SF 2314 (LSB 5186XS (1) 91)

SENATE FILE 2314

BY  WEBSTER

A BILL FOR

An Act relating to executive branch functions, including ratification of major administrative rules and certain other actions, other matters relating to the state rulemaking process, and terms of service of certain appointed members of certain boards, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
RATIFICATION OF MAJOR RULES

    Section 1.  Section 17A.2, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  7A.  “Major rule” means a rule that does any of the following:
   a.  Requires annual expenditures of at least two hundred thousand dollars, or combined expenditures of at least one million dollars within five years, by all affected persons including the agency itself. An express appropriation of funds enacted by the general assembly shall not be considered an expenditure for purposes of this paragraph.
   b.  Has significant adverse effects on competition, employment, investment, productivity, or innovation, including significant adverse effects on individual industries or regions.
   c.  Amends the state implementation plan under section 110 of the federal Clean Air Act as amended through January 1, 1991.
    Sec. 2.  Section 17A.4, subsection 1, paragraph a, Code 2026, is amended to read as follows:
   a.  Give notice of its the agency’s intended action by submitting the notice to the administrative rules coordinator and the administrative code editor. The administrative rules coordinator shall assign an ARC number to each rulemaking document. The administrative code editor shall publish each notice meeting the requirements of this chapter in the Iowa administrative bulletin created pursuant to section 2B.5A. The legislative services agency shall provide the chairpersons and ranking members of the appropriate standing committees of the general assembly a means to receive an electronic copy of the notice for additional study. Any A notice of intended action shall be published at least thirty-five days in advance of the action. The notice shall include a statement of either the terms or substance of the intended action or a description of the subjects and issues involved, and the all of the following:
   (1)  The text of the proposed rule.
   (2)  The time when, the place where, and the manner in which interested persons may present their views.
   (3)  A concise description of the purpose and summary of the proposed rule.
   (4)  A classification stating whether the proposed rule is a major rule and an explanation for the agency’s classification. The classification shall encompass all rulemaking actions included in the notice and shall expressly and unambiguously state whether the proposed rule is a major rule.
   (5)  A list of all other related regulatory actions by the agency intended to implement the same statutory provision or regulatory objective, as well as the individual and aggregate economic effects of those actions.
   (6)  The tentative effective date of the proposed rule.
    Sec. 3.  Section 17A.4A, subsection 2, paragraph a, Code 2026, is amended to read as follows:
   a.  The regulatory analysis must contain all of the following:
   (1)  A description of the classes of persons who probably will be affected by the proposed rule, including classes that will bear the costs of the proposed rule and classes that will benefit from the proposed rule.
   (2)  A description of the probable quantitative and qualitative impact of the proposed rule, economic or otherwise, upon affected classes of persons, including a description of the nature and amount of all of the different kinds of costs that would be incurred in complying with the proposed rule.
   (3)  The probable costs to the agency and to any other agency of the implementation and enforcement of the proposed rule and any anticipated effect on state revenues.
   (4)  A comparison of the probable costs and benefits of the proposed rule to the probable costs and benefits of inaction.  The comparison shall include all of the following:
   (a)  The estimated primary or direct benefits of the proposed rule.
   (b)  The estimated cost savings or financial benefits to society of the proposed rule.
   (c)  The estimated compliance costs to be incurred by entities subject to regulation by the proposed rule.
   (d)  The estimated secondary or indirect costs of the proposed rule.
   (e)  The estimated opportunity cost of the proposed rule. The comparison must identify the opportunity cost of compliance with the proposed rule resulting from the potential exit of private capital from the market due to the proposed rule.
   (5)  A determination of whether less costly methods or less intrusive methods exist for achieving the purpose of the proposed rule.
   (6)  A description of any alternative methods for achieving the purpose of the proposed rule that were seriously considered by the agency and the reasons why they were rejected in favor of the proposed rule.
   (7)  A description of any actions taken by the agency to minimize the cost and impact of the rule on regulated entities.
   (8)  The legal authority for the proposed rule.
   (9)  All sources consulted by the agency during formulation of the proposed rule.
   (10)  All key assumptions made by the agency during formulation of the proposed rule.
