Budget differences have delayed progress but spurred negotiations thus far in the 2025 Iowa legislative session. Last week, it was announced that the Senate and House of Representatives agreed on a FY26 budget.
Now, both chambers must move the budgetary bills through their Appropriations Committees and debate them on their respective floors. The bills must be passed in identical form before being sent to the governor for her signature. Then, they can adjourn sine die (for the final time) this legislative session.
The bill creating the Grocer Reinvestment and Local Produce Processing Funds and Programs (House File, or HF, 1032) is still alive for consideration. An appropriation of $1.25 million has been written into the House and the Senate Economic Development Budget bills, contingent on HF 1032’s passing through the Senate. We continue to urge Senators to pass the bill. However, with slow progress there, we are looking for other ways to get the bill over the finish line, perhaps through the Standing Appropriation bill, which may be considered sometime this week.
We have been tracking other bills that would affect rural communities, including the governor's utility and energy bill and the pharmacy benefit managers (PBM) reform bill.
The governor’s energy companion bills, HF 834 and Senate File (SF) 585, have not made any progress in over a month. We have been watching for updates, but it appears they may not move anywhere this legislative session.
We reported in February that PBM reform is necessary to avoid pharmacy deserts in rural Iowa communities. SF 834 passed the Senate and the House and heads to the governor’s desk for her signature. The bill will help ensure patient access to pharmacies and lower the cost of prescription drugs.
If you have feedback on the legislation we are monitoring, do not hesitate to reach out to me and share the rural issues important to you at [email protected] or 402.687.2100 ext. 1034.
Thank you for making your rural voice heard.
Rural grocery / local food
HF 1032 (previously HF 550 and HF 59) – Support: Introduced by Reps. Brian Lohse and Chad Ingels, this Center priority bill creates the Grocer Reinvestment Program and the Local Food Processing Program. The legislation directs the Iowa Economic Development Authority to create a grant program for new or current grocery stores. Prioritization is given to projects focused on cost-saving efforts and business efficiency measures to ensure the long-term sustainability of stores. Grants are directed to help small, locally owned grocery stores sell perishable foods in rural communities. The bill was considered by the House Economic Growth and Technology Committee on Feb. 19 and the House Appropriations Committee on April 16, both passing unanimously. With amendments, the bill does not include a population requirement and instead calls for priority to be given to rural communities, and the definition of grocery stores has been expanded to include businesses that sell more than groceries, such as a deli or restaurant. Furthermore, the portion of the bill creating the local produce processing grant program was moved to the oversight of the Iowa Department of Agriculture and Land Stewardship. The bill passed the House unanimously on April 24 and was immediately messaged to the Senate for consideration. To fund the program, the House and Senate Economic Development Budgets (HF 1040 and SF 645) include $1.25M, contingent on the passage of HF 1032 through the Senate. HF 1032 was introduced in the Senate and assigned to a subcommittee on April 29; a meeting has not yet been scheduled.
Check out these feature stories on Mulholland Grocery and Market on Market!
SF 232 (previously Senate Study Bill [SSB] 1012) / HF 920 – Support: Introduced by the Senate Committee on Health and Human Services (HHS) by Chairperson Mike Klimesh and by 33 representatives in the House, this bill allocates funding to the Iowa Healthiest State Initiative to administer Double Up Food Bucks. This program doubles the investment for purchases of fruits and vegetables by Iowans participating in the Supplemental Nutrition Assistance Program (SNAP). It also specifically benefits local food producers who accept SNAP at farmers markets, grocery stores, and other local places of sale. The Senate bill was considered by the Senate HHS Committee on Feb. 10 and passed on a vote of 17-0. It was renumbered and awaits consideration by the Appropriations Committee; a subcommittee has been assigned, but a meeting has not yet been scheduled. The House version was introduced on March 12 and referred to the Appropriations Committee; a subcommittee has not yet been assigned.
HF 970 (previously HF 796 and House Study Bill [HSB] 216) – Monitor: Introduced by the House Committee on HHS by Chairperson Carter Nordman, this bill is similar to SF 232, also allocating funding to the Iowa Healthiest State Initiative to administer Double Up Food Bucks. However, there is an additional piece requiring Iowa HHS to request a waiver from the U.S. Department of Agriculture Food and Nutrition Service, providing limitations on eligible food purchases. The bill was considered by the House HHS Committee on March 3 and passed on a vote of 14-6. A subcommittee considered the bill on March 18 and recommended its passage. The Appropriations Committee passed the bill 14-8. The bill was considered on the House floor and passed on a vote of 56-40 on March 26. It was immediately messaged to the Senate for consideration. A subcommittee has not yet been assigned.
