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Illinois Realtors

June 4, 2019

The 2019 SPRING SESSION WRAPS UP SUNDAY, JUNE 2nd

After two additional days of overtime over the weekend the spring session wrapped up its business following a flurry of activity on several significant issues including the State budget, a massive capital bill, legalization of recreational cannabis and a large expansion of gaming.

Today’s report summarizes key action items at the State Capitol since our last report on May 24th. Please note that there will be a comprehensive “End of Session Report” issued later this summer which will summarize all issues, both approved and defeated, that were tracked this 2019 spring session.


SNAPSHOT OF THE STATUS OF KEY ISSUES OF THE 2019 SESSION

OPPOSED

Rent Control (HBs 255, 2192, 3207) DEAD

Tripling of Real Estate Transfer Tax for nonresidential (House Amend. #2 SB 690) DEAD

Cook County Assessor data reporting (SB 1379/HB 2217) DEAD

Source of Income/Human Rights Violation-Real Estate (HB 926) DEAD

Retainage %- Construction Contracts (SB 1636) PASSED

Doubling of the Rental Housing Support Fee (SB 2092) DEAD

Tenants Radon Protection Act (SB 1559) DEAD

Sealing and impoundment of eviction records (HB 2299) DEAD

Wetlands regulation (SB 1352) DEAD

No comps- commercial property/covenants (SB 1160) DEAD

PACE financing for residential (SB 1296) DEAD

No publication of public notices (SB 189/SB 1061) DEAD

Wage Payment- Direct Contractor (HB 2838) DEAD

SUPPORTED

Real Estate License Act rewrite PASSED

Local Government Consolidation (HB 348, HB 3369, SB 90) PASSED

Local Government Residential Inspection Limitation Act (HB 2206) DEAD


GRADUATED INCOME TAX PROPOSALS APPROVED

The House followed the Senate’s action and approved two items on the proposal to shift Illinois from a flat tax to a graduated income tax structure. It is important to remember that the ULTIMATE decision maker on this shift will be the Illinois voters in the 2020 election. On Monday, May 27th the House, after an extensive and long debate, approved Senate Joint Resolution Constitutional Amendment 1 (Harmon/Martwick) on a partisan roll call vote of 73-44-0. This proposed amendment seeks to amend the Revenue Article of the Illinois Constitution to remove the provision that provides that a tax on income shall be measured at a non-graduated rate. Earlier the Senate had approved this measure, also on a partisan roll call vote of 40-19-0. The House ALSO followed the Senate and approved Senate Bill 687 (Hutchinson/Zalewski) on May 30th. SB 687 creates the actual income tax rates that would go into effect in 2021 IF the constitutional amendment is approved by the voters in November of 2020. The bill ALSO included the provision to increase the Illinois income tax credit for residential property taxes paid from 5% to 6% for tax years ending on or after December 31, 2021. The House approved the bill on a partisan roll call vote of 67-48-0 and the following day (May 31st) the Senate concurred with a House amendment that tweaked the provisions of the original proposal on a partisan roll call vote of 37-20-0. SB 687 has been sent to the Governor who has indicated that he will sign the bill.


REAL ESTATE LICENCE ACT REWRITE APPROVED

 

On Friday, the Senate UNANIMOUSLY concurred with the House amendment to Senate Bill 1872 (Anderson-Jones III/Rita) which marked FINAL legislative action. As we have reported, the legislation represents the agreement between the Illinois REALTORS® and the Department of Financial and Professional Regulation on rewriting and renewing the Real Estate License Act. Provisions included in the bill:

  • Enhances the pre- and post-licensing requirements; reduces pre-license hours from 90 to 75 hours and completely revamps post-license education from the current 30 hours to a 45-hour program that target essential skill-building;
  • Enhances and more clearly specifies Managing Broker supervisory responsibilities, especially for new licensees;
  • Reduces the minimum age for obtaining a license from 21 to 18;
  • Defines and recognizes real estate brokerage “teams” and addresses the use of team names in advertising;
  • Clarifies and streamlines consumer access to the Real Estate Recovery Fund and addresses and clarifies other disciplinary provisions.

