2022 Legislative Updates

2022 ILLINOIS GENERAL ASSEMBLY LEGISLATIVE UPDATES

Second Year of the 102^nd General Assembly

The Illinois General Assembly adjourned an abbreviated 2022 regular session early in the morning hours on April 9. Leadership in both chambers pushed for a shorter session given the upcoming June 28 primary election. Adjourning at the beginning of April rather than the usual end date of May 31 gives members facing competitive primaries more time to campaign in their district.

Despite the shorter timeframe, the General Assembly accomplished a great deal, including passing the fiscal year (FY) 2023 budget, a $1.83B tax incentive package, a suite of bills to support law enforcement and reduce crime, a trailer to the 2021 Climate and Equitable Jobs Act (CEJA), a Medicaid omnibus, changes to the hospital assessment program, and a property tax omnibus, amongst many other passed bills.

The General Assembly will return to Springfield for a fall veto session and potentially a lame duck session before the 103^rd General Assembly begins.

FY 2023 Budget

***HB 900 (Welch/Sims) creates the FY 2023 budget, FY 2022 supplemental budget, and FY 2023 capital plan. It is a balanced budget with $46.494B in General Revenue Fund (GRF) spending, based on revenue estimates of $46.543B. Budget leaders in both chambers, Rep. Greg Harris (D-Chicago) and Sen. Elgie Sims (D-Chicago), stated that this budget builds upon Illinois’ strong fiscal position as the COVID-19 pandemic winds down while working to provide relief to Illinois residents who continue to struggle from the pandemic and inflation.

HB 900 passed the House in May 2021 as a budget shell bill. It was held on the order of second reading in the Senate until April 8, when it was amended to become the FY 2023 budget. SFA 4 is the final version that was passed into law. Early in the morning on April 9, it passed the Senate by a partisan vote of 34-19-0, and the House passed a concurrence motion by a partisan vote of 72-42-0. The budget was signed into law by Gov. J.B. Pritzker on April 19. Here are some of the highlights:

Pensions

$9.6B contribution to fully fund the FY 2023 pension obligation.

Includes an additional $200M, above the required minimum pension contribution, to the Pension Stabilization Fund in the revenue omnibus (SB 157).

Education

$12.023B for education.

$9.783B to the K-12 education evidence-based formula.

$350M increase over FY 2022.
$12M increase to Regional Offices of Education to address truancy and chronic absenteeism issues after the COVID-19 pandemic.

$2.24B for higher education.

$68M increase over FY 2022.
$600M for MAP grants.

$122M increase over FY 2022.

$54.4M increase over FY 2022 for early childhood education.

Healthcare

$8.84B to the Department of Human Services.
$6.861B to the Department of Healthcare and Family Services.
$450M for the Healthcare Transformation Collaborative program for care in underserved areas.
$543M for long-term care rate reform.
$69.8M to safety net hospitals to improve health equity.
$14.5124M for breast and cervical cancer screenings.

Public Safety

$6.3B for public safety.

$2.2B in GFR spending for public safety.
$235M from the State Coronavirus Urgent Remediation Emergency Fund to DHS for administrative expenses for the Reimagine Public Safety Act.
$19M to fund three new Illinois State Police cadet classes, producing 300 new troopers.
$33M for the law enforcement camera grant program.
$10M for the officer recruitment and retention pilot program.

Housing

$150M for construction of new affordable housing units.
$275M for affordable housing development programs.
$130M for legal assistance for those facing eviction as a result of the COVID-19 pandemic.

Capital Budget

$42.356B in capital reappropriations of unfinished projects from FY 2022.

Some changes at the request of members for projects that received appropriations in FY 2022 but were not started.

Lead Service Line Replacement

$113M to IEPA for lead service line replacement.

American Rescue Plan Act (ARPA) Funds

This budget appropriates almost all of Illinois remaining ARPA funds, after SB 2803 appropriated $2.7B in ARPA funds to pay off Unemployment Insurance Trust Fund debt.

$320M to IEMA, DOC, DHS, and IDPH.
$380M to healthcare providers for pandemic support payments.
$150M for affordable housing programs under IDHA.
$83.4M for violence prevention and interruption grants under ICJIA.
$190M to DCEO for various support programs.

$75M to the hotel industry.
$50M for restaurants and bars.
$50M for arts and culture grants.
$15M for tourism attraction development grants.

Infrastructure Investment and Jobs Act (IIJA) Funds

$2.5M to DNR for well plugging projects.
$59.5M to DNR to plug, remediate, and restore abandoned or leaking oil and gas wells.
$65M to DNR to eliminate hazards created by abandoned mines.
$30.2M to DoIT to address cybersecurity risks and threats.
$5.7M in GRF spending to the DoIT Special Projects Fund.

