Fiscal Note
Fiscal Services Division
HF 2661 – Law Enforcement Omnibus (LSB5454HZ.1)
Staff Contacts: Xavier Leonard (515.725.0509) xavier.leonard@legis.iowa.gov
Molly Kilker (515.725.1286) molly.kilker@legis.iowa.gov
Eric Richardson (515.281.6767) eric.richardson@legis.iowa.gov
Fiscal Note Version – Final Action
House File 2661 relates to public safety personnel and does the following:
• Makes changes to the retirement benefits of sheriffs and deputy sheriffs.
• Restricts bail for murder in the first degree or felonious assaults committed upon public
safety personnel.
• Provides for a tax credit for moving expenses that is available against the individual income
tax for new public safety personnel moving to the State.
Division I — Iowa Public Employees’ Retirement System — Sheriffs and Deputy Sheriffs
Description
Division I of the Bill increases the applicable percentage for retirement benefit payments of
sheriff and deputy sheriff members of the Iowa Public Employees’ Retirement System (IPERS)
retiring on or after July 1, 2024, for each calendar quarter of service beyond 22 years of service
from 0.375% to 0.625%, up to a maximum accumulation of 80.0%.
The Division also establishes an annual adjustment to the monthly allowance for active and
inactive sheriff and deputy sheriff members of the IPERS, and to any beneficiaries or contingent
annuitants, for retirements occurring on or after July 1, 2024. Beginning on that date, and each
July 1 thereafter, the monthly retirement allowance will be increased by 1.5% of the monthly
retirement allowance payable on that date. Sheriff and deputy sheriff members of the IPERS
who retire after July 1, 2024, will not be eligible to receive a retirement dividend under Iowa
Code section 97B.49F.
Background
Based on the July 1, 2023, actuarial valuation, the IPERS Sheriffs and Deputies membership
group covers approximately 1,732 active members and 1,250 retired members. The current
funded ratio is 102.60%. The current actuarial accrued liability is $910.2 million, the actuarial
value of assets is $933.8 million, and the unfunded actuarial liability (UAL) is $-23.6 million.
For FY 2025, the IPERS Sheriffs and Deputies membership group’s estimated contributions at
the current rate of 17.02% of payroll total $26.3 million, split evenly between the members and
the State. Figure 1 displays the contribution rates for FY 2021 through FY 2025.
Figure 1 — Contribution Rates for the IPERS Sheriffs and Deputies, FY 2021 – FY 2025
FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
Employer Contribution Rate 9.26% 9.01% 8.76% 8.51% 8.51%
Employee Contribution Rate 9.26% 9.01% 8.76% 8.51% 8.51%
Total 18.52% 18.02% 17.52% 17.02% 17.02%
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Currently, a vested member of the IPERS Sheriffs and Deputies membership group is eligible to
receive one of two retirement dividends under Iowa Code section 97B.49F, depending on when
the member retired. A member who retired before July 1, 1990, is eligible to receive annual
dividend payments in November of each year. A member who retired on or after July 1, 1990, is
eligible to receive a favorable experience dividend (FED) when a favorable experience on the
actuarial liabilities and assets occurs and the IPERS Fund is fully funded. Due to the funding
status of the IPERS Fund, the IPERS has not made any FED payments since 2014.
Under current law, the applicable percentage used to calculate a retiree’s monthly retirement
benefit is increased by 0.375% for each calendar quarter of service beyond 22 years of service.
The current maximum retirement benefit payment increase is 12.0%, while the Bill increases the
maximum retirement benefit payment increase to 20.0%. Figure 2 displays the applicable
percentage for the current law and proposed law under HF 2661.
Figure 2 — Applicable Percentage, Current and Proposed Law
Years of Service Current Law Proposed Law Difference
22 60.00% 60.00% 0.00%
23 61.50% 62.50% 1.00%
24 63.00% 65.00% 2.00%
25 64.50% 67.50% 3.00%
26 66.00% 70.00% 4.00%
27 67.50% 72.50% 5.00%
28 69.00% 75.00% 6.00%
29 70.50% 77.50% 7.00%
30+ 72.00% 80.00% 8.00%
Assumptions
• According to the cost study performed by Cavanaugh Macdonald Consulting in December
2022 using the FY 2022 valuation report, increasing the applicable percentage and
establishing a 1.5% annual adjustment to the monthly allowance for FY 2022 would have
increased the IPERS Sheriffs and Deputies membership group’s UAL from $-40.0 million to
$56.9 million, a $96.8 million increase. The funded ratio for the IPERS Sheriffs and
Deputies membership group would have decreased from 104.70% to 93.99%, a 10.71%
decrease. The contribution rate would have increased from 17.02% (8.51% employer,
8.51% employee) to 23.90% (11.95% employer, 11.95% employee).
• While the results of the cost study cannot be directly applied to the FY 2023 valuation report
to arrive at an updated fiscal impact, the cost study can be broadly applied to anticipate a
similar impact.
• The IPERS will incur administrative costs, including costs to update software. The costs are
unknown but are estimated to be nominal.
Fiscal Impact
The Cavanaugh Macdonald Consulting cost study performed in December 2022 using the
FY 2022 valuation report estimated a $96.8 million increase in the UAL, a decrease in the
funded ratio of 10.71%, and an increase in the contribution rate of 6.88% (split evenly between
employer and employee) of the IPERS Sheriffs and Deputies membership group.
According to the FY 2023 valuation report, the UAL was $-23.6 million, the funded ratio was
102.60%, and the contribution rate was 17.02% (split evenly between employer and employee)
for the IPERS Sheriffs and Deputies membership group.
