Proposed bills still in talks

By Robin Opsahl, Brooklyn Draisey And Cami Koons

Iowa Capital Dispatch

Following the second “funnel” deadline of the Iowa legislative session, lawmakers often aim to shift their focus from policy to budgeting. But as lawmakers hit week 10 of the 2026 session, it appears agreements have not been reached on some of the top priorities laid out by Republicans at the beginning of session — primarily, eminent domain and property taxes.

March 20 marked the second major deadline of the session, when most bills must be passed by one chamber and approved by a committee in the other chamber to stay eligible for consideration. There are many caveats to this rule — legislation involving spending, taxes or government oversight are not subject to the funnel.

Chamber leadership also can designate bills that have not made it through the committee process required as “unfinished business,” saving the measure from the funnel cutoff – and can also bring back “dead” legislation as leadership-sponsored legislation. Some “dead” bills may be added as amendments to surviving bills in future debate.

Though there are still many avenues for state lawmakers to continue working on policy, the Legislature is just over a month away from the scheduled end date of April 21, when per diem expenses end for state lawmakers. Before they can end the session, the Legislature must approve and send budget bills funding the state government to Gov. Kim Reynolds.

The March Revenue Estimating Conference has given legislators a framework to start crafting appropriations bills for Fiscal Year 2027, but no budget plans have yet been released in either chamber.

“We’ll start to work through those, you know, in the next couple of weeks, identify those targets, and then start the process of … winding this show up,” Senate Majority Leader Mike Klimesh said March 19.

The Legislature typically adjourns after a budget is sent to the governor. But House Minority Leader Brian Meyer told reporters “there seems to be a lot of work to be done” before that will happen.

“We’ve got property taxes, which I don’t think they’re close on. You’ve got eminent domain — I know they’re not close on,” Meyer said. “And then you have a budget. We don’t even have targets down for the budgets yet. So I think at some point, something has to give, and they have to start working together to get this done.”

GOP priorities unresolved

Republican leaders in both the House and Senate brought up both property taxes and eminent domain as top priorities to tackle in 2026.

The House moved early in the session to pass House File 2104, a bill that proposed directly banning the use of eminent domain in carbon capture pipeline projects. But that bill was amended during Senate committee and replaced with language from Klimesh’s proposal, Senate File 2067. His bill would still allow for hazardous liquid pipeline operators to use eminent domain, but only after proving it had “diligently exhausted” possibilities to seek willing landowner easements within a widened corridor.

The last public discussion on the bill was during the Jan. 28 committee meeting. 

Finding ways to lower property taxes was also brought up as a top goal by both legislative leaders and Reynolds heading into 2026. All three parties have released their plans on property taxes, and legislators have received public feedback on each of the proposals through subcommittee meetings.

In a House Ways and Means Committee meeting March 18, lawmakers advanced House Study Bill 596, the House proposal with planned amendments to add portions from the governor’s proposal. Both the House GOP and Reynolds’ plans include a 2% revenue cap with some exceptions.

The House bill, as passed, incorporates certain portions of the governor’s proposal, like creating a $10 million fund of one-time money for local governments to finance consolidation efforts and shared service agreements, and would create a state-sponsored tax-deductible savings account similar to the state’s Iowa 529 Plan for first-time homeowners.

The measure still preserves some parts of House Republicans’ original bill, such as creating an exemption of 10% of the taxable value of a property or a maximum $25,000 exemption — whichever amount is less — for all residential properties, instead of cutting property taxes for seniors specifically.

Senate Republicans have put forward Senate File 2472, a bill that takes a substantially different approach when compared to the governor and House Republicans’ bills. This bill proposes eliminating the state’s “rollback” system for calculating property tax, reversing certain 2013 property tax cuts for multi-residential buildings like apartments, and eliminating property taxes altogether for Iowa homeowners older than 60. The bill also seeks to provide local governments access to new revenue streams by seeking voter approval to raise the local option sales tax and indexing the state’s gas tax to inflation.

The Senate Ways and Means Committee advanced the Senate bill March 11 with bipartisan support. Committee Chair Sen. Dan Dawson, R-Council Bluffs, thanked members of the committee for their work on the bill, saying it showed “there is a high desire to overhaul this entire system on a bipartisan basis.”

“It should not go unnoticed in this building, that there’s a larger appetite than ‘simple’ and kicking the can down the road to the next year,” Dawson said. “So I thank you all for being part of the process and hopefully getting to a better solution.”

The Iowa House passed a tax bill March 19 which faces its own deadline from the federal government. House File 2739 retroactively raises the premium tax rate for health maintenance organizations from 0.925% to 3.5% from Jan. 1 and Sept. 30, 2026, to make up for a shortfall in Iowa Medicaid funding.

Republicans said the tax increase was necessary to draw down certain federal funds made available through President Donald Trump and congressional Republicans’ 2025 tax and spending law. Reynolds said the state has a March 31 federal deadline to make the change.