HF 1006 (previously HF 179 and HF 32) – Monitor: This legislation distinguishes two separate categories for food processing licenses: a category in which meat or poultry is processed on a farm or private residence, and a general category including all other processing locations. In 2023, the general assembly revised the methods used to calculate the annual license fees imposed on food processing plants. The updated correlating license fee structure is included in the bill. The bill passed through the Agriculture Committee on Jan. 28 on a vote of 23-0. A subcommittee further considered the bill on March 20 and recommended its passage. The bill was considered by the Ways and Means Committee on April 9 and passed on a vote of 24-0. It was renumbered, considered on the House floor, and passed on a vote of 90-1 on April 21. It was immediately messaged to the Senate for consideration and referred to Ways and Means. It was assigned a subcommittee on April 23, but a subcommittee has not yet been scheduled.
SF 525 (previously SSB 1158) / HF 851 (previously HSB 173) – Monitor: Introduced by Senate Committee on Agriculture by Chairperson Dawn Driscoll and House Committee on State Government by Chairperson Jane Bloomingdale, these companion bills require education on nutrition, agriculture, food, and natural resources to K-12 students related to the career and technical education components of instruction. They also require the Department of Education to apply for a waiver to update nutritional guidelines, creating exemptions for school lunch recommendations and prioritizing food groups in the following order: animal-based proteins, dairy products, vegetables, and fruits. The Senate version was considered by the Agriculture Committee on March 4 and passed on a vote of 11-4. It was renumbered and awaits consideration on the Senate floor. The House version was considered by the State Government Committee on March 5 and passed on a vote of 15-6. It passed on a vote of 60-36 on March 19, was immediately messaged to the Senate, and attached to SF 525 for consideration. Both versions have been placed on the unfinished business calendar and can be considered during debate at any point.
Water quality
Senate Joint Resolution (SJR) 6 – Monitor: Introduced by 17 senators, this bill repeals the natural resources and outdoor recreation trust fund from the constitution and directs funds from an increased sales tax for the benefit of property tax relief. The bill was introduced on Feb. 17 and considered by a subcommittee on Feb. 19, which recommended its passage on a vote of 2-1. Although this bill has not made it through a committee, it is still alive and eligible for consideration, as joint resolutions are not subject to the funnel process.
HF 329 – Undecided: Introduced by Rep. Mike Sexton, this bill relates to the distribution of water exempt from taxation and the use of tax exemption certificates. With definitions for water utility and exemption certification provided, the bill requires a water utility to accept and retain a valid exemption certificate, rather than receiving the exemption itself. The water utility shall not unnecessarily require a person who presents a valid exemption certificate to obtain a sale or water service refund from the Department of Revenue. After attending the House subcommittee meeting, Center staff learned this bill was requested by Iowa Select Farms and may no longer be needed based on new interpretations of the current Iowa code. We continue to research the potential positive or negative implications for rural communities. A subcommittee considered the bill on March 12 and recommended its passage. The bill awaits consideration by the House Ways and Means Committee.
HF 1033 (previously HSB 226) – Undecided: Introduced by the House Committee on Ways and Means Chairperson Bobby Kaufmann, this bill makes rural water districts a designated exempt entity for sales and use tax purposes. Center staff know rural water districts provide drinking water where private wells and municipalities do not. This bill cleans up the confusion the current code causes by allowing all purchases by rural water districts to be tax-exempt. A subcommittee considered the bill on March 13 and recommended its passage. The bill was considered by the House Ways and Means Committee on April 23, and it passed on a vote of 20-2. It was renumbered, considered on the House floor, and passed on a vote of 86-4 on May 12. It was immediately messaged to the Senate for consideration and referred to Ways and Means. It has not yet been assigned a subcommittee.
Renewable energy
HF 834 (previously HSB 123) / SF 585 (previously SSB 1112) – Undecided: Introduced by Gov. Reynolds, these bills address a variety of energy and utility issues, including a new requirement for public utilities to file Integrated Resource Plans every five years with the Iowa Utilities Commission, a process commonly found in other states. While the bill creates more transparency for future energy plans, the legislation does not allow official public input in the process. Another key update provides further protections for farmers by requiring transmission line developers to uphold certain land restoration standards, an idea supported by the Center. The bills passed out of their respective House and Senate Commerce Committees. As companion bills, they are headed to their respective Appropriations Committees for more work on the Integrated Resource Plan components and other ratepayer issues. The House version has been assigned a subcommittee, but a meeting has not been scheduled. A subcommittee considered the Senate version on March 31 and recommended its passage. It awaits consideration by the Appropriations Committee.
