Senate File 2464 S-5125 Amend Senate File 2464 as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < DIVISION I 4 HEALTH MAINTENANCE ORGANIZATION TAXATION 5 Section 1. Section 249A.13, subsection 1, Code 2026, is 6 amended to read as follows: 7 1. A Medicaid managed care organization premiums health 8 care tax fund is created in the state treasury under the 9 authority of the department of health and human services. 10 Moneys collected by the director of the department of revenue 11 as taxes on premiums pursuant to section 432.1B 432B.2 shall be 12 deposited in the fund. 13 Sec. 2. Section 432.1, unnumbered paragraph 1, Code 2026, 14 is amended to read as follows: 15 Every insurance company or association of whatever kind or 16 character, not including fraternal beneficiary associations, 17 health maintenance organizations, and nonprofit hospital and 18 medical service corporations, shall, as required by law, pay to 19 the director of the department of revenue, or to a depository 20 designated by the director, as taxes, an amount equal to the 21 following, except that the premium tax applicable to county 22 mutual insurance associations shall be governed by section 23 518.18 : 24 Sec. 3. Section 432.1, subsection 2, unnumbered paragraph 25 1, Code 2026, is amended to read as follows: 26 The “applicable percent” for purposes of subsection 1 of this 27 section , section 432.1B , and section 432.2 is the following: 28 Sec. 4. NEW SECTION . 432B.1 Definitions. 29 As used in this chapter: 30 1. “Commissioner” means the commissioner of insurance. 31 2. “Health maintenance organization” means the same as 32 defined in section 514B.1. “Health maintenance organization” 33 includes a health maintenance organization contracting with 34 the department of health and human services to administer the 35 -1- SF 2464.3610 (1) 91 (amending this SF 2464 to CONFORM to HF 2739) jm/jh 1/ 9 #1.

medical assistance program under chapter 249A. 1 3. a. “Taxable funds” means all of the following: 2 (1) Payments received by the health maintenance 3 organization for health care services, insurance, indemnity, 4 or other benefits to which an enrollee is entitled through a 5 health maintenance organization. 6 (2) Payments made by the health maintenance organization 7 to providers for health care services, to insurers, or to 8 corporations authorized under chapter 514 for insurance, 9 indemnity, or other authorized service benefits, except 10 a payment made by a health maintenance organization that 11 qualifies both as a payment received under subparagraph (1) and 12 a payment made under this subparagraph, shall be considered 13 taxable funds under subparagraph (1). 14 b. “Taxable funds” does not include payments made to a 15 health maintenance organization by the United States secretary 16 of health and human services under a contract issued under 17 section 1833 or 1876 of the federal Social Security Act, or 18 under section 4015 of the federal Omnibus Budget Reconciliation 19 Act of 1987. 20 Sec. 5. NEW SECTION . 432B.2 Imposition of health 21 care-related tax. 22 1. Commencing with the calendar year beginning January 23 1, 2026, and for subsequent calendar years, each health 24 maintenance organization transacting business in this state 25 shall be subject to a health care-related tax payable to 26 the director of revenue in an amount equal to ninety-five 27 hundredths of one percent of the applicable percentage of 28 taxable funds. 29 2. The amounts received by the director of revenue from the 30 imposition of the tax shall be deposited in the health care tax 31 fund created in section 249A.13. 32 Sec. 6. NEW SECTION . 432B.3 Date tax due —— method of 33 payment —— statute of limitations. 34 1. Except as provided in subsection 2, the tax imposed 35 -2- SF 2464.3610 (1) 91 (amending this SF 2464 to CONFORM to HF 2739) jm/jh 2/ 9

