Senate File 659 - Introduced SENATE FILE 659 BY COMMITTEE ON APPROPRIATIONS (SUCCESSOR TO SSB 1241) A BILL FOR An Act relating to state government and finances, including by 1 making, modifying, limiting, or reducing appropriations, 2 distributions, or transfers, authorizing expenditure of 3 unappropriated moneys in special funds, providing for 4 properly related matters including crystalline polymorph 5 psilocybin and medical residency and fellowship positions, 6 making corrections, and including effective date and 7 retroactive applicability provisions. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 TLSB 2990SV (1) 91 ns/jh

S.F. 659 DIVISION I 1 APPROPRIATIONS, DISTRIBUTIONS, TRANSFERS, AND EXPENDITURE 2 AUTHORITY 3 Section 1. LIMITATIONS OF STANDING APPROPRIATIONS —— FY 4 2025-2026. Notwithstanding the standing appropriation in the 5 following designated section for the fiscal year beginning July 6 1, 2025, and ending June 30, 2026, the amount appropriated from 7 the general fund of the state pursuant to that section for the 8 following designated purpose shall not exceed the following 9 amount: 10 For payment of claims for nonpublic school pupil 11 transportation under section 285.2 : 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,997,091 13 If total approved claims for reimbursement for nonpublic 14 school pupil transportation exceed the amount appropriated in 15 accordance with this section, the department of education shall 16 prorate the amount of each approved claim. 17 Sec. 2. INSTRUCTIONAL SUPPORT STATE AID —— FY 2025-2026. In 18 lieu of the appropriation provided in section 257.20, 19 subsection 2, the appropriation for the fiscal year 20 beginning July 1, 2025, and ending June 30, 2026, for paying 21 instructional support state aid under section 257.20 for the 22 fiscal year is zero. 23 Sec. 3. SPECIAL FUNDS —— SALARY ADJUSTMENTS —— FY 24 2025-2026. For the fiscal year beginning July 1, 2025, and 25 ending June 30, 2026, salary adjustments otherwise provided 26 may be funded as determined by the department of management, 27 subject to any applicable constitutional limitation, using 28 unappropriated moneys remaining in the commerce revolving 29 fund, the gaming enforcement revolving fund, the gaming 30 regulatory revolving fund, the primary road fund, the road 31 use tax fund, the fish and game protection fund, and the Iowa 32 public employees’ retirement fund, and in other departmental 33 revolving, trust, or special funds for which the general 34 assembly has not made an operating budget appropriation. 35 -1- LSB 2990SV (1) 91 ns/jh 1/ 9

S.F. 659 Sec. 4. IOWA ECONOMIC EMERGENCY FUND EXCESS —— USE FOR 1 FOUNDATION AID. Of the excess moneys transferred to the 2 general fund of the state under section 8.55, subsection 2, 3 paragraph “b”, for the fiscal year beginning July 1, 2024, 4 $21,881,303 shall be used in lieu of a like amount of other 5 general fund moneys to pay foundation aid under chapter 257, 6 as described in section 257.16, for the fiscal year beginning 7 July 1, 2025. This section is based on the application of 8 assessment limitations calculated under section 441.21 due to 9 the enactment of 2023 Iowa Acts, chapter 5. 10 Sec. 5. Section 257.35, Code 2025, is amended by adding the 11 following new subsection: 12 NEW SUBSECTION . 19A. Notwithstanding subsection 1, and in 13 addition to the reduction applicable pursuant to subsection 2, 14 the amounts specified for school districts and area education 15 agencies in subsection 1, paragraph “a” , for the fiscal year 16 beginning July 1, 2025, and ending June 30, 2026, shall be 17 reduced by the department of management by twenty-five million 18 dollars. The reductions for each district or agency shall be 19 prorated based on the proportional reduction that the district 20 or agency receives under subsection 2. 21 DIVISION II 22 CORRECTIVE PROVISIONS 23 Sec. 6. Section 29D.4, subsection 2, paragraph b, as enacted 24 by 2025 Iowa Acts, Senate File 619, section 8, is amended to 25 read as follows: 26 b. Moneys in the fund are appropriated to the department to 27 provide loans to eligible entities pursuant to section 29D.9 28 29D.8 , and for administration of the program as permitted 29 under the STORM Act. Moneys in the fund shall not be used to 30 provide a loan to a private entity for the acquisition of real 31 property. Moneys in the fund shall not be considered part of 32 the general fund of the state subject to appropriation for any 33 other purpose by the general assembly, and in determining a 34 general fund balance, shall not be included in the general fund 35 -2- LSB 2990SV (1) 91 ns/jh 2/ 9

