Regulatory Reform

Creating opportunities and making Iowa’s economy more competitive are key priorities for Governor Kim Reynolds and the legislature and requires reducing Iowa’s regulatory burden. Regulations can act as hidden taxes: often costly and growth-limiting, they can hinder individuals’ right to work or start businesses and raise costs for both small and large businesses, affecting their ability to hire.

Governor Reynolds and the legislature have made significant progress in regulatory reform. From occupational licensing changes to the Governor’s executive order mandating a review of state regulations, these efforts are reducing Iowa’s regulatory burden. This past session, the legislature passed a new reform requiring oversight and a cost-benefit analysis of new regulations, another positive step toward reducing unnecessary red tape.

For decades, Iowa’s judicial system has fallen short of the promise of impartial justice, particularly in cases involving state regulatory agencies. Judges in Iowa have adopted a practice of deferring to agencies’ interpretations of statutes, regulations, and factual determinations. This deference undermines the foundational principle of an unbiased judiciary and tilts the scales in favor of the government, often at the expense of Iowa’s citizens and businesses. Instead of independently interpreting laws, Iowa courts have allowed agencies to act as both the rule-makers and the interpreters, eroding public trust in checks and balances and the judiciary’s role as an impartial arbiter. 

The legislature should require Iowa courts to interpret statutes and regulations de novo —without deference to agency interpretations —and restore judicial independence.

Outdated certificate of need (CON) laws limit healthcare competition and accessibility. In 2023, states like West Virginia and South Carolina repealed their CON laws. These laws give established healthcare providers monopoly power by requiring new providers to get approval from existing ones, restricting healthcare options and driving up costs. Repealing Iowa’s CON laws would improve access to healthcare, especially in rural areas, reduce costs, and promote fair competition.

Reducing regulatory burdens can foster a more-competitive economy and encourage innovation. A promising idea is the introduction of a “regulatory sandbox” — a controlled environment in which businesses can innovate free from certain regulations. Sandboxes allow businesses to work with regulators to find the balance between fostering innovation and managing potential risks. This concept could help Iowa determine which regulations are necessary and which may be overly restrictive or redundant.

Many Iowa industries stand to benefit from regulatory sandboxes. Iowa is a national leader in finance and insurance, with 7,000 companies employing 95,000 people. Since 2015, the state has supported the Global Insurance Accelerator, promoting innovation in insurance technology. Iowa is also a leader in agriculture, biosciences, and manufacturing, which contributes 18.2% of the state’s GDP. A regulatory sandbox could enable these industries to innovate, spurring economic growth and creating jobs.