2018 Legislative Updates

2018: END OF SESSION REPORT

For the first legislative session in four years, an agreement was reached on a full-year budget by the end of the regular spring session. On May 31, 2018, both the House and Senate chambers completed approval of a package of legislation for fiscal year 2019, which begins July 1, 2018.

Although additional unpaid expenses remain for pension and health insurance benefits from prior years, the fiscal year 2019 budget package does reflect this year’s spending and revenue to be balanced at around $38.5 billion. A little over half of this spending and revenue is dedicated to pensions, debt payments, Medicaid, and health insurance for state workers, which are all expenses that in large part are set by federal mandates and prior state laws.

Some highlights of the fiscal year 2019 budget include reduced spending throughout state agencies, nearly 40% of which are through cuts to both the Department of Corrections and the Department of Human Services. Pension costs are also estimated to be reduced by up to $445 million, 85% of which is estimated to be the result of voluntary buyouts regarding automatic 3% annual benefit increases.

Some spending increases involve the compensation costs of individuals providing social services. Additionally, colleges and universities received a two percent increase in funding along with a new state scholarship program to encourage students to attend school in Illinois with universities being asked to match state funding for the program. Early childhood education and Kindergarten through 12^th grade schools received the five percent increase in funding that was envisioned in the education funding formula enacted last year.

Since the end of the last legislative session, the legislature introduced over 3,000 pieces of legislation and passed around 600 of them on to the Governor. Enclosed is a report of legislation and regulations that more specifically impacted your group as well as information regarding the legislative process going forward.

Illinois Capital

LEGISLATIVE AGENDA SUMMARIES

Work Ethics Curriculum (HB3792): Beginning in grade 6, students should be introduced to the importance of developing and applying a work ethic in a variety of contexts. Passed both chambers and is expected to be approved by the Governor.

Entrepreneur Learner’s Permit (SB2281): Expands the Entrepreneur Learner’s Permit pilot program to assist any beginning entrepreneurs starting new businesses instead of just for “new information services, biotechnology, and green technology businesses.” Removes provisions limiting the aggregate amount of all reimbursements under the Entrepreneur Learner’s Permit pilot program to $500,000 per State fiscal year. SB 2281 passed both chambers and is expected to be approved by the Governor

Regional Development Authority (SB2589): Multiple parts, see information below. Passed both chambers and sent to the Governor.

Adds Livingston and McLean counties to the jurisdiction of the Eastern Illinois Economic Development Authority Act.
Adds Winnebago, Stark, and Ogle counties to the jurisdiction of the Quad Cities Regional Economic Development Authority Act, and adds Jo Daviess, Carroll, Whiteside, Stephenson, and Knox counties to provisions concerning additional powers and duties of the Authority.
Expands the jurisdiction of the Southeastern Illinois Economic Development Authority Act to include all of Washington County (rather than Irvington Township in Washington County).
Adds Monroe County to the Southwestern Illinois Economic Development Authority Act, and adds Bond and Clinton counties to provisions concerning powers of the Authority.
Adds Boone and DeKalb counties to the Upper Illinois River Valley Development Authority Act, and adds Kendall, Kane, Lake, and McHenry counties to provisions concerning duties and acquisitions of the Authority.
Makes conforming changes to board sizes, the number of board members to constitute a quorum, the number of board members needed to perform official acts, board powers and duties, and an election of a board chairperson.
Expands the purposes for which bonds, notes, or other evidence of indebtedness may be issued including local government projects and local government securities.

Prohibiting the Use of Public Funds at Conventions (HB4246-4248): Various bans on public funds for conference attendance, sponsorships, or booths. The only proposal that obtained bipartisan support was HB4247, which banned the use of public funds for sponsorships or booth exhibits at conventions; however, exemptions were obtained for cases involving tourism or economic development. Regardless, the bill stalled out in the House.

Open Meetings Act & Freedom of Information Act (SB36-SA1): This amendment, introduced late in the session, adds certain entities to the Open Meetings Act, including for-profit and not-for profit tourism organizations that receive public funds as well as convention or civic center boards located in any county (rather than in counties that are contiguous to the Mississippi River with populations of more than 250,000 but less than 300,000). If the amendment is approved, the legislation would make similar changes concerning for-profit and not-for-profit tourism boards or organizations in the Freedom of Information Act. SB 36, Senate Amendment 1 further requires all not-for profit tourism organizations to create a website, and requires any not-for-profit tourism organization receiving public funds to disclose all expenses and employee salary information on its website. The amendment was not approved before the end of session and the legislation did not move any further.

TAX CREDIT UPDATES

Rivers Edge Tax Credit (SB3527): Modifies criteria of the River Edge Redevelopment Credit regarding a limited recapture period and exclusion of prevailing wage requirements. Also creates the Historic Preservation Tax Credit Act for use on certified historic structures under Section 47(c)(3) of the federal Internal Revenue Code, with a maximum of $15 million in credits to be issued by the state. SB 3527 passed both chambers and is expected to be approved by the Governor

Other Development Tax Credits: Several bills were introduced, but none gained enough traction to pass their respective Revenue Committees.

Amazon HQ (HB4131): Incentives shall be limited to no more than $50,000 for each job opportunity created by the development.
Enterprise Zones (HB4220): Allows DCEO to certify an additional 25 Enterprise Zones. Allows partial points during the application process when numbers are below current thresholds. Allows adjustment of scoring if designation helps to alleviate the effects of poverty and unemployment.
Development Project Areas (SB2315): For a newly designated tax increment redevelopment project area, the redevelopment project area shall not contain more than 20% of the area of a previous redevelopment project area that has been completed in the 10 years prior to the adoption of the ordinance designating the new redevelopment project area.