HF 717 (LSB 2665YH (2) 91)

HOUSE FILE 717

BY  WILLS

A BILL FOR

An Act relating to procedures for, and judicial review of, licensing and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 17A.18, subsection 1, Code 2025, is amended to read as follows:
   1.  When the The grant, denial, or renewal of a license is required by Constitution or statute to shall be preceded by notice and opportunity for an evidentiary hearing, and the provisions of this chapter concerning contested cases apply to such action.
    Sec. 2.  NEW SECTION.  27D.1  Definitions.
   As used in this chapter, unless the context otherwise requires:
   1.  “Agency” means the same as defined in section 17A.2.
   2.  “Agency action” means the same as defined in section 17A.2.
   3.  “Contested case” means the same as defined in section 17A.2.
   4.  “License” means the same as defined in section 17A.2.
   5.  “Licensing” means the same as defined in section 17A.2.
    Sec. 3.  NEW SECTION.  27D.2  Criteria for licenses —— clear and unambiguous language.
   1.  Any criterion in statute, rule, or other agency action for licensing of a constitutionally protected activity shall be specified in clear and unambiguous language. Any criterion in violation of this section shall be void and unenforceable.
   2.  In determining whether language is clear and unambiguous, a court shall not give any presumption in favor of the validity of a criterion and shall not give any deference to the view of an agency.
    Sec. 4.  NEW SECTION.  27D.3  Time period for license applications.
   When the time period for an agency to make a decision on an application for a license is not specified in statute, the time period shall be thirty days. An agency and an applicant for a license may mutually agree to extend the thirty-day period.
    Sec. 5.  NEW SECTION.  27D.4  Contested cases on licensing decisions —— requirements.
   1.  This section shall apply to a contested case proceeding on a licensing decision by an agency.
   a.  The rules of civil procedure and the rules of evidence shall apply.
   b.  All proceedings shall be conducted orally and shall be recorded at the agency’s expense either by mechanized means or by certified shorthand reporters.
   c.  On application of a party or the agency, an administrative law judge may permit a deposition of a witness to be taken if the witness cannot be subpoenaed or is unable to attend a hearing. Such a deposition shall be taken in the manner and on the terms designated by the administrative law judge.
   d.  The agency shall have the burden of persuasion. The agency shall have the burden of proof by a preponderance of the evidence unless a higher burden of proof is provided by law.
   e.  In addition to the grounds specified in section 17A.11, subsection 2, any person serving or designated to serve alone or with others as a presiding officer is subject to disqualification for lack of technical expertise necessary to effectively preside at a hearing.
   2.  Chapter 17A and other provisions of law relating to contested case hearings shall apply to a contested case proceeding on a licensing decision by an agency where such requirements are not in conflict with this section. However, section 17A.10 shall apply to all of the requirements provided in this section.
    Sec. 6.  NEW SECTION.  27D.5  Judicial review of licensing decisions.
   1.  In any action for judicial review of final agency action on a licensing decision, the parties shall be entitled to a speedy and public determination by the court. If requested by a party to such an action within thirty days after a petition for judicial review is filed, the court shall hold an evidentiary hearing, including testimony and argument, to the extent necessary to make the determination. The court shall review de novo all relevant questions of law, including the interpretation of constitutional, statutory, and regulatory provisions, unless the parties stipulate otherwise. On demand of any party, a determination of facts shall be made by a jury.
   2.  Relevant and admissible exhibits and testimony that were not received during contested case proceedings shall be admitted by the court if compliant with the rules of evidence. An objection that a party failed to make to evidence offered during contested case proceedings shall be considered by the court unless either of the following is true:
   a.  The exhibit, testimony, or objection was withheld for purposes of delay, harassment, or other improper purpose.
   b.  Allowing admission of the exhibit or testimony or consideration of the objection would cause substantial prejudice to another party.
   3.  Section 17A.19 and other provisions of law relating to judicial review of agency action shall apply to judicial review of a licensing decision by an agency where such requirements are not in conflict with this section.
    Sec. 7.  NEW SECTION.  27D.6  Conflicts with other provisions of state law.
   Except as otherwise provided in this chapter, the provisions of this chapter apply notwithstanding any other provision of state law to the contrary, including but not limited to chapter 17A.
