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HF 1052

Student discipline provisions modified.

2025-2026 Regular Session Introduced by Ben Bakeberg and 11 co-sponsors

Expands the Research Activities Tax Credit to include agriscience research with retroactive effect, while also modernizing tobacco product filings and allowing a small-city budget

Authors added Bennett and Duran
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Bill Summary · HF 1052

Summary — H.F. 1052 (introduced May 13, 2025)

Note on contents: the bill materials provided concern a multi‑division measure primarily addressing cigarette and tobacco regulatory filings, expansion of the Research Activities Tax Credit (RAC) to agriscience research, and a narrow city budget deadline exception. (The bill caption you supplied — “Student discipline provisions modified” — does not match the documents; this summary follows the provided text and fiscal note.)

Main purpose and intent

H.F. 1052 makes three distinct changes:
1. Require electronic filing and modernize permitting and reporting for cigarettes, tobacco products, alternative nicotine products, and vapor products (Division I).
2. Expand the state Research Activities Tax Credit to include defined “agriscience research,” with retroactive application to tax years beginning on/after Jan. 1, 2017 (Division II).
3. Allow a single “qualified city” (population 20,400–20,500 per 2020 census) that missed the FY 2026 budget certification deadline to certify on or before July 1, 2025, without a public hearing (Division III).

Key provisions

Division I — Cigarette & tobacco regulations (effective July 1, 2025)
- Requires submission of specified tax returns, permits, bonds, reports and related documentation electronically to the Iowa Department of Revenue (IDR). Non‑electronic submissions are invalid unless the director grants permission for an alternative method.
- Retail permits for tobacco, alternative nicotine, and vapor products are issued by IDR after city or county approval; IDR will collect local permit fees and remit them to the local government.
- Creates a $50 penalty for failing to timely submit required documentation when no tax is shown due.
- Assumes 147 active state cigarette/tobacco permits; bonds, forms and many reports must be filed electronically.

Division II — Research Activities Tax Credit (RAC) (applies retroactively to tax years beginning Jan. 1, 2017)
- Adds “agriscience research” (defined in the bill) as eligible for the income tax RAC; removes the existing exclusion for persons engaged in agricultural production when activities qualify as agriscience research.
- Retroactivity may trigger amended returns and pending appeals; the bill does not extend the standard three‑year amendment period.
- Refundability of the credit is limited progressively for tax years beginning in 2023 and later: refundable portion capped at 90% (2023), 80% (2024), 70% (2025), 60% (2026), and 50% (2027+).

Division III — City budget certification (effective upon enactment)
- Defines “qualified city” (pop. 20,400–20,500) and allows that city to certify its FY 2026 budget on/before July 1, 2025 without holding the usual public hearing.

Fiscal impact (from Legislative Services Agency fiscal note)

  • Division I: $50 penalty revenue deposited to General Fund — expected to be minimal.
  • Division II: Reduction in net General Fund revenue projected as:
    • FY 2025: −$2.8 million
    • FY 2026: −$1.2 million
    • FY 2027: −$1.6 million
    • FY 2028: −$1.1 million
    • FY 2029: −$0.7 million
    • FY 2030: −$0.7 million
  • Division III: Potential city revenue/expense effects for FY 2026 are unknown and not estimated.

Who is affected

  • Retailers, distributors, wholesalers, manufacturers of cigarettes, tobacco, alternative nicotine, and vapor products — new electronic filing and permitting processes.
  • Cities and counties — retain approval role for retail permits, but use IDR’s electronic portal; local permit fee remittance handled by IDR.
  • Businesses and taxpayers conducting agriscience research — become eligible for the RAC (subject to refundability limits).
  • The specified “qualified city” (per 2020 census population band) gains a one‑time budget certification remedy.
  • State General Fund — net revenue losses primarily from expanded RAC.

Procedural status and timeline

  • Introduced May 13, 2025; fiscal note dated May 13, 2025.
  • Amendment H‑1328 was filed (May 13), adopted (May 14) and then withdrawn (May 14); the bill was substituted with S.F. 612 on May 14.
  • Division I effective July 1, 2025; Division II applies retroactively to tax years beginning on/after Jan. 1, 2017; Division III effective upon enactment.

Related/companion: S.F. 2066 (companion); substitution with S.F. 612 noted in actions.

If you want, I can:
- Extract the statutory language additions/definitions (e.g., the bill’s definition of “agriscience research”),
- Produce a side‑by‑side comparison of current law vs. proposed changes, or
- Track subsequent actions on S.F. 612 and related amendments.

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

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