2025 Government Relations Legislative Update - Week Fourteen

By: Matthew H. McKinney, R.G. Schwarm & Julie A. Smith

Capitol Update

Both the Senate and House had floor debate with the Senate passing 41 bills and the House passing 26 bills. So far this session, 79 bills have been enrolled - which means they have passed both the Senate and the House, have been signed by the President of the Senate and the Speaker of the House, and are ready for the Governor’s signature. Of those 79 bills, so far the Governor has signed 27.

A bill to appropriate monies from the Opioid Settlement Fund passed out of the Senate Appropriations Committee on Wednesday. SF 624 appropriates $12 million to the Department of Health and Human Services (HHS) for a nonprofit organization that specializes in the treatment and prevention of co-occurring mental health and substance use disorders for adolescents and adults and $30 million to “abate the opioid crisis in the state.” The bill requires HHS and the Attorney General's (AG) Office to submit legislation each year recommending appropriations for the next fiscal year. HHS and the AG are required to consider recommendations from each district behavioral health advisory council. The funds must be used in a manner that is consistent with the master settlement agreement with 75% of the state money to HHS and 25% to the AG. Iowa expects to receive $325 million over the next several years as a result of opioid lawsuits. The Opioid Settlement Fund was created in 2022 and requires legislative approval before the state portion of the funds can be spent.

The Governor’s disaster assistance bill, SF 619, passed both the Senate and House this week. After passage by the House, the Governor issued a Press Release which reflected on the devastating tornadoes and historic flooding Iowa experienced in 2024 “leaving families, farms, businesses, school and entire communities in peril.” The bill addresses some of the issues that became apparent during the 2024 disasters. To see additional information on this bill, see the Legislative Fiscal Agencies NOBA. The 91 page bill with many substantive provisions includes the following Divisions:

Division I - Creates the natural hazard mitigation financing program in a new chapter 29D and gives the Iowa Finance Authority (IFA) authority to issue bonds to fund the program. The purpose of the program is to make loans available for eligible entities to finance all or part of the costs of a project. The program is jointly administered by the Department of Homeland Security and IFA. Eligible persons and projects for the new program are determined by eligibility for the federal STORM Act.
Division II - Changes the existing Disaster Recovery Housing Assistance Fund from a forgivable loan and grant fund to a financial assistance fund. It also requires the Governor to specify whether funds are available for housing assistance for renters and owners in an emergency disaster proclamation.
Division III - Excludes grants from the State Disaster Recovery New Housing Program awarded between August 20, 2024 and December 31, 2024 from state income tax.
Division IV - Post - Loss Assignment of Benefits - Residential Contractor. Provides homeowner protections in the event of disaster.
Division V - Public, Independent and Staff Adjusters. Requires licensing of adjusters. Gives authority to the Iowa Insurance Commissioner to implement.
Division VI - Licensing and Regulation of Appraisers and Umpires. Requires licensing and regulation of appraisers and umpires. Gives authority to the Iowa Insurance Commissioner to implement.
Division VII - Iowa Economic Emergency Fund - Proclamation of Disaster Emergency. Gives the Department of Management authority to provide for an interdepartmental transfer of economic emergency fund monies subject to approval of the Governor for disaster emergencies.
Division VIII - Iowa Economic Emergency Fund Appropriations - For FY 24-25, appropriates $2 million to the nuisance property remediation assistance fund and $11.6 million to IFA for deposit in the disaster recovery housing assistance program fund.

A bill that reduces the amount of retainage required to be withheld for public improvement projects passed the House and is on its way to the Governor for her signature. Current Iowa law allows a governmental entity to withhold a total of 5% for retainage for contractor and subcontractor work on public improvements. SF 574 reduces that amount to 3%.

In the Know

Effective Dates of Bills. Have you ever wondered how to figure out what the effective date of a bill is? Some laws contain a specific effective date in the body of the bill itself, but if a law does not provide a specific date, the effective date is considered to be July 1. This requirement is found in Article III, Section 26 of the Iowa Constitution Codified. Section 26 also provides that the Legislature may “establish by law a procedure for giving notice of the contents of Acts of immediate importance which become law.” Iowa Code Section 3.7 establishes such a procedure providing that if a law is deemed to be of “immediate importance”, it will be considered in effect when signed by the Governor. Both the Constitution and Iowa Code provide for a 90 day effective date after adjournment in the case of a special session.

It wasn’t always this way. Article III, Section 26 of the original Iowa Constitution which was Codified in 1857 provides that “No law of the General Assembly, passed at a regular session, of a public nature, shall take effect until the fourth day of July next after the passage thereof.” This provision was amended in 1966 to change the effective date to July 1. The original Constitution also provided for special session effective dates and laws of “immediate importance” whose effective date was when the law was published in newspapers in the state.” If you are interested in seeing the original Constitution of Iowa in all its handwritten glory - it is on display in the Secretary of State’s Office located on the first floor of the Iowa Capitol. Or click here to see the original scanned version.