Week 2 Legislative Update

January 19, 2024

Week 2 was a short work week as the legislature took Monday off to celebrate Martin Luther King Jr. Day. Both chambers held a number of subcommittee meetings throughout the week. On Thursday, the House adopted HR 101 with a voice vote. The resolution affirms Iowa’s support for the State of Israel and condemns the Hamas attack on October 7, 2023.

On Monday, President Donald Trump won the Iowa Republican Caucuses with 51% of the vote, winning all counties with the exception of Johnson County, which chose Ambassador Nikki Haley.

Republican Candidate Results


Total Votes

% Votes


Donald Trump




Ron DeSantis




Nikki Haley




Vivek Ramaswamy




Ryan Binkley




Asa Hutchinson








Chris Christie





Governor’s Proposed Tax Legislation

During the Condition of the State, Governor Reynolds announced a new proposal to further reduce individual income taxes in Iowa at an accelerated pace. The legislation also reduces unemployment taxes and recategorizes childcare center property taxes.

Income Tax Relief

·         Effective this year, accelerate and enact the flat income tax at a reduced rate of 3.65% retroactive to January 1, 2024.  

·         Next year, reduce the flat rate to 3.5%, effective January 1, 2025. 

·         Modernize the cash reserve and economic emergency funds to index to the current needs of the state. 

Unemployment Insurance Reform

·         Reduce the Unemployment Trust Fund balance requirement to remain in the lowest tax rate table.  

·         Lower the maximum tax rate from 7% to 5.4% in all tax tables.  

·         Reduce the number of tax tables from eight to four.  

·         Reduce the tax table rankings from 21 to nine, effectively cutting overall tax categories from 168 to 36.  


Child Care Property Tax Parity

·         Create a subcategory of commercial property for child care centers, allowing for a residential rate for child care centers.  

Additional details can be found here.

Area Education Agencies

Governor Reynolds introduced Senate Study Bill 3073 and companion House Study Bill 542 on Wednesday. The legislation outlines the Governor’s proposal to reform Iowa’s AEA. After receiving feedback from stakeholders and Iowans, Governor Reynolds, Senator Whitver, and Speaker Grassley announced an amendment would be filed that will allow AEA’s to continue to provide general education and media services if requested by schools and approved by the Department of Education.

The original proposal removed general education and media services from the AEA’s jurisdiction. Under the legislation, school districts will receive state and federal special education funding directly and will be able to choose how they receive special education services. The Department of Education will provide special education oversight.

“The legislative process generates feedback from parents, teachers, and students,” Senate Majority Leader Jack Whitver stated. “Their input has been helpful in adjusting this legislation to meet its goal of improving the services provided to students with disabilities, improve student achievement, and ensure value to taxpayers.” 

“We all share the goal of ensuring this bill improves outcomes for Iowa students with disabilities and empowers school districts to decide how best to suit the needs of their schools,” remarked House Speaker Pat Grassley. “We will continue to seek feedback from Iowans and do our due diligence as this bill works its way through the legislative process.” 

The full press release can be found here.

Other Bills of Interest

Topsoil and Stormwater Reform Senate File 455: Creates uniformity in the regulation of topsoil and stormwater regulation. Passed Senate 33-1, passed House subcommittee 2-1. 

Chamber Bucks House File 2036:  Allows for chambers of commerce to reclaim unused chamber buck funds after a chamber bucks program is discontinued. Introduced.

MEGA Program Senate File 574: Proposed IEDA pilot program would allow the state to offer additional incentives for large economic development projects. Passed Senate 45-2.

Next week, legislators will continue to hold subcommittee and committee meetings on proposed legislation. The first funnel deadline where bills must be passed out of committee in their originating chamber to remain eligible is February 16.