This appropriation will qualify for federal IIJA matching funds.

$500,000 to IEPA for the Battery Labeling Guidelines Program.
$4.5M to IEPA to provide assistance to local water districts.

FY 2023 BIMP

***HB 4700 (Harris/Sims) creates the FY 2023 budget implementation (BIMP) bill. It makes various revenue changes and transfers to implement the FY 2023 budget.

HB 4700 passed the House on March 4 as a gambling disorder bill before being amended into the BIMP in the Senate. It passed the Senate by a partisan vote of 37-18-0 on April 9, and the House passed a concurrence motion by a vote of 72-42-0. It was signed into law by Gov. J.B. Pritzker on April 19. Here are some highlights:

Climate Jobs Training Institute

Creates the Climate Jobs Training Institute under IBHE to produce research on labor, employment, and the broader social and economic impacts of decarbonizing the Illinois economy.

Also establishes the associated Climate Jobs Advisory Council.

Broadband

Provides that at least 30 days before applying for federal broadband funds through the Infrastructure Investment and Jobs Act, the governor’s administration must provide its application and plan to the Legislative Budget Oversight Commission.

Tourism and Hospitality Support

$75M in federal ARPA or CURE funds for the Hotel Jobs Recovery Grant Program.
$50M in federal ARPA or CURE funds for the Restaurant Employee and Stabilization Grant Program.
Establishes the Illinois Creative Recovery Grant Program Act to provide grants to independent live venue operators, performing or presenting arts organizations, arts education organizations, museums, or cultural heritage organizations that experienced business interruption due to the COVID-19 pandemic.

Local Government Distributive Fund

Beginning August 1, 2022, the Local Government Distributive Fund (LGDF) will receive the following transfers from funds received the previous month:

6.16% of individual income tax.
6.85% of corporate income tax.
6.16% of pass-through entity income tax.

Elections

Requires proposed constitutional amendments to appear on a separate election ballot.

This change will take effect after the November 8, 2022, general election.
Requires SOS to send a postcard to every mailing address in the state providing information that a constitutional amendment will be considered in the November 8 general election ballot.

Opioid Settlement

Creates the Office of Opioid Settlement Administration in DHS to administer and implement opioid settlement programs, prevention, treatment, and recovery programs.

Statewide 9-8-8 Trust Fund

Creates the Statewide 9-8-8 Trust Fund to administer a mental health response pursuant to the National Suicide Hotline Designation Act of 2020.

PATH Program

Creates the Illinois Pipeline for the Advancement of the Healthcare (PATH) Workforce Program to expand opportunities for community college students to enter the healthcare workforce.

Revenue Omnibus

***SB 157 (Hastings/Zalewski) creates the FY 2023 revenue omnibus. It provides $1.83B in tax relief to Illinois families and tax credits to Illinois businesses. This package is designed to help businesses and families cope with historic levels of inflation and fully recover from the COVID-19 pandemic.

SB 157 passed the Senate as an extension for the River Edge Redevelopment Zone program in April 2021. It was amended into the revenue omnibus in the House and passed by a vote of 110-0-4 on April 9. It returned to the Senate for a concurrence vote also on April 9 and passed by a vote of 55-1-0. It was signed into law by Gov. J.B. Pritzker on April 19.

Fiscal Stability

$1B to the Budget Stabilization Fund (rainy day fund).

$720M in FY 2022 supplemental.
$280M in FY 2023.

$200M above the required minimum pension contribution to the Pension Stabilization Fund in FY 2023.

Tax Rebates

Property tax rebate equal to the lesser of the taxpayer’s Section 208 credit in 2021 or $300.

$470M appropriated for this purpose.

Individual income tax rebate providing $50 checks for single filers, $100 checks for joint filers, and an additional $100 per dependent up to three dependents.

These tax rebates only apply in FY 2023.
$685M appropriated to the Income Tax Refund Fund for this purpose.

Earned income tax credit (EITC) increase from 18% to 20% of the federal EITC.

Removes age restrictions and makes taxpayers who only have an ITIN eligible.

Grocery Tax

Suspends the 1% state grocery tax in FY 2023.

$400M appropriated to the newly created Grocery Tax Replacement Fund.

Motor Fuel COLA Suspension

Suspends the cost-of-living adjustment for the Motor Fuel Tax Law until January 1, 2023.

The adjustment would normally occur on July 1, 2022.
Requires prominent placement of a sign noting that this inflation adjustment is the result of the Illinois General Assembly at each gas pump.

