Springfield End of Session Wrap-Up June 22, 2012
The Illinois General Assembly adjourned early in the morning of June 1 with many substantial accomplishments and some unfinished business. During its spring session the legislature reformed Medicaid, passed a fiscally-conservative bipartisan budget, made changes to the state’s procurement law, modified the Enterprise Zone program, and jump-started the three-year-old capital construction program which had not yet been fully funded. Although lawmakers passed legislation changing group health benefits for retired state employees, they failed to pass a comprehensive public employee pension reform plan and will work over the summer to reach a bipartisan agreement. Listed below are some important issues to members of the Chicagoland Chamber of Commerce. This update leads off with several key priorities of the Chicagoland Chamber that were successful toward the end of session: authorization of a Chicago casino, approval of health care purchasing cooperatives, and prevention of the development of the Tenaska power plant. Government Affairs staff lobbied hard on these issues, all of which have been longtime concerns of the Chamber.
The report then highlights bills of interest to Chicagoland Chamber members that either passed both houses and are headed to the governor or fell short of passage and may still be addressed during the November-December veto session. A public act number is indicated if a bill has already been signed into law. For information on specific bills, visit www.ilga.gov and click on “Bills and Resolutions”, find the bill number and click on the “enrolled” version if it passed both houses. Gaming Expansion
Long-Time Chamber Initiative Senate Bill 1849 (Link; Lang) – In 2011 major gaming legislation (Senate Bill 744) passed the General Assembly but was not sent to the governor because of his stated objections to signing the bill. SB 1849incorporates certain ethics changes and Illinois Gaming Board oversight recommended by the governor, as well as reducing the number of gaming positions and eliminating slot machines at the Illinois State Fair. It includes the following provisions: * Provides for one Chicago land-based casino (4,000 gaming positions). * Provides for four new riverboats (land-based optional): Danville, Park City in Lake County, South Suburban Cook County and Rockford. (1,200 gaming positions per facility). * Current law authorizes 12,000 gaming positions (1,200 at each of the 10 riverboats). This bill increases the number of gaming positions at the existing and new riverboats to 1,600. All riverboats may become land-based. * Grants gaming positions to the state’s six racetracks (“racinos”) – each Cook County track (Arlington, Hawthorne, and Maywood) is authorized up to 1,200 positions. Each track outside Cook County is initially authorized up to 350 positions (Balmoral, Quad City Downs, and Fairmount). * Requires additional dollars to be spent on backstretch workers, university research, state & county fairs, retired or injured thoroughbred horses, and increased purses --$100 million per year. * Eliminates the casino impact fee; eliminates purse recapture; and eliminates the 10th license subsidy to racing. * Increases revenues to the state for certain programs – estimated in the hundreds of millions annually. SB 1849 passed both houses but has not yet been sent to Governor Quinn, whose action on the bill is uncertain. The Chicagoland Chamber supports SB 1849 and will urge the governor to sign it. Chamber Initiated Health Purchasing Cooperatives Senate Bill 2885 (Raoul; May) - This legislation embodies a long-time initiative of the Chicagoland Chamber to provide the access to health insurance and healthcare services for small business employees that they otherwise do not have today. In our discussions with the Illinois Department of Insurance during the spring session, it was decided to modify only the existing Health Care Purchasing Group Act to clarify the types and number of employees covered by the law. SB 2885 includes sole proprietors and raises the limit on covered employees from 500 to 2500. It also provides that if an HPG is formed by any two or more employers with no more than 2,500 covered employees each, it shall utilize a licensed insurance producer to negotiate, solicit, market, obtain proposals for, and enter into group or master health insurance contracts on behalf of its members and their employees and employee dependents. SB 2885 passed both houses unanimously and will be sent to the governor who is expected to sign it. The Chamber applauds Rep. Karen May and Sen. Kwame Raoul, our determined and committed sponsors of this legislation. Tenaska Senate Bill 678 (Cullerton; Bradley) As originally introduced, this legislation authorized the construction of a “clean coal” power plant, known as the Taylorville Energy Center (TEC), in