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A 6.88% increase to the contribution rate split evenly between employer and employee is
estimated to cost approximately $5.3 million for each group and $3,000 per employee.
Administrative costs to the IPERS are unknown at this time but are estimated to be nominal.
Any increased administrative costs for the IPERS will be paid from the IPERS Fund.
Sources
Iowa Public Employees’ Retirement System
Iowa Public Employees’ Retirement System FY 2023 Actuarial Analysis
Iowa Public Employees’ Retirement System FY 2022 Actuarial Analysis
Cavanaugh Macdonald Consulting Cost Study for Non-Retired Sheriffs and Deputies
(December 2022)
Legislative Services Agency
Division II — Assault on Public Safety Personnel — Bail
Description
Division II of the Bill provides that a defendant who has been charged with the following may
not be admitted to bail:
• A defendant who has been charged with murder in the first degree of a peace officer or
correctional officer pursuant to Iowa Code section 707.2 with the knowledge that the person
against whom the murder was committed was a peace officer or correctional officer acting in
the peace officer’s or correctional officer’s official capacity.
• A defendant awaiting judgment of conviction and sentencing following a plea or a verdict of
a felonious assault upon an officer with the knowledge that the person against whom the
murder was committed was a peace officer or correctional officer acting in the peace
officer’s or correctional officer’s official capacity.
• A defendant appealing a conviction of a felonious assault upon an officer with the
knowledge that the person against whom the murder was committed was a peace officer or
correctional officer acting in the peace officer’s or correctional officer’s official capacity.
Background
For the purposes of Division II of the Bill, “assault” means the same as defined in Iowa Code
section 708.1; “charged” means the same as “charge” as defined in Iowa Code section 801.4(3);
and “peace officer” means the same as “peace officers” defined in Iowa Code section 801.4(11).
Under Iowa Code section 811.1, all defendants are eligible for bail both before and after
conviction, by sufficient surety, or subject to release upon condition or on their own
recognizance. Additionally, under current law, a person waiting judgment of a conviction
following either a plea or verdict of having committed a Class A felony or appealing a conviction
of a Class A felony is not eligible for bail. Murder in the first degree is a Class A felony.
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As of July 1, 2017, the uniform bond schedule is as follows:
• Any Class B felony: $25,000.
• Any Class C felony: $10,000.
• Any Class D felony: $5,000.
• Aggravated misdemeanor: $2,000.
• Serious misdemeanor: $1,000.
• Simple misdemeanor: $300.
Assumptions
• The inability to post bail may create a fiscal impact to city and county jails, but that impact is
not able to be estimated.
• In FY 2023, the marginal cost per day for jail was $50.
Fiscal Impact
The fiscal impact of Division II cannot be estimated, but is not expected to be significant.
Sources
Department of Corrections
Iowa Judicial Branch
Legislative Services Agency
Division III — Public Safety Officer Moving Expenses — Tax Credit
Description
Division III of the Bill creates a refundable tax credit, available against the individual income
tax, not to exceed $2,000 per move for unreimbursed moving expenses incurred by a new Iowa
resident, after January 1, 2024, who takes full-time employment as a public safety officer. In
lieu of a refund, the tax credit may be credited for the following tax year. Division III specifies
that a resident is not eligible for the credit if moving expenses were deducted for federal tax
purposes.
The Iowa Department of Revenue (IDR) is required to adopt administrative rules to administer
the tax credit.
Division III of the Bill is retroactive to tax years beginning on or after January 1, 2024 (tax year
(TY) 2024).
Background
Iowa Code section 422.12 details deductions from the individual income tax that Iowans may
claim on their State tax returns. The Tax Cuts and Jobs Act of 2017 (TCJA) eliminated the
deduction for moving expenses beginning in TY 2018, which is set to expire after TY 2025 if the
deduction is not reenacted. Currently, only members of the military can claim a deduction for
moving expenses incurred because of work at a new location.
Assumptions
• The IDR will incur costs for the implementation and ongoing administration of the Bill,
including development and modification of tax administration procedures, software, and
information systems; however, these costs cannot be estimated due to a lack of information.
• The 2024 Iowa Law Enforcement Annual Report detailed an average of 249 officers certified
by the Iowa Law Enforcement Academy (ILEA) from 2017 to 2023 (leaving out the pandemic
year of 2020), with a 5.0% rate of growth annually.
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• For purposes of this Fiscal Note, 10.0% of ILEA graduates are classified as out-of-state
residents who qualify to claim the proposed tax credit, beginning on January 1, 2024
(TY 2024), with a rate of growth of 5.0% annually.
• The first fiscal impacts will occur in FY 2025 from TY 2024.
• The entire $2,000 tax credit will be claimed by each qualified claimant.
• The number of claimants by fiscal year is estimated as follows:
• FY 2025 = 26
• FY 2026 = 27
• FY 2027 = 29
• FY 2028 = 30
• FY 2029 = 32
Fiscal Impact
The tax credit in Division III of House File 2661 will decrease General Fund revenue by the
following estimated amounts:
• FY 2025 = $52,000
• FY 2026 = $55,000
• FY 2027 = $58,000
• FY 2028 = $61,000
• FY 2029 = $64,000
Sources
Iowa Department of Management
Iowa Department of Revenue
Legislative Services Agency analysis
/s/ Jennifer Acton
May 1, 2024
Doc ID 1449658
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in developing this
fiscal note is available from the Fiscal Services Division of the Legislative Services Agency upon request.
www.legis.iowa.gov
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Statutes affected:
Introduced: 97B.49C, 124.416, 811.1
Enrolled: 97B.49C, 124.416, 811.1