900 Des Moines St Des Moines, 50309 Ph: 515.327.9156 Fax: 515.327.1407 Contact: Joe Hrdlicka | [email protected] | 515-327-9156

IowaBio Capitol Report November 15, 2016

STATE ISSUES

Election Update This article submitted by IowaBio Lobbyist Mike St. Clair

While we knew Republicans would likely hold on to the Iowa House and Republicans had a decent chance to take the majority, no one saw the wave experienced on election night, including many of those who stand to benefit from it.

Republicans not only held the Iowa House, but increased their majority by two seats to control the chamber 59-41. The Iowa Senate was the big surprise. In the waning days of this cycle it began to look more promising for Republicans to pick up the three seats needed to gain a clear majority, but no one expected they would gain six seats. With one seat open due to the recent passing of Sen. Joe Seng (D-Davenport), and one seat turned independent with Sen. David Johnson (I-Ocheyedan) leaving the republican caucus, this leaves Republicans in control 29-19-1. The special election for Seng’s seat will be held on December 27th and Democrats are expected to hold that seat with state Rep. (D-Davenport) moving over from the House.

There were significant casualties in the Republican wave, most shocking was the upset of Senate Majority Leader Sen. Mike Gronstal (D-Council Bluffs), who lost his race after 34 years in the Legislature. Gronstal’s departure will leave a significant hole in terms of leadership, strategy and institutional knowledge. Despite some bumps in the road, Sen. Gronstal was instrumental in helping us figure out how to move the Biochemical Tax Credit Bill through the Iowa Senate in a challenging bi-partisan environment. He will be sorely missed.

Additionally, IowaBio lost another strong ally in Sen. Steve Sodders (D-State Center). Sodders was responsible for the reorganization of the Department of Economic Development into what is now the Economic Development Authority, along with the Innovation Council, earning him IowaBio distinction as Legislator of the Year in 2013. Sen. Sodders was also a helpful and critical behind-the-scenes strategist for Iowa Bio on the Biochemical Tax Credit Bill. We are grateful for his friendship and service.

Republicans now control the Governor's office and both Chambers of the Legislature. Senate Republicans have held their initial caucus and elected Se. (R-Shell Rock) as Majority Leader and Sen. Jack Whitver (R-Ankeny) as the President of the Senate. We anxiously await the appointment of the new committee chairs, which should be made public sometime in the next few weeks.

As for the House Republicans, they hold their first post-election caucus on Wednesday, November 16th. While we don’t expect any major changes in the top posts of Speaker Rep. Linda Upmeyer (R-Garner) and Majority Leader Rep. (R-Windsor Heights), we will see a number of changes in committee chairs due to several retirements. The one new chair announced before the election was Rep. Guy Vander Linden (R-Oskaloosa), who is taking over the Ways & Means Committee from Rep. Tom Sands (R-Wapello) who announced his retirement earlier this year. Rep. Sands will be missed by IowaBio as well. While not always a fan of new tax credits, particularly Page 1 of 3

900 Des Moines St Des Moines, Iowa 50309 Ph: 515.327.9156 Fax: 515.327.1407 Contact: Joe Hrdlicka | [email protected] | 515-327-9156

refundable ones, Rep. Sands was a calm, supportive and patient shepherd on the Biochemical Tax Credit Bill. In addition to being a personal friend of myself and our executive director Joe Hrdlicka, Sands was a friend to the Biotechnology Industry as well.

Despite the uncertainties that come in a wave/change election like this one, there are opportunities that also manifest themselves. We feel confident about the strong relationships we have built with those who represent the new leadership, including those mentioned above. Senators Dix and Whitver as well as Rep. Vander Linden have all been supportive on our issues as has Lt. Governor - in case you’re worried about Governor Branstad taking a post in the new federal administration. We look forward to 2017 and the chance to work on issues advancing Biotechnology in Iowa!

For some additional insight on last week’s elections: The Des Moines Register explored some of the priorities of the new Iowa Senate majority. Click here to learn more.

Click here for a look at the Trump Administration’s potential impact on the drug sector from Business Insider. Forbes offered a look at the projections for bioenergy under President-elect Trump’s leadership. Click here to read more.

Government Affairs Committee Discusses 2017 Priorities The IowaBio Government Affairs Committee recently met to discuss priorities for the upcoming legislative session.

As legislation directing the distribution of biosimilars has passed in the neighboring states of Missouri and Illinois, health care legislative leaders believe it’s time to consider the legislation in Iowa. The Committee will recommend to the IowaBio Board to proactively seek legislation enabling the distribution of biosimilars through the state’s Code of Pharmacy. BIO is targeting Iowa for the passage of this legislation as well.

The Committee also discussed continued work on the administrative rules for the renewable biochemical tax credit program as well as funding the state’s renewable fuels infrastructure fund. Committee members also are concerned about legislation that could be proposed on drug pricing transparency and fetal tissue research regulation.

IowaBio leadership has discussed working on a biosimilars legislative initiative over the past two years. Progress on passing the legislation in several other states has created consensus on the issue among most industry stakeholders including major pharmacy entities. Biosimilar legislative initiatives are being considered in Nebraska and Kansas in 2017 as well.

These recommendations will be discussed by the IowaBio Board of Directors at its meeting on Thursday, Dec. 8th.

FEDERAL ISSUES

Congress Will Return to Session Prior to End of Year Congress will review a variety of issues as it returns to Washington for a “lame duck” session to finish the year. The list of items that will be addressed appears to shrink as time moves forward, but here is a look at a few items that will potentially be discussed:

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900 Des Moines St Des Moines, Iowa 50309 Ph: 515.327.9156 Fax: 515.327.1407 Contact: Joe Hrdlicka | [email protected] | 515-327-9156

Government Funding for FY 2017 must be addressed, but there is more discussion about simply doing legislation for funding on the first six months. Learn more by clicking here for an article that covers this more in-depth from the Governor’s Biofuels Coalition newsletter.

Another item that may be pushed off to the final months of the Obama Administration is consideration of a handful of energy tax provisions, known as extenders. Last December, Congress approved an extenders deal (PATH Act) that included permanent and short-to-long term extensions of various tax extender provisions. Some Democrats, including Senate Finance Committee Ranking Member Ron Wyden (D-OR), criticized the package saying it inadvertently left out tax incentives for geothermal and fuel cell technologies from a longer extension period. Over the course of 2016, Senator Wyden has attempted to add the extenders to other legislation to no avail. Senate Majority Leader Mitch McConnell (R-KY) has stated that he is open to fixing the omission, but action may be deferred until after the election.

Another item that may see action before the end of the year is the Senate package of bills similar to the House’s 21st Century Cures Act, which seeks to modernize the Food and Drug Administration (FDA) and the National Institute for Health (NIH). The House passed the Cures bill in July 2015, but Health, Education, Labor, and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) proceeded at a slower pace with the Senate version and announced in June that floor consideration would be delayed until after the summer recess at the earliest. The delay comes as Senate Democrats continue to push for an increase in overall funding for NIH.

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