Budget & Taxes

This bill primarily updates tax and bond laws in Illinois to support large-scale construction projects known as megaprojects. It allows the Department of Commerce and Economic Opportunity to certify specific building projects, granting eligible developers a temporary exemption from state and local taxes on building materials for up to 15 years. Additionally, the legislation clarifies that public corporations can no longer levy taxes to pay off bonds once the debt is fully paid or the bond matures. The bill also requires that future bond referenda be held during general elections rather than at regularly scheduled times, while making various technical adjustments to existing tax acts.

HB 5796 amends the state's 2027 budget to allocate funds to the Department of Commerce and Economic Opportunity for various job training, business development, and community support programs. The bill distributes millions of dollars in grants to specific organizations, including labor unions, colleges, and chambers of commerce, to help fund workforce initiatives and operational costs. Additionally, it provides money to reduce food insecurity in urban and rural areas and supports planning and development projects in Chicago and other regions. These changes directly affect the organizations receiving the grants and the communities they serve by funding specific economic and social programs.

Creates the Taxpayer and Investment Protection Act. Provides that a developer that undertakes a qualifying project may apply to the Department of Commerce and Economic Opportunity for certain benefits authorized under the Act, including, but not limited to, a negotiated property tax agreement and infrastructure support if the project satisfies certain job creation, investment, and location requirements. Provides that one or more taxing bodies may enter into a negotiated property tax agreement with the developer of a qualifying project. Provides that the agreement shall provide for a single annual payment in full satisfaction of all ad valorem property taxes that would otherwise be levied on the improvements constructed on the project site as part of the qualifying project. Provides that the State may provide infrastructure support for public infrastructure improvements that directly benefit a qualifying project and provide broader public benefit to the region in which the project is located. Amends the Property Tax Code to make conforming changes. Effective immediately.

Appropriates specified amounts from various funds to the Court of Claims to pay claims in conformity with awards and recommendations made by the Court of Claims. Effective July 1, 2026.

Appropriates $10,000,000 from the Partners for Conservation Fund to the Department of Agriculture for grants to Soil and Water Conservation Districts for ordinary and contingent expenses. Effective July 1, 2026.

Appropriates $1,260,000,000 to the Department of Transportation to be used for transportation related purposes in municipalities, counties, townships and road districts for projects related to (1) State and local asset management, (2) ADA improvements, (3) bike and pedestrian infrastructure improvements, (4) multi-modal connections, (5) capital safety improvement, and (6) match for federal grant opportunities. Effective July 1, 2026.

Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that diapers for use by infants, children, or adults are exempt from the taxes under the Acts. Effective immediately.

Authorizes the Department of Military Affairs, on behalf of the State of Illinois, to sell, convey, lease, or otherwise dispose of all right, title, and interest in and to the real property commonly known as The Midway Flight Facility, Chicago Illinois. Provides that all proceeds from the sale or disposition of the property must be deposited into the General Revenue Fund and, subject to appropriation by the General Assembly, must be designated for the rehabilitation, redevelopment, or reuse planning of the former Illinois National Guard Armory located at 5500 S. Cottage Grove Avenue, Chicago, Illinois, in the Washington Park community area. Effective immediately.

Specifies that the amendatory Act may be referred to as the Reducing Expenses and Advancing Local (REAL) Housing Act. Amends the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. Creates the Middle Housing Incentive Program. Amends the Department of Labor Law of the Civil Administrative Code of Illinois. Authorizes the Department to establish workforce development initiatives. Amends the Department of Revenue Law of the Civil Administrative Code of Illinois. Extends the Veteran Property Tax Relief Reimbursement Pilot Program to July 1, 2030 (rather than July 1, 2028). Describes administrative responsibilities of the Department. Amends the State Finance Act. Creates the Veterans Property Tax Relief Reimbursement Pilot Program Fund and the Middle Housing Incentive Program Fund as special funds in the State treasury. Amends the Illinois Municipal Code and the Counties Code. Provides that a county or municipality may opt in, by resolution, to participate in the receipt of Local Government Distributive Fund revenues exceeding 8% of State income tax collections. Authorizes by-right overlay districts for middle housing and other housing-related innovations. Amends the Tax Increment Allocation Redevelopment Act. Makes changes to the definition of "redevelopment costs." Amends the Use Tax Act, the Services Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Changes the rate of tax on qualified residential development building materials to 1.25% (rather than 6.25%). Amends the Property Tax Code. Makes changes concerning the distribution of moneys collected from the Real Estate Transfer Tax. Amends the Prevailing Wage Act. Modifies the definition of "public works". Amends the Illinois Housing Development Act. Establishes grant-making and reporting requirements for the Illinois Housing Development Authority. Amends the Real Estate License Act of 2000. Limits commissions charged in residential real estate transactions. Amends the Security Deposit Return Act, the Security Deposit Interest Act, and the Landlord and Tenant Act. Makes changes regarding screening reports of prospective tenants and upfront rental costs of residential units. Makes conforming changes in the Condominium Property Act and the Common Interest Community Association Act regarding middle housing. Makes other changes. Effective January 1, 2028.

Expresses strong support for the American High Speed Rail Act of 2026 and commends Illinois congressional delegation members for their leadership as original cosponsors of this landmark legislation. Urges the United States Congress to advance and pass the American High Speed Rail Act of 2026 and to ensure that any federal surface transportation reauthorization package includes substantial, dedicated funding for high-speed and higher-speed rail development nationwide. Calls upon the Trump administration to include robust funding for high-speed rail in its federal budget proposals. Affirms support for the ongoing work of the Illinois High Speed Rail Commission and the Illinois Department of Transportation in developing a statewide high-speed rail plan. Recognizes this state-level planning effort represents the kind of serious groundwork that merits strong federal investment.