H.F. 718 Section 1. Section 17A.4, subsection 4, Code 2025, is 1 amended to read as follows: 2 4. Any rule filed pursuant to this section or section 3 17A.5 that necessitates additional annual expenditures of at 4 least one hundred thousand dollars or combined expenditures 5 of at least five hundred thousand dollars within five years 6 by all affected persons, including the agency itself, shall 7 be accompanied by a fiscal impact statement outlining the 8 expenditures. The agency shall promptly deliver a copy of file 9 the statement to with the legislative services agency along 10 with the rule filed with the administrative rules coordinator 11 and the administrative code editor pursuant to this section 12 or section 17A.5 . To the extent feasible, the legislative 13 services agency shall analyze the statement and provide a 14 summary of that analysis to the administrative rules review 15 committee. If the agency has made a good-faith effort to 16 comply with the requirements of this subsection , the rule shall 17 not be invalidated on the ground that the contents of the 18 statement are insufficient or inaccurate. 19 Sec. 2. NEW SECTION . 17A.25 Delay, rescission, and approval 20 of rules —— fiscal impact. 21 1. a. If the fiscal impact statement prepared by an agency 22 pursuant to section 17A.4, subsection 4, for a rule adopted 23 pursuant to section 17A.5 indicates the rule will necessitate 24 additional annual expenditures of at least one million dollars, 25 or combined expenditures of at least five million dollars 26 within five years, by all affected persons, including the 27 agency itself, the effective date of the rule shall be delayed 28 until the adjournment of the next regular session of the 29 general assembly that convenes after the rule is published 30 in the Iowa administrative bulletin. The agency shall note 31 the delay in its filing submitted to the administrative 32 rules coordinator and administrative code editor pursuant to 33 section 17A.5, subsection 1. The administrative code editor 34 shall publish notice of the delay in the Iowa administrative 35 -1- LSB 2672YH (3) 91 je/ko 1/ 5

H.F. 718 bulletin. The agency shall not adopt such a rule pursuant to 1 section 17A.5, subsection 2, paragraph “b” , unless the rule was 2 also adopted pursuant to section 17A.4, subsection 3. 3 b. Upon the adjournment of the regular session of the 4 general assembly specified in paragraph “a” , a rule delayed 5 pursuant to paragraph “a” is rescinded and shall not become 6 effective. As soon as practicable after such rescission, 7 the administrative code editor shall publish notice of the 8 rescission in the Iowa administrative bulletin and, no sooner 9 than two weeks after such publication, remove the rule from the 10 Iowa administrative code. 11 c. During the period of a delay pursuant to paragraph “a” , 12 the agency may do any of the following: 13 (1) Engage in further rulemaking that will amend or repeal 14 a rule subject to the delay. However, any rule that amends 15 or repeals a rule subject to a delay, and that will become 16 effective during the delay, shall be subject to that delay as 17 though it were included in the initially delayed rule. 18 (2) Submit a notice of rescission that rescinds the rule 19 to the administrative rules coordinator and the administrative 20 code editor for publication in the Iowa administrative 21 bulletin. Upon publication of the notice of rescission, if 22 the rule has not already become effective or been rescinded, 23 the rule is rescinded and shall not become effective. As 24 soon as practicable, but no sooner than two weeks after such 25 publication, the administrative code editor shall remove the 26 rule from the Iowa administrative code. 27 d. If the effective date of a rule adopted by an agency that 28 would otherwise be subject to a delay pursuant to subsection 1 29 may occur after the adjournment of the regular session of the 30 general assembly specified in paragraph “a” , such rule shall be 31 deemed to be delayed pursuant to subsection 1 and subject to 32 this section. 33 e. This section shall not apply to a rule adopted pursuant 34 to section 17A.4, subsection 3. 35 -2- LSB 2672YH (3) 91 je/ko 2/ 5