   (11)  All sources of uncertainty identified by the agency regarding the most effective and economical means of achieving the purposes of the proposed rule.
   (12)  A statement of the need for the proposed rule as determined by the agency.
   (13)  A classification stating whether the proposed rule is a major rule and an explanation for the agency’s classification. The classification shall encompass all rulemaking actions included in the regulatory analysis and shall expressly and unambiguously state whether the proposed rule is a major rule.
    Sec. 4.  NEW SECTION.  17A.4C  Legislative regulatory analysis.
   1.  a.  Upon receipt of the notice of an agency’s intended action under section 17A.4, subsection 1, paragraph “a”, or an adopted rule under section 17A.5, the legislative services agency shall conduct a legislative regulatory analysis of a proposed or adopted rule classified by the proposing or adopting agency as a major rule.
   b.  The regulatory analysis must contain all of the following:
   (1)  A summary of the rule.
   (2)  The state or federal law implemented by the rule.
   (3)  A review of any actions taken by the agency to minimize the cost and impact of the rule on regulated entities.
   (4)  An evaluation of the costs of the rule, including all of the following:
   (a)  The estimated implementation and compliance costs of the rule to be incurred by regulated entities, which shall include both initial and ongoing costs.
   (b)  The number or estimated number of regulated entities in the state affected by the rule, and an estimate based on available regulatory history, of how many newly regulated entities may be affected or deterred by the costs of the rule each year.
   (c)  Information on specific industries or regions of the state that may be affected by the rule, if applicable.
   (d)  Estimated effects of the rule on state revenue.
   (e)  Estimated effects of the rule on state expenditures including estimated administrative expenses.
   (5)  All sources consulted by the legislative services agency during formulation of the regulatory analysis.
   (6)  All key assumptions made by the legislative services agency during formulation of the regulatory analysis.
   (7)  All sources of uncertainty identified by the legislative services agency regarding the determinations made in the regulatory analysis.
   c.  The legislative services agency shall submit a report including the legislative regulatory analysis to the administrative code editor, who shall publish it in the Iowa administrative bulletin, and the administrative rules review committee. The report shall include an assessment of whether the agency’s rulemaking process complied with the requirements of this chapter governing major rules, and an assessment of whether the major rule imposes any new limits or mandates on private-sector activity.
   d.  An agency shall not adopt a rule classified as a major rule pursuant to section 17A.4, subsection 1, paragraph “a”, less than thirty-five days after the report required by paragraph “c” is published in the Iowa administrative bulletin.
   2.  To the extent resources are available, the legislative services agency shall conduct legislative regulatory analyses of specified existing rules and proposed or adopted rules that are not major rules when requested by a chair or ranking member of a standing committee of the general assembly relating to matters within the committee’s jurisdiction. The legislative services agency shall undertake such reviews in the order requested unless directed otherwise by the legislative council.
   3.  The legislative services agency may request information relevant to a legislative regulatory analysis from an agency. The agency shall promptly comply with such a request.
    Sec. 5.  Section 17A.5, subsection 2, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  c.  The effective date of a major rule, including a rule filed under paragraph “b”, shall be subject to section 17A.5A.
    Sec. 6.  Section 17A.5, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  An adopted rule shall include an updated classification stating whether the rule is a major rule if the classification differs from that included in the notice of intended action pursuant to section 17A.4, subsection 1, paragraph “a”. The updated classification shall include the information required by section 17A.4, subsection 1, paragraph “a”, subparagraph (4), as well as an explanation for the change in classification.
    Sec. 7.  NEW SECTION.  17A.5A  Ratification of major rules.
   1.  Except as provided in subsection 2, a major rule shall not become effective until it is ratified by the general assembly. A major rule that is not ratified shall not become effective. The general assembly may ratify a major rule by passage of a joint resolution that requires approval of the governor.
