Iowa law forbids the practice of “selling babies,” however, the distinction between what is fair and reasonable is laid out in Iowa § 600A.6(c).

Most recently, in 2017, the Iowa legislature passed Senate File 433 §22 detailing penalties for prohibited adoption fees.

Iowa ß 600A.6(c) Report of Expenditures – Penalties provides:

1. a. A biological parent shall not receive anything of value as a result of the biological parent terminating the parent’s parental rights, unless that thing of value is an allowable expense under subsection 2.

b. Any person assisting in any way with the termination of parental rights shall not charge a fee which is more than usual, necessary, and commensurate with the services rendered.

c. If the biological parent receives any prohibited thing of value, if a person gives a prohibited thing of value, or if a person charges a prohibited fee under this subsection, the person is guilty of a serious misdemeanor.

2. a. The petitioner shall file with the juvenile court or court, prior to the termination hearing, a full accounting of all disbursements of anything of value paid or agreed to be paid by or on behalf of the petitioner or intended adoptive parent in connection with the petitioned termination. This accounting shall be made by a report prescribed by the juvenile court or court and shall be signed and verified by the petitioner. The report shall be accompanied by documentation of all disbursements made prior to the date of filing of the report. Only expenses incurred in connection with the following and any other expenses approved by the juvenile court or court are allowable:

(1) The birth of the minor person to be adopted.
(2) Placement of the minor person by the adoption service provider.
(3) Legal expenses related to the termination of parental rights and adoption processes.
(4) Pregnancy-related medical care received by the biological parents or the minor person during the pregnancy or delivery of the minor person and for medically necessary postpartum care for the biological parent and the minor person.
(5) Ordinary and necessary living expenses of the mother including but not limited to the costs of housing, food, utilities, and transportation for medical purposes related to the pregnancy and birth of the child, in an amount not to exceed two thousand dollars and for no longer than thirty days after the birth of the minor person.
(6) Costs of the counseling provided to the biological parents prior to the birth of the child, prior to the release of custody, and any counseling provided to the biological parents for not more than sixty days after the birth of the child.
(7) Living expenses or care of the minor person during the pendency of the termination of parental rights proceedings.
b. All payments for allowable expenses shall be made through the adoption service provider. An adoption service provider shall deposit all funds received from prospective adoptive parents as payments for allowable expenses for a designated biological parent into an escrow account established with a financial institution located in this state whose accounts are insured by the federal deposit insurance corporation, the national credit union administration, or the federal savings and loan insurance corporation. Such escrow funds shall not be commingled with other revenues or expense accounts of the adoption service provider and separate accounting shall be maintained for each prospective adoptive parent whose funds are deposited in the escrow account. Any escrow funds not disbursed by the adoption service provider for the benefit of the designated biological parent shall be returned to the prospective adoptive parents with a full accounting of all deposits and disbursements. If the adoption service provider is a licensed attorney, use of the attorney’s state-sanctioned trust account shall satisfy the requirements relative to the escrow account under this paragraph.

c. Any payments for allowable expenses shall not be made to a biological parent, but instead shall be made directly to the provider of the service, product, or other activity to which the allowable expense is attributable, if applicable.
d. The provisions of this subsection do not apply in a stepparent adoption.
3. The juvenile court or court shall review the report prior to the termination hearing and shall include findings regarding the allowance or disallowance of any disbursements or projected disbursements in the termination order.

Application: (Since this code section is relatively new, Westlaw did not have any relevant case law pertaining to Iowa § 600A.6(c)).
Here, Iowa ß 600A.6(c) allows for seven (7) different types of expenses to be exchanged between the petitioner or adoptive parent and the biological parent. The seven different types of expenses are as follows:
1) The birth of the minor person to be adopted.

(2) Placement of the minor person by the adoption service provider.

(3) Legal expenses related to the termination of parental rights and adoption processes.

(4) Pregnancy-related medical care received by the biological parents or the minor person during the pregnancy or delivery of the minor person and for medically necessary postpartum care for the biological parent and the minor person.
(5) Ordinary and necessary living expenses of the mother including but not limited to the costs of housing, food, utilities, and transportation for medical purposes related to the pregnancy and birth of the child, in an amount not to exceed two thousand dollars and for no longer than thirty days after the birth of the minor person.
(6) Costs of the counseling provided to the biological parents prior to the birth of the child, prior to the release of custody, and any counseling provided to the biological parents for not more than sixty days after the birth of the child.
(7) Living expenses or care of the minor person during the pendency of the termination of parental rights proceedings.
Iowa § 600A.6(c)(2) lays out the specific types of value that can be received by the biological parent in exchange for terminating their parental rights (TPR) during an adoption proceeding. Fees associated with the termination of parental rights shall not exceed what is more than “usual, necessary and commensurate with the services rendered.” Iowa § 600A.6(c) was enacted in 2017, therefore, Iowa case law has not interpreted the statutory language of fees that are “usual, necessary, and commensurate with the services rendered.” However, Iowa § 600A.6 (c)(2)(a) explicitly states the categories of expenses that are allowed to be exchanged between the petitioner or intended adoptive parent in relation with the adoption proceeding. This section also requires the petitioner to record and submit a full accounting of all disbursements of anything of value paid or agreed to be paid by in connection with the termination. If a birthparent receives anything of prohibited value, give something of prohibited value or if a person charges a prohibited fee under this statute, the person is guilty of a serious misdemeanor. Proper documentation would include accompanying records of disbursements made prior to the date of filing the report. The seven categories of expenses stated under Iowa § 600A.6 (c)(2)(a) and “other expenses” approved by the Court are allowable under this statute. Due to the lack of case law, “other expenses” is a broad term that has yet to be interpreted. Iowa § 600A.6(c)(2)(b) outlines the procedure for which expenses shall be paid during an adoption. The adoption service provider, either the agency or licensed attorney, shall be the only party to be handling the deposits received from the prospective adoptive parents and biological parents. The deposits should be placed in an escrow account and the account should not be associated with other expenses that are not related to that specific prospective adoptive parent(s). Any amount not disbursed by the adoption service provider for the benefit of the biological parent should be returned to the prospective adoptive parents. If the adoption service provider is an attorney, the attorney’s state-sanctioned trust account satisfies the requirements of an escrow account. Iowa § 600A.6(c)(2)(c) reiterates payments for allowable expenses shall not be made to the biological parent directly.

Conclusion: Iowa § 600A.6(c) lays out the types of value that are allowed to be exchanged between biological and prospective adoptive parents; requires expenses to be recorded diligently before the termination of parental rights; states any person who violates this statute receives a serious misdemeanor; and discusses the payment procedure for which the parties should handle expenses (through the adoption service provider with an escrow account).

Please contact David A. Grooters, Iowa Adoption Attorney, to discuss this further!