Lee Hein

The session will be extended for another week.  We are still waiting for the Senate to act on the budget bills we sent over several weeks ago.  We did move a couple of priority bills for the Governor this week. I hope next week is the week things start to move but the ball is in the Senate’s court.

Supporting Iowa’s Renewable Fuels Industry

This week the House supported Iowa farmers and sent House File 2128 to the Governor for her signature.  I managed the bill since the Governor made it one of her priorities last year.  We met with the stakeholders throughout the session and into the summer.  The bill was redrafted this session with much input from the groups. It represents a lot of compromise over a two year period of time.

The renewable fuels bill requires dealers with compatible infrastructure to offer E-15. It does provide for waivers from this access standard in certain situations. The bill makes changes to retailer fuel tax credits as well as fuel production tax credits. Additionally, the bill makes changes to the renewable fuel infrastructure program. The bill ensures maximum choice at the pump for the Iowa consumer, by guaranteeing higher blend renewable fuel availability at the pump. 

The final changes include creating a new exemption for small stations that sell less than 300,000 gallons of gasoline based on a 3-year average. It also increases cost-share percentages and grant amounts for retailers who sell less than 450,000 gallons of gasoline.

There is no doubt E15 is less expensive than E10 and promoting this product will save Iowans money. But promoting this product will also support Iowa farmers and Iowa jobs.  I enjoyed working on one of the Governor’s top priorities along with Senator Brown to get it to the Governor for her to sign. 

Making Unemployment a Re-Employment System

• We’re facing a workforce shortage in Iowa and across the country. We need our state’s unemployment system to serve as a reemployment system.
• This week, the House passed HF 2355 which makes a number of reasonable reforms to Iowa’s unemployment insurance system.
• This is the second time the House has passed the bill, but it now has both chambers’ approval and is headed to the Governor’s desk for her signature.
  • This bill shortens the amount of time Iowans can collect unemployment from 26 weeks to 16 weeks.
  • If unemployment is due to plant closure, the weeks are reduced from 39 to 26.
  • This bill does not change who is required to search for employment in order to receive unemployment benefits. However, if you are required to be looking for employment, the percentage of benefits you receive, if you refuse a job offer, will decrease.
  • The bill does not include a one-week waiting period before you can receive unemployment benefits. 

As Governor Reynolds said, the unemployment safety net has become more of a hammock. We need to ensure that government is not incentivizing Iowans to remain out of work, but instead incentivizing folks to return to the workforce as quickly as possible. 

As always, if you have any concerns or thoughts on these or other issues, feel free to send me an email at lee.hein@legis.iowa.gov  or give me a call at 319-480-1997.

This week again the House stood at a stand still waiting for the Senate to move Budget bills so that we can start the process of working out the differences and pass the budgets.  This is the last thing that needs to be done before we close the session.  The Senate worked a couple of days on policy legislation but did not move the needed budget legislation.  Tuesday was the 100^th day of the session which is the official end of the session. 

The end of the session means that our clerks are done. Clerks help answer emails.  They keep track of bills in committee, take notes at committee meetings, and help draft the weekly newsletter.  My clerk this year was David Wade.  He was a great help in keeping me on task during the busy days at the Capitol. 

Below is his last assignment I gave him on Tuesday before he left.  I asked him to write his thoughts on the session.  Thank you David for spending time with me this session and making my job much easier in serving the constituents of House District 96.

This week was my last week at the Capitol as a clerk. I was fortunate enough to clerk for both Representative Hein and Representative Mommsen. The experience has just been fantastic. I have been able to learn so much about how our state government works. Representatives Hein and Mommsen have been great at explaining the process to me and helping me understand the intricacies of state politics. I have been able to meet some very great, interesting, and well-educated people here in the statehouse, including other senators and the Governor herself. I have found an abundance of opportunities to further explore my potential future in law or maybe even politics. Later this week, I start my next job as a regional campaign director for Governor Reynolds campaign. I am very excited to start this opportunity, but I will definitely miss my time at the Capitol. I cannot overstate how great of an opportunity this was-thank you again. Representatives Hein and Mommsen!

As always, if you have any concerns or thoughts on these or other issues, feel free to send me an email at lee.hein@legis.iowa.gov or give me a call at 319-480-1997

This week is funnel week at the Capitol, the busiest week of session. It’s been a flurry trying to vote bills out of subcommittees and full committees. If a bill is not voted out of committee before funnel week, it cannot be debated on the House floor. There are two committees that are “funnel proof” meaning that they can still introduce and pass bills after funnel week. Those two committees are Ways & Means, and Appropriations. The next funnel week is March 18^th.