   2.  a.  If the governor determines that a major rule must become effective while the general assembly is not in session, the governor may request temporary approval of the major rule by the legislative council. The governor shall only make such a request if federal law, a condition of federal funding, or response to a state of disaster emergency proclaimed by the governor pursuant to section 29C.6 requires that the major rule become effective while the general assembly is not in session. The major rule shall become effective upon temporary approval by the legislative council. If a major rule is so approved, the governor shall submit a statement for publication in the Iowa administrative bulletin explaining why federal law, a condition of federal funding, or response to a state of disaster emergency requires the rule to become effective while the general assembly is not in session.
   b.  A major rule temporarily approved by the legislative council pursuant to paragraph “a” shall cease to be effective upon the adjournment of the next regular session of the general assembly following the effective date of the major rule unless the general assembly ratifies the rule pursuant to subsection 1 before adjournment. The administrative code editor shall publish a notice that the rule has ceased to be effective in the Iowa administrative bulletin. As soon as practicable, but no sooner than two weeks after such publication, the administrative code editor shall remove the major rule from the Iowa administrative code.
   3.  When the administrative code editor publishes a major rule adopted in accordance with this chapter in the Iowa administrative code, the administrative code editor shall include a notice with the rule indicating whether the major rule has been ratified by the general assembly or temporarily approved by the legislative council. If the major rule is ratified or temporarily approved subsequent to the publication, the administrative code editor shall update the notice accordingly.
   4.  An agency may submit a notice of rescission that rescinds a major rule that has not been ratified by the general assembly to the administrative rules coordinator and the administrative code editor for publication in the Iowa administrative bulletin. Upon publication of the notice of rescission, if the major rule has not already been ratified, the major rule is rescinded and shall not become effective. If the rule has been temporarily approved pursuant to subsection 2, paragraph “a”, and not ratified, the rule shall cease to be effective. In either case, as soon as practicable, but no sooner than two weeks after such publication, the administrative code editor shall remove the major rule from the Iowa administrative code.
   5.  a.  An agency may engage in additional rulemaking that amends a major rule that has not been ratified by the general assembly. An agency’s classification stating whether the additional rulemaking is a major rule shall also expressly and unambiguously state whether the major rule being amended remains a major rule after the amendment, and include an explanation for the agency’s determination. 
   b.  If the additional rulemaking is not itself a major rule, and if the result of the additional rulemaking is that the major rule that has not been ratified no longer meets the definition of a major rule, the former major rule shall be considered part of the additional rulemaking and shall have the same effective date as the additional rulemaking. If the former major rule has been temporarily approved, the former major rule shall remain in effect until either the effective date of the additional rulemaking or the former major rule ceases to be effective pursuant to subsection 2, paragraph “b”, whichever is sooner.
   c.  If the additional rulemaking is not itself a major rule, and if the result of the additional rulemaking is that the major rule that has not been ratified still meets the definition of a major rule, the additional rulemaking shall be considered part of the major rule and shall have the same effective date as the major rule. If the major rule has been temporarily approved and has not ceased to be effective pursuant to subsection 2, paragraph “b”, the additional rulemaking shall become effective on the date specified in the additional rulemaking pursuant to section 17A.5 and shall be considered part of the major rule. If the major rule has ceased to be effective pursuant to subsection 2, paragraph “b”, the additional rulemaking shall not become effective and the administrative code editor shall publish notice in the Iowa administrative bulletin and remove the additional rulemaking from the Iowa administrative code as provided in subsection 2, paragraph “b”.
   d.  If the additional rulemaking is itself a major rule, and the first major rule has not been ratified or temporarily approved, the first major rule shall be considered part of the additional rulemaking and shall only become effective when the additional rulemaking is ratified or temporarily approved. If the first major rule has not been ratified but has been temporarily approved, whichever of the following occurs first shall apply:
   (1)  The first major rule ceases to be effective pursuant to subsection 2, paragraph “b”.
   (2)  The additional rulemaking is ratified or temporarily approved, in which case the first major rule shall be considered part of the additional rulemaking and shall have the same effective date as the additional rulemaking.
   6.  If the effective date of a major rule is subject to delay by the administrative rules review committee pursuant to section 17A.8, subsection 9 or 10, and the major rule is ratified or temporarily approved during the period of the delay, the major rule shall not become effective until the conclusion of the period of the delay. If the period of such a delay concludes and the major rule has not been ratified or temporarily approved, the major rule shall not become effective until it is ratified or temporarily approved.