S.F. 659 of the state subject to section 16.31, insofar as section 16.31 1 complies with the STORM Act. 2 Sec. 7. Section 144E.3, Code 2025, as amended by 2025 Iowa 3 Acts, Senate File 233, section 2, if enacted, is amended to 4 read as follows: 5 144E.3 Manufacturer and eligible facility rights. 6 1. A manufacturer of an investigational drug, biological 7 product, or device or a manufacturer operating within, 8 and in compliance with all requirements applicable to, an 9 eligible facility may make available, and an eligible patient, 10 as applicable under section 144E.1 144E.2 , subsection 2, 11 paragraph “a” or “b” , may request from a manufacturer of 12 an investigational drug, biological product, or device, 13 or a manufacturer operating within, and in compliance with 14 all requirements applicable to, an eligible facility, the 15 manufacturer’s investigational drug, biological product, or 16 device, or the manufacturer’s individualized investigational 17 treatment under this chapter . This chapter does not require a 18 manufacturer of an investigational drug, biological product, 19 or device, or of an individualized investigational treatment 20 to provide or otherwise make available the investigational 21 drug, biological product, or device, or the individualized 22 investigational treatment to an eligible patient. 23 2. An eligible facility, or a manufacturer described 24 in subsection 1 , that is in compliance with all applicable 25 requirements, may do any of the following: 26 a. Provide an investigational drug, biological product, 27 or device, or an individualized investigational treatment 28 to an eligible patient, as applicable under section 144E.1 29 144E.2 , subsection 2, paragraph “a” or “b” , without receiving 30 compensation. 31 b. Require an eligible patient, as applicable under section 32 144E.1 144E.2 , subsection 2, paragraph “a” or “b” , to pay the 33 costs of, or the costs associated with, the manufacture of the 34 investigational drug, biological product, or device, or the 35 -3- LSB 2990SV (1) 91 ns/jh 3/ 9

S.F. 659 individualized investigational treatment. 1 Sec. 8. Section 237.10, subsection 1, paragraph d, if 2 enacted by 2025 Iowa Acts, House File 644, section 3, is 3 amended to read as follows: 4 d. (1) The department shall notify an individual licensee, 5 and the parents or guardians of a child, if the department 6 delegates the department’s right to consent to emergency 7 medical care and routine medical care on behalf of the child 8 under section 232.2, subsection 12, paragraph “c” , to the 9 individual licensee. 10 (2) The department shall notify the department of 11 education, an individual licensee, and the parents or guardians 12 of a child if the department delegates the department’s right 13 to consent to participation in an individualized education 14 program on behalf of the child under section 232.2, subsection 15 12, paragraph “c” , to the individual licensee. 16 Sec. 9. Section 237.10, subsection 1, paragraph d, if 17 enacted by 2025 Iowa Acts, House File 644, section 7, is 18 amended to read as follows: 19 d. (1) The department shall notify an individual licensee 20 or an approved kinship caregiver, and the parents or guardians 21 of a child, if the department delegates the department’s right 22 to consent to emergency medical care and routine medical care 23 on behalf of the child under section 232.2, subsection 12, 24 paragraph “c” , to the individual licensee or approved kinship 25 caregiver. 26 (2) The department shall notify the department of 27 education, an individual licensee or an approved kinship 28 caregiver, and the parents or guardians of a child, if the 29 department delegates the department’s right to consent to 30 participation in an individualized education program on behalf 31 of the child under section 232.2, subsection 12, paragraph “c” , 32 to the individual licensee or approved kinship caregiver. 33 Sec. 10. Section 256.9, subsection 69, as enacted by 2025 34 Iowa Acts, House File 782, section 1, is amended to read as 35 -4- LSB 2990SV (1) 91 ns/jh 4/ 9

