Iowa lawmakers could return for special session on steel plant tax incentives before midterms

A Democratic state senator on the Senate’s tax-writing committee said Friday that timing on a potential special session reported Friday is “suspicious” as the 2026 general election draws near.

The Des Moines Register first reported lawmakers are considering a potential special session in October. Kevin McCarthy, chief of staff for Iowa House Minority Leader Brian Meyer, sent an email to Iowa House Democrats Thursday stating House Democratic leaders “have been in communication with the lobby firm that has been retained by a company in the steel industry wishing to have an incentive package passed in the very near future to then allow them to make the decision to locate in SE Iowa near the Mississippi River and build their large plant there.”

The steel company has not been disclosed, but the message stated the company is asking Iowa Gov. Kim Reynolds and legislative leaders to consider holding a special session “to pass an incentive package and they claim they need it soon.”

Special sessions can be called by the governor or by a two-thirds majority of the Iowa Legislature. The last special session was called in 2023 to pass Iowa’s law banning most abortions after six weeks. There was also a special session in 2021 to conduct the redistricting process during the COVID-19 pandemic — but before that, the last special session was in 2006, when lawmakers voted to override former Gov. Tom Vilsack’s veto of eminent domain legislation.

House Democratic staff declined to make a comment on the potential special session or tax incentives in a message to Iowa Capital Dispatch Friday, stating “we are waiting to see what the majority party plans to do.” Reynolds’ office, as well as spokespersons for Iowa House and Senate Republicans, did not respond to requests for comment at the time of this article’s publishing.

Iowa Sen. Tony Bisignano, D-Des Moines, who serves as ranking member for the Senate Ways and Means Committee, said he has not had formal discussions about potential legislation providing tax breaks for a steel company, but said the incentives may be “extremely expensive.” The Iowa Economic Development Authority has the ability to provide certain tax breaks and other incentives without needing legislative approval, meaning a special session would likely involve a larger financial package than what IEDA can allot through current programs.

While no information about what an incentive package for the steel company would entail, Bisignano said the timing for potentially calling lawmakers back to Des Moines was “suspicious” ahead of the contentious 2026 general election.

Though Republicans are expected maintain control in both chambers at the Iowa Legislature, there are many other races in the state in contention — including the race for Iowa governor between state Auditor Rob Sand and Republican Zach Lahn. Political forecasters see Iowa’s gubernatorial seat as a potential pick-up for Democrats in the election, with Cook Political Report rating the race as “leans Democrat” — despite having a Republican in the office for more than a decade.

Bisignano said discussions on tax incentives for a steel company could also be a “Trojan horse” to allow the Republican-led Legislature to pass new measures restricting gubernatorial powers.

During the regular session, Iowa lawmakers passed House File 2694, a law signed by Reynolds to ban the governor from restricting private businesses’ operations or ordering places of worship to close during disasters and public health emergencies. Senate Republicans also discussed a proposal to prevent state government shutdowns if a governor does not approve a budget before the beginning of the next fiscal year, July 1, by creating a “continuing appropriations” measure. This language, which did not advance, was criticized by Democrats as a “power grab” that would allow a GOP-controlled Legislature to refuse to negotiate on a budget with a Democratic governor.

Bisignano said there has been no proposals or language officially released. But he said his concerns come because of the timing for the potential special session, situated ahead of the election and as Reynolds is not seeking reelection.

“This could very easily been done after the election,” Bisignano said. “This could … wait and be done at the beginning of the session. … But when you’re a billion dollars in debt, I don’t want to go into session and rush to give away hundreds of millions of dollars in credits, in refunds and rebates and all these different options that they’re working on. We have a budget that’s in crisis. And so, being that she’s leaving, and to push this forward so fast with so little preparation — I don’t think that that’s really her concern, what the budget’s going to be like next year.”

Senate Minority Leader Janice Weiner said in a statement Friday, “I have heard nothing from the governor’s office, so at this point all we have to go on are rumors and speculation.”

“If there is an incentive package being offered to a company, we don’t have those details,” Weiner said. “We need more information before we can decide if a special session is in Iowans’ best interests.”