But the recent withdrawal of US troops in Syria meant many of those imprisoned will be released.
This means Taylor could come back to New Zealand, where he has residency.
The bill – which will have its first reading next week - gives the New Zealand Police the ability to apply to the High Court to impose control orders on New Zealanders who have engaged in terrorism-related activities overseas.
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Taylor had joined Isis before his imprisonment.
Otago University Law Professor Andrew Geddis told Stuff the current laws which would deal with Taylor were messy and out of date.
A control order, as part of the bill, would only be imposed on a very small number of people, Justice Minister Andrew Little said.
Control orders are a way to managing risk if criminal prosecution is not possible.
For example, one can be issued if insufficient evidence is available from current overseas conflict zones.
"This bill is about being prepared should any high-risk New Zealander return home pending any prosecution for their offending."
National Leader Simon Bridges has confirmed National would support the bill in its first reading.
But it will push for changes in the select committee stage, where the bill is able to be further refined.
National wants to see the age limit for those who can receive control orders to 14 years old and an increase to the maximum duration of those orders.
Bridges wants the financial penalty to be scrapped and the maximum term of imprisonment increased to five years, among other changes.
"These changes would strengthen the legislation to be more in line with Australia's laws and reflect the serious risk posed by terrorist activity.
Little said conditions imposed by the High Court would be tailored to the person's circumstances, risks and rehabilitative needs.
The bill is a proportionate response to managing risk, and is designed to prevent terrorism and support de-radicalisation in a way that is consistent with New Zealand's human rights laws, Little said.
"The more serious the risk, the more restrictive the conditions are likely to be."