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HF 1002

Head Start funding provided, and money appropriated.

2025-2026 Regular Session Introduced by Nathan Coulter and 6 co-sponsors

The bill lets municipalities create tax‑deferred LOSAP awards for volunteer responders and provides a state grant fund to help fund these programs.

Author added Hemmingsen-Jaeger
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Bill Summary · HF 1002

Summary — HF 1002 (2025): Length of Service Award Programs (LOSAP) for Volunteers

Main purpose

HF 1002 authorizes municipalities to establish length of service award programs (LOSAPs) — tax‑deferred retirement-style awards under IRC section 457(e)(11) — for volunteer fire fighters, volunteer emergency medical care providers, and reserve peace officers. The bill also creates a state grant fund to help municipalities contribute to those programs and appropriates start‑up funding.

Key provisions

  • Authorization (new 100B.51):
    • A municipality’s governing body may create a LOSAP for volunteer fire fighters (per Iowa Code §85.61), volunteer emergency medical care providers (per §147A.1) who meet the volunteer definition, and reserve peace officers (per §80D.1A).
    • Programs must be designed to treat awards as tax‑deferred under IRC §457(e)(11).
    • Governing bodies, in consultation with fire/police leadership as applicable, must adopt guidelines covering eligibility, minimum vesting requirements, distribution rules, and other operational details.
  • Volunteer definition: For purposes of the section, “volunteer” means an individual compensated by the municipality for less than $5,000 in the immediately preceding calendar year and in the current calendar year.
  • Grant fund (new 100B.52):
    • A “length of service award program grant fund” is created in the state treasury under the control of the Economic Development Authority (EDA). The fund consists of moneys appropriated or deposited to it.
    • Moneys are appropriated to the EDA to provide grants to municipalities that have established a LOSAP to make contributions on behalf of participants. The EDA must adopt rulemaking (Iowa Admin. Proc. Act, ch. 17A) and require electronic grant applications.
    • Application windows:
    • Municipalities with a department annual budget under $100,000: application period Aug 1–Sept 30; grant match of $3 state : $1 local, capped at $500 per participant.
    • All other municipalities: application period Sept 1–Sept 30; up to $1 state : $1 local match, capped at $500 per participant.
    • If fund moneys are insufficient in a fiscal year, the EDA director shall prorate awards. Municipalities may use gifts, bequests, etc., to provide their match.
    • Interest/earnings credited to the fund and moneys do not revert at fiscal year close.
  • Appropriation: $1,500,000 is appropriated from the sports wagering receipts fund to the LOSAP grant fund for FY 2025–2026. Moneys from that transfer are exempt from certain sports‑wagering reporting requirements.

Who is affected

  • Primary: volunteer fire fighters, volunteer EMS providers, and reserve peace officers who serve municipalities that elect to establish a LOSAP.
  • Municipalities (cities/towns) that choose to create and fund LOSAPs; smaller departments (annual budgets < $100,000) receive enhanced state matching (3:1).
  • Economic Development Authority — charged with administering the grant program and rulemaking.

Implementation & timeline

  • Application periods established annually (Aug 1–Sept 30 for smaller municipalities; Sept 1–Sept 30 for others).
  • FY 2025–2026 one‑time deposit of $1.5 million to create initial grant pool; ongoing replenishment not specified in the enrolled law text. Interest/earnings remain in the fund and do not lapse.

Legislative status and procedure

  • Introduced: April 10, 2025.
  • House pass: April 22, 2025 (vote recorded as overwhelmingly in favor).
  • Senate amendments adopted; House concurred.
  • Passed Senate: May 14, 2025 (46–0).
  • Reported enrolled and sent to Governor: May 22, 2025.
  • Signed by Governor Kim Reynolds: June 3, 2025 (Chapter 124, 2025 Acts).

Related

  • Companion bill: SF 1013.

This law gives municipalities a tool to recognize and retain volunteer emergency responders by allowing tax‑deferred LOSAP awards, while creating a modest state grant program (initialized with $1.5M) to incentivize local contributions — especially for smaller jurisdictions.

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

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