Iowa House Bill HF112

Iowa 2025-2026 Regular Session

• Filed/Introduced: 3/31/25
• Introduced: 1/23/25
• Refer: 1/23/25

Caption

A bill for an act relating to the maximum annual gross income for an enterprise to qualify as a targeted small business.(See HF 872.)

Summary

HF 112 would change Iowa’s definition of a “targeted small business” by dramatically increasing the annual gross income threshold a business may have and still qualify. Under current law, a business must have annual gross income of less than $4 million (averaged over the prior three fiscal years) or fewer than 20 employees; the bill would raise the income cap to less than $200 million while leaving the other eligibility requirements in place. The targeted small business category applies to enterprises that are at least 51% owned, operated, and actively managed by women, minority persons, service-disabled veterans, or persons with disabilities, and that are located in Iowa, operated for profit, and under single management.

Impact

The bill would substantially expand the pool of businesses eligible for targeted small business status under Iowa Code section 15.102, subsection 12, paragraph a. That status can affect access to state contracting preferences, certification, and related economic development programs for businesses owned by women, minorities, service-disabled veterans, and persons with disabilities. By raising the income ceiling from $4 million to $200 million, the bill would make many larger enterprises eligible for benefits intended for smaller firms, potentially changing how state procurement and certification programs operate.

Sentiment

The available voting history suggests the bill received some support in committee, passing the House Committee on Economic Growth And Technology by a 13-7 vote. However, the bill was later withdrawn, which indicates it did not advance to enactment. With no committee transcript available, the overall sentiment can be described as mixed: enough support to move it out of committee, but not enough consensus for the bill to continue through the legislative process.

Contention

The main point of contention is the size of the income threshold increase. Supporters likely viewed the change as broadening participation in targeted small business programs, while opponents may have seen the $200 million cap as far too high for a program designed to benefit genuinely small businesses. The bill’s effect on eligibility for state contracting preferences and certification likely raised concerns about whether the expanded definition would dilute resources and opportunities for smaller firms that the program was originally meant to assist.