Members,

Last Week

The legislature did not hold floor debates or many subcommittee meetings on Monday because of the weather. On Tuesday, both chambers held floor debates on remaining bills before conducting committee meetings for the rest of the week. Bills that did not pass out of a policy committee in the opposite chamber from where they originated by Friday, March 20^th are no longer eligible for consideration. Bills in the Ways and Means or Appropriations Committees are exempt from this deadline, as are any bills placed on the unfinished business calendar.

Property Tax

On Wednesday, the House Ways and Means Committee introduced an amendment to House Study Bill 596. The amendment aligns the property tax proposals of the Governor and the House and includes the following provisions:

• Caps all local government revenue growth at 2%, but excludes new valuation connected to new construction, debt service, and school funding
• Prohibits bonding for general operations
• Increases the Business Tax Credit for commercial and industrial properties from $150k to $350K
• Creates a new residential property tax exemption of 10% or up to $25K

• • This tax exemption excludes taxes imposed by school districts

• Requires an annual report of property parcel information to the Department of Management
• Creates a Utility Replacement Task Force to review the accuracy of taxes imposed by the utility replacement tax.
• Extends and transfers SAVE revenue for property tax relief
• Tax Increment Financing Reform

• • Includes “housing” as economic development and merges definitions with the workforce housing tax credit program
  • Excludes the $5.40 school aid levy and EMS levy from TIF
  • Limits perpetual TIF districts’ revenue usage to 60%, excludes existing debt
  • Caps all new TIF districts at 23 years
  • Removes LMI requirements and includes a construction cap

• Establishes a FirstHome Iowa Accounts Program
• Creates a new $10M grant fund to assist and incentivize local governments to consolidate and share services
• Removes the school foundation levy from TIF agreements for data centers
• Additional reporting for certifying boards that are not political subdivisions and are identified under a designation of special taxing districts.
• Requires new, clear, and concise reporting for property tax information disclosures
• Additional reporting for certifying boards that are not political subdivisions and are identified under a designation of special taxing districts.
• Budget reserves limitations on school unspent balances

 

HMO Tax

On Thursday, the House approved House File 2739 with a 53-40 vote. Ten Republicans joined every Democrat in voting no on the bill, and seven representatives were absent during the vote. The bill proposes a one-time tax increase on health maintenance organizations and Iowa’s managed care organizations, retroactively raising the tax rate from 0.925% to 3.5% between January 1 and September 30, 2026. This increased tax would generate $123 million and enable the state to receive matching federal funds before a provision in the One Big Beautiful Bill Act prevents such increases from taking effect in November.

The bill also transfers $296.2 million from the Taxpayer Relief Fund to the General Fund in FY26 to be included in the expenditure limitation for FY27.

Lobbyists for the Federation of Iowa Insurers, Wellmark, the Iowa Business Council, the Iowa Taxpayers Association, and Iowans for Affordable Healthcare all voiced opposition to the bill, citing concerns that the tax increase will raise healthcare costs for Iowans, and that tax increases and retroactive taxation are bad tax policy.

Other Bills of Interest

Senate File 2218: Requires the Iowa Board of Educational Examiners and school districts to require proof of citizenship/work authorization and creates penalties for applicants who provide false information. Passed the House 78-16 and sent to the Senate with an amendment.

House File 2676: Governor’s Make American Healthy Again bill directing the state to request a waiver each year, preventing Iowans from using SNAP dollars to buy certain foods considered unhealthy, and allowing for the sale of over-the-counter Ivermectin. The House amended the bill to remove the division increasing the tax on cigarette and tobacco products. The bill passed the House 65-30 and was placed on the Senate Unfinished Business Calendar.

Senate File 2422: Aligns eligibility for Medicaid, SNAP, and other public benefits programs with federal guidelines passed in the OBBA. The House HHS Committee passed an amendment removing the division codifying Iowa’s privatized Medicaid program. Passed the Senate 30-17 and the House Health and Human Services Committee.

House File 2694: Limits the Governor’s emergency powers and allows state government funding to continue into a new fiscal year if lawmakers fail to pass a budget by June 30^th. Passed the House 67-23 and the Senate State Government Committee.

 

This Week

This week, both chambers will hold floor debate. The Senate will only consider House bills, joint resolutions, and bills on the unfinished business calendar, while the House will only consider Senate bills, joint resolutions, and bills on the unfinished business calendar.

House Schedule

Senate Schedule

 

Take Care,

Chris LaFerla
President & CEO
Council Bluffs Chamber