    Sec. 8.  REPORT TO GENERAL ASSEMBLY ON IMPACT TO AGENCIES.  Any agency, as defined in section 17A.2, may submit a report to the governor and the general assembly by January 1, 2026, regarding the impact of this Act on the functions of the agency. The report may include recommendations, proposed legislation, and any other relevant information. An agency may consult with interested stakeholders when preparing the report.
    Sec. 9.  EFFECTIVE DATE.  This Act takes effect July 1, 2026.
    Sec. 10.  APPLICABILITY.  This Act applies to agency action, as defined in section 17A.2, and judicial review thereof, commenced on or after the effective date of this Act.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to procedures for, and judicial review of, licensing.
   The bill defines “license” as the same as provided in Code chapter 17A: the whole or a part of any agency permit, certificate, approval, registration, charter, or similar form of permission required by statute. Additional definitions in the bill are the same as defined in Code chapter 17A.
   The bill requires that any criterion in statute, rule, or other agency action for licensing of a constitutionally protected activity be specified in clear and unambiguous language. Any criterion in violation of this requirement shall be void and unenforceable. In determining whether language is clear and unambiguous, a court shall not give any presumption in favor of the validity of a criterion and shall not give any deference to the view of an agency.
   The bill provides that when the time period for an agency to make a decision on an application for a license is not specified in statute, the time period shall be 30 days unless an agency and an applicant for a license mutually agree to extend the period.
   The bill provides requirements that apply to a contested case proceeding on a licensing decision by an agency. The bill provides that the rules of civil procedure and the rules of evidence shall apply. The bill provides that all proceedings shall be conducted orally and shall be recorded at the agency’s expense. On application of a party or the agency, the bill authorizes an administrative law judge to permit a deposition of a witness to be taken if the witness cannot be subpoenaed or is unable to attend a hearing. The bill provides that the agency shall have the burden of persuasion. The bill provides that the agency shall have the burden of proof by a preponderance of the evidence unless a higher burden of proof is provided by law. The bill provides that any person serving as a presiding officer is subject to disqualification for lack of technical expertise necessary to effectively preside at a hearing. The bill specifies that Code chapter 17A and other provisions of law relating to contested case hearings shall apply to a contested case proceeding on a licensing decision by an agency where such requirements are not in conflict with the bill.
   The bill provides requirements that apply to an action for judicial review of final agency action on a licensing decision. The bill provides that the parties shall be entitled to a speedy and public determination by the court. The bill provides that the court shall hold an evidentiary hearing, to the extent necessary to make the determination, if requested by a party to such an action within 30 days after a petition for judicial review is filed. The bill provides that the court shall review de novo all relevant questions of law, including the interpretation of constitutional, statutory, and regulatory provisions, unless the parties stipulate otherwise. The bill provides that a determination of facts shall be made by a jury on demand of any party. The bill provides that relevant and admissible exhibits and testimony that were not received during contested case proceedings shall be admitted by the court if compliant with the rules of evidence. The bill provides procedures for consideration of objections that a party failed to make to evidence offered during contested case proceedings. The bill specifies that Code section 17A.19 and other provisions of law relating to judicial review of agency action shall apply to judicial review of a licensing decision by an agency where such requirements are not in conflict with the bill.
   The provisions of the bill apply notwithstanding any other provision of state law to the contrary.
   The bill strikes language in Code chapter 17A specifying that the provisions of Code chapter 17A concerning contested cases apply to licensing decisions by agencies only when notice and opportunity for an evidentiary hearing are required by Constitution or statute. The bill instead provides that the provisions of Code chapter 17A concerning contested cases always apply to such decisions.
   The bill authorizes an agency to submit a report to the governor and the general assembly by January 1, 2026, regarding the impact of the bill on the functions of the agency. The report may include recommendations, proposed legislation, and any other relevant information.
   The bill takes effect July 1, 2026, and applies to agency action, and judicial review thereof, commenced on or after that date.