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New Iowa laws taking effect Jan. 1 include hands-free driving fines, tax credit overhaul
Dec. 31, 2025 2:18 pm
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The start of a new year also means the start of new laws in Iowa, including fines for handling a cellphone while driving, a statewide ban on ranked choice voting and an overhaul of state business tax incentives.
Iowa lawmakers in 2025 passed and Gov. Kim Reynolds signed more than 170 laws. Most took effect July 1, the beginning of the state fiscal year. However, a handful will go into effect with the start of the new year.
Here is a look at some of the notable new laws that take effect Thursday.
Hands-free driving: Warnings end, $100 tickets begin
Beginning Thursday, Iowa's hands-free driving law becomes a citable driving offense — and the state’s warning period ends.
Senate File 22 prohibits drivers from using cellphones or electronic devices while driving except in hands-free or voice-activated mode. The legislation does not apply if the vehicle is at a complete stop and off the traveled portion of road.
Iowa law already barred drivers from writing, sending or viewing electronic messages while driving. The new law expands that prohibition to “holding, viewing or manipulating an electronic device” behind the wheel.
The penalty also increases. The fine rises from $45 to $100, and the violation becomes a moving offense that can be considered for administrative license suspension or habitual offender status. If a violation results in serious injury or death, the fines increase to $500 and $1,000, respectively, and a driver’s license could be suspended.
The bill was a longtime push by families, law enforcement and traffic-safety advocates who argued Iowa’s distracted-driving laws didn’t go far enough.
Law enforcement officials say Iowa drivers have already received extensive warnings ahead of enforcement.
The Iowa State Patrol issued close to 10,000 warnings from July 1 — when the new law officially took effect, with officers required to issue warnings before writing citations, starting in 2026 — through the end of November, Sgt. Alex Dinkla, public information officer for the Iowa State Patrol, said during a Dec. 12 episode of “Iowa Press” on Iowa PBS. Dinkla noted officers also handed out educational materials explaining the new restrictions.
Brett Tjepkes, chief of the Governor’s Traffic Safety Bureau, said on “Iowa Press” the state printed and distributed 60,000 pamphlets to law enforcement and the public, placing them “in every rest area” and “in every driver’s licensing station in the state of Iowa” to boost understanding of the law ahead of enforcement.
Traffic safety experts also noted broader trends on Iowa’s roads. Early data suggest fatalities are trending downward, and Dinkla expressed hope that increased compliance with the hands-free law will continue that trend.
Together, officials said the combination of stricter enforcement beginning Jan. 1, ongoing education and broader traffic safety initiatives aim to further decrease crashes and make Iowa roads safer for all drivers.
Since July 1, the Cedar Rapids Police Department has issued 28 written warnings for hands-free violations. Officers have also frequently issued verbal warnings during stops to explain the law and emphasize how distracted driving affects other motorists, said CRPD traffic division commander Sgt. Graham Campshure.
Once citations become enforceable Jan. 1, CRPD plans to continue active patrols and traffic enforcement, Campshure said, but hopes the law itself changes driver behavior.
“We hope drivers don’t wait to be stopped and given a warning or citation,” he said.
Under the law, drivers may not hold an electronic device while driving, though dialing 911 is permitted. Phones must be mounted or secured in a cradle, and only one-touch actions to answer or end a call are allowed. Campshure said drivers are encouraged to use Bluetooth or speaker functions and to program GPS routes before starting a trip. The same rules apply to food-delivery drivers unless they are safely stopped.
“Use a headset, mount your phone to the dash and learn to use voice commands. We want you and our streets to be safe,” CRPD posted Tuesday on Facebook. “Iowa is on track to have fewer than 300 traffic related deaths in 2025 — the first time that's happened in a very long time.”
Tax incentive overhaul
A wide-ranging business tax incentive overhaul starts taking effect with the new year, reshaping how Iowa awards and monitors credits.
Senate File 657 includes 17 provisions that repeal, adjust and create multiple state tax incentives. Among the changes are new tax credits for film production and sustainable aviation fuel, along with the elimination of older credit programs.
The law also overhauls the state’s Research Activities Credit, replacing it with a new Research and Development Tax Credit Program administered by the Iowa Economic Development Authority. Under the new program, tax credits will be awarded to eligible businesses that incur qualified research expenses in Iowa.
The law also includes a “clawback” provision allowing the state to take back credits in certain situations — including if a business closes, lays off workers or knowingly employs individuals not authorized to legally work in Iowa.
Ranked choice voting banned
Beginning Jan. 1, Iowa elections may not be conducted using ranked choice voting, also known as instant runoff voting. The law defines the practice as a system in which voters rank candidates in order of preference and ballots are tabulated in rounds, with votes transferred as candidates are eliminated until a candidate receives a majority or all available offices are filled.
No local government in Iowa currently uses ranked choice voting.
Supporters argue it saves time by eliminating the need for runoffs, increases voter participation and makes it harder for extremist candidates to win elections. Opponents contend it confuses voters and, because not all voters rank every candidate, violates the principle of one person, one vote. The system is used in Alaska and Maine for statewide elections and in various municipalities across the country, according to the National Conference of State Legislatures.
Proponents of ranked choice voting in 2022 pressed the Cedar Rapids City Council to study it if allowed by the state, but the council declined.
