Second Funnel Deadline has Arrived

Week 10 of the 2026 Iowa Legislative Session has concluded, and with it comes the second funnel. Moving forward, bills that have passed out of one chamber and through a full committee in the other chamber, along with bills on the unfinished business calendar, appropriations, ways & means and a few other types, are eligible for the rest of the year.

We are now one month away from the expiration of per diem expenses for lawmakers, which serves as an incentive for legislators to wrap up their work for the year. Expect plenty of floor debate, longer caucuses, and several late nights leading up to adjournment.

Check out the status of many bills ABI has been working on this year below. If you have any questions about these bills or others, please contact JD Davis or Brad Hartkopf.

Alive
ABI Supports

SF 2419 - Third Party Litigation Financing Regulation
The Senate Judiciary Committee has passed bipartisan legislation that would crack down on the practice of third party litigation financing by imposing regulations that help protect consumers and businesses from bad actors who fund lawsuits for the purpose of seeking a cut of the financial outcome. This kind of funding ultimately drives up costs for industry and perverts the justice system. The bill also would enact a prohibition on sovereign wealth funds and nations that are hostile to the United States from funding lawsuits. The bill has been referred to Ways & Means, which means it’s alive for the rest of the session.

HF 2327/SF 2168 - Codifying the Re-employment Case Management Program
Iowa Workforce Development has brought forward legislation that would codify their re-employment case management program (RCMP) into law. The program was implemented in 2022 and helps connect Iowans who lose their jobs through no fault of their own with a caseworker who will assist claimants in finding their next job sooner rather than later. The RCMP, along with other recent, common-sense changes to our unemployment law, has helped reduce the duration of time an average claimant spends on unemployment by several weeks.

The bill also transfers $30 million from the Unemployment Compensation Reserve Fund (UCRF) to the main unemployment insurance trust fund. Those funds were initially intended for workforce training programs, but Iowa didn’t receive approval from the federal Department of Labor to use the money for this purpose, so the money will go to the UI trust fund.

The Senate has passed this bill. It was on the House debate calendar a few weeks ago, but it was not called up and has now been referred to the Appropriations Committee. The bill remains alive for the rest of the year.

SF 2292 - NCFCTI Fix (Single Factor Formula Protection)
Bipartisan support has been displayed as a measure preserving Iowa’s single-factor formula for business income moves through the Senate. The measure has passed the Senate Commerce Committee and has been referred to the Ways and Means Committee. The bill is necessary because federal tax changes made in 2025 would have exposed business income from outside Iowa to Iowa taxes. This is an echo of changes that were required by federal tax changes made in 2017.

SF 2427/HF 2527 - Greenhouse Gas Liability Reform
The House and the Senate Agriculture Committee have passed legislation that would make it more challenging to successfully sue businesses, farmers and ranchers over allegations that the greenhouse gases they emit are responsible for damage caused, or potentially caused, by climate change.

The bill heightens evidentiary standards and creates other requirements for plaintiffs to meet should they believe they have been harmed by defendants. Though these lawsuits aren’t currently prevalent in Iowa, they are in other parts of the country. Policymakers are being proactive by pre-empting this activity before it arrives here.

HF 2592/SF 2286 - Public Funds
The House and Senate State Government Committees have approved legislation that would require more local tax dollars to be invested in local financial institutions. ABI members, the Iowa Bankers Association and the Iowa Credit Union League, have highlighted a practice in which local governments and school districts pool deposits of property tax revenues and place them with out-of-state organizations for deposit and management. This forgoes local use by hometown banks that could keep deposits and loans from those funds in local economies.

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ABI Opposes

HF 2739 - Health Maintenance Organization Tax Increase
The House took action yesterday on a bill that will raise health care costs for the employer sponsors of Health Maintenance Organizations (HMOs) for fully insured health care plans and for Iowans who secure health care from the individual marketplace. The measure, proposed by Governor Reynolds, is a way to add revenues to the Medicaid Trust Fund for the purposes of drawing down federal dollars and paying ongoing Medicaid claims. The current 0.925% tax on HMO premiums would increase to 3.5%, retroactive to January 1, 2026, through September 2026. Insurers that manage the Medicaid program will recover their tax burden from Medicaid funds. Insurers in the private market will recover the tax burden from fully insured plan sponsors and Iowans who have secured health care in the individual marketplace. The cost per individual is estimated at $115 and $27.5 million across all targeted plans in the private sector. ABI members understand that taxes on service providers, such as the one proposed, are paid by the customer in higher costs of service, and ABI staff is working to reduce or eliminate this new cost to health care plans. There is a similar bill that has passed the committee level in the Senate.

