Call your Iowa State Senator by February 20
The bulk of our work at Ag & Business Legal Strategies is focused on helping farmers navigate complex court processes in bankruptcy, as well as laws and regulations that affect their livelihood. But our attorneys also devote time and expertise to working with state and federal legislators to try improving laws that govern these, as well.
Ultimately, lawmakers serve you, the people. So from time to time, we like to update you on pending or potential legislation that could impact your daily life at some point so that you may reach out to your elected representative and share your opinion.
File the first two items in this article under “Needs Attention NOW.”
Updating for inflation in Iowa
Last year we worked with an Iowa state lawmaker on draft legislation to better assist farmers and other small business owners seeking debt solutions by updating Iowa’s exemption laws for inflation. We explained what that means, and how it would help struggling parties protect more of their property, in this article.
That legislation was introduced in the Iowa Senate last month and was assigned to a subcommittee of the Judiciary Committee. Not only would it bring up to date long-overlooked indexing, going forward it would require periodic indexing every three years. The subcommittee has recommended that the main Committee vote Senate File 2054 out to the full Senate for debate and consideration.
Here is what’s needed: If the Judiciary Committee does not vote on this by February 20, 2026 (later this week, as of this publication), it will become much more difficult to get the bill to the Senate floor for a vote this year—if at all. If you’re in favor of fair protection for debtors while supporting economic recovery in the debt reorganization/bankruptcy process, contact your State Senator TODAY and ask that the Committee vote on S.F. 2054 by February 20. If you don’t know your Senator, find them here.
ABCs of business liquidation
In addition to farmers, we also advise small business owners. Section 681 of Iowa Code governs assignment for benefit of creditors, commonly referred to in legal circles as ABC. The concept has been around for centuries, crossing from common law of England to the U.S., and allows a failing business to close efficiently and the owner(s) to maintain credibility by liquidating assets to pay its creditors. This process happens largely outside of court supervision, saving court expenses and potential time delays related to oversight. Used efficiently, ABC lets a business owner transfer its assets to a neutral third party, whose job is to sell them and recover the best prices to pay creditors. When the state enacted its current ABC laws in Iowa Code Chapter 681 more than a century ago, it imposed significant court oversight and bonding requirements. The bond requirement has historically proven onerous and expensive, crippling this tool—in fact, the last case we can find using this was in 1949.
Because ABC liquidation can be a more affordable alternative to bankruptcy when a business owner is not trying to reorganize to stay in business, we have been working with Iowa legislators to overhaul this state law. Senate File 2213 would do that, repealing Section 681 and replacing it with more modern, uniform language recently drafted and also under consideration in other states. UPDATE: The Governor signed the final bill, SF 2497, into law on June 2, 2026
As with the above-mentioned S.F. 2054, this bill has been recommended by the Judiciary Committee’s subcommittee for passage, so the full Committee can take it up for consideration. It too must be voted on by February 20, or it may be difficult-to-impossible for the full Senate to vote on this year. Contact your State Senator to request a Committee vote before February 20.
Protect farmer safety, legal relief
Recent approval of the use of dicamba herbicide by the U.S. Environmental Protection Agency (EPA) puts us in mind of an effort from the past two years, in Iowa, to nullify farmers’ rights to sue for relief if harmed by pesticides.
In 2024 and 2025, the Iowa Senate voted twice to approve a bill that stated if the EPA approves registration of a pesticide under the federal Insecticide, Fungicide and Rodenticide Act, that “shall be sufficient to satisfy any requirements for a warning or labeling regarding health or safety” for its use. And twice, the Iowa House refused to make it law.
Although we are not aware of any effort yet so far this year to revive the bill, it’s never a bad idea to get out ahead of potential action and let your legislators know that you are not in favor of taking away a farmer’s right to sue for injury from something they may be required to handle on a regular basis.
Why it matters: Several years ago, Ag & Business Legal Strategies had a client who grew very sick and nearly died when he was mixing a pesticide and some landed on his skin. It turned out that in the 1980s this chemical had contained a “loud” dye so the user could more easily see if it was applied or spilled, and caused it to sting so the user could wash it off promptly. By the early 2000s, however, the dye and warning sting had been eliminated. The Eighth Circuit Court ruled this elimination a design defect that was an exception to how the EPA had registered the pesticide, and the farmer prevailed.
EPA registration of a pesticide is predicated on how well it works for your crops, which has nothing to do with how safe it may be to use. Manufacturers and others will argue lawsuits raise the price or make approval a longer process. We ask: At what price do you really need those chemicals if they’re not going to be safe for everyday handling and exposure?
Federal bankruptcy goals
Next month, Ag & Business Legal Strategies Founding Attorney Joe Peiffer is headed to Washington, D.C., to join colleagues in speaking with federal legislators such as Iowa Senator Chuck Grassley about two important updates to the Bankruptcy Code.
Venue reform is a cause near to his heart, and passage of which he has lobbied Congress for many years. If a large company such as an ethanol manufacturer or grain processor—just to name a couple examples—that purchases commodities from farmers decides to file for bankruptcy, it would be much easier on the farmers and other creditors for the company to do so close to where it’s headquartered (which is often also where it does most of its business).
But this doesn’t always happen. That’s because federal law provides a loophole through which a company can file for bankruptcy far from where it’s doing most of its business, in a much more friendly-to-its-interests state such as Delaware or Texas, simply by legally establishing an affiliate office in the faraway state.
This makes it difficult for the farmers and their attorneys to travel for hearings and other proceedings to seek fair payment, such as what happened in the 2008 VeraSun bankruptcy. Peiffer will continue to seek legislation to close this loophole and force companies to keep bankruptcy proceedings closer to home.
Another issue he plans to speak with federal lawmakers about is Subchapter V bankruptcy, which helps small businesses. It was created to provide a more efficient way for these owners to successfully file for bankruptcy reorganization without the expense and burden of a typical Chapter 11 filing.
To provide more relief following the devastating economic effects of 2020 Covid shutdowns, Congress temporarily raised debt limits for businesses from $2.7 million to $7.5 million. But this provision expired in 2024 and was not renewed. Peiffer hopes to influence the introduction of legislation to enact a permanently higher debt limit.
If you would like to help by lending your voice to federal legislators, check out our guide for finding and contacting them. And if you have any legal questions or concerns related to debt reorganization or bankruptcy, reach out directly to Ag & Business Legal Strategies any time.
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