House Passes Tax Bill

Yesterday, 2/16, the House voted to pass HF 2317 out of the House and sent it to the Senate. This was a priority of ours this session. I am proud to see this bill move forward. I was very much involved every step of the way moving this bill along, and I managed this bill on the House floor. Thanks to this bill, every Iowan will keep more of their hard-earned money in their pocket. Right now, Iowa is taking in more money than it needs to run state government. The state has over-collected from Iowa taxpayers and they deserve that money back. Thanks to the Governor’s leadership, and our conservative budgeting, Iowa’s economy remains strong and will be able to maintain growth even with this tax cut. We can fund this tax cut while still funding Iowan’s priorities. It is a simple and responsible flat tax. A flat 4% tax on individual income tax across the board is fair to everyone. It puts money back into the pockets of the taxpayers that paid it into the state in what I call an overpayment.

This bill reduces income tax for retirees, as it makes all retirement income tax free. The hope is that it helps keep Iowa on the radar as a place to retire and make as their place of residence. If these folks stay in Iowa, they will continue to contribute to the Iowa economy, as well as be a part of their local community activities.

Board of Educational Examiners Reform

This week, the House Education Committee advanced a proposal to reform the Board of Educational Examiners’ procedure in handling complaints made against teachers and administrators, particularly complaints of child abuse. We have been made aware of many cases of teachers or administrators with very serious complaints filed against them not be reprimanded appropriately by the BOEE. Teachers with these allegations leveled against them often have no record of a complaint attached to their license. And even in cases where the allegations are found to be true, teachers have had their licenses reinstated after a short period of time, when those teachers do not belong in the classroom ever again. We know the vast majority of teachers are great people who are doing great work for our students. But there must be a system in place to remove the ones that are harming our children. The system for protecting our kids and ensuring their safety in school is clearly broken. We are working on a number of reforms to fix it.

I will be having a forum at Anamosa Library on February 25^th at 12:00-1:00 pm

On Monday, we did not have session in the House, instead I attended caucuses. Very important step in the Democratic process that it is always my honor to be a part of. I met with the Jackson County Supervisors on Tuesday morning, and Tuesday afternoon the Ways and Means committee voted on HSB 626, the income tax bill. I managed this bill in committee, and it has been a lot of work to get this bill right. I really enjoy seeing it pass through committee. The bill is very similar to the Governor’s tax proposal (HSB 551) except that the House version does not include corporate tax cuts and instead focuses on individuals. Additionally, the House bill provides that the taxpayer trust fund will be used to partially pay for the tax cuts. The next step for this bill is a public hearing called for by the minority party. This will take place on Monday, February 14^th at 5:00 pm in room Rm 103 at the Capitol. There will be a link to this meeting posted on the legislative website an hour before the meeting. We are very excited about the individual income tax cuts that come from this bill.

            Next week is the first funnel. By next Friday, a policy bill needs to be passed out of committee. If the bill doesn’t make it out of committee, it is no longer eligible for consideration by the rest of the session. Bills in Ways & Means and Appropriations are funnel proof and remain eligible for the entire session. Next week is always one of the busiest weeks of the session.

This week, we have had many meetings, both full committee and subcommittees, working on discussing and passing along bills. The big bill of the week was the Governor’s Biofuel bill, HF 2128. Last night, 2/2/22, the bill passed out of the House with bipartisan support 81-10. Now, it moves to the Senate, where hopefully they pass it quickly as well. This bill has been a long time coming and I am very happy to see the progress we’ve made. This is a huge win not just for Iowans, but also for Iowa agriculture. We are the example to the rest of the country on the importance of using cleaner, renewable fuel source. This bill increases Iowans’ access to E-15 by ensuring all gas stations that are compatible offer E-15 as an option to consumers. If a station’s equipment is not compatible, and upgrading their infrastructure would come at a great cost to the business, they can apply for a waiver from this requirement. This change was made from last year’s bill to ensure the bill does not put small fuel retailers out of business.

            Next up on the agenda is the Governor’s tax bill. This bill, HSB 626, has been introduced, and passed through subcommittee. HSB 626 is focused on the individual, outlining a flat tax rate that will go into effect the tax year of 2026. Another provision in the bill gets rid of income tax on retirees in the state. This is similar to the Governor’s tax bill, but our version does not include a corporate tax cut. I could support a corporate tax cut, but I think we need to have a discussion on corporate tax credits also. Since it has passed the subcommittee, this bill is ready to be debated by the entire Ways and Means committee. I will be floor managing this bill.   I think with the tax dollars surplus, that we can lower individual income taxes. The bill also eliminates taxes on retirement plans.  I also want to give people a reason to want to retire, a reason to stay in Iowa. This will make Iowa a more attractive state for retires.