HF 2529 - Right to Repair
Many farm implement manufacturers, including ABI member John Deere, have worked with the American Farm Bureau Federation to manage right to repair public policy to make sure farmers have access to parts and can make their own repairs to equipment. It comes as a bit of a surprise, then that HF2709 was introduced. This is a traditional right to repair bill, which in similar forms, has been introduced in the past in other states. Unique to Iowa’s version are requirements that replacement parts must be sold at cost and software be transferred for free. That bill passed the House Agriculture Committee but was not debated on the House floor. ABI testified on behalf of all manufacturers regarding this intrusion into open markets. In a move to preserve the bill for debate beyond this week’s funnel deadline for policy bills, the measure was referred to the House Ways and Means Committee.

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ABI is Neutral

SF 2472 & HSB 596 - Senate and House Property Tax Proposals
ABI members who have participated in our policy-related events during the session have gained an in-person view of how the Iowa Legislature and Governor are navigating the property tax reform process. Just prior to our Welcome Back Reception, the Iowa Senate introduced their version of property tax reform, SF 2472. Key features of that bill now include a 2% revenue cap, allowance for new growth, a phased reduction and elimination of residential property taxes for seniors 65+ who own their homes unencumbered, and indexing of the gas tax to inflation to preserve the buying power of local revenues allocated to road construction.

Attendees at ABI’s Business Day in Des Moines heard the Governor state that, while not much had been spoken publicly about the progress of bridging differences between her plan and the plans of the House and Senate, very productive conversations were happening regularly. House Speaker Grassley and Senate Majority Leader Klimesh confirmed as much during their presentations. Confirmation of that progress arrived this week as the Iowa House Ways and Means Committee moved their version, HSB 596, out of committee with an amendment. The amendment, while still under review, is for residential property taxpayers, as it changes a $25,000 residential property tax exemption to a 10% homestead tax exemption capped at $25,000. The amendment also increases the value of commercial and industrial property subject to the resident tax rate from $150,000 to $350,000, which is positive. Both measures help prevent a shift of the tax burden to property owned by Iowa businesses.

ABI views this week’s events as a signal that all parties are beginning to show their cards publicly and are fulfilling the assessment of the Governor and all legislators who presented at Business Day, that passage of property tax relief and reform is an imperative this session. ABI has registered as neutral on all versions of property tax reform this year in an effort to move the process along. You can view news coverage on this issue below.

• Des Moines Register
• Telegraph Herald
• WHO13 News

SF 2218 - E-verify for the Public Sector
The Legislature has considered numerous immigration/workforce integrity proposals this year. Multiple bills have passed committees in both chambers. Now that we are past the second funnel, there is an omnibus bill that has passed the Senate, was amended and passed by the House and is now back in the Senate. 

The bill contains the following:

• Requires criminal background checks and verification of proof to work in the U.S. for those applying for educational licenses
• Prohibits employers from continuing to employ employees who the employer knows have utilized a false Social Security number
• Requires state agencies, those seeking a professional license, and higher education institutions to utilize the federal e-verify system when hiring someone
• Addresses issues related to voter registration and pretrial detention

The current version of this legislation combines elements of three or four bills into one. ABI is tracking this to ensure an amendment is not added to the final product that would include private-sector e-verify.

HF 2466 - Iowa Skilled Workforce Act
The House Higher Education Committee and an Appropriations Subcommittee have advanced a bill that affects training programs targeted for the building trades. The bill increases the amount annually appropriated to the apprenticeship training fund from $3 million to $4.5 million, aids in grants to establishments for training facilities and addresses the ratios of journey/lead employees to apprentices. As currently drafted, the bill would also allow a participant in a training program to be supported by benefits from the Iowa Unemployment Trust Fund for a week of their annual training. As this violates state policy requiring that those supported by unemployment benefits be able and available for work, ABI has objected to that language. It is understood that language is being developed to replace or eliminate the funding source for this support and if that effort succeeds, ABI could then reconsider its position on the legislation.

SF 2263 - Guns on Public Property Parking Lots
Over the last several years, ABI has worked to ensure that employers are able to maintain their private property rights by defeating legislation that would tell businesses they cannot have a policy in place that prohibits employees from having guns in their locked vehicles on the employer’s private property.

SF 2263, which has passed the Senate and the House Judiciary Committee, would permit guns in vehicles on publicly accessible parking lots operated by the state,  or a county, city, or township. The original bill would have also allowed guns in the parking lots of regent schools, community colleges, and K-12 schools, but that language was removed via amendment before it came out of the Senate Judiciary Committee. ABI is following this closely to ensure that language is not added that would impact the private sector.

SF 2301/HSB 755 - Iowa Economic Development Authority Omnibus
The Senate Commerce Committee and a House Ways & Means Subcommittee have advanced legislation brought forward by the Iowa Economic Development Authority. The omnibus contains provisions that would establish the EDGE program (Expansion and Development for Growth and Employment) and perfects earlier work done on the MEGA program to attract very large economic development projects, as well as the BIG program for traditional projects. The legislation also proposes changes to the financing of worker training at community colleges by eliminating bonding capabilities for 260e programs and creates an opportunity for alternative training to be supported through a payroll tax funding source. ABI members continue to assess the measure as it advances.