under this chapter shall be paid on or before March 1 of the 1 year following the calendar year for which the tax is due. The 2 commissioner may suspend or revoke the license of a health 3 maintenance organization subject to the health care-related tax 4 in this chapter that fails to pay the health care-related tax 5 on or before the due date. 6 2. a. Each health maintenance organization transacting 7 business in this state that is subject to the tax in section 8 432B.2 shall remit on or before June 1, on a prepayment basis, 9 an amount equal to one-half of the product of the rate in 10 section 432B.2 and the taxable funds in the prior calendar 11 year. 12 b. In addition to the prepayment amount in paragraph “a” , 13 each health maintenance organization subject to the tax in this 14 chapter shall remit on or before August 15, on a prepayment 15 basis, an additional amount equal to one-half of the product of 16 the rate in section 432B.2 and the taxable funds in the prior 17 calendar year. 18 c. (1) The sums prepaid by a health maintenance 19 organization under paragraphs “a” and “b” shall be allowed 20 as credits against the health maintenance organization’s 21 health care-related tax liability for the calendar year during 22 which the payments are made. If a prepayment made under this 23 subsection exceeds the health maintenance organization’s annual 24 health care-related tax liability, the excess shall be allowed 25 as a credit against the health maintenance organization’s 26 subsequent prepayment or tax liabilities under this chapter. 27 The commissioner shall authorize the department of revenue 28 to make a cash refund to a health maintenance organization, 29 in lieu of a credit against subsequent prepayment or tax 30 liabilities under this section, if the health maintenance 31 organization demonstrates the inability to recoup the funds 32 paid via a credit. 33 (2) The commissioner shall adopt rules establishing a 34 health maintenance organization’s eligibility for a cash 35 -3- SF 2464.3610 (1) 91 (amending this SF 2464 to CONFORM to HF 2739) jm/jh 3/ 9

refund, and the process for the department of revenue to make a 1 cash refund to an eligible health maintenance organization from 2 the Medicaid managed care organization health care tax fund 3 created in section 249A.13. The commissioner may suspend or 4 revoke the license of a health maintenance organization that 5 fails to make a prepayment on or before the due date under this 6 subsection. 7 3. The commissioner shall determine whether or not the tax 8 remitted is correct. If the tax remitted is not sufficient, 9 the commissioner shall notify the delinquent company of the 10 amount of such delinquency and certify the amount to the 11 department of revenue which shall proceed to collect the 12 delinquency. 13 4. Within five years after the tax return is filed or within 14 five years after the tax return became due, whichever is later, 15 the commissioner shall examine the return and determine the 16 tax. An assessment or a claim for credit must be made within 17 five calendar years after the annual tax filing is made. For 18 a five-year period preceding the current calendar year, a 19 company may apply for a credit, or the commissioner may make 20 an assessment, as appropriate. The period of examination and 21 determination of the correct amount of tax is unlimited in the 22 case of a false or fraudulent return made with the intent to 23 evade tax or in the case of a failure to file a return. 24 Sec. 7. Section 508C.19, Code 2026, is amended to read as 25 follows: 26 508C.19 Credits for assessments paid. 27 1. An insurer may offset an assessment made pursuant to 28 section 508C.9 against its premium tax liability pursuant to 29 chapter 432 or health care-related tax liability pursuant to 30 chapter 432B to the extent of twenty percent of the amount of 31 the assessment for each of the five calendar years following 32 the year in which the assessment was paid. If an insurer 33 ceases doing business, all uncredited assessments may be 34 credited against its premium or health care-related tax 35 -4- SF 2464.3610 (1) 91 (amending this SF 2464 to CONFORM to HF 2739) jm/jh 4/ 9

liability for the year it ceases doing business. 1 2. Sums acquired by refund from the association which have 2 been written off by contributing insurers and offset against 3 premium taxes or health care-related taxes as provided in 4 subsection 1 and are not then needed for purposes of this 5 chapter shall be paid by the association to the commissioner. 6 The commissioner shall remit the moneys to the treasurer of 7 state to deposit in the state general fund. 8 Sec. 8. Section 514B.31, Code 2026, is amended by striking 9 the section and inserting in lieu thereof the following: 10 514B.31 Health maintenance organization health care-related 11 taxation. 12 Every health maintenance organization and including health 13 maintenance organizations contracting with the department of 14 health and human services to administer the medical assistance 15 program under chapter 249A shall be subject to taxation under 16 chapter 432B. 17 Sec. 9. Section 514E.1, subsection 3, Code 2026, is amended 18 to read as follows: 19 3. “Carrier” means an insurer providing accident and 20 sickness insurance under chapter 509 , 514 , 514A and includes a 21 health maintenance organization established under chapter 514B 22 if payments received by the health maintenance organization 23 are considered premiums pursuant to section 514B.31 and are 24 taxed under chapter 432 subject to the health care-related 25 tax under chapter 432B . “Carrier” also includes a corporation 26 which becomes a mutual insurer pursuant to section 514.23 and 27 any other person as defined in section 4.1, subsection 20 , who 28 is or may become liable for the tax imposed by chapter 432 or 29 432B . 30 Sec. 10. Section 514E.2, subsection 13, Code 2026, is 31 amended to read as follows: 32 13. An insurer may offset an assessment made pursuant to 33 this chapter against its premium tax liability pursuant to 34 chapter 432 or against its health care-related tax liability 35 -5- SF 2464.3610 (1) 91 (amending this SF 2464 to CONFORM to HF 2739) jm/jh 5/ 9