Taylorville, Illinois by Nebraska-based Tenaska Inc. TEC was expected to raise costs significantly for Illinois industrial and commercial electricity customers ---up to $400 million per year. The Chicagoland Chamber joined the STOP coalition, a broad group of businesses opposing the construction of the Tenaska plant. SB 678 passed the Senate 30-28 in the last hour of the fall veto session last November. It was expected to be amended in the House before it was called for a vote this spring, and was posted for several hearings. In mid-May, a revised proposal that would build an ordinary natural gas plant was unveiled. Opposed by the STOP coalition, Tenaska's new plan would have cost $1.2 billion but still required a state subsidy, long-term guaranteed power contracts, and electric rate increases for residents and businesses. It would have created far fewer jobs than the original proposal and do nothing to help the Illinois coal industry. The revised proposal was not called for a hearing in the House Public Utilities Committee, and SB 678has been re-referred to the House Rules Committee. Medicaid Reform Governor Quinn called for sweeping changes and cuts to the state’s Medicaid program in his Budget Address in March. Throughout the spring session a bi-partisan group of lawmakers worked with the governor’s staff and Julie Hamos, Director of Healthcare and Family Services, to craft a reform plan with an estimated savings of $2.7 billion. The Chicagoland Chamber generally supported the Medicaid reform proposal. The following five bills embody these significant changes to the state’s Medicaid program. All were signed into law by the governor on June 14. Senate Bill 2194 (Schoenberg; Currie) – SB 2194 represents an agreement between the hospitals and the state regarding their property tax exemptions and charity care. It creates an income tax credit for hospitals in an amount equal to the lesser of the amount of real property taxes paid during the tax year on real property used for hospital purposes during the prior tax year or the cost of free or discounted services provided during the tax year pursuant to the hospital's charitable financial assistance policy, measured at cost. It also imposes specific assessments on outpatient services for state fiscal years 2013 through 2014, and July 1, 2014 through December 31, 2014. SB 2194 also raises the tax on cigarettes by $1.00. (Public Act 97-688) Senate Bill 2840 (Steans; Feigenholtz) - This legislation represents the major restructuring of the Medicaid program and the changes in its eligibility and verification. Under its sweeping reform provisions, 61 projects will need to be implemented, according to Director Hamos, in order to achieve the desired results. SB 2840 also includes a cut in rate reimbursement for pharmacies. (Public Act 97-689) Senate Bill 3261 (Martinez; Cassidy) - An initiative of the Illinois Attorney General, SB 3261 changes provisions in “charity care” by amending the Fair Patient Billing Act to require the Attorney General to develop standard provisions in applications for financial assistance, together with rules for determining presumptive eligibility. It also amends the Hospital Uninsured Patient Discount Act to make changes concerning discounted charges for uninsured patients. (Public Act 97-690) Senate Bill 3397(Steans; Currie) - Amends Section 25 of the State Finance Act to prohibit payment of FY 2012 Medicaid bills with FY2013 funds; makes other changes concerning fiscal year limitations relating to payments for medical care. (Public Act 97-691) House Bill 5007 (Currie; Raoul) - Extends the moratorium on eligibility expansions from 2 years to 4 years and provides that the moratorium does not apply to expansions approved by the federal government that are financed entirely by units of local government and federal matching funds. Under this provision Cook County can enroll up to 100,000 new Medicaid patients at no cost to the state. Cook County Board President Toni Preckwinkle lobbied hard for this provision to be added to the overall package. (Public Act 97-687) Capital Bonding House Bill 4568 (Bradley; Cullerton) - A major capital bonding bill to provide funding to complete infrastructure projects started under the Illinois Jobs Now program passed in 2009. The bill authorizes the Illinois Department of Transportation to sell $2.4 billion in Illinois Jobs Now bonds. It includes a long-time supported initiative of the Chicagoland Chamber, CREATE (Chicago Region Environmental and Transportation Efficiency). The bond sale will allow for completion of the remaining $211 million needed for critical CREATE rail infrastructure projects, funding the completion of 15 projects that help create 3,300 jobs and resulting in an additional $155 million in a federal match for improved Metra, Amtrak and regional freight rail service. HB 4568 has been sent to the governor.
