Bills › 91st General Assembly
Relating to bonds and letters of credit for general contractors and subcontractors
Sponsored by the Senate Local Government (successor To Ssb 1151) Committee
Topics:Cities & counties
Where it is now
- Done: IntroducedMarch 10, 2025
- Done: SubcommitteeJanuary 15, 2026
- Done: Senate committeeMarch 10, 2025
- Done: Passes the SenateMarch 2, 202644–0
- Stopped: House committeeDied when the General Assembly ended
- Next: Passes the House
- Next: To the Governor
- Next: Signed into law
Died when the session ended The General Assembly adjourned on October 2, 2026. Bills that didn’t pass both chambers died. What’s a funnel?
What’s in it
This bill relates to performance bonds and letters of credit for general contractors and subcontractors. The bill requires a general contractor or subcontractor, as defined in Code chapter 572 (mechanic’s lien), engaged in the business of construction, defined in the bill as the improvement of real property, including the performance of labor or furnishing of materials for the alteration, repair, or erection of a building or structure, in this state to obtain and maintain an annual performance bond or irrevocable letter of credit in the amount of $50,000.
Read the full explanation
The bond or letter of credit shall be payable to the state of Iowa and executed by a surety company or financial institution authorized to do business in this state. The bill requires a bond or letter of credit required by the bill to be filed with the state. The bill allows the state or a political subdivision of the state to enforce the requirements of the bill in connection with private construction work within its jurisdiction and to bring an action on the bond or letter of credit in the name of the state of Iowa for the use and benefit of a private person or political subdivision harmed by the contractor’s or subcontractor’s failure to perform contractual obligations or for violation of the bill or other applicable law. The bill limits the aggregate liability of a surety company or financial institution under a bond or letter of credit issued pursuant to the bill to the penal sum of the bond or the face amount of the letter of credit. The bill prohibits a general contractor or subcontractor from registering, renewing a registration, or conducting business as a general contractor or subcontractor unless the general contractor or subcontractor has a bond or letter of credit as required by the bill. The bill prohibits a political subdivision of the state from requiring, in connection with private construction work, a general contractor or subcontractor to obtain or file a bond, letter of credit, or other financial security, or the issuance of a license, or imposing a license fee or charge, except as otherwise required by law. The bill does not apply to a general contractor or subcontractor performing work for the state or a political subdivision of the state.
From the explanation printed with the bill as introduced, written by the Legislative Services Agency. Changed since by amendment S-5044; see Amendments. Full bill text
House subcommittee
Named March 10, 2026. On March 12, 2026 it recommended passage.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
Fiscal note
Cost: up to $724,000 Compare with other bills
5 additional FTE positions and a one-time programming cost of $10,000 to the ALIGN system. The costs for FY 2028 and thereafter will be approximately $724,000 annually. Source Department of Inspections, Appeals, and Licensing /s/ Jennifer Acton March 18, 2026 Doc ID 1602502 The Fiscal Note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code.
- Contractor Bond Requirements · March 18, 2026 · $724,000
Nonpartisan cost estimates from the Legislative Services Agency’s Fiscal Services Division. The newest is first. Reading a fiscal note
Iowa Code it changes
Creates§572A.1
Read from the bill as introduced. Each links to every bill touching that chapter of the Iowa Code. How the Code works
Lobbying
4 for · 4 against · 31 undecided · Who →
Family tree
Where this legislation came from and where it went: earlier tries, the versions it moved through this Assembly, and later bills built on it.
Study bill
91st General Assembly
Earlier and later bills are matched by wording or an identical title; check the text to be sure it’s the same idea.