S.F. 659 follows: 1 69. On or before May 1, 2025, develop and distribute 2 to school districts, accredited nonpublic schools, charter 3 schools, and innovation zone schools model policies that, 4 if adopted, would satisfy the a school district’s , charter 5 school’s, or innovation zone school’s responsibilities under 6 section 279.87 relating to policies governing student use of 7 personal electronic devices. 8 Sec. 11. Section 280.36, subsection 1, as enacted by 2025 9 Iowa Acts, Senate File 583, section 4, is amended to read as 10 follows: 11 1. The board of directors of each school district and the 12 authorities in charge of each accredited nonpublic school may 13 establish a multidisciplinary school safety assessment team. 14 If established, the multidisciplinary school safety assessment 15 team shall coordinate resources and assess and intervene 16 when a student enrolled in the school district or accredited 17 nonpublic school exhibits behavior that may pose a threat to 18 the safety of the school district or accredited nonpublic 19 school, employees of the school district or accredited 20 nonpublic school, or other student students enrolled in the 21 school district or accredited nonpublic school. 22 Sec. 12. Section 299.1D, subsection 1, paragraph f, if 23 enacted by 2025 Iowa Acts, House File 870, section 2, is 24 amended to read as follows: 25 f. The school district or accredited nonpublic school 26 must not expend any moneys related to the course in religious 27 instruction, not including de minimis administrative costs 28 associated with processing notifications received under 29 subsection 1 paragraph “a” and tracking the child’s attendance 30 to ensure compliance with this section. 31 Sec. 13. Section 510B.8E, subsection 3, unnumbered 32 paragraph 1, if enacted by 2025 Iowa Acts, Senate File 383, 33 section 7, is amended to read as follows: 34 The pharmacy benefits manger manager shall respond to an 35 -5- LSB 2990SV (1) 91 ns/jh 5/ 9

S.F. 659 appeal within seven business days after the date on which the 1 pharmacy benefits manager receives the appeal. 2 Sec. 14. Section 514F.8, subsection 1A, paragraph c, 3 subparagraph (8), if enacted by 2025 Iowa Acts, House File 303, 4 section 1, is amended to read as follows: 5 (8) The average and median time that elapsed between the 6 submission of a nonurgent prior authorization request and a 7 determination by the utilization review organization for the 8 urgent nonurgent prior authorization request, aggregated for 9 all health care services or items. 10 Sec. 15. Section 522F.4, subsection 2, as enacted by 2025 11 Iowa Acts, Senate File 619, section 59, is amended to read as 12 follows: 13 2. Any The fee for a criminal history check shall be 14 the same as any applicable fee for a criminal history check 15 pursuant to section 522B.5A. 16 Sec. 16. Section 522F.9, subsection 2, as enacted by 2025 17 Iowa Acts, Senate File 619, section 64, is amended to read as 18 follows: 19 2. Any The fee for a criminal history check shall be 20 the same as any applicable fee for a criminal history check 21 pursuant to section 522B.5A. 22 Sec. 17. CODE EDITOR DIRECTIVE. 2025 Iowa Acts, Senate File 23 619, section 29, amends section 515.137A, subsections 3, 4, and 24 5, Code 2025, by striking the subsections and inserting in lieu 25 thereof new subsections 3, 4, and 5, and, notwithstanding the 26 Acts section lead-in, adds new subsections 6, 7, 8, 9, and 10. 27 The Code editor is directed to codify 2025 Iowa Acts, Senate 28 File 619, section 29, by striking section 515.137A, subsections 29 3, 4, and 5, Code 2025, and inserting in lieu thereof new 30 subsections 3, 4, and 5, and then by amending section 515.137A, 31 Code 2025, by adding new subsections 6, 7, 8, 9, and 10. 32 Sec. 18. EFFECTIVE DATE. The following, being deemed of 33 immediate importance, takes effect upon enactment: 34 The section of this division of this Act amending section 35 -6- LSB 2990SV (1) 91 ns/jh 6/ 9

