The National Federation of Independent Business (NFIB), Iowa’s leading small business advocacy organization, announced highlights from the 91st General Assembly, which wrapped on May 14, 2025.

Unemployment Insurance Tax Reform – SF 607

Iowa has over-collected nearly $1 billion in unemployment Insurance taxes over the past several years. In 2025, Iowa employers will pay unemployment tax on the first $39,500 of each employee’s wages, which ranks second highest in the Midwest. Thanks to the Governor’s leadership, this legislation will “right-size” Iowa’s unemployment insurance tax system by lowering the taxable wage base from $39,500 to $19,500, while also lowering and simplifying the various tax brackets. This legislation will help save employers over $800 million over the next five years. This legislation passed the House 60-27 and the Senate 32-16.

Gov. Reynolds Signed this Legislation into Law on June 5, 2025.

Drug and Alcohol Testing Reform – HF 767

Businesses face many challenges under Iowa’s current drug and alcohol testing statute. NFIB has supported legislation over the past several years to address some of these issues. This legislation ensures employers can define certain jobs as “safety sensitive positions”, allows for more communication methods as it relates to exchanging drug and alcohol testing results, makes recoverable attorney fees “reasonable,” and flips the burden of proof from the employer to the plaintiff to prove the employer violated the law. Under current law, businesses are considered guilty until proven innocent when a claim is brought against them. This legislation passed the House 60-32 and the Senate 31-14.

Gov. Reynolds Signed this Legislation into Law on June 6, 2025.

Prohibiting State and Local Regulations on Fuel-Powered Equipment – HF 860

The United States, in recent years, has seen an increase in government overregulation by outlawing certain fuel-powered equipment. This legislation prohibits any Iowa government entity, including a state department or political subdivision, from adopting or continuing a regulation that prohibits a person from possessing, storing, transferring, acquiring, operating, maintaining, repairing, or reusing fuel powered equipment or parts that are manufactured to be powered by a specific fuel source. This legislation passed the House 84-12 and the Senate 39-8.

Gov. Reynolds Signed this Legislation into Law on April 18, 2025.