House File 2156 is aimed at shutting down businesses that hire illegal workers.
Right now it's just a proposal, but earlier this week it was passed out of committee in Iowa's House of Representatives.
If it's signed into law, any business caught with undocumented workers would be placed on three years probation. If they're caught again during that three-year span, the business would have its license pulled, effectively ending its ability to do business in Iowa.
At the Diversity Service Center of Iowa, director Rosa Mendoza says this bill will drive businesses and workers out of the state if it's signed into law.
"I see a lot of places closing, and that's really sad that's going to really hurt our economy here in our state. It's really sad to see that," says Mendoza.
Under the bill, employers must use the federal "E-Verify" system every time they make a new hire. Right now there are 38 Republicans and three Democrats co-sponsoring the bill in the Iowa House of Representatives.
The legislation was introduced January 31, 2012 and is currently in committee.