Feel free to contact me: 515-281-3221 or lee.hein@legis.iowa.gov

In the third week of this General Assembly, we really hit the ground running working on the Governor’s proposal bills. Our main focus this week was to pass through House Study Bill 594, which was about bio fuels. With HSB 594, every well-equipped gas station in the state would be required to offer so much E-15 gasoline, an efficient and more environmentally friendly fuel. New gas stations will be required to plan for and build with the capacity for E-15 gasoline. For companies without compatible equipment, there is a waiver option that allows them to not participate. The bill prioritizes funding for infrastructure for the gas retailers that cannot afford to upgrade their equipment. There is a budget for this already for other improvements to gas retailers, but this will increase this budget as needed. We have worked hard since last year to correct the language in the bill to fit everyone’s needs, and this year I am very happy with where we are at. The bill passed through the Ways and Means committee on Wednesday, and it should be ready to hit the house floor for debate. This bill has been in the works for a while, and I am glad to see it start its way through the process, even if we have to continue making adjustments to it. House Study Bill 594 will be great for our industries, our fuel companies, and Iowa agriculture. The availability of a new, more efficient and eco-friendly fuel option will be great for the state, and I am excited for to see this bill move forward.

              Week 2 at the Capitol has been very busy. Last week the Governor laid out her comprehensive tax plan for the 2022 legislative session during her speech. This week more details and fiscal information are available as House Study Bill 551 was released publicly. The bill has landed in the Ways and Means committee of which I am the chair, so we are taking an extensive look at how to implement her ideas. The following is a division by division explanation:

Division I—Sale of Certain Qualified Stock—Net Capital Gain Exclusion

This division provides an employee-owner one lifetime election to exclude from income tax their net capital gains from the sale or exchange of capital stock (ESOPs). This exclusion is phased in over three years starting tax year 2023.

Division II—Retired Farmer Lease Income Exclusion

This division provides that a retired farmer’s income from rental of their property is exempt from tax. The farmer must be 55/farmed for at least 10 years. If the farmer choses this exemption, they are not eligible for the capital gains exclusion provided by Division III. This change begins tax year 2023.

Division III—Retired Farmer Capital Gain Exclusion

This division provides a single lifetime exclusion of capital gain on the sale of a retired farmer’s land or livestock. This change begins in tax year 2023.   

Division IV—Individual Income Tax Rates—Tax Years 2023-2025

This division strikes the tax brackets and rates that would go into effect in tax year 2023 and reduces them further in tax years 2023, 2024, and 2025.

Division V—Individual Income Tax—Flat Rate

This division picks up where Division IV left off. It provides for a flat tax of 4.0 percent on all taxable income. This begins in tax year 2026.

Division VI—Corporate Income Tax Rates—Adjustments

This division provides for the corporate tax rates to be reduced based on a revenue trigger. It provides that in a year where corporate tax revenue exceeds $700 million, the excess is used to reduce the corporate rates the following year. This change begins in tax year 2023.

Division VII—Corporate Income Tax—Flat Rate

This division provides that when the corporate rates are reduced (by Division VI) to a point where all rates equal 5.5 percent, the corporate tax rate is codified at a flat 5.5 percent.  

Division VIII—Retirement Income

Currently, Iowa Code provides for an income tax exclusion for the first $6,000 of retirement income. This division provides that all retirement income would be excluded from tax. The change begins in tax year 2023.

The total fiscal impact of the proposal is -$245.13 million in FY23, -$594.29 million in FY24, and -$833.61 million in FY25. Years beyond that do go above one billion.  A subcommittee has been assigned to the bill.

On a personal note, my mother in-law Mary Morgan Squires turns 100 on Friday.  Congratulations and Happy Birthday to her.  That’s quite an accomplishment.

If you have any concerns or comments on these or any other issues, feel free to contact me at my legislative email which is lee.hein@legis.iowa.gov or call me at 319.480-1997. I look forward to hearing from you.

Upcoming Forums:

Friday, January 28^th I will be in Monticello with the Jones County Economic Development Reform from 12:00-1:00 pm

Friday, February 4^th, I will be in Manchester at the Delaware County farm bureau from 10:00-11:30 am

Iowa House Passes Support for Hoover Presidential Library Renovation
House File 588 passed the Iowa House this week with nearly unanimous support. The bill creates a Hoover Presidential Library Tax Credit. The 31st President of the United States was born in Iowa and his presidential library is located in West Branch. The library’s foundation is currently planning a $20.0 million renovation of the library, museum, and associated grounds.
The amount of the credit is 25 percent of a person’s donation to the Hoover presidential foundation for the Hoover presidential library and museum renovation project fund. Additionally, the credit is not refundable or transferable, but the excess may be carried forward five years or until depleted, whichever occurs first. The tax credit cannot be carried back to a tax year prior to the tax year in which the person claims the tax credit.
The Hoover Presidential Library Tax Credit has a program cap of $5 million. The maximum amount of tax credits granted to a person shall not exceed five percent of the aggregate amount of tax credits authorized under the cap. Additionally, 10 percent of the aggregate amount of tax credits authorized shall be reserved for those donations in amounts of $30,000 or less. If any portion of the reserved tax credits have not been distributed by September 1, 2023, the remaining reserved tax credits can be available to any other eligible person.
House File 588 requires the economic development authority to develop a system for authorization and distribution of tax credits. The tax credit is available in tax years beginning on or after January 1, 2021, but before January 1, 2024 and is repealed December 31, 2029, to account for the carryforward of any excess credit that may be credited to the person’s tax liability for up to five years. The bill will now move to the Senate for further consideration.
If you have further interest in these or any other bill in the House please contact me and I will do my best to try and keep you up to date. You can also follow bills on the legislative website once you know the bill number http://www.legis.iowa.gov.