Also taking effect Jan. 1, the law prohibits any person whose name appears on the ballot from occupying a voting booth with a voter, even if the voter is requesting assistance. Supporters said the change is intended to prevent candidates from being present while a ballot is being marked.
Voters who qualify for assistance because of blindness, inability to read English or certain physical disabilities may still receive help from precinct election officials or another person of the voter’s choosing — so long as that person is not a candidate on the ballot.
Other portions of House File 954 — including provisions related to voter registration challenges and citizenship verification overseen by Iowa Secretary of State Paul Pate — took effect earlier this year.
Insurance coverage: Limits lifted for autism spectrum disorder
A new law expands insurance coverage rules for the treatment of autism spectrum disorder.
House File 330 updates state insurance code language from “autistic disorders” to “autism spectrum disorder” and aligns coverage standards with other medical services. The law prohibits insurers from imposing aggregate annual or lifetime dollar limits on autism spectrum disorder benefits and eliminates caps on outpatient visits for applied behavior analysis or other autism-related care.
The legislation also removes age restrictions that previously limited coverage to children or young adults, extending autism coverage to individuals of all ages. Deductibles, co-pays and coinsurance for autism treatment must now be no more restrictive than those applied to other medical services, bringing Iowa law into closer alignment with federal mental health parity requirements.
The expanded coverage applies to fully insured group health policies, contracts and plans delivered, issued, continued or renewed in Iowa on or after Jan. 1, 2026. Self-insured employer plans are generally exempt from state insurance mandates but remain subject to applicable federal parity rules.
School bus driver instruction: Districts get more flexibility
A new law modifies training requirements for Iowa school bus drivers, giving school districts greater discretion while incorporating federal entry-level driver training standards into state law.
House File 395 updates Iowa Code to align state requirements with federal Entry-Level Driver Training (ELDT) standards administered by the Federal Motor Carrier Safety Administration, which sets minimum training requirements for new commercial drivers nationwide. Under federal rules, ELDT applies to drivers who obtain an initial Class A or Class B commercial driver’s license or receive a school bus or passenger endorsement. In Iowa, school bus drivers must hold a Class A, B or C commercial driver’s license and both school bus and passenger endorsements.
HF 395 allows school districts to continue requiring drivers to complete an approved course of instruction, but expands what qualifies as acceptable training. Approved courses may include a course authorized by the Iowa Department of Education, federally compliant entry-level driver training, or other training approved through a local school board resolution.
The law directs the Iowa Department of Education, in collaboration with the Iowa Department of Transportation, to adopt administrative rules by July 1, 2026, establishing requirements for providers of ELDT specific to the school bus endorsement. The departments have convened a task force to draft the rules, with the goal of ensuring consistent, high-quality training statewide while allowing districts flexibility in how drivers meet the requirements.
When required, drivers must complete the training before or within the first six months of employment and at least once every 24 months thereafter. Drivers who fail to provide proof of completion are subject to revocation of their school bus authorization by the Department of Education.
Lawmakers and education officials have said the changes are intended to streamline and standardize school bus driver training, improve consistency across districts, and help address Iowa’s ongoing school bus driver shortage by recognizing multiple training pathways that meet federal and state standards.
Sellers required to disclose if property is fed by lead service pipes
Homebuyers and renters will see new disclosure requirements related to lead service lines beginning in 2026, as Iowa moves to align real estate transactions with new federal drinking water rules.
The Environmental Protection Agency says exposure to lead can cause a range of serious health problems. Lead is a known contaminant to drinking water, contributing to serious health and developmental problems for children and pregnant women. Exposure can cause developmental delays, fertility issues, cardiovascular and neurological issues, and kidney damage. Under the 2024 finalized rule, lead water lines and certain galvanized water lines must be replaced nationwide within 10 years.
During the 2025 legislative session, Iowa REALTORS® worked with Des Moines Water Works and other utilities on legislation implementing those federal requirements. Under House File 876 and rules adopted by the Iowa Real Estate Commission, real estate disclosures must now address whether a property has a lead service line.
Beginning Jan. 1, sellers will be required to disclose the presence of lead service lines on the seller disclosure statement. The disclosure applies to service lines that connect a city’s water main to a building’s interior plumbing or water meter.
The Iowa Department of Natural Resources (DNR) has developed a Lead Service Line Inventory. This statewide inventory is mandated by the EPA’s 2021 Lead and Copper Rules Revisions, which requires public water systems to identify and share the locations of lead, non-lead and unknown service leads in a comprehensive inventory. Some Iowa cities, such as Des Moines, Cedar Rapids and Dubuque, have elected to make their lead service line inventories public.
If homeowners with lead service lines choose to sell their property, that information must now be included in the seller disclosure. If a seller doesn’t disclose those lead service lines, it could result in penalties for the seller.
Sports wagering winnings: State withholding tied to federal withholding
A new law changes when Iowa income tax must be withheld from sports wagering winnings.
Senate File 605 specifies that state income tax must be withheld on sports wagering winnings whenever federal income tax is required to be withheld from the same winnings under the Internal Revenue Code. The law also updates related language in Iowa code governing the tax treatment of winnings from gambling activities.
For sports bettors, the practical effect is that state withholding on certain winnings will be triggered by the same circumstances that require federal withholding.
Gazette Des Moines Bureau Chief Erin Murphy and Lee Des Moines Bureau Chief Maya Marchel Hoff contributed to this report.
Comments: (319) 398-8499; tom.barton@thegazette.com
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