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HF 1038

A bill for an act relating to the opioid settlement fund, making appropriations and disbursements, and including effective date and retroactive applicability provisions.

2025-2026 Regular Session

HF 1038 directs Iowa’s share of national opioid settlement funds to HHS and AG for abatement, with 75% to HHS and 25% to AG, plus strict oversight and outcome reporting.

Explanations of votes.
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Bill Summary · HF 1038

Summary — HF 1038 (2025): Opioid Settlement Fund — Appropriations, Disbursements, Oversight

Status: Enrolled and signed by Governor (approved June 6, 2025). Includes explanations of votes; retroactive applicability provision.

Purpose

HF 1038 establishes how Iowa will receive, appropriate, and oversee the state portion of funds received from national opioid litigation settlements. It directs distributions to the Department of Health and Human Services (HHS) and the Office of the Attorney General (AG) for use in abating the opioid crisis, and it makes a one-time appropriation from the Opioid Settlement Fund for FY 2024–2025.

Key provisions and changes

  • Creates/clarifies the Opioid Settlement Fund (Code §12.51). State settlement receipts from national opioid litigation go into this dedicated fund; interest is credited to the fund.
  • Allocation formula (applies for fiscal years beginning July 1, 2025 through June 30, 2030): of the state portion deposited in the fund (plus earnings), 75% is appropriated to HHS and 25% to the AG for opioid-abatement purposes.
  • Unspent appropriations under this allocation do not revert annually and remain available for the designated purposes until June 30, 2030.
  • Administrative cap: the department and AG together may use up to 2.5% of those appropriated moneys for administrative costs (amendment reduced prior 5% cap to 2.5%).
  • Protections/exceptions: monies that are earmarked for or required to be transferred to counties, cities, or other local governments are excluded from the subsection allocating 75/25.
  • Oversight duties: HHS and the AG must
    • review proposed uses submitted by administrative services organizations (ASOs) for crisis response, early intervention, treatment, and recovery in behavioral health districts;
    • disburse funds consistent with national settlement terms and state law;
    • identify indicators/outcomes (e.g., preventing opioid deaths, reducing misuse, increasing access to OUD medications) for each disbursement; and
    • submit an annual report (on or before November 1) to the governor and General Assembly detailing disbursements, outcomes, and input from district behavioral health advisory councils.
  • Recipients may receive no more than one disbursement under a specified provision.
  • HHS and AG may (but need not) ensure equal distributions among ASOs.

FY 2024–2025 appropriation and designated disbursements

  • Appropriates $29,000,000 from the Opioid Settlement Fund to HHS for FY 2024–2025.
  • The bill directs HHS to disburse portions of that $29 million to specified nonprofit and treatment providers. Documented examples include:
    • $3,000,000 to a long-established youth-serving nonprofit to develop a recovery-focused high school and workforce training center;
    • Grants for detoxification programs, expansion of medication-assisted treatment via mobile/co-located units, recovery housing development, and community mental health center programs (several specific grant recipients and amounts are identified in the enrolled bill text; some recipient descriptions and amounts are detailed within the bill record).
  • Recipients must use funds consistent with national settlement requirements and report outcomes to HHS and AG.

Oversight, evaluation, and reporting

  • An evaluation/review panel (including the AG, HHS director, and the state drug policy director or designees) reviews and approves or denies proposals and ASO applications; gives priority to evidence-based proposals.
  • The bill funds statewide prevention and requires HHS evaluations with measurable outcomes (the bill references recurring appropriations and multi-year reporting requirements in parts of the legislative text).
  • HHS must make certain reports public on its website and submit multi-year reports with district recommendations for future disbursements.

Who is affected

  • State agencies: HHS and the Office of the Attorney General (administration, oversight, and disbursement duties).
  • Administrative services organizations and behavioral health districts (applicants and recipients).
  • Nonprofit treatment providers, community mental health centers, youth services, recovery housing providers, and local governments that receive earmarked settlement funds.
  • Individuals and communities affected by opioid use disorder via funded prevention, treatment, crisis response, and recovery services.

Timeline / procedural notes

  • Primary allocation framework applies FY 2025–2026 through FY 2029–2030 (period beginning July 1, 2025, ending June 30, 2030).
  • Division II of the act applies retroactively to July 1, 2024.
  • Enrolled and signed into law June 6, 2025; House passed May 14 (84–1), Senate passed May 14 unanimously (45–0). Several amendments (H-1349 and H-1356) were adopted before final passage (notably reducing admin cap to 2.5% and adjusting eligibility wording).

Expected impact

HF 1038 creates a structured, accountable mechanism to direct the state’s share of national opioid settlement funds toward prevention, treatment, recovery, and capacity-building. It imposes outcome reporting and limits administrative spending to preserve funds for frontline services, and it authorizes a targeted $29 million FY25 appropriation to accelerate specific programs and providers identified in the bill.

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

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