hear that you support that allocation and they need to hear it SOON and OFTEN.

The budget numbers will start to take shape in the days ahead and items can wait that cost too much, or don't have unanimous support, or are less of a critical need, or, or, or.... Legislators are looking for any reason they can to hold off on funding any of those requests that can be pushed to the back burner. Don't give them a reason. Speak LOUDLY for tourism and recruit everyone you know to do the same!
Ten weeks downs, six (ish) to go! Monday, March 22nd will mark Session Day 71 of the scheduled 110-day session.  Lots of floor debate the last two weeks, a higher volume of bills in Week 9 and then fewer bills that required more time in Week 10. As Rep. Latham from North Central Iowa pointed out in her newsletter, “To give you an idea of how long our debates were, this week we passed six bills and last week we passed 67.”
Two big events now set the tone for the last 40 (or so) days of the session, but especially the next two weeks – the REC report and the Second funnel deadline.
Revenue Estimating Conference (REC)
The REC (Link) is a three-person group that meets periodically to assess Iowa’s revenues and expenditures and create a revenue estimate for the current and future fiscal year. The Legislature and the Governor use the REC figures when determining fiscal policy. The REC meets every year in March and the Legislature begins assembling a budget after that meeting; they are required to use the LOWER of the REC’s December and March estimates.
The REC just met on Friday, March 19th, and announced their March estimates (Summary HERE). They estimated an increase in FY 2021 (the current fiscal year that ends June 30th) of 1.9% over FY 2020. They settled on a FY 2021 budget figure totaling $8,078.9 million, a figure that is $109.6 million higher than the REC’s December estimate and $175.3 million higher than FY 2020. 
For the upcoming FY 2022 budget year, the REC projects net receipts of $8,385.6 million, an increase of 3.8% over FY 2021. This represents an increase of $119.9 million over the REC’s December estimate and $306.7 million over FY2021 (as revised in the previous paragraph). 
As is customary, the REC also took a first look at FY 2023 and provided a preliminary projection. They settled on net receipts of $8,762.5 million, an increase of 4.5% over FY2022. 
The Legislature will now begin to assemble a FY2022 budget in the weeks ahead using the lower December numbers. 
Second Funnel
By close of business on Friday, April 2nd, policy bills will have to be passed by the appropriate committee in the second chamber or else they will be dead for the year. (Example, a House Education Committee bill will have to have been passed by that committee, passed by the full House, and then passed by the Senate Education Committee in order to remain alive).
The funnels serve as a mechanism for eliminating policy bills that are not showing forward progress, so the Legislature can stop spending time on issues that clearly don’t have widespread support.  Bills dealing with taxes (Ways & Means Committee), spending (Appropriations Committee) or oversight (Oversight Committee) are exempt from the funnel deadlines. Additionally, any bill that dies in the funnel can be resurrected as an amendment to other legislation, AND since this is the first year of a two-year General Assembly, all bills that die this year become alive again next January. 
Legislative Forums
At the bottom of every one of these newsletters is a link to our list of legislative forums. We wanted to put this reminder here though just in case you never scroll past the bill list! Click HERE to see the forums list posted at a website we manage. Just like your Bill Tracker, as new legislative forums are set, the list is updated, so bookmark that link and check back often!
Gov. Kim Reynolds has announced all Iowans will be eligible for the COVID-19 vaccine by April 5 as long as the state’s vaccine allocation increases as much as the federal government anticipates. If you need more information, go to
Iowa’s Unemployment
Feeding into the State revenue growth in the REC numbers above is the workforce recovery that Iowa has experienced. Iowa’s seasonally adjusted unemployment rate just decreased to 3.5% from a December rate of 3.7%. We are quickly moving in the direction of the 2.8% unemployment rate that Iowa had pre-pandemic. In contrast, the federal unemployment rate in January was 6.3%. 
During the REC meeting, one of the members noted that Iowa Workforce Development’s website listed over 65,000 jobs in Iowa available as of the morning of March 19th, the day of the REC meeting. Legislators have begun holding more subcommittees on bills that target programs to get more people to move to Iowa and we expect that conversation to continue in the weeks ahead.
Tax Triggers
Discussions around taxes are always a huge deal at the Statehouse. One issue in particular this year is the issue of tax triggers, whether we would hit them, whether we would repeal them, etc. Where did this start?
During the 2018 session, the Legislature and Governor enacted a tax relief package that eliminated federal deductibility and reduced income tax rates (along with a number of other provisions). The rate reductions were set to take place over a period of years, but in order to put people’s minds at ease about the revenue implications of the bill, the bill contained requirements that needed to be met (triggers) in order for that stage of the cuts to occur. 
The first year that the triggers can be met is FY 2022, and the two triggers are General Fund Revenue exceeding $8.3146 billion AND 104% of the previous year (or 4+% growth).  If you scroll back up to the REC story above, you’ll see that the REC estimated FY 2022 revenues would be $8.3856 billion and 3.8% above last year. Technically, those numbers meet the first trigger but fall short of the second. This would push the tax cut into the following year to try to meet the FY 2023 numbers, unless…. 
The Governor called in her Condition of the State address for the removal of the triggers in order to ensure the rate cuts next year occur. On March 8th, the Senate introduced SSB 1250 to repeal the triggers and to also phase out the inheritance tax. The bill moved through committee and out on to the Senate floor as SF 576 (Link). The Senate took up and unanimously passed (46-0) SF 576 on March 17th. The House now needs to determine their path on this issue in the weeks ahead.
TFI Bills of Interest - Bill List
HF142 Sale and Use Tax Refunds Summary | Details House Ways & Means Committee
Makes changes to sales and use tax refunds.