The bill now will be sent to the Governor for his consideration.



COOK COUNTY ASSESSOR INITIATVE STALLS

Various stakeholders, including the Illinois REALTORS®, worked throughout this spring session on Senate Bill 1379 (Hutchison/Davis), which was an initiative of the Cook County Assessor to establish ANNUAL reporting requirements for tax purposes on most income-producing properties in Cook County. While the bill enacted the provisions for Cook County other counties would have had the ability to opt-in as well. The bill was OPPOSED by a large coalition of business groups, including the Illinois REALTORS®. Meetings were held with the chief sponsor-Representative Davis, the Chair of the House Revenue and Finance Committee-Representative Zalewski and staff of the Assessor’s office. While language was crafted to address many of the concerns in the bill, no final agreement was reached, and the bill was not called for a vote in the House. The Assessor has indicated that it is his intent to revive the bill, possibly as early as the fall session. We expect that this bill will be discussed with the various parties over the summer.



PROPERTY TAX RELIEF MEASURES APPROVED

Senate Bill 39 (Link/Didech) and Senate Bill 1932 (Manar/Carroll) were both approved in the waning days of this spring session. SB 39 creates the Illinois Property Tax Relief Fund within the State treasury. Moneys in this new fund would be used to pay rebates to residential property taxpayers. The legislation provides for the payment of rebates to be made beginning in the State’s 2021 fiscal year to those property taxpayers that receive homestead exemptions. The state would allocate the rebates to each county and the county treasurer would be responsible for the distribution of the rebates. Senate Bill 1932 (Manar/Carroll) creates a new Property Tax Relief Task Force. The Task Force is directed to identify the causes of increasingly burdensome property taxes in Illinois; review best practices in public policy strategies that create short-term and long-term property tax relief for homeowners and make recommendations to assist in the development of both short-term and long-term administrative, electoral and legislative changes needed for property tax relief. The membership of the Task Force will include gubernatorial appointees and members of all four caucuses of the General Assembly. A final report is due December 31, 2019.



LOCAL GOVERNMENT CONSOLIDATION BILLS APPROVED

 

The Illinois REALTORS® has consistently supported legislative efforts to eliminate or consolidate the staggering number of property tax funded units of government in Illinois.
 

Senate Bill 90 (McConchie/Didech) was further amended in the House and the Senate concurred in that action on Thursday, May 30th, marking final legislative action. SB 90 provides for the dissolution of certain drainage districts wholly or partially contained within the Lake Michigan Watershed, the Chicago/Calumet Watershed, the Des Plaines River Watershed or Fox River Watershed. Another qualifier is that one or more municipalities must account for at least 75% of a drainage district’s territory. The district may be dissolved if each municipality AND the county in which the drainage district lies adopt a resolution or ordinance dissolving the district (provided certain criteria are met). Upon the adoption of the required resolutions or ordinances the county must file the dissolution petition in the circuit court for a hearing. The court would, after the hearing, enter the order providing for a final financial report and a report of its property. After all reports are filed, the court sets the hearing to determine and enter requested transfer orders and enters the order dissolving the drainage district. If the former drainage district had levied an assessment that is still effective when dissolved, the county and municipality can continue to collect and spend the proceeds in a proportionate share to the area of the dissolved drainage district. The county board or city council is directed, within 60 days after the dissolution to reduce the assessment or eliminate the assessment.


 

Earlier this month, the General Assembly overwhelmingly approved two other consolidation bills. House Bill 348 (McSweeney/Link) adds provisions to Illinois law dealing with the dissolution of a single township in McHenry County by a referendum vote and also establishes the procedure for abolishing a township road district in Lake or McHenry County if the roads of the district are less than 15 centerline miles in length. House Bill 3369 (Weber/Wilcox) provides that the board of trustees of the of the Village of Lindenhurst may, by ordinance, terminate the terms of all members of the board of trustees of the Lindenhurst Sanitary District and the powers of the Lindenhurst Sanitary District shall be exercised by the board of trustees of the Village, including the District's authority to levy and collect taxes.


