After observing the MLK Day holiday on Monday, legislators returned to the Capitol and moved quickly into a full schedule of subcommittee and committee work. Dozens of subcommittee hearings were held throughout the week, and by midweek several bills had already advanced to full committee consideration, with some now eligible for floor debate. As anticipated, two major policy issues are dominating early session activity and are expected to shape much of the legislative discussion this year: property tax reform and proposals related to eminent domain authority for carbon capture pipelines.
House Republicans Introduce Property Tax Reform Bill
House Republicans introduced their own property tax reform bill, HSB 596, this week. Their proposal is the most succinct coming in at just 23 pages in comparison to the much lengthier proposals from Senate Republicans and the Governor, outlined last week.
HSB 596 includes:
- A 102 percent revenue growth cap for most local governments, excluding school and debt levies, with new construction outside the limit.
- A new, across-the-board $25,000 residential property tax exemption beginning with the 2026 assessment year. (This is in addition to the rollback and other exemptions)
- A revamped property tax statement to improve transparency, effective for budgets beginning July 1, 2027.
- Directs Councils of Governments (COGs) to assist with local government service consolidation and streamlining.
- A requirement that any property-tax-supported bond receive 60 percent voter approval beginning July 1, 2026.
With the House proposal now introduced, lawmakers will begin comparing the three competing property tax plans. Over the coming weeks, committees will review each proposal, hold hearings, and negotiate key differences as they work toward a final bill that can gain enough support to pass through both chambers.
Carbon Pipeline and Eminent Domain: Dueling Proposals
This week brought significant movement on both the House and Senate approaches to the carbon capture pipeline and eminent domain debate. As a reminder, this issue stalled the state budget and effectively brought the Legislature to a standstill at the end of last session. The chambers remain deeply divided on how to address the issue, raising concerns that it could once again dominate the legislative agenda and slow progress on other priorities.
On Wednesday, the Iowa House passed HF 2104, which would prohibit the use of eminent domain for carbon dioxide pipelines, by a bipartisan vote of 64–28. Eight House Republicans joined 20 Democrats in opposing the bill. The vote reflected the competing interests surrounding the issue, with a mix of agriculture and labor organizations urging lawmakers to oppose the measure, while landowners and private property rights advocates applauded its passage. The bill now moves to the Senate, where its future is uncertain.
Meanwhile, Senate Majority Leader Klimesh announced and introduced the Senate’s alternative proposals, SF 2067 and SF 2069, during a press conference this week. These bills would not ban eminent domain outright but instead place additional restrictions on its use, including:
- Requiring pipeline companies to fully exhaust all voluntary easement options, using expanded routing corridors, before eminent domain could be considered.
- Imposing additional procedural and regulatory hurdles prior to any use of eminent domain.
- Exploring the creation of a CO₂ severance tax, with potential revenues directed to the Taxpayer Relief Fund.
This contrast highlights the ongoing divide between the two chambers: the House favoring an outright prohibition on eminent domain for CO₂ pipelines, and the Senate seeking tighter limitations and oversight. At this stage, neither side appears to have shifted from the positions that led to last year’s stalemate, signaling that this issue will remain one of the most consequential and closely watched debates of the session.
House Democrats Release Water Plan
On Thursday House Democrats released a comprehensive water quality proposal aimed at improving Iowa’s drinking water and protecting rivers and lakes. Their plan would expand statewide water monitoring, significantly increase funding for the Nutrient Reduction Strategy, and create new incentives for farmers through tax credits, property tax relief, and zero-interest loans to encourage conservation practices that reduce runoff and improve water quality. This marks the first major proposal introduced this session by any party addressing Iowa’s water quality challenges.
Looking Ahead
The third week will be the legislature’s first full week of work. A full schedule is expected with subcommittee and committee meetings already scheduled into Thursday afternoon as lawmakers look to get their priorities moving early. Want to learn more…Click here to view the daily hearing schedule and virtual access information.