HF273 Winter Recreational Activities Protections Summary | Details House Floor
Makes a person who owns a commercial property immune from civil liability for voluntary winter activities if the owner shows that the injury resulted from the risks inherent in such activities.

HF384 Off-Site Drinks Summary | Details Senate Floor
Requires mixed drinks, wine, liquor, beer, and wine sold by class "C" licensees for off-site consumption be in original, unopened containers.

HF486 Scenic Byways Enhancement Fund Summary | Details House Floor
Creates a scenic byways enhancement fund.

HF493 Low-Speed Electric Bicycles Summary | Details House Floor
Makes changes to low-speed electric bicycle regulations.

HF558 Amusement Ride Training Summary | Details House Floor
Establishes a minimum age and training requirements for attendants who control amusement rides.

Prohibits vehicle rental companies from blocking or charging a customer's credit card in excess of the estimated total daily or weekly charges and rental deposits stated in the rental agreement.

HF762 Snowmobile/ATV Transfer Fees Summary | Details House Floor
Waives transfer title fees for snowmobiles and ATVs for surviving spouses.

HF768 Alcohol Licensing Summary | Details House Floor
Authorizes ABD to grant up to two of each license/permit to a native distillery, beer manufacturer, brewery, or wine manufacturer.

HF785 Amusement Concessions Summary | Details House Floor
Makes changes to definitions related to amusement concessions and licensing.

HF789 Manufacturing 4.0, Tourism Funding and Other IEDA Programs Summary | Details House Ways & Means Committee
Makes provisions related to Manufacturing 4.0, tourism funding, and other IEDA programs. Includes $5 million in direct funds to IEDA to more than double tourism marketing.

HF806 Nonresident Deer Hunting Summary | Details House Floor
Reserves 500 nonresident deer hunting licenses for individuals who have made reservations with a hunting guide company.

HF820 Lobbying Activities Summary | Details House Floor
Places requirements on lobbying activities of political subdivisions.

Eliminates the requirement that a resident snowmobile operator must obtain a user permit to operate a snowmobile on public land, public ice, or a designated snowmobile trail.

HSB195 Pandemic Relief Deductions Summary | Details House Ways & Means Committee
Excludes certain COVID-19 related grants from individual and corporate income taxes and allows certain deductions related to the paycheck protection program loan forgiveness.

Repeals individual income tax and increases the state sales and use tax.

SF169 Promotional Play Receipts Summary | Details Senate Floor
Makes changes to promotional play receipts governing gambling games and sports wagering.

SF356 Agricultural Tourism Promotion Act Summary | Details House Agriculture Committee
Creates the Iowa Agricultural Tourism Promotion Act.

SF364 Paycheck Protection Program Summary | Details Senate Floor, Second Time
Fully conforms Iowa tax law to federal law regarding money received from the federal paycheck protection program for all taxpayers.

SF390 Governor's Broadband Proposal Summary | Details Senate & House Floors
Makes provisions related to broadband service availability and administration of the empower rural Iowa broadband grant fund.

SF420 Recreational Use of Private Land Summary | Details Senate Floor
Amends definition of private land available for public recreational use and amends definition of "recreational purpose."

SF465 Littering Offenses Summary | Details Senate Floor
Adds revocation of certain privileges upon conviction of a littering offense.

SF475 Statewide Tourism Marketing Summary | Details Senate Appropriations Committee
Transfers funds to IEDA from the beer and liquor control fund to more than double the funding for IEDA tourism marketing and funds a statewide tourism marketing organization.

Creates a local hotel and motel tax account and board to administer locally imposed taxes.

SF542 Alcohol Renewal Fee Rebate Summary | Details Senate Floor
Requires ABD to provide a renewal fee rebate to holders of an annual license/permit to sell alcoholic beverages for on-premises consumption who renewed in CY2020.

SF548 Advertising Device Regulation Summary | Details Sent to Governor
Modifies regulations and requirements relating to advertising devices along highways.

Makes provisions related to renewable fuel.

SF555 Vaccinations/Immunizations Summary | Details Senate Floor
Makes several provisions related to vaccinations and immunizations.

Makes provisions regarding state taxation.

SSB1242 Governor's Economic Development Budget Summary | Details Senate Appropriations Committee
The governor's budget for economic development authority, department of cultural affairs, Iowa finance authority, public employment relations board, and department of workforce development for for FY2021-2022 and FY2022-2023.

SSB1246 Governor's Transportation Budget Summary | Details Senate Appropriations Committee
The governor's budget on transportation and other infrastructure appropriations for FY2021-2022 and FY2022-2023.

Excludes certain COVID-19 related grants from individual and corporate income taxes.
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