EDGE Credits

Extends the Economic Development for a Growing Economy (EDGE) Credit program for 5 years through June 30, 2027.
Expands the program to allow certain startup businesses to claim EDGE credits.
Changes the definition of “underserved area” in the EDGE Tax Credit Act and the River Edge Redevelopment Zone Act to require one or more of the following:

Poverty rate of at least 20%.
35% or more of families with children living below 130% of the poverty line.
20% of households receive SNAP assistance.
Unemployment rate is 120% of the national average, or higher.

Unemployment Insurance Speed Bump

Follow up to SB 2803, passed on March 25, which appropriated $2.7B in ARPA funds to the Unemployment Insurance Trust Fund (UITF).

This left the UITF approximately $1.8B in debt for business and organized labor to resolve through tax hikes, benefit cuts, or borrowing.

This bill represents an agreement between business and labor to delay the scheduled unemployment insurance speed bump on July 3, 2022, through December 31, 2022.

Speed bumps temporarily increase taxes on businesses and cut benefits to force an agreement between business and labor.
Delaying speed bumps gives business and labor until December 31 to reach an agreement, likely occurring in the fall veto session.

Additionally, allows IDES to accept funds deposited in the UITF from any other funding source.
The speed bump delay language was originally introduced in HB 4450.

Organ Donation Employer Credit

Allows private employers to take a credit against wage payments for an employee who takes at least 30 days of paid leave for the purpose of serving as an organ donor or bone marrow donor.

Maximum of $1,000 in withholding for each employee who takes organ donation leave.

REV Act Expansion

Expands the Reimagining Electric Vehicles in Illinois (REV) Act to include manufacturers of advanced battery components as EV component parts manufacturers.

MICRO Act

Creates the Manufacturing Illinois Chips for Real Opportunity (MICRO) Act to provide incentives to microchip and semiconductor manufacturing businesses looking to expand or relocate in Illinois.

Credits apply to semiconductor manufacturing, microchip manufacturing, or component part manufacturing.

Modeled after the REV Act.

The MICRO Act was originally introduced as a stand-alone bill, HB 4634 and SB 3917.

Film Production Tax Credit

Allows a limited number of non-resident wages to be counted towards the Film Production Tax Credit, as long as the wages are still taxed in Illinois.
Creates the Illinois Production Workforce Development Fund to issue grants to organizations deemed appropriate to support efforts to recruit, hire, promote, retain, develop, and train a diverse and inclusive workforce in the film industry.

This fund will receive at most 0.25% of film production tax credits calculated on Illinois wages and 2.5% of film production tax credits on nonresident wages.

Live Theater Production Tax Credit

Doubles the Live Theater Production Tax Credit in FY 2023 from $2M to $4M.

All credits given out in excess of the standard $2M must go to applicants spending more than $2.5M in Illinois each year.

Coal Mining Equipment Credit

Extends the sunset for the coal and aggregate exploration, mining, and reclamation equipment credit until July 1, 2028.

School Supply Tax Holiday

Creates a back-to-school school supply and clothing tax holiday from August 5 through August 14, 2022.

Provides for reduced rate sales tax rate of 1.25%.
Clothing items under $125 receive this reduced tax rate.

Teacher Instructional Materials Credit

Doubles teacher instructional materials credit to $500.

Breast Pump Exemption

Exempts breast pumps and breast pump kits from sales tax beginning on July 1, 2022.

Agritourism Credit

Creates a tax credit for 100% of the cost of agritourism liability insurance, up to $1,000, in FY 2022 and FY 2023.

Debt Repayment Package

***SB 2803 (Holmes/Harris) appropriates a total of $4.128B to pay down debts. SB 2803 passed the Senate by a vote of 33-15-0 as just an appropriation to the UITF. It was amended in the House to increase the UITF appropriation from $2B to $2.7B and add in additional appropriations as a part of the FY 2022 supplemental budget. It passed the House by a vote of 68-43-0, and the Senate passed a concurrence motion 39-16-0. Gov. Pritzker signed it into law on March 25, prior to the April 1 federal deadline for UITF appropriations. Here are the appropriations included:

Unemployment Insurance Trust Fund

$2.7B in ARPA funds to the UITF.

Reduces UITF debt from around $4.5B to $1.8B.
Remaining debts will be paid though the agreed bill process between business and organized labor.
The FY 2023 revenue omnibus (SB 157) includes a provision to delay the scheduled UITF speed bump until December 31, 2022.

Business and labor will likely reach an agreement by the fall veto session.

Group Employee Health Insurance Debt

$898M to pay of all debts to the old Group Employee Health Insurance system.

College Illinois!