Legislative Update
This week marked the second funnel here in the Iowa legislature. This means that any bill that has not already passed out of the House or Senate, and passed out of a committee in the opposite chamber is considered to be done for the session. Unless they are assigned to the Ways and Means or Appropriations committee. This helps to narrow our focus to the budget and bills with the best chance of becoming law.

Iowa Tax Due Date Extended-Automatic Unemployment Fix
This week the Iowa Department of Revenue officially extended the filing and payment deadline to June 1, 2021 for 2020 individual income tax returns and first quarter estimated income tax payments for individuals. The extension does not include business filers and other tax types for individuals.
No late-filing or underpayment penalties shall be due for qualifying taxpayers who comply with the extended filing and payment deadline. Interest on unpaid taxes shall be due beginning on June 2, 2021.
Additionally, because Iowa is a state that automatically conforms with the Internal Revenue Code, certain unemployment compensation will not be included in Iowa income. Based on the federal legislation, the first $10,200 of unemployment compensation income is excluded from taxation for qualifying taxpayers.
Because the federal legislation was enacted after many taxpayers filed their returns, taxpayers were unable to take advantage of this change. To assist these taxpayers, the Department will begin making unemployment compensation related automatic adjustments. The adjustment process may take up to 90 days due to cross-checking these amounts against 1099s and validating eligibility to ensure accuracy and eliminate fraud.
Taxpayers will not need to file an amended Iowa tax return if their only adjustment pertains to unemployment compensation. The Department currently is processing state income tax refunds in 28 days, slightly under the Department’s goal of 30 days. Taxpayers can check the status of their refunds online at the Department’s website Where’s My Refund

Expansion of Beginning Farmer Tax Credit
This week we passed HF 694 also known as the Beginning Farmer Tax Credit Expansion. The goal of this bill is to expand eligibility for the Beginning Farmer Tax Credit program to reach even more owner and operators. Since its creation in 2007 the program has issued over 77 million dollars in tax credits across the State. The program was designed to provide an Iowa tax credit incentive for agriculture asset owners to lease their land, equipment and/or buildings to beginning farmers in order to transfer farming to the next generation.
Currently, beginning farmers can participate in the tax credit program for ten years and the proposed legislation will extend this cap to 15 years. The Legislation also removes the $50,000 tax credit cap that landowners can receive. As the program exists, farm land must be part the lease. If signed by the governor, the program will allow standalone buildings, livestock facilities and grain storage to qualify. It also allows the landowner to enter into multiple agreements with different beginning farmers. This piece of legislation has been a priority of the Governor’s and was a recommendation from the Empower Rural Iowa Initiative.
HF 694 is now on its way to the Senate to be considered and if passed will head to the Governor’s office for her signature to become law. If you are interested in the legislation becoming law please contact your senator to bring HF 694 to the Senate floor for consideration.
The program operated on a first come first serve basis. Applications are accepted until August 1 or until all the tax credit allocation has been awarded (there is an annual 12-million-dollar cap) If you are interested in applying for the Beginning Farmer Tax Credit program you can learn more about the qualifications at https://www.iowafinance.com/beginning-farming-programs/beginning-farmer-tax-credit-program/.

Vaccine Update
I have continued the dialogue with the Governor’s office about proposed vaccine allocation increases in Jones County. At this time, I remain optimistic that in the upcoming weeks we will see an increase in vaccine rollout across Iowa. On Tuesday of this week the vaccine was distributed to legislators who were eligible. While I am able to receive a vaccine here at the Capitol, I have made the decision to wait my turn back home. I believe that in the coming months everyone in Jones County that wants a vaccine will be able to receive one

Anamosa State Penitentiary
The news out of the Anamosa State Penitentiary was a tragedy. This correctional facility has been a staple in our community for over a century and the workers there are vital public servants. To think that two of these public servants lost their lives while on duty is devastating. I want to offer my most sincere condolences to the loved ones of the victims.
Corrections and the Governor have been keeping me informed about the situation and the investigation. I hope we will see justice brought to these assailants soon