SF 581 – Deer depredation program and population study
SF 581 would make a number of changes with the goal to increase the deer harvest and reduce the deer population. These changes include:
The bill also requires the DNR to conduct a deer population study for each county, including a review of environmental impact such as damage to crops and trees because of excessive deer populations and the spread of disease in wildlife, as well as information on property loss, medical costs and fatalities due to deer-vehicle accidents.
[3/15: 9-5, Party-line (Absent: Bolkcom, Goodwin, Sweeney)]
SF 580 – Ban on social media blocking by private corporations
SF 580 prohibits the State or political subdivisions from entering into contracts with, or providing tax incentives or other benefits to, certain companies that censor online content.
- Defines “monopolistic entity” to include companies that own or operate a social media networking website, own or operate a search engine, or a person who owns or operates any similar Internet site that displays content to its users.
- Requires the Iowa Attorney General to file a lawsuit alleging a violation of state or federal antitrust or price-fixing laws on such monopolistic entities. The bill was amended in committee to allow the attorney general to aggregate complaints into a single action against a company.
- Adds additional exceptions (i.e., allowed censorship) to cover situations where constitutionally-protected speech should be allowed to be removed or limited on a platform: Intellectual Property (trademark and copyrighted material); content generated by bots; and pornography.
- Allows a pre-installed application store to remove the ability to download a social media website (app) from its store if the app poses a national security threat that is confirmed by the U.S. Department of Homeland Security within 60 days after the removal.
To address concerns from various governmental entities (e.g., school boards, Regents institutions), the bill bifurcates tax incentive and non-tax incentive agreements. Agreements entered into by government entities and “Big Tech” companies require termination if they relate to tax incentives. Government entities may at their discretion terminate all other agreements within 90 days.
- Tax incentive agreements must be terminated by government entities upon a court finding of a violation of 554E by a company.
- If the agreement relates to tax incentives, the tech company breaches the agreement once a court finds a violation of 554E.3 (censored constitutionally protected content), and the government entity is required to terminate the contract and recapture any tax incentives not earned through performance under the contract
- This requirement to terminate will apply to existing contracts and future contracts
- Government entities must include a provision stating the requirement to terminate a tax incentive in any agreement entered into on or after the effective date of this bill (prospective application)
- This provision will essentially be written into an existing contract (retroactive application)
Non-tax incentive agreements are not required to be terminated by government entities, but they have the discretion to terminate these contracts within 90 days of the court’s finding of a violation of 554E by a company.
- If the agreement does not relate to tax incentives, the tech company breaches the agreement once a court finds a violation of 554E.3 (censored constitutionally protected content), and the government entity will have the option to terminate the contract within 90 days of the courts finding of a 554E.3 violation but may choose to continue the contract.
- Option to terminate within 90 days must be included as a provision in any contract a between a government entity and a tech company entered into on or after the effective date.
- Option to terminate the contract within 90 days will only apply to contracts entered into on or after the effective date of the bill.
The Attorney General must create a reporting system within 60 days following the effective date of the bill that will operate until 59 days following that date. The system must include at a minimum a mechanism to submit electronic reports of potential violations of chapter 554E including evidence.
The bill takes effect upon enactment and applies to agreements in effect or entered into on or after the effective date.
[COMMITTEE 3/15: 9-5, Party-line (Absent: Bolkcom, Goodwin, Sweeney); FLOOR 3/17: 30-17, Party-line (Absent: Goodwin, Hogg, Nunn)]
SF 576– Removal of triggers for Contingent Income Tax System; Inheritance Tax phase-out
SF 576 would remove the “triggers” that must be met to move to the contingent individual income tax system that was established as part of SF 2417 in 2018 and make the new system effective for TY 2023. Under SF 2417, the contingent tax system only goes into effect after tax year 2023 when two conditions are met: general fund net receipts for FY22 (or after) exceed $8.31 billion, and net general fund receipts for that year must grow at least 4% above the year prior (equal to or more than 104% of previous year’s net receipts).
Under the contingent tax system, the basis for determining Iowa taxable income will be calculated on federal taxable income. This will incorporate all federal tax deductions into the Iowa tax code and will eliminate many of the Iowa specific adjustments to taxable income. The bill removes the state standard deduction but will bring federal standard or itemized deductions into the Iowa tax code by using federal taxable income as the base. One of the largest changes under the contingent tax system is the removal of the Iowa deduction for federal taxes paid, which is known as “federal deductibility.” This massive deduction has the impact of making Iowa’s income tax rates artificially high and appear less competitive with other states.
The bill also phases out and eventually repeals Iowa’s inheritance tax and qualified use inheritance tax. The inheritance tax is paid by a beneficiary of the estate based on the taxable value of his or her share of the estate. Estates for deaths of decedents on or after January 1, 2024, would be fully exempt. The amount of the estate a beneficiary receives that is subject to the tax would be reduced by 25% for 2021, 50% for 2022, and 75% for 2023.
Iowa’s inheritance tax provides a complete exemption from the tax for lineal relatives (parents and step-parents, children and step-children, adopted family, etc.) of the deceased owner of the estate (decedent) who are beneficiaries, while also exempting estates valued at less than $25,000.
This is separate and distinct from the federal estate tax, which is assessed to the estate based on the taxable value of the estate. The federal estate tax does not have an exemption based on the designated beneficiary but does exempt estates valued up to $11.4 million.
The inheritance tax is assessed at different rates based on the beneficiary’s relationship to the deceased owner of the estate. For inheritances not exempt, the tax rate varies by size of the inheritance and category of the beneficiary:
- If the net value of the entire estate is less than $25,000, the tax rate is 0%.
- For a brother, sister, son-in-law or daughter-in-law, the rate is 5% to 10%.
- For an aunt, uncle, niece, nephew, foster child, cousin, brother-in-law, sister-in-law and all other individuals, the rate is 10% to 15%.
- For firms and for-profit corporations and organizations, the rate is 15%.
- For charitable, educational or religious organizations under the laws of other states or countries, the rate is 10%.
- For bequests for religious services in excess of $500, the rate is 10%.
- For unknown heirs, the rate is 5%.
- For public libraries and art galleries, hospitals, humane societies, municipal corporations, or for the care of cemetery or burial lots, or bequests for religious services not to exceed $500, the rate is 0%.
The qualified use inheritance tax is available to certain taxpayers who elect to use an alternate valuation for the estate under Section 2032A of the federal Internal Revenue Code.
[3/17: 46-0 (Absent: Goodwin, Hogg, Nunn, Quirmbach)]