HSB 595/SF 2467 - Second Injury Fund Appropriations
The Senate has approved legislation that would double the amount of money the Attorney General’s office receives from the second injury fund for workers’ compensation, from an annual $450,000 to $900,000. The apparent need for more funding arises from two Iowa Supreme Court decisions in 2024 that opened the door to new theories of liability being offered by plaintiff attorneys against the second injury fund. This has increased the caseload for the AG’s office as they defend cases brought against the second injury fund. ABI is working to see if language can be added that would address the root cause of this increased funding by fixing the Iowa Supreme Court decisions.

HF 2725/SF 2407 – Workforce Data Sharing for Pell Grants
The Iowa Department of Education (DE) has brought forward legislation that, if enacted, would allow the State of Iowa to apply for a federal grant for a newly created pot of money for Pell Grants. The bill, which has passed both the House and Senate Education Committees, requires Iowa Workforce Development (IWD) to share certain information collected by employers on employees with DE to facilitate the process. The problem is IWD currently does not collect some of the information laid out in the bill from employers. This section of the bill imposes a mandate on businesses that could be costly and administratively burdensome. ABI is working with IWD and DE to find a solution to this issue.

Dead
ABI Opposes

HF 2672/SSB 3092 - Community Solar
Companion bills were introduced in both the House and Senate that would enable aggregation of electric customers by third parties that would provide solar energy to groups of customers when available. The House and Senate Commerce Committees took different paths, with the Senate declining to advance the measure and the House reporting an amended bill out of committee. ABI is against the legislation as they violate our current energy policy against cross-subsidization of energy costs amongst customers. The House ultimately did not bring their bill to the floor.

HF 2287 - Vaccine Manufacturers’ Liability
The House Judiciary Committee ultimately did not take up legislation that would require a vaccine manufacturer that wants to sell its product in Iowa to give up lawsuit immunity under the federal Childhood Vaccine Injury Act. If the manufacturer refused to give this up, not only could they not sell their product in Iowa, but no Iowan could take that vaccine, even if they wanted to do so voluntarily. If this were to be enacted, it could create extraordinary public health issues in our state. Given the magnitude of the negative impact of the bill, the legislation did not survive the funnel.

HF 2368 - Iowa Medical Freedom Act
This bill takes a direct shot at Iowa’s status as an “at-will” employment state by prohibiting employers from taking certain actions within their business as it relates to “medical interventions” for employees. The legislation would dictate the terms and conditions employers set with their employees, tell employers how much they have to pay their employees, and would allow the Attorney General or county attorneys to sue the business for violating the bill. Businesses would also be required to pay attorneys’ fees to those parties if they were to prevail. The House Health and Human Services Committee did not advance the bill.

HF 2480 - Posting Veterans Benefits in the Workplace
The House Veterans Affairs Committee approved a bill that would mandate that employers hang a poster in a conspicuous location in their business that highlights benefits veterans are entitled to. This new requirement would come on top of all the other posters that state and federal law already require of industry. ABI was opposed, as it could potentially create new penalties and open the door to litigation against businesses that are alleged to be in violation. ABI appreciates Rep. David Blom, the bill manager, for trying to work with ABI to address our concerns, but ultimately the House chose not to take this to the full floor. A companion bill in the Senate didn’t even hold a subcommittee.

HF 2709 - Right to Repair
A lesser version the all-encompassing right to repair bill which remains alive for the session, HF 2709 would allow those with an interest in an implement to make modifications to defeat federally required emissions controls. The Trump Administration, through the EPA  had just updated guidance making it clear that the required emissions controls must remain in place unless the equipment was under repair. That measure passed the Iowa House but was not taken up by the Senate Commerce Committee.

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ABI is Neutral

SF 2380 - Abusive Litigation Alleging Internet Site ADA Violations
In some jurisdictions across the country, plaintiff attorneys are sending demand letters to businesses alleging that their internet sites violate the Americans with Disabilities Act (ADA). In these letters, they demand payment in order for a potential lawsuit to go away. The Senate passed legislation aimed at combating this malicious practice by allowing the Attorney General or the victims of such demand letters to file suit against those initiating the letters. Though there aren’t numerous examples of this happening in Iowa yet, the point of the bill is to preempt this aggressive tactic from arriving in our state. The legislation was referred to the House Economic Growth and Technology Committee, where it did not advance.

HF 2173 - Prohibition of Weather Engineering
The House passed legislation that would prohibit individuals and businesses from intentionally emitting, releasing or injecting chemicals into the atmosphere for the express purpose of altering the temperature, climate or intensity of the sun that is presently not regulated by state or federal law. Those found doing so would be charged with a Class D felony and significant fines. ABI was monitoring the legislation to ensure there are no unintended consequences, including allowing opponents of industry to start filing frivolous litigation against businesses. The Senate Judiciary Committee failed to advance it out of committee before today’s deadline.