$230M to pay off all debt to the College Illinois! program.

Pension Payment

Additional $300M pension payment beyond the minimum required contribution in FY 2022.

The FY 2023 budget (HB 900) provides for another additional $200M pension payment above the minimum in FY 2023.

Property Tax Omnibus

***SB 1975 (Martwick/Kifowit) is the property tax omnibus. SB 1975 passed the Senate in April 2021, prior to being amended into an omnibus bill. It passed the House by a vote of 110-0-1 on April 8, and the Senate passed a concurrence motion by a vote of 51-1-1 early in the morning on April 9. The bill now awaits the governor’s signature.

PTELL Changes

Makes changes to the Property Tax Extension Limitation Law (PTELL), which limits the amount of total taxes billed for non-home rule taxing districts. According to the Illinois Department of Revenue “This if often referred to as a tax cap; however, it doesn’t actually cap or limit taxes, it allows taxing districts to have limited inflationary increase in tax extensions on existing property, plus any amount from a voter approved increase or amounts from new construction.” Increases in property tax extensions are limited to the lesser of 5% or the Consumer Price Index for the year prior to the levy.

This bill adds an alternative aggregate extension base levy for certain districts. Allows qualifying school, park, library, and community college districts to recapture levy amounts from previous years, rather than encouraging districts to take the maximum possible 5% levy every year. It allows the base levy to be the greater of the taxing district’s aggregate extension limit or the taxing district’s last preceding aggregate extension. These PTELL changes were taken from HB 448.

Homestead Exemption

This bill sets the maximum homestead exemptions. For tax levy year 2022, it provides in counties with 3 million or more inhabitants (Cook County), a homestead exemption of $10,000. It additionally provides continues bordering Cook County (collar counties) a homestead exemption of $8,000. All other counties will have a maximum homestead exemption of $6,000.

Senior Homestead Exemption

It also raises the maximum senior homestead exemption in Cook County and the collar counties from $5,000 to $8,000. In all other counties, the maximum senior homestead exemption is $5,000. It allows for Cook County seniors who receive SNAP or LILHEAP benefits to automatically qualify for the senior freeze and decreases the Senior Citizen Real Estate Tax Deferral program interest rate from 6% to 3%.

Veterans Homestead Exemption

In taxable year 2023, it allows for a taxpayer who is the surviving spouse of a veteran whose death was service related to retain exemptions held by the veteran. If a veteran is deemed to be permanently and totally disabled, their property tax exemption shall be in effect permanently without having to re-apply on an annual basis. Allows a study of the impact of the homestead exemption for veterans with disabilities in St. Clair, Lake, Will, Madison, Rock Island, and DuPage Counties.

Bills for IEDA

***HB 4410 (Robinson/Hunter) creates the Real Estate Valuation Task Force. This new task force is formed specifically to address the federally developed home mortgage origination industry which considered racial and ethnic make-up of neighborhoods when underwriting loans. The task force shall submit a report to the governor and the General Assembly within 2 years of the effective date of the act. HB 4410 passed the House unanimously on March 4 and passed the Senate unanimously on March 30. The House unanimously concurred with Senate amendments adding additional membership to the task force on April 7. The bill now awaits the governor’s signature.

***SB 658 (Cunningham/Walsh) extends numerous TIFs; completion of redevelopment projects; River Edge projects; and the retirement of obligations in Chicago, Madison, Aviston, Warren, Farmer City, Fairmont City, Chicago Heights, and Springfield. For Business District Development and Redevelopment plans in blighted areas, it further defines contiguous parcels if they are to be considered for annexation under the Illinois Municipal Code. This definition may be applied retroactively but is subject to a final judgement pursuant to the opinion of the Illinois Supreme Court in Board of Education of Richland School District 88A v. City of Crest Hill, 2021 IL 126444 (September 23, 2021.) SB 658 passed the Senate in April 2021 as a municipal annexation bill, and passed the House, as amended, by a vote of 89-14-0 on April 8. The Senate unanimously passed a concurrence motion early in the morning on April 9, and the bill now awaits the governor’s signature.

***SB 3930 (Sims/Halpin) assists businesses and municipalities located geographically close to bordering states by providing an advantage when disbursing money from the Department of Commerce and Economic Opportunity’s Home-Grown Business Opportunity Act. It creates the Border Community COVID-19 Mitigation Grant program for these businesses and communities. As a new program, this will need the creation of new DCEO rules. Although it is on the border with Indiana, Chicago is likely to be excluded from this program. SB 3930 passed the Senate unanimously on February 24 and passed the House on April 1 by a vote of 73-30-0. It now awaits the governor’s signature.