Summary — HF 1044 (FY 2025–2026 Appropriations; Administration & Regulation)
Status and context
- Enacted and signed by Governor Kim Reynolds on June 11, 2025.
- Introduced May 9, 2025; passed House (May 13, 2025; yeas 60, nays 31) and Senate (May 14, 2025; yeas 31, nays 15). Explanations of votes recorded June 27, 2025.
- Primary purpose: make FY 2025–2026 general fund and related appropriations for state government administration and regulation and enact related policy changes, including creation of targeted tax incentives for long‑term care workers and provisions related to captive insurance premium tax revenue.
Main components / key provisions
1. Appropriations to agencies (selected highlights)
- Department of Administrative Services (DAS): multiple line items, including
- $3,713,718 for salaries/support (55.30 FTE)
- $4,487,598 for utility costs (1.00 FTE) — unspent utility funds may carry forward one year
- Terrace Hill operations $460,884 (4.37 FTE)
- State library services $2,626,613 (19.00 FTE) and Enrich Iowa program $2,464,823
- Historical resources and sites: $3,804,774 (37.99 FTE) and $425,751 (2.81 FTE)
- Auditor of State: $1,002,686 (98.00 FTE); allowed to retain additional reimbursable FTEs for certain audits.
- Iowa Ethics & Campaign Disclosure Board: $1,045,432 (7.00 FTE).
- Offices of Governor and Lieutenant Governor: $2,864,932 (25.00 FTE) plus Terrace Hill governor’s quarters $144,222 (1.93 FTE).
- (Bill contains many additional agency appropriations and internal fund authorizations throughout state administrative and regulatory agencies.)
2. Administrative provisions
- DAS: direction to segregate workers’ compensation premiums into a dedicated fund that does not revert year‑end balances; DAS may draw from revolving/internal service funds as needed.
- DAS may assess a $2.00 monthly per‑contract administrative charge on all health insurance plans it administers (FY 2025–26).
3. Long‑term care workforce tax incentives (Amendment H‑1336 — added to the bill)
- Creates two refundable income tax credits administered via new sections:
- Relocation tax credit (new §135E.1 / §422.12Q): $3,000 one‑time credit for a direct care professional (DCP) who moved to Iowa from another state, subject to documentation and a written acknowledgment. If the claimant fails to maintain ≥1,500 hours/year as a DCP in Iowa for three consecutive years after claiming, a pro‑rata repayment is required. Credits are nontransferable.
- Retention tax credit (new §135E.2 / §422.12R): $2,000 credit for a DCP who worked ≥1,500 hours in the prior tax year and is employed in Iowa at filing. Same repayment and nontransferability rules. Beginning tax year 2029 a qualifying DCP may claim the retention credit once every three years if continuing to meet requirements.
- Credits are refundable beyond tax liability, with option to elect credit against next year’s liability instead of refund.
- “Direct care professional” is broadly defined to include personal/home care aides, nursing aides, attendants, home health aides, and similar roles.
- Administration: Department of Inspections, Appeals, and Licensing (DIAL), in consultation with Department of Revenue, to adopt rules under chapter 17A.
- Applicability: tax years beginning on or after January 1, 2026.
4. Other technical and policy items
- Provisions addressing deposit of captive company premium tax receipts and other “properly related matters” are included (see bill text for details).
- Amendment H‑1330 adjusts several FTE authorizations (example: 100.00 → 98.00).
Who is affected
- State agencies named in the appropriations (DAS, Auditor, Ethics Board, Governor’s office, DIAL, Insurance & Financial Services, Management, IPERS, Public Information Board, Revenue, Secretary of State, Treasurer, Utilities Commission, etc.) — through funding and administrative directives.
- Direct care professionals (DCPs): eligible for new relocation and retention refundable tax credits if they meet hours, employment, residency, and documentation conditions.
- Employers and payroll administrators of DCPs may be affected administratively by verification and recordkeeping tied to the credits.
Procedural/timeline notes
- Tax credit provisions take effect for tax years beginning on or after January 1, 2026.
- Agencies (DIAL and Dept. of Revenue) to adopt administrative rules under chapter 17A to implement the tax credits.
- The bill was enacted as a FY 2025–26 appropriations vehicle and incorporates both appropriation schedules and policy additions (notably the workforce tax incentives) via floor amendment activity.
For full line‑item appropriations, statutory text of the new tax credit sections, rulemaking duties, and deposit language related to captive insurance premium taxes, consult the enrolled bill text and associated division(s).