    Sec. 8.  Section 17A.6, subsection 2, Code 2026, is amended to read as follows:
   2.  The administrative code editor shall publish the Iowa administrative bulletin and the Iowa administrative code as provided in section 2B.5A.  The legislative services agency shall provide the members and staff of the general assembly a means to receive an electronic copy of the Iowa administrative bulletin and rulemaking documents published therein.
    Sec. 9.  Section 17A.8, subsection 6, Code 2026, is amended to read as follows:
   6.  The committee shall meet for the purpose of selectively reviewing rules, whether proposed or in effect.  The committee shall review a notice of intended action classified as a major rule pursuant to section 17A.4, subsection 1, paragraph “a”, before the earliest date on which the proposed rule could be adopted pursuant to that paragraph. A regular or special committee meeting shall be open to the public and an interested person may be heard and present evidence. The committee may require a representative of an agency whose rule or proposed rule is under consideration to attend a committee meeting.
    Sec. 10.  NEW SECTION.  17A.19A  Judicial review —— major rules.
   1.  In addition to any other action permitted under section 17A.19, an aggrieved or adversely affected person or party may bring an action in district court concerning a major rule. The district court shall have jurisdiction to do all of the following:
   a.  Engage in de novo review of whether a rule is a major rule.
   b.  Determine whether an agency, the general assembly, the legislative council, or the governor completed the requirements for a major rule to become effective.
   c.  Determine when or if a rule alleged to be a major rule became effective.
   2.  The ratification of a major rule by the general assembly shall not do any of the following:
   a.  Extinguish or otherwise affect any legal claim, whether substantive or procedural, concerning any alleged legal defect of the major rule.
   b.  Be construed as a grant or modification of statutory authority by the general assembly for the adoption of the major rule.
   c.  Be part of the record before the district court in any judicial proceeding concerning a major rule except for purposes of a proceeding under subsection 1.
    Sec. 11.  APPLICABILITY.  This division of this Act applies to rulemaking commencing with a regulatory analysis pursuant to section 17A.4A, as amended by this Act, published in the Iowa administrative bulletin on or after July 1, 2027, or with a rule adopted under section 17A.4, subsection 3, on or after July 1, 2027.
DIVISION II
RATIFICATION OF PROPOSED AMENDMENTS TO STATE IMPLEMENTATION PLAN —— FEDERAL CLEAN AIR ACT

    Sec. 12.  Section 455B.133, subsection 2, Code 2026, is amended to read as follows:
   2.  a.  Adopt, amend, or repeal rules pertaining to the evaluation, abatement, control, and prevention of air pollution. The rules may include those that are necessary to obtain approval of the state implementation plan under section 110 of the federal Clean Air Act as amended through January 1, 1991. The commission is not required to adopt rules that use air dispersion modeling for a minor source or minor modification of a major stationary source unless modeling is specifically required by the federal Clean Air Act as amended through January 1, 1991, or a federal or state agreement.
   b.  A proposal to amend the state implementation plan under section 110 of the federal Clean Air Act as amended through January 1, 1991, shall not be submitted for federal approval until it is ratified by the general assembly. A proposal that is not ratified shall not be submitted for federal approval. The general assembly may ratify a proposal by passage of a joint resolution that requires approval of the governor.
DIVISION III
EXECUTIVE BRANCH BOARDS —— TERMS OF OFFICE

    Sec. 13.  Section 16.2, subsection 2, Code 2026, is amended to read as follows:
   2.  a.  The members of the authority appointed by the governor on or before June 30, 2026, shall serve for staggered terms of six years beginning and ending as provided in section 69.19.
   b.  The members of the authority appointed by the governor on or after July 1, 2026, shall serve for staggered terms of four years beginning and ending as provided in section 69.19.
   c.  A person appointed by the governor to fill a vacancy shall serve only for the unexpired portion of the term. A member is eligible for reappointment. The ex officio voting member designated by the agricultural development board shall serve at the pleasure of that board. A member of the authority may be removed from office by the governor for misfeasance, malfeasance, or willful neglect of duty or other just cause, after notice and hearing, unless the notice and hearing is expressly waived in writing.
    Sec. 14.  Section 16.2C, subsection 4, paragraph c, Code 2026, is amended to read as follows:
   c.  (1)  Members appointed on or before June 30, 2026, shall serve for staggered terms of six years beginning and ending as provided in section 69.19.