pursuant to chapter 432B, as applicable, to the extent of 1 twenty percent of the amount of the assessment for each 2 of the five calendar years following the year in which the 3 assessment was paid. If an insurer ceases doing business, all 4 uncredited assessments may be credited against its premium or 5 health care-related tax liability for the year it ceases doing 6 business. 7 Sec. 11. REPEAL. Section 432.1B, Code 2026, is repealed. 8 Sec. 12. PREMIUM TAX —— HEALTH MAINTENANCE 9 ORGANIZATION. For purposes of imposing the premium tax 10 under section 432.1, beginning with calendar year 2026, and 11 subsequent calendar years, a health maintenance organization 12 is not subject to the premium tax under section 432.1, if the 13 health maintenance organization is subject to the imposition 14 of the health care-related tax under chapter 432B, if enacted 15 by this division of this Act. 16 Sec. 13. TEMPORARY PROVISIONS FOR THE HEALTH CARE-RELATED 17 TAX AND PREPAYMENTS FOR CALENDAR YEAR 2026. Notwithstanding 18 section 432B.2, subsection 1, if enacted by this division 19 of this Act, each health care maintenance organization 20 transacting business in this state shall be subject to a health 21 care-related tax payable to the director of revenue in an 22 amount equal to three and one-half percent of the applicable 23 percentage of taxable funds as defined in section 432B.1, 24 if enacted by this division of this Act, for the period in 25 calendar year beginning January 1, 2026, and ending September 26 30, 2026. The difference between the amount of taxes collected 27 pursuant to this section and the amount of tax that would be 28 collected by imposing the rate under section 432B.2, subsection 29 1, if enacted by this division of this Act, shall not be 30 subject to prepayment under section 432B.3, subsection 1, if 31 enacted by this division of this Act. 32 Sec. 14. CONTINGENT EFFECTIVE DATE. The following takes 33 effect upon the date the department of health and human 34 services notifies the general assembly and the Code editor of 35 -6- SF 2464.3610 (1) 91 (amending this SF 2464 to CONFORM to HF 2739) jm/jh 6/ 9

the approval by the federal centers for Medicare and Medicaid 1 services of the United States department of health and human 2 services of the method of taxation upon a health maintenance 3 organization imposed pursuant to this division of the Act: 4 The section of this division of this Act enacting the 5 temporary provisions for the health care-related tax and 6 prepayments for calendar year 2026. 7 Sec. 15. EFFECTIVE DATE. Unless otherwise provided, this 8 division of this Act, being deemed of immediate importance, 9 takes effect upon enactment. 10 Sec. 16. RETROACTIVE APPLICABILITY. This division of this 11 Act applies retroactively to January 1, 2026, for tax years 12 beginning on or after that date. 13 DIVISION II 14 TAXPAYER RELIEF FUND TRANSFERS —— SUPPLEMENTAL APPROPRIATIONS 15 Sec. 17. Section 8.54, subsection 5, paragraph b, Code 2026, 16 is amended to read as follows: 17 b. (1) For fiscal years in which it is anticipated that 18 moneys will be transferred from the taxpayer relief fund to 19 the general fund of the state in accordance with section 20 8.57E, subsection 2 , paragraph “b” , the original state general 21 fund expenditure limitation amount provided for in subsection 22 3 shall not be readjusted to include the amount of moneys 23 anticipated to be so transferred. This paragraph subparagraph 24 is repealed July 1, 2029 2027 . 25 (2) For the fiscal year beginning July 1, 2027, and each 26 fiscal year thereafter, in which it is anticipated that moneys 27 will be transferred from the taxpayer relief fund to the 28 general fund of the state in accordance with section 8.57E, 29 subsection 2, paragraph “b” , the original state general fund 30 expenditure limitation amount provided for in subsection 3 31 shall be readjusted to include the amount of moneys anticipated 32 to be so transferred. 33 (3) This paragraph is repealed July 1, 2029. 34 Sec. 18. Section 8.57E, subsection 2, paragraph b, Code 35 -7- SF 2464.3610 (1) 91 (amending this SF 2464 to CONFORM to HF 2739) jm/jh 7/ 9