Other Senate Bill 409 (Link; Cassidy) - Changes several of the notice and hearing provisions for a proposed tax levy in a special service area to make the process more transparent. The Chicagoland Chamber supports SB 409 which passed both houses and heads to the governor. Senate Bill 1313 (Schoenberg; Madigan) - Deletes provisions that require the state to contribute toward the cost of coverage under the basic program of retiree group health benefits an amount that is equal to 5% of that cost for each full year of creditable service, up to a maximum of 100% for an annuitant with 20 or more years of creditable service. Provides that, beginning on July 1, 2012, the Director of Central Management Services shall, on an annual basis, determine the amount that the state shall contribute toward the basic program of group health benefits on behalf of annuitants, survivors, and retired employees and that the contributions required of these individuals shall be the same for all retirement systems. (Public Act 97-695) Senate Bill 1565 (Lightford) - Makes changes to the state’s minimum wage law. Among its provisions: a procedure for increasing the minimum wage annually to restore the minimum wage to its “historic level” and thereafter increasing the minimum wage by the increase in the cost of living during the preceding year; also deletes language pertaining to temporary or irregular employees and employees under the age of 18. SB 1565 passed the Senate Executive Committee on May 16 by a vote of 9-5, along party lines. Sen. Lightford did not call the bill for a vote in the full Senate, and is expected to hold meetings throughout the summer among both proponents and opponents, including the Chicagoland Chamber. Senate Bill 2861 (Sandoval; D.Burke) - Establishes a railroad “escrow account” within the Illinois Department of Transportation so that whenever the Department is required to enter into an agreement with any carrier for the payment of railroad maintenance expenses necessary for intercity passenger service, the Department may deposit funds in the account; also contains provisions governing the use and withdrawal of the funds. Chicagoland Chamber supports SB 2861 which passed both houses and heads to the governor. Senate Bill 2958 (Althoff; Currie) - Makes significant changes to the state procurement code adopted in 2010 that presented compliance-related problems. Among its provisions: provides greater clarity in prohibited bidder and contractor provisions that previously hindered basic communications between the vendor community and the state; establishes contractors due process prior to imposing penalties; removes onerous paperwork requirements; clarifies the definition of subcontract and subcontractor and keeps proprietary information confidential. SB 2958 also transfers state employer workers’ compensation responsibilities away from CMS to a private vendor (grants authority to the state’s chief procurement officer to procure this vendor). The Chicagoland Chambersupports SB 2958 which passed both houses and heads to the governor. Senate Bill 3241(Sullivan; Costello) - Creates an income tax credit in the amount equal to 20%, but in no event to exceed $5,000, of the gross wages paid by the taxpayer to a qualified veteran in the course of that veteran's sustained employment during each taxable year ending on or after the date of hire by the taxpayer if that veteran was unemployed for an aggregate period of 4 weeks or more during the 6-week period ending on the Saturday immediately preceding the date he or she was hired by the taxpayer. SB 3241 passed both houses and heads to the governor. Senate Bill 3280 (Frerichs; Jakobsson) - The underlying language of SB 3280 as it unanimously passed the Senate represented a compromise on hydraulic fracturing reached between the petroleum industry, environmentalists, and the farm bureau. On the final day of the session, an amendment to SB 3280 adopted in the House Environmental Health Committee would have provided a moratorium on hydraulic fracturing until June 1, 2013 and call for the creation of a state task force to further study this issue in the interim. (An expected amendment to impose a 6 percent gross receipts tax on oil and gas production and other prohibitive regulations and fees on fracturing did not surface in the final days.) The Chicagoland Chamber joined a coalition of other business groups that opposes this amended version of the bill, which was not called for a vote and has been re-referred to the House Rules Committee. Senate Bill 3522 (Collins; Yarbrough) - The banking industry and other interested parties including the City of Chicago worked throughout the session to reach a comprehensive agreement on abandoned property; these changes were embodied in SB 2534 which passed the Senate on May 25. Senate Bill 3522 was amended in the House to include many of the negotiated provisions of SB 2534, but also to apply a new foreclosure filing fee and judicial sale fee on banks with over $10 billion in assets. On May 31, SB 3522, as amended, passed the House, was approved by a Senate Committee late that night, but was not called for a vote before the Senate adjournment. The Chicagoland Chamberopposes this amended version. Discussions on this legislation are expected over the summer. Senate Bill 3616 (Frerichs; Bradley) - Makes substantial changes to the state’s Enterprise Zone program. These include: extends the program for 25 years, with a mandatory review period at the mid-point of each zone; creates five new zones (there are currently 97); allows local zone administrators to determine eligibility for a new zone based on ten qualifying criteria, three of which are necessary; eliminates three income tax credits; requires annual reporting of incentive information to IDOR; and caps fees of local administrators. The Chicagoland Chamber supports SB 3616; it passed both houses unanimously and is headed to the governor. Senate Bill 3619 (Kotowski; Biss) - Makes changes regarding the requirements for the repayment of an income tax credit allowed for “angel” investment in a qualified new business venture. SB 3619 passed both houses and is headed to the governor. Senate Bill 3631 (Raoul; G. Harris) - Amends the McPier Act regarding its marketing agreement with a Chicago-based not-for-profit organization and changes the composition of the board of the organization to 35 members, (rather than 25 members), with eight members to be appointed by the Mayor of Chicago. SB 3631 passed both houses and is headed to the governor.
