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As the Legislature adjourned Sine Die over the weekend, lawmakers closed out a consequential session for Iowa communities. The final days of session largely focused on negotiations over property tax reform, with lengthy discussions stretching overnight before lawmakers reached a final agreement.
City officials from across the state remained actively engaged throughout the process, helping lawmakers better understand how proposed changes would affect local government services, operations and long-term investments.
Below is a summary of legislation of interest passed during the closing days of session. This will be the final edition of Legislative Link for the 2026 session. In the coming weeks, the League will share additional resources, including a webinar providing a more detailed overview of the final property tax legislation and our New Laws of Interest webinar & publication.
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League Priority Legislation |
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Property Taxes
SF 2472 combines provisions from the three property tax reform proposals introduced by the House, Senate and Governor’s office. The legislation establishes a 2% revenue growth limitation solely on a city’s general fund levy (CGFL) revenues, without an inflationary adjustment, while also excluding new construction from the cap. All other city levies remain outside the limitation, including debt services, trust and agency, and “special” revenue levies such as tort liability/insurance and employee benefits.
The bill also restructures residential property tax relief by converting the homestead credit into a homestead exemption, retains existing military and senior exemptions, phases down the statewide school foundation levy, and creates a new multi-residential rollback structure. Additional provisions modify assessment procedures, increase renter credits for elderly and disabled Iowans, establish reserve balance limitations, and enact significant changes to tax increment financing (TIF).
The legislation incorporates several League policy priorities and solutions advanced throughout session, including adoption of the League’s proposed taxpayer notice form, preserving bonding flexibility for infrastructure and capital projects, extending the $8.10 levy limitation deadline to FY31, and maintaining a CGFL-only limitation structure rather than applying the cap across all city levies. While the legislation will require cities to carefully evaluate future budgeting decisions, the final property tax reform package reflects substantial changes from earlier proposals introduced.
The League is continuing a full analysis of the legislation and will provide additional guidance and educational resources in the coming weeks and months.
You can review the League’s preliminary outline of the bill here: SF 2472 Property Tax Highlights.
NOTE: After the marathon weekend, LSA is understandably behind in updating the legislative website’s bill book. Please refer to this amendment for the final property tax bill language in the meantime.
SF 2146 | Sidewalk Liability
The League’s sidewalk liability priority bill (SF 2146) unfortunately failed to go to the floor of the House during the last days of the Legislative Session. We made large strides with this bill over the course of four months and plan to continue our efforts out of session and into next year.
SF 2286 | Public Funds Trusts
Cities’ ability to use Iowa Public Agency Investment Trust (IPAIT) was successfully protected, with League advocacy helping to keep a bill that would limit a city’s ability to invest their dollars as they see fit from reaching the House floor.
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SF 2472 | Property Tax Reform |
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Makes broad changes to Iowa’s property tax system by establishing new revenue growth limitations for local governments, including a 2% cap on city general fund levy growth with new construction excluded from the cap. The bill also restructures residential property tax relief by converting the homestead credit into an exemption, increasing certain renter credits, and phasing down the statewide school foundation levy from $5.40 to $4.90 over three years. Additional provisions address transparency and budgeting requirements, including the League’s proposed taxpayer notice standards, reserve balance limitations, and restrictions on using debt service for general operations while preserving bonding flexibility for infrastructure and capital projects. The legislation also significantly reforms Tax Increment Financing (TIF) by imposing a 23-year sunset on future districts, limiting perpetual TIF revenue capture after 20 years, and restricting the use of school foundation levy revenues within TIF areas. |
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HF 2800 | Standing Appropriations Bill |
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This bill makes clarifying changes to multiple policy bills passed throughout session, primarily in the form of grammatical or technical corrections. However, it does include policy changes to previously passed local city rights laws legislation.
Additionally, Division III incorporates identical language from SF 2374, which failed to pass the House. The bill defines the 'National Electrical Code' for Iowa as the 2023 edition with specific state modifications and exclusions. It alters several core requirements for residential electrical systems, including ground-fault and arc-fault circuit interrupters, kitchen receptacle placement, load calculations, and installation standards for ceiling fan outlets. The bill bars local governments from adopting electrical codes more restrictive than the state code. Before adopting future code changes, a cost analysis must be conducted and published. The amendments take effect immediately and will be repealed if the 2026 NEC is adopted. |
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SJR 11 | Constitutional Amendment: Two-Thirds Majority Requirement for State Tax Increases |
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Proposes a constitutional amendment mandating that any bill increasing the individual or corporate income tax rate, or creating any new tax based on income or legal and special reserves, must receive at least a two-thirds majority vote in both the Iowa House and Senate to pass. The requirement does not apply to taxes imposed only by local governments. The amendment also sets a one-year limit for filing lawsuits challenging whether tax bills met the two-thirds vote requirement and requires explicit reference to this requirement in each applicable bill. It would be submitted for voter approval at the 2026 general election. |
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HF 2531 | Divestiture and Abandonment of County and City Mineral Rights |
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Requires cities and counties to convey mineral interests they own to surface owners (except when they own the surface), without consideration or cost to the surface owner. It establishes a five-year deadline for such conveyances, with shorter timelines for newly acquired interests. The legislation amends tax procedures, clarifies abandonment and vesting of mineral interests in surface owners, and modernizes definitions and filing requirements related to severed mineral interests. It also changes procedures for handling delinquent taxes on mineral interests, including notice and conveyance protocols, and sets out conditions for when mineral interests are considered active or abandoned. |
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HF 2617 | Abandoned Vehicles Law Reorganization and Notice Procedures Update |
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Institutes broad reforms to abandoned vehicle procedures. The bill updates notification timelines, allows for credit card payments when releasing a vehicle, establishes new processes for lienholder inspections and owner retrieval of personal property, mandates fee transparency, and asserts state preemption over local ordinances regarding abandoned vehicle towing. It also clarifies legal procedures for reclamation and disposal, and modifies the rights of owners and lienholders in these contexts. |
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HF 2797 | Expansion of Rights and Remedies for Officers Placed on Brady-Giglio Lists |
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This bill grants peace officers placed on Brady-Giglio lists the right to petition, appeal, or intervene in district court regarding their placement, regardless of when the placement occurred. If an officer prevails in such an action, the court is required to award equitable relief, reasonable attorney fees, expenses, and court costs, paid by the state, municipality, or county responsible for the prosecuting agency. The bill is effective immediately and applies retroactively to placements and related proceedings/orders from July 1, 2021 onward.
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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). |
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