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SF 627

A bill for an act authorizing length of service award programs for volunteer fire fighters, volunteer emergency medical care providers, and reserve peace officers, and making appropriations.

2025-2026 Regular Session

authorize municipalities to create tax-deferred LOSAPs for volunteers and provide matching state grants to fund them, with caps and eligibility rules.

Withdrawn.
#appropriations #citygovernment #emergencymedicalcare #firedepartments #fiscalyear #grants #internalrevenuecode #lawenforcementofficers #publicemployees #receipts #revenuedepartment #sportswagering #volunteerism
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Bill Summary · SF 627

Summary — SF 627 (Withdrawn)

Status: Introduced April 16, 2025; committee-approved and placed on the Appropriations calendar; multiple amendments filed (S-3117, S-3180); attached to HF 1002 (Apr 23); amended and substituted; withdrawn May 14, 2025.

Purpose / Intent

Authorize municipalities to establish tax-preferred length-of-service award programs (LOSAPs) for volunteer fire fighters, volunteer emergency medical care providers, and reserve peace officers, and provide state grant funding to help municipalities contribute to those programs. The aim is to support recruitment and retention of public safety volunteers by offering retirement-style, tax-deferred awards.

Key provisions

  • Authorization (new section 100B.51)

    • Municipalities may create LOSAPs that provide "length of service awards" as described in IRC section 457(e)(11), allowing awards to be treated as tax‑deferred under federal law.
    • Local governing bodies, in consultation with department chiefs, must adopt program guidelines covering eligibility, vesting, distribution, and other operational rules.
    • One amendment version specified a minimum vesting period of three years.

  • State grant fund (new section 100B.52)

    • Creates a Length of Service Award Program Grant Fund in the state treasury under the Department of Revenue to make matching grants to eligible municipalities.
    • Department of Revenue to adopt rules (chapter 17A) and an electronic grant application process; grants prorated if fund is insufficient.
    • Municipalities may use gifts, bequests, or other sources as the local match.
    • Interest credited to the fund; moneys do not revert at fiscal year end.

  • Appropriation / funding

    • One-time FY2026 appropriation found in the amendment: $1,500,000 from the Sports Wagering Receipts Fund to deposit into the length of service award grant fund.
    • An alternate provision (in proposed changes to section 8.57I) would transfer yearly amounts from the sports wagering receipts fund beginning FY2026 to bring the LOSAP grant fund balance to $1,500,000 each July 1 through FY2030; such transfers would be exempt from certain reporting requirements and that subsection would repeal July 1, 2030.

  • Matching / grant caps (two amendment versions)

    • Amendment S-3180 (adopted May 14 in committee action notes): up to a dollar‑for‑dollar match, not to exceed $500 per program participant per year.
    • Amendment S-3117 (filed earlier; noted as out of order): defines “volunteer” as compensated less than $5,000/year; for departments with annual budgets under $100,000, provides a $3 state match per $1 local (up to $300 per recipient/year) with application window Aug 1–Sep 30; for other municipalities, provides up to dollar‑for‑dollar match up to $300 per recipient/year with application window Sep 1–Sep 30.

Who is affected

  • Municipalities that choose to adopt LOSAPs (city/town governments).
  • Volunteer fire fighters, volunteer EMS providers, and reserve peace officers who meet local eligibility requirements.
  • Department of Revenue (administration of the grant fund and rulemaking).
  • Sports Wagering Receipts Fund (source of initial/ongoing appropriations in the bill versions).

Procedural / timeline notes

  • Introduced April 16, 2025; committee report favorable same day.
  • Multiple amendments filed (S-3117, S-3180). S-3180 language provided the $1.5M FY2026 appropriation and $500 cap; S-3117 proposed alternative match formulas and definitions.
  • Bill was attached to HF 1002 (Apr 23), amended/substituted, then withdrawn May 14, 2025. Because the bill was withdrawn, its provisions did not become law.

Compiled from official sources — confirm details with the bill’s official record.

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