   (2)  Members appointed on or after July 1, 2026, shall serve for staggered terms of four years beginning and ending as provided in section 69.19.
   (3)  A person appointed to fill a vacancy shall serve only for the unexpired portion of the member’s term. A member is eligible for reappointment. An appointed member may be removed from office by the governor for misfeasance, malfeasance, willful neglect of duty, or other just cause, after notice and hearing, unless the notice and hearing is expressly waived in writing.
    Sec. 15.  Section 52.4, subsection 1, Code 2026, is amended to read as follows:
   1.  The state commissioner of elections shall appoint three members to a board of examiners for voting systems, not more than two of whom shall be from the same political party. The examiners Examiners appointed on or before June 30, 2026, shall hold office for staggered terms of six years, subject to removal at the pleasure of the state commissioner of elections.  Examiners appointed on or after July 1, 2026, shall hold office for staggered terms of four years beginning and ending as provided in section 69.19, subject to removal at the pleasure of the state commissioner of elections.
    Sec. 16.  Section 97B.8A, subsection 4, paragraph d, Code 2026, is amended to read as follows:
   d.  (1)  The appointive terms of the members appointed by the governor on or before June 30, 2026, are for a period of six years beginning and ending as provided in section 69.19.
   (2)  The appointive terms of the members appointed by the governor on or after July 1, 2026, are for a period of four years beginning and ending as provided in section 69.19.
   (3)  If there is a vacancy in the membership of the board for one of the members appointed by the governor, the governor has the power of appointment. Gubernatorial appointees to this board are subject to confirmation by the senate.
    Sec. 17.  Section 256.3, subsection 3, Code 2026, is amended to read as follows:
   3.  a.  The terms of office for voting members appointed on or before June 30, 2026, are for six years beginning and ending as provided in section 69.19.
   b.  The terms of office for voting members appointed on or after July 1, 2026, are for four years beginning and ending as provided in section 69.19.
    Sec. 18.  Section 262.2, Code 2026, is amended to read as follows:
   262.2  Appointment —— term of office.
   1.  The members shall be appointed by the governor subject to confirmation by the senate. Prior to appointing the ninth member as specified in section 262.1, the governor shall consult with the appropriate student body government at the institution at which the proposed appointee is enrolled.
   2.  Subject to subsection 3:
   a.  The term of each member of the board appointed on or before June 30, 2026, shall be for six years, unless. 
   b.  The term of each member of the board appointed on or after July 1, 2026, shall be for four years.
   3.  If the ninth member, appointed in accordance with section 262.1, graduates or is no longer enrolled at an institution of higher education under the board’s control more than one year before the expiration of the term, at which time the term of the ninth member shall expire one year from the date on which the member graduates or is no longer enrolled in an institution of higher education under the board’s control. However, if within that year the ninth member reenrolls in any institution of higher education under the board’s control on a full-time basis and is a student in good standing at either the graduate or undergraduate level, the term of the ninth member shall continue in effect.
   4.  The terms of three members of the board shall begin and expire in each odd-numbered year as provided in section 69.19.
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 executive branch functions, including ratification of major administrative rules and certain other actions, other matters relating to the state rulemaking process, and terms of service of certain appointed members of certain boards.
   RATIFICATION OF MAJOR RULES. The bill provides for ratification of major administrative rules and other matters relating to the executive branch rulemaking process.
   The bill defines “major rule” as a rule that does at least one of three things. A major rule requires annual expenditures of at least $200,000 or combined expenditures of at least $1 million within five years by all affected persons including the agency itself. An express appropriation of funds enacted by the general assembly shall not be considered an expenditure. A major rule has significant adverse effects on competition, employment, investment, productivity, or innovation, including significant adverse effects on individual industries or regions. Finally, a major rule amends the state implementation plan under section 110 of the federal Clean Air Act as amended through January 1, 1991.
   The bill provides that a major rule shall not become effective until it is ratified by the general assembly. The bill authorizes the general assembly to ratify a major rule by passage of a joint resolution that requires approval of the governor.
