Public Policy Update: 2026 Legislative Session Concludes

Public Policy Update: 2026 Legislative Session Concludes

May 5, 2026 | Public Policy

State Policy Update

The 2026 Iowa Legislative Session officially adjourned sine die Sunday evening, concluding the 91st General Assembly after lawmakers finalized several key bills impacting Iowa's business climate, workforce, and infrastructure.

Throughout the session, the Economic Alliance advanced a set of 2026 legislative priorities focused on workforce, business competitiveness, and sustainable community growth. Several outcomes in the final days of session reflect progress in those areas, while others highlight where continued advocacy is needed.

Workforce & Talent Development

A continued focus on workforce remains a positive signal for employers.

• Lawmakers approved an increase in funding for apprenticeship training to $4.5 million annually, strengthening Iowa's talent pipeline.
• Additional investments in reemployment case management and unemployment insurance trust funds aim to improve system efficiency and support both employers and job seekers.

Economic Development & Competitiveness

The Legislature advanced changes aimed at improving Iowa's competitive position:

• A broad economic development package includes:
• A Headquarters Expansion (EDGE) program to incentivize companies to grow in Iowa
• Creation of a business incentives fund tied to workforce training
• Updates and limitations to existing job training programs, including changes to new jobs tax credits and a call for an interim study on these programs

• Lawmakers also approved the Economic Development budget, which reflects a more targeted, though slightly reduced, approach to state investments:
• Overall funding decreased by about $1 million, including the elimination of several programs such as regional support (COGS), and summer internship programs
• The Iowa Finance Authority housing renewal program was made permanent, reinforcing housing as a key economic development priority

Property Tax Reform: What It Means for Business

Property tax reform was the most significant issue of the session. The final bill establishes a 2% cap on local government revenue growth, alongside changes to assessments, new rollback procedures, and increased transparency requirements.

The legislation also includes limits on tax increment financing (TIF), creates a multi-residential property classification, and allows communities to increase local option sales taxes up to 1.25%.

For businesses, the impact is mixed:

• Greater predictability in property tax growth supports long-term planning
• New limits on TIF and property tax revenue may change how communities finance development
• Assessment and classification changes could shift tax burdens across property types

Read more details about the property tax legislation.

Infrastructure, Water Quality & Quality of Life

The state also made major commitments to infrastructure and environmental sustainability:

• A $319 million water quality initiative will expand investment in wastewater and drinking water systems, support watershed protection, and fund nitrate reduction efforts.
• Additional funding includes grants and loan programs for communities, particularly benefiting rural and regional infrastructure.

These investments are critical to long-term economic competitiveness, community health, and quality of life. The proposals received funding the Agriculture and Rebuild Iowa Infrastructure Fund (RIIF) budgets.

Next Up

While the session has concluded, the work continues.

The governor's 30-day veto window remains open, and implementation, rulemaking, and interim committees will shape how these policies impact businesses and communities in the months ahead. The June 2 primary election will also help define the policy landscape for 2027.

The Economic Alliance will continue to:

• Monitor implementation of key legislation
• Advocate for pro-growth, pro-workforce policies
• Elevate the voice of our business community

Looking ahead, Economic Alliance members, partners and stakeholders will have opportunities to help shape our 2027 legislative priorities and participate in The Collective Voice process, ensuring business input continues to guide our policy agenda and the work in our region. Be on the lookout for ways to participate. Contact Barbra Solberg with any questions.