Senate Bill 3766 (Trotter; Lyons) - Requires Ameren and NICOR to purchase synthetic natural gas from one plant (Leucadia) that is double the current market price and locks the utilities into expensive 30-year contracts at a time when abundant new discoveries of natural gas have sent prices plummeting. The bill will artificially increase the price of natural gas for Illinois residents and businesses. The Chicagoland Chamber opposes SB 3766 which passed both houses and is headed to the Governor.
House Bill 1447 (K. Burke; Cullerton) - As amended by the Senate, HB 1447 makes fundamental changes to the state’s retirement systems with employees having an election of either certain health care benefits or cost–of-living adjustments. Narrowly passed by the Senate on the last day of session, this legislation does not address the teachers’ retirement system, and was depicted during the Senate debate as a possible legislative vehicle for further pension negotiations. HB 1447 was not acted upon by the House. House Bill 3859 (Sente; Raoul) - An initiative of the Regional Transportation Authority, this legislation establishes disclosure requirements for county and municipal “tax revenue sharing agreements”; provides that specified reports required to be filed with the Department of Revenue shall be posted on the Department's website. HB 3859 passed both houses and heads to the governor. The Chicagoland Chamber was neutral on the bill. House Bill 3934 (Franks; Garrett) - Amends the Economic Development for a Growing Economy (EDGE) Tax Credit Act and requires the Department of Commerce and Economic Opportunity to post on its website the terms of each agreement entered into under the Act. HB 3934 passed both houses unanimously and now heads to the governor. House Bill 5192 (Zalewski; Hutchinson) - Creates the Illinois Independent Tax Tribunal based on the American Bar Association Model Tax Tribunal Act. On and after July 1, 2013 an executive branch tax tribunal that is independent of the state Department of Revenue, and staffed with up to four administrative law judges appointed by the governor, will review and rule on protests to Department of Revenue tax assessments. Taxpayers will not have to pay IDOR assessed tax, penalty or interest, until and unless the administrative law judge of the tax tribunal agrees with the Department’s assessment and all appeals by the taxpayer have been exhausted. HB 5192 also allows taxpayers to appeal an adverse decision of the tax tribunal directly to the appellate court, eliminating circuit court review and accordingly reducing litigation costs. The Chicagoland Chamber supports HB 5192which passed both houses unanimously and now heads to the governor. House Bill 5289 (Turner; Schoenberg) - Creates the offense of sales tax evasion (instead of “tax evasion”) and provides that the offense of sales tax evasion of $100,000 or more is a Class 1 felony. An initiative of the Illinois Attorney General, this legislation was aimed at certain gas station owners who failed to pay sales tax. Many business groups opposed the original bill because of its overreaching definitions regarding penalties for failure to file a return and filing a fraudulent return; these were removed in the final version.HB 5289 passed both houses and heads to the governor. House Bill 5440 (Currie; Cullerton) - Creates the Direct Broadcast Satellite Service Providers Fee Act by imposing a fee on the act or privilege of providing direct broadcast satellite service to a subscriber or customer in Illinois at the rate of 5% of the provider's gross revenue. All proceeds from this new tax would also be directed to the Education Assistance Fund similar to HB 5342 (mentioned below). HB 5440 passed the Senate on the last day of the session but was not acted on by the House. House Bill 5342 (K. Burke; Cullerton) - Amends the corporate income tax concerning unitary business groups; provides that, for taxable years ending on or after December 31, 2012, the term "United States" includes any area over which the United States has asserted jurisdiction or claimed exclusive rights with respect to the exploration for or exploitation of natural resources (the so-called “outer continental shelf”). Provides that 100% of the proceeds collected as a result of these tax changes shall be deposited into the Education Assistance Fund. Also creates an income tax credit in an amount equal to 2.5% of the qualified education expenses paid by a qualifying taxpayer to an eligible educational institution for a qualified student (credit capped at $125 per individual). HB 5342 passed the Senate on the last day of the session but was not acted on by the House.
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