   The bill authorizes the governor to request temporary approval of a major rule by the legislative council if the governor determines that a major rule must become effective while the general assembly is not in session. The governor shall only make such a request if federal law, a condition of federal funding, or response to a state of disaster emergency proclaimed by the governor requires that the major rule become effective while the general assembly is not in session. The major rule shall become effective upon temporary approval by the legislative council. If a major rule is so approved, the governor must submit a statement for publication in the Iowa administrative bulletin explaining why federal law, a condition of federal funding, or response to a state of disaster emergency requires the rule to become effective while the general assembly is not in session.
   The bill provides that a major rule temporarily approved by the legislative council shall cease to be effective upon the adjournment of the next regular session of the general assembly following the effective date of the major rule unless the general assembly ratifies the rule as provided in the bill before adjournment.
   The bill provides procedures for an agency to rescind a major rule that has not been ratified and to engage in further rulemaking relating to a major rule that has not been ratified.
   The bill requires an agency to classify whether a proposed or adopted rule is a major rule at each of the three stages of the rulemaking process (regulatory analysis, notice of intended action, and adoption). The agency must include an explanation for the agency’s classification. The classification must encompass all rulemaking actions included in a rulemaking document and expressly and unambiguously state whether the rule is a major rule.
   The bill requires the legislative services agency to conduct a legislative regulatory analysis of each notice of intended action and adoption classified by an agency as a major rule. The bill specifies the content of the legislative regulatory analysis. The bill requires the legislative services agency to submit a report including the legislative regulatory analysis for publication in the Iowa administrative bulletin and to the administrative rules review committee. The report shall include an assessment of whether the agency’s rulemaking process complied with the requirements of Code chapter 17A governing major rules and an assessment of whether the major rule imposes any new limits or mandates on private-sector activity. The bill prohibits adoption of a notice of intended action classified as a major rule less than 35 days after the report is published.
   The bill requires the legislative services agency, to the extent resources are available, to conduct legislative regulatory analyses of existing rules and proposed or adopted rules that are not major rules when requested by a chair or ranking member of a standing committee of the general assembly.
   The bill requires agencies to promptly comply with requests for information relevant to a legislative regulatory analysis from the legislative services agency.
   The bill requires the administrative rules review committee to review a notice of intended action classified as a major rule before the earliest date on which the proposed rule could be adopted.
   The bill authorizes an aggrieved or adversely affected person or party to bring an action in district court concerning a major rule. The bill provides that the district court shall have jurisdiction to engage in de novo review of whether a rule is a major rule; determine whether an agency, the general assembly, the legislative council, or the governor completed the requirements for a major rule to become effective; and determine when or if a rule alleged to be a major rule became effective.
   The bill provides that ratification of a major rule shall not extinguish or otherwise affect any legal claim concerning any alleged legal defect of the major rule, be construed as a grant or modification of statutory authority by the general assembly for the adoption of the major rule, or be part of the record before the district court in any judicial proceeding concerning a major rule except for purposes of a proceeding authorized by the bill.
   The bill requires that rulemaking documents include additional specified information such as related regulatory actions by the agency, more detailed comparisons of costs and benefits of the rule, sources consulted by the agency, key assumptions made by the agency, and sources of uncertainty identified by the agency.
   This division of the bill applies to rulemaking commencing with a regulatory analysis published in the Iowa administrative bulletin on or after July 1, 2027, or with a rule adopted under Code section 17A.4, subsection 3 (emergency rule), on or after July 1, 2027.
   RATIFICATION OF PROPOSED AMENDMENTS TO STATE IMPLEMENTATION PLAN —— FEDERAL CLEAN AIR ACT. The bill provides that a proposal to amend the state implementation plan under section 110 of the federal Clean Air Act shall not be submitted for federal approval until it is ratified by the general assembly. The bill authorizes the general assembly to ratify such a proposal by passage of a joint resolution that requires approval of the governor.
   EXECUTIVE BRANCH BOARDS —— TERMS OF OFFICE. The bill changes the terms of service for members of the Iowa finance authority board of directors, agricultural development board, board of examiners for voting systems, investment board of the Iowa public employees’ retirement system, state board of education, and state board of regents from six years to four years. This change in terms of service applies to members appointed by the governor on or after July 1, 2026.