Legislative Updates: Iowa and Illinois state houses remain active with deadlines approaching

The Iowa and Illinois state houses have passed key procedural milestones, but remain actively at work with budget negotiations and procedural deadlines looming. The Iowa Legislature's end date was April 21. The Illinois Legislature reached its third reading deadline April 17, when bills advanced out of their respective committees to remain viable moving forward. The QC Chamber continues to track remaining bills in both states that align with its 2026 Legislative Agenda. 

Iowa Update

The remaining items in the Iowa Legislature include finalizing negotiations on the fiscal year 2027 budget and property tax reform. Last week, the House Ways and Means Committee took up SF 2472 – the Senate Property Tax Reform Bill – and passed it out of committee after striking its contents and replacing it with the House version of the bill. The full House voted on the amended bill and passed it 64 to 23. The Senate will now have a final opportunity to approve or amend that package and send it back to the House.

Key elements of the House proposal include: 

• Limits the growth of certain property tax levies for local governments to 102.0% of the prior year’s budget; limits local governments’ general fund unassigned reserves and prohibits bond usage for general operations
• Eliminates the ongoing General Fund appropriation supporting the commercial and industrial property tax replacement beginning in FY 2028 and appropriates $125.0 million annually to the Taxpayer Relief Fund
• Reduces the school foundation levy from $5.40 to $5 per $1,000 starting in FY 2028; makes changes to school district reorganization incentives; conforms the Family Farm Tax Credit and conforms the Agricultural Land Credit
• Modifies the Secure an Advanced Vision for Education (SAVE) Fund Equity Transfer percentage and extends the Fund’s repeal to January 1, 2071
• Requires county auditors to submit an annual report that includes parcel identification information
• Modifies provisions related to urban renewal areas and tax increment financing (TIF), including exempting certain levies and setting fixed durations to TIF Districts
• Modifies provisions related to property assessments
• Creates the Local Government Efficiency Grant Program and appropriates $10.0 million from the General Fund
• Creates the FirstHome Iowa Program and related fund to assist with first-time homeownership
• Modifies provisions related to distorted market valuations
• Makes changes to local government property tax statements and procedures
• Adds a second bond special election date in June and prohibits two bond elections in the same year
• Establishes a voter-approved emergency medical services (EMS) levy above the current maximum levy rate
• Establishes an unspent balance cap; allows schools to request a one-time budget adjustment and requires school districts to establish policies related to unspent balances
• Establishes a homestead property tax exemption equal to $15,000 in taxable value per homestead
• Limits the growth of agriculture extension levies for local governments to 102.0% of the prior year’s budget

Iowa Economic Development Authority (IEDA) Omnibus bill: A priority issue for the Quad City Chamber throughout the 2026 session has been to oppose efforts to eliminate the Iowa Industrial New Jobs Training (260E) program. 260E is a tool that supports jobs, growth and long-term competitiveness in our community. We continue to monitor this program here during the final days of session. 

Illinois Update

Mid-Income Housing Grant (SB 1926/SB 1927)

• This bill establishes a 3-year pilot program within the Illinois Housing Development Authority (IHDA) targeted to developers working in communities with an authorized River Edge Development Zone (RERZ) and to develop or redevelop projects for households with incomes up to 140% of the area median income. The program would grant $20,000 per unit. Status of both the policy and funding bills: 3rd reading deadline established as May 15, 2026 

Passenger Rail Planning Act (SB 3285)

• This bill would incorporate passenger rail linking Chicago to the Quad Cities into the state’s transportation plans. Last fall, funding was allocated during the legislature’s veto session, and this legislation takes the next step in directing these funds. Status: Third reading deadline established as May 8, 2026 

Tipped Wage Credit Elimination (HB 2982)

• This bill would eliminate the Tipped Wage Credit in Illinois. While the intent is to improve worker compensation, the impact on local restaurants that may be forced to raise menu prices, add mandatory service charges or eliminate table service could be devastating. Status: Re-referred to Rules Committee on April 11, 2026

Border Community Zones (SB 4030)

• This bill would allow communities within 10 miles of the state border to apply for border community status to receive economic development incentives like those in the RERZ program including investment credit, construction jobs credits, sales tax exemptions on building materials and property tax abatements. Status: 3rd reading deadline established as May 15, 2026