Other bills of interest
HF 369 (previously HF 33) – Support: Introduced by Reps. Chad Ingels and Shannon Latham, this bill establishes an agriculture education grant program to expand high school students’ access to instruction related to agriculture, food, and natural resources. The bill was considered by the House Education Committee on Feb. 11 and passed on a vote of 23-0. A subcommittee considered the bill on March 26 and recommended passage. It awaits consideration by the Appropriations Committee.
SF 383 (previously HF 852, HF 99, and SSB 1074) – Support: Introduced by House Commerce Committee Chair Rep. Shannon Lundgren and Senate Health and Human Services Committee Chair Sen. Mike Klimesh, this bill relates to pharmacy benefits managers, pharmacies, and prescription drugs. Fair pricing requirements allow rural pharmacies to be competitive and stay in business, preventing more areas of the state from losing local pharmacy services. The Senate version was considered by the Senate Health and Human Services Committee on Feb. 19 and passed on a vote of 16-1. It was renumbered, considered on the Senate floor, and passed on a vote of 36-14 on April 28. It was immediately messaged to the House for consideration. The House version was considered by the House Commerce Committee on Feb. 11 and passed on a vote of 23-0. The bill was considered on the House floor and passed on a vote of 75-15 on May 12. It is now headed to the Governor for her signature.
HF 1001 (previously HF 209 and HF 15) – Undecided: Introduced by Rep. Brian Lohse, this bill creates a rural attorney recruitment assistance program. Rural counties and municipalities recruiting attorneys to practice in their areas would be eligible to apply for financial incentives through the College Student Aid Commission, providing program requirements are met. Center staff are researching the potential impact of this legislation, as it limits assistance to no more than five attorneys across the state. The House bill was considered by the Judiciary Committee and the Appropriations Committee, both passing unanimously. It was renumbered, considered on the House floor, and passed on a vote of 86-6 on April 22. It was immediately messaged to the Senate for consideration. A subcommittee has been assigned, but a meeting has not yet been scheduled.
HF 143 – Support: Introduced by Rep. Devon Wood, this bill creates a rural veterinary practice innovation and revitalization fund and program. Funding would be appropriated to assist veterinary practices in rural counties. The bill was introduced on Jan. 27 and referred to the Appropriations Committee, but it has not yet been assigned a subcommittee.
HF 235 – Undecided: Introduced by Rep. Henry Stone, this bill changes the general and rural county services levy rate limitation for upcoming fiscal years, allowing counties to adjust levy rates if property tax income is equal to or less than the expected general county service expenses. Center staff are monitoring this bill to better understand the monetary consequences for counties that have declining property tax income. The bill was introduced on Feb. 6 and referred to the Ways and Means Committee, but it has not yet been assigned a subcommittee.
SF 270 / HSB 274 – Support: Introduced by Sen. Mike Klimesh and House Ways and Means Committee Chairperson Bobby Kaufmann, these bills create the Iowa Rural Development Tax Credit Program. Through an application process, the Iowa Economic Development Authority could award tax credits to qualifying businesses for investing in special capital contributions in rural areas. The Senate version was introduced and referred to the Ways and Means Committee, and a subcommittee was assigned on Feb. 18, but a meeting has not yet been scheduled. The House version was considered by a subcommittee on March 11, which recommended its passage; it awaits consideration by the House Ways and Means Committee.
SF 632 (previously SF 522 and SSB 1160) – Undecided: Introduced by the Department of Agriculture and Land Stewardship, this bill seeks to clean up some parts of the Iowa Code and make changes to a few sections, including those covering crop production nutrient application, animal health, and foreign disease threats, agriculture food processing and licensing fees, and agriculture marketing as it relates to the grain indemnity fund. The bill was considered on the Senate floor and passed on a vote of 48-0 on April 29. It was immediately messaged to the House for consideration. The bill was considered on the House floor and passed on a vote of 84-0 on May 8. The bill is now headed to the Governor for her signature.
HF 624 (previously HF 56) – Support: Introduced by Reps. Bill Gustoff, Derek Wulf, and Megan Jones, this bill allows net income earned, received, or reported from farm tenancy by an S corporation, a trust, or an estate to be excluded from a farmer’s taxable income. To be eligible, the farmer must have held the property that is under tenancy for 10 or more years. The bill was considered by the House Ways and Means Committee on Feb. 25 and passed on a vote of 24-0. It was renumbered, considered on the House floor on March 19, and passed on a vote of 96-0. The bill was immediately messaged to the Senate for consideration, where it has been referred to the Ways and Means committee. It was assigned a subcommittee, but a meeting has not yet been scheduled.
