January 16, 2026

You Need to Know

• The 2026 Legislative Session got off to a fast start with property tax proposals being released from the Senate and Governor’s office. A House property tax bill is expected to be released next week. The early release of these bills is a positive sign, indicating that legislators have heard the feedback provided by the League and others asking for time to review, model, and understand the impacts of their proposals.
  

League Priority Legislation

• The Senate Property Tax proposal included provisions that allow for the digital publication of the Taxpayer notice form currently codified. The League looks forward to discussing the full bill with the Senate Ways & Means committee and advocating for our revamped Taxpayer Notice Form to be included in full. Legislators have also indicated that several other League Priority initiatives are in drafting. Stay tuned for further updates in the coming weeks.
  

• The League is currently working with our municipal finance partners to model the impacts of both released property tax proposals from the Senate and Governor’s Office.
  

New Legislation of Interest

SSB 3001 | Comprehensive State and Local Government Tax and Budget Reform Act

The Senate property tax proposal is a comprehensive bill built largely off of the proposal from 2025 with some significant changes. Some important provisions include:

• A stairstepped “Budget Adjustment Factor” which intends to restrict property tax revenue growth of existing assessment valuations at 2-5% while accounting for some inflation.
  

• Phasing out the Residential Rollback over a period of 13 years and replacing it with a homestead exemption of up to $350,000 depending on the value of the property..
  

• Allowance for an increase in Local Options Sales Tax to 1.5%.
  

• An annual increase in the Road Use Tax Fund based on the Consumer Price Index.
  

• An exemption for residents 60 years of age and older who have paid off their mortgages from paying non-voter approved levies or taxes.
  

SSB 3034 | Comprehensive State and Local Government Tax, Property Assessment, Urban Renewal, and Governance Reform

The Governor’s property tax proposal introduces brand new concepts for 2026. The Department of Management released a State Property Tax Dashboard for citizens to review and compare their property tax rates. Some important provisions include:

• A 2% cap on property tax revenue growth of existing assessment valuations.
  

• A limitation on the general fund reserve balances of cities capped at 10% of the previous year’s budgeted expenditures.

• Moves property assessments to a 3-year cycle and requires more stringent reporting from assessors.

• Changes to the procedures for urban renewal plans that use tax increment financing (TIF). New TIFs will be sunset after 20 years. The school foundation levy would no longer be subject to TIF diversion for new projects after July 1, 2027.  

• Increases the residential-assessment-limited portion from $150k to $250k, and only keeps the state funded backfill for the BPTC through fiscal year 2027.

• Establishes a $10 million grant fund to support local government efforts to consolidate services, reduce positions, or share services with the goal of reducing costs of providing services.

Legislation with Scheduled Subcommittees

SF 310 | Fire Sprinkler System Prohibition in Attached Single-Family Residences

• This bill mandates that neither the Iowa state building code nor local building regulations may require the installation of fire protection sprinkler systems in a series of attached single-family residences containing fewer than seven units. It directs the state building code commissioner to adopt this prohibition within the state building code, thereby preventing both state and local authorities from imposing such requirements on these smaller residential developments.

• Subcommittee scheduled Jan. 20 at 11:30 a.m.

League Registered Opposed

SF 609 | Property Tax Abatement for Surviving Spouses of Fallen Emergency Service Members

• This bill creates a process for the surviving spouse of an emergency services member (including firefighters, peace officers, correctional officers, emergency medical care providers, and certain volunteers) killed in the line of duty to petition for abatement of property taxes and special assessments on their homestead. The bill outlines eligibility requirements, petition procedures, and circumstances that disqualify applicants. The abatement applies to applicable taxes unless objected to by a taxing authority, and may cover multiple years if the spouse remains eligible. The law applies retroactively to assessment years starting January 1, 2025, and is effective immediately.

• Subcommittee scheduled Jan. 20 at 1:30 p.m.

League Registered Undecided

SF 656 | Temporary Opt-out for Solid Waste Collection Services

• This bill creates a legal mechanism enabling residential property owners who receive a homestead credit to temporarily discontinue county- or city-provided solid waste collection and disposal services for up to five consecutive months within a twelve-month period. To qualify, property owners must submit a completed application at least eight weeks prior to the proposed opt-out period. During the opt-out period, service fees are suspended, and an application fee (not exceeding $5 per requested opt-out month) may be charged. The bill also provides for the resumption of services and fees after the opt-out period and imposes civil penalties for knowingly submitting false application information.

• Subcommittee scheduled Jan. 20 at 2 p.m.
  

League Registered Undecided

Resources

• What Do the League's Bill Declarations Mean?

• How to Find Your Legislators

• League's Legislative Advocacy Toolkit

You can view all editions of Legislative Link at iowaleague.org/resource/legislative-link.

Like our membership, the Iowa League of Cities is a non-partisan, service-oriented organization that does not participate in elections, make campaign contributions, or have a political action committee (PAC).