H.F. 718 2. The general assembly may, by a joint resolution approved 1 by the governor, approve a rule delayed pursuant to subsection 2 1 prior to its rescission pursuant to subsection 1. Upon 3 approval of the joint resolution by the governor, the rule 4 shall not be rescinded and shall become effective upon the date 5 of approval of the joint resolution by the governor, or another 6 date specified in the joint resolution. This subsection shall 7 not be construed to prohibit the general assembly from enacting 8 other legislation relating to a rule delayed pursuant to 9 subsection 1, including but not limited to a joint resolution 10 to nullify the rule. 11 3. For purposes of this section, “additional annual 12 expenditures” includes expenditures by political subdivisions 13 or agencies, and entities which contract with political 14 subdivisions, to provide services as described in section 15 25B.6, subsection 1. “Additional annual expenditures” does not 16 include an expenditure of funds by the agency that adopted 17 a rule if the funds were appropriated to the agency for the 18 purpose of the agency program or other function implemented by 19 the rule. 20 Sec. 3. APPLICABILITY. This Act applies to rules adopted by 21 agencies pursuant to section 17A.5 on or after July 1, 2026. 22 EXPLANATION 23 The inclusion of this explanation does not constitute agreement with 24 the explanation’s substance by the members of the general assembly. 25 This bill establishes processes for delay, rescission, and 26 approval of certain administrative rules (rules) based on 27 fiscal impact statements prepared by agencies as required under 28 Code section 17A.4, subsection 4. 29 The bill provides that if the fiscal impact statement 30 prepared by an agency for an adopted rule indicates the rule 31 will necessitate additional annual expenditures of at least $1 32 million, or combined expenditures of at least $5 million within 33 five years, by all affected persons, including the agency 34 itself, the effective date of the rule shall be delayed until 35 -3- LSB 2672YH (3) 91 je/ko 3/ 5

H.F. 718 the adjournment of the next regular session of the general 1 assembly that convenes after the rule is published in the Iowa 2 administrative bulletin (bulletin). 3 The bill provides that upon the adjournment of the specified 4 regular session of the general assembly, a rule delayed in this 5 manner is rescinded and shall not become effective. 6 The bill authorizes an agency, during the period of a delay, 7 to engage in further rulemaking that will amend or repeal a 8 rule subject to the delay. However, any rule that amends 9 or repeals a rule subject to a delay, and that will become 10 effective during the delay, shall be subject to that delay as 11 though it were included in the initially delayed rule. 12 The bill authorizes an agency, during the period of a 13 delay, to submit a notice of rescission for publication in 14 the bulletin that rescinds the rule. Upon publication of 15 the notice, if the rule has not already become effective or 16 been rescinded, the rule is rescinded and shall not become 17 effective. 18 The bill provides that the general assembly may, by a joint 19 resolution approved by the governor, approve a rule delayed 20 in this manner prior to its rescission. Upon approval of 21 the joint resolution by the governor, the rule shall not 22 be rescinded and shall become effective upon the date of 23 approval of the joint resolution by the governor, or another 24 date specified in the resolution. The bill shall not be 25 construed to prohibit the general assembly from enacting other 26 legislation relating to a delayed rule, including but not 27 limited to a joint resolution to nullify the rule. 28 For purposes of the bill, “additional annual expenditures” 29 includes expenditures by political subdivisions or agencies, 30 and entities which contract with political subdivisions, to 31 provide services as described under current law, but does not 32 include an expenditure of funds by the agency that adopted 33 a rule if the funds were appropriated to the agency for the 34 purpose of the agency program or other function implemented by 35 -4- LSB 2672YH (3) 91 je/ko 4/ 5

H.F. 718 the rule. 1 The bill addresses how the procedures provided in the 2 bill apply to rules adopted pursuant to Code section 17A.4, 3 subsection 3, and Code section 17A.5, subsection 2, paragraph 4 “b” (emergency rules). 5 Under current law, a fiscal impact statement that is 6 required for a noticed or adopted rule must be promptly 7 delivered to the legislative services agency. The bill 8 provides that the statement must be included with a rule when 9 it is filed. 10 The bill applies to rules adopted by agencies on or after 11 July 1, 2026. 12 -5- LSB 2672YH (3) 91 je/ko 5/ 5