S.F. 659 256.9, subsection 69, as enacted by 2025 Iowa Acts, House File 1 782, section 1. 2 Sec. 19. RETROACTIVE APPLICABILITY. The following applies 3 retroactively to April 30, 2025: 4 The section of this division of this Act amending section 5 256.9, subsection 69, as enacted by 2025 Iowa Acts, House File 6 782, section 1. 7 DIVISION III 8 CRYSTALLINE POLYMORPH PSILOCYBIN 9 Sec. 20. Section 124.201, subsection 5, if enacted by 2025 10 Iowa Acts, House File 383, section 1, is amended to read as 11 follows: 12 5. a. Notwithstanding section 124.204, subsection 4, a drug 13 that contains the pharmaceutical composition of crystalline 14 polymorph psilocybin , also known as COMP 360, or any other 15 trade name approved by the United States food and drug 16 administration, shall be immediately removed from schedule I 17 under section 124.204, subsection 4, paragraph “s” , upon its 18 approval by the United States food and drug administration and 19 rescheduled based upon the recommendations of the United States 20 food and drug administration and its listing in the federal 21 Controlled Substances Act, 21 U.S.C. §812, and 21 C.F.R. 22 §1308.14. 23 b. Immediately upon the rescheduling of the drug under 24 paragraph “a” , it shall be lawful to prescribe, distribute, and 25 market the pharmaceutical composition of crystalline polymorph 26 psilocybin , also known as COMP 360, or any other trade name 27 approved by the United States food and drug administration . 28 DIVISION IV 29 MEDICAL RESIDENCY AND FELLOWSHIP POSITIONS —— RESIDENTS OF IOWA 30 Sec. 21. Section 262.9, subsection 39, paragraph e, 31 subparagraph (2), if enacted by 2025 Iowa Acts, House File 516, 32 section 1, is amended to read as follows: 33 (2) An individual who has lived in Iowa for at least four 34 consecutive years immediately preceding the date the individual 35 -7- LSB 2990SV (1) 91 ns/jh 7/ 9

S.F. 659 applies for admission to begins classes at the college of 1 medicine in the doctor of medicine program or the college of 2 dentistry at the state university of Iowa, or for begins a 3 residency at the university of Iowa hospitals and clinics. 4 EXPLANATION 5 The inclusion of this explanation does not constitute agreement with 6 the explanation’s substance by the members of the general assembly. 7 APPROPRIATIONS, DISTRIBUTIONS, TRANSFERS, AND EXPENDITURE 8 AUTHORITY. This bill limits or reduces the standing 9 appropriations for FY 2025-2026 for payment of claims for 10 nonpublic school pupil transportation, instructional support 11 state aid, and state aid for area education agencies and school 12 districts under Code section 257.35. 13 The bill authorizes salary adjustments to be funded as 14 determined by the department of management from unappropriated 15 moneys in certain special funds. 16 The bill provides that, of the moneys in excess of the 17 maximum balance of the Iowa economic emergency fund transferred 18 to the general fund of the state under current law for FY 19 2024-2025, an amount based on the application of assessment 20 limitations calculated under Code section 441.21 due to the 21 enactment of 2023 Iowa Acts, chapter 5, must be used in lieu of 22 a like amount of other general fund moneys to pay foundation 23 aid under Code chapter 257 for FY 2025-2026. 24 CORRECTIVE PROVISIONS. The bill makes technical corrections 25 to, or as the result of, legislation enacted or considered 26 during the 2025 legislative session. Certain provisions take 27 effect or apply retroactively based on the underlying 2025 28 legislation. 29 CRYSTALLINE POLYMORPH PSILOCYBIN. The bill removes the 30 trade name specifications for crystalline polymorph psilocybin 31 in 2025 Iowa Acts, House File 383, which provides for the 32 rescheduling of that substance upon recommendation by the 33 United States food and drug administration. 34 MEDICAL RESIDENCY AND FELLOWSHIP POSITIONS —— RESIDENTS OF 35 -8- LSB 2990SV (1) 91 ns/jh 8/ 9