 

All of these bills will be sent to the Governor for his consideration.


HUMAN RIGHTS ACT CHANGES REGARDING ARREST RECORDS APPROVED

After very substantive and productive discussions with sponsors Representative Curtis Tarver and Senator Omar Aquino, the Illinois REALTORS® SUPPORTED Senate Bill 1780, which was approved in both the House and the Senate late last week. SB 1780 amends the Illinois Human Rights Act to provide that it is a civil rights violation in a real estate transaction to discriminate against someone because of an arrest record. The bill adds provisions defining “arrest record” as follows:

“Arrest Record” means:

  1. an arrest not leading to a conviction;
  2. a juvenile record; or
  3. criminal history record information ordered expunged, sealed, or impounded under Section 5.2 of the Criminal Identification Act.

The bill also specifically states that it does not prohibit landlords from preventing tenants from engaging in unlawful activities on the premises. These changes, if approved by the Governor, would be effective January 1, 2020.


IMMIGRANT TENANT PROTECTION ACT APPROVED

On Sunday, May 26th the House approved Senate Bill 1290 (Castro/Mah) on a roll call vote of 67-35-0, marking final legislative action. This measure, also approved but vetoed by Governor Rauner in 2018, enacts the Immigrant Tenant Protection Act. SB 1290 permits a tenant to sue a landlord for damages and attorney’s fees IF AND ONLY IF the landlord threatens, intimidates, or harasses a tenant because of their immigration or citizenship status. The bill also includes an “affirmative defense” to an eviction if a landlord tries to evict a tenant because of their status. The Illinois REALTORS® was NEUTRAL after language was added in the 2018 session to address our concerns. The bill will be sent to the Governor for his consideration.


RETAINAGE PROVISIONS IN COMMERCIAL CONTRACTS

The General Assembly approved Senate Bill 1636 (Mulroe/Arroyo) and the bill will be sent to the Governor for his consideration. SB 1636 establishes certain parameters for the terms of “retainage” provisions in a contract between a commercial real estate developer and businesses that contract to do work for the developer. The bill limits the retainage provision in commercial construction contracts to 10% and requires the retainage amount to be reduced to 5% once 50% of the work is completed.


PROPERTY ASSESSED CLEAN ENERGY (PACE) CHANGES APPROVED

Final legislative action occurred late this session on House Bill 3501 (Bush/Manley). This bill had nearly unanimous support in both chambers and was an initiative of the Illinois Finance Authority. The bill made various changes in the definitions and procedures of the Property Assessed Clean Energy (PACE) program. While the Illinois REALTORS® had some initial opposition to some of the changes, our concerns were addressed in the Senate and we ultimately SUPPORTED the final version of the legislation. The changes are intended to enhance the program for the benefit of financing energy efficient improvements, renewable energy improvements, resiliency improvements (such as flood mitigation, seismic retrofits, etc.) and water use improvements (including lead pipe replacements). The bill will be sent to the Governor for his consideration.


SERVICE ANIMALS- ACCOMMODATIONS APPROVED

The Thursday, May 30th the House unanimously concurred with the Senate changes to House Bill 3671 (Thapedi/Villivalam), marking final legislative action on the bill. HB 3671 establishes various provisions regarding assistance animals. The newly created Assistance Animal Integrity Act, will allow a landlord who receives a request from a person to make an exception to the landlord's policy prohibiting or restricting animals on the landlord's property because the person requires the use of an assistance animal to require the person to produce reliable documentation of the disability and disability-related need for the animal only if the disability or disability-related need is not readily apparent or known to the landlord. The bill establishes various requirements for documentation and permits a landlord to require a resident to cover the costs of repairs for damage the animal causes to the resident's dwelling unit or the common areas, reasonable wear and tear excepted, in the same manner it would for damage caused by any other resident, but may not require a resident to pay a pet-related deposit, pet fee, or related pet assessment and also may not require purchase of special liability insurance or coverage for the assistance animal. In short, this bill establishes a clear procedure by which landlords can reasonably evaluate a tenant’s need for an assistance animal without risking a fair housing violation for failure to make a reasonable accommodation. The Illinois REALTORS® SUPPORTED the bill which will be sent to the Governor for his consideration.


