April 25, 2025

This Week at the Capitol

• Governor Reynolds signs disaster legislation which will appropriate $13.6 million from the Economic Emergency Fund to the Disaster Recovery Housing Assistance Program to provide disaster aid to impacted Iowans.

• The Iowa House passed legislation creating sales tax exemptions on “everyday items.”
  

League's Priority Legislation

• HSB 328 / SSB 1227 | Property Tax System Overhaul 

  • Updated versions of the property tax overhaul were filed by Ways and Means Chairs. Read the League's unofficial analysis here.

• SF 588 | Public Notice Alignment – To the Governor! 

  • After unanimous passage through the Senate, SF 588 was passed by the House! Congratulations and thank you to all who advocated for this legislation!
    

Regarding the Property Tax Bill

• Talking Points on proposed property tax legislation:

  • The removal of the rollback is a positive step in simplifying Iowa’s tax system, but replacing the rollback with a dollar-based Homestead exemption will not offset the shift of tax burden onto residential property owners, particularly those with properties valued above $300k. 

    • Shifting to a percentage-based Homestead exemption may mitigate this shift more fairly across all residential property values.

  • The revenue restrictor set currently at 2% likely does not keep up with the costs cities are responsible for, i.e., salaries, city equipment/materials.

    • The CPI-based Budget Adjustment Factor (BAF) is a League-influenced inclusion, but the BAF needs to align the revenue restrictor closer to inflationary costs.

  • Lowering the city levy rate via the combination of increasing the taxable valuation of properties to 100%, combined with the 2% revenue restrictor, harms both current and future tax increment financing (TIF) economic development agreements.

    • Maintaining levy rates through a percentage-based Homestead exemption, closer to the current average taxable valuation of 47%, paired with a more flexible revenue restriction, would preserve TIF’s effectiveness as an economic development tool.
      

Legislation that Advanced

HF 706 | Increased Penalties for Open Meetings & Open Records

• To the Governor. 

• Increases the range of damages for violations of the Open Meetings Law ($500-$2,500 for violations and $5,000 to $12,500 for knowing violations). Requires a court to order the removal of a member of a board for open meetings violations, regardless of whether damages are assessed. Requires the members of a government body to take training in Open Meetings/Records laws within 90 days of assuming responsibilities. Requires the IPIB to develop such training. Makes a member subject to damages for not completing the training.

• An amendment was added on the Senate floor making security footage and employee access logs confidential if they’re from Legislative-controlled camera systems or State-owned or leased facilities.

HF 793 | Prohibition of Fire Fighter Certification for Sex Offenders

• To the Governor. 

• Requires the Department of Public Safety to adopt rules prohibiting anyone from serving as a volunteer, non-certified, or professional firefighter who has been listed on the sex offender registry. This also applies to persons who work at fire stations.

HF 991 | Assessment Limitations for Commercial Child Care Facilities

• Passed the House.

• Introduces assessment limitations for commercial child care facilities starting from January 1, 2025. Assessment for eligible properties will be calculated using the residential assessment limitation percentage multiplied by the actual value of the property. Property owners must apply for the assessment limitation by July 1 of the assessment year, providing necessary documentation. Once approved, the assessment limitation remains in effect as long as the property continues to be used as a child care facility. The bill includes retroactive applicability provisions for assessment years beginning January 1, 2025.
  

HF 1002 | Length of Service (LOS) Award Programs for Volunteer Emergency Responders

• Passed House floor. Attached to SF 627.

• Allows municipalities to establish LOS programs for volunteer firefighters, reserve police officers and volunteer EMS workers and to determine requirements and distributions for the programs. Creates a fund under the DOR and appropriates $2 million to the fund from Lottery revenues. Increases the amount by $500,000 if the LOS fund is depleted for two years, but caps the LOS fund at $5 million. Allows the DOR to make matching grants to LOS programs that do not exceed $300.
  

HF 975 | Economic Development Authority & Iowa Finance Authority Revisions

• Passed the House. Attached to SF 642.

• This legislation could impact cities by modifying various economic development programs, including the strategic infrastructure and community attraction and tourism programs, potentially making it easier for cities to access funding for local projects. The repeal of the brownfield redevelopment program and changes to the redevelopment tax credit process may alter how cities approach revitalizing underdeveloped areas. Additionally, the establishment of the arts and culture enhancement fund could provide new funding opportunities for local arts initiatives, while changes to the historic preservation tax credit program may influence local preservation efforts. Furthermore, the Iowa Finance Authority's new rule-making authority regarding homelessness could affect city efforts to address this issue, and adjustments to the Iowa Reinvestment Act criteria may reshape local economic development strategies.
  

HF 617 | Enhancement of Low and Moderate Income Housing Assistance in Urban Renewal Areas

• Passed House Ways & Means Committee. 
  

• Modifies provisions related to public improvements for housing and residential development in urban renewal areas, increasing the required assistance for low and moderate income family housing from 10% to 20% of project costs and extending the revenue division period from 10 to 20 fiscal years for certain projects. The bill takes effect immediately and applies to projects approved after its enactment.
  

HSB 332 | Emergency Communications System Modernization and Funding Adjustments

• Advanced through a House subcommittee.
  

• Temporarily decreases the allocation of emergency communications service surcharge funds to joint 911 service boards from 60% to 50% until June 30, 2029, after which it increases to 55%.

• Directs the 911 program manager to allocate one-half of the operating surplus revenues to public safety answering points (PSAPs) starting July 1, 2029. Removes the option to use remaining funds in the 911 emergency communications fund to provide grants to PSAPs agreeing to consolidate. Directs the Department of Homeland Security and Emergency Management to work with the Iowa Communications Network to improve the next generation 911 network by implementing session initiation protocol call control and routing technology and decommission existing routers. Implements federal rules regarding next generation 911 systems, including funding wireline cost recovery.
  

• Requires the Department of Homeland Security and Emergency Management to study and make recommendations regarding PSAP managed services, consolidation, and funding arrangements by January 1, 2026.

You can view all editions of Legislative Link at iowaleague.org/resource/legislative-link.

Like our membership, the Iowa League of Cities is a non-partisan, service-oriented organization that does not participate in elections, make campaign contributions, or have a political action committee (PAC).