2026, is amended by adding the following new subparagraph: 1 NEW SUBPARAGRAPH . (02) (a) For the fiscal year beginning 2 July 1, 2027, the transfer pursuant to this paragraph shall not 3 exceed fifty percent of the difference between the adjusted 4 revenue estimate, as defined in section 8.54, for the fiscal 5 year and the net general fund appropriation for the fiscal 6 year. 7 (b) For the fiscal year beginning July 1, 2028, the transfer 8 pursuant to this paragraph shall not exceed fifty percent 9 of the difference between the adjusted revenue estimate, as 10 defined in section 8.54, for the fiscal year and the net 11 general fund appropriation for the fiscal year. 12 Sec. 19. TAXPAYER RELIEF FUND TRANSFER —— FEDERAL TAX LAW 13 CHANGES. 14 1. On the effective date of this division of this Act, there 15 is transferred from the taxpayer relief fund created in section 16 8.57E to the general fund of the state, the following amount: 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $347,013,889 18 2. The transfer under this section is made in accordance 19 with section 8.57E, subsection 2, paragraph “a”, for state tax 20 relief based on the reduction in state revenue for the fiscal 21 year beginning July 1, 2025, associated with 2025 federal tax 22 law changes pursuant to section 422.3, subsection 5, paragraph 23 “b”, including but not limited to the allowance of income tax 24 deductions for qualified tips, overtime compensation, and 25 qualified passenger vehicle loan interest under the federal 26 Internal Revenue Code, as amended by Pub. L. No. 119-21, 27 commonly referred to as the One Big Beautiful Bill Act. 28 3. Notwithstanding section 8.54, the state general fund 29 expenditure limitation amount calculated for the fiscal year 30 beginning July 1, 2026, shall be readjusted to include one 31 hundred percent of the moneys transferred under this section. 32 Sec. 20. DEPARTMENT OF HEALTH AND HUMAN SERVICES —— 33 SUPPLEMENTAL APPROPRIATION. There is appropriated from the 34 general fund of the state to the department of health and human 35 -8- SF 2464.3610 (1) 91 (amending this SF 2464 to CONFORM to HF 2739) jm/jh 8/ 9

services for the fiscal year beginning July 1, 2025, and ending 1 June 30, 2026, the following amount, or so much thereof as is 2 necessary, to be used for the purposes designated: 3 To supplement the appropriation made for medical assistance 4 program reimbursement and associated costs in 2025 Iowa Acts, 5 chapter 169, section 9, unnumbered paragraph 2: 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 89,000,000 7 Notwithstanding section 8.33, moneys appropriated in this 8 section that remain unencumbered or unobligated at the close of 9 the fiscal year shall not revert but shall remain available for 10 expenditure for the purposes designated until the close of the 11 succeeding fiscal year. 12 Sec. 21. EFFECTIVE DATE. This division of this Act, being 13 deemed of immediate importance, takes effect upon enactment. > 14 2. Title page, by striking lines 1 through 6 and inserting 15 < An Act relating to state finances by modifying the taxes 16 imposed on health maintenance organizations, making transfers 17 from the taxpayer relief fund, making and supplementing 18 appropriations to the department of health and human services, 19 and including effective date, contingent effective date, and 20 retroactive applicability provisions. > 21 ______________________________ MARK COSTELLO -9- SF 2464.3610 (1) 91 (amending this SF 2464 to CONFORM to HF 2739) jm/jh 9/ 9 #2.