TAX INCREMENT FINANCING DISTRICT LEGISLATION APPROVED

Both chambers gave unanimous approval to House Bill 2209 (Yingling/Fine). HB 2209 will require all property tax bills to contain a list of each tax increment financing (TIF) district in which the property is located and the dollar amount of tax due that is allocable to the TIF district. While many jurisdictions provide this information, this bill makes it a statewide requirement. House Bill 2931 (Davis/Harris), the bill that would extend the life of various TIFs had final legislative action last week as the House concurred in Senate amendments to include additional TIFs. Approval for extensions were granted to the village of Phoenix, the village of Swansea, the village of Saunemin, the village of Romeoville, the city of Berwyn (2 TIFs) and the village of Hanover Park. The Illinois REALTORS® was NEUTRAL and both bills have been sent to the Governor for his consideration.


BLOCKCHAIN MEASURES APPROVED

On Wednesday, May 29th the Senate unanimously approved House Bill 3575 (Wheeler/Sims), marking final legislative action. HB 3575 creates the Blockchain Technology Act and provides for the permitted uses of blockchain technology in transactions and proceedings. The bill also provides limitations to the use of blockchain technology and prohibits units of local government from implementing specified restrictions on the use of blockchain technology. On Saturday, June 1st the House unanimously concurred with the Senate changes to House Bill 2540 (Harper/T. Cullerton). The bill in its current form directs the Department of Financial and Professional Regulation to review the application of blockchain technology to the provisions of banking and consider areas for potential adoption and necessary regulatory changes in Illinois. The report is to be submitted to the General Assembly and the Governor by January 1, 2021. The bill also directs the Department of Commerce and Economic Opportunity to incorporate into one or more of its economic development marketing and business support programs, events, and activities topics related to blockchain technology (the topics are specified in the bill). The Illinois REALTORS® was NEUTRAL on both bills which have been sent to the Governor for his consideration.


COUNTY RECORDER DEMAND AND REFERRAL PROGRAM CHANGES APPROVED

On Tuesday, May 28th the House unanimously approved Senate Bill 62 (Castro/Costa Howard), marking final legislative action on the bill. SB 62 amends the Recorder Division within the Counties Code to modify how a county recorder determines if a lien is an expired lien under a county's demand and referral program. The bill specifies that a lien is expired if a suit to enforce the lien has not been commenced or a counterclaim has not been filed by the lienholder within 2 years after the completion date of the contract as specified in the recorded mechanics lien. The bill provides that the 2-year period shall be increased to the extent that an automatic stay under specified provisions of the United States Bankruptcy Code stays a suit or counterclaim to foreclose the lien or, if a work completion date is not specified in the recorded lien, then the work completion date is the date of recording of the mechanics lien. The Illinois REALTORS® is NEUTRAL on this measure which will now be sent to the Governor for his consideration.


QUALIFICATIONS OF ASSESSORS

On Friday, May 31st the Senate unanimously approved House Bill 2243 (Marron/Aquino) this week, marking final legislative action. HB 2243 makes various changes concerning certifications required for township and multi-township assessors and supervisors of assessments. This was an initiative of the County Assessment Officers Association and was also supported by the Illinois Department of Revenue. The bill will now be sent to the Governor for his consideration. The Illinois REALTORS® was NEUTRAL.


SENATE CONFIRMS SECRETARY OF IDFPR

On Friday, May 31st the Senate unanimously approved the motion to advise and consent to the Governor’s appointment of Deborah Hagan as Secretary of the Illinois Department of Financial and Professional Regulation. The Illinois REALTORS® SUPPORTED the motion and extends our congratulations to Secretary Hagan.


GENERAL ASSEMBLY UPCOMING SCHEDULE FOR FALL

The General Assembly will reconvene for its annual